Filing summary
Registrant and period: The filing is for Intellisense Solutions Inc., not Odysight.Ai Inc. It is an unaudited Form 10-Q for the quarter and six months ended September 30, 2019; the financial statements compare the three- and six-month periods with 2018. The company identified itself as a shell company and reported no commercial sales or significant operating history.
Financial results and position
| Metric | Three months ended September 30, 2019 | Six months ended September 30, 2019 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $52,535 | $94,601 |
| Interest expense | $4,188 | $8,227 |
| Net loss | $56,723 | $102,828 |
| Basic and diluted loss per share | $0.02 | $0.04 |
- At September 30, 2019, cash and total assets were $2,442, versus $26,322 at March 31, 2019. Current liabilities were $272,894, including $225,000 of related-party notes and $47,894 payable to related parties. Stockholders’ deficit was $270,452; accumulated deficit was $347,821.
- Six-month operating cash use was $78,880; financing provided $55,000, leaving a $23,880 decline in cash. No operating cash flow or revenue supported the business.
- Margins are not meaningful because the company reported no revenue. The filing reports no off-balance-sheet arrangements.
Changes, transactions and outlook
- Compared with the prior-year quarter, operating expenses rose from $13,198 to $52,535 and net loss increased from $14,748 to $56,723. For the six-month comparison, expenses rose from $21,603 to $94,601 and net loss from $24,432 to $102,828. Management attributed higher operating expenses mainly to professional, board and legal fees; higher interest expense reflected more outstanding notes.
- Related-party notes carry 8% interest and were due September 30, 2019. The full $225,000 principal was in default at quarter-end; the filing also reports $14,894 of accrued interest. The company borrowed $55,000 from related parties during the six months.
- On September 16, 2019, the company agreed to acquire Medigus Ltd.’s wholly owned ScoutCam subsidiary in exchange for 60% of the company’s shares immediately before closing. Closing conditions include at least $3 million in cash on hand, compared with reported quarter-end cash of $2,442. If ScoutCam reaches $33 million in aggregate sales during the first three years after closing, Medigus is entitled to additional shares representing 10% of the company’s share capital as of closing. The filing does not establish that the transaction closed.
- The company said it lacks sufficient resources for the next 12 months, has no financing arranged, and expects to rely on loans or equity financing, with no assurance it can raise funds. Management disclosed substantial doubt about the company’s ability to continue as a going concern.
- The planned Canna Patch research study was not performed or funded after the company changed strategic direction; the company said it might divest the subsidiary. Management reported ineffective disclosure controls, citing inadequate segregation of duties and no formal audit committee with a financial expert. No pending legal proceedings were reported. The filing provides no operating guidance.
Important facts to verify
- Confirm the filing belongs to the intended issuer: its cover and financial statements name Intellisense Solutions Inc., whereas the request identifies Odysight.Ai Inc.
- Check the status and subsequent outcome of the ScoutCam exchange, including how the $3 million cash closing condition was to be met.
- Confirm repayment, extension, or other resolution of the $225,000 defaulted related-party notes and accrued interest.
- Review subsequent financing, liquidity and going-concern disclosures; the filing reports only $2,442 cash and states that funding is not arranged.
- Reconcile the equity issuance disclosures: the financial statements show 15,000 shares issued and 30,000 shares from warrant exercise, while the unregistered-sales section reports 44,800 shares.