Business Context and Reporting Period
This Form 8-K was filed by Intellisense Solutions Inc. (not Odysight.Ai Inc.) on September 17, 2019, reporting an event that occurred on September 16, 2019. The registrant is a Nevada corporation headquartered in Tel Aviv, Israel.
Key Financial Metrics and Transaction Details
This filing reports a material definitive agreement rather than periodic financial results. Key transaction metrics include:
- Transaction Type: Acquisition of 100% of ScoutCam Ltd. (a wholly-owned subsidiary of Medigus Ltd.) via a Securities Exchange Agreement.
- Consideration: Issuance of common stock representing 60% of the Corporation's issued and outstanding share capital immediately upon closing.
- Contingent Consideration: If ScoutCam achieves $33,000,000 in aggregate sales within the first three years post-closing, Medigus will receive additional shares representing 10% of the Corporation's issued and outstanding share capital.
- Liquidity Requirement: The Corporation must have at least $3,000,000 in cash on hand upon closing.
- Funding Target: The Corporation has undertaken to secure at least $3,000,000 in funding prior to closing, based on a pre-money valuation of $10,000,000 on a post-closing basis.
The filing text does not provide current revenue, profit, cash flow, margins, or existing debt levels for the Corporation.
Material Changes
The primary material change is the entry into the Exchange Agreement to acquire ScoutCam Ltd. This transaction will result in a significant dilution of existing shareholders, as the target company's owners will receive 60% of the post-closing equity. The filing does not provide comparative financial data to assess changes in revenue or profitability versus prior periods.
Guidance, Outlook, and Risks
Management Commentary and Conditions: The transaction is conditioned on the Corporation securing $3,000,000 in funding and maintaining that cash balance at closing. The Corporation will bear all costs and expenses related to the agreement.
Risks and Contingencies:
- Closing Condition: The deal is contingent upon the Corporation raising the required $3,000,000 in funding.
- Performance Milestone: Future equity issuance is tied to ScoutCam achieving $33,000,000 in sales over three years.
- Valuation Basis: The funding is structured around a specific pre-money valuation of $10,000,000.
Investor Verification Checklist
- Verify the successful execution of the $3,000,000 funding commitment required for the closing of the Exchange Agreement.
- Confirm the exact number of shares to be issued to Medigus to achieve the 60% ownership stake post-closing.
- Review the full text of the Securities Exchange Agreement (Exhibit 10.1) for additional covenants or termination rights.
- Assess the financial health and sales pipeline of ScoutCam Ltd. to evaluate the likelihood of triggering the 10% contingent equity payment.
- Clarify the discrepancy between the company name in the metadata (Odysight.Ai Inc.) and the registrant name in the filing (Intellisense Solutions Inc.).