Filing summary
Entity and period: The supplied filing is Intellisense Solutions Inc.’s Form 10-K for the fiscal year ended March 31, 2018, filed July 5, 2018. It is not identified in the filing as an Odysight.Ai Inc. report or a 2017 Q4 report; verify the entity and period before relying on this summary.
Business context
Intellisense reported no commercial operations or revenue. Its original plan to develop online vegetarian-food portals did not produce commercial sales, and the company said it was seeking an acquisition or merger with an operating business. A proposed 2015 merger with Dotz Nano was terminated in May 2016. At March 31, 2018, the company had no employees, subsidiaries, or intellectual property.
Financial performance and position
| Metric | Year ended March 31, 2018 | Year ended March 31, 2017 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $23,373 | $33,408 |
| Net income (loss) | $(27,975) | $13,818 |
| Basic and diluted EPS | $(0.01) | $0.01 |
| Cash used in operating activities | $(23,507) | $(5,464) |
| Cash at year-end | $10,153 | $2,660 |
- 2017 net income included $50,000 of other income from the Dotz merger termination fee; there was no comparable income in 2018. Interest expense was $4,602 in 2018, versus $2,774 in 2017.
- At March 31, 2018, total assets were $10,153; current liabilities were $82,458, including $51,000 of notes payable. Stockholders’ deficit was $72,305, and accumulated deficit was $145,453.
- Working capital was negative $72,305. The filing gives no gross-margin measure, consistent with having no revenue.
- Operating cash outflow was partly offset by $31,000 of note proceeds; cash increased by $7,493 during the year.
Changes, outlook, and risks
- Operating expenses fell by $10,035 year over year, while results shifted from net income to loss, principally because the prior-year $50,000 termination fee did not recur. No revenue was reported in either year.
- Management said cash was insufficient to meet planned needs for the 12 months after March 31, 2018. It expected to seek loans and/or equity financing, but had no financing arranged and gave no assurance it could obtain funding; without financing, it said the business would likely fail.
- The auditor highlighted substantial doubt about the company’s ability to continue as a going concern. The financial statements contain no adjustments for a possible inability to continue.
- At year-end, $20,000 of older unsecured notes were in default. The notes were originally described at 12% interest; the filing says they accrued at 15% while in default. The company disclosed that it paid one $10,000 defaulted note, including $3,321 of accrued interest, on June 26, 2018.
- After year-end, the company borrowed $60,000 from four investors at 8%, due December 5, 2018. The filing identifies the note holders as related parties due to their influence and reports related board and officer changes. It also says the Trius Holdings convertible note was amended to become due on or before May 17, 2019.
- Management identified material weaknesses in financial reporting controls: no functioning audit committee, inadequate segregation of duties, and ineffective period-end reporting controls. Remediation was conditional on additional working capital and identifying a suitable acquisition. The company had no independent audit committee, no audit committee financial expert, and no code of ethics.
- The filing’s Risk Factors section is marked “Not Applicable,” despite the going-concern warning and financing risks discussed elsewhere.
Important facts to verify
- Confirm the filing belongs to the intended issuer and reporting period; the document names Intellisense Solutions Inc. and covers the year ended March 31, 2018.
- Reconcile the narrative’s accumulated-deficit figure of $142,653 with the audited balance sheet and notes, which report $145,453.
- Check the audit-fee disclosure: the financial statement expense table and audit-fee table report $9,700 for 2018, while MD&A refers to $8,700 of auditor fees.
- Review the status, interest, maturity, and repayment of year-end debt, including the defaulted notes and the subsequent $60,000 financing.
- Assess the company’s ability to secure further funding, meet near-term obligations, and remediate the disclosed control weaknesses.
- Consider the OTC Pink stock’s lack of trading and the filing’s report of 41 shareholders of record and 2,529,680 shares outstanding as of July 5, 2018.