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 June 30, 2019

 

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.)

 

924 N Main St,

Wichita, KS, 67203

(Address of principal executive offices)(Zip Code)

 

(855) 678-4532

(Registrant’s telephone number, including area code)

 

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, if any, every Interactive Data File required to be submitted 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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐      No ☒

 

As of June 30, 2019 the registrant had 20,943,753 shares of its common stock outstanding.

 

 

 

OptiLeaf, Inc.

Balance Sheets

 

		June 30				December 31
		2019				2018
		(unaudited)
ASSETS
Current Assets:
Cash		$	16,208			$	11,290
Accounts receivable			4,675				2,300
Inventory			4,142				-
Total current assets			25,025				13,590
Total Assets		$	25,025			$	13,590
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued expenses		$	19,651			$	17,797
Accrued payroll			4,073				7,262
Deferred revenue			10,654				3,969
Total current liabilities			34,378				29,028
Long term loans  payable - related parties			45,000				45,000
Long term loans  payable			40,000				40,000
Total long term liabilities			85,000				85,000
Total Liabilities			119,378				114,028
Commitments and Contingencies			-				-
Stockholders’ Deficit:
Common stock, no par value; 100,000,000 shares authorized; 20,943,753 and 20,777,086 issued and outstanding at June 30, 2019 and December 31, 2018.			821,000				796,000
Treasury Stock, at cost, 0 and 1,000,000 shares at June 30, 2019 and December 31, 2018			(40,000	)			(40,000	)
Accumulated deficit			(875,352	)			(856,438	)
Total Stockholders’ Deficit			(94,352	)			(100,438	)
Total Liabilities and Stockholders’ Deficit		$	25,025			$	13,590

 

(See accompanying notes to unaudited financial statements)

 

 

OptiLeaf, Inc.

Statements of Operations

(unaudited)

 

		For the Three Months Ended								For the Six Months Ended
		June 30								June 30
		2019				2018				2019				2018
Revenue
Product sales and services		$	15,822			$	13,320			$	38,929			$	18,554
Cost of goods sold			379				5,494				6,463				5,494
Gross income			15,443				7,826				32,467				13,060
Expenses:
Other			4,439				6,122				8,078				9,153
Payroll			11,250				20,692				27,599				53,179
Professional fees			430				4,471				10,240				8,721
Rent			3,482				6,825				5,857				12,118
Research and development			-				(3,628	)
Supplies			744				4,716				954				5,564
Travel			2,076				381				3,024				712
Total operating expenses			22,421				39,579				55,751				89,447
Net loss before other income and provision for income taxes			(6,978	)			(31,753	)			(23,285	)			(76,387	)
Other income
Miscellaneous income			2,100				2,175				2,100				2,175
Interest income			450				2				2,271				2
Total other income			2,550				2,177				4,371				2,177
Net loss		$	(4,428	)		$	(29,576	)		$	(18,914	)		$	(74,210	)
Basic and diluted loss per share		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Basic and diluted weighted average number of shares outstanding			20,943,753				21,443,752				20,885,742				21,443,752

 

(See accompanying notes to unaudited financial statements)

 

 

OptiLeaf, Inc.

Statement of Stockholders’ Deficit

For the Six and Three Months Ended June 30, 2019 and 2018

(unaudited)

 

		Common Stock								Treasury Stock								Accumulated				Stockholders’
		Shares				Amount				Shares				Amount				Deficit				(Deficit)
Balances, December 31,  2018			20,777,086			$	796,000				1,000,000			$	(40,000	)		$	(856,438	)		$	(100,438	)
Common shares sold for cash			166,667				25,000				-				-				-				25,000
Net loss for the six months			-				-				-				-				(18,914	)			(18,914	)
Balances, June 30, 2019			20,943,753				821,000				1,000,000				(40,000	)			(875,352	)			(94,352	)
For the Three Months ended June 30, 2019
Balances, March 31  2019			20,943,753			$	821,000				1,000,000			$	(40,000	)			(870,970	)			(89,970	)
Adjustment to reconcile account			-				-				-				-				46				46
Loss for the three months			-				-				-				-				(4,428	)			(4,428	)
Balances, June 30, 2019			20,943,753				821,000				1,000,000				(40,000	)			(875,352	)			(94,352	)
For the Six Months Ended June 30,2018
Balance, December 31, 2018			20,433,752			$	746,000				1,000,000			$	(40,000	)		$	(699,759	)		$	6,241
Net loss for the six months			-				-				-				-				(74,210	)			(74,210	)
Balances, June 30, 2018			20,433,752			$	746,000				1,000,000			$	(40,000	)		$	(773,969	)		$	(67,969	)
For the Three Months Ended June 30, 2018
Balances, March 31, 2018			20,433,752			$	746,000				1,000,000			$	(40,000	)		$	(744,393	)		$	(38,393	)
Net loss for the three months			-				-				-				-				(29,576	)			(29,576	)
Balances, June 30, 2018			20,433,752			$	746,000				1,000,000			$	(40,000	)		$	(773,969	)		$	(67,969	)

 

(See accompanying notes to unaudited financial statements)

 

 

OptiLeaf, Inc.

