UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2016
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 333-182856
OptiLeaf, Inc.
(Exact name of registrant as specified in its charter)
Florida | 47-1553134 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
100 N Main St,
Wichita, KS, 67202
(Address of principal executive offices)(Zip Code)
(855) 678-4532
(Registrant’s telephone number, including area code)
Securities registered under Section 12(b) of the Exchange Act:
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | Smaller reporting company | ☒ |
(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☒ No ☐
As of March 30, 2016, the registrant had 20,210,419 shares of its common stock outstanding.
TABLE OF CONTENTS
Page | ||
Item 1. | Financial Statements | 1 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 8 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 11 |
Item 4. | Controls and Procedures | 11 |
PART II-- OTHER INFORMATION | ||
Item 1. | Legal Proceedings | 13 |
Item 1A. | Risk Factors | 13 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 13 |
Item 3. | Defaults Upon Senior Securities | 13 |
Item 4. | Mine Safety Disclosures | 13 |
Item 5. | Other Information | 13 |
Item 6. | Exhibits | 14 |
SIGNATURES | 15 |
CAUTIONARY NOTE FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of the Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results, and any other statements that are not historical facts.
From time to time, forward-looking statements also are included in our other periodic reports on Forms 10-Q and 8-K, in our press releases, in our presentations, on our website and in other materials released to the public. Any or all of the forward-looking statements included in this Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
OptiLeaf Incorporated
Condensed Balance Sheets
September 30, 2016 and December 31, 2015
(unaudited)
September 30, 2016 | December 31, 2015 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and equivalents | $ | 251,484 | $ | 504,971 | ||||
Prepaid expenses | - | 1,144 | ||||||
Total current assets | 251,484 | 506,115 | ||||||
Computer equipment, net | 3,536 | 6,165 | ||||||
Other Assets | ||||||||
Security deposit | 1,144 | 1,144 | ||||||
Total other assets | 1,144 | 1,144 | ||||||
$ | 256,164 | $ | 513,424 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Liabilities | ||||||||
Accounts payable and accrued expenses | $ | 15,001 | $ | 10,997 | ||||
Total current liabilities | 15,001 | 10,997 | ||||||
Commitments | ||||||||
Stockholders' Equity: | ||||||||
Common stock, no par value; 100,000,000 shares authorized, 20,210,419 shares issued | 711,000 | 711,000 | ||||||
Treasury stock, at cost, 1,000,000 and 0 shares at September 30, 2016 and December 31, 2015, respectively | (40,000 | ) | - | |||||
Accumulated deficit | (429,837 | ) | (208,573 | ) | ||||
241,163 | 502,427 | |||||||
$ | 256,164 | $ | 513,424 |
See accompanying notes to condensed financial statements.
1 |
OptiLeaf Incorporated
Condensed Statements of Operations
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | |||||||||||||
Sales | $ | - | $ | - | $ | - | $ | - | ||||||||
Cost of goods sold | - | - | - | - | ||||||||||||
Gross income | - | - | - | - | ||||||||||||
Expenses: | ||||||||||||||||
Professional fees | 8,634 | 2,207 | 41,712 | 10,850 | ||||||||||||
Payroll | 41,852 | 12,421 | 130,044 | 46,702 | ||||||||||||
Rent | 3,846 | 2,288 | 11,440 | 9,152 | ||||||||||||
Supplies | 809 | 299 | 1,216 | 1,453 | ||||||||||||
Travel | 764 | 483 | 1,881 | 749 | ||||||||||||
Research and Development | 614 | 2,817 | 20,037 | 4,557 | ||||||||||||
Other | 6,037 | 6,224 | 15,105 | 11,276 | ||||||||||||
62,556 | 26,739 | 221,435 | 84,739 | |||||||||||||
Net loss before other income and provision for income taxes | (62,556 | ) | (26,739 | ) | (221,435 | ) | (84,739 | ) | ||||||||
Other income | ||||||||||||||||
Interest income | 62 | 56 | 171 | 216 | ||||||||||||
Net loss before provision for income taxes | (62,493 | ) | (26,683 | ) | (221,264 | ) | (84,523 | ) | ||||||||
Provision for income taxes | - | - | - | - | ||||||||||||
Net loss | $ | (62,493 | ) | $ | (26,683 | ) | $ | (221,264 | ) | $ | (84,523 | ) | ||||
Basic and diluted loss per share | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
Basic and diluted weighted average number of shares outstanding | 20,210,419 | 20,210,419 | 20,210,419 | 20,210,419 |
See accompanying notes to condensed financial statements.
