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Share Name | Share Symbol | Market | Type |
---|---|---|---|
KinerjaPay Corporation (CE) | USOTC:KPAY | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.000001 | 0.00 | 01:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 10-Q/A
___________________
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2016
Commission File Number: 0-55081
(Exact name of small business issuer as specified in its charter)
Delaware | 42-1771817 |
(State of Incorporation) | (I.R.S. Employer Identification No.) |
Jl. Multatuli, No.8A, Medan, Indonesia | 20151 |
(Address of Principal Executive Offices) | (ZIP Code) |
Registrant's Telephone Number, Including Area Code: +62-819-6016-168
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 period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes
x
No
¨
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes
¨
No
x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act) or a smaller reporting company .
Large accelerated filer ¨ | Accelerated filer ¨ | Non-Accelerated filer ¨ | Smaller reporting company x |
On May 17, 2016, the Registrant had 7,467,013 shares of common stock outstanding.
Item
|
Description
|
Page
|
|||
---|---|---|---|---|---|
PART I - FINANCIAL INFORMATION |
|||||
ITEM 1. | FINANCIAL STATEMENTS. | 3 | |||
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND PLAN OF OPERATIONS. | 12 | |||
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. | 14 | |||
ITEM 4. | CONTROLS AND PROCEDURES. | 14 | |||
PART II - OTHER INFORMATION |
|||||
ITEM 1. | LEGAL PROCEEDINGS. | 14 | |||
ITEM 1A. | RISK FACTORS. | 14 | |||
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. | 14 | |||
ITEM 3. | DEFAULT UPON SENIOR SECURITIES. | 14 | |||
ITEM 4. | MINE SAFETY DISCLOSURE. | 15 | |||
ITEM 5. | OTHER INFORMATION. | 15 | |||
ITEM 6. | EXHIBITS. | 15 |
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Back to Table of Contents
ASSETS
LIABILITIES
AND STOCKHOLDERS' DEFICIT
KINERJAPAY CORP.
1. The Company and Significant Accounting Policies
Organizational Background
KinerjaPay Corp. (formerly Solarflex Corp. ) ("KinerjaPay" or the "Company") is a Delaware corporation
and has not commenced operations. The Company was incorporated under the
laws of the State of Delaware on February 12, 2010. The business plan of the
Company was to develop a commercial application of the design in a patent of
a "Solar element and method of manufacturing the same". On November 10, 2015
this plan was abandoned and all related contracts and agreements rescinded.
On December 1, 2015, the Company entered into a license agreement with PT
Kinerja Indonesia, an entity organized under the laws of Indonesia and
controlled by Mr. Ng ("PT Kinerja"), for an exclusive, world-wide license to
use and commercially exploit certain technology and intellectual property
and its website, KinerjaPay.com. Pursuant to the License Agreement, the
Company was granted the exclusive, world-wide rights to the KinerjaPay IP,
an e-commerce platform that provides users with the convenience of e-wallet
service for bill transfer and online shopping and is among the first portals
to allow users the convenience to top-up phone credit. In conjunction with
the agreement the company changed its name from Solarflex Corp. to
KinerjaPay Corp.
The accompanying financial statements of the Company were prepared from
the accounts of the Company under the accrual basis of accounting.
Basis of Presentation: The accompanying financial statements have been
prepared in conformity with accounting principles generally accepted in the
United States of America, which contemplate continuation of the Company as a
going concern. The Company has not established any source of revenue to
cover its operating costs, and as such, has incurred an operating loss since
inception. Further, as of March 31, 2016, the cash resources of the Company
were insufficient to meet its current business plan. These and other factors
raise substantial doubt about the Company's ability to continue as a going
concern. The accompanying financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities
that may result from the possible inability of the Company to continue as a
going concern.
Significant Accounting Policies
Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statement and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from the estimates.
Cash and Cash Equivalents
For financial statement presentation purposes, the Company considers
those short-term, highly liquid investments with original maturities of
three months or less to be cash or cash equivalents. There were no cash
equivalents as of March 31, 2016 and December 31, 2015.
Property and Equipment
New property and equipment are recorded at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of the
assets, generally 5 years. Expenditures for renewals and betterments are
capitalized. Expenditures for minor items, repairs and maintenance are
charged to operations as incurred. Gain or loss upon sale or retirement due
to obsolescence is reflected in the operating results in the period the
event takes place.
