UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, ~~2018~~2019

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________________ to __________________________

Commission file number 000-55081

KINERJAPAY CORP.

(Exact name of registrant as specified in its charter)

Delaware		42-1771817
State or Other Jurisdiction of		(I.R.S. Employer
State or Other Jurisdiction of Incorporation or Organization		(I.R.S. Employer Identification No.)
Incorporation or Organization		Identification No.)

JI Multatuli, No. 8A Clyde Road, Medan, Indonesia, 20151

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: +62-819-6016-168

Securities registered pursuant to Section 12(b) of the Act: None

~~Common stock,~~Title ~~par~~of ~~value~~each ~~$0.0001~~class ~~per~~Trading ~~share~~symbol(s) Name of exchange on which registered N/A N/A N/A

Securities registered pursuant to Section 12(g) of the Act: ~~None~~

Common Stock, par value $0.0001

Title of Class

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

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 has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]
Emerging growth company [ ]

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

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

The ~~registrant had 35,485,275 shares of common stock outstanding as of April 22, 2019. The~~ aggregate market value of the 1533,~~480~~841,~~258~~425 shares of common stock held by non-affiliates of the registrant as of June 2928, ~~2018~~2019 (the last trading day in June ~~2018~~2019) was $138,~~932~~333,~~232~~236, as computed by reference to the closing price of $0.2462 of ~~such~~the registrant’s common stock on such date. For purposes of the above statement only, all directors, executive officers and 10% shareholders are assumed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for any other purpose.

The number of shares outstanding of the registrant’s common stock as of October 7, 2020 was 1,513,872,948.

KINERJAPAY CORP.

~~2018~~2019 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

	Page	~~Page~~
PART I	~~PART I~~
ITEM 1.	BUSINESS	4
ITEM 1. BUSINESS	4
ITEM 1A.	RISK FACTORS	13
ITEM 1A. RISK FACTORS	12
ITEM 1B.	UNRESOLVED STAFF COMMENTS	27
ITEM 1B. UNRESOLVED STAFF COMMENTS	27
ITEM 2.	PROPERTIES	27
ITEM 2. PROPERTIES	27
ITEM 3.	LEGAL PROCEEDINGS	27
ITEM 3. LEGAL PROCEEDINGS	27
ITEM 4.	MINE SAFETY DISCLOSURES	27
ITEM 4. MINE SAFETY DISCLOSURES	27
PART II	~~PART II~~
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	28
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	28
ITEM 6.	SELECTED FINANCIAL DATA	30
ITEM 6. SELECTED FINANCIAL DATA	44
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	30
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	44
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	43
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	52
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	43
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	52
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	43
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	52
ITEM 9A.	CONTROLS AND PROCEDURES	43
ITEM 9A. CONTROLS AND PROCEDURES	52
ITEM 9B.	OTHER INFORMATION	45
ITEM 9B. OTHER INFORMATION	53
PART III	~~PART III~~
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	46
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	54
ITEM 11.	EXECUTIVE COMPENSATION	48
ITEM 11. EXECUTIVE COMPENSATION	56
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	48
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	56
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	49
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	57
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	50
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES	58
PART IV	~~PART IV~~
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	50
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES	59
ITEM 16.	FORM 10-K SUMMARY	52
ITEM 16. FORM 10-K SUMMARY	60
SIGNATURES	61	53

FORWARD-LOOKING STATEMENTS

CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The following discussion should be read in conjunction with the financial statements and related notes contained elsewhere in this Annual Report on Form 10-K. Certain statements made in this discussion are “forward-looking statements” within the meaning of 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by the Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.

Unless otherwise indicated or the context requires otherwise, the words “we,” “us,” “our,” the “Company” or “our Company” or “KinerjaPay Corp” refer to KinerjaPay Corp., a Delaware corporation, and its wholly-owned subsidiaries, PTP.T. Kinerja Pay Indonesia (“PT Kinerja Pay”) and PTP.T. Kinerja Indonesia (“PT Kinerja”). PT Both subsidiaries of KinerjaPay Corp. are organized under the law of Indonesia. P.T. Kinerja ~~Simpan~~Sukses ~~Pinjam~~Gemilang (“PT Kinerja SP SG”), isorganized aunder ~~wholly-owned~~the ~~subsidiary~~laws of PTIndonesia, and Kinerja. ~~All~~Pay ~~subsidiaries~~Ltd., oforganized in the ~~Company are~~State ~~organized~~of ~~under~~Nevada, ~~the~~are ~~laws~~wholly-owned subsidiaries of ~~Indonesia~~PT Kinerja.

Forward-looking statements made in this annual report on Form 10-K include statements about:

● our ability to achieve profitability; ● our ability to raise sufficient capital and obtain financing on acceptable terms to make strategic business arrangements; ● our ability to manage our growth, including acquiring and effectively integrating other businesses into our infrastructure; ● our ability to attract and retain key officers and employees, including Edwin Witarsa Ng, our CEO and Chairman of Board of Directors, and other personnel critical to the execution of existing business strategies and integration of our newly acquired businesses; ● our ability to grow the size and capabilities of our organization through further collaboration and strategic alliances;

●

our ability to raise sufficient capital and obtain financing on acceptable terms to make strategic business arrangements;

●

our ability to manage our growth, including acquiring and effectively integrating other businesses into our infrastructure;

●

our ability to attract and retain key officers and employees, including Edwin Witarsa Ng, our CEO and Chairman of Board of Directors, and other personnel critical to the execution of existing business strategies and integration of our newly acquired businesses;

●

our ability to grow the size and capabilities of our organization through further collaboration and strategic alliances;

● the accuracy of estimates regarding expenses, future revenue, capital requirements, profitability, and needs for additional financing; ● our ability to retain our customers, including effectively migrating and keeping new customers acquired through business acquisitions; ● our ability to compete with other companies developing products and selling services competitive with ours, and who may have greater resources and name recognition than we have; ● our ability to maintain operations in Indonesia in a manner that continues to enable us to offer competitively-priced products and services; ● our ability to keep and increase market acceptance of our products and services; ● our ability to keep pace with the changing industry trend, rapidly evolving technology demands, and regulatory environment; ● our ability to protect and enforce intellectual property rights; and ● our ability to maintain and protect the privacy of customer information.

~~These statements~~● are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” set forth in this Annual Report on Form 10-K for the year ended December 31, 2018, any of which may cause our ~~Company’s~~ability ~~or our industry’s actual results, levels of activity, performance or achievements~~ to beretain ~~materially~~our ~~different from any future results~~customers, ~~levels~~including ofeffectively ~~activity,~~migrating ~~performance~~and orkeeping ~~achievements~~new ~~expressed~~customers oracquired ~~implied~~through bybusiness ~~these forward-looking statements.~~acquisitions;

●

our ability to compete with other companies developing products and selling services competitive with ours, and who may have greater resources and name recognition than we have;

●

our ability to maintain operations in Indonesia in a manner that continues to enable us to offer competitively-priced products and services;

●

our ability to keep and increase market acceptance of our products and services;

●

our ability to keep pace with the changing industry trend, rapidly evolving technology demands, and regulatory environment;

●

our ability to protect and enforce intellectual property rights; and

●

our ability to maintain and protect the privacy of customer information.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” set forth in this Annual Report on Form 10-K for the year ended December 31, 2019, any of which may cause our Company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. The Company is under no duty to update any forward-looking statements after the date of this report to conform these statements to actual results.

PART I

ITEM 1. BUSINESS

Corporate Overview and History

Our business aim is to build a secure and convenient e-commerce ecosystem tofor use by our customers and merchants ~~through~~by ~~our~~providing ~~introduction of~~ services and products including: (i) electronic payment service; and (ii) virtual marketplace for the sale of a wide variety of products and services, both of which are available on the portal, KinerjaPay.com, (the “Portal”). In addition to access to the Portal, our Android and iPhone based mobile application includes additional in-app services to mobile phone users such as social engagement and digital entertainment (the “Mobile App”). A virtual marketplace, powered by our proprietary electronic payment service and gamified with in-app entertainment features, creates a one-stop-shop e-commerce platform for users to BUY, PAY and PLAY. We brand our virtual marketplace under the name of KMALL, our electronic payment solution under the name of KPAY, and our gamification features under the name of KGAMES.

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 (“Equipment”), andesigned ~~equipment~~to ~~that~~convert ~~converts~~ light into electrical flow (also ~~known~~ known as a photovoltaic cell) based on certain proprietary technology to enable an increase in solar energy conversion efficiency ~~and~~ and provide energy at a lower cost. The Company entered into an Asset Purchase Agreement with International Executive Consulting SPRL, organized under the laws of Belgium (“IEC”) on May 14, 2013 (the “IEC Agreement”) pursuant to which the Company issued IEC 2,000,000 million shares of the Company’s common stock, par value $0.0001 (“Common Stock”). The business plan was to use the Equipment to: (i) develop a working prototype of its photovoltaic cell for testing and evaluation; (ii) enter into manufacturing arrangements with third parties to produce the photovoltaic elements and sell to solar panel producers; and (iii) enter into distribution agreements for the commercial sale of our products. ~~Since~~However, from the ~~Asset~~date ~~Purchase~~of ~~Agreement~~the ~~with~~ IEC Agreement through mid-2015, wethe ~~did~~Company ~~not~~was ~~successfully use~~unable ~~the Equipment~~ to successfully develop a working prototype, nor was ~~there~~the Company able to predict with any ~~estimated~~certainty a timeline for ~~our~~its ability to put the working prototype in into production. ~~Since the Company did not generate any revenue from the technology, we determined that it was not in the best interest of the Company or its shareholders to continue devoting resources~~ and ~~incurring~~be ~~expenditures~~able ~~towards efforts~~ to ~~commercialize the~~commercially ~~technology~~exploit ~~using~~ the Equipment.

On November 10, 2015, the Company entered into an Asset Purchase Rescission Agreement with IEC (the “Rescission Agreement”) pursuant to which: (i) we transferred and assigned all right, title and interest in the Equipment back to IEC; (ii) IEC returned 333,333 of the 2,000,000 Shares back to the Company; (iii) IEC transferred and assigned the remaining 1,666,667 Shares to Mr. Edwin Witarsa Ng (“Mr. Ng”), a resident of Indonesia, who was appointed as Chairman of our Board of Directors, in consideration for a cash payment by Mr. Ng of $20,000 to IEC. The rationale of the Rescission Agreement was based upon the Registrant’s determination not to pursue the use and commercial exploitation of the Equipment in furtherance of its former solar energy business plan.

As a result, we determined that it was not in the best interest of the Company or its shareholders to discontinue efforts to commercialize the technology using the Equipment and on November 10, 2015, the Company entered into an Asset Purchase Rescission Agreement with IEC (the “Rescission Agreement”) pursuant to which: (i) we transferred and assigned back to IEC all rights to the Equipment; (ii) IEC returned to the Company 333,333 shares of the 2,000,000 shares of Common Stock initially issued to IEC; and (iii) IEC transferred and assigned its remaining 1,666,667 shares of Common Stock to Mr. Edwin Witarsa Ng, who was appointed as Chairman of our Board of Directors, in consideration for a cash payment by Mr. Ng of $20,000 to IEC.

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 technology and intellectual property owned by PT Kinerja (the “KinerjaPay IP”) and its website, KinerjaPay.com (the “Portal”). The Portal, and the technology behind it, KinerjaPay IP, create an e-commerce platform that provides electronic payment solutions to customers and merchants for bill payment, money transfer and online shopping. KinerjaPay.com is among the first portals that allow users to conveniently top up mobile phone credit in Indonesia.

~~Pursuant to~~On ~~the~~March ~~License~~10, ~~Agreement~~2016, following the ~~Company~~approval ~~agreed~~of ~~to:~~FINRA, ~~(i) change~~ the Company’s name ofchanged ~~the Company~~ to KinerjaPay Corp.;, ~~(ii)~~and ~~implement~~its ~~a reverse split of the Company’s shares of common stock on a~~ one-for-thirty (1:30) ~~basis;~~reverse and (iii) 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 consists of 1 share of common stock ~~and 1 Class A warrant exercisable for a period of 24 months to purchase 1 additional~~split ~~share~~became ~~of common stock at $1~~effective.00 (“Unit Offering”). The Unit Offering is only being made to “accredited investors” who are not U.S. Persons pursuant to Regulation S promulgated by the SEC under the Securities Act of 1933, as amended (the “Securities Act”). On January 20, 2016, the Company closed its first Unit Offering receiving subscription proceeds in excess of $500,000. To date, the Company has raised $1,540,000 pursuant to subsequent Unit Offerings.

On ~~March~~April 106, 2016, P.T. Kinerja Pay Indonesia (“PT Kinerja Pay”), a wholly-owned subsidiary of the Company, was organized under the laws of Indonesia, for the purpose of developing and managing the Company’s ~~name~~e-commerce ~~changed~~business toranging ~~KinerjaPay~~from ~~Corp.~~electronic payment solutions, virtual marketplace, and ~~its~~any ~~one-for-thirty~~other ~~(1:30)~~strategies ~~reverse~~within ~~stock~~the ~~split~~e-commerce ~~became effective~~ecosystem in Indonesia.

On ~~April~~August 631, ~~2016~~2018, PTthe ~~Kinerja~~Company ~~Pay~~completed the acquisition of its licensor P.T. Kinerja Indonesia (“PT Kinerja ~~Pay~~”), which became a wholly-owned subsidiary of the Company,. ~~was~~PT ~~organized under~~Kinerja ~~the~~Indonesia ~~laws~~continues ofto ~~Indonesia,~~provide ~~for~~ the ~~purpose~~technology ofsolutions ~~developing~~needed ~~and~~by ~~managing~~ the Company’s to support its e-commerce business ~~ranging~~and ~~from~~may ~~electronic payment~~expand ~~solutions,~~into ~~virtual~~cloud ~~marketplace,~~computing services and ~~any~~ other ~~strategies~~IT ~~within the e~~service-~~commerce~~related ~~ecosystem in Indonesia~~businesses.

On ~~August~~September 3113, 2018, ~~the~~P.T. ~~Company completed the acquisition of its licensor PT~~ Kinerja ~~Indonesia~~Simpan Pinjam (“PT Kinerja SP”), ~~which became~~ a wholly-owned subsidiary of PT Kinerja, was organized under the ~~Company~~laws of Indonesia for the purpose of developing and managing a peer-to-peer (“P2P”) lending platform focusing on micro-lending activities. PT Kinerja ~~Indonesia~~SP ~~continues~~was renamed to ~~provide~~PT ~~the~~Kinerja ~~technology~~SG ~~solutions~~on ~~needed~~August by30, ~~the~~2019 ~~Company~~ to ~~support~~comply ~~its~~with ~~e-commerce~~the ~~business~~naming ~~and~~convention permitted ~~may~~by ~~expand~~Financial ~~into~~Service ~~cloud~~Authority ~~computing~~(Otoritas ~~services~~Jasa ~~and~~Keuangan ~~other~~– IT“OJK”) ~~service-related~~of ~~businesses~~Indonesia.

On ~~September~~ 13February 28, ~~2018~~2019, Kinerja PTPay ~~Kinerja~~Ltd. ~~Simpan~~was ~~Pinjam~~organized ~~(“PT~~in ~~Kinerja~~Nevada ~~SP”),~~as a wholly-owned subsidiary of PTthe ~~Kinerja~~Company (“KPAY Ltd”), ~~was~~which ~~organized~~entity had ~~under~~no ~~the~~employees ~~laws~~or ofoperations ~~Indonesia~~and ~~for~~whose ~~the~~ purpose ofwas ~~developing~~to establish and ~~managing~~maintain a ~~peer-~~U.S. bank account to~~-peer~~ receive cash proceeds from security purchase agreements and convertible debentures, which proceeds were: (~~“P2P”~~i) ~~lending~~transferred ~~platform~~to ~~focusing~~its parent company; or (ii) used to pay onexpenses ~~micro-lending~~of ~~activities~~the Company or the wholly owned subsidiaries of KinerjaPay Corp.

E-Commerce Portal KinerjaPay.com

Indonesia is the fourth largest country in the world in terms of population size with a GDP ~~just~~that ~~slightly~~surpassed ~~under~~ $1 trillion in ~~2018~~2019, with ~~more~~ more than 50% of its population under the age of 30, and yet with its citizens largely underserved by the banking industry and ~~less~~ less than 10% of the population have credit cards. Our business aim is to build a secure and convenient e-commerce ecosystem to ~~customers~~ customers and merchants through our introduction of services and products including: (i) electronic payment service; and (ii) virtual marketplace both of which are available on the portal, KinerjaPay.com, (the “Portal”). In addition to access to the Portal, our Android and iPhone based mobile application includes additional in-app services to mobile phone users such as social engagement and digital entertainment (the “Mobile App”). A virtual marketplace, powered by our proprietary electronic payment service and gamified with in-app entertainment features, creates a one-stop-shop e-commerce platform for users to BUY, PAY and PLAY. We brand our virtual marketplace under the name of KMALL, our electronic payment solution under the name of KPAY, and our gamification features under the name of KGAMES. Since the Company acquired licensing rights from PT Kinerja on December 1, 2015 and established its wholly-owned subsidiary PT Kinerja Pay on April 6, 2016, we have raised capital to fund our e-commerce business development and operations through: (i) private placements of equity securities offered in reliance on the exemptions under Regulation D (“Reg D”) and Regulation S (“Reg S”) promulgated by the Securities and Exchange Commission (“SEC”) under the Securities Act; and (ii) convertible debt financing from accredited investors in reliance upon Section 4(2) of the Securities Act and Reg D. The Company began generating sales revenue from the Portal in 2017.

Electronic Payment Service (PAY)

We provide electronic payment service to consumers and merchants using the technology licensed from PT Kinerja on the Portal and Mobile App. We completed the acquisition of our licensor and former parent company, PT Kinerja, in August 2018 and, as a result, P.T. Kinerja became our subsidiary and the licensing agreement was terminated. The electronic payment service is also known as KPAY., ~~KPAY~~which provides an affordable, secure and convenient method for money transfer, bill payment and online transactions. Friends and family may transfer money using electronic devices anywhere and anytime; consumers may pay utility bills, phone bills, credit card bills and top up mobile phone credit to their mobile phone accounts; merchants of all sizes may accept payments ~~channeled~~ channelled through KPAY on their merchant websites. Our Company also developed a proprietary digital wallet software (“e-wallet”) that provides an easy, safe and secure way for individuals and businesses to make and receive payments on the Internet. Our e-wallet provides an escrow payment service that reduces transaction risk for online consumers; shoppers can verify whether they are happy with the products received before releasing funds to the seller.

The Company plans to develop its payment gateway service to enable users process payments or transfer money directly using their bank, debit and credit card accounts on our Portal and marketplace. We also offer merchants an end-to-end payment solution that provides authorization and settlement capabilities, of which merchants can connect with their customers and manage collection risk. We have also introduced an application-generated token to confirm outgoing payments to enhance transaction security.