2 |
OptiLeaf Incorporated
Condensed Statement of Cash Flows
(Unaudited)
Nine Months Ended | ||||||||
September 30, 2016 | September 30, 2015 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (221,264 | ) | $ | (84,523 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation expense | 2,629 | 3,996 | ||||||
Increase (decrease) in: | ||||||||
Prepaid expenses | 1,144 | - | ||||||
Accounts payable and accrued expenses | 4,004 | (713 | ) | |||||
Net cash used in operating activities | (213,487 | ) | (81,240 | ) | ||||
Cash flows from investing activities: | ||||||||
Employee advance | - | (6,000 | ) | |||||
Purchase of equipment | - | 1,894 | ||||||
Net cash used in investing activities | - | (4,106 | ) | |||||
Cash flows from financing activities: | ||||||||
Settlement of stock subscription receivable | - | 6,000 | ||||||
Treasury stock purchase | (40,000 | ) | - | |||||
Net cash (used in) provided by financing activities | (40,000 | ) | 6,000 | |||||
Net decrease in cash | (253,487 | ) | (79,346 | ) | ||||
Cash at beginning of period | 504,971 | 653,937 | ||||||
Cash at end of period | $ | 251,484 | $ | 574,591 | ||||
Supplemental cash flow information: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | - | $ | - | ||||
Income taxes | $ | - | $ | - |
See accompanying notes to condensed financial statements.
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Note 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
OptiLeaf Incorporated ("OptiLeaf" or the "Company") was incorporated in Florida in August 2014. The Company has been in the development stage since inception and has not generated any sales to date. The Company plans to develop, market and sell integrated software and hardware to the agriculture industry for the seamless tracking and management of growth, task automation and sale of their clients' products.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such principles and regulations of the Securities and Exchange Commission for Form 10-Q. All adjustments, consisting of normal recurring adjustments, have been made which, in the opinion of management, are necessary for a fair presentation of the results of interim periods. The results of operations for such interim periods are not necessarily indicative of the results that may be expected for a full year because of, among other things, seasonality factors in the retail business. The unaudited financial statements contained herein should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2015.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash equivalents consisted of money market funds.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided over the estimated useful lives (3 years) of the related assets using the straight line depreciation method.
Maintenance and repairs are charged to operations when incurred. Betterments and improvements are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are reduced, and any gain or loss is included in operations.
Revenue Recognition
In general, the Company will record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company:
Revenue will be recognized at the time the product is delivered or services are performed. Provision for sales returns will be estimated based on the Company's historical return experience. Revenue will be presented net of returns.
Research and Development
The cost of research and development are charged to expense when incurred.
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Note 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Net Loss Per Common Share
Basic net (loss) income per common share is calculated using the weighted average common shares outstanding during each reporting period. Diluted net (loss) income per common share adjusts the weighted average common shares for the potential dilution that could occur if common stock equivalents (convertible debt and preferred stock, warrants, stock options and restricted stock shares and units) were exercised or converted into common stock. There were no common stock equivalents at September 30, 2016 and December 31, 2015.
Income Taxes
Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities.
ASC 740, Income Taxes, requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.
The Federal and state income tax returns of the Company for 2015 and 2014 are subject to examination by the internal Revenue Service and state taxing authorities for three (3) years from the date filed.
Stock-Based Compensation
The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value using an option pricing model. ASC 718 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates.
Equity instruments granted to non-employees are accounted for in accordance with ASC 505, Equity. The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance.
Fair Value of Financial Instruments
Pursuant to ASC No. 820, "Fair Value Measurement and Disclosures", the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of September 30, 2016 and December 31, 2015. The Company's financial instruments consist of accounts payable and accrued expenses. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments.
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Note 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recent Pronouncements
In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires lessees to recognize most lease liabilities on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. The update states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The update is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the impact of this guidance on its financial statements.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.
Note 2. COMPUTER EQUIPMENT (NET)
Equipment is recorded at cost and consisted of the following at September 30, 2016:
Computer equipment | $ | 10,514 | ||
Less: accumulated depreciation | (6,978 | ) | ||
$ | 3,536 |
Depreciation expense was $2,629 and $3,996 for the nine months ended September 30, 2016 and 2015, respectively.
Note 3. STOCKHOLDERS' EQUITY
Common stock
The Company has authorized 100,000,000 shares of no par value common stock. At September 30, 2016, the number of shares of common stock issued was 20,210,419.
Treasury stock
On September 20, 2016, the Board of Directors authorized the Company to repurchase one million shares of common stock for $40,000. These treasury stock shares may at anytime be canceled upon the Board of Directors approval. The Board has not made such election.
