Filing summary
Entity and period: The supplied filing is for Intellisense Solutions Inc., not Odysight.Ai Inc. It covers the three months ended June 30, 2016, and compares results with the three months ended June 30, 2015. The filing labels itself a quarterly report but does not identify the period as “2016 Q1”; investors should verify the entity and period against the intended filing.
Business context: The company reported no commercial sales or significant operations from its former web-portal business and said it was seeking to acquire or merge with an operating business. Its proposed merger with Dotz Nano Ltd. was terminated on May 17, 2016.
Financial results and position
| Metric | Three months ended June 30, 2016 | Comparable 2015 period or balance-sheet date |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $11,678 | $9,672 |
| Other income, net of interest expense | $49,401 | $0 |
| Net income (loss) | $37,723 | $(9,672) |
| Operating cash flow | $(4,855) | $(5,791) |
| Cash and cash equivalents | $3,269 at June 30, 2016 | $8,124 at March 31, 2016 |
| Total current liabilities | $48,694 at June 30, 2016 | $66,272 at March 31, 2016 |
| Stockholders’ deficit | $(20,425) at June 30, 2016 | $(58,148) at March 31, 2016 |
| Accumulated deficit | $(93,573) at June 30, 2016 | $(131,296) at March 31, 2016 |
Reported net income included a $50,000 Dotz termination fee, rather than revenue from operations. The company recorded $25,000 of that fee as a receivable at June 30; it said the installment was received after quarter-end and mostly used to pay outstanding accounts payable. Margins are not meaningful because the company had no revenue.
The cash decline from $8,124 to $3,269 reflected $4,855 of operating cash use. No cash interest or income taxes were paid in the quarter. The filing reports $20,000 of unsecured notes bearing 12% annual interest, due August 8 and August 27, 2016. The notes had not been paid as of June 30; the filing does not clearly state their payment status as of its August 15 filing date.
Common shares outstanding were 2,529,680 as of August 15, 2016; the filing reports no equity transactions during the quarter.
Changes, outlook and risks
- Operating expenses rose $2,006 year over year. Professional fees increased $2,164, including higher accounting and audit fees, partly offset by lower legal and other professional fees following the Dotz deal cancellation.
- The company said it lacked sufficient cash for its plans over the next 12 months and had no financing arranged. It expected to seek loans or additional equity, but gave no assurance it could obtain funding; without financing, it said the business would likely fail.
- Management reported accumulated losses and negative working capital of $20,425 and disclosed substantial doubt about the company’s ability to continue as a going concern. The financial statements include no adjustments that might be required if the company cannot continue.
- Management concluded disclosure controls and procedures were ineffective, citing no functioning audit committee, inadequate segregation of duties, and ineffective period-end financial reporting controls. Management said it was reviewing remediation, but the filing reports no material control changes during the quarter.
- No revenue guidance or operating forecast was provided. The filing reports no pending legal proceedings considered likely to have a material adverse effect and no material off-balance-sheet arrangements.
Important facts to verify
- Confirm that this Intellisense Solutions Inc. filing and June 30, 2016 reporting period are the intended company and period, given the request identifies Odysight.Ai Inc. and “2016 Q1.”
- Verify whether the $20,000 notes were repaid, extended, or otherwise addressed after their stated August 2016 maturities.
- Confirm receipt and application of the remaining $25,000 Dotz termination fee and the company’s subsequent cash and payable balances.
- Assess the availability and terms of financing, the company’s ability to continue as a going concern, and progress in remediating the disclosed control weaknesses.