Business context and reporting period
The supplied filing is Intellisense Solutions Inc.’s Form 10-K for the fiscal year ended March 31, 2017, filed June 29, 2017. This does not match the request metadata, which identifies Odysight.Ai Inc. and “2016 Q4”; the filing itself names neither Odysight.Ai nor that quarter.
Intellisense had no commercial sales or significant operations and was seeking an acquisition or merger to establish an operating business. Its proposed merger with Dotz Nano Ltd. was terminated in May 2016. The company reported no employees, subsidiaries, or intellectual property at year-end.
Financial results and position
| Metric | FY ended March 31, 2017 | FY ended March 31, 2016 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $33,408 | $64,049 |
| Other income (expense), net | $47,226 | $(261) |
| Net income (loss) | $13,818 | $(64,310) |
| Cash at year-end | $2,660 | $8,124 |
| Net cash used in operating activities | $5,464 | $23,739 |
| Total current liabilities | $46,990 | $66,272 |
| Stockholders’ deficit | $(44,330) | $(58,148) |
FY2017 net income included a $50,000 termination fee from the cancelled Dotz transaction, recorded as other income and reported as paid. Thus, the profit did not reflect revenue-generating operations. No gross or operating margin is meaningful given zero revenue. The filing does not report a separate cash-flow-from-investing amount.
Current liabilities included $20,000 of unsecured notes payable, $23,274 of accounts payable and accrued expenses, $3,066 payable to a related party, and $650 due to a related party. The two $10,000 notes were past due, unpaid, and in default as of March 31, 2017; the filing says they accrued interest at 15% after default. No financing was arranged at filing.
Changes, outlook, risks, and unusual items
- Operating expenses fell by $30,641 year over year, mainly because legal fees declined after the Dotz merger was abandoned; professional fees decreased from $58,756 to $29,075. Accounting and audit costs increased, while general and administrative expenses were broadly stable.
- Cash declined by $5,464 during FY2017. Management said available cash was insufficient for the next 12 months and that the company needed loans and/or additional equity financing, with no assurance such funding could be obtained. Management warned that without financing the business would likely fail.
- The auditor’s report expressed substantial doubt about the company’s ability to continue as a going concern. The statements contain no adjustments that might result if the company could not continue.
- On May 18, 2017, the company issued a subsequent-event promissory note for $10,000 at 8% interest, due May 18, 2018.
- Management identified ineffective disclosure controls and material weaknesses in internal control: no functioning audit committee, inadequate segregation of duties, and ineffective period-end reporting controls. Remediation depended on financing and identifying an operating business.
- The sole director and officer owned Eventus, which provided accounting and advisory services and office space. The company reported $17,978 of Eventus fees in FY2017 and related-party payables; this relationship creates governance and potential conflict-of-interest considerations. The company had no independent director or audit committee.
- The common stock was quoted on OTC Pink under INLL, but the filing said it did not trade and had no set bid or ask. Management provided no quantified operating or financial guidance.
Important facts for investors to verify
- Confirm that this is the intended issuer and period: the source is Intellisense Solutions Inc.’s FY2017 10-K, not an Odysight.Ai filing or a 2016 Q4 report.
- Verify the status, repayment terms, and accrued interest of the $20,000 defaulted notes, and the company’s ability to meet near-term obligations.
- Assess whether any financing or acquisition has occurred since filing; the company disclosed no arranged financing and substantial going-concern doubt.
- Reconcile the filing’s differing fee disclosures: MD&A lists FY2017 audit fees of $8,200, while the principal-accountant-fees table reports $8,700; compensation disclosure also cites Eventus fees of $13,179, while the related-party note reports $17,978 for FY2017.
- Review the status of the disclosed internal-control weaknesses and related-party arrangements, including any remediation or independent oversight.