OptiLeaf, Incorporated
Balance Sheets
|
|
March 31
|
|
|
December 31
|
|
|
|
2020
|
|
|
2019
|
|
|
|
(unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
14,047
|
|
|
$
|
20,495
|
|
Accounts receivable
|
|
|
-
|
|
|
|
7,590
|
|
Inventory
|
|
|
-
|
|
|
|
4,044
|
|
Total current assets
|
|
|
14,047
|
|
|
|
32,129
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
14,047
|
|
|
$
|
32,129
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
11,846
|
|
|
$
|
33,995
|
|
Accrued payroll
|
|
|
-
|
|
|
$
|
6,001
|
|
Deferred revenue
|
|
|
10,977
|
|
|
|
-
|
|
Total current liabilities
|
|
|
22,823
|
|
|
|
39,996
|
|
|
|
|
|
|
|
|
|
|
Long term loans payable - related parties
|
|
|
5,000
|
|
|
|
5,000
|
|
Long term loans payable
|
|
|
40,000
|
|
|
|
40,000
|
|
Total long term liabilities
|
|
|
45,000
|
|
|
|
45,000
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
67,823
|
|
|
|
84,996
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (Note 7)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
Common stock, no par value; 100,000,000 shares authorized; 20,943,753 issued and outstanding at March 31, 2020 and December 31, 2019
|
|
|
821,000
|
|
|
|
821,000
|
|
Accumulated deficit
|
|
|
(874,776
|
)
|
|
|
(873,867
|
)
|
Total Stockholders’ Deficit
|
|
|
(53,776
|
)
|
|
|
(52,867
|
)
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Deficit
|
|
$
|
14,047
|
|
|
$
|
32,129
|
|
(See accompanying notes to unaudited financial
statements)
OptiLeaf, Incorporated.
Statements of Operations
(unaudited)
|
|
For the Three Months Ended
|
|
|
|
March 31
|
|
|
|
2020
|
|
|
2019
|
|
Revenue
|
|
|
|
|
|
|
Product sales and services
|
|
$
|
35,251
|
|
|
$
|
23,107
|
|
Cost of goods sold
|
|
|
(11,110
|
)
|
|
|
(6,083
|
)
|
Gross income
|
|
|
24,140
|
|
|
|
17,024
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Other
|
|
|
38,038
|
|
|
|
3,639
|
|
Payroll
|
|
|
14,688
|
|
|
|
16,350
|
|
Professional fees
|
|
|
-
|
|
|
|
9,810
|
|
Rent
|
|
|
-
|
|
|
|
2,374
|
|
Supplies
|
|
|
-
|
|
|
|
210
|
|
Travel
|
|
|
798
|
|
|
|
948
|
|
Total operating expenses
|
|
|
53,525
|
|
|
|
33,331
|
|
|
|
|
|
|
|
|
|
|
Net loss before other income and provision for income taxes
|
|
|
(29,384
|
)
|
|
|
(16,307
|
)
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
Rent forgiven
|
|
|
28,475
|
|
|
|
-
|
|
Interest income
|
|
|
|
|
|
|
1,821
|
|
Total other income (expense)
|
|
|
28,475
|
|
|
|
1,821
|
|
|
|
|
|
|
|
|
|
|
Net loss before provision for income taxes
|
|
$
|
(909
|
)
|
|
|
(14,486
|
)
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(909
|
)
|
|
$
|
(14,486
|
)
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average number of shares outstanding
|
|
|
20,827,086
|
|
|
|
20,827,086
|
|
(See accompanying notes to unaudited financial
statements)
OptiLeaf, Incorporated
Statements of Stockholders’ (Deficit)
For the Three Months Ended March 31,
2020 and 2019
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
Common Stock
|
|
|
Treasury Stock
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Deficit
|
|
|
(Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances, December 31, 2019
|
|
|
20,943,753
|
|
|
$
|
821,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
(873,867
|
)
|
|
$
|
(52,867
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the three months
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(909
|
)
|
|
|
(909
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances, March 31 2020
|
|
|
20,943,753
|
|
|
$
|
821,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
(874,776
|
)
|
|
|
(53,776
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, 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 three months
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(14,486
|
)
|
|
|
(14,486
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances, March 31, 2019
|
|
|
20,943,753
|
|
|
$
|
821,000
|
|
|
|
1,000,000
|
|
|
$
|
(40,000
|
)
|
|
$
|
(870,924
|
)
|
|
$
|
(89,924
|
)
|
(See accompanying notes to unaudited
financial statements)
OptiLeaf, Incorporated
Statements of Cash Flows
(unaudited)
|
|
For the Three Months Ended
|
|
|
|
March 31
|
|
|
|
2020
|
|
|
2019
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(909
|
)
|
|
$
|
(14,486
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Change in operating assets and liabilities
|
|
|
|
|
|
|
|
|
Decrease (increase) in accounts receivable
|
|
|
7,590
|
|
|
|
(2,435
|
)
|
Decrease (increase) in inventory
|
|
|
4,044
|
|
|
|
(4,230
|
)
|
Increase (decrease) in accrued payroll
|
|
|
(6,001
|
)
|
|
|
(1,519
|
)
|
Increase (decrease) in accounts payable and accrued expenses
|
|
|
(22,149
|
)
|
|
|
417
|
|
Increase (decrease) in deferred revenue
|
|
|
10,977
|
|
|
|
4,292
|
|
Net cash used in operating activities
|
|
|
(6,448
|
)
|
|
|
(17,961
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Common shares sold for cash
|
|
|
-
|
|
|
|
25,000
|
|
Net cash provided by financing activities
|
|
|
-
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
(6,448
|
)
|
|
|
7,039
|
|
|
|
|
|
|
|
|
|
|
Cash at beginning of period
|
|
|
20,495
|
|
|
|
11,290
|
|