Statements of Cash Flows

(unaudited)

 

		For the Six Months Ended
		June 30
		2019				2018
Cash flows from operating activities:
Net loss		$	(18,914	)		$	(74,210	)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in operating assets and liabilities
Decrease (increase) in accounts receivable			(2,375	)			5,650
Decrease (increase) in inventory			(4,142	)			168
Increase (decrease) in accrued payroll			(3,189	)			-
Increase (decrease) in accounts payable and accrued expenses			1,854				(19,497	)
Increase (decrease) in deferred revenue			6,685				-
Net cash used in operating activities			(20,082	)			(87,889	)
Cash flows from investing activities:
Net cash used in investing activities			-				-
Cash flows from financing activities:
Common shares sold for cash			25,000				-
Proceeds from loan - related parties			-				85,000
Net cash provided by financing activities			25,000				85,000
Net increase (decrease) in cash			4,918				(2,889	)
Cash at beginning of period			11,290				17,197
Cash at end of period		$	16,208			$	14,308
Supplemental cash flow information:
Cash paid during the period for:
Interest		$	-			$	-
Income taxes		$	-			$	-

 

(See accompanying notes to unaudited financial statements)

 

 

OptiLeaf, Inc

Notes to Financial Statements

For the Six Months Ended June 30, 2019

(unaudited)

 

Note 1. ORGANIZATION AND OPERATIONS

 

Organization

 

OptiLeaf Incorporated (“OptiLeaf” or the “Company”) was incorporated in Florida in August 2014. The Company has been in the infancy stage since inception and has generated minimal 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.

 

Note 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

Summary of Significant Accounting Policies

 

The accompanying unaudited interim financial statements of OptiLeaf, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto for the period ended December 31, 2018 contained in the Company’s Form 10K originally filed with the Securities and Exchange Commission on March 27, 2019.  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein.  The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year.  Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the period ended December 31, 2018, as reported on March 27, 2019 in the Company’s Form 10K, have been omitted.

 

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. At June 30, 2019, the Company had no cash equivalents.

 

Accounts Receivable 

 

The Company has $4,675 and $2,300 of trade accounts receivable at June 30, 2019 and December 31, 2018. The Company reviews the accounts receivable, at least quarterly, and, if appropriate, records an allowance for doubtful accounts. No allowance was required as of June 30, 2019 and December 31, 2018.

 

Inventory

 

On June 30, 2019 and December 31, 2018 the Company had $4,142 and $0 worth of inventory. The inventory consists of equipment and other items necessary to enable customers to utilize the Company’s proprietary software. Inventory is valued at cost and reviewed each quarter for obsolescence, No impairment was deemed necessary at either June 30, 2019 or December 31, 2018.

 

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.

 

 

OptiLeaf, Inc

Notes to Financial Statements

For the Six Months Ended June 30, 2019

(unaudited)

 

Revenue Recognition

 

The Company adopted Accounting Standards Codification (“ASC”) 606. ASC 606, Revenue from Contracts with Customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

 

The Company has assessed the impact of the guidance by performing the following five steps analysis:

 

Step 1: Identify the contract

Step 2: Identify the performance obligations

Step 3: Determine the transaction price

Step 4: Allocate the transaction price

Step 5: Recognize revenue

 

The Company generates revenue from the sale of its software service. Revenue is recognized monthly through a subscription application which requires the user to pay monthly in advance. If the user does not pay the monthly access fee the Company has the right to cancel the users’ access to the software. Revenue is recognized each month under the terms of a contract with the customer. Satisfaction of contract terms is continuous, but, may be terminated at the Company’s discretion if payment is not received. The amount of consideration the Company expects to receive consists of the agreed upon subscription fee adjusted for any agreed upon changes. In applying judgment, the Company considers customer expectations of performance, materiality and the core principles of ASC Topic 606. The Company’s performance obligations are generally transferred to the customer at a point in time. The Company’s contracts with customers generally do not include any other variable considerations.