Valuation of Long-Lived Assets
We review the recoverability of our long-lived assets including
equipment, goodwill and other intangible assets, when events or changes in
circumstances occur that indicate that the carrying value of the asset may
not be recoverable. The assessment of possible impairment is based on our
ability to recover the carrying value of the asset from the expected future
pre-tax cash flows (undiscounted and without interest charges) of the
related operations. If these cash flows are less than the carrying value of
such asset, an impairment loss is recognized for the difference between
estimated fair value and carrying value. Our primary measure of fair value
is based on discounted cash flows. The measurement of impairment requires
management to make estimates of these cash flows related to long-lived
assets, as well as other fair value determinations.
Stock Based Compensation
Stock-based awards are accounted for using the fair value method in
accordance with ASC 718, Share-Based Payments. Our primary type of
share-based compensation consists of stock options. We use the Black-Scholes
option pricing model in valuing options. The inputs for the valuation
analysis of the options include the market value of the Company's common
stock, the estimated volatility of the Company's common stock, the exercise
price of the warrants and the risk free interest rate.
Accounting For Obligations And Instruments Potentially To Be Settled In
The Company's Own Stock: We account for obligations and instruments
potentially to be settled in the Company's stock in accordance with FASB ASC
815, Accounting for Derivative Financial Instruments. This issue addresses
the initial balance sheet classification and measurement of contracts that
are indexed to, and potentially settled in, the Company's own stock.
Fair Value of Financial Instruments
FASB ASC 825, "Financial Instruments," requires entities to disclose the
fair value of financial instruments, both assets and liabilities recognized
and not recognized on the balance sheet, for which it is practicable to
estimate fair value. FASB ASC 825 defines fair value of a financial
instrument as the amount at which the instrument could be exchanged in a
current transaction between willing parties. At March 31, 2016 and
December 31, 2015, the carrying value of certain financial instruments (cash
and cash equivalents, accounts payable and accrued expenses.) approximates
fair value due to the short-term nature of the instruments or interest
rates, which are comparable with current rates.
Fair Value Measurements
The Company measures fair value under a framework that utilizes a fair
value hierarchy that prioritizes the inputs to valuation techniques used to
measure fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (level 1
measurements) and the lowest priority to unobservable inputs (level 3
measurements). The three levels of inputs which prioritize the inputs used
in measuring fair value are:
Level 1: Inputs to the valuation methodology are unadjusted quoted prices
for identical assets or liabilities in active markets that the Company has
the ability to access.
Level 2: Inputs to the valuation methodology include:
- Quoted prices for similar assets or liabilities in active markets;
If the asset or liability has a specified (contractual) term, the level 2
input must be observable for substantially the full term of the asset or
liability.
Level 3: Inputs to the valuation methodology are unobservable and
significant to the fair value measurement.
The assets or liability's fair value measurement level within the fair
value hierarchy is based on the lowest level of any input that is
significant to the fair value measurement. Valuation techniques used need to
maximize the use of observable inputs and minimize the use of unobservable
inputs. The following table presents assets that were measured and recognize
at fair value on March 31, 2016 and December 31, 2015 and the year periods
ended on a recurring basis:
When the Company changes its valuation inputs for measuring financial
assets and liabilities at fair value, either due to changes in current
market conditions or other factors, it may need to transfer those assets or
liabilities to another level in the hierarchy based on the new inputs used.
The Company recognizes these transfers at the end of the reporting period
that the transfers occur. For the fiscal periods ended March 31, 2016 and
December 31, 2015, there were no significant transfers of financial assets
or financial liabilities between the hierarchy levels.
Earnings per Common Share
We compute net income (loss) per share in accordance with ASC
260, Earning per Share. ASC 260 requires presentation of both basic and
diluted earnings per share (EPS) on the face of the income statement. Basic
EPS is computed by dividing net income (loss) available to common
shareholders (numerator) by the weighted average number of shares
outstanding (denominator) during the period. Diluted EPS gives effect to all
dilutive potential common shares outstanding during the period using the
treasury stock method and convertible preferred stock using the if-converted
method. In computing Diluted EPS, the average stock price for the period is
used in determining the number of shares assumed to be purchased from the
exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti-dilutive.