OnThe ~~August 22, 2016, the~~ Company ~~and~~offers ~~its~~a ~~wholly-owned~~service ~~Indonesian~~that ~~subsidiary,~~enables PTusers ~~Kinerja~~to ~~Pay,~~process ~~entered~~payments ~~into~~or antransfer ~~addendum~~money ~~(the~~directly ~~“Addendum”) of~~using ~~the~~their ~~License Agreement~~bank, ~~effective~~debit asand ofcredit card ~~July~~accounts 1,on ~~2016,~~our ~~with~~Portal PTand ~~Kinerja~~marketplace. ~~Pursuant~~We toalso ~~the~~offer ~~Addendum,~~merchants PTan ~~Kinerja Pay agreed~~ end-to-end ~~utilize certain~~ payment ~~services~~solution ofthat PTprovides ~~Kinerja as described below. PT Kinerja has already successfully established the requisite infrastructure~~authorization ~~for billing, collections, payments~~ and ~~related~~settlement ~~payment services in the furtherance of its various businesses~~capabilities, ~~including its e-wallet and web portal business that were the subject~~ of ~~the~~which ~~License~~merchants ~~Agreement~~can ~~between~~connect ~~the~~with ~~Registrant~~their customers and PTmanage ~~Kinerja~~collection ~~dated December 1, 2015~~risk. ~~The~~We ~~Company~~have ~~entered~~also ~~into the Addendum as a strategic move to accelerate the commencement of its electronic payment services~~introduced ~~business~~an byapplication-generated ~~licensing~~token ~~existing technology. It also eliminated the need~~ to ~~hire~~confirm ~~and~~outgoing ~~maintain~~payments ~~additional personnel in-house~~ to ~~manage the~~enhance ~~infrastructure~~transaction security.

Pursuant to the Addendum, in consideration for the payment of an administrative fee of $200 per month, PT Kinerja, our licensor, shall: (i) collect payments from users of KinerjaPay.com, including cash deposits, bank transfers, debit cards and credit cards payments, and other forms of payments for transactions generated on the Portal; and (ii) distribute the appropriate payments to vendors, less the commissions chargeable for all transactions generated by the users while using KinerjaPay.com. Commission is paid to our subsidiary PT Kinerja Pay as vendors receive payments.

Virtual Marketplace (BUY)

We launched our virtual marketplace (“KMALL”) (~~www.KinerjaMall.com or https://KMALL.id)~~ during 2017 as a free platform for buyers to explore products and sellers to establish a low-cost online presence for their products from the local Indonesian market. Buyers and sellers can access KMALL from their electronic devices anytime and anywhere. KMALL features a “Max-3-Steps” concept aiming to streamline the shopping experience of buyers. Buyers complete a purchase transaction within three steps, by choosing an item, checking out and making a payment using their e-wallet under KPAY.

In addition to the typical categories of consumer products offered similarly by other virtual marketplaces, KMALL differentiates itself from the competitors by offering computer-related goods and mobile phone prepaid vouchers. A large selection of computer-related goods serves to attract the younger generation which tends to be heavy users of electronic devices. Approximately 98% of Indonesian mobile-phone users use prepaid vouchers to top up phone credit and the size of the prepaid voucher market in Indonesia is estimated to be $4 billion according to a research conducted by AdPlus, a leading digital media network in Indonesia. By offering mobile phone prepaid vouchers on our virtual marketplace, we believe that KMALL can generate a substantial number of return customers to shop online with us.

Market Opportunity in Indonesia

Indonesia, the world’s fourth most-populous country, having a population of approximately ~~266~~274 million as of its 2020 census, is rapidly becoming the major economic power in Southeast Asia. Over 50% of its population is below the age of 30 and the young Indonesian generation is highly adaptive to new technology. A combination of positive factors including the rapidly growing pool of internet users, the increase in discretionary spending among the middle class, and the increasing popularity of inexpensive smartphones and tablets, have pushed the Indonesian e-commerce market towards scalability and profitability. Indonesia’s e-commerce market is projected to reach $130 billion by 2020 only surpassed by China and India. According to a joint report released by idEA, Google Indonesia, and Taylor Nelson Sofres (TNS), the e-commerce market in Indonesia, where our business operates and where our principal ~~initial~~ marketing efforts ~~is focused~~are onfocused, is also the fastest growing in Southeast Asia. With an estimated annual growth rate of 50% in e-commerce business and strong mobile-first initiatives, Indonesia presents a unique opportunity for merchants and businesses to establish their online presence in the country with a service provider like us.

We believe that the current Indonesian e-commerce market resembles the early-stage Chinese e-commerce market, which is characterized by a large pool of entrepreneurial merchants offering a wide variety of consumer goods to buyers, and buyers rely heavily on social media recommendations to make their purchase decisions. In addition, Indonesian customers and merchants welcome the concept of electronic payment services and are anxious to adopt the technology which has been widely available in other sophisticated e-commerce markets such as the United States. We believe that our Company is well positioned, as an e-commerce business solution provider, to connect buyers and sellers seamlessly on KMALL, and provide an electronic payment solution KPAY to facilitate secure and convenient online transactions.

Competitive Advantages and Growth Opportunities

The KinerjaPay Core Pillars represents the competitive advantage of our Company. We believe that the successful integration of PAY, BUY and PLAY, will enable our business to become an indispensable player in Indonesia’s e-commerce market. Our electronic payment service (“KPAY”), backed by strong proprietary technology from PT Kinerja and connected with many third party business partners, acts as a secure and convenient payment channel for users to fulfil their day-to-day payment needs, ranging from bill payment, money transfer, and online shopping; our virtual marketplace (“KMALL”), curates a unique baskets of goods and offers a free platform to connect buyers and sellers, armed with its “Max-3-Steps” check-out process and escrow services backed by KPAY. To enhance user engagement, we complete KinerjaPay Core Pillars by introducing gamification features (“KGAMES”), which allows users to entertain and get rewards in our e-commerce ecosystem.

Based on data from Alexa.com, a website analytics provider, KinerjaPay.com users spend an average of 30 minutes on our Portal, which we believe is partly due to our unique gamification features. By further gamifying the e-commerce experience for our Portal users, we foresee monetizing opportunities directly and indirectly from our KGAMES features. We plan to partner with third-party game developers and develop proprietary games that curate to our user experience on the Portal and virtual marketplace. Users may transfer rewards from games and redeem in KMALL.

In building an e-commerce ecosystem from our KinerjaPay Core Pillars, we plan to continue strengthening our areas of excellence and exploring growth opportunities:

● Currently we have significant market ~~dominance~~presence in mobile phone prepaid top-up voucher business~~. Our fee structure is very competitive in the business and currently faces few competitors; ● Our e-wallet feature under KPAY enables fast and secure payment~~, ~~and~~which ~~provides~~we ~~escrow~~expect ~~services to online transactions; ● Our gamification features~~ will continue to grow ~~and enhance user engagement~~ in ~~other~~2021. ~~areas~~Our offee ~~services~~structure weis ~~provide;~~very ●competitive We plan to expand our Portal functionality by offering advertising packages to merchants and business partners, and seeking for collaboration with mobile publishers such as Google and Facebook to use our Portal as an advertising channel; ● Pursuant to our acquisition of PT Kinerja, our former licensor of the core technologies behind our payment services, we plan to explore opportunities in ~~cloud computing and data management businesses; and ● Pursuant to~~ the ~~formation~~business ~~of a new subsidiary PT Kinerja SP, we plan to develop a P2P micro-lending platform~~ and ~~target the majority of Indonesian population which is~~ currently ~~underserved~~faces byfew ~~the banking system.~~competitors;

~~Since the~~● ~~formation~~Our ~~of PT Kinerja SP, we have embarked on active planning of the new P2P micro~~e-~~financing~~wallet ~~platform~~feature ~~and intend to launch the platform~~ under ~~the~~KPAY ~~brand~~enables ~~name~~fast ~~of KFUND. KFUND will provide financing solutions to individuals,~~ and ~~small~~secure ~~to medium-size enterprises in Indonesia~~payment, ~~who currently lack access to financing from banks~~ and ~~other~~provides ~~financial~~escrow ~~institutions~~services which typically favor collateralized large projects with lower credit risk. KFUND will connect individual and business borrowers and lenders via our proprietary online platform which is currently under development. We plan to: 1) build a robust credit rating process by developing a proprietary credit rating methodology and partnering with a certified credit rating agency; 2) create a borrower acquisition strategy that reaches audience via online social media and offline sales effort in local communities. Potential lenders will have the opportunity to select a desired loan or a combination of several loans to invest in based on their risk appetite and preferred investment duration. KFUND will collect an average of 9% administration fees from each loan transaction. We understand the importance of compliance in the microlending space and is currently in the process of applying for required licenses, including ISO 27001, Information Security Management System certification. We believe that with the launch of KFUND business, we will reach another milestone in building our online ecosystem. We aim to offer our users an expanded and integrated online service experience with our existing businesses and future KFUND, and become a one-stop-shop solution for their needs to buy, pay, play and fund.transactions;

8● Our gamification features will continue to grow and enhance user engagement in other areas of services we provide;

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We plan to expand our Portal functionality by offering advertising packages to merchants and business partners, and seeking for collaboration with mobile publishers such as Google and Facebook to use our Portal as an advertising channel;

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Pursuant to our acquisition of PT Kinerja, our former licensor of the core technologies behind our payment services, we are also pursuing opportunities in cloud computing and data management businesses, which we expect to be able to commercially exploit in or about the first quarter of 2021; and

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Pursuant to the formation of our subsidiary PT Kinerja SP, which was subsequently renamed to PT Kinerja SG, we plan to develop a P2P micro-lending platform and target the majority of Indonesian population which is currently underserved by the banking system.

Since the formation of PT Kinerja SG, we began active planning of the new P2P micro-financing platform and, to date, we have received the requisite regulatory approvals and are implementing the launch of the P2P platform under the brand name of KFUND. We expect KFUND to be fully-operational during the fourth quarter of 2020 or the first quarter of 2021, the timing of which will depend on our cash flow from operations during such periods. KFUND will provide financing solutions to individuals, and small to medium-size enterprises in Indonesia, who currently lack access to financing from banks and other financial institutions which typically favor collateralized and/or larger projects with lower credit risk than the market we intend to serve. KFUND will connect individual and business borrowers and lenders via our proprietary online platform which the Company believes is in the final stages of development, following which we plan to: (1) build a credit rating process utilizing a proprietary credit rating methodology currently in development and partnering with a certified credit rating agency; (2) create a borrower acquisition strategy that reaches audience via online social media and offline sales effort in local communities. Potential lenders will have the opportunity to select a desired loan or a combination of several loans to invest in based on their risk appetite and preferred investment duration. KFUND will collect an average of 9% administration fees from each loan transaction. We understand the importance of compliance in the microlending space, and we are currently in the process of applying for required licenses, including ISO 27001, Information Security Management System certification. We believe that with the launch of KFUND business, we will reach another milestone in building our online ecosystem.

Company Subsidiaries and Collaboration Agreements

We carry out our business through the Company and three wholly-owned subsidiaries. This corporate structure allows us to simplify the accounting treatment, minimize taxation and optimize local grant support. The subsidiaries related to this business are as follows:

● PT Kinerja Pay Indonesia – this entity currently focuses on building our e-commerce ecosystem including KPAY, KMALL and KGAMES. Together with the parent Company, PT Kinerja Pay Indonesia continues to expand collaboration with third parties and develop an internal sales and marketing effort. ● PT Kinerja Indonesia – this entity, as the previous licensor of the Company prior to acquisition, has already successfully established the requisite infrastructure for billing, collections, payments and related payment services, and continues to provide all necessary R&D, technical support, servers, procurement/logistic and IT operational services, equipment bandwidth and other technology support. It continues to serve as the technology engine of the Company and will explore cloud computing business and other IT service-related businesses. ● PT Kinerja Simpan Pinjam – this entity will manage the new KFUND brand and focus on developing a peer-to-peer (P2P) micro-lending platform.

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PT Kinerja Indonesia – this entity, as the previous licensor of the Company prior to acquisition, has already successfully established the requisite infrastructure for billing, collections, payments and related payment services, and continues to provide all necessary R&D, technical support, servers, procurement/logistic and IT operational services, equipment bandwidth and other technology support. It continues to serve as the technology engine of the Company and will explore cloud computing business and other IT service-related businesses.

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PT Kinerja SG – this entity will manage the new KFUND brand and focus on developing a peer-to-peer (P2P) micro-lending platform.

We have embarked on a strategy of collaborative arrangements and partnerships with strategically situated third parties around the world. We believe that these parties have the expertise, experience and strategic location to advance our e-commerce business.

Corporation and Service Agreement with Black Grace Investment Ltd.

On August 31, 2016, the Company and PT Kinerja Pay entered into a corporation and service agreement with Black Grace Investment Ltd., organized under the laws of the British Virgin Island (“Black Grace”) and its affiliate, PT. Pay Secure Online Indonesia, organized under the laws of Indonesia (“PT. PaySec”). 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 to share the net revenue generated from the use of the Payment Services and e-wallet and payment gateway technology on a 50/50 basis. On May 12, 2017, the agreement with Black Grace was terminated.

Corporation and Service Agreement with PT. Indonesia EnamDua

On September 8, 2016, the Company 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 wholesaler and online shop that sells a wide range of products and services, an online search engine and an online customer service provider. Pursuant to this Agreement, the parties agreed to share resources in connection with the development of PT Kinerja Pay’s virtual marketplace, KMALL. In consideration for PT.IED’s services, the parties agreed to allocate the profits, defined as an item’s selling price on KMALL minus the cost price of the item sold 90% to the Company and 10% to PT.IED. The Company has not generated revenue as a result of this Corporation and Service Agreement. On August 31, 2018, the agreement with PT.IED was terminated.

Partnerships with businesses

At the end of March 2017, we started, in cooperation with third parties, providing monthly billing services to PLN customers which could serve potentially 10 million accounts nation-wide. PLN is an Indonesian government-owned corporation that has a monopoly on electricity generation and distribution in the country. During April 2017, we expanded our payment channel by cooperation with large state-owned companies in Indonesia such as PT Pos Indonesia and PT Pegadaian, as well as leading multi finance companies including Columbia Cash & Credit, Mega Auto Finance and WOM Finance. In addition, beginning May 2017, we extended our payment channel to include minimart chains such as Indomaret and Alfamart, as well as PT 24 Jam Online. We believe that by expanding our network of payment channels with well-organized notable businesses, we will be able to generate a significant number of new users for KinerjaPay.com to use KPAY, and serve the unbanked Indonesian customers and businesses, helping them to shop and pay bills quicker, safer, and more conveniently. In October 2017, we entered into a partnership with a global smartphone-enabled ‘Ride Hailing’ service, Uber Technologies, Inc.(“Uber”). Our partnership with Uber was intended to bring promotional deals for KinerjaPay users to use Uber service and use our payment solutions for ride payment processing. Due to the acquisition of Uber Southeast Asia by GrabTaxi Holdings Pte. Ltd. (“Grab”) in March 2018, our partnership with Uber was not extended.

Corporation and Service Agreement with Ace Legends, Pte. Ltd.

In July 2017, the Company entered into a Cooperation and Service Agreement with Ace Legends, Pte. Ltd, organized under the laws of Singapore (“ACE”). Pursuant to the agreement, ACE, a game developer, will develop games for the Company under our KGAMES business. On March 6, 2018, the Company and ACE launched a game called FLOO on Android and iOS platform. However, due to delay of the launch of subsequent planned games, in November 2018, the Company and ACE agreed to terminate the agreement. The Company plans to build its own game division in PT Kinerja.

Sales and Marketing

Our primary sales and marketing effort emphasizes on our key differentiator from competitors – KinerjaPay Core Pillars, an e-commerce ecosystem that integrates electronic payment service with a virtual marketplace enhanced by gamification components. The emphasis of such will deliver a message to potential users that they can PAY, BUY and PLAY at one place and thus achieve the marketing objective to attract new users and enhance user engagement.

We commenced a nationwide marketing ~~campaign~~campaigns to promote KinerjaPay.com to Indonesian consumers and merchants ~~during~~in 2017. Marketing ~~techniques~~ techniques used include online advertisement on Facebook®, YouTube®, Twitter®, AdWords®, AdChoices® and Instagram®. Early January 2017, the holiday campaigns held by KinerjaPay were able to help in securing a milestone of reaching 100,000 users. We localized our online and offline marketing effort to target specific communities to attract new customers and merchants. Our user basis is currently approaching 200,000 users.

Our services and products are marketed under the brand names as follows:

● KPAY – our electronic payment service (“PAY”) business including payment gateway, e-wallet and payment with QR code; ● KMALL – our virtual marketplace (“BUY”) business B2B and B2C online transactions; and ● KGAMES – our gamification (“PLAY”) business that develops games internally and from local game developers.

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KMALL – our virtual marketplace (“BUY”) business B2B and B2C online transactions; and

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KGAMES – our gamification (“PLAY”) business that develops games internally and from local game developers.

Proprietary Technology, Domain Name and Licenses

KinerjaPay IP and www.KinerjaPay.com are backed by proprietary technology including the application codes, infrastructure architecture, infrastructure design, processes/sub-processes, integrated proprietary payment solutions, built-in marketplace and gamification concepts and modules. We will endeavor to protect our propriety technology, domain name, customer base and trade secrets to the extent reasonably and commercially practicable because such protection is critical to our success. We will rely principally on the laws in Indonesia and, to a lesser extent on available international protection, if any.

We have registered our domain names, Kinerja Pay, Kmall and Kfund to Ministry of Communication and Informatics of the Republic of Indonesia. As we expand our markets, we may seek to further protect our proprietary rights, to the extent that they may exist, a process that can be both expensive and time consuming and may not be successful. If we are unable to register or protect our domain name, we could be adversely affected in any jurisdiction in which our trademarks and/or domain names are not registered or protected.

Research and Development

Because the industries in which the Company competes are characterized by rapid technological advances, the Company’s ability to compete successfully depends heavily upon its ability to ensure a continual and timely flow of competitive products, services and technologies to the marketplace. The Company continues to develop new technologies to enhance existing products and services, and to expand the range of its offerings through R&D, licensing of intellectual property and acquisition of third-party businesses and technology.

Competition

We compete with various companies in each of our business segments directly and indirectly.

Our electronic payment service (“KPAY”) competes directly with other electronic payment solution services and alternative payment gateways provided by banks or telecommunication companies. These are typical stand-alone payment service providers that depend on third-party e-commerce marketplaces to generate transaction flows.

We believe that our KPAY service differs from our competition in three major aspects:

● Unique feature: we provide e-wallet functionality which allows users to deposit funds using different means into the secured digital wallet. An e-wallet is accessible from multiple electronic devices; ● Security feature: our e-wallet acts as an escrow account to enhance the reliability of KMALL transactions. Payments are only released to merchants once goods are received by buyers on our virtual marketplace; and ● Versatility in use: our KPAY service not only acts as a traditional payment gateway like other providers, the service is deeply integrated with KMALL. Users enjoy the convenience of KPAY for different purposes, including bill payment, fund transfer, as well as online shopping.

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Security feature: our e-wallet acts as an escrow account to enhance the reliability of KMALL transactions. Payments are only released to merchants once goods are received by buyers on our virtual marketplace; and

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Versatility in use: our KPAY service not only acts as a traditional payment gateway like other providers, the service is deeply integrated with KMALL. Users enjoy the convenience of KPAY for different purposes, including bill payment, fund transfer, as well as online shopping.