 

Recent Accounting Pronouncements

 

The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change. The Company currently does not have any recent accounting pronouncements that they are studying and feel may be applicable.

 

Note 3. 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 losses, as a result of the investment necessary to achieve its operating plan, which is long-range in nature, during its infancy stage. As of June 30, 2019 the Company has sustained accumulated losses of $875,352. For the six months ended June 30, 2019 and 2018 the Company sustained a losses of $18,914 and $74,210 and had negative working capital of $9,353. In addition, the Company has minimal revenue generating operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

 

During the six months ended June 30, 2019 the Company had net cash used in operating activities of $20,082 compared to $87,889 during the six months ended June 30, 2018. The Company received $25,000 from the sale of common stock, during the six months ended June 30, 2019 compared to $85,000 from the issuance of a note payable during the six months ended June 30, 2018.

 

The ability of the Company to continue as a going concern is in doubt and dependent upon achieving a profitable level of operations or on the ability of the Company to obtain necessary financing to fund ongoing operations. Management believes that its current and future plans enable it to continue as a going concern for the next twelve months.

 

To meet these objectives, the Company continues to seek other sources of financing in order to support existing operations and expand the range and scope of its business. However, there are no assurances that any such financing can be obtained on acceptable terms and timely manner, if at all. The failure to obtain the necessary working capital would have a material adverse effect on the business prospects and, depending upon the shortfall, the Company may have to curtail or cease its operations.

 

The accompanying financial statements do not include any adjustment to the recorded assets or liabilities that might be necessary should the Company have to curtail operations or be unable to continue in existence.

 

 

OptiLeaf, Inc

Notes to Financial Statements

For the Six Months Ended June 30, 2019

(unaudited)

 

Note 4. RELATED PARTY TRANSACTIONS

 

During the six months ended June 30, 2018, two related party shareholders made unsecured loans, to the Company, totaling $45,000, maturing on April 1, 2020, bearing interest of 3%. $40,000 was repaid on December 31, 2019 by the transfer, of the 1,000,000 previously issued treasury shares, to the two related party shareholders.

  

Note 5. STOCKHOLDERS’ EQUITY

 

Common stock

 

The Company has authorized 100,000,000 shares of no par value common stock. At June 30, 2019, the number of shares of common stock issued was 20,943,753.

 

On July 25, 2018, the Company issued, for cash, to two investors, 333,334 restricted common shares for a total of $50,000, recorded at a cost of $0.15 per share.

 

On March 19, 2019, the Company issued, for cash of $25,000, to an investor, 166,667 restricted common shares recorded at a cost of $0.15 per share.

 

Note 6. CONCENTRATION CREDIT RISK

 

At June 30, 2019 the Company had 3 non – related customers that owed 30%, 30% and 19% of total accounts receivable, compared to June 30, 2018 when 2 non – related customers owed minimal amounts.

 

The Company maintains its cash balances in a local financial institution which at times may exceed the $250,000 amount insured by the Federal Deposit Insurance Corporation (FDIC).

 

Note 7. COMMITMENTS AND CONTINGENCIES

 

On August 10, 2018 the Company leased its offices for six years, payable at the rate of $2,000 per month, plus the Company’s pro rata share of operating expenses. The space was not utilized and the agreement was terminated, on January 1, 2019, without penalty, by mutual consent.

 

Note 8. SUBSEQUENT EVENTS

 

Subsequent to June 30, 2019 and through the date when this report was completed, the Company has evaluated subsequent events through the date the financial statements were issued and has not identified any reportable events.

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

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

 

We were incorporated under the laws of the State of Florida on August 11, 2014. OptiLeaf, Inc. was formed to provide a world-class fully integrated turn-key growth management system for the cannabis industry to help dispensary owners, grow operations and caregivers increase their sales and reduce costs, increase their company’s productivity and profitability and reduce or eliminate the need for manual labor while maximizing yield. We are presently a development stage company with minimal customers, sales, suppliers, or inventory as of this filing.

 

OptiLeaf’s target market includes dispensaries and grow operations.

 

OptiLeaf has completed the development of its Grow Pro and POS management software. Both products are being beta tested in the state of Colorado and we are currently looking for beta testers in the states of Washington and Oregon. OptiLeaf has completed integration with Metric in the State of Colorado and Oregon and with BioTrack in the state of Washington.

 

OptiLeaf plans on commencing the development of its wireless network censors in the latter half of 2018. We believe our integrated hardware will be capable of monitoring and adjusting light, soil moisture, CO2, temperature, ventilation, nutrients, and humidity as needed, in real time and around-the-clock.

