3. Stockholders’ Equity

On January 15, 2016, we amended our certificate of incorporationWe are authorized to increase authorized capital to include 10 millionissue 500,000,000 shares of $.0001 par value preferred shares. No preferred shares have been issued.

Issuance of Shares of Common Stock, $0.0001 par value per share. We are authorized to issue 10,000,000 shares of Preferred Stock, $0.0001 par value per share. The Board of Directors has the authority to establish one or more series of Preferred Stock and fix relative rights and preferences of any series of Preferred Stock. On January 2, 2018, the board of directors authorized the issuance of a Series A Convertible Preferred Stock, of which Two Hundred Thousand (200,000) shares are outstanding as of September 30, 2017:2018. Each Preferred Share shall have a par value of $0.0001.

During the three months ended September 30, 2017, the CompanyThe Company’s wholly-owned Indonesian subsidiary, PT. Kinerja Indonesia, has 20,000,000 authorized the issuance of 181,818 shares of commoncapital stock, for cash at $1.10 per share for a total to be earnedpar value $0.001 of $200,000. As of September 30, 2017 none of thesewhich 18,000,000 shares have beenwere issued and outstanding even thoughat September 30, 2018. Prior to the acquisition of the 18,000,000 shares of PT. Kinerja Indonesia (the “PT. Kinerja Indonesia Shares”), 75% or 13.5 million the PT. Kinerja Indonesia Shares were owned by Edwin Ng, Chairman and CEO of the Company received $50,000 with respect to theseand the remaining 25% of the PT. Kinerja Indonesia Shares were owned as follows: (i) Mr. Henful, 1.8 million shares; (ii) Mr. Eric Wibowo, 900,000 shares; and (iii) PT. Adelyus Anugerah Abadi, 1.8 million shares. As a result, the Company recorded $50,000 in stock payable as of September 30, 2017.

During the three months ended September 30, 2017, the Company authorized the issuance of 80,000 shares of common stock valued at $1.60 per share to Ace Legends Pte Ltd. for services provided. As of September 30, 2017 none of these shares have been issued and outstanding. As a result, the Company recorded $128,000 in stock payable as of September 30, 2017.

Debt Conversion into Shares of Common StockStock-Based Compensation

During the nine months ended September 30, 2017,2018, the Company agreed to convert $100,000 in debt into 200,000 shares of common stock and 200,000 warrants. The debt was non-convertible, and the borrowings took place on May 7, 2017, but were subsequently fully converted on May 23, 2017. In addition, the Company incurred a loss of $442,697 in connection with the debt conversion, which was recorded as additional paid-in capital.did not issue stock-based compensation.

Common Stock and Warrants IssuedShares issued for Cashservices

During the nine months ended September 30, 2017, the Company received $902,000 through a placement of 1,359,000 common stock units to investors for an offering price of $0.50 and $1.00 per unit. Each unit consisted of one share of common stock and one warrant to purchase common stock. The 1,214,000 warrants are exercisable at $2.00 and $1.00 and expire one year from the date of issuance. The warrants were valued using the Black-Scholes pricing model to estimate the relative fair value of $781,714. The Black-Sholes-Merton pricing model assumptions used are as follows: expected dividend yield of 0%; risk-free interest rate of 1.36%; expected volatility between 179% and 181%, and warrant exercise period based upon the stated terms. The warrants were classified within stockholders’ equity.

Stock-Based Compensation

During the nine months ended September 30, 2017,2018, the Company issued 1,475,000 fully vested2,257,778 shares of the Companyrestricted common stock and 1,900,000 warrants to consultants as payment for services. As the equity instruments issued are fully vested and non-forfeitable, the fair value of the grants was recognized as an increase additional paid-in capital at the measurement date.services provided. The shares were valued at the closing price as of the date of the underlying agreements (ranging from $0.65$0.85 to $2.93).$1.39) and resulted in current recognition of $3,302,441 in consulting service expense.

Preferred Stock for Cash

On January 2, 2018, the Company issued 400,000 Series A Convertible Preferred Stock to an institutional investor for an aggregate purchase price of $500,000. The Series A Convertible Preferred Stock was convertible into 400,000 shares of the Company’s common stock at a conversion price of $1.25 per share. On July 11, 2018, the Company issued to the institutional investor a total of 416,667 shares of common stock, pursuant to a notice of conversion dated July 9, 2018, in connection with the conversion of $250,000 in principal amount of the Series A Convertible Preferred Stock, at an adjusted conversion price of $0.60, which adjustment was subject to an agreement between the Company and the institutional investor. The Company recognized a loss on conversion in the amount of $246,745, In addition, on January 2, 2018, the Company issued to the institutional investor Class N Warrants exercisable to purchase an additional 400,000 shares on a cashless basis, at an exercise price of $1.25 per Share, during a period of three (3) years from the date of the Agreement. The warrants were valued using the Black-Scholes pricing model to estimate the relative fair value of $1,051,973 and resulted in current recognition in additional consulting services. The Black-Sholes pricing model assumptions used are as follows: expected dividend yield of 0%; risk-free interest rate of 1.21%; expected volatility between 179% and 185%, and warrant exercise period based upon the stated terms.$300,772.