Note 4. COMMITMENTS AND CONTINGENCIES
The Company leases its offices in a month to month arrangement. The monthly minimum lease payments $1,144 plus its pro rata share of operating expenses.
6 |
Note 5. INCOME TAXES
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows:
Income tax provision at the federal | ||||
statutory rate | 15 | % | ||
Effect of operating losses | (15 | )% | ||
0 | % |
At September 30, 2016, the Company has a net operating loss carryforward of approximately $429,840 for Federal and state purposes. This loss will be available to offset future taxable income. If not used, this carryforward will begin to expire in 2034. The deferred tax asset relating to the operating loss carryforward has been fully reserved at September 30, 2016 and December 31, 2015. The principal difference between the operating loss for income tax purposes and reporting purposes is disallowed meals and entertainment and a temporary difference in depreciation expense.
Note 6. GOING CONCERN
The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
The Company has experienced a loss from operations during its development stage as a result of its investment necessary to achieve its operating plan, which is long-range in nature. For the period from August 11, 2014 (inception) to September 30, 2016, the Company incurred a net loss of approximately $429,840. In addition, the Company has no revenue generating operations.
The Company currently believes it has sufficient cash to sustain itself for the next 12 months, and management believes that the funds currently on hand will be sufficient for management to execute its plan of operations and to continue as a going concern.
Note 7. CONCENTRATION CREDIT RISK
The Company maintains its cash balances in a local financial institution. Balances at September 30, 2016 were insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. On September 30, 2016 the Company's uninsured cash balances were approximately $2,100.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The information and financial data discussed below is derived from our unaudited financial statements, herein, for the period from inception, August 11, 2014 through September 30, 2016. The unaudited financial statements were prepared and presented in accordance with generally accepted accounting principles in the United States. The information and financial data discussed below is only a summary and should be read in conjunction with the related notes contained elsewhere in this prospectus. The financial statements contained elsewhere in this prospectus fully represent our financial condition and operations; however, they are not indicative of our future performance.
Overview
A key problem in the fledgling cannabis industry is a lack of full service, seed-to-sale growth management systems. While there are existing software products on the market, none are completely integrated with software and hardware for the seamless tracking and management of growth, task automation, and sale. A complete solution has thus far been unavailable. We believe OptiLeaf’s comprehensive technological solution, when and if fully developed, will greatly reduce labor expenses while maximizing yield.
OptiLeaf will endeavor to offer a complete technological solution for the cannabis industry, incorporating both hardware and software. Our software, when and if fully developed, will be a seed-to-sale growth management system designed to offer a complete grow automation system that will enhance every aspect of cannabis business. Once developed, our wireless sensor network will include an array of products that control, monitor, and automate every aspect of grow house operation. Once developed, our principal product, OptiLeaf GrowPro Elite, should provide a complete, robust, state-of-the-art hardware and software solution for the large cultivation operation with multiple locations. We have not completed development of any products as of this Offering, and there can be no assurance that our products will ever become fully developed, or will gain market acceptance when and if fully developed.
In the period from inception (August 11, 2014) through September 30, 2016 we had zero revenue and our net loss was $429,837. As of Septermber 30, 2016 we had total current assets of $252,628 and total current liabilities of $15,001.
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Recent Developments
Plan of Operation
We are a development stage company. Our activities have been primarily limited to business formation, strategic development, marketing, website and product development, negotiations with third party sales and channel partners, and capital raising activities. Our plans include attempting to have distributors and channel partners market our wireless network sensor products within their product line, in their promotional materials, and on their websites. To date, we have no agreements with any distributors or channel partners to market our products, and we cannot be assured that we will be able to reach any such agreements in the future.
We believe that our products will be able to control, monitor, and automate all aspects of the grow house operation. We believe that, once fully developed and launched, OptiLeaf will be the first and only system to completely integrate all aspects of growth automation and management into one system. However, there can be no assurance that our products will ever become fully developed, or will gain market acceptance when and if fully developed.
Much of the development time and effort at OptiLeaf during the next 12 months will be spent on research and development for the new wireless sensor network product line and in optimizing our OptiLeaf GrowPro seed-to-sale growth management software. During the next 12 months, OptiLeaf intends to spend approximately $250,000 on R&D.
OptiLeaf is regularly examining roles that new products will play in the growth of the Company.