Cash at end of period
|
|
$
|
14,047
|
|
|
$
|
18,329
|
|
|
|
|
|
|
|
|
|
|
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 Three Months Ended March 31, 2020
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, 2019 contained in the Company’s Form 10K originally
filed with the Securities and Exchange Commission on July 1, 2021. 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, 2019, as reported on July 1, 2021 in the Company’s Form 10K,
have been omitted.
The
outbreak of COVID19 coronavirus in China and Asia starting from the beginning of 2020 has resulted in implementation delays for our business.
The Company followed the restrictive measures implemented in the United States, by suspending contacting clients or contacting clients
remotely during February and March 2020. The Company gradually resumed contacting clients in person starting in April 2021. The recent
developments of COVID 19 are expected to result in lower revenue and net income in 2020. Other financial impact could occur though such
potential impact is unknown at this time.
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 March
31, 2020, the Company had $14,047 cash on hand.
Accounts Receivable
The Company had $24,656
and $7,590 of trade accounts receivable at March 31, 2020 and December 31, 2019. The Company reviews the accounts receivable, at least
quarterly, and, if appropriate, records an allowance for doubtful accounts. An allowance for doubtful accounts of $24,656 was recorded
on March 31, 2020. No allowance was considered necessary on December 31, 2019.
Inventory
On March 31, 2020 and December 31, 2019 the Company
had $0 and $4,044 worth of inventory. The inventory consisted 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 March 31, 2020 or December 31, 2019.
OptiLeaf, Inc.
Notes to Financial Statements
For the Three Months Ended March 31, 2020
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.
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 March 31, 2020
the Company has sustained accumulated losses of $874,776. For the three months ended March 31, 2020 and 2019 the Company sustained a losses
of $909 and $14,486 and had negative working capital of $8,776 and $7,867 respectively. 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.
OptiLeaf, Inc.
Notes to Financial Statements
For the Three Months Ended March 31, 2020
During the three months ended March 31,
2020 the Company used net cash in operating activities of $6,448 for operating expenses compared to $17,961 during the three months ended
March 31, 2019. The Company received $25,000 from the sale of 166,667 common shares, during the three months ended March 31, 2019.
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.
Note 4. RELATED PARTY TRANSACTIONS
During the year ended December 31, 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 March 31, 2020, 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
There were no accounts receivable on March 31,
2020. On December 31, 2019 the Company had 2 non – related customers that owed 25.6% and 19.6% of total accounts receivable. 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 7. SUBSEQUENT EVENTS
Subsequent to August 22, 2022 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.
The outbreak
of COVID19 coronavirus in China and Asia starting from the beginning of 2020 has resulted in in implementing our business plan. The Company
followed the restrictive measures implemented in the united States, by suspending contacting clients or contacting clients remotely during
February and March 2020. The Company gradually resumed contacting clients in person starting in April 2021. The recent developments of
COVID 19 are expected to result in lower revenue and net income in 2020. Other financial impact could occur though such potential impact
is unknown at this time.
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 planned on commencing the development
of its wireless network censors in the latter half of 2019. 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.
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 March 31, 2020. We generated revenue of approximately $218,769 during this period. We
had net losses of approximately $874,776 for that period.
Liquidity and Capital Resources
As of March 31, 2020, we had cash of $14,047. 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 three months ended March 31, 2020 the Company used net cash
in operating activities of $6,448 compared to $17,961 for the three months ended March 31, 2019, and received $25,000 from the sale of
common stock during the three months ended March 31, 2019.
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 March 31, 2020, the Company had $14,047 cash
on hand.
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 March 31, 2020 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 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 March 31, 2020. 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 March 31, 2020, 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 March 31, 2020, 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.