 

Our Product

 

Once developed, the heart of our system will be the innovative multi-purpose growth management software suite. OptiLeaf plans to add proprietary hardware components, which we believe, together with software, will provide a turn-key growth management system. The system, once developed and implemented, will potentially allow growers to realize significant labor savings as common grow house tasks are fully automated. Once developed, we believe our integrated hardware is capable of monitoring and adjusting light, soil moisture, CO2, temperature, ventilation, nutrients, and humidity as needed, in real time and around-the-clock. Once developed, we believe our user interface, data tracking, and remote access capabilities could potentially allow growers to monitor, adjust, and manage their facilities as needed from anywhere in the world, however, none of our products are fully developed or available for sale or use at this time, 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 June 30, 2019 we had approximately $113,000 of revenue and our net loss was $874,734. As of June 30, 2019, we had total current assets of $25,025 and total current liabilities of approximately $34,378. 

 

 

Our Strategy

 

OptiLeaf offer a complete line of hardware and software technological solution for the cannabis industry.

 

Our software is a seed-to-sale growth management system, designed to not only offer a complete grow automation system, but to enhance every aspect of the medical cannabis business.

 

Our wireless sensor networks will include an array of products that control, monitor, and automate all aspects of the grow house operations. Our principal product, OptiLeaf GrowPro Elite, provides a complete, robust state-of-the-art hardware and software solution for large cultivation operations with multiple locations.

 

The heart of our system will be a multi-purpose growth management software suite. OptiLeaf will add proprietary hardware components, which, together with software, will provide a turn-key growth management system. The system will potentially allow growers to realize significant labor savings as common grow house tasks are fully automated. Our integrated hardware is capable of monitoring and adjusting light, soil moisture, CO2, temperature, ventilation, nutrients, and humidity as needed, in real time and around-the-clock. Our user interface, data tracking, and remote access capabilities allow growers to monitor, adjust, and manage their facilities as needed from anywhere in the world.

 

Our products will be manufactured in the USA, managed by a team possessing years of experience with domestic and overseas production. OptiLeaf does not directly distribute, sell, grow, harvest cannabis or any substances that violate United States law or the Controlled Substances Act, nor does it intend to do so in the future.

 

While individual components of our system are available from our main competitors, OptiLeaf believes it will have the first and only system to completely integrate all aspects of growth automation and management into one system.

 

Marketing

 

OptiLeaf will focus its sales and marketing efforts in the states of Colorado, Oregon, Oklahoma, and Washington at this point. Once the rules and regulations for the state of California are introduced, we plan to expand our marketing efforts into that state as well. We have decided to focus our efforts with the most developed and broadest customer base at this point.

 

We are currently in the process of interviewing and hiring for full time marketing and sales personnel in Colorado, Oregon and Washington.

 

There is a total of 8,100 potential customers in the states of Colorado, Oregon, Oklahoma, and Washington.

 

Operations

 

OptiLeaf’s operational strategies behind the development of our products and services are based on design, innovation, and added value. When developing a new product, we want to be the leader by introducing innovative features that will allow cannabis cultivators to lower their costs, boost yields, and maximize production capacity. Furthermore, when OptiLeaf develops new goods or services, we will package them with support services as well as immediate observable and psychological benefits. Our focus is on how our products and services stand against the competition and how our technical measures relate to the customers’ needs.

  

 

Over the next twelve months, we anticipate expenses of up to $175,000 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 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.  

 

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 June 30, 2019. We generated revenue of approximately $113,000 during this period. We had net losses of approximately $875,352 for the period from inception (August 11, 2014) to June 30, 2019.

 

Liquidity and Capital Resources

 

As of June 30, 2019, we had cash of $16,208. Our primary uses of cash were for employee compensation and working capital. The main sources of cash were from our Founders and Private Placement of securities. 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.

 

During the six months ended June 30, 2019 the Company had net cash used in operating activities of $20,082 compared to $87,889 for the six months ended June 30, 2018, and received $25,000 from the sale of common stock compared to, $85,000 from the issuance of notes payable during the six months ended June 30, 2018,

 

We plan to fund our activities through our existing cash on hand, through revenue generated from the sale of our services, and through additional debt or equity financing. 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. 

 

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 June 30 30, 2018, the Company had no cash equivalents.

 

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 June 30, 2019, we have not generated significant 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. 

 

 

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2019. 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 June 30, 2019, 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 June 30, 2019, 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 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

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.

 

Item 6. Exhibits, Financial Statement Schedules 

 

Exhibit No.		Description
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

 

 

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: June 25, 2021

 

	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
		Duly Authorized and
		Principal Financial Officer

 

 

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