Business context and reporting period
This filing is for Intellisense Solutions Inc., not Odysight.Ai Inc. It covers the three and nine months ended December 31, 2018, for the company’s fiscal third quarter. The filing identifies Intellisense as a shell company. It reports no commercial sales or significant operations and says it is seeking to acquire or merge with an operating business.
Financial results and liquidity
| Metric | Three months ended Dec. 31, 2018 | Nine months ended Dec. 31, 2018 | Comparable 2017 period |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Operating expenses | $13,964 | $35,567 | $3,129 and $15,226, respectively |
| Net loss | $16,461 | $40,893 | $4,309 and $18,411, respectively |
| Net loss per share | $0.01 | $0.02 | $0.00 and $0.01, respectively |
| Net cash used in operating activities | Not provided for the quarter | $49,811 | $20,948 for nine months |
At December 31, 2018, cash was $34,342, total assets were $37,259, and current liabilities were $150,457, leaving a working capital deficit of $113,198. Current liabilities included $125,000 of related-party notes payable. The company reported an accumulated deficit of $186,346 and total stockholders’ deficit of $113,198. No gross margin or operating margin is meaningful because the company had no revenue.
Material changes versus the prior comparable period
- For the quarter and nine-month period, operating expenses and net losses increased substantially year over year. Management attributed the expense increase mainly to board consulting and legal fees.
- Nine-month operating cash use increased to $49,811 from $20,948. Financing provided $74,000 net: the company received $125,000 in new notes and repaid $51,000 of prior notes. Cash declined by $24,189 from March 31, 2018, to $34,342.
- Notes payable rose to $125,000 from $51,000 at March 31, 2018. The new notes bear 8% interest and are due May 1 or June 1, 2019.
Outlook, risks, and unusual items
- Management stated that available cash was insufficient to fund its plans through the remainder of fiscal 2019 or the following 12 months. It expects to seek loans, equity financing, or a merger, but had no financing arranged and gave no assurance it could obtain funding. The filing warns that without financing the business could fail.
- The company reported substantial doubt about its ability to continue as a going concern. Its financial statements contain no adjustments that might be required if it cannot continue as a going concern.
- Five related-party investors provided $75,000 in June 2018 notes and five investors provided $50,000 in November 2018 notes. A further $10,000 related-party note was entered into on January 20, 2019, after quarter-end.
- Management concluded disclosure controls and procedures were ineffective due to inadequate segregation of duties and the absence of a formal audit committee with a financial expert. It said limited resources prevented hiring additional staff and that remediation would be pursued as practicable.
- The filing describes changes in leadership and ownership: 79% of outstanding shares were transferred to 14 new shareholders in November 2018; Eyal Ben Ami became president and sole director on January 8, 2019.
- The filing states there were no legal proceedings, unregistered equity sales, or defaults upon senior securities. It provides no business or financial guidance.
Important facts for investors to verify
- Confirm the filing’s issuer identity: the submitted text names Intellisense Solutions Inc., whereas the request identifies Odysight.Ai Inc.
- Clarify the lender classification: MD&A calls the $125,000 borrowing from an “unaffiliated lender,” while the notes and balance sheet describe the notes and note holders as related party.
- Verify the timing and repayment terms of the outstanding notes, including the separate Trius Holdings Limited note referenced as due by May 17, 2019, which is not clearly reconciled with the $125,000 notes-payable balance.
- Assess near-term funding needs, ability to meet note maturities, and the stated going-concern uncertainty.
- Review the control weaknesses and subsequent management and ownership changes. The cover page also gives an outstanding-share count date of February 12, 2018, which appears inconsistent with this February 2019 filing and should be checked.