Note 1. 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.
Note 1. 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 June 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 June 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.
Note 2. COMPUTER EQUIPMENT (NET)
Equipment is recorded at cost and consisted
of the following at June 30, 2016:
Computer equipment
|
|
$
|
10,514
|
|
Less: accumulated depreciation
|
|
|
(6,101
|
)
|
|
|
$
|
4,413
|
|
Depreciation expense was $1,752 and $328 for
the 6 months ended June 30, 2016 and 2015, respectively.
Note 3. STOCKHOLDERS' EQUITY
The Company has authorized 100,000,000 shares
of no par value common stock. At June 30, 2016, the number of shares of common stock issued and outstanding was 20,210,419.
Note 4. COMMITMENTS AND CONTINGENCIES
The Company leases its offices pursuant to
an agreement that terminates in August 2016. The agreement requires the Company to make monthly minimum lease payments $1,144
plus its pro rata share of operating expenses. Rent expense for the 6 months ended June 30, 2016 was $7,594.
At June 30, 2016, future minimum lease payments
were $2,288.
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 June 30, 2016, the Company has a net operating
loss carryforward of approximately $367,327 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 June 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 June 30, 2016, the Company incurred a net loss of approximately $367,327. 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 June 30, 2016 were insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000.
On June 30, 2016 the Company's uninsured cash balances were approximately $105,000.