Filing summary
Entity and period: The supplied filing is Intellisense Solutions Inc.’s Form 10-Q for the three months ended June 30, 2017, filed August 11, 2017. It does not identify Odysight.Ai Inc.; the company and period in the request metadata do not match the filing. Intellisense described itself as a shell company pursuing an acquisition or merger, with no commercial sales or significant operations.
Financial results and liquidity
| Metric | Quarter ended June 30, 2017 | Quarter ended June 30, 2016 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $7,448 | $11,678 |
| Net income (loss) | $(8,290) | $37,723 |
| Operating cash flow | $(8,942) | $(4,855) |
| Cash at period end | $3,718 | $3,269 |
- At June 30, 2017, total assets were $3,718, current liabilities were $56,338, and stockholders’ deficit was $52,620. The company reported a working capital deficit of $52,620.
- Notes payable totaled $30,000: $20,000 in default and a new $10,000 note due by August 18, 2018. The two defaulted notes were unsecured and, according to the filing, accruing interest at 15% per year; their original stated rates were 12%. They had not been paid, and no extensions had been negotiated as of the filing date.
- No revenue-based margins were reported. Interest expense was $842 in 2017 versus $599 in 2016. No cash interest or income taxes were paid in either period.
Changes and unusual items
- Operating expenses fell $4,230 year over year, primarily as professional fees declined by $4,142. The filing attributes much of the difference to lower audit fees; general and administrative expenses were roughly unchanged.
- Net results shifted from $37,723 income to an $8,290 loss. The prior-year quarter included $50,000 of other income from termination of the proposed Dotz Nano merger; there was no comparable income in 2017.
- Cash increased by $1,058 during the 2017 quarter, supported by $10,000 of note proceeds despite cash used in operations.
Outlook, risks, and controls
- Management said available cash was insufficient to fund plans for the next 12 months and that no financing was arranged. It expected to seek loans and/or equity financing; there was no assurance of obtaining funds, and management warned that without financing the business would likely fail.
- The filing states that the accumulated deficit was $125,768 and that substantial doubt existed about the company’s ability to continue as a going concern. Continuation depended on additional financing or a merger with an operating company and ultimately achieving profitability.
- Management reported ineffective disclosure controls and material weaknesses involving the lack of an audit committee, inadequate segregation of duties, and ineffective period-end financial reporting controls. Remediation was under review; management said the weaknesses had not materially affected the financial statements.
- The company reported no pending material legal proceedings, no material off-balance-sheet arrangements, and no risk factors listed in Part II. It reported no revenues since inception.
Investor verification points
- Confirm the intended issuer and reporting period: this filing is for Intellisense Solutions Inc., not Odysight.Ai Inc.
- Verify the status, accrued interest, demand terms, and repayment expectations for the two defaulted notes, as well as terms of the new $10,000 note.
- Assess whether the company obtained financing after the filing date and whether it could meet near-term obligations.
- Review progress on the disclosed control weaknesses and the feasibility and status of the proposed acquisition or merger strategy.