Accordingly, we have had no sales and no other operations to date. During the next eighteen months, we expect to take the following steps in connection with the further development of our business and the implementation of our plan of operations:
● | We plan on inviting the most influential reporters and editors from various trade publications to visit OptiLeaf. During the visit, each of the editors will receive a complete facility tour, briefings about the product, and an opportunity to interview the CEO, CTO, product designer and marketing manager. If logistics or timing is a problem, individual appointments can be arranged, or meetings will be scheduled during major trade shows. | |
● | To promote our products during the important launch stage, we have concluded that we will need specific expertise and contacts that are not available inside our company. We will attempt to engage outsourced professionals in the areas of marketing and public relations as a result. | |
● | OptiLeaf will attempt to implement a direct sales force to interact with our customers on a one-to-one basis. The sales force will be responsible for implementing our marketing plans. Each sales person will be trained to communicate the OptiLeaf message effectively. Our plan is that our sales force will be continuously updated and educated on the Company's objectives, any new products in the pipeline, product enhancements, as well as any potential changes to state or federal legislation that could have an impact on cannabis cultivation, usage and distribution. Our decision to potentially use a direct sales force was taken because OptiLeaf products require considerable customer education and post-sales support. | |
● | We hope to expand our product offerings from time to time to meet market demand. |
Over the next twelve months, we anticipate expenses of up to $190,000 including general, administrative and corporate expenses. The extent of such expenses will depend upon the successful implementation of our financing strategy and the acceleration of our business plan accordingly.
We raised approximately $711,000 in gross proceeds in the private placement closed in 2014.
We expect to finance our operations primarily through our existing cash, our operations and any future financing. If we do not obtain additional funding, we will continue to operate on a reduced budget until such time as more capital is raised. We believe that we could operate with our current cash on hand while satisfying any shortfall in cash flow with income that will be generated after the launch of our sales and marketing programs. However, to effectively implement our business plan, we will need to obtain additional financing in the future.
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If we obtain financing, we would expect to accelerate our business plan and increase our advertising and marketing budget, hire additional staff members, and increase our office space and operations all of which we believe would result in the generation of revenue and profit for our company.
Results of Operations
We have conducted minimal operations during the period from inception (August 11, 2014) to September 30, 2016. We have not generated revenues during this period. We had net losses of $428,837 for the period from inception (August 11, 2014) to September 30, 2016.
Liquidity and Capital Resources
As of September 30, 2016, we had cash of $251,484. Our primary uses of cash were for employee compensation and working capital. The main sources of cash were from our Founders. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:
● | An increase in working capital requirements, | |
● | Addition of administrative and sales personnel as the business grows, | |
● | Increases in advertising, public relations and sales promotions as we commence operations, | |
● | Research and Development, | |
● | The cost of being a public company and the continued increase in costs due to governmental compliance activities. |
The following summarizes the key components of the Company’s cash flows for the six months ended September 30, 2016 and 2015
2016 | 2015 | |||||||
Cash flows used by operating activities | $ | (213,487 | ) | $ | (81,240 | ) | ||
Cash flows used by investing activities | 0 | (4,106 | ) | |||||
Cash flows (used by) from financing activities | (40,000 | ) | 6,000 | |||||
Net decrease in cash and cash equivalents | $ | (253,487 | ) | $ | (79,346 | ) |
We plan to fund our activities during and beyond 2016 through our existing cash on hand and through revenue generated through the sale of our product, and through additional debt or equity financing if available. We cannot be certain that such funding will be available on acceptable terms, or available at all. To the extent that we raise additional funds by issuing debt or equity securities or through bank financing, our stockholders may experience significant dilution. If we are unable to raise funds when required or on acceptable terms, we may have to significantly scale back, or discontinue, our operations.
Off-Balance Sheet Arrangements
We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, sales or expenses, results of operations, liquidity or capital expenditures, or capital resources that are material to an investment in our securities.
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Critical Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. At September 30, 2016, the Company had cash equivalents of approximately $251,484.
Recently Issued Accounting Pronouncements
We do not expect that other recently issued accounting pronouncements will have a material impact on our financial statements.
Going Concern
Our financial statements have been prepared on a going concern basis. As of September 30, 2016, we have not generated any revenues since inception. We expect to finance our operations primarily through our existing cash, our operations and any future financing. However, there is no assurance we will be able to obtain such capital, through equity or debt financing, or any combination thereof, or on satisfactory terms or at all. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet our capital needs. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, our operations would be materially negatively impacted.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are not required to provide the information required by this Item because we are a smaller reporting company.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s President, Chief Financial Officer, Secretary, Treasurer and Director, of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure for the reasons discussed below.