Common Stock Split
On January 20, 2016, we declared a reverse split of our common stock. The
formula provided that every thirty (30) issued and outstanding shares of
common stock of the Corporation be automatically split into one (1) share of
common stock. Except as otherwise noted, all share, option and warrant numbers have
been restated to give retroactive effect to this split, which became
effective on March 10, 2016. All per share
disclosures retroactively reflect post-split shares.
Income Taxes
We have adopted ASC 740, Accounting for Income Taxes. Pursuant to ASC
740, we are required to compute tax asset benefits for net operating losses
carried forward. The potential benefits of net operating losses have not
been recognized in these financial statements because the Company cannot be
assured it is more likely than not it will utilize the net operating losses
carried forward in future years.
We must make certain estimates and judgments in determining income tax
expense for financial statement purposes. These estimates and judgments
occur in the calculation of certain tax assets and liabilities, which arise
from differences in the timing of recognition of revenue and expense for tax
and financial statement purposes.
Deferred tax assets and liabilities are determined based on the
differences between financial reporting and the tax basis of assets and
liabilities using the tax rates and laws in effect when the differences are
expected to reverse. ASC 740 provides for the recognition of deferred tax
assets if realization of such assets is more likely than not to occur.
Realization of our net deferred tax assets is dependent upon our generating
sufficient taxable income in future years in appropriate tax jurisdictions
to realize benefit from the reversal of temporary differences and from net
operating loss, or NOL, carryforwards. We have determined it more likely
than not that these timing differences will not materialize and have
provided a valuation allowance against substantially all of our net deferred
tax asset. Management will continue to evaluate the realizability of the
deferred tax asset and its related valuation allowance. If our assessment of
the deferred tax assets or the corresponding valuation allowance were to
change, we would record the related adjustment to income during the period
in which we make the determination. Our tax rate may also vary based on our
results and the mix of income or loss in domestic and foreign tax
jurisdictions in which we operate.
In addition, the calculation of our tax liabilities involves dealing with
uncertainties in the application of complex tax regulations. We recognize
liabilities for anticipated tax audit issues in the U.S. and other tax
jurisdictions based on our estimate of whether, and to the extent to which,
additional taxes will be due. If we ultimately determine that payment of
these amounts is unnecessary, we will reverse the liability and recognize a
tax benefit during the period in which we determine that the liability is no
longer necessary. We will record an additional charge in our provision for
taxes in the period in which we determine that the recorded tax liability is
less than we expect the ultimate assessment to be.
ASC 740 which requires recognition of estimated income taxes payable or
refundable on income tax returns for the current year and for the estimated
future tax effect attributable to temporary differences and carry-forwards.
Measurement of deferred income tax is based on enacted tax laws including
tax rates, with the measurement of deferred income tax assets being reduced
by available tax benefits not expected to be realized.
Uncertain Tax Positions
When tax returns are filed, it is highly certain that some positions
taken would be sustained upon examination by the taxing authorities, while
others are subject to uncertainty about the merits of the position taken or
the amount of the position that would be ultimately sustained. In accordance
with the guidance of FASB ASC 740-10, Accounting for Uncertain Income Tax
Positions, the benefit of a tax position is recognized in the financial
statements in the period during which, based on all available evidence,
management believes it is more likely than not that the position will be
sustained upon examination, including the resolution of appeals or
litigation processes, if any. Tax positions taken are not offset or
aggregated with other positions. Tax positions that meet the
more-likely-than-not recognition threshold are measured as the largest
amount of tax benefit that is more than 50 percent likely of being realized
upon settlement with the applicable taxing authority. The portion of the
benefits associated with tax positions taken that exceeds the amount
measured as described above should be reflected as a liability for
unrecognized tax benefits in the accompanying consolidated balance sheets
along with any associated interest and penalties that would be payable to
the taxing authorities upon examination.
Our federal and state income tax returns are open for fiscal years ending
on or after December 31, 2009. We are not under examination by any
jurisdiction for any tax year. At March 31, 2016 we had no material
unrecognized tax benefits and no adjustments to liabilities or operations
were required under FASB ASC 740-10.