Our virtual marketplace (“KMALL”) competes directly with online B2B and B2C shopping platforms and other offline channels including but not limited to, retailers, catalogs and classifieds. Direct competitive shopping platforms include Tokopedia, Bukalapak, Shopee, Lazada, and Blibli, etc. We mainly compete based on price, product selection and services.

Some of the principal competitive factors include:

● ability to attract, retain and engage buyers and sellers; ● volume of transactions and price and selection of goods; ● reliability in our electronic payment service; ● customer service; ● accessibility and user-friendliness of website, mobile app and application; ● reliability and security of our technology and system, and ● level of service fees.

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volume of transactions and price and selection of goods;

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reliability in our electronic payment service;

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customer service;

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accessibility and user-friendliness of website, mobile app and application;

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reliability and security of our technology and system, and

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level of service fees.

We believe that our KMALL differs from our competition in three major aspects:

● KMALL is backed by technology and market knowledge developed by Indonesian locals. Our Company currently focuses solely on growing the Indonesian e-commerce market. We believe that our in-depth understanding of local cultural, commercial, and regulatory environment gives us a unique competitive edge compared to foreign e-commerce players; ● KMALL features the “Max-3-Steps” check out process and payment method backed by KPAY; shopping on KMALL is convenient and secure for customers and merchants who are already our KPAY users; and ● As we continue to grow our KGAMES gamification features, we reward our gaming users with extra bonuses for shopping on KMALL. We believe this feature is particularly enticing to younger generation under the age of 30, which accounts for more than 50% of the entire Indonesian population.

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KMALL features the “Max-3-Steps” check out process and payment method backed by KPAY; shopping on KMALL is convenient and secure for customers and merchants who are already our KPAY users; and

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As we continue to grow our KGAMES gamification features, we reward our gaming users with extra bonuses for shopping on KMALL. We believe this feature is particularly enticing to younger generation under the age of 30, which accounts for more than 50% of the entire Indonesian population.

We expect that our P2P lending business, KFUND, will face intense competition from established players in Indonesia. Some notable competitors include KoinWorks, Investree, Modalku, Danamas, Akseleran and Taralite. Top players have achieved annual revenue between two to three million US Dollars, with over one million active user accounts and annual loan disbursement of over $110 million. We expect our customer base will overlap significantly with top players in the market. Therefore, successful product differentiation and sophisticated technological interface will strengthen our competitive advantage in the industry. Our strategic focus will include the following:

● Build a proprietary lending platform and develop necessary technological infrastructure in-house, which will allow us to respond to market changes rapidly and achieve business scalability; ● Develop proprietary credit scoring methodology using a mix of traditional and behavioral metrics, and integrate with data from third-party credit rating agency, to create a hybrid credit rating system; and ● Offer a unique portfolio of loan products such as employee loans and SME micro productive loans.

11● Develop proprietary credit scoring methodology using a mix of traditional and behavioral metrics, and integrate with data from third-party credit rating agency, to create a hybrid credit rating system; and

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Offer a unique portfolio of loan products such as employee loans and SME micro productive loans.

We plan to continue to invest significant resources in technology to enhance user experience. We also plan to refine search engine optimization and use paid search advertising to increase visibility of our products and services. By deepening existing collaborative relationships with our partners and seeking for new partnerships, we aim to reach more end users efficiently.

Government Regulation

There are currently few laws or regulations in Indonesia that are specifically related to the sale of goods and services on the Internet. We currently are subject to Indonesian regulations in our role as a money transfer agent and are, therefore, subject to Indonesian electronic fund transfer and money laundering regulations. We received the requisite GeoTrust Certificate in March 2014 in which entire user transactions have been protected by 256-bit encryption. This is understood to provide a safe platform for online transaction. We believe to be in compliance with all existing Indonesian governmental regulations applicable to e-commerce operator that facilitate online transactions between sellers and buyers.

Any application of existing laws and regulations related to banking, currency exchange, online gaming, electronic contracting, consumer protection and privacy is at present unclear. Our potential liability in case our customers are in violation of any applicable laws on pricing, taxation, impermissible content, intellectual property infringement, unfair or deceptive practices or quality of services is also unclear. In addition, we may become subject to new laws and regulations directly applicable to the Internet or our specific e-commerce activities. Any existing or potential new legislation applicable to specific e-commerce activities could expose us to substantial liability, including significant expenses necessary to comply with these laws and regulations, and reduce and/or limit the use of the Internet on which we depend.

To date, we have not incurred any compliance-related expenses with any governmental laws in Indonesia pertaining to the use of our e-commerce portal as a payment option for online shopping and other transactions.

Employees

As of December 31, ~~2018~~2019, we had an aggregate of 7760 employees working at our Company and three operating subsidiaries. Mr. Edwin Witarsa Ng, has served as our CEO and Chairman ~~(“Mr.~~since ~~Ng”)~~inception and ~~Mr.~~ Windy Johan, ~~our~~had served as CFO (“of the Company and its subsidiaries from December 2017 until his resignation on April 27, 2020, at which date the Company appointed Mrs. Butet Evans as CFO. As of December 31, 2019, our executive officers consisted on Mr. Edwin Ng and Mr. Windy Johan~~”),~~ ~~constitute~~and constituted our management team, ~~together~~ together with Mr. Deddy Oktomeo (“Mr. Oktomeo”), CEO of our wholly-owned Indonesian subsidiary, PT Kinerja Pay Indonesia, Mr. Christopher Danil, CEO of PT Kinerja Indonesia, Mr. Henful Pang, Commissioner of PT Kinerja Indonesia, and Mr. Anoki Kiyosyi, CEO of PT Kinerja ~~Simpan Pinjam~~SG. They are not obligated to contribute any specific number of hours per week to our operations and intend to devote only as much time as they deem necessary to the Company’s affairs until our business scales and new business initiatives require to do so. We have not entered into employment agreements with Mr. Ng, Mr. Johan, Mr. Oktomeo, Mr. Danil, Mr. Pang and Mr. Kiyoshi.

The employees of our Company and our subsidiaries are not subject to any collective bargaining agreement. We believe that we have good relations with our employees.

Transfer Agent

Our stock transfer agent is Transfer Online, Inc., with offices located at 512 SE Salmon Street, Portland, OR 97214. Their telephone number is (503) 227 2950, their fax number is (503) 227 6874, and their website is www.transferonline.com.

Corporate and Available Information

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are available free of charge though our website (https://www.kinerjapay.co/) as soon as practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”). Except as otherwise stated in these documents, the information contained on our website or available by hyperlink from our website is not incorporated by reference into this report or any other documents we file, with or furnish to, the SEC.

ITEM 1A. RISK FACTORS

An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this report in evaluating our company and its business before purchasing shares of our company’s common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. You could lose all or part of your investment due to any of these risks.

Risks Related to Our Business and Industry

Although our financial statements have been prepared on a going concern basis, we must raise additional capital to fund our operations in order to continue as a going concern.

The audited financial statements have been prepared assuming that we will continue as a going concern and do not include any adjustments that might result if we cease to continue as a going concern. We believe that in order to continue as a going concern, including the costs of being a public company, we will need to continue to increase sales and revenue to fund business expenses, and support business expansion through the sale of restricted shares of our Common Stock, and the issuance of convertible notes.

During the year ended December 31, ~~2018~~2019, we raised approximately $~~500~~146,000 from the private sale of equity securities and received net proceeds of approximately $14,~~519~~344,000 ~~and~~ ~~$100,000 respectively~~ from issuance of convertible notes ~~and 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 OTC Market Group’s OTCQB. 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 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.

Our limited operating history does not afford investors a sufficient history on which to base an investment decision.

Our existing electronic payment service and virtual marketplace businesses were first launched and operated by PT Kinerja in February 2015 and only has a limited operating history. The Company initially utilized KinerjaPay IP and operated KinerjaPay.com through License Agreement entered into with PT Kinerja in December 2015 before acquiring PT Kinerja as a wholly-owned subsidiary in August 2018. As a result of limited operating history of the business, and the Company’s short period of control over the subsidiary, the business may not break-even or become profitable in the near future, if at all. If we are unable to reach profitability, our stock price would decline and our ability to continue to raise capital, either equity or debt, may be adversely affected. The e-commerce market in Indonesia is emerging and evolving; we may need an extended period of time to prove our business model in the local market and reach long-term profitability and scalability, during which we will encounter risks and difficulties commonly faced by any early-stage companies in new and rapidly evolving markets.

We will need to raise capital in order to realize our business plan, the failure of which could adversely impact our operations.

We are currently not profitable. For the fiscal year ended December 31, ~~2018~~2019 and as of the date of this report, we assessed our financial condition and concluded that our belief that in order to continue as a going concern, including the costs of being a public company, we ~~may~~will need to ~~raise~~continue ~~additional~~to ~~capital~~increase sales and revenue to fund business ~~operations~~expenses, ~~for~~and support business expansion through the ~~next~~sale of 12restricted ~~months~~shares ~~from~~of our Common Stock, and the ~~date~~issuance of ~~the~~convertible ~~report.~~notes ~~Our auditor’s~~and ~~report~~otherwise ~~for~~need ~~the~~to ~~year~~raise ~~ended~~additional ~~December~~capital to ~~31,~~fund ~~2018~~business ~~includes~~operations afor ~~going~~the ~~concern~~next ~~opinion~~12 onmonths from the ~~matter~~date of this annual report. We had a net loss of approximately $819,~~393~~948,~~660~~ 000 for the year ended December 31, ~~2018~~2019. During the same period, cash used in operations was approximately $23,~~037~~301,~~691~~000, the working capital deficit and accumulated deficit as of December 31, ~~2018~~2019 were approximately $36,~~594~~259,000 and $1838,~~145~~093,000, respectively. Management is unable to predict if and when we will be able to generate significant positive cash flow or achieve profitability. Without adequate funding or a significant increase in revenue, we may not be able to resume operations in the normal course of business or expand business development efforts in other strategic initiatives; we may not be able to invest in research and development needed to upgrade technological infrastructure of our electronic payment service, virtual marketplace and gamification features; we may not be able to acquire additional businesses or form more collaborative relationships with third parties to gain market share in the e-commerce market. As of December 31, ~~2018~~2019, we had available cash resources of $~~150~~95,~~091~~972.

13Overall, we have funded our cash needs: (i) primarily from the issuance of convertible debt instruments; (ii) to a lesser extent, through the private placement of equity securities to accredited investors in reliance upon the exemptions under Reg D and Reg S; and (iii) lastly through cash flow from our revenue-generating operations.

Overall, we have funded our cash needs from inception through the date hereof with a series of debt and equity transactions, and through cash flow from our revenue-generating operations.

We expect to continue to finance our operations, acquisitions and develop strategic relationships, primarily by issuing equity or convertible debt securities, which could significantly reduce the percentage ownership of our existing stockholders. Furthermore, any newly issued securities could have rights, preferences and privileges senior to those of our existing common stock. Moreover, any issuances by us of equity securities may be at or below the prevailing market price of our common stock and in any event may have a dilutive impact on existing stockholders’ ownership interest, which could cause the market price of our common stock to decline. We may also issue securities in our subsidiaries, and these securities may have rights or privileges senior to those of our common stock.

We may have difficulty obtaining additional funds as and when needed, and we may have to accept terms that would adversely affect our stockholders. In addition, any adverse conditions in the credit and equity markets may adversely affect our ability to raise funds when needed. Any failure to achieve adequate funding will delay our business plan executions and could lead to abandonment of one or more of our initiatives, as well as prevent us from responding to competitive pressures or take advantage of unanticipated acquisition opportunities. Any additional equity financing will likely be dilutive to stockholders, and certain types of equity financing, if available, may involve restrictive covenants or other provisions that would limit how we conduct our business or finance our operations.

We will need to grow the size and capabilities of our organization, and we may experience difficulties in managing this growth.

As of December 31, ~~2018~~2019, we had 7762 employees., including our 2 executive officers and 60 persons working at our 3 Indonesian subsidiaries. As our marketing plans and business strategies develop, we may need to recruit additional managerial, operational, sales and marketing, financial, IT and other personnel. Future growth will impose significant added responsibilities on members of management, including:

● identifying, recruiting, integrating, maintaining, and motivating additional employees; ● maintaining and furthering collaborative relationships with third-party business partners, service providers and investors; and ● improving our operational, financial and management controls, reporting systems, and procedures of the Company and its subsidiaries.

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maintaining and furthering collaborative relationships with third-party business partners, service providers and investors; and

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improving our operational, financial and management controls, reporting systems, and procedures of the Company and its subsidiaries.

Our future financial performance and our ability to scale our e-commerce business will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities. This lack of long-term experience working together may adversely impact our senior management team’s ability to effectively manage our business and growth.

We currently rely, and for the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors and consultants to provide certain services. There can be no assurance that the services of these independent organizations, advisors and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements. In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our marketing plans to promote e-commerce business may be delayed, or terminated; our technological integrity of the IT system backing up KPAY, KMALL and KGAMES may be compromised, and we may not be able to ensure the security of our electronic payment service or prevent system malfunction of the virtual marketplace. There can be no assurance that we will be able to manage our existing consultants or find other competent outside contractors and consultants on economically reasonable terms, if at all. If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully implement the tasks necessary to achieve our marketing, research, development, and expansion goals, and we may face loss and liability in connection with any deficiency in service caused by the lack of capable personnel or errors made by third party contractors.

We depend on key personnel who would be difficult to replace, and our business plans will likely be harmed if we lose their services or cannot hire additional qualified personnel.

Our success depends substantially on the efforts and abilities of our senior management, including Mr. Ng, our CEO and controlling shareholder, and certain key personnel. The competition for qualified management and key personnel is intense. The loss of services of one or more of our key employees, or the inability to hire, train, and retain key personnel, could delay the development and sale of our services and products, disrupt our business, and interfere with our ability to execute our intended business plan.

We plan to grant stock options or other forms of equity awards in the future as a method of attracting and retaining employees, motivating performance and aligning the interests of employees with those of our stockholders. There are currently no options and/or equity awards outstanding. If we are unable to adopt, implement and maintain equity compensation arrangements that provide sufficient incentives, we may be unable to retain our existing employees and attract additional qualified personnel. If we are unable to retain our existing employees, including qualified technical personnel, and attract additional qualified candidates, our business and results of operations could be adversely affected.

Our revenue will be dependent upon acceptance of our e-commerce services and products by Indonesian Consumers. The failure of such acceptance will cause us to curtail or cease operations.

We are uncertain whether our e-commerce services and products including KPAY, KMALL and KGAMES will be accepted by Indonesian consumers and become commercial success. A number of factors may limit the market acceptance of our services and products, including:

● the availability of alternative electronic payment solutions; ● the competitiveness of transaction fees using our services relative to alternative electronic payment solutions; ● competition from other locally or internationally recognized virtual marketplaces; ● market demand for our e-commence products and services proves to be smaller than we expect; ● user friendliness of our services and products in comparison to competitors; ● research and development turns out to be costlier and/or more time-consuming than anticipated; and ● change in regulatory environment may make running our Portal and virtual marketplace become uneconomical.

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the competitiveness of transaction fees using our services relative to alternative electronic payment solutions;

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competition from other locally or internationally recognized virtual marketplaces;

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market demand for our e-commence products and services proves to be smaller than we expect;

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user friendliness of our services and products in comparison to competitors;

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research and development turns out to be costlier and/or more time-consuming than anticipated; and

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change in regulatory environment may make running our Portal and virtual marketplace become uneconomical.

We may not be able to realize substantial streams of revenue from our offering of services and products if we lose market share in currently dominant market such as the mobile phone credit voucher business, or fail to increase market share in electronic payment service and virtual marketplace. We may incur significant amount of capital expenditure on research and development to exploit and commercialize KinerjaPay IP but never succeed despite of management’s effort.

Service interruption in PT Kinerja may harm our business operations.

We rely on our wholly-owned subsidiary PT Kinerja to provide substantially all technology support required for electronic payment service and payment processing on our virtual marketplace. If the operations of PT Kinerja are limited, restricted, curtailed or degraded in any way or become unavailable to our users for any reason, our business operations may be materially and adversely affected. PT Kinerja operates all of the servers, manages the 1,500 square-feet data center located in North Sumatra, Indonesia, and provides hosting and maintenance services to all infrastructure systems which we rely on.

PT Kinerja’s operation is subject to a number of risks that could materially and adversely impact its ability to provide payment processing and escrow services to KPAY and KMALL, including:

● service outages, system failures or failure to effectively scale the system to handle large and growing transaction volumes; ● breach of users’ privacy and concerns over the use and security of information collected from customers; and ● failure to manage funds accurately or loss of funds, whether due to employee fraud, security breaches, technical errors or otherwise.

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breach of users’ privacy and concerns over the use and security of information collected from customers; and

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failure to manage funds accurately or loss of funds, whether due to employee fraud, security breaches, technical errors or otherwise.

While all of our operations have disaster recovery plans in place and we plan to carry property and business interruption insurance, preventive measures and insurance coverage may be inadequate. Despite any precautions we undertake, damage from natural disasters, outbreak of war, escalation of hostilities, acts of terrorism, and similar events at PT Kinerja’s computer facilities could result in interruptions in the flow of data to our users. In addition, any failure by the computer environment to provide our required data communications capacity could result in interruptions in our service. In the event of a server failure, we could be required to transfer our user data operations to an alternative provider of server hosting services. Such a transfer could result in delays in our ability to deliver our services to our customers and increased operating costs.

If glitches and errors interrupt user experience with our services, our Company may attract negative publicity and incur further cost to remedy the situation. We may also be subject to liability if the glitches and malfunctions cause breach of the security of user proprietary information. There is no assurance that technical difficulties will not occur in the normal course of business of PT Kinerja. Resulting business consequences may include decrease in market acceptance of our services and products, loss of trust from our existing customers, diversion of development resources and management attention, damage to our reputation, potential litigation, and increased service costs, any of which would have a material adverse effect upon our business, operating results and financial condition.

Change in Credit card associations rules may harm our business.

Credit card associations rules may change or certain practices could negatively affect our electronic payment service business and, incompliance with these rules may result in our inability to accept credit cards from our customers. If we are unable to accept credit cards, our competitive position would be critically damaged. We are not a bank and as a result we are barred from belonging to or directly access any credit card associations or bank payment networks. We rely on banks, credit card companies, and their respective service providers to process our transactions. We must comply with the operating rules of credit card associations and bank payment networks as they apply to all merchants dealing on our Portal. The association’s member banks set these rules, and the association interprets the rules. Some of those member banks compete with us in providing electronic payment services to customers and businesses. Credit Card Association could issue new operating rules or change interpretations of existing rules which we may find difficult or impossible to comply with, in which case we could lose our ability to provide customers with the option of using credit cards to process payments and thus lose our competitive position to financial institutions and/or other electronic payment solution providers.

We rely on a single bank for payment processing.

Bank Central Asia (“BCA”) currently processes our bank transactions and our credit card transactions. BCA also provides payment processing services to some of our competitors and offers credit card processing services directly to online merchants. If our cooperative relationship with BCA become unsustainable, we may not be able to find alternative bank, credit card companies and other service providers quickly at acceptable terms to prevent any disruption in our service.

Increase in transactions processed by credit card may increase our transaction cost.