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Our management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2016. The framework used by management in making that assessment was the criteria set forth in the document entitled “ Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our President and Chief Financial Officer have determined and concluded that, as of September 30, 2016, the Company’s internal control over financial reporting were not effective.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control our financial reporting as of September 30, 2016, the Company determined that the following items constituted a material weakness:
● | The Company does not have an independent audit committee in place, which would provide oversight of the Company’s officers, operations and financial reporting function; | |
● | The Company’s accounting department, which consists of a limited number of personnel, does not provide adequate segregation of duties and timely information; and | |
● | The Company does not have effective controls over period end financial disclosure and reporting processes. |
Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board. Management plans to take action and implementing improvements to our controls and procedures when our financial position permits.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to the permanent exemption of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.
Changes in Internal Control over Financial Reporting
No change in our system of internal control over financial reporting occurred during the period covered by this report (i.e. the third quarter of the fiscal year ended December 31, 2016) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
12 |
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
Item 1A. Risk Factors
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
13 |
Item 6. Exhibits, Financial Statement Schedules
Exhibit No. | Description | |
3.1 | Articles of Incorporation. ** | |
3.2 | By-Laws. ** | |
31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 * | |
31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 * | |
32.1 | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 * | |
32.2 | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 * | |
101.INS | XBRL Instance Document * | |
101.SCH | XBRL Taxonomy Extension Schema Document * | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document * | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document * | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document * | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document * |
* Filed herewith
** Previously filed
14 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 14, 2016
Optileaf Inc | ||
By: | /s/ Thomas Tran | |
Name: Thomas Tran | ||
Position: Chief Executive Officer, | ||
Chief Technology Officer | ||
President | ||
By: | /s/ Nick Nguyen | |
Name: Nick Nguyen Position: Chief Operating Officer, Chief Financial Officer |
15
Exhibit 31.1
CERTIFICATION
OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Thomas Tran, certify that:
1. I have reviewed this quarterly report on Form 10-Q of OptiLeaf, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financing reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant's internal control over financial reporting.
November 14, 2016
By: | /s/ Thomas Tran | |
Name: Thomas Tran | ||
Position: Chief Executive Officer, | ||
Chief Technology Officer | ||
President |
Exhibit 31.2
CERTIFICATION
OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Nick Nguyen, certify that:
1. I have reviewed this quarterly report on Form 10-Q of OptiLeaf, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financing reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant's internal control over financial reporting.
November 14, 2016
By: | /s/ Nick Nguyen | |
Name: Nick Nguyen Position: Chief Operating Officer, Chief Financial Officer |
||
Exhibit 32.1
Certification Pursuant To
18 U.S.C. Section 1350,
As Adopted Pursuant To
Section 906 Of The Sarbanes-Oxley Act Of 2002
In connection with the Quarterly Report of OptiLeaf, Inc. (the "Company") on Form 10-Q for the period ended September 30, 2016 as filed with the Securities and Exchange Commission (the "Report"), I, Thomas Tran, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition of the Company as of the dates presented and the results of operations of the Company.
By: | /s/ Thomas Tran | |
Name: Thomas Tran | ||
Position: Chief Executive Officer, | ||
Chief Technology Officer | ||
President |
Dated: November 14, 2016
The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.
Exhibit 32.2
Certification Pursuant To
18 U.S.C. Section 1350,
As Adopted Pursuant To
Section 906 Of The Sarbanes-Oxley Act Of 2002
In connection with the Quarterly Report of OptiLeaf, Inc. (the "Company") on Form 10-Q for the period ended September 30, 2016 as filed with the Securities and Exchange Commission (the "Report"), I, Nick Nguyen, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition of the Company as of the dates presented and the results of operations of the Company.