Recent Accounting Pronouncements
In April 2015, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") 2015-03, "Interest-Imputation of
Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance
Costs." ASU 2015-03 requires that debt issuance costs related to a
recognized debt liability be presented in the balance sheet as a direct
deduction from the carrying amount of that debt liability, consistent with
debt discounts. Currently, debt issuance costs are recognized as deferred
charges and recorded as other assets. The guidance is effective for annual
and interim periods beginning after December 15, 2015 with early adoption
permitted and is to be implemented retrospectively. Adoption of the new
guidance will only affect the presentation of the Company's consolidated
balance sheets and will have no impact to our financial statements.
Management does not anticipate that the adoption of these standards will
have a material impact on the financial statements.
The accompanying balance sheet as of March 31, 2016, which was derived
from audited financial statements, and the unaudited interim financial
statements have been prepared in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP") for interim
financial information and in accordance with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by U.S. GAAP for complete financial
statements. These financial statements should be read in conjunction with
the audited financial statements and related notes for the fiscal year ended
December 31, 2015, included in the Company's Annual Report on Form 10-K
covering that period.
The preparation of these financial statements in conformity with
accounting principles generally accepted in the United States requires us to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. On an on-going basis, we evaluate our estimates,
including those related intangible assets, income taxes, insurance
obligations and contingencies and litigation. We base our estimates on
historical experience and on various other assumptions that are believed to
be reasonable under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other resources. Actual results may
differ from these estimates under different assumptions or conditions. The
results of operations for the periods presented are not necessarily
indicative of the results for the full fiscal year or any future period.
In the opinion of management, the information furnished in these interim
financial statements reflects all adjustments necessary for a fair statement
of the financial position and results of operations and cash flows as of and
for the three-month periods ended March 31, 2016 and 2015. All such
adjustments are of a normal recurring nature. The Financial Statements do
not include some information and notes necessary to conform to annual
reporting requirements.
2. Stockholders' Equity
On January 20, 2016, we amended our certificate of incorporation to
increase authorized capital to include 10 million shares of $.0001 par value
preferred shares and declared a reverse stock split of our common stock. As
of March 31, 2016, no preferred shares have been issued.
The formula provided that every thirty (30) issued and outstanding shares of
common stock of the Corporation be automatically split into one (1) share of
common stock. Except as otherwise noted, all share, option and warrant numbers have
been restated to give retroactive effect to this split, which became
effective on March 10, 2016. All per share
disclosures retroactively reflect post-split shares.
Transactions in our Common Stock
Stock issued upon conversion of debt
On February 19, 2016 we issued
30,000 shares of our common stock at par value in settlement of $15,750 in accounts
payable.
Stock issued upon completion of Regulation S Offering
We received $474,987 during the three months ended March 31, 2016 and
$250,013 in Q4 of 2015 through a placement of common stock units.
Each unit consists of one share of common stock and one warrant to purchase
common stock. The units were sold for the offering price of $0.50 per unit.
The warrants are exercisable at $1.00 and expire two years from the date of
issuance.
Stock Issued for Services
On February 19, 2016, we issued 1,333,333 shares
of our common stock to Mr. Ng (an officer and director of the company)
individually and as control person of PT Kinerja as payment for services as
part of a service agreement resulting from the license agreement. The shares
were valued at the closing price as of the date of the agreement ($0.9001)
and resulted in full recognition of $1,200,133 in consulting services expense.
3. Related Party Transactions Not Disclosed Elsewhere
On December 1, 2015, the Company entered into an agreement with PT
Kinerja Indonesia, an entity organized under the laws of Indonesia ("PT
Kinerja"), for an exclusive, world-wide license to use and commercially
exploit certain KinderjaPay technology and intellectual property. Pursuant
to the License Agreement and in consideration for the payment of royalties,
the Company has been granted the exclusive, world-wide rights to the
KinerjaPay IP, an eCommerce platform that provides users with the
convenience of e-Wallet service for bill transfer and online shopping having
advanced functionality and "gamification" features, among others, and is
among the first portals to allow users the convenience to top-up phone
credit. Mr. Ng is a control person of PT Kinerja and a controlling
shareholder and board member of KinerjaPay Corp.