3. Related Party Transactions not Disclosed ElsewhereWarrant Exercise

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 useJanuary 4, 2018, Firstfire Global Opportunities Fund LLC exercised their warrants and commercially exploit certain KinderjaPay technology and intellectual property. Pursuant to the License Agreement andpaid $100,000 in consideration for the paymentissuance of royalties,100,000 shares.

Notes Payable Conversion

From June 25, 2018 to September 30, 2018, Tangiers Global, LLC, Power Up Lending Group, Ltd and Crossover Capital Fund I, LLC converted a total of $662,862 in the principal amount of their notes together with accrued interest of $48,822 into 2,408,489 shares of Common Stock based upon an average conversion price of $0.15 - 1.25. The conversion resulted in the loss of conversion for the Company has been granted the exclusive, world-wide rights to the KinerjaPay IP, an e-commerce platform that provides users with the convenience of e-commerce services for bill transfer and online shopping. Mr. Ng is the control person of PT Kinerja and a controlling shareholder, CEO and Chairman of the Company.

The Company purchases data, prepaid mobile plans, and more from a list of vendors that specialize in these transactions. We have a risk of loss as we are buying the plans without the right to return them, therefore we are a principal to the transaction and not an agent. Based upon this, gross revenue treatment appears reasonable for these transactions.

Both PT Kinerja and PT KinerjaPay Indonesia, the Company’s subsidiary created under the laws of Indonesia, are owned and controlled by Mr. Ng, and considered related. All revenue is earned by PT Kinerja, and then transferred to us either gross or net depending on the revenue transaction.

On February 19, 2016, we issued 1,333,333 shares of our common stock to Mr. Ng, our CEO, sole director and control person. Mr. Ng is the sole officer and directors and control person of PT Kinerja, the other party to this agreement, 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. The services provided and to be provided under this service agreement are as follows:

(a) The Service Company shall provide the Company and the Subsidiary with the following services during a term of three (3) years from the date first set forth above (the “Services”), for which the Subsidiary shall pay the Service Company:

I. General Business Services: which shall include personnel, office facilities and equipment, utilities, and related overhead and operational expenses and shall be provided under the direction and control of a designated project manager; and

II. Technical Services: which shall include, but not be limited to, Web Hosting, Web Maintenance, Web Updates and System Upgrades, from time-to-time, which Technical Services will be fulfilled by a minimum of five (5) experienced computer engineers / programmers, one (1) algorithm specialist and two (2) trained technical engineers who shall maintain the servers provided by the Service Company and support the Subsidiary’s full time operations. In addition, the Service Company, in support of the Technical Services, shall guarantee ninety-nine point nine-nine (99.99%) percent uptime of the Company’s domains and applications, and provide all requisite support for the traffic to the Company’s domains with unlimited bandwidth and scalable uplink whenever the traffic to the domains increases, from time-to-time; and$1,396,433.

III. R&D Services:4. Notes Payable

On May 9, 2017, we had a $50,000 note payable outstanding to our CEO, and control stockholder. The balance is due on demand and accrues interest at 8% per annum.

On November 3, 2017, the Company entered into an investment agreement (the “Investment Agreement”) with Tangiers Global LLC (“Tangiers”) pursuant to which shall include, but not be limitedthe Company agreed to the development of new features, products, or services related to the KinerjaPay IP and KinerjaPay.com. In connectionfile a registration statement with the R&D Services,SEC registering the Parties acknowledge that all new KinerjaPay IP that is developedshares underlying the Investment Agreement, which permitted the Company to “put” up to ten million dollars ($10,000,000) in shares of our Common Stock to Tangiers over a period of up to thirty-six (36) months or for which enhancements are created for KinerjaPay IP alreadyuntil $10,000,000 of such shares have been put (the “Registration Statement”).

On November 9, 2017, the Company executed a 10% fixed convertible promissory note payable to Tangiers in existence atthe principal amount of $330,000. This note, due six months from the date of this Agreement (“Additional IP”)funding, was funded by Tangiers in the initial sum of $150,000 on November 15, 2017 and $150,000 on December 19, 2017. The note is convertible into shares of Common Stock at a conversion price of $1.25 per share if converted within seven and one half months, or thereafter the conversion price shall belong exclusivelybe equal to the lower of (i) the fixed price or (ii) 65% of the average of the two (2) lowest trading prices of the Common Stock during the twenty (20) trading days prior to which the Holder elects to convert all or part of the note and holder gives notice of conversion to the Company and its Subsidiary. The Parties further agree that in each instance, they will, in “good faith,” negotiatetransfer agent.Tangiers converted $198,724 including principal and execute separate, supplemental addendums to this Agreement to address the Services to be provided by the Service Company with respect to the Additional IP.

(b) The Subsidiary shall responsible for the following:

I. Salesinterest on its convertible promissory notes into 362,043 shares on July 10, 2018 at a conversion price of $0.50 and Marketing: PT. KinerjaPay Indonesia shall cover$82,500 of principal and be directly responsible for all sales and marketing activities and expenses associated with the commercial exploitationinterest on its convertible promissory notes into 198,317 shares on June 25, 2018 at a conversion price of the License for the KinerjaPay IP; and

II. Billing and Collections: PT. KinerjaPay Indonesia shall be responsible for all billing and collections and book all revenues generated by and from commercial exploitation of the License; and　

III. Advertising and Sales Reps: PT. KinerjaPay Indonesia shall at all times maintain a staff of at least three (3) sales reps;　

IV. Office and Administration: PT. KinerjaPay Indonesia shall retain at least one (1) person to provide office/administrative/accounting services to fulfill the duty of Subsidiary in Section 1B(ii) above.$1.25.