By: | /s/ Nick Nguyen | |
Name: Nick Nguyen Position: Chief Operating Officer, Chief Financial Officer |
Dated: November 14, 2016
The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Mar. 30, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | OPTILEAF, INC. | |
Entity Central Index Key | 0001628228 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2016 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 20,210,419 |
Condensed Balance Sheets (Unaudited) - USD ($) |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Current Assets: | ||
Cash and equivalents | $ 251,484 | $ 504,971 |
Prepaid expenses | 1,144 | |
Total current assets | 251,484 | 506,115 |
Computer equipment, net | 3,536 | 6,165 |
Other Assets | ||
Security deposit | 1,144 | 1,144 |
Total other assets | 1,144 | 1,144 |
Total assets | 256,164 | 513,424 |
Liabilities | ||
Accounts payable and accrued expenses | 15,001 | 10,997 |
Total current liabilities | 15,001 | 10,997 |
Commitments | ||
Stockholders' Equity: | ||
Common stock, no par value; 100,000,000 shares authorized, 20,210,419 shares issued | 711,000 | 711,000 |
Treasury stock, at cost, 1,000,000 and 0 shares at September 30, 2016 and December 31, 2015, respectively | (40,000) | |
Accumulated deficit | (429,837) | (208,573) |
Total stockholders' equity | 241,163 | 502,427 |
Total liabilities and stockholders' equity | $ 256,164 | $ 513,424 |
Condensed Balance Sheets (Parenthetical) (Unaudited) - $ / shares |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 20,210,419 | 20,210,419 |
Treasury stock, shares | 1,000,000 | 0 |
Condensed Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Income Statement [Abstract] | ||||
Sales | ||||
Cost of goods sold | ||||
Gross income | ||||
Expenses: | ||||
Professional fees | 8,634 | 2,207 | 41,712 | 10,850 |
Payroll | 41,852 | 12,421 | 130,044 | 46,702 |
Rent | 3,846 | 2,288 | 11,440 | 9,152 |
Supplies | 809 | 299 | 1,216 | 1,453 |
Travel | 764 | 483 | 1,881 | 749 |
Research and Development | 614 | 2,817 | 20,037 | 4,557 |
Other | 6,037 | 6,224 | 15,105 | 11,276 |
Total Expenses | 62,556 | 26,739 | 221,435 | 84,739 |
Net loss before other income and provision for income taxes | (62,556) | (26,739) | (221,435) | (84,739) |
Other income | ||||
Interest income | 62 | 56 | 171 | 216 |
Net loss before provision for income taxes | (62,493) | (26,683) | (221,264) | (84,523) |
Provision for income taxes | ||||
Net loss | $ (62,493) | $ (26,683) | $ (221,264) | $ (84,523) |
Basic and diluted loss per share | $ 0 | $ 0 | $ 0 | $ 0 |
Basic and diluted weighted average number of shares outstanding | 20,210,419 | 20,210,419 | 20,210,419 | 20,210,419 |
Condensed Statement of Cash Flows (Unaudited) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Cash flows from operating activities: | ||
Net loss | $ (221,264) | $ (84,523) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 2,629 | 3,996 |
Increase (decrease) in: | ||
Prepaid expenses | 1,144 | |
Accounts payable and accrued expenses | 4,004 | (713) |
Net cash used in operating activities | (213,487) | (81,240) |
Cash flows from investing activities: | ||
Employee advance | (6,000) | |
Purchase of equipment | 1,894 | |
Net cash used in investing activities | (4,106) | |
Cash flows from financing activities: | ||
Settlement of stock subscription receivable | 6,000 | |
Treasury stock purchase | (40,000) | |
Net cash (used in) provided by financing activities | (40,000) | 6,000 |
Net decrease in cash | (253,487) | (79,346) |
Cash at beginning of period | 504,971 | 653,937 |
Cash at end of period | 251,484 | 574,591 |
Cash paid during the period for: | ||
Interest | ||
Income taxes |
Nature Of Operations And Summary Of Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Nature Of Operations And Summary Of Significant Accounting Policies [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
OptiLeaf Incorporated ("OptiLeaf" or the "Company") was incorporated in Florida in August 2014. The Company has been in the development stage since inception and has not generated any sales to date. The Company plans to develop, market and sell integrated software and hardware to the agriculture industry for the seamless tracking and management of growth, task automation and sale of their clients' products.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such principles and regulations of the Securities and Exchange Commission for Form 10-Q. All adjustments, consisting of normal recurring adjustments, have been made which, in the opinion of management, are necessary for a fair presentation of the results of interim periods. The results of operations for such interim periods are not necessarily indicative of the results that may be expected for a full year because of, among other things, seasonality factors in the retail business. The unaudited financial statements contained herein should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2015.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash equivalents consisted of money market funds.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided over the estimated useful lives (3 years) of the related assets using the straight line depreciation method.
Maintenance and repairs are charged to operations when incurred. Betterments and improvements are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are reduced, and any gain or loss is included in operations.
Revenue Recognition
In general, the Company will record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company:
Revenue will be recognized at the time the product is delivered or services are performed. Provision for sales returns will be estimated based on the Company's historical return experience. Revenue will be presented net of returns.
Research and Development
The cost of research and development are charged to expense when incurred.
Net Loss Per Common Share
Basic net (loss) income per common share is calculated using the weighted average common shares outstanding during each reporting period. Diluted net (loss) income per common share adjusts the weighted average common shares for the potential dilution that could occur if common stock equivalents (convertible debt and preferred stock, warrants, stock options and restricted stock shares and units) were exercised or converted into common stock. There were no common stock equivalents at September 30, 2016 and December 31, 2015.