In connection with the License Agreement, we agreed to: (i) change the name
of the Company from Solarflex Corp to KinerjaPay Corp.; (ii) implement a
reverse split of our common stock on a one-for-thirty (1:30) basis; and
raise equity capital in the minimum offering amount of $500,000 and the
maximum offering amount of $2,500,000 through the offering of units at a
price of $0.50, each Unit, each consisting of 1 share of common stock
(post-reverse) and 1 class A warrant exercisable for a period of 24 months
to purchase 1 additional share of common stock (post-reverse) at $1.00. The
Unit Offering was made only to "accredited investors" who are not U.S.
Persons in reliance upon Regulation S promulgated by the SEC under the
Securities Act of 1933, as amended (the "Act"). On January 20, 2016, the
Company closed the Minimum Offering after it received subscription proceeds
in excess of $500,000. To date, we have raised $725,000 under the Unit
Offering, while the Unit Offering is continuing.
On February 19, 2016 we issued 1,333,333 shares
of our common stock to Mr. Ng (an officer and director of the company)
individually and as control person of PT Kinerja as payment for services as
part of a service agreement resulting from the license agreement. The shares
were valued at the closing price as of the date of the agreement ($0.9001)
and resulted in full recognition of $1,200,133 in consulting services expense.
On March 10, 2016, the Company's name change to KinerjaPay Corp.
and its one-for-thirty reverse stock split became effective. The Company's
shares of common stock are subject to quotation on the OTCQB market under
the symbol KPAY.
4. Future Commitment
On December 1, 2015, the Company entered into an agreement with PT
Kinerja Indonesia, an entity organized under the laws of Indonesia ("PT
Kinerja"), for an exclusive, world-wide license to use and commercially
exploit certain KinderjaPay technology and intellectual property. The
licensing agreement requires a 1% royalty on sales generated by Solarflex.
Cancellation of previous agreement
On November 10, 2015, the Asset Purchase Rescission Agreement with IEC
effectively cancelled the Patent Sale Agreement whereby the Company acquired
all of the rights, title and interest in the patent known as the "Solar
element and method of manufacturing the same". In consideration of the
rescission the Company is released from all terms and is no longer obligated
to pay any royalties under that agreement and has returned all related
equipment.
5. Going Concern
The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of
America, which contemplate continuation of the Company as a going concern.
The Company has not established any source of revenue to cover its 2016
operating costs, and as such, has incurred an operating loss since
inception. Further, as of March 31, 2016, the cash resources of the
Company were insufficient to meet its current business plan. These and other
factors raise substantial doubt about the Company's ability to continue as a
going concern. The accompanying financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities
that may result from the possible inability of the Company to continue as a
going concern.
6. Subsequent Events
Effective on April 6, 2016, the Registrant's Subsidiary, P.T. Kinerja Pay
Indonesia, was organized under the laws of Indonesia. On April 11, 2016, the
Subsidiary successfully established a bank account at Bank OCBC NISP, a
publicly listed banking and financial institution traded on the Indonesia
Stock Exchange and on the same date the Registrant transferred US$400,000
from its United States bank account, maintained at JP Morgan Chase Bank to
its account at Bank OCBC NISP to fund the operations of the Subsidiary.
There were no other material subsequent events following the period ended
March 31, 2016 and throughout the date of the filing of Form 10-Q.
ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
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As used in this Form 10-Q, references to the "KinerjaPay," Company," "we," "our" or
"us" refer to KinerjaPay Corp.
Unless the context otherwise indicates.
Plan of Operation
The Company was incorporated in Delaware on February 12, 2010 under the
name Solarflex Corp. for the purpose of developing, manufacturing and
selling a solar photovoltaic element, a device that converts light into
electrical flow (also known as a photovoltaic cell) based on certain
proprietary technology to enable an increase in solar energy conversion and
provide energy at a lower cost.
We did not generate any revenues from the sale of any solar
photovoltaic element, nor did we successfully manufacturer or construct a
working prototype, either on our own or through third-party manufacturers. We
determined during the 4th quarter of 2015 to evaluate potential business
opportunities.
On December 1, 2015, the Company entered into a license agreement (the
"License Agreement") with PT Kinerja Indonesia, an entity organized under
the laws of Indonesia and controlled by Mr. Ng ("PT Kinerja"), for an
exclusive, world-wide license to use and commercially exploit certain
technology and intellectual property (the "KinerjaPay IP") and its website,
KinerjaPay.com. Pursuant to the License Agreement, the Company was granted
the exclusive, world-wide rights to the KinerjaPay IP, an e-commerce
portal.
