Filing and business context
The supplied filing is Intellisense Solutions Inc.’s unaudited Form 10-Q for the three and six months ended September 30, 2017, filed November 13, 2017. This does not match the request metadata naming Odysight.Ai Inc.; investors should verify the issuer and filing period. The company reported that it had no commercial sales or significant operations and was seeking to acquire or merge with an operating company. It checked the “shell company” box.
Financial results and liquidity
| Metric | Three months ended Sep. 30 | Six months ended Sep. 30 |
|---|---|---|
| Revenue | $0 in 2017 and 2016 | $0 in 2017 and 2016 |
| Operating expenses | $4,649 in 2017; $8,051 in 2016 | $12,097 in 2017; $19,729 in 2016 |
| Net income (loss) | $(5,812) in 2017; $(8,728) in 2016 | $(14,102) in 2017; $28,995 in 2016 |
| Operating cash flow | Not separately presented | $(17,101) in 2017; $(18) in 2016 |
At September 30, 2017, cash was $6,559, total assets $6,559, current liabilities $64,991, and stockholders’ deficit $58,432. The resulting working capital deficit was $58,432. Notes payable totaled $41,000, including $20,000 of unsecured notes in default; the company reported that these defaulted notes accrued interest at 15% annually. It borrowed an additional $21,000 under unsecured notes at 8% during the six-month period. No revenue or gross-margin figures are reported; margins are not meaningful given the absence of sales.
Changes, outlook, and risks
- Quarterly net loss narrowed by $2,916 versus the prior-year quarter, while operating expenses fell by $3,402, mainly due to lower professional fees.
- The six-month comparison shifted from $28,995 net income to a $14,102 loss. The prior-year period included $50,000 of one-time income from terminating a proposed merger with Dotz Nano Ltd.; 2017 had no corresponding income.
- Management said available cash was insufficient to fund operations through the remainder of fiscal 2018 or for the twelve months following September 30, 2017. It planned to seek loans, equity financing, or a merger, but had no financing arranged and gave no assurance it could obtain funding. Management and the filing identified substantial doubt about the company’s ability to continue as a going concern.
- Management reported ineffective disclosure controls and material weaknesses involving the lack of an audit committee, inadequate segregation of duties, and ineffective period-end reporting controls. It said it was reviewing remediation steps.
- The company reported no material pending legal proceedings and no off-balance-sheet arrangements. It provided no operating or financial guidance.
Key facts for investors to verify
- Confirm that this Intellisense Solutions filing—not a filing by Odysight.Ai Inc.—is the intended document and that September 30, 2017 is the intended reporting period.
- Verify the status, terms, and accrued interest of the $20,000 defaulted notes, and the repayment terms of the newer notes.
- Assess whether the company obtained financing or completed a merger after the filing; the report states funding was not arranged and continued operations depended on additional financing or a transaction.
- Reconcile the reported accumulated deficit of $131,580 with a separate MD&A sentence that appears to misstate it as $58,432; the balance sheet reports $131,580 accumulated deficit and $58,432 total stockholders’ deficit.