In consideration forconnection with the Services to be provided,Company’s Investment Agreement with Tangiers, the Company shall payissued Tangiers a commitment fee note in the amount of $75,000, bearing interest rate of 10% which was due on June 24, 2018. The commitment fee note had a conversion price of $1.25, but in case of maturity default, the conversion price was subject to adjustment to a price equal to the lower of: (i) the conversion price or compensate(ii) 65% of the Service Company as follows: (i) Edwin Witarsa Ng, CEO and Chairman - 3,000,000average of the two (2) lowest trading prices of the Common Stock during the twenty (20) trading days prior to Tangiers notice to convert all or part of this $75,000 note.

On September 14, 2018, Tangiers elected to convert $75,000 in the principal amount of the commitment fee note into 490,998 shares representing 34.77%; (ii)P.T. Starest Asset Management - 640,000 shares representing 7.42%; and (iii) Desa Sebong Lagoi Kec and Teluk Sebong Bintan Kepulauan Riau, Indonesia, 3,000,000 shares representing 34.77%.of Common Stock, based upon a default conversion price of $0.15

The Tangiers fixed convertible promissory notes payable and the commitment fee note are guaranteed an interest payment of 10% of the beginning note balance. As such, the Company shall issuehad to immediately expense the Servicebalances during 2017.

On November 1, 2017, the Company 1,333,333 restricted shares.executed an 8% fixed convertible promissory note payable to Crossover Capital Fund I, LLC in the principal amount of $115,000. The restricted shares shall not be deemed fully-paid and non-assessable until eighteen (18)note is due eight months from the date first set forth above; andas mentioned above. The note is convertible into shares of Common Stock at a conversion price of $1.30 per share if converted within 8 months, or thereafter the conversion price shall be equal to the lower of (i) the fixed price or (ii) The Subsidiary,65% of the average of the two (2) lowest trading prices of the Common Stock as reported on a quarterly basis, shall pay the Service CompanyNational Quotations Bureau OTC market on which the Company’s shares are traded, for the services, facilities and personnel providedtwenty (20) prior trading days including the day upon which a notice of conversion is received by the Service Company or its transfer agent. As of September 30, 2018, $5,369 in interest was expensed during the nine months ended September 30, 2018.The note has been fully converted into 525,815 Shares of common stock as of September 30, 2018, based upon an average conversion price of $0.28.

On July 27, 2018, the Company executed an 8% fixed back-end convertible promissory note payable to Crossover Capital Fund I, LLC in the principal amount of $115,000. The note is due eight months from the date as mentioned above. The note is convertible into shares of Common Stock at a conversion price of $1.3 per share if converted within 5 months, or thereafter the conversion price shall be equal to the lower of (i) the fixed price or (ii) 65% of the average of the two (2) lowest trading prices of the Common Stock as reported on the National Quotations Bureau OTC market on which the Company’s shares are traded, for the twenty (20) prior trading days including the day upon which a notice of conversion is received by the Company or its transfer agent. As of September 30, 2018, $1,638 in interest was expensed during the nine months ended September 30, 2018.

On January 12, 2018, the Company issued a 12% fixed convertible promissory note payable to Power Up Lending, LLC in the principal amount of $153,000, which note was is due on July 12, 2018. The note was convertible into shares of Common Stock at a conversion price of $1.75 per share, subject to adjustment based upon the terms of the note including, among others, default in payment at maturity or a formula based upon a discount from the trading price of the Company’s shares during a period prior to notice of conversion. As of September 30, 2018, $13,129 in interest was expensed during the nine months ended September 30, 2018. The note has been fully converted to common stock as of September 30, 2018 into 478,533 shares of common stock, based upon an average conversion price of $0.36 per share.

On March 7, 2018, the Company executed an 12% fixed convertible promissory note payable to Power Up Lending, LLC in the principal amount of $63,000. The note was due on September 7, 2018 and was convertible into shares of Common Stock at a conversion price of $1.75 per share, subject to adjustment based upon the terms of the note. As of September 30, 2018, $4,018 in interest was expensed during the nine months ended September 30, 2018. The note has been fully converted into 352,782 shares of Common Stock as of September 30, 2018, at an average price of $0.24.

On May 1, 2018, the Company executed an 12% fixed convertible promissory note payable to Power Up Lending, LLC in the principal amount of $53,000, which note was due on November 1, 2018. The note is convertible into shares of Common Stock at a conversion price of $1.75 per share, subject to adjustment based upon the terms of the note. As of September 30, 2018, $2,650 in interest was expensed during the nine months ended September 30, 2018.

On July 30, 2018, the Company executed an 12% fixed convertible promissory note payable to Power Up Lending, LLC in the principal amount of $53,000. The note is due on May 15, 2019 and is convertible into shares of Common Stock at a conversion price of $1.75 per share, subject to adjustment based upon the terms of the note. As of September 30, 2018, $1,080 in interest was expensed during the nine months ended September 30, 2018.