In connection with the License Agreement, we agreed to: (i) change the name
of the Company from Solarflex Corp to KinerjaPay Corp.; (ii) implement a
reverse split of our common stock on a one-for-thirty (1:30) basis; and
raise equity capital in the minimum offering amount of $500,000 and the
maximum offering amount of $2,500,000 through the offering of units at a
price of $0.50, each Unit, each consisting of 1 share of common stock
(post-reverse) and 1 class A warrant exercisable for a period of 24 months
to purchase 1 additional share of common stock (post-reverse) at $1.00. The
Unit Offering was made only to "accredited investors" who are not U.S.
Persons in reliance upon Regulation S promulgated by the SEC under the
Securities Act of 1933, as amended (the "Act"). On January 20, 2016, the
Company closed the Minimum Offering after it received subscription proceeds
in excess of $500,000. To date, we have raised $725,000 under the Unit
Offering, while the Unit Offering is continuing.
On March 10, 2016, the Company's name change to KinerjaPay Corp.
and its one-for-thirty reverse stock split became effective. The Company's
shares of common stock are subject to quotation on the OTCQB market under
the symbol KPAY.
Our principal products and services are (i) our
electronic payment service (the "EPS"); and (ii) our virtual marketplace
(the "Marketplace") both of which
are available on our portal under the domain name KinerjaPay.com (the
"Portal").
Our Android-based mobile app not only
serves as an extension of desktop or laptop access to our website, but has additional
in-app services that cater to mobile users, such as social engagement and
digital entertainment (the "Mobile App").
We believe that in
combining our EPS function
("PAY") with the ability to buy and sell products via our
virtual marketplace ("Buy") enhanced by a
gamification component ("Play")
our customers and merchants are enticed to return more often and increase their loyalty to our
services.
Indonesia, the world's fourth most-populous country, having a population
estimated to be 255 million people, is rapidly becoming the major economic
power in the Southeast Asia region. Over 50% of its population is below the
age of 30, and as a result, we believe that the young Indonesian population is highly adaptive to
new technology. The rise of
cheap Smartphones and tablets that sell for less than US$100 is rapidly
broadening internet access and pushing the nascent Indonesian e-commerce
market toward a critical point in terms of scale and profitability, in spite
of significant challenges due to poor infrastructure and payment systems. The number of internet users is excepted to double to
125 million by 2017 and Smartphone ownership is to rise from 20 per cent to
52 per cent in the same period,
the
highest percentage compared to other Southeast Asian countries,
according to Redwing, an advisory group.
Our Portal was launched in
February 2015 but has already achieve significant market
acceptance evidenced by more than 13,000 users/customers and
approximately 78,000
e-commerce transactions in 2015.
KINERJAPAY CORP.
(formerly Solarflex Corp.)
Balance Sheets
As of
March 31, 2016 (Unaudited) and December 31, 2015
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March 31, 2016
(Unaudited)
December 31, 2015
Current assets:
Cash
$
578,956
$
81
Restricted cash
-
250,113
Total current assets
578,956
250,194
Total Assets
$
578,956
$
250,194
Current liabilities:
Accounts payable - trade
$
12,500
-
Accrued
interest
-
15
Unissued stock
subscriptions
-
250,013
Notes payable
-
24,439
Total current liabilities
12,500
274,467
Total liabilities
12,500
274,467
Stockholders'
Deficit:
Preferred stock, par value
$0.0001 per share; 10,000,000 shares authorized; none issued
-
-
Common
stock, par value $0.0001 per share; 500,000,000 shares authorized;
7,467,013 shares issued and outstanding at March 31, 2016
and
4,653,680 shares issued and outstanding at December 31, 2015
746
465
Additional
paid-in capital
2,812,698
863,093
Accumulated deficit
(2,246,988)
(887,831)
Total stockholders' deficit
566,456
(24,273)
Total Liabilities and Stockholders' Deficit
$
578,956
$
250,194
See notes
to unaudited interim financial statements.
KINERJAPAY CORP.
(formerly Solarflex Corp.)