We pay significant amount of transaction fees depending on issuing banks’ policies, which ranges from 0% to 3% when payers fund payment transactions using credit cards, nominal fees when payers fund payment transactions by electronic transfer of funds from bank accounts, and no fees when payers fund payment transactions from an existing e-wallet account with us. Users may prefer funding payments by credit card because of certain protection and benefits offered by credit cards, including the ability to dispute and reverse merchant charges, offering cash reward and incentive programs. Our transaction fees may increase significantly which in turn squeeze our profit margin in electronic payment service if increasing number of users switch to using credit card as their preferred method of payment.

From time to time, Credit card associations increase the interchange fees that they charge for each transaction using their cards. Our credit card processors have the right to pass any increases in interchange fees on to us. Any such increased fees could increase our operating costs and reduce our profit margin. Furthermore, our credit card processors require us to pledge cash as collateral with respect to our acceptance of certain credit cards and the amount of cash that we are required to pledge could increase at any time.

We may incur liabilities and losses related to our electronic payment processing business; insurance coverage is expensive and difficult to obtain, we may be exposed to lawsuits and monetary penalties that will harm our business.

Our business exposes us to potential liability risks which are inherent in the e-commerce market. As we will take preventive measures we deem to be appropriate to avoid potential liability claims against us, there can be no assurance that we can avoid exposure to significant liability claims. Liability insurance for electronic payment processing industry is generally expensive. We also plan to obtain liability professional indemnity insurance coverage for our Portal services. There can be no assurance that we will be able to obtain such coverage on acceptable terms, or that any insurance policy will provide adequate protection against potential claims. A successful liability claim brought against us may exceed any insurance coverage secured by us and could have a material adverse effect on our results or ability to continue our business.

The loss of market share in the mobile phone credit top-up business or a change in mobile phone bill payment method could harm our business.

~~Currently~~We believe that we ~~are~~can continue to remain one of the few ~~players~~participants in Indonesia providing mobile phone credit top-up service to our electronic payment service users. The business contributes a significant amount of revenue to our Company. During the year ended December 31, ~~2018~~2019, revenue generated from mobile phone credit top-up service ~~amounts~~amounted to $1216,~~412,303~~136. There can be no assurance that customers will continue to favor our service if other competitors offer more affordable and convenient payment options. If mobile service providers offer payment options using credit cards or bank accounts directly, our service may be obsolete and cause material adverse effect on our business, operating results and financial condition.

We may be unable to compete successfully against current and future competitors.

The e-commerce market in Indonesia has become very active only during the past several years with a few major companies that were funded by big institutional investors. Some current and potential competitors have longer operating histories, larger customer bases and greater brand recognition in other business and Internet sectors than we do. To a lesser extent, there are local and a few regional companies that have entered the e-commerce market. The products being offered in the marketplace have typically been physical items across few different categories such as electronics and gadgetry, fashion items and household goods. These e-commerce entities typically are charging transaction fees of from 2% to 5% per transaction.

Customer complaints or negative publicity about our product and customer service could harm our business.

Customer complaints or negative publicity about our products and services could tarnish our reputation and decrease customer confidence. Customer complaints may stem from system malfunction, server shutdown, breach of privacy, fraud, disputes around online transactions, and inadequate customer service towards issues and disputes. Measures we sometimes take to combat risks of fraud and breaches of privacy and security, such as freezing customer funds, can damage relations with our customers. These measures heighten the need for prompt and accurate customer service to resolve irregularities and disputes. We may receive negative media coverage, as well as public criticism regarding customer disputes. Effective customer service requires significant personnel expense, and if not managed properly, could adversely impact our business. We expect to employ more customer service and sales representatives at PT Kinerja. Any inability to manage or train our customer service representatives properly could compromise our ability to handle customer complaints effectively. If we do not handle customer complaints effectively, our reputation may suffer and we may lose our customers’ confidence in our business.

We have limited experience in managing and accounting accurately for large amounts of customer funds. Our failure to manage these funds properly would harm our business.

Our ability to manage customer funds requires a high level of internal controls. We have neither an established operating history nor proven management experience in maintaining, over a long term, these internal controls. With limited experience, we may mishandle a single large transaction or encounter technical difficulty in surging volume of transactions. Any failure to maintain controls over large amount of customer funds can hurt consumer confidence and drive away large merchants.

We face considerable risks of loss due to fraud and/or disputes between senders and recipients. If we are unable to deal effectively with losses from fraudulent transactions and user disputes, our losses would increase, and our business would be materially adversely affected.

We face significant risks of losses and liabilities to fraud and disputes between senders and recipients, including:

● settling funds for illegitimate transactions and unable to recover them; ~~● fraud and identity thieves using stolen or fabricated credit card or bank account numbers causing damage to users; and ● inability to collect chargebacks or refunds.~~

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fraud and identity thieves using stolen or fabricated credit card or bank account numbers causing damage to users; and

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inability to collect chargebacks or refunds.

Illegitimate transactions can expose us to governmental and regulatory sanctions as well as potentially prevent us from satisfying our contractual obligations to our third party partners, which may cause us to be in breach of our obligations. The highly automated nature of our payments services may make us a target for illegal or improper uses, including fraudulent or illegal sales of goods or services such as alcoholic beverages, tobacco products, prescription medications, controlled substances, pirated software and intellectual properties, illegal online games, illegal activities such as money laundering, bank fraud, child pornography trafficking, online securities fraud, and terrorist financing.

In the event that a billing dispute between a buyer and a seller is not resolved in favor of the seller, including in situations where the seller engaged in fraud, the transaction is typically “charged back” to the seller and the purchase price is credited or otherwise refunded to the buyer. If we are unable to collect chargebacks or refunds from the seller’s account, or if the seller refuses to or is unable to reimburse us for chargebacks or refunds due to closure, bankruptcy, or other reasons, we may bear the loss for the amounts paid to the buyer. If our chargeback rate becomes excessive, credit card associations may require us to pay fines and could terminate our ability to accept their cards for payments.

In configuring our payments services, we face an inherent trade-off between security and customer convenience. We believe that several of our current and former competitors in the electronic payments business have gone out of business or significantly restricted their businesses largely due to fraudulent transactions. We expect that technically knowledgeable criminals will continue to attempt to circumvent our anti-fraud systems. Our current business and anticipated growth will continue to place significant demands on our risk management and compliance efforts, and we will need to continue developing and improving our risk management infrastructure, techniques, and processes. If our risk management policies and processes contain errors or are otherwise ineffective, we may suffer large financial losses, we may be subject to civil and criminal liability, and our business may be materially and adversely affected.

We have entered into collaborations and may form or seek collaborations or strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements.

We may form or seek strategic alliances, create joint ventures or collaborations, or enter into additional licensing arrangements with third parties that we believe will complement or augment our development efforts with respect to our e-commerce business and any future products or services that we may develop. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders, or disrupt our management and business. In addition, we face significant competition in seeking appropriate strategic partners for which the negotiation process is time-consuming and complex. Moreover, we may not be successful in our efforts to establish a strategic partnership because our e-commerce business may be deemed to be too early stage for collaborative effort and third parties may not view our business model as having the requisite potential to demonstrate security and scalability. Further, collaborations involving our services and products, are subject to numerous risks, which may include the following:

● collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration; ● collaborators may elect not to continue or renew revenue-sharing agreements for our electronic payment service and virtual marketplace; changes in their strategic focus due to the acquisition of competitive products, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities; ● collaborators could independently develop, or develop with third parties, electronic payment service, e-wallet, payment gateway, virtual marketplace, online game, and any other related e-commerce services or products that compete directly or indirectly with our services, products or product candidates; ● collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; ● disputes may arise between us and a collaborator that cause the termination of the joint effort, loss of revenue source, or that result in costly litigation or arbitration that diverts management attention and resources; and ● collaborators may own or co-own intellectual property covering our products that results from our collaborating with them and, in such cases, we would not have the exclusive right to commercialize such intellectual property.

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collaborators may elect not to continue or renew revenue-sharing agreements for our electronic payment service and virtual marketplace; changes in their strategic focus due to the acquisition of competitive products, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities;

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collaborators could independently develop, or develop with third parties, electronic payment service, e-wallet, payment gateway, virtual marketplace, online game, and any other related e-commerce services or products that compete directly or indirectly with our services, products or product candidates;

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collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;

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disputes may arise between us and a collaborator that cause the termination of the joint effort, loss of revenue source, or that result in costly litigation or arbitration that diverts management attention and resources; and

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collaborators may own or co-own intellectual property covering our products that results from our collaborating with them and, in such cases, we would not have the exclusive right to commercialize such intellectual property.

As a result, if we enter into collaboration agreements and strategic partnerships or license our products or businesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture, which could delay our timelines or otherwise adversely affect our business. We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction. Any delays in entering into new collaborations or strategic partnership agreements or any unexpected termination of the existing relationships could cause loss of revenue streams and user base in the short term, and would harm our business prospects, financial condition, and results of operations.

We have established current business model by acquisitions of requisite technology infrastructure and intellectual properties; future acquisitions may not be successful or may not realize the long-term performance we expect from business integration.

Corporate and product acquisition is an important part of our growth strategy. We may not be able to identify suitable targets given the relatively narrow scope of our business. We may not be able to close an acquisition or lose to other competitors due to inadequate capital funding. If we make strategic acquisitions to expand our existing business lines or develop new business services or products, the target may be loss-making; we may incur significant operating expenses and capital expenditure which will adversely impact our financial results. The acquired business may compete directly or indirectly with one or more of our existing strategic partners or collaborators, thus negatively impacting other existing revenue streams. There is no assurance that we will be able to realize the expected benefits of synergies and growth opportunities in connection with these acquisitions. Acquisition could be dilutive to earnings, or in the event of acquisitions made through the issuance of commons stocks, may be dilutive to our existing shareholders.

New lines of business or new products and services may subject us to additional risks.

From time to time, we may implement new lines of business or offer new services within existing lines of business. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new services, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new services may not be achieved and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service.

19In forming PT Kinerja SG as a new wholly-owned subsidiary to develop our KFUND brand and enter the potentially highly profitable peer-to-peer micro-lending market, we estimate that the cost of becoming fully-operational in P2P lending with a significant presence, we will require a significant amount of capital. There can be no assurance that the we will be able to raise this amount at terms and conditions satisfactory to the Company, if at all, or that the P2P business if adequately funded will be successful in the near future, if at all. Failure to successfully launch the KFUND business, integrate it into our existing operations and manage risks related to the new business could have a material adverse effect on our business, results of operations and financial condition.

In forming PT Kinerja SP, a new wholly-owned subsidiary in an effort to develop our KFUND brand and tap into peer-to-peer micro-lending market, we anticipate the launching cost will be approximately $175,000. There is no assurance that the business will materialize in the near future. Failure to successfully launch the business, integrate it into our existing operations and manage risks related to the new business could have a material adverse effect on our business, results of operations and financial condition.

Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services, and brand.

Our proprietary technology, domain name and licenses and other intellectual property rights are critical to our success. We rely on, and expect to continue to rely on, existing KinerjaPay IP backed by PT Kinerja, any proprietary technology developed internally and other intellectual property rights acquired through various third party collaborative relationships to build our continuing business and brand. However, various events outside of our control may pose a threat to our intellectual property rights, as well as to our products and services. Effective protection of our proprietary technology, domain names, and licenses is expensive and difficult to maintain, both in terms of application and maintenance costs, as well as the costs of defending and enforcing those rights. Our intellectual property rights may be infringed, misappropriated, or challenged, which could result in them being narrowed in scope or declared invalid or unenforceable. Our agreements with employees and third parties that place restrictions on the use and disclosure of any intellectual property rights may be insufficient or may be breached, or we may not enter into sufficient agreements with such individuals in the first instance, in either case potentially resulting in the unauthorized use or disclosure of our proprietary technology and other intellectual property, including to our competitors, which could cause us to lose any competitive advantage resulting from this intellectual property.

Cyber-attacks or other security breaches could have a material adverse effect on our business.

In the normal course of business, we collect, process and store certain personal and other sensitive information from users of our electronic payment service and virtual marketplace, which makes it an attractive target and potentially vulnerable to cyber-attacks, computer viruses, physical or electronic break-ins or similar disruptions. While we have taken steps to protect the confidential information that we have access to, our security measures could be breached. Because techniques used to sabotage or obtain unauthorized access to systems change frequently and generally are not recognized until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any accidental or willful security breaches or other unauthorized access to our platform could cause confidential borrower and lender information to be stolen and used for criminal purposes. Security breaches or unauthorized access to confidential information could also expose us to liability related to the loss of the information, time-consuming and expensive litigation and negative publicity. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in our technology infrastructure are exposed and exploited, our relationships with borrowers and lenders could be severely damages, we could incur significant liability and our business and operations could be adversely affected.

We face increasing competition in the Indonesian e-commerce market.

We compete in the Indonesian market, which is characterized by vigorous competition, changing technology, changing customer needs, evolving industry standards, and frequent introductions of new products and services. We expect competition to intensify in the future as existing and new competitors introduce new services or enhance existing services. We compete against many companies to attract customers, and some of these companies have greater financial resources and substantially larger bases of customers than we do, which may provide them with significant competitive advantages. These companies may devote greater resources to the development, promotion, and sale of products and services, and they may offer lower prices or more effectively introduce their own innovative products and services that adversely impact our growth. Mergers and acquisitions by these companies may lead to even larger competitors with more resources. We also expect new entrants to offer competitive products and services. Certain merchants have long-standing exclusive, or nearly exclusive, relationships with our competitors to accept payment cards and other services that we offer. These relationships may make it difficult or cost-prohibitive for us to conduct material amounts of business with them. Competing services tied to established brands may engender greater confidence in the safety and efficacy of their services. If we are unable to differentiate ourselves from and successfully compete with our competitors, our business will be materially and adversely affected. We may, from time to time, make adjustments to pricing, service scope or marketing strategies that are unwelcomed by our users as we respond to changing competitive landscape in the market, which could reduce activity on our Portal and harm our business.

Our notable competitors in the electronic payment services sector include payment processors such as Doku and Veritrans. Our notable competitors in the virtual marketplace sector include Tokopedia, Bukalapak, Shopee, Lazada, Zalora, OLX, and Blibli.

We have limited or no experience competing in certain international markets, where we hope to compete, beyond Indonesia.

We intend to expand our business in selected international markets, initially in the Southeast Asian region. We may face challenges in expanding our international and cross-border businesses and operations which may expose us to greater political, intellectual property, regulatory, exchange rate fluctuation and other risks. We will face risks associated with expanding into markets in which we have limited or no experience, in which we may be less well-known or have fewer available local resources and in which we may need to localize our business practices, culture and operations. We may be unable to attract a sufficient number of customers and other participants, fail to anticipate competitive conditions or face difficulties in operating effectively in these new markets. We may also face protectionist policies that could, among other things, hinder our ability to execute our business strategies and put us at a competitive disadvantage relative to domestic companies in other jurisdictions. The expansion of our international and cross-border businesses will also expose us to risks inherent in operating businesses globally, including:

● lack of acceptance of our products and service offerings, including offering customers the ability to transact business in major currencies in addition to the Indonesian Rupiah; ● challenges and increased expenses associated with staffing and managing international and cross-border operations and managing a multi-national organization; ● trade barriers, such as duties and taxes, competition law regimes and other trade restrictions, as well as other protectionist policies; ● compliance with privacy laws and data security laws; heightened restrictions and barriers on the transfer of data between different jurisdictions; ● the need for increased resources to manage regulatory compliance across our international businesses in multiple jurisdictions with different and sometimes conflicting requirements; ● foreign currency restrictions and exchange rate fluctuations; ● challenges caused by distance, language, business customs and cultural differences; and ● political instability and general economic or political conditions in particular countries or regions.

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challenges and increased expenses associated with staffing and managing international and cross-border operations and managing a multi-national organization;

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trade barriers, such as duties and taxes, competition law regimes and other trade restrictions, as well as other protectionist policies;

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compliance with privacy laws and data security laws; heightened restrictions and barriers on the transfer of data between different jurisdictions;

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the need for increased resources to manage regulatory compliance across our international businesses in multiple jurisdictions with different and sometimes conflicting requirements;

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foreign currency restrictions and exchange rate fluctuations;

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challenges caused by distance, language, business customs and cultural differences; and

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political instability and general economic or political conditions in particular countries or regions.

Our business is subject to extensive regulation and oversight in a variety of areas, all of which are subject to change and uncertain interpretation.

We are currently subject to Indonesian electronic fund transfer and money laundering regulations in our capacity as a money transfer agent. As we seek to build a trusted and secure platform for e-commerce, and as we expand our network of users and facilitate their transactions and interactions with one another or otherwise evolve our products and services, we will increasingly be subject to laws and regulations relating to the payment processing, collection, use, retention, privacy, security, and transfer of information, including the personally identifiable information of our employees and users. In the future, we may be further subject to:

● banking regulations; ● additional electronic fund transfer and money laundering regulations; ● international banking or financial services regulations or laws governing other regulated industries and regions; or ● international regulation of Internet transactions.

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additional electronic fund transfer and money laundering regulations;

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international banking or financial services regulations or laws governing other regulated industries and regions; or

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international regulation of Internet transactions.

If we are found to be engaged in any unauthorized banking business, we may be subject to monetary penalties and be required to cease business. We may not be able to respond quickly or effectively to regulatory, legislative, and other developments, and these changes may in turn impair our ability to offer our existing or planned features, products, and services and/or increase our cost of doing business. In addition, if our practices are not consistent or viewed as not consistent with legal and regulatory requirements, including changes in laws, regulations, and industry standards or new interpretations or applications of existing laws, regulations, and standards, we may become subject to audits, inquiries, adverse media coverage, investigations, or criminal or civil sanctions, all of which may have an adverse effect on our reputation, business, results of operations, and financial condition.

It may be difficult to enforce a U.S. judgment against us, our officers and directors and the foreign persons named in this Annual Report on Form 10-K in the United States or in foreign countries, or to assert U.S. securities laws claims in foreign countries or serve process on our officers and directors and these experts.

While we are incorporated in the State of Delaware, currently a majority of our directors and executive officers are not residents of the United States, and the foreign persons named in this Annual Report on Form 10-K are located in Indonesia. Other than our cash assets held in our U.S. bank accounts, all of our operating assets are located outside the United States. Therefore, it may be difficult for an investor, or any other person or entity, to enforce a U.S. court judgment based upon the civil liability provisions of the U.S. federal securities laws against us or any of these persons in a U.S. or foreign court, or to effect service of process upon these persons in the United States. Additionally, it may be difficult for an investor, or any other person or entity, to assert U.S. securities law claims in original actions instituted in foreign countries in which we operate. Foreign courts may refuse to hear a claim based on a violation of U.S. securities laws on the grounds that foreign countries are not necessary the most appropriate forum in which to bring such a claim. Even if a foreign court agrees to hear a claim, it may determine that foreign law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by foreign countries law. There is little binding case law in foreign countries addressing the matters described above.

Our reported financial statements and results may be materially and adversely affected by changes in accounting principles generally accepted in the United States.

Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board (FASB), the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial statements and results and could materially and adversely affect the transactions completed before the announcement of a change. Additionally, the adoption of new or revised accounting principles may require that we make significant changes to our systems, processes, and controls. Changes in any new standards may result in materially different financial statements and results and may require that we change how we process, analyze, and report financial information and that we change financial reporting controls.