On September 11, 2018, the Company executed an 12% fixed convertible promissory note payable to Power Up Lending, LLC in the principal amount of $53,000. The note is due on June 30, 2019. The note is convertible into shares of Common Stock at a conversion price of $1.75 per share. As of September 30, 2018, $331 in interest was expensed during the nine months ended September 30, 2018.

On June 13, 2018, the Company executed an 10% convertible promissory note payable to Crown Bridge Partners in the principal amount of $75,000. The note is due on June 13, 2019. As of September 30, 2018, $2,240 in interest was expensed during the nine months ended September 30, 2018. On August 21, 2018, the Company executed an 10% convertible promissory note payable to Crown Bridge Partners in the principal amount of $25,000. The note is due on August 21, 2019. As of September 30, 2018, $274 in interest was expensed during the nine months ended September 30, 2018.

On July 19, 2018, the Company executed an 10% convertible promissory note payable to GS Capital in the principal amount of $125,000. The note is due on July 19, 2019. As of September 30, 2018, $2,446 in interest was expensed during the nine months ended September 30, 2018.

In accordance with ASC 470, the Company has analyzed the beneficial nature of the initial conversion terms of the fixed convertible notes and determined that a beneficial conversion feature (BCF) exists because the effective conversion price was lower than the quoted market price at the rate set forth in Appendix A attached hereto; and (iii) The Subsidiary, on a quarterly basis, shall pay the Service Company royalties equal to one (1%) percenttime of the net revenues generated fromissuance. As of September 30, 2018, the commercial exploitationCompany recognized amortization expenses of $39,655 on the License;discount created during the twelve month-period ended December 31, 2017.

For the nine months ended September 30, 2018, the Company has recognized $36,185 in interest expense related to the notes as described above. In addition, during the three and (iv) The Servicenine-month periods ended September 30, 2018, the Company shall be paidrecognized a one-time set-up feeloss on debt conversion of $55,000 within three (3) business days$1,270,417 and $1,396,433, respectively.

5. Related Party Transactions; Acquisition of the execution of this Agreement.PT. Kinerja Indonesia

As of September 30, 2017,2018, we had $51,849$51,779 in accounts payable due to our CEO consisting of a $50,000 loan and $1,849$1,779 in expenses paid on behalf of the Company by our CEO. The balanceloan is due on demand and accrues interest at 8% per annum. As of September 30, 2017, $1,8302018, $2,992 in accrued interest was due and was expensed during the threenine months ended September 30, 2017.

4. Other Assets

On July 31, 2017, the Company entered into an 18 month license agreement through January 31, 2019, with Ace Legends Pte Ltd. (the “Service Company”) for an exclusive, world-wide license to acquire and market the games currently owned and developed by the Service Company. In consideration for receiving the license and for becoming the game publisher for all of the Service Company’s games indefinitely, the Company agreed to pay to the Service Company $100,000 in four installments of $25,000 each.2018. In addition, the Company agreedassumed the liability of $119,340 owed by our CEO on the building owned/used by PT. Kinerja Indonesia upon the closing of the acquisition.

Effective August 31, 2018, the Company completed the acquisition of PT. Kinerja Indonesia, its former affiliated company, owned, operated and controlled by our CEO and principal shareholder. The terms of the acquisition provide for the payment of $1,200,000 to issuePT Kinerja Indonesia’s previous shareholders pursuant to the Serviceterms of a promissory note due in twenty-four (24) months, bearing the interest at the rate of 6% per annum, which note the Company 80,000 restrictedcan prepay at any time.

The acquisition was performed under common control accounting as the Company’s CEO and sole director was in control of both the Company and PT. Kinerja Indonesia and was the executive officer and 75% owner of PT. Kinerja Indonesia at the date of acquisition.

During periods prior to September 30, 2018, the Company could only recognize revenues on a “net basis” as they were not the principal in the transactions, but as a result of the acquisition of PT. Kinerja Indonesia, the Company’s revenues can be recognized on a “gross basis.” The net value of PT. Kinerja Indonesia at the date of the recognized acquisition period was $16,700.

At the date of the closing of the acquisition, PT. Kinerja Indonesia had 20 million authorized shares of commoncapital stock, par value 0.001, of which shall be deemed fully paid.

The Company shall pay18 million shares were issued and outstanding. Prior to the Service Company royalty fees of 21% of all sales generated underacquisition, 75% or 13.5 million the license agreement, which payments shall paid on a quarterly basis. PT KinerjaPay Indonesia, the subsidiaryshares were owned by Edwin Ng, Chairman and CEO of the Company shall also pay a monthly fee of $5,000 toand the Service Company during the 18 month termremaining 25% of the license agreement for further business development.

shares were owned as follows: (i) Mr. Henful, 1.8 million shares; (ii) Mr. Eric Wibowo, 900,000 shares; and (iii) PT. Adelyus Anugerah Abadi, 1.8 million shares. The amortization expense for the period ended September 30, 2017 was immaterial to the Company.latter entity is controlled by Mr. Deny Rahardjo, a resident of Indonesia.

5.6. 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 sufficient revenue to cover its 20172018 operating costs, and as such, has incurred an operating loss since inception. Further, as of September 30, 2017,2018, 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.