Statements of Operations
For the Three Months Ended March 31, 2016 and 2015
(Unaudited)
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For the
For the
Three Months Ended
Three Months Ended
March 31, 2016
March 31, 2015
Revenue
$
-
$
-
Expenses:
General and administrative
1,350,151
9,148
Total general and
administrative expenses
1,350,151
9,148
(Loss) from operations
(
1,350,151
)
(
9,148
)
Other income (expense):
Interest expense
(3)
(3,315)
Loss on
conversion of debt
(9,003)
(3,315)
Amortization of debt
discount
-
(15,975)
Total costs and expenses
(
1,359,157
)
(28,438)
Net loss before income taxes
(1,359,157)
(28,438)
Income taxes
-
-
Net loss
$
(1,359,157)
$
(28,438)
Basic and diluted per share amounts:
Basic and diluted net loss
$
(0.21)
$
(0.00)
Weighted average shares
outstanding (basic and diluted)
6,412,325
4,508,333
See notes
to unaudited interim financial statements.
KINERJAPAY CORP.
(formerly Solarflex Corp.)
Statements of Cash
Flows
For the Three Months Ended March 31, 2016 and 2015
(Unaudited)
Back to Table of Contents
For
the
For
the
Three
Months Ended
Three
Months Ended
March 31, 2016
March 31, 2015
Cash flows from operating activities:
Net loss
$
(1,359,157)
$
(28,438)
Adjustments required to
reconcile net loss to cash used in operating activities:
Amortization of debt discount
-
15,975
Common stock issued for services
1,200,133
-
Changes in net assets and liabilities:
Increase (decrease) in
accounts payable and accrued liabilities
12,485
1,315
Net cash used in operating activities
(137,536)
(11,148)
Cash flows from
financing activities:
Proceeds from issuance of common stock
474,987
-
Proceeds from debt
-
20,000
Principal
payments made on debt
(8,689)
-
Net cash provided by financing activities
466,298
20,000
Change in cash
328,762
8,852
Cash - Beginning of period
250,194
1,824
Cash - End of
period
$
578,956
$
10,676
See notes to unaudited interim financial
statements.
Supplemental Cash Flow Disclosure:
Debt discount
attributable to beneficial conversion feature
$
-
$
13,333
Stock issued to settle
debt
$
15,750
$
-
Settlement of
restricted cash with common stock issuance
$
250,013
$
-
See notes
to unaudited interim financial statements.
(formerly Solarflex Corp.)
Back to Table of Contents
-
Quoted prices for identical or similar assets or liabilities in inactive
markets;
- Inputs other than quoted prices that are observable for the
asset or liability;
- Inputs that are derived principally from or
corroborated by observable market data by correlation or other means.
Notwithstanding our belief that our Portal represents a significant advance as compared to other Indonesian portals, there are a number of potential difficulties that we might face, including the following:
We may not be able to raise sufficient additional funds
to fully implement our business plan and grow our business;
Competitors may develop
alternatives that render our Portal services redundant or
unnecessary;
We may not obtain and maintain sufficient protection of
our intellectual property;
Our
proprietary technology may be shown to have characteristics that may render
it insufficient for our business;
Our
Portal may not become widely accepted by consumers and merchants; and
Strict,
new government regulations and
inappropriate e-commerce policies, especially in an emerging economy such as
Indonesia, may
hinder the growth of the e-commerce market.
To date, we raised $725,000 in equity capital and we may be expected to require up to an additional $2.5 million in capital during the next 12 months to fully implement our business plan and fund our operations.
Results of Operations during the three months ended March 31, 2016 as compared to the three months ended March 31, 2015
During the three months ended March 31, 2016, we had operating expenses related to general and administrative expenses being a public company and interest expenses. During the three months ended March 31, 2016 , we incurred a net loss of $1,359,157 due to general and administrative expenses of $1,350,151, interest expenses of $3 and a loss on conversion of debt of $9003. During the three months ended March 31, 2015 , we incurred a net loss of $28,438 due to general and administrative expenses of $9,148, interest expenses of $3,315 and expenses related to amortization of debt discount of $15,975 . The significant increase in net loss during the three month ended March 31, 2106 as compared to the same period in the prior year was mainly due to increased professional fees and non-cash compensation expenses.
Liquidity and Capital Resources
On March 31, 2016, we had $578,956 in current assets represented by cash in the same amount.