Servicing our Notes may require a significant amount of cash, and we may not have sufficient cash or the ability to raise the funds necessary to repay the Notes at maturity.

In consideration of the acquisition of PT Kinerja Indonesia in August 2018, the Company issued a Promissory Note of $1,200,000 with interest of 6.00% per annum. The note is due twenty-four months from August 31, 2018. Our ability to repay full principal with interest upon note maturity will depend on our ability to generate sufficient cash flow from operations and equity financing to fulfill debt repayment. Our inability to repay the note in full at maturity will lead to default and we may be responsible for additional cost related to collection and attorney fee. The Company currently runs working capital deficit as of December 31, ~~2018~~2019, we may not have sufficient funds to repay the indebtedness at maturity.

The conversion of some or all of our currently outstanding convertible notes in shares of our common stock will dilute the ownership interests of existing stockholders.

The conversion of some or all of our currently outstanding convertible notes in shares of our common stock will dilute the ownership interests of existing stockholders. As of December 31, ~~2018~~2019, we had $1,~~304~~674,~~853~~994 outstanding notes convertible into up to our common stock based on then applicable conversion prices, which are subject to adjustment based upon applicable discounts based upon the closing market price of our common stock on the respective dates of conversion. Each holder of the notes has agreed to a 4.99% beneficial ownership conversion limitation (subject to certain noteholders’ ability to increase such limitation to 9.99% upon 60 days’ notice to us), and each note may not be converted during the first six-month period from the date of issuance. Any sales in the public market of the common stock issuable upon such conversion or any anticipated conversion of our convertible notes into shares of our common stock could adversely affect prevailing market prices of our common stock.

The outbreak of the coronavirus disease (COVID-19), and the resulting government-imposed quarantines, office closings and travel restrictions, may have a material adverse effect on our business, financial condition and results of operations. Many of these effects are not even completely known at this time.

On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic.” As many United States jurisdictions have mandated quarantines and or “lockdowns” of businesses and organizations, this has resulted in an economic as a result of this unprecedented health crisis. The significant outbreak of COVID-19 has resulted in a widespread health crisis that are proving to adversely affect the economies and financial markets worldwide, and could adversely affect our business, results of operations and financial condition, including extended closures of offices in both the United States and Indonesia, and the inability to expand our business model and continue to raise capital, due to financial market instability, social distancing and concern over contracting COVID-19. The ultimate extent of the impact of the COVID-19 pandemic on our business, financial condition and results of operations are yet unascertainable and cannot be predicted, including new information that may emerge concerning the severity of the COVID-19 pandemic or other health crisis and actions taken to contain or prevent their further spread, among others. These and other potential impacts of COVID-19 could therefore materially and adversely affect our business, financial condition and results of operations.

~~The~~Certain ~~accounting~~of ~~method~~the ~~for~~statements ~~convertible~~contained ~~debt~~in ~~securities~~this report should be considered forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by the use of forward-looking terminology such as “will,” “believes,” “expects,” “endeavor” or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be ~~settled~~incorrect. inYou ~~cash~~should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. The Company’s actual results could ~~have~~differ materially from those anticipated in these forward-looking statements as a ~~material~~result ~~adverse~~of ~~effect~~a variety of factors, including the risk factors discussed in the Company’s periodic reports that are filed with the SEC and available on ~~our~~the ~~reported~~SEC’s ~~financial~~website ~~results~~(http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the applicable securities laws, the Company does not assume a duty to update these forward-looking statements.

Under Financial Accounting Standards Board Accounting Standards Codification 470-20, Debt with Conversion and Other Options (“ASC 470-20”), we are required to separately account for the liability and equity components of our convertible notes because they may be settled entirely or partially in cash upon conversion in a manner that reflects our economic interest cost. The effect of ASC 470-20 on the accounting for our convertible notes is that the equity component is required to be included in the additional paid-in capital section of stockholders’ deficit on our consolidated balance sheet, and the value of the equity component would be treated as original issue discount for purposes of accounting for the debt component of our convertible notes. As a result, we will be required to record a greater amount of non-cash interest expense in current periods presented as a result of the amortization of the discounted carrying value of our convertible debt or notes to their face amount over the terms. We will report higher net loss in our financial results in part because ASC 470-20 will require interest to include both the current period’s amortization of the debt discount and the instrument’s coupon interest, which could adversely affect our reported or future financial results, the trading price of our common stock and the trading price of our convertible notes.

In addition, because our convertible notes may be settled entirely or partly in cash, under certain circumstances, these are currently accounted for utilizing the treasury stock method, the effect of which is that the shares issuable upon conversion are not included in the calculation of diluted earnings per share except to the extent that the conversion value exceeds their principal amount. Under the treasury stock method, for diluted earnings per share purposes, the transaction is accounted for as if the number of shares of common stock that would be necessary to settle such excess, if we elected to settle such excess in shares, are issued. We cannot be sure that the accounting standards in the future will continue to permit the use of the treasury stock method. If we are unable to use the treasury stock method in accounting for the shares issuable upon conversion of our convertible notes, then our diluted earnings per share would be adversely affected.

Risks Related to Our Common Stock

If we issue additional shares in the future, it will result in the dilution of our existing stockholders.

Our articles of incorporation authorize the issuance of up to ~~500~~35,000,000,000 shares of our common stock with a par value of $0.0001 per share. As of ~~April 22~~October 7, ~~2019~~2020, we have approximately ~~236~~1,~~931~~513,~~976~~872,948 shares of Common Stock available for issuance. Our Board of Directors may choose to issue some or all of such shares for business acquisition and for funding of operations without stockholder approval. The issuance of any such shares will reduce the book value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current stockholders. Further, such issuance may result in a change of control of our company.

Our articles of incorporation ~~authorizes~~authorize the issuance of up to 10,000,000 shares of our preferred stock with a par value of $0.0001 per share. ~~The~~Our ~~board~~Board of ~~directors~~Directors is authorized to provide for the issuance of these unissued shares of preferred stock in one or more series, and to fix the number of shares and to determine the rights, preferences and privileges thereof. Accordingly, ~~the~~our ~~board~~Board of ~~directors~~Directors may issue preferred stock which may convert into large numbers of shares of Common Stock and consequently lead to further dilution of other shareholders. As of ~~April~~October 227, ~~2019~~ 2020, ~~400~~500,000 shares of Series AB ~~Convertible~~ Preferred ~~Shares~~ ~~issued were fully converted to 1~~Shares,~~666~~ 200,~~667 shares of Common Stock; 500,~~000 ~~shares~~ of Series BD Preferred ~~Shares~~Stock ~~was issued~~ and ~~outstanding. On November 2~~200, ~~2018, we filed a Registration Statement on Form S-1 for the offering of up to 300,~~000 ~~shares~~ of Series CE Preferred Stock atwere anissued ~~offering price of $25.00 per share. The Registration Statement is pending,~~ and ~~we will file an amendment in response to limited SEC comments as soon as practicable after filing this Form 10-K~~outstanding.

We are subject to compliance with securities law, which exposes us to potential liabilities, including potential rescission rights.

We have offered and sold our Common Stock to investors pursuant to certain exemptions from the registration requirements of the Securities Act of 1933 (the “Securities Act”), as well as those of various state securities laws. The basis for relying on such exemptions is factual; that is, the applicability of such exemptions depends upon our conduct and that of those persons contacting prospective investors and making the offering. We have not received a legal opinion to the effect that any of our prior offerings were exempt from registration under any federal or state law. Instead, we have relied upon the operative facts as the basis for such exemptions, including information provided by investors themselves.

If any prior offering did not qualify for such exemption, an investor would have the right to rescind its purchase of the securities if it so desired. It is possible that if an investor should seek rescission, such investor would succeed. A similar situation prevails under state law in those states where the securities may be offered without registration in reliance on the partial preemption from the registration or qualification provisions of such state statutes. If investors were successful in seeking rescission, we would face severe financial demands that could adversely affect our business and operations. Additionally, if we did not in fact qualify for the exemptions upon which it has relied, we may become subject to significant fines and penalties imposed by the SEC and state securities agencies.

Mr. Ng, our Controlling Shareholder and Chairman controls approximately 54.47% of our common stock and may be able to influence the outcome of stockholder votes and their interests may differ from other stockholders.23

~~As of April 22, 2019,~~ Mr. Ng, our ~~controlling~~Controlling ~~stockholder,~~Shareholder ~~executive officer~~ and ~~director~~Chairman ~~has~~controls ~~voting~~approximately ~~control of 54~~51.471% of our ~~voting~~common ~~capital~~ stock, ~~consisting of 1,266,667 shares of our Common Stock (of which 400,000 shares of Common Stock pledged to secure loan to Mr. Ng)~~ and 500,000 shares of Series B Preferred Stock entitled to a number of votes equal to 51% of all matters subject to vote by the holders of Common Stock. Subject to any fiduciary duties owed to our other stockholders under Delaware law, the stockholder may be able to ~~exercise significant~~ influence ~~over matters requiring stockholder approval,~~the ~~including~~outcome ~~the election~~ of ~~directors~~stockholder ~~and~~votes ~~approval of significant corporate transactions,~~ and ~~will~~their ~~have some control over our management and policies. Some of these persons may have~~ interests ~~that are different from others. For example, these stockholders~~ may ~~support proposals~~differ ~~and actions with which others may disagree. The concentration of ownership could delay or prevent a change in control of the Company or otherwise discourage a potential acquirer~~ from attempting to obtain control of the Company, which in turn could reduce the price of our stock. In addition, these stockholders could use their voting influence to maintain our existing management and directors in office, delay or prevent changes in control of the Company, or support or reject other ~~management and board proposals that are subject to stockholder approval, such as amendments to our employee stock plans and approvals of significant financing transactions~~stockholders. ~~Reference is made to the disclosure under “Description of Our Capital Stock - Series B Preferred Stock” below.~~

As of October 7, 2020, Mr. Ng, our controlling stockholder, executive officer and director has voting control of 51.1% of our voting capital stock, consisting of 1,266,667 shares of our Common Stock (of which 400,000 shares of Common Stock pledged to secure loan to Mr. Ng) and 500,000 shares of Series B Preferred Stock entitled to a number of votes equal to 51% of all matters subject to vote by the holders of Common Stock. Subject to any fiduciary duties owed to our other stockholders under Delaware law, the stockholder may be able to exercise significant influence over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, and will have some control over our management and policies. Some of these persons may have interests that are different from others. For example, these stockholders may support proposals and actions with which others may disagree. The concentration of ownership could delay or prevent a change in control of the Company or otherwise discourage a potential acquirer from attempting to obtain control of the Company, which in turn could reduce the price of our stock. In addition, these stockholders could use their voting influence to maintain our existing management and directors in office, delay or prevent changes in control of the Company, or support or reject other management and board proposals that are subject to stockholder approval, such as amendments to our employee stock plans and approvals of significant financing transactions. Reference is made to the disclosure under “Description of Our Capital Stock - Series B Preferred Stock” below.

We have never paid cash dividends and do not intend to pay dividends on any investments in the shares of stock of our Company in the foreseeable future.

We have never paid any cash dividends, and currently do not intend to pay any dividends for the foreseeable future. The Board of Directors has not directed the payment of any dividends and does not anticipate paying dividends on the shares for the foreseeable future and intends to retain any future earnings to the extent necessary to develop and expand our business. Payment of cash dividends, if any, will depend, among other factors, on our earnings, capital requirements, and the general operating and financial condition, and will be subject to legal limitations on the payment of dividends out of paid-in capital. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock’s price. This may never happen, and investors may lose all of their investment in our company.

Our Common Stock is subject to the “Penny Stock” rules of the SEC and the trading market in our stock is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment.

The Securities and Exchange Commission (the “SEC”) has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempted, the rules require:

● That a broker or dealer approve a person’s account for transactions in penny stocks; ~~● The broker or dealer receives a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.~~

24● The broker or dealer receives a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

● Obtain financial information and investment experience objectives of the person; and ● Make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

●

Make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

● Sets forth the basis on which the broker or dealer made the suitability determination; and ~~● That the broker or dealer received a signed, written agreement from the investor prior to the transaction.~~

●

That the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our Common Stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

Financial Industry Regulatory Authority, Inc. (“FINRA”) sales practice requirements may limit a shareholder’s ability to trade our Common Stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for some customers. FINRA requirements make it more difficult for broker-dealers to make a market, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our Shares.

Our stock is thinly traded, sale of your holding may take a considerable amount of time.

The shares of our Common Stock are traded on the OTCQB Market, meaning that the number of persons interested in purchasing our Common Stock at or near bid prices may be relatively small or non-existent. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. There can be no assurance that a broader or more active public trading market for our Common Stock will develop or be sustained. Due to these conditions, we can give you no assurance that you will be able to sell your shares at or near bid prices or at all if you need money or otherwise desire to liquidate your shares.

Our share price could be volatile and our trading volume may fluctuate substantially.

The price of our Common Shares has been and may in the future continue to be extremely volatile~~, with the sale price fluctuating from a low of $0~~.30 ~~to a high of $2.74 during the last three fiscal years.~~ Many factors could impact future price of our common shares, including:

● our inability to raise additional capital to fund our operations; ● our failure to successfully implement our business objectives and strategic growth plans; ● compliance with ongoing regulatory requirements; ● market acceptance of our product; ● changes in government regulations; and ● actual or anticipated fluctuations in our quarterly financial and operating results; and the degree of trading liquidity in our common shares.

25● our failure to successfully implement our business objectives and strategic growth plans;

●

compliance with ongoing regulatory requirements;

●

market acceptance of our product;

●

changes in government regulations; and

●

actual or anticipated fluctuations in our quarterly financial and operating results; and the degree of trading liquidity in our common shares.

Shares eligible for future sale may adversely affect the market.

From time to time, certain of our stockholders may be eligible to sell all or some of their shares of Common Stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act, subject to certain limitations. In general, pursuant to amended Rule 144, non-affiliate stockholders may sell freely after six months subject only to the current public information requirement. Affiliates may sell after six months subject to the Rule 144 volume, manner of sale (for equity securities), current public information and notice requirements. Any substantial sales of our Common Stock pursuant to Rule 144 may have a material adverse effect on the market price of our Common Stock.

Compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.

In recent years, there have been several changes in laws, rules, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and various other new regulations promulgated by the SEC and rules promulgated by the national securities exchanges. The Dodd-Frank Act, enacted in July 2010, expands federal regulation of corporate governance matters and imposes requirements on publicly-held companies, including us, to, among other things, provide stockholders with a periodic advisory vote on executive compensation and also adds compensation committee reforms and enhanced pay-for-performance disclosures. While some provisions of the Dodd-Frank Act were effective upon enactment, others will be implemented upon the SEC’s adoption of related rules and regulations. The scope and timing of the adoption of such rules and regulations is uncertain and accordingly, the cost of compliance with the Dodd-Frank Act is also uncertain. In addition, Sarbanes-Oxley specifically requires, among other things, that we maintain effective internal control over financial reporting and disclosure of controls and procedures. These and other new or changed laws, rules, regulations and standards are, or will be, subject to varying interpretations in many cases due to their lack of specificity. As a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Our efforts to comply with evolving laws, regulations and standards are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. Further, compliance with new and existing laws, rules, regulations and standards may make it more difficult and expensive for us to maintain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. Members of our board of directors and our principal executive officer and principal financial officer could face an increased risk of personal liability in connection with the performance of their duties. As a result, we may have difficulty attracting and retaining qualified directors and executive officers, which could harm our business. We continually evaluate and monitor regulatory developments and cannot estimate the timing or magnitude of additional costs we may incur as a result.

If we fail to maintain effective internal controls over financial reporting, the price of our Common Stock may be adversely affected.

Our internal control over financial reporting may have weaknesses and conditions that could require correction or remediation, the disclosure of which may have an adverse impact on the price of our Common Stock. We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely affect our public disclosures regarding our business, financial condition or results of operations. In addition, management’s assessment of internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our Common Stock.

Our annual and quarterly operating results fluctuate and may not predict our future performance accurately. Variability in our future performance could cause our stock price to fluctuate and decline.

We expect our annual and quarterly results will fluctuate in the future as a result of a variety of factors, many of which are beyond our control. These factors include:

●

changes in our costs, including interchange and transaction fees charged by credit card associations, and our transaction losses;

●

changes in our pricing policies or those of our competitors;

●

relative rates of acquisition of new customers;

●

seasonal patterns, including increases during the holiday season;

●

delays in the introduction of new or enhanced services, software and related products by us or our competitors or market acceptance of these products and services; and

●

other changes in operating expenses, personnel and general economic conditions.

Our quarterly operating results fluctuate and may not predict our future performance accurately. Variability in our future performance could cause our stock price to fluctuate and decline.

We expect our quarterly results will fluctuate in the future as a result of a variety of factors, many of which are beyond our control. These factors include:

● changes in our costs, including interchange and transaction fees charged by credit card associations, and our transaction losses; ● changes in our pricing policies or those of our competitors; ● relative rates of acquisition of new customers; ● seasonal patterns, including increases during the holiday season; ● delays in the introduction of new or enhanced services, software and related products by us or our competitors or market acceptance of these products and services; and ● other changes in operating expenses, personnel and general economic conditions.

As a result, period-to-period comparisons of our operating results may not be meaningful, and you should not rely on them as an indication of our future performance.

Delaware law contains provisions that could discourage, delay or prevent a change in control of our Company, prevent attempts to replace or remove current management and reduce the market price of our stock.

Provisions in our certificate of incorporation and bylaws may discourage, delay or prevent a merger or acquisition involving us that our stockholders may consider favorable. For example, our certificate of incorporation authorizes our board of directors to issue up to ten million shares of “blank check” preferred stock without further stockholder approval. The board of directors has the authority to attach special rights, including voting and dividend rights, to this preferred stock. With these rights, preferred stockholders could make it more difficult for a third party to acquire us.

We are also subject to the anti-takeover provisions of Delaware General Corporation Law (“DGCL”). Under these provisions, if anyone becomes an “interested stockholder,” we may not enter into a “business combination” with that person for three years without special approval, which could discourage a third party from making a takeover offer and could delay or prevent a change in control of us. An “interested stockholder” is, generally, a stockholder who owns 15% or more of our outstanding voting stock or an affiliate of ours who has owned 15% or more of our outstanding voting stock during the past three years, subject to certain exceptions as described in the DGCL.

ITEM 1B. UNRESOLVED STAFF COMMENTS

~~The Company is in the process of filing an amendment to its Registration Statement on Form S-1, Registration No~~None. ~~333-228125, in response to limited SEC comments, which amendment will be filed as soon as practicable after filing this Annual Report on Form 10-K.~~

ITEM 2. PROPERTIES

~~Our~~From December 2015 through March 2020, our principal office is located at J1. Multatuli, No. 8A, Medan, Indonesia 20151. ~~Our~~and our offices consisted ~~consist~~ of approximately 4,000 square feet of executive offices and sales and marketing space. The land and building space of our principal office iswere owned by PTP.T. Kinerja and provided to the Company on a rent-free basis until the property was sold to an unrelated third party in March 2020 for net proceeds of $803,571. Subsequent to the year-ended December 31, 2019, following the sale of the property, we moved our offices to leased offices located at Green Park Blok Olive A No. 48, Jl. Suka Cerdas, Medan Johor, Indonesia, consisting of 4,000 square feet, which are leased from an unrelated third party at an annual rental of $5,000. We believe that these facilities will be sufficient for the next twelve months.