6.7. Subsequent Events

There were no material subsequent events followingDuring the period endedfrom October 16, 2018 to November 14, 2018, the Company received net proceeds of $420,250 from four separate convertible note transactions with institutional lenders in the aggregate principal amount of $476,000. In addition, effective October 31, 2018, the Company entered into a Securities Purchase Agreement with EMA Financial, LLC (“EMA”) pursuant to which the Company executed a convertible note in the principal amount of $150,000 and issued EMA warrants to purchase 312,500 shares. To date, EMA has not yet funded the loan proceeds underlying their $150,000 convertible note.

In connection with these convertible note transactions that occurred after September 30, 20172018, the Company reserved a total of 14,038,123 shares of its common stock underlying the conversion of these notes and throughout the dateexercise of the filingwarrants, which share reserves are subject to increase in the event of a decline in the price of the Company’s shares, from time to time.

On October 8, 2018, the Company issued 37,500 restricted shares to Mr. Stephen Kann as partial consideration for services to be rendered by Mr. Kann pursuant to his engagement to provide investor relation services to the Company.

On September 13, 2018, the Company incorporated PT. Kinerja Simpan Pinjam, a new wholly-owned subsidiary, for the purpose of managing its KFUND brand as a peer-to-peer (P2P) lending platform focusing on micro-lending activities. The Company plans to develop the KFUND brand mainly targeting the consumer sector to facilitate micro loans ranging from $100 to $1,000 on biweekly or monthly term. The main consumer target group are individuals who have only limited access to banking services and are not familiar with the banking system. The Company reasonably expects that the costs of developing, lunching and funding this peer-to-peer micro lending facility during its initial start-up period to be approximately $175,000. However, there can be no assurance that we will not experience cost higher than estimated and/or delays in this project that could adversely impact the Company’s results of operations and liquidity and capital resources. Until September 30, 2018, KFUND is still in preparation stage and expected to start in December 2018 or the first quarter of 2019.

On November 2, 2018, the Company filed a registration statement on Form 10-Q.S-1 for the purpose of offering a total of up to 300,000 shares of our 11% Series C Cumulative Redeemable Perpetual Preferred Stock (“Series C Preferred Stock”), at an offering price of $25 per share. If the offering is successful, of which there can be no assurance, the gross proceeds will be $7.5 million. The Company’s intention is to have these shares of Series C Preferred Stock subject to quotation on the OTCQB.

On November 9, 2018, the Company, having determined not proceed with the Tangiers’ Investment Agreement, filed a Form RW to withdraw the registration statement related to the Tangiers’ Investment Agreement.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.Back to Table of Contents

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.

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which refer to future events. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Plan of OperationsOperation

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. 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 PTP.T. Kinerja Indonesia, an entity organized under the laws of Indonesia and controlled by Mr. Ng, (“PT Kinerja”),our chairman, CEO and control stockholder, 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.

The Company purchases data, prepaid mobile plans, and more from a list of vendors that specialize in these transactions. We have a risk of loss as we are buying the plans without the right to return them, therefore we are a principal to the transaction and not an agent. Based upon this, gross revenue treatment appears reasonable for these transactions.

Both PT Kinerja and PT KinerjaPay Indonesia, the Company’s subsidiary created under the laws of Indonesia, are owned and controlled by Mr. Ng, and considered related. All revenue is earned by PT Kinerja, and then transferred to us either gross or net depending on the revenue transaction.

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 $1,105,000 under the Unit Offering, while the Unit Offering is continuing.

As ofOn 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.

On August 31, 2016, the Registrant and its wholly-owned Indonesian subsidiary, PT. Kinerja Pay Indonesia, entered into a Cooperation and Service Agreement with Black Grace Investment Ltd, organized under the laws of the British Virgin Islands (“Black Grace”) and its affiliate, PT. Pay Secure Online Indonesia (“PT. PaySec”), organized under the laws of Indonesia. Pursuant to this Agreement, PT. PaySec granted PT. Kinerja Pay the right to use the PT. PaySec’s payment services (“Payment Services”) under a revenue sharing arrangement. As consideration for the use of the Payment Services, the Registrant agreed to issue 200,000 restricted shares to Black Grace or its designee. As further consideration for the use of the Payment Services, the Parties agreed that to share the net revenues generated from the use of the Payment Services and e-wallet and payment gateway technology on a 50/50 basis. The agreement was terminated on May 12, 2017.

On September 8, 2016, PT. Kinerja Pay entered into a second Cooperation and Service Agreement with PT. Indonesia EnamDua, organized under the laws of Indonesia (“PT.IED”), which owns 62hall.co.id, an integrated online wholesaler that sells a wide range of products and services through an online search engine and offers extensive customer services. Pursuant to this Agreement, the parties agreed to share resources in connection with the development of PT, Kinerja Pay’s new e-commerce portal, KinerjaMall.com. In consideration for PT.IED’s services, the parties agreed to allocate the profits, defined as an item’s selling price on KinerjaMall.com minus the cost price of the item sold, 90% to PT. Kinerja Pay and 10% to PT.IED.

On April 10, 2017, the Company announced that customers are now able to use its platform to make payments to state-run Pegadaian, the largest provider of fiduciary services and credit across Indonesia.

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 increase their loyalty to our services.

Indonesia, the world’s fourth most-populous country, having a population estimated to be 255 million people, is becoming an economic power in the Southeast Asia region. Over 50% of its population is below the age of 30 and we believe that the young Indonesian population is highly adaptive to new technology. The rise of Smartphones and tablets that sell for less than US$100 is rapidly broadening internet access and pushing the 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 20182017 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.