Income Taxes
Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities.
ASC 740, Income Taxes, requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.
The Federal and state income tax returns of the Company for 2015 and 2014 are subject to examination by the internal Revenue Service and state taxing authorities for three (3) years from the date filed.
Stock-Based Compensation
The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value using an option pricing model. ASC 718 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates.
Equity instruments granted to non-employees are accounted for in accordance with ASC 505, Equity. The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance.
Fair Value of Financial Instruments
Pursuant to ASC No. 820, "Fair Value Measurement and Disclosures", the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of September 30, 2016 and December 31, 2015. The Company's financial instruments consist of accounts payable and accrued expenses. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments.
Recent Pronouncements
In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires lessees to recognize most lease liabilities on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. The update states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The update is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the impact of this guidance on its financial statements.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
Computer Equipment (Net) |
9 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | ||||||||||||||||
Computer Equipment (Net) [Abstract] | ||||||||||||||||
COMPUTER EQUIPMENT (NET) | Note 2. COMPUTER EQUIPMENT (NET)
Equipment is recorded at cost and consisted of the following at June 30, 2016:
Depreciation expense was $1,752 and $328 for the 6 months ended June 30, 2016 and 2015, respectively. |
Stockholders' Equity |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Stockholders' Equity [Abstract] | |
STOCKHOLDERS' EQUITY | Note 3. STOCKHOLDERS' EQUITY
Common stock
The Company has authorized 100,000,000 shares of no par value common stock. At September 30, 2016, the number of shares of common stock issued was 20,210,419.
Treasury stock
On September 20, 2016, the Board of Directors authorized the Company to repurchase one million shares of common stock for $40,000. These treasury stock shares may at anytime be canceled upon the Board of Directors approval. The Board has not made such election. |
Commitments and Contingencies |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 4. COMMITMENTS AND CONTINGENCIES
The Company leases its offices in a month to month arrangement. The monthly minimum lease payments $1,144 plus its pro rata share of operating expenses. |
Income Taxes |
9 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||
Income Taxes [Abstract] | |||||||||||||||||||||
INCOME TAXES | Note 5. INCOME TAXES
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows:
At September 30, 2016, the Company has a net operating loss carryforward of approximately $429,840 for Federal and state purposes. This loss will be available to offset future taxable income. If not used, this carryforward will begin to expire in 2034. The deferred tax asset relating to the operating loss carryforward has been fully reserved at September 30, 2016 and December 31, 2015. The principal difference between the operating loss for income tax purposes and reporting purposes is disallowed meals and entertainment and a temporary difference in depreciation expense. |
Going Concern |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Going Concern [Abstract] | |
GOING CONCERN | Note 6. GOING CONCERN
The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
The Company has experienced a loss from operations during its development stage as a result of its investment necessary to achieve its operating plan, which is long-range in nature. For the period from August 11, 2014 (inception) to September 30, 2016, the Company incurred a net loss of approximately $429,840. In addition, the Company has no revenue generating operations.
The Company currently believes it has sufficient cash to sustain itself for the next 12 months, and management believes that the funds currently on hand will be sufficient for management to execute its plan of operations and to continue as a going concern. |
Concentration Credit Risk |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Concentration Credit Risk [Abstract] | |
CONCENTRATION CREDIT RISK | Note 7. CONCENTRATION CREDIT RISK
The Company maintains its cash balances in a local financial institution. Balances at September 30, 2016 were insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. On September 30, 2016 the Company's uninsured cash balances were approximately $2,100. |
Nature Of Operations And Summary Of Significant Accounting Policies (Policies) |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Nature Of Operations And Summary Of Significant Accounting Policies [Abstract] | |
Organization | Organization
OptiLeaf Incorporated ("OptiLeaf" or the "Company") was incorporated in Florida in August 2014. The Company has been in the development stage since inception and has not generated any sales to date. The Company plans to develop, market and sell integrated software and hardware to the agriculture industry for the seamless tracking and management of growth, task automation and sale of their clients' products. |
Basis of Presentation | Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such principles and regulations of the Securities and Exchange Commission for Form 10-Q. All adjustments, consisting of normal recurring adjustments, have been made which, in the opinion of management, are necessary for a fair presentation of the results of interim periods. The results of operations for such interim periods are not necessarily indicative of the results that may be expected for a full year because of, among other things, seasonality factors in the retail business. The unaudited financial statements contained herein should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2015. |
Cash and Cash Equivalents | Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash equivalents consisted of money market funds. |
Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Property and Equipment | Property and Equipment
Property and equipment are stated at cost. Depreciation is provided over the estimated useful lives (3 years) of the related assets using the straight line depreciation method.