We believe that our facilities are generally in good condition and suitable to carry on our business. We also believe that, if required, suitable alternative or additional space will be available to us on commercially reasonable terms.

Reference is made to Note 12 - Subsequent Events, with respect to the use of the net proceeds from the sale of the property.

ITEM 3. LEGAL PROCEEDINGS

We are not involved in any pending legal proceedings that we anticipate would result in a material adverse effect on our business or operations.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

The common stock of KinerjaPay Corp. trades on the OTCQB under the symbol “KPAY”. On ~~April~~October 226, ~~2019~~2020, the closing price of our common stock reported by the OTC Markets was $0.760009 per share.

Holders of record

As of ~~April~~October 227, ~~2019~~2020, there were approximately 80137 beneficial holders of record of our common stock. Because many of of our shares are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of of beneficial holders represented by these record holders.

Dividends

Payment of dividends and the amount of dividends depend on matters deemed relevant by our Board, such as our results of operations, financial condition, cash requirements, future prospects and any limitations imposed by law, credit agreements and debt securities. To date, we have not paid any cash dividends or stock dividends on our common stock. We currently anticipate that we will not pay any cash dividends in the foreseeable future. Furthermore, the terms of any financing arrangements that we may enter into may restrict our ability to pay any dividends.

Securities Authorized for Issuance under Equity Compensation Plans

Not applicable.

Unregistered Sales of Equity Securities

During the fiscal year ended December 31, ~~2018~~2019, our financing activities consisted of the following:

Issuance of Shares of Preferred Stock

On January 215, ~~2018~~2019, the Company issued ~~400~~200,000 ~~Series~~shares Aof ~~Convertible~~Series D Preferred ~~Stock~~Shares to anthe ~~institutional~~shareholders ~~investor~~of ~~for~~FRS anLending, ~~aggregate~~Inc., a Delaware ~~purchase~~corporation ~~price~~(“FRS”) ofin ~~$500,000.~~consideration ~~The~~for ~~Series~~the Aacquisition ~~Convertible~~by ~~Preferred~~the ~~Stock~~Company ~~was~~of ~~convertible~~100% ~~into~~of ~~400~~the capital stock of FRS,~~000~~ ~~shares~~which shall operate on behalf of and provide the Company with services related to the Company’s ~~common~~ ~~stock~~lending atand amicro-lending ~~conversion~~activities and ~~price~~related oflending ~~$1.25~~services ~~per~~in ~~share.~~the ~~In addition~~U.S., onIndonesia ~~January~~and 2internationally, ~~2018,~~which ~~the~~is ~~Company~~a ~~issued~~newly todeveloping division that the ~~institutional~~Corporation ~~investor~~is ~~Class~~planning Nto ~~Warrants~~devote ~~exercisable~~resources to ~~purchase~~grow anits ~~additional~~operations. ~~400,000~~The ~~shares~~fair onvalue aof ~~cashless~~the ~~basis,~~consideration was calculated at an$2,372,945, ~~exercise~~based on ~~price~~10% of ~~$1.25 per~~the ~~Share,~~fully ~~during~~diluted acommon ~~period~~shares of ~~three~~the ~~(3)~~Company ~~years~~as ~~from~~of the date of ~~the Agreement~~issuance. The ~~warrants~~agreement ~~were~~also ~~valued~~includes ~~using~~an ~~the~~employment agreement ~~Black~~with a three-~~Scholes pricing~~year ~~model~~term. The consideration issued in the acquisition has been recognized as consideration related to the ~~estimate~~employment agreement and is being amortized over the ~~fair~~three-year ~~value~~term of ~~$300~~the employment agreement,~~772~~ with the unamortized balance recognized as prepaid expense.

On ~~December~~January 1715, ~~2018~~2019, the Company issued ~~500~~200,000 shares of Series BE Preferred ~~Stock~~Shares to the Company’s CEO and Chairman, Edwin Ng as compensation for services related to the negotiation with PT. Investa Wahana Group for the commitment agreement for the subscription of preferred stock. The ~~shares~~fair ~~were~~value ~~valued~~of the compensation was calculated at $~~871~~3,~~000~~559,417, ~~and~~based ~~recognized~~on ~~for~~15% ~~Mr.~~of ~~Ng’s~~the ~~services~~fully ~~provided~~diluted tocommon shares of the Company as of the date of issuance.

Issuance of Shares of Common Stock and Warrants for Cash

On ~~December~~March 19, ~~2018~~2019, the Company ~~issued~~received 1$70,~~990,~~000 ~~restricted~~through ~~shares~~a toplacement ~~various~~of ~~investors~~140,000 common stock units to ~~replace~~an ~~previously~~investor ~~issued~~for ~~shares~~an ~~that~~offering ~~the~~price ~~investors~~of ~~had purchased~~$0.50 ~~The~~per ~~investors’~~unit. ~~shares~~Each ~~had~~unit ~~been~~consists ~~misappropriated~~of byone ashare ~~brokerage~~of ~~agent,~~common stock and ~~the~~one ~~Company~~warrant ~~made~~to apurchase common stock. The 140,000 ~~decision~~warrants toare ~~take~~exercisable ~~responsibility~~at $1.00 and ~~therefore~~expire ~~reissue~~two years from the ~~lost~~date ~~shares~~of issuance. The ~~shares~~common ~~were~~stock ~~valued~~related atto ~~$272,630,~~the ~~based~~units onwere ~~the market~~not ~~value~~issued ofupon the ~~common~~unit ~~stock~~purchase onand ~~the~~were ~~date~~recognized ofas ~~issuance~~stock payable.

During the second quarter of 2019, the Company received $76,374 for the sale of 59,000 shares of common stock. The common stock was not issued upon purchase and was recognized as stock payable.

On November 7, 2019, effective as of May 7, 2019, the Company issued the 199,000 shares of common stock that had been previously been recognized as stock payable.

Issuance of Shares upon Warrant Exercise

OnDuring ~~January~~the 2year ended December 31, ~~2018~~2019, ~~the~~on ~~Company~~three ~~received $100~~occasions,~~000~~ asthere was a ~~result~~total of ~~the~~7,243,132 ~~exercise~~shares byof ancommon ~~institutional~~stock ~~investor~~issued ofunder ~~100,000~~cashless exercises ~~Class~~of Cwarrants ~~Warrants~~ that had been ~~originally~~ issued ~~as part of a unit purchase transaction~~ in ~~April~~connection ~~2017.~~with ~~The~~convertible ~~Class~~debentures C(see ~~Warrants~~discussion ~~were exercisable for a period~~ of 12convertible ~~months~~note ~~to purchase 100,000 shares of common stock at an exercise price of $1~~agreements below).~~00 per share.~~

On January 9, 2018, 363,127 shares were issued under a cashless exercise of warrants.

Issuance of Shares upon Conversion

OnDuring ~~July~~the 11year ended December 31, ~~2018~~2019, the Company issued ~~to the institutional investor a total of 416~~63,~~667~~395,488 shares of common stock, ~~pursuant~~upon toconversion ~~a notice~~ of ~~conversion dated July 9~~$3, ~~2018~~332,970 ~~in connection with the conversion~~ of ~~200,000~~principal and ~~shares~~accrued ofinterest ~~the~~on ~~Series~~their Aconvertible ~~Convertible~~debentures ~~Preferred~~(see ~~Stock, at~~discussion ~~an adjusted conversion price~~ of ~~$0.60,~~convertible ~~which~~note ~~adjustment~~agreements ~~was subject to an agreement between the Company and the institutional investor~~below).

~~Shares~~Issuance ~~Issued~~of Shares of Common Stock for Services

On January 1110, ~~2018~~2019, the Company ~~entered~~issued ~~into an advisory agreement with Blockchain Industries, Inc.,~~ a ~~public~~total ~~Nevada~~of ~~corporation and Fintech Financial Consultants~~3, ~~Inc.~~200,000 arestricted ~~Nevada~~shares ~~corporation.~~to Invarious ~~connection~~third ~~with~~parties ~~the~~for ~~advisory~~consulting ~~agreement,~~services ~~the Company agreed to~~valued ~~issue~~at ~~1,000,000 shares, with a fair value of~~ $1883,~~800,000~~200 ~~recognized as consulting expenses,~~ based upon the market price of the shares of $0.28 on the date of issuance.

~~Based~~On ~~on agreement with Bear Creek Capital on~~ January 2915, ~~2018~~2019, the Company issued 25250,000 restricted shares ~~and was~~ to ~~issue~~a anthird ~~additional 25,000~~party ~~shares~~for ~~120~~consulting ~~days~~services ~~from~~already ~~the agreement,~~ provided ~~the Company was still using the service of the party. Consequently~~, ~~the Company~~valued ~~recorded~~at ~~the stock payable amounting to~~ $34155,000 tobased upon the ~~party,~~market asprice of the shares ~~were~~of ~~not~~$0.62 ~~issued~~on ~~prior~~the todate ~~December~~of ~~31, 2018~~issuance.

On ~~January~~March ~~23 and February 14~~10, ~~2018~~2019, the Company ~~issued~~entered into a ~~total~~consulting ofagreement ~~200~~to issue 400,000 restricted shares to a third ~~parties~~party for consulting services to be provided over the year term of the consulting agreement, valued at $~~278~~200,~~500~~000 based upon the market price of the shares of $0.50 on the ~~respective~~date ~~dates~~ of ~~issuance~~the agreement.

On ~~February~~April 92, ~~2018~~2019, the Company issued a total of ~~200~~300,000 restricted shares to ~~two~~a ~~parties~~third inparty ~~consideration~~ for consulting services ~~valued~~already provided, valued at $~~220~~180,000 based upon the market price of the shares of $0.60 on the date of issuance.

On ~~February~~May 1823, ~~2018~~2019, the Company issued a150,000 ~~total~~fully ofvested ~~218,044~~common ~~restricted~~ shares to a third party for consulting services in ~~consideration~~accordance ~~for~~with the ~~services~~terms of a consulting agreement dated April 17, 2019. The shares were valued at $~~276~~63,~~916~~000 based upon the market price of the shares of $0.42 on the date of issuance. An additional 100,000 shares were issued on June 7, 2019, valued at $24,000, based upon the market price of the shares of $0.24 on the date of issuance.

On ~~March~~June 126, ~~2018~~2019, the Company ~~issued~~entered 80into a consulting agreement to issue 500,000 restricted shares ~~owing~~ to atwo ~~third~~parties, ~~party~~ for consulting services ~~under~~to anbe provided over the year term of the consulting agreement, ~~entered~~valued ~~into~~at $115,000 based upon the market price of the shares of $0.23 on the date of the agreement. The fair value of the shares was recognized in ~~July~~Prepaid ~~31,~~assets ~~2017~~and the expense will be recognized over the term of the agreement.

On ~~October~~July 82, ~~2018~~2019, the Company issued 37450,~~500~~000 ~~restricted~~ shares to ~~Mr.~~consultants ~~Stephen Kann as partial consideration~~ for services, towith bea ~~rendered by~~fair ~~Mr.~~value ~~Kann~~of ~~pursuant to his engagement to provide investor relation services to the Company. The services were valued at~~ $10211,~~313~~500, based on the ~~market~~ fair value of the Company’s common stock on the date of ~~issuance~~the consulting agreements.

On October 1, 2019, the Company entered into consulting agreements to issue 300,000 restricted shares each to two parties for a total of 600,000 restricted shares, for consulting services to be provided over the fifteen month term of the consulting agreements, valued at $66,000 based upon the market price of the shares of $0.11 on the date of the agreement. The fair value of the shares will be recognized in prepaid assets and the expense will be recognized over the term of the agreement.

On October 2, 2019, the Company issued an additional 800,000 restricted shares to a third party for consulting services already provided pursuant to a consulting agreement dated November 14, 2017, valued at $88,000 based upon the market price of the shares of $0.11 on the date of issuance.

On October 15, 2019, the Company issued an additional 1,750,000 restricted shares to three separate third parties for consulting services under amendments to previously issued consulting agreements, valued at $157,500 based upon the market price of the shares of $0.09 on the date of issuance.

Treasury stock

During the year ended December 31, 2019, the Company bought back 616,000 shares of their common stock for $86,340.

Convertible Note Agreements

On January 2, 2019, the Company executed an 12% convertible promissory note payable to an accredited investor in the principal amount of $43,000, which is due on October 30, 2019. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The note is convertible during first 180 days after issuance at a fixed conversion price of $1.75. After the initial conversion period, the conversion price shall equal the lesser of: (i) the fixed price; and (ii) 61% multiplied by the market price (as defined in the note). Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. The conversion feature does not meet the definition of a derivative during the first 180 days but will meet the definition of a derivative when the conversion price becomes variable and would at that time require bifurcation and to be accounted for as a derivative liability. On July 2, 2019, the Company exercised its option to redeem the January 2, 2019 debenture, for a redemption price at $85,000.

On January 18, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $165,000, with an OID of $15,000, convertible into shares of common stock of the Company, which matures on January 18, 2020. The note bears interest at 10%, which increases to 20% upon an event of default. In an event of default as set forth in the note, the outstanding principal balance increases by 40%. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $66,000. As a result, the outstanding balance of the note as of June 30, 2019, was $231,000. On August 6, 2019, the Tangiers note was purchased from Tangiers by three other noteholders for a purchase price of $254,000, which included the default penalty and accrued interest. The note is convertible at 65% multiplied by the lowest closing price during the 15 days prior to the conversion. The discount increases by 5% discount if there is a DTC “chill” in effect., and an additional 5% if the Company is not DWAC eligible. Per the agreement, the Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 120% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. During the second half of 2019 the note and related accrued interest was fully converted into 5,127,240, at conversion prices ranging from $0.03 to $0.05.

On January 25, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $38,500 for a purchase price of $35,000, convertible into shares of common stock of the Company, which matures on October 25, 2019. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $19,250. As a result the outstanding balance of the note as of June 30, 2019, was $57,750. The note is convertible at 65% multiplied by the lowest closing price during the 20 days prior to the conversion. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. The note was fully converted on August 1, 2019, into 1,087,685 shares of the Company’s common stock at a conversion price of $0.06In connection with the note, the Company issued 115,500 warrants, exercisable at $0.49, with a five year term. The warrants were exercised on December 2, 2019, in a cashless exercise, resulting in the issuance of 710,080 shares of the Company’s common stock.

On January 25, 2019, the Company entered into a second convertible note with another accredited investor for the principal amount of $38,500 for a purchase price of $35,000, convertible into shares of common stock of the Company, which matures on October 25, 2019. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $19,250. As a result the outstanding balance of the note as of June 30, 2019, was $57,750. The note is convertible at 65% multiplied by the lowest closing price during the 20 days prior to the conversion. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. In connection with the note, the Company issued 115,500 warrants, exercisable at $0.49, with a five year term. On various dates in August and September 2019, the note was fully converted into 2,015,812 shares of the Company’s common stock at conversion prices ranging from of $0.04 to $0.06.

On January 25, 2019, the Company entered into a third convertible note with another accredited investor. for the principal amount of $38,500 for a purchase price of $35,000, convertible into shares of common stock of the Company, which matures on October 25, 2019. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $19,250. As a result the outstanding balance of the note as of June 30, 2019, was $57,750. The note is convertible at 65% multiplied by the lowest closing price during the 20 days prior to the conversion. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. In connection with the note, the Company issued 115,500 warrants, exercisable at $0.49, with a five year term. The note was fully converted on August 1, 2019, into 1,107,685 shares of the Company’s common stock at a conversion price of $0.06.

On January 28, 2019, the Company executed an 12% convertible promissory note payable to an accredited investor in the principal amount of $48,000, which is due on November 30, 2019. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $24,000. As a result the outstanding balance of the note as of June 30, 2019, was $72,000. The note is convertible during first 180 days after issuance at a fixed conversion price of $1.75. After the initial conversion period, the conversion price shall equal the lesser of: (i) the fixed price; and (ii) 61% multiplied by the market price (as defined in the note). Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. On several dates in August 2019, $45,000 of the note was converted into 702,028 shares of the Company’s common stock at a conversion price of $0.06. The remaining balance and accrued interest was paid off by the Company.

On February 28, 2019, the Company executed an 10% fixed convertible promissory note payable to an accredited investor in the principal amount of $115,000 with a $10,000 OID, which is due on November 28, 2019. In the case of a sale event, as defined in the agreement, the principal amount of the note increases to 150%. The note is convertible into shares of Common Stock at a conversion price of the lower of (i) $1.00 per share or (ii) 65% of the lowest trading price for the 20 prior trading days including the day upon which a notice of conversion is received by the Company or its transfer agent. The discount increases 10% if there is a DTC “chill” in effect. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. The variable conversion price has been adjusted to 45% of the market price, based on the conversion price of a new note on May 9, 2019. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 125% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the note. On September 6, 2019, the note was fully converted into 2,219,872 shares of the Company’s common stock at a conversion price of $0.05.

On March 4, 2019, the Company executed an 8% fixed convertible promissory note payable to an accredited investor in the principal amount of $55,000 with a $5,000 OID, for a purchase price of $50,000, which is due on March 5, 2020. In the case of a sale event, as defined in the agreement, the principal amount of the note increases to 150%. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $27,500. As a result the outstanding balance of the note as of June 30, 2019, was $82,500. The note is convertible into shares of Common Stock at a conversion price of 65% of the market price, as defined in the note. The discount increases 15% if there is an event of default, and 10% if the shares are not deliverable via DWAC. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved eight times the number of shares that is actually issuable upon full conversion of the note. On September 6, 2019, the note was fully converted into 1,786,022 shares of the Company’s common stock at a conversion price of $0.05.

On March 5, 2019, the Company executed an 12% convertible promissory note payable to an accredited investor in the principal amount of $53,000, which is due on January 15, 2020. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $26,500. As a result the outstanding balance of the note as of June 30, 2019, was $79,500. The note is convertible during first 180 days after issuance at a fixed conversion price of $1.75. After the initial conversion period, the conversion price shall equal the lesser of: (i) the fixed price; and (ii) 61% multiplied by the market price (as defined in the note). Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. The conversion feature does not meet the definition of a derivative during the first 180 days but will meet the definition of a derivative when the conversion price becomes variable and would at that time require bifurcation and to be accounted for as a derivative liability. On September 7, 2019, the Company exercised its option to redeem the March 5, 2019 debenture, for a redemption price at $84,286.

On March 14, 2019, the Company entered into a 12% convertible note for the principal amount of $118,000 with an accredited investor, which matures on March 14, 2020, and has a $5,000 OID. The holder will also deduct $13,000 from the purchase price for legal and due diligence fees. The note is convertible commencing 180 days after issuance of the note (or upon an event of Default), with a variable conversion rate at 60% of market price (as defined in the note). The conversion rate adjusts if there are common stock equivalents issued and in which the aggregate per share price is below the original conversion price, in which case the adjusted conversion price is the lower of the original conversion price or 25% of the aggregate price. The discount increases to a 55% discount if there is a DTC “chill” in effect and an additional 5% if the Company is not DWAC or DTC eligible, as well as an additional 5% discount for each event of default. The debenture also includes various liquidated damages for various events, as set forth in the agreement, such as the Company’s inability or delay in the timely issuance of the shares upon receipt of a conversion request. In an event of default, as defined in the note, the “default amount” shall be calculated at the product of (A) the then outstanding principal amount of the note, plus accrued interest, divided by (B) the conversion price as determined on the issuance date, multiplied by (C)the highest price at which the common stock traded at any time between the issuance date and the date of the event of default. Per the agreement, the Company is required at all times to have authorized and reserved eight times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture, and at 150% after 180 days. On September 18, 2019, $60,000 of the March 14, 2019 note was converted into 813,008 shares of the Company’s common stock at a conversion price of $0.07 and on October 2, 2019, the remaining $58,000 of the note was converted into 954,059 shares of the Company’s common stock at a conversion price of $0.07.