On December 31, 2015, we had $250,194 in current assets consisting of $81 in cash and $250,113 in restricted cash.As of March 31, 2016, we had total current liabilities of $12,500 representing accounts payable. As of December 31, 2015, we had total current liabilities of $274,467 consisting of $15 in accrued interest, $250,013 in unissued stock subscriptions and $24,439 in short-term notes payable. We had no long-term liabilities as of March 31, 2016 and December 31, 2015.
We used $137,536 in our operating activities during the three months ended March 31, 2016, which was due to a net loss of $1,359,157 offset by non-cash compensation charges of $1,200,133, an increase in accounts payable and accrued liabilities of $12,485 and loss on debt conversion of $9,003
We used $11,148 in our operating activities during the three months ended March 31, 2015, which was due to a net loss of $28,438 offset by an increases in amortization of debt discount of $15,975 and an increase in accounts payable and accrued liabilities of $1,315.
We financed our negative cash flow from operations during the period ended March 31, 2016 through the issuance of common stock of $474,987 reduced by payments of $8,689 related to principal payments on debt. We financed our negative cash flow from operations during the period ended March 31, 2015 through proceeds of $20,000 from debt issuance.
We had no investing activities during the three months ended March 31, 2016 and 2015.
Availability of Additional Capital
Notwithstanding our success in raising over $725,000 from the private sale of equity securities during the three month ended March 31, 2016 and our expectation that we will be successful in raising up to an additional $2.5 million during 2016, there can be no assurance that we will continue to be successful in raising equity capital and have adequate capital resources to fund our operations or that any additional funds will be available to us on favorable terms or in amounts required by us. If we determine that it is necessary to raise additional funds, we may choose to do so through public or private equity or debt financing, a bank line of credit, or other arrangements. If we are unable to obtain adequate capital resources to fund operations, we may be required to delay, scale back or eliminate some or all of our plan of operations, which may have a material adverse effect on our business, results of operations and ability to operate as a going concern.
We are not aware of any material trend, event or capital commitment, which would or could potentially adversely affect our liquidity. The Company currently has no arrangements with any persons or entities with regard to our existing debt, however limited. We do not have any arrangements with potential investors or lenders to provide us with any additional financing and there can be no assurance that any such additional financing will be available when required in order to proceed with the business plan.
Any additional equity financing may be dilutive to our stockholders, new equity securities may have rights, preferences or privileges senior to those of existing holders of our shares of common stock. Debt or equity financing may subject us to restrictive covenants and significant interest costs.
Going Concern Consideration
Our registered independent auditors have issued an opinion on our financial statements which includes a statement describing our going concern status. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills and meet our other financial obligations. This is because we have not generated any revenues and no revenues are anticipated until we begin marketing the product. Accordingly, we must raise capital from sources other than the actual sale of the product. We must raise capital to implement our project and stay in business.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK. Back to Table of Contents
A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES. Back to Table of Contents
Evaluation of disclosure controls and procedures. As of March 31, 2016, the Company's chief executive officer and chief financial officer conducted an evaluation regarding the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the evaluation of these controls and procedures, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.
Changes in internal controls. During the quarterly period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. Back to Table of Contents
There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Companys property is not the subject of any pending legal proceedings.
ITEM 1A. RISK FACTORS. Back to Table of Contents
A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES UND USE OF PROCEEDS. Back to Table of Contents
None.
ITEM 3. DEFAULT UPON SENIOR SECURITIES. Back to Table of Contents
None.
ITEM 4. MINE SAFETY DISCLOSURE. Back to Table of Contents
None.
ITEM 5. OTHER INFORMATION. Back to Table of Contents
None.
ITEM 6. EXHIBITS. Back to Table of Contents
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Signature | Title | Date |
/s/ Edwin Witarsa Ng | Chief Executive Officer (Principal Executive Officer) | October 16, 2017 |
Edwin Witarsa Ng | ||
/s/ Budi Sidarta Pranata | Chief Financial Officer (Principal Financial and Principal Accounting Officer) | October 16, 2017 |
Budi Sidarta Pranata |
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | Title | Date |
/s/ Edwin Witarsa Ng | Chairman of the Board and CEO | October 16, 2017 |
Edwin Witarsa Ng | ||
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