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;

● 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.

On August 31, 2018, the Company completed its acquisition of PT. Kinerja Indonesia, the licensor of the Company’s IP technology and controlled by Edwin Ng, our CEO and principal shareholder. The result of this acquisition will enable the Company to consolidate all of its previous accumulated gross revenue to date. At the same time, the Company will end its existing service agreement with PT. Kinerja Indonesia dated February 20, 2016. In addition, the Company now has the ability to consolidate its IP technology and manage its 1,500 square-feet data center located in North Sumatra which the Company plans to expand to provide cloud computing services as well as data mining from the Company’s existing customer base. The Company believes that the acquisition will make the Company more cost efficient and potentially generate more revenues from other IT services. The terms of the acquisition provide for the payment of $1,200,000 to PT Kinerja Indonesia’s previous shareholders pursuant to a note due in twenty-four (24) months, bearing interest at 6% per annum, which note may be prepaid by the Company at any time. Upon the effective date of the acquisition, the Service Agreement between the Company and PT Kinerja Indonesia was terminated. The Company also agreed to the issuance of the 1,333,333 shares in the name of PT Kinerja Indonesia to its beneficial owners, Edwin Ng, Mr. Henful, Eric Wibowo and PT. Adelyus Anugerah Abadi, an entity is controlled by Deny Rahardjo, a resident of Indonesia.

On November 2, 2018, the Company filed a registration statement with the SEC on Form S-1 offering to the public a total of up to 300,000 shares of our 11% Series C Cumulative Redeemable Perpetual Preferred Stock at a price of $25.00 per share. If we are successful in the completion of this offering, of which there can be no assurance, we will receive gross proceeds of up to $7.5 million in or about the first quarter of 2019.

Results of Operations during the nine months ended September 30, 2018 as compared to the nine months ended September 30, 2017

During the nine months ended September 30, 2018 and 2017, we generated revenues of $3,032,602 and $1,914,358, respectively. During the nine months ended September 30, 2018, we had costs of revenue of $2,849,761 compared to $2,002,073 during the same period of the prior year, resulting in a gross profit of $182,841 and negative gross margin of $87,715, respectively.

During the nine months ended September 30, 2018 and September 30, 2017, we had general and administrative expenses of $6,526,020 and $3,993,974, respectively. We had depreciation expense of $71,008 during the nine months ended September 30, 2018 compared to $1,896 during the same period in the prior year.

During the nine months ended September 30, 2018 and 2017, we incurred interest expense of $78,155 and $1,844, respectively. During the nine months ended September 30, 2018 and 2017, we incurred a loss on debt conversion of $1,396,433 and $442,697, respectively. During the nine months ended September 30, 2018, we had other income of $24,486 compared to $0 during the nine months ended September 30, 2017.

Our total costs and expenses were $1,450,102 during the nine months ended September 30, 2018 compared to $444,541 during the nine months ended September 30, 2017.

We may be expected to require up to an additional $2.5 million in capitalhad a net loss of $7,864,289 during the next 12nine months ended September 30, 2018 compared to fully implement our business plan and fund our operations.a net loss of $4,528,126 during the nine months ended September 30, 2017.

Results of Operations during the three months ended September 30, 20172018 as compared to the three months ended September 30, 20162017

During the three months ended September 30, 20172018 and 2016,2017, we generated revenues of $531,830 and $1,763,608, respectively. During the three months ended September 30, 2018 and 2017, we had costs of revenue from services of $1,763,608$350,317 and $1,842,985, respectively, resulting in a gross profit of $181,513 and negative gross margin of $79,377, respectively.

During the three months ended September 30, 2018, we had general and administrative expenses of $2,146,157 and depreciation expense of $68,957, as compared to $444,732 and $940, respectively, during the same period in the prior year. During the three months ended September 30, 2018, we incurred interest expenses of $59,332 as compared to $1,830 during the same period in the prior year. During the three months ended September 30, 2018 and 2017, we incurred a loss on debt conversion of $1,270,417 and $0, respectively. During the three months ended September 30, 2017,2018, we had other income of $78,249 compared to $0 during the nine months ended September, 2017.

Our total costs related to our services revenue of $1,842,985 resulting in a negative gross margin of $79,377. We incurred no costs related to service revenuesand expenses were $1,251,500 during the three months ended September 30, 2017.

During the three months ended September 30, 2017, we had general and administrative expenses of $444,732 and depreciation expense of $9402018 as compared to $363,434 and $17, respectively, during the same period in the prior year . During the three months ended September 30, 2017, we had other costs and expenses related to interest expense of $1,830 as compared to $137 in the same period in the prior year. Our total other costs and expenses were $1,830 during the three months ended September 30, 2017 as compared to $137 in the same period in the prior year.

We had a net loss of $3,285,101 during the three months ended September 30, 2018, as compared to a net loss $526,879 during the three months ended September 30, 2017 as compared to a net loss $363,588 during the three months ended September 30, 2016.2017.

Results of Operations during the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016

During the nine months ended September 30, 2017 and 2016, we generated revenue from services of $1,914,358 and $0, respectively. During the nine months ended September 30, 2017, we had costs related to our services revenue of $2,002,073 resulting in a negative gross margin of $87,715. We incurred no costs related to service revenues during the nine months ended September 30, 2016.