On March 25, 2019, the Company executed an 8% convertible promissory note payable to an accredited investor in the principal amount of $137,500, for a purchase price of $125,000, which is due on March 24, 2020. In an event of default as set forth in the note, the interest rate increases to a default amount of 18%, and the default sum due becomes 130% of the principal outstanding and accrued interest (the “default redemption amount”). Alternatively, at the election of the holder, the Holder may require the Company to redeem all or part of the default redemption amount through the issuance of such number of shares of common stock equal to (x) the default redemption amount, divided by (y) or 55% of the lowest traded price in the 20 trading days prior to the conversion date. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $41,250. The note is convertible into shares of common stock at a conversion price of the lower of (i) $1.00 per share or (ii) 61% of the lowest trading price for the 20 prior trading days prior to the conversion date. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. The Company may redeem the note at any time the note is outstanding and there is not an event of default, at amounts ranging in the first 90 days from the date of issuance from 115% to 135% of the principal and accrued interest balance, based on the redemption date’s passage of time. The note also includes a “most favored nation” clause, whereby when the Company enters into any future financing transactions with a third-party investor, the Company must provide the holder notification of the terms of the new financing transaction, and if the holder determines that the terms of the subsequent investment are preferable to the original terms of the March 25, 2019 convertible promissory note, the original terms of the note will be amended and restated, which may include the conversion terms. On September 24, 2019, the Company exercised its option to redeem the debenture, for a redemption price at $192,582.

On April 1, 2019, the Company executed a 12% fixed convertible promissory note payable to an accredited investor in the principal amount of $43,000, and s due on February 15, 2020. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $21,500. As a result the outstanding balance of the note as of June 30, 2019, was $64,500. The note is convertible for 180 days from inception into shares of Common Stock at a conversion price of $1.75 per share, subject to adjustment based upon the terms of the note. After the 180 days the conversion price shall equal the lesser of: (i) $1.75; and (ii) 61% multiplied by the market price, as defined in the agreement. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. On October 1, 2019, the Company exercised its option to redeem the debenture, for a redemption price at $70,261.

On April 25, 2019, the Company executed an 8% fixed convertible promissory note payable to an accredited investor in the principal amount of $110,000, and is due on May 17, 2020. The convertible note had a OID of $10,000, for a purchase price of $100,000. In an event of default as set forth in the note, the interest rate increases to a default amount of 18%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. On May 20, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $55,000. As a result the outstanding balance of the note as of June 30, 2019, was $165,000. On September 17, 2019, the outstanding note was acquired from the holder by a third-party accredited investor. The note is convertible into shares of Common Stock at 65% of the lowest trading price 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. The conversion price is adjusted if any 3rd party has the right to convert monies at a discount to market greater than the conversion price in effect at that time then the holder, may utilize such greater discount percentage. The variable conversion price has been adjusted to 45% of the market price, based on the conversion price of a new note on May 9, 2019. Additionally, upon an event of default the conversion rate increases to 55% of the lowest trading price during the 20 days prior to conversion. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. The Company may redeem the note at amounts ranging from 110% to 150% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. On November and December 2019, the note was fully converted into 5,000,396 shares of the Company’s common stock at a conversion prices of $0.04 to $0.02.

On May 9, 2019, the Company entered into a 12% convertible promissory note with an accredited investor for $282,000, which matures on November 6, 2019. The interest rate increases to a default rate of 24% for events as set forth in the agreement, including if the market capitalization is below $5 million, or there are any dilutive issuances. There is a right of prepayment in the first 180 days, but there is no right to repay after 180 days. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. There is also a cross default provision to all other notes. In the event of default, the outstanding principal balance increases to 150%, and if the Company fails to maintain the required authorized share reserve, the outstanding principal increases to 200%. On May 20, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $141,000. As a result the outstanding balance of the note as of June 30, 2019, was $423,000. On September 18, 2019, the outstanding note was acquired from the holder by a third-party accredited investor, consisting of $232,000 of principal, $141,000 of default penalties and $22,752 of accrued interest. Additionally, If the Company enters into a 3(a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder’s written consent before issuing any new debt. Additionally, if the note is not repaid by the maturity date the principal balance increases by $15,000. In connection with the convertible debenture, the Company issued 313,263 of their common shares as a commitment fee to the noteholder, with a fair value of approximately $169,000, based on the market value of the common stock on the date of issuance of $0.54, included in the debt discount. Upon the acquisition of the note by the new investor, the original holder returned the commitment fee shares to the Company. The note is convertible into shares of the Company’s common stock at a variable conversion rate that is equal to the lesser of the lowest trading price for the last 20 days prior to the issuance of the note or 45% of the lowest market price over the 20 days prior to conversion. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. There are additional 12% adjustments to the conversion price for events set forth in the agreement, including if the conversion price is less than $0.01, if the Company is not DTC eligible, the Company is no longer a reporting company, or the note cannot be converted into free trading shares on or after six months from issue date. The holder has the option to increase the principal by $5,000 per each default occurrence instead of applying further discounts to the conversion price. However, under no circumstances shall the principal amount exceed an additional $25,000 nor can the conversion price be less than 30% multiplied by the market price due to the cumulative effect. Per the agreement, the Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the note. On September 5, 2019, $50,000 of the note was converted into 1,000,100 shares of the Company’s common stock at a conversion price of $0.05, and in November and December 2019, another $168,830 of the note was converted into 5,900,000 shares of the Company’s common stock at a conversion prices of $0.04 to $0.02.

On May 17, 2019, the Company executed a 10% fixed convertible promissory note payable to an accredited investor in the principal amount of $82,500, and is due on May 17, 2020. The convertible note had an OID of $7,500, for a purchase price of $75,000. In an event of default as set forth in the note, the interest rate increases to a default amount of 24%. The note is convertible into shares of Common Stock at a conversion price the lower of (i) the fixed price of $1.00 or (ii) 61% 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. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable. Additionally, if the Company fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late or delinquent in its filings, even if the Company subsequently cures such delinquency), the discount shall be increased an additional 15%. Per the agreement, the Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 120% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. In December 2019, $55,980 of the note was converted into 2,450,000 shares of the Company’s common stock at a conversion prices of $0.04 to $0.02.

On May 15, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $200,000, convertible into shares of common stock of the Company, which matures on February 15, 2020. In an event of default as set forth in the note, the interest rate increases to a default amount of 24%. In the event of default, the outstanding principal balance increases to 150%, and if the Company fails to maintain the required authorized share reserve, the outstanding principal increases to 200%. If certain events of default, relating to the reporting requirements or listing of the Company’s common stock, occur or continue after six months from the date of issuance of the note, the principal increases by $15,000. On May 20, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $100,000. As a result the outstanding balance of the note as of June 30, 2019, was $300,000. The note is convertible into shares of Common Stock at a conversion price the lower of (i) the lowest closing price (as defined) during the previous twenty trading days prior to the date of the note or (ii) 60% of the lowest trading price of the Common Stock as reported on the National Quotations Bureau OTC market on which the Company’s shares are traded, for the 20 prior trading days including the day upon which a notice of conversion is received by the Company or its transfer agent. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable, and increased by 15% if there is a DTC “chill”. Furthermore, if the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the conversion price is less than $0.01 at any time after the issue date, the principal amount of the note shall increase by $15,000. In addition, the variable conversion price shall be redefined to mean 40% multiplied by the market price. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. If the Company enters into a 3(a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 150% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. In December 2019, $90,713 of the note was converted into 5,000,000 shares of the Company’s common stock at a conversion prices of $0.04 to $0.02.

On May 29, 2019, the Company executed a 10% fixed convertible promissory note payable to an accredited investor for the principal amount of $115,000, which matures on May 29, 2020. The convertible note had an OID of $5,000, plus $5,000 was deducted from the purchase price for legal and due diligence fees for a purchase price of $100,000. In an event of default as set forth in the note, the interest rate increases to a default amount of 22% and the principal balance increases by 15%. The note is convertible into shares of Common Stock at a conversion price equal to 60% multiplied by the lowest closing trade price during the 20 trading days immediately preceding the applicable conversion. Per the agreement, the Company is required at all times to have 1,800,000 common shares reserved. The Company may prepay the note at 125% of the principal and accrued interest balance. On December 11, 2019, the Company exercised its option to redeem the debenture, for a redemption price of $151,363.

On June 3, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $192,500, convertible into shares of common stock of the Company, which matures on June 3, 2020. The convertible note had an OID of $17,500, for a purchase price of $175,000. The note bears interest at 10%, which increases to 24% upon an event of default. In an event of default as set forth in the note, including if the Company does not pay the note at maturity, or the common stock of the Company is delisted or loses its bid price, the default sum becomes 110% to 150% of the principal outstanding and accrued interest. The note is convertible beginning on the six month anniversary of the note, at the lesser of: (i) $1.00; or (ii) 60% multiplied by lowest end of day VWAP during the previous 20 days before the Issue date of the note. The discount shall increase to 50% if the Company experiences a DTC “chill”. If the Company is not current in their filings with the SEC after the six month anniversary of the note, the holder shall be entitled to use the lowest closing bid price during the delinquency period as a base price for the conversion. Per the agreement, the Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 120% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. On two dates in October and December 2019, the note was fully converted into 5,584,032 shares of the Company’s common stock at a conversion price of $0.04.

On June 28, 2019, the Company entered into a convertible note with an accredited investor which was funded on July 2, 2019, for the principal amount of $118,000, convertible into shares of common stock of the Company, which matures on July 11, 2019. The convertible note had an OID of $5,000, for a purchase price of $113,000. The note bears interest at 12%, which increases to 18% upon an event of default. The note is convertible commencing 180 days after issuance of the note (or upon an event of Default), with a variable conversion rate at a 40% discount to the lowest closing price during the previous twenty days to the conversion date. The conversion rate adjusts if there are common stock equivalents issued and in which the aggregate per share price is below the original conversion price, in which case the adjusted conversion price is the lower of the original conversion price or 25% of the aggregate price. The discount increases to a 55% discount if there is a DTC “chill” in effect and an additional 5% if the Company is not DWAC or DTC eligible, as well as an additional 5% discount for each event of default. The debenture also includes various liquidated damages for various events, as set forth in the agreement, such as the Company’s inability or delay in the timely issuance of the shares upon receipt of a conversion request. In an event of default, as defined in the note, the “default amount” shall be calculated at the product of (A) the then outstanding principal amount of the note, plus accrued interest, divided by (B) the conversion price as determined on the issuance date, multiplied by (C)the highest price at which the common stock traded at any time between the issuance date and the date of the event of default. Per the agreement, the Company is required at all times to have authorized and reserved eight times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture, and at 150% after 180 days.

On July 8, 2019, the Company entered into a 12% convertible promissory note in the principal amount of $150,000 with an accredited investor, which matures on April 8, 2020. The holder may extend the maturity date up to one year, by written notice at least five days before the original maturity date. The convertible note had an OID of $9,000, for a purchase price of $141,000. In an event of default as set forth in the note, the interest rate increases to a default amount of 24%, and the default sum due becomes 200% of the principal outstanding and accrued interest. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. Additionally, if the market price of the Company’s common stock falls below $0.01, the principal shall increase by $25,000. The note is convertible at a variable conversion rate of 60% of the lowest closing price during 20 days on which at least 100 shares of common stock were traded prior to and including the conversion date, to be adjusted if in default. The discount increases by 15% discount if there is a DTC “chill” in effect, the closing price falls below $0.095, the Company ceases to be a reporting company pursuant to the 1934 Act, or the note cannot be converted into free trading shares after 181 days from the issuance date. The discount also increases by 10% if the Company’s common shares are not deliverable via DWAC system. Additionally, if the Company enters into a Section 3(a)(9) or 3(a)(10) transaction, there shall be liquidation damages of 25% of the outstanding principal balance of the debt, but not to be less than $15,000. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 150% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture.

On July 31, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $200,000, convertible into shares of common stock of the Company, which matures on April 30, 2020. In an event of default as set forth in the note, the interest rate increases to a default amount of 24%. In the event of default, the outstanding principal balance increases to 150%, and if the Company fails to maintain the required authorized share reserve, the outstanding principal increases to 200%. If certain events of default, relating to the reporting requirements or listing of the Company’s common stock, occur or continue after six months from the date of issuance of the note, the principal increases by $15,000. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note is convertible into shares of Common Stock at a conversion price the lower of (i) the lowest closing price (as defined) during the previous twenty trading days prior to the date of the note or (ii) 60% of the lowest trading price of the Common Stock as reported on the National Quotations Bureau OTC market on which the Company’s shares are traded, for the 20 prior trading days including the day upon which a notice of conversion is received by the Company or its transfer agent. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable, and increased by 15% if there is a DTC “chill”. Furthermore, if the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the conversion price is less than $0.01 at any time after the issue date, the principal amount of the note shall increase by $15,000. In addition, the variable conversion price shall be redefined to mean 40% multiplied by the market price. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. If the Company enters into a 3(a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note. If the Company does not maintain or replenish the reserve amount within three days of request by the holder, the principal amount of the note shall increase by $5,000. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 150% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture.

On August 23, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $110,000, convertible into shares of common stock of the Company, which matures on August 23, 2020. The note has an OID of $10,000, for a purchase price of $100,000. The note bears interest at 10%, which increases to 24% upon an event of default. If the note is not paid at maturity, the outstanding principal shall increase by 10%. If the Company loses their bid price, the outstanding principal shall increase by 20%, and if the Company is delisted or the trading of the common stock is suspended for more than ten consecutive days or the Company ceases to file 1934 Act reports with the SEC, the outstanding principal shall increase by 50%. The note is convertible commencing six months after issuance of the note (or upon an event of Default) at a conversion price which shall equal the lesser of: (i) $1.00; and (ii) 60% multiplied by the lowest closing bid price during the 20 days prior to the conversion. The discount will be increased by 10% if the Company’s experiences a DTC “chill”. Additionally, if the Company is not current in their filings with the SEC, and does not cure the delinquency within 10 days, the base price of the conversion price shall change to the lowest closing bid price during the delinquency period. Per the agreement, the Company is required at all times to have authorized and reserved four times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 120% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture.

On August 27, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $82,500, convertible into shares of common stock of the Company, which matures on August 27, 2020. The note has an OID of $7,500, for a purchase price of $75,000. The note bears interest at 10%, which increases to 24% upon an event of default. If the note is not paid at maturity, the outstanding principal shall increase by 10%. If the Company loses their bid price, the outstanding principal shall increase by 20%, and if the Company is delisted or the trading of the common stock is suspended for more than ten consecutive days or the Company ceases to file 1934 Act reports with the SEC, the outstanding principal shall increase by 50%. The note is convertible commencing six months after issuance of the note (or upon an event of Default) at a conversion price which shall equal the lesser of: (i) $1.00; and (ii) 60% multiplied by the lowest closing bid price during the 20 days prior to the conversion. The discount will be increased by 10% if the Company’s experiences a DTC “chill”. Additionally, if the Company is not current in their filings with the SEC, and does not cure the delinquency within 10 days, the base price of the conversion price shall change to the lowest closing bid price during the delinquency period. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. Per the agreement, the Company is required at all times to have authorized and reserved four times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 120% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture.

On September 3, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $82,500 with a purchase price of $75,000, convertible into shares of common stock of the Company, which matures on June 3, 2020. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. Additionally, if the Company is in default due to a failure to comply with the Exchange Act, is delisted, or the Company loses its bid price, the principal shall increase by $15,000. The note is convertible at the lessor of $0.40 or 65% multiplied by the lowest closing price during the 20 days prior to the conversion. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable, and increased by 15% if there is a DTC “chill”. Furthermore, if the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the conversion price is less than $0.01 at any time after the issue date, the principal amount of the note shall increase by $15,000. In addition, the variable conversion price shall be redefined to mean 50% multiplied by the market price. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. If the Company does not maintain or replenish the reserve amount within three days of request by the holder, the principal amount of the note shall increase by $5,000. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture.

On September 3, 2019, the Company entered into a second convertible note with another accredited investor for the principal amount of $82,500 with a purchase price of $75,000, convertible into shares of common stock of the Company, which matures on June 3, 2020. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. Additionally, if the Company is in default due to a failure to comply with the Exchange Act, is delisted, or the Company loses its bid price, the principal shall increase by $15,000. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note is convertible at the lessor of $0.40 or 65% multiplied by the lowest closing price during the 20 days prior to the conversion. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable, and increased by 15% if there is a DTC “chill”. Furthermore, if the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the conversion price is less than $0.01 at any time after the issue date, the principal amount of the note shall increase by $15,000. In addition, the variable conversion price shall be redefined to mean 50% multiplied by the market price. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. If the Company does not maintain or replenish the reserve amount within three days of request by the holder, the principal amount of the note shall increase by $5,000. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture.

On September 3, 2019, the Company entered into a third convertible note with another accredited investor for the principal amount of $82,500 with a purchase price of $75,000, convertible into shares of common stock of the Company, which matures on June 3, 2020. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. Additionally, if the Company is in default due to a failure to comply with the Exchange Act, is delisted, or the Company loses its bid price, the principal shall increase by $15,000. The note is convertible at the lessor of $0.40 or 65% multiplied by the lowest closing price during the 20 days prior to the conversion. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable, and increased by 15% if there is a DTC “chill”. Furthermore, if the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the conversion price is less than $0.01 at any time after the issue date, the principal amount of the note shall increase by $15,000. In addition, the variable conversion price shall be redefined to mean 50% multiplied by the market price. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. If the Company does not maintain or replenish the reserve amount within three days of request by the holder, the principal amount of the note shall increase by $5,000. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture.

On September 13, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $395,000, convertible into shares of common stock of the Company, which matures on April 21, 2020. The note has an OID of $39,500 for a purchase price of $335,500, which is to be paid in two tranches of $167,750 each. The first tranche was funded on September 19, 2019, and the second tranche is to be funded nine months after the funding of the first tranche. The note bears interest at 12%, which increases to 24% upon an event of default. Additionally, in the event of a default, for numerous events as set forth in the agreement, the outstanding principal shall increase by 50%. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note is convertible at the lesser of: (i) $0.40; and (ii) 60% multiplied by the lowest closing bid price during the 20 days prior to the conversion. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. The discount will be increased by 12% for various occurrences as set forth in the agreement, including if the Company is not DTC eligible or experiences a DTC “chill”, if the conversion price falls below $0.01, or if the Company is delisted or delinquent in their filings with the SEC. Or the holder has the option to increase the principal by $5,000 for each occurrence in place of increasing the discount to the conversion price. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at 140% of the principal and accrued interest balance. In connection with the note, the Company granted a number of warrants equal to $395,000 divided by the market price which is defined as the conversion factor (60%) of the lowest closing bid price over the last 20 days to date of issuance at inception, and to exercise date when the warrants are exercised, exercisable at $0.12, with a five year term. The exercise price is adjustable upon any future dilutive issuance. The Company estimated the fair value of the warrants, which were calculated as 5,486,111 warrants at issuance, at $734,000.