Maintenance and repairs are charged to operations when incurred. Betterments and improvements are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are reduced, and any gain or loss is included in operations. |
Revenue Recognition | Revenue Recognition
In general, the Company will record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company:
Revenue will be recognized at the time the product is delivered or services are performed. Provision for sales returns will be estimated based on the Company's historical return experience. Revenue will be presented net of returns. |
Research and Development | Research and Development
The cost of research and development are charged to expense when incurred. |
Net Loss Per Common Share | Net Loss Per Common Share
Basic net (loss) income per common share is calculated using the weighted average common shares outstanding during each reporting period. Diluted net (loss) income per common share adjusts the weighted average common shares for the potential dilution that could occur if common stock equivalents (convertible debt and preferred stock, warrants, stock options and restricted stock shares and units) were exercised or converted into common stock. There were no common stock equivalents at September 30, 2016 and December 31, 2015. |
Income Taxes | Income Taxes
Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities.
ASC 740, Income Taxes, requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.
The Federal and state income tax returns of the Company for 2015 and 2014 are subject to examination by the internal Revenue Service and state taxing authorities for three (3) years from the date filed. |
Stock-Based Compensation | Stock-Based Compensation
The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value using an option pricing model. ASC 718 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates.
Equity instruments granted to non-employees are accounted for in accordance with ASC 505, Equity. The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments
Pursuant to ASC No. 820, "Fair Value Measurement and Disclosures", the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of September 30, 2016 and December 31, 2015. The Company's financial instruments consist of accounts payable and accrued expenses. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments. |
Recent Pronouncements | Recent Pronouncements
In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires lessees to recognize most lease liabilities on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. The update states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The update is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the impact of this guidance on its financial statements.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
Computer Equipment (Net) (Tables) |
9 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | ||||||||||||||||
Computer Equipment (Net) [Abstract] | ||||||||||||||||
Schedule of computer equipment, net |
|
Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||
Income Taxes [Abstract] | |||||||||||||||||||||
Schedule of reconciliation between statutory tax rate and effective tax rate |
|
Nature Of Operations And Summary Of Significant Accounting Policies (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Nature Of Operations And Summary Of Significant Accounting Policies (Textual) | |
Property and equipment, Estimated useful lives | 3 years |
Income tax examination, description | The Federal and state income tax returns of the Company for 2015 and 2014 are subject to examination by the internal Revenue Service and state taxing authorities for three (3) years from the date filed. |
Computer Equipment (Net) (Details) - USD ($) |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Schedule of computer equipment, net | ||
Computer equipment | $ 10,514 | |
Less: accumulated depreciation | (6,978) | |
Computer Equipment (Net) | $ 3,536 | $ 6,165 |
Computer Equipment (Net) (Details Textual) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Computer Equipment (Net) (Textual) | ||
Depreciation expense | $ 2,629 | $ 3,996 |
Stockholders' Equity (Details) - USD ($) |
1 Months Ended | ||
---|---|---|---|
Sep. 20, 2016 |
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Stockholders' Equity (Textual) | |||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |
Common stock, par value | |||
Common stock, shares issued | 20,210,419 | 20,210,419 | |
Common stock repurchase, shares | 1,000,000 | ||
Payments for repurchase of common stock | $ 40,000 |
Commitments and Contingencies (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Commitments and Contingencies (Textual) | |
Monthly minimum lease payments | $ 1,144 |
Income Taxes (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Schedule of reconciliation between statutory tax rate and effective tax rate | |
Income tax provision at the federal statutory rate | 15.00% |
Effect of operating losses | (15.00%) |
Effective tax rate | 0.00% |
Income Taxes (Details Textual) |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Income Taxes (Textual) | |
Net operating loss carryforward | $ 429,840 |
Operating loss carryforwards, Expiration | Dec. 31, 2034 |
Going Concern (Details) - USD ($) |
3 Months Ended | 9 Months Ended | 26 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
|
Going Concern (Textual) | |||||
Net loss | $ (62,493) | $ (26,683) | $ (221,264) | $ (84,523) | $ 429,840 |
Concentration Credit Risk (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Concentration Credit Risk [Abstract] | |
Federal Deposit Insurance Corporation insured amount | $ 250,000 |
Uninsured cash amount | $ 2,100 |
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