During the nine months ended September 30, 2017, we had general and administrative expenses of $3,993,974 and depreciation expense of $1,896 as compared to $2,444,238 and $103, respectively, during the same period in the prior year . During the nine months ended September 30, 2017, we had other costs and expenses related to interest expense of $1,844 and a loss of $442,697 related to debt conversion as compared to interest expenses of $31 and a loss of $9,003 due to the extinguishment of debt during the nine months ended September 30, 2016. Our total costs and expenses were $444,541 during the nine months ended September 30, 2017 as compared to $9,034 in the same period in the prior year.

We had a net loss of $4,528,126 during the nine months ended September 30, 2017 as compared to a net loss $2,453,375 during the nine months ended September 30, 2016.

Liquidity and Capital Resources

On September 30, 2017,2018, we had $124,409$223,101 in current assets represented by cash of $60,488, restricted cash of $29,841,$66,742, accounts receivable of $22,632 and$23,115, other receivable of $19,231, prepaid expenses of $11,448.$44,066, inventory of $24,311 and deposits of $45,636. On December 31, 2016,2017, we had $77,738$248,227 in current assets consisting of $32,591$160,629 in cash, $16,181 in restricted cashaccounts receivable of $20,900, other receivable of $2,687, prepaid expenses of $22,861 and $28,966 in prepaid expenses.deposits of $41,150.

We had fixed assets, net, of $13,636 and intangible assets of $25,000$640,097 as of September 30, 20172018 and fixed assets of $3,845$12,596 as of December 31, 2016.2017. As of September 30, 2018, and December 31, 2017, we had other assets, net of amortization of $117,070 and $266,045, respectively. We had total assets of of $163,045$980,268 as of September 30, 20172018 and $81,583$526,868 as of December 31, 2016. 2017.

As of September 30, 2017,2018, we had $57,371$2,633,679 in current liabilities comprised of $2,782$60,646 in accounts payable, $51,849$4,311 in related party accounts payable, $8,031 in tax payable, $47,349 in accrued expenses, notes payable to a related party taxof $1,369,340, notes payable of $907, accrued interest$572,134 and convertible notes payable of $1,830 and accrued expense of $3. $571,868.

As of December 31, 2016,2017, we had total current liabilities of $157,663$641,777 consisting of accounts payable of $3,461,$2,794, tax payable of $95,$8,092, accrued expensesexpense of $4,107$97,873, notes payable to a related party of $52,673 and unissued stock subscriptionsconvertible notes payable of $150,000.$480,345.

We had no long-term liabilities as of September 30, 20172018 and December 31, 2016.2017.

We used $1,049,360 in our operating activities during the nine months ended September 30, 2017, which was due to a net loss of $4,528,126 offset by total non-cash compensation chargesshares issued for services valued at of $3,214,580, a$2,097,751, loss on debt conversion of debt of $442,697, $1,896 in depreciation expense of $1,896, share-based compensation of $1,116,829, an increase in accounts receivable of $22,632, a decrease in prepaid expense of $17,518, an increase in other assets of $25,000, a decrease in prepaid expenses of $17,518, a decrease in accounts payable of $148,019, and a decrease in accrued liabilities of $2,274.

We used $902,428 in our operating activities during the nine months ended September 30, 2016, which was due to a net loss of $2,453,375 offset by depreciation expense of $103, a loss on extinguishment of debt of $9,003, non-cash compensation charges of $1,508,133, an increase in accounts payable of $31,230, an increase in accrued liabilities of $7,094 and an increase in prepaid expenses of $4,616.

We financed our negative cash flow from operations during the nine months ended September 30, 20172018 through proceeds of $500,000 through the issuance of preferred and common stock, of $952,000 and debt borrowings of $150,000.$1,915,000 and cash proceeds of $100,000 through the exercise of warrants. We financed our negative cash flow from operations during the nine-month period ended September 30, 20162017 through the issuance of common stock for proceeds of $804,987 reduced by payments$952,000 and debt borrowings of $8,689 related to principal payments on debt.$150,000.

We had investing activities of $2,720 during the nine months ended September 30, 2018 related to purchase of equipment and acquisition of P.T. Kinerja Indonesia compared to $11,687 during the nine months ended September 30, 2017 related to the purchase of equipment as compared to $2,720 during the same period in the prior year.equipment.

Availability of Additional Capital

During the nine months ended September 30, 2018, we raised $500,000 from the private sale of equity, $715,000 from the issuance of short-term debt and $100,000 in proceeds from the exercise of warrants.

On November 2, 2018, the Company filed a registration statement on Form S-1 for the purpose of offering a total of up to 300,000 shares of our 11% Series C Cumulative Redeemable Perpetual Preferred Stock (“Series C Preferred Stock”), at an offering price of $25 per share. If the offering is successful, of which there can be no assurance, the gross proceeds will be $7.5 million. The Company’s intention is to have these shares of Series C Preferred Stock subject to quotation on the OTCQB.