On September 16, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $200,000, convertible into shares of common stock of the Company, which matures on September 16, 2020. In an event of default as set forth in the note, the interest rate increases to a default amount of 24%. In the event of default, the outstanding principal balance increases to 150%, and if the Company fails to maintain the required authorized share reserve, the outstanding principal increases to 200%. If certain events of default, relating to the reporting requirements or listing of the Company’s common stock, occur or continue after six months from the date of issuance of the note, the principal increases by $15,000. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note is convertible into shares of Common Stock at a conversion price the lower of (i) the lowest closing price (as defined) during the previous twenty trading days prior to the date of the note or (ii) 60% of the lowest trading price of the Common Stock as reported on the National Quotations Bureau OTC market on which the Company’s shares are traded, for the 20 prior trading days including the day upon which a notice of conversion is received by the Company or its transfer agent. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable, and increased by 15% if there is a DTC “chill”. Furthermore, if the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the conversion price is less than $0.01 at any time after the issue date, the principal amount of the note shall increase by $15,000. In addition, the variable conversion price shall be redefined to mean 40% multiplied by the market price. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. If the Company enters into a 3(a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note. If the Company does not maintain or replenish the reserve amount within three days of request by the holder, the principal amount of the note shall increase by $5,000. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 150% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture.

On September 24, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $149,453, convertible into shares of common stock of the Company, which matures on September 24, 2020. The note has an OID of $13,587, for a purchase price of $135,866. The note bears interest at 8%, which increases to 24% upon an event of default. If the note is not paid at maturity, the outstanding principal shall increase by 10%. If the Company loses their bid price, the outstanding principal shall increase by 20%, and if the Company is delisted or the trading of the common stock is suspended for more than ten consecutive days or the Company ceases to file 1934 Act reports with the SEC, the outstanding principal shall increase by 50%. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note is convertible commencing six months after issuance of the note (or upon an event of Default) at a conversion price equal to 60% multiplied by the lowest closing bid price during the 20 days prior to the conversion. The discount will be increased by 10% if the Company’s experiences a DTC “chill”. Additionally, if the Company is not current in their filings with the SEC, and does not cure the delinquency within 10 days, the base price of the conversion price shall change to the lowest closing bid price during the delinquency period. Per the agreement, the Company is required at all times to have authorized and reserved four times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 130% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. The conversion feature does not meet the definition of a derivative during the first 180 days but will meet the definition of a derivative when the conversion price becomes variable and would at that time require bifurcation and to be accounted for as a derivative liability.

On October 1, 2019, the Company executed an 8% fixed convertible promissory note payable to an accredited investor in the principal amount of $55,000 with a $5,000 OID, for a purchase price of $50,000, which is due on October 1, 2020. In the case of an event of default, as defined in the agreement, the principal amount of the note increases to 150%. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note is convertible into shares of Common Stock at a conversion price of 65% of the market price, as defined in the note. The discount increases 15% if there is an event of default, and 10% if the shares are not deliverable via DWAC. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved eight times the number of shares that is actually issuable upon full conversion of the note. The conversion feature met the definition of a derivative and required bifurcation and to be accounted for as a derivative liability.

On October 23, 2019, a fifth tranche on the June 13, 2018 note, for a 10% convertible promissory note in the amount of $30,000 was executed. The note is due twelve months after payment. In an event of default as set forth in the note, the interest rate increases to a default amount of 15%, and the default sum due becomes 150% of the principal outstanding and accrued interest. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note is convertible at a variable conversion rate of 65% of the lowest closing price during 20 days prior to the conversion date. If at any time while the note is outstanding, the conversion price is equal to or lower than $0.50, then an additional fifteen percent (15%) discount shall be factored into the conversion price. The discount will also be increased by 10% if the Company’s common shares are not DTC deliverable. Additionally, if the Company fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late or delinquent in its filings, even if the Company subsequently cures such delinquency), the discount shall be increased an additional 15%. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note. The conversion feature met the definition of a derivative and required bifurcation and to be accounted for as a derivative liability. In connection with the fifth tranche, the Company issued 40,000 warrants, exercisable at $0.75, with a five year term, at a fair value of $7,000.

On October 24, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $118,000, convertible into shares of common stock of the Company, which matures on October 17, 2020. The convertible note had an OID of $5,000, for a purchase price of $113,000. The note bears interest at 12%, which increases to 18% upon an event of default. The note is convertible commencing 180 days after issuance of the note (or upon an event of Default), with a variable conversion rate at a 40% discount to the lowest closing price during the previous twenty days to the conversion date. The conversion rate adjusts if there are common stock equivalents issued and in which the aggregate per share price is below the original conversion price, in which case the adjusted conversion price is the lower of the original conversion price or 25% of the aggregate price. The discount increases to a 55% discount if there is a DTC “chill” in effect and an additional 5% if the Company is not DWAC or DTC eligible, as well as an additional 5% discount for each event of default. The debenture also includes various liquidated damages for various events, as set forth in the agreement, such as the Company’s inability or delay in the timely issuance of the shares upon receipt of a conversion request. In an event of default, as defined in the note, the “default amount” shall be calculated at the product of (A) the then outstanding principal amount of the note, plus accrued interest, divided by (B) the conversion price as determined on the issuance date, multiplied by (C)the highest price at which the common stock traded at any time between the issuance date and the date of the event of default. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. Per the agreement, the Company is required at all times to have authorized and reserved eight times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture, and at 150% after 180 days. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability on the date the note becomes convertible, either 180 days after issuance or upon an event of default.

On October 29, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $91,500 with a purchase price of $83,000, convertible into shares of common stock of the Company, which matures on July 29, 2020. If the note is not paid at maturity date then the outstanding principal due under the note shall increase by $15,000. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. Additionally, if the Company is in default due to a failure to comply with the Exchange Act, is delisted, or the Company loses its bid price, the principal shall increase by $15,000. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note is convertible at the lessor of $0.30 or 65% multiplied by the lowest closing price during the 20 days prior to the conversion. The discount will be increased by 10% if the Company’s common shares are not DWAC deliverable, and increased by 15% if there is a DTC “chill”. Furthermore, if the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the conversion price is less than $0.01 at any time after the issue date, the principal amount of the note shall increase by $15,000. In addition, the variable conversion price shall be redefined to mean 50% multiplied by the market price. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. If the Company does not maintain or replenish the reserve amount within three days of request by the holder, the principal amount of the note shall increase by $5,000. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability.

On October 29, 2019, the Company entered into a second convertible note with another accredited investor for the principal amount of $91,500 with a purchase price of $83,000, convertible into shares of common stock of the Company, which matures on July 29, 2020. If the note is not paid at maturity date then the outstanding principal due under the note shall increase by $15,000. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. Additionally, if the Company is in default due to a failure to comply with the Exchange Act, is delisted, or the Company loses its bid price, the principal shall increase by $15,000. The note is convertible at the lessor of $0.40 or 65% multiplied by the lowest closing price during the 20 days prior to the conversion. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable, and increased by 15% if there is a DTC “chill”. Furthermore, if the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the conversion price is less than $0.01 at any time after the issue date, the principal amount of the note shall increase by $15,000. In addition, the variable conversion price shall be redefined to mean 50% multiplied by the market price. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. If the Company does not maintain or replenish the reserve amount within three days of request by the holder, the principal amount of the note shall increase by $5,000. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability.

On October 29, 2019, the Company entered into a third convertible note with another accredited investor for the principal amount of $91,500 with a purchase price of $83,000, convertible into shares of common stock of the Company, which matures on July 29, 2020. If the note is not paid at maturity date then the outstanding principal due under the note shall increase by $15,000. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. Additionally, if the Company is in default due to a failure to comply with the Exchange Act, is delisted, or the Company loses its bid price, the principal shall increase by $15,000. The note is convertible at the lessor of $0.40 or 65% multiplied by the lowest closing price during the 20 days prior to the conversion. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable, and increased by 15% if there is a DTC “chill”. Furthermore, if the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the conversion price is less than $0.01 at any time after the issue date, the principal amount of the note shall increase by $15,000. In addition, the variable conversion price shall be redefined to mean 50% multiplied by the market price. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. If the Company does not maintain or replenish the reserve amount within three days of request by the holder, the principal amount of the note shall increase by $5,000. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability.

On December 10, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $180,000, convertible into shares of common stock of the Company, which matures on December 10, 2020. The note has an OID of $13,587, for a purchase price of $135,866. The note bears interest at 8%, which increases to 24% upon an event of default. If the note is not paid at maturity, the outstanding principal shall increase by 10%. If the Company loses their bid price, the outstanding principal shall increase by 20%, and if the Company is delisted or the trading of the common stock is suspended for more than ten consecutive days or the Company ceases to file 1934 Act reports with the SEC, the outstanding principal shall increase by 50%. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note is convertible commencing six months after issuance of the note (or upon an event of Default) at a conversion price equal to 60% multiplied by the lowest closing bid price during the 20 days prior to the conversion. The discount will be increased by 10% if the Company’s experiences a DTC “chill”. Additionally, if the Company is not current in their filings with the SEC, and does not cure the delinquency within 10 days, the base price of the conversion price shall change to the lowest closing bid price during the delinquency period. Per the agreement, the Company is required at all times to have authorized and reserved four times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 130% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. The conversion feature does not meet the definition of a derivative during the first 180 days but will meet the definition of a derivative when the conversion price becomes variable and would at that time require bifurcation and to be accounted for as a derivative liability.

On December 19, 2019, the Company, through its subsidiary, KinerjaPay Ltd, entered into an assignment agreement with an accredited investor for $100,000 of the May 29, 2019 note (see discussion previously). In connection, the Company entered into a new convertible note with the accredited investor, effective as of May 29, 2019, for the principal amount of $100,000, convertible into shares of common stock of the Company, which matures on December 19, 2020. The note bears interest at 10%, which increases to 22% upon an event of default. If the note is not paid at maturity, the outstanding principal shall increase by 10%. The note is convertible at a conversion price equal to 60% multiplied by the lowest closing bid price during the 20 days prior to the conversion. Additionally, six months after the issuance of the new note, the lender has the right to redeem all of any portion of the note, either in cash or in conversion shares. In the event of a default, as set forth in the agreement, the lender may accelerate the note by written notice, or may elect to increase the outstanding balance by applying the default effect. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The Company may prepay the note at any time, at an amount in cash equal to 110% multiplied by the outstanding balance the Company elects to prepay. The conversion feature meets the definition of a derivative and therefore requires bifurcation and is to be accounted for as a derivative liability. In December 24, 2019, $10,000 of the note was converted into 533,334 shares of the Company’s common stock at a conversion price of $0.02.

On December 23, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $31,000 with a purchase price of $26,500, convertible into shares of common stock of the Company, which matures on December 23, 2020. If the note is not paid at maturity date then the outstanding principal due under the note shall increase by $15,000. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. Additionally, if the Company is in default due to a failure to comply with the Exchange Act, is delisted, or the Company loses its bid price, the principal shall increase by $15,000. The note is convertible at the lessor of $0.15 or 65% multiplied by the lowest closing price during the 20 days prior to the conversion. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable, and increased by 15% if there is a DTC “chill”. Furthermore, if the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the conversion price is less than $0.01 at any time after the issue date, the principal amount of the note shall increase by $15,000. In addition, the variable conversion price shall be redefined to mean 50% multiplied by the market price. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. If the Company does not maintain or replenish the reserve amount within three days of request by the holder, the principal amount of the note shall increase by $5,000. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability. In connection with the note, the Company issued 180,000 warrants, exercisable at $0.15, with a five year term.

On December 23, 2019, the Company entered into a second convertible note with another accredited investor for the principal amount of $31,000 with a purchase price of $26,500, convertible into shares of common stock of the Company, which matures on December 23, 2020. If the note is not paid at maturity date then the outstanding principal due under the note shall increase by $15,000. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. Additionally, if the Company is in default due to a failure to comply with the Exchange Act, is delisted, or the Company loses its bid price, the principal shall increase by $15,000. The note is convertible at the lessor of $0.15 or 65% multiplied by the lowest closing price during the 20 days prior to the conversion. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable, and increased by 15% if there is a DTC “chill”. Furthermore, if the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the conversion price is less than $0.01 at any time after the issue date, the principal amount of the note shall increase by $15,000. In addition, the variable conversion price shall be redefined to mean 50% multiplied by the market price. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. If the Company does not maintain or replenish the reserve amount within three days of request by the holder, the principal amount of the note shall increase by $5,000. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability. In connection with the note, the Company issued 180,000 warrants, exercisable at $0.15, with a five year term.

All of the securities issued in the transactions described above were issued without registration under the Securities Act in reliance upon the exemptions provided in Section 4(2) and/or Regulation D or Regulation S of the Securities Act. Except with respect to securities sold pursuant to Regulation S, the recipients of securities in each such transaction acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof. Appropriate legends were affixed to the share certificates issued in all of the above transactions. Each of the recipients also represented that they were “accredited investors” within the meaning of Rule 501(a) of Regulation D under the Securities Act or had such knowledge and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in its common stock. All recipients had adequate access, through their relationships with the Company and its officers and directors, to information about the Company. None of the transactions described above involved general solicitation or advertising.

Issuer Purchases of Equity Securities

WeDuring dothe ~~not~~year-ended ~~have~~December 31, 2019, the Company repurchased in the open market a ~~stock~~total of 616,000 shares of its Common Stock at an average price of $0.14 per share. The repurchase ~~program~~plan ~~for~~was ~~our~~filed ~~common~~as ~~stock~~Exhibit ~~and~~99.1 ~~have~~to ~~not~~the ~~otherwise~~Company’s ~~purchased~~Form ~~any~~8-K ~~shares~~filed with the SEC on January 30., 2019. The repurchases, representing a total cost of ~~our~~approximately ~~common~~$86,340, ~~stock~~was funded with the Company’s working capital and the 616,000 shares are being retired to “treasury shares.”

ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information necessary to understand our audited consolidated financial statements for the two-year period ended December 31, ~~2018~~2019 and highlight certain other information which, in the opinion of management, will enhance a reader’s understanding of our financial condition, changes in financial condition and results of operations. In particular, the discussion is intended to provide an analysis of significant trends and material changes in our financial position and the operating results of our business during the fiscal year ended December 31, ~~2018~~2019, as compared to the fiscal year ended December 31, ~~2017~~2018. This discussion should be read in conjunction with our consolidated financial statements for the two-year period ended December 31, ~~2018~~2019 and related notes included elsewhere in this Annual Report on Form 10-K. These historical financial statements may not be indicative of our future performance. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains numerous forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described throughout this filing, particularly in “Item 1A. Risk Factors.”

Corporate Overview and History

Our business aim is to build a secure and convenient e-commerce ecosystem to customers and merchants through our introduction of services and products including: (i) electronic payment service; and (ii) virtual marketplace both of which are available on the portal, KinerjaPay.com, (the “Portal”). In addition to access to the Portal, our Android and iPhone based mobile application includes additional in-app services to mobile phone users such as social engagement and digital entertainment (the “Mobile App”). A virtual marketplace, powered by our proprietary electronic payment service and gamified with in-app entertainment features, creates a one-stop-shop e-commerce platform for users to BUY, PAY and PLAY. We brand our virtual marketplace under the name of KMALL, our electronic payment solution under the name of KPAY, and our gamification features under the name of KGAMES.

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 (“Equipment”), an equipment 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 efficiency and provide energy at a lower cost. ~~The~~From ~~Company~~2010 entered into an Asset Purchase Agreement with International Executive Consulting SPRL, organized under the laws of Belgium (“IEC”) on May 14, 2013. The business plan was to use the Equipment to: (i) develop a working prototype of its photovoltaic cell for testing and evaluation; (ii) enter into manufacturing arrangements with third parties to produce the photovoltaic elements and sell to solar panel producers; and (iii) enter into distribution agreements for the commercial sale of our products. Since the Asset Purchase Agreement with IEC through mid-2015, we did not successfully use the Equipment to develop a working prototype, nor was there any estimated timeline for our ability to put the working prototype in production. Since the Company did not generate any revenue from the technology, we determined that it was not in the best interest of the Company or its shareholders to continue devoting resources and incurring expenditures towards efforts to commercialize the technology using the Equipment.

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”), for an exclusive, world-wide license to use and commercially exploit technology and intellectual property owned by PT Kinerja (the “KinerjaPay IP”) and its website, KinerjaPay.com (the “Portal”). The Portal, and the technology behind it, KinerjaPay IP, create an e-commerce platform that provides electronic payment solutions to customers and merchants for bill payment, money transfer and online shopping. KinerjaPay.com is among the first portals that allow users to conveniently top up mobile phone credit in Indonesia.

Pursuant to the License Agreement, the Company agreed to: (i) change the name of the Company to KinerjaPay Corp.; (ii) implement a reverse split of the Company’s shares of common stock on a one-for-thirty (1:30) basis; and (iii) 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 consists of 1 share of common stock and 1 Class A warrant exercisable for a period of 24 months to purchase 1 additional share of common stock at $1.00 (“Unit Offering”). The Unit Offering is only being made to “accredited investors” who are not U.S. Persons pursuant to Regulation S promulgated by the SEC under the Securities Act of 1933, as amended (the “Securities Act”). On January 20, 2016, the Company closed its first Unit Offering receiving subscription proceeds in excess of $500,000. To date, the Company has raised $1,540,000 pursuant to subsequent Unit Offerings.

On March 10, 2016, the Company’s name changed to KinerjaPay Corp., and its one-for-thirty (1:30) reverse stock split became effective.

On April 6, 2016, PT Kinerja Pay Indonesia (“PT Kinerja Pay”), a wholly-owned subsidiary of the Company, was organized under the laws of Indonesia, for the purpose of developing and managing the Company’s e-commerce business ranging from electronic payment solutions, virtual marketplace, and any other strategies within the e-commerce ecosystem in Indonesia.

On August 31, 2018, the Company completed the acquisition of its licensor PT Kinerja Indonesia (PT Kinerja”), which became a wholly-owned subsidiary of the Company. PT Kinerja Indonesia continues to provide the technology solutions needed by the Company to support its e-commerce business and may expand into cloud computing services and other IT service-related businesses.

On September 13, 2018, PT Kinerja Simpan Pinjam (“PT Kinerja SP”), a wholly-owned subsidiary of PT Kinerja, was organized under the laws of Indonesia for the purpose of developing and managing a peer-to-peer (“P2P”) lending platform focusing on micro-lending activities.45

~~Material~~On ~~Developments~~September ~~During~~13, ~~Fiscal~~ 2018, PT Kinerja Simpan Pinjam (“PT Kinerja SP”), a wholly-owned subsidiary of PT Kinerja, was organized under the laws of Indonesia for the purpose of developing and managing a peer-to-peer (“P2P”) lending platform focusing on micro-lending activities. PT Kinerja SP was renamed to PT Kinerja SG on August 30, 2019 to comply with the naming convention permitted by Financial Service Authority (Otoritas Jasa Keuangan – “OJK”) of Indonesia.

On ~~January~~February 1228, ~~2018~