Notwithstanding our success in raising over $952,000$500,000 from the private sale of equity securities during the nine-month periodnine months ended September 30, 2017,2018 and our expectation that we will be able to raise an additional $4.5 million by or about the end of 2018 or during the first quarter of 2019, there can be no assurance that we will continue to be successful in raising additional equity capital to fund our operations. If we determine that it is necessaryable to raise additional funds, we may choosesuch amount at terms and conditions acceptable to do so through public or private equity or debt financing,the Company, if at all. As discussed in Note 7, Subsequent Events, above, the Company received net proceeds of $420,250 from four separate convertible note transactions with institutional lenders after the quarter ended September 30, 2018.

As discussed in Note 4 above, on November 3, 2017, the Company signed an Investment Agreement with Tangiers Global, LLC (“Tangiers”) pursuant to which Tangiers agreed invest up to $10,000,000 by purchasing the Company’s Common Stock, subject to an effective registration statement that was filed on May 8, 2018.

On November 9, 2018, the Company, having determined not proceed with the Tangiers’ Investment Agreement, filed a bank line of credit, or other arrangements. Form RW to withdraw the registration statement related to the Tangiers’ Investment Agreement.

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.

Capital Expenditure Plan During the Next Twelve Months

During the nine-month period ended September 30, 2017, we raised $952,000 in equity capital and $150,000 through borrowings on debt. We may be expected to require up to an additional $1.6 million in capital during the next 12 months to fully implement our business plan and fund our operations. Our plan is to utilize the equity capital and debt that we raise, together with anticipated cash flow from operations, to fund a very significant investment in sales and marketing, concentration principally on online advertising and incentivizing existing customers for the introduction of new customers, among other strategies. However, there can be no assurance that: (i) we will continue to be successful in raising equity capital in sufficient amounts and/or at terms and conditions satisfactory to the Company; or (ii) we will generate sufficient revenues from operations, to fulfill our plan of operations. Our revenues are expected to come from the sale of our portal services. As a result, we will continue to incur operating losses unless and until we are able to generate sufficient cash flow to meet our operating expenses and fund our planned sales and market efforts. There can be no assurance that the market will adopt our portal or that we will generate sufficient cash flow to fund our enhanced sales and marketing plan. In the event that we are not able to successfully: (i) raise equity capital and/or debt financing; or (ii) market and significantly increase the number of portal users and revenues from such users, our financial condition and results of operations will be materially and adversely affected and we will either have to delay or curtail our plan for funding our sales and marketing efforts.

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 September 30, 2017,2018, 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 as provided under the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013), our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were ineffective as September 30, 2017.2018. Management has identified corrective actions to address the weaknesses and plans to implement them during the fourth quarterend of 2017.year of 2018.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the period covered by this report, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s 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 Company’s 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

In July 2016, weDuring the nine months ended September 30, 2018, the Company issued 100,0002,257,778 shares of ourrestricted common stock to an unrelated party as payment for a service agreement.services provided. The shares were valued at the closing price as of the date of the agreement ($0.77)underlying agreements (ranging from $0.85 to $1.39) and offset by $1,000 in cash received for the shares. This resulted in fullcurrent recognition of the excess of fair value over cash received of $76,000 as$3,298,941 in consulting servicesservice expense.

On January 2, 2018, the Company issued 400,000 Series A Convertible Preferred Stock to an institutional investor for an aggregate purchase price of $500,000. The Series A Convertible Preferred Stock is convertible into 400,000 shares of the Company’s common stock at a conversion price of $1.25 per Share. In addition, the Company issued to the Investor Class N Warrants exercisable to purchase 400,000 Shares on a cashless basis, at an exercise price of $1.25 per Share, based payment transactionsduring a period of three (3) years from the date of the Agreement. The warrants were accounted for in accordance withvalued using the requirements of ASC 505-50 Equity Based PaymentsBlack-Scholes pricing model to Non Employees. Paragraph 505-50-30-6 establishes that share-based payment transactions with non-employees shall be measured atestimate the relative fair value of $300,772.

The Registrant issued and sold the consideration received orabove restricted securities in reliance upon the fair valueexemptions provided in Section 4(2) of the equity instruments issued, whichever is more reliably measurable. The Company measured share-based payment transactions atSecurities Act of 1933, as amended (the “Act”) and in reliance upon Regulation S or Regulation D, promulgated by the fair value ofUnited States Securities and Exchange Commission under the shares issued at date of grant, the Company believes that the value of the shares is more reliably measurable.

During the three months ended September 30, 2017, the Company authorized the issuance of 181,818 shares of common stock valued at $1.10 per share. As of September 30, 2017 none of these shares have been issued and outstanding even though the Company received $50,000 with respect to these shares. As a result, the Company recorded $50,000 in stock payable as of September 30, 2017.

During the three months ended September 30, 2017, the Company authorized the issuance of 80,000 shares of common stock valued at $1.60 per share to Ace Legends Pte Ltd. for services provided. As of September 30, 2017 none of these shares have been issued and outstanding. As a result, the Company recorded $128,000 in stock payable as of September 30, 2017Act.

The Company believes that the issuances and sale of the restricted shares were exempt from registration pursuant to Section 4(2) of the Act as privately negotiated, isolated, non-recurring transactions not involving any public solicitation. The recipients in each case represented their intention to acquire the securities for investment only and not with a view to the distribution thereof. Appropriate restrictive legends are affixed to the stock certificates issued in such transactions. All recipients of restricted shares either received adequate information about the Company or had access, through employment, relation and/or business relationships with the Company to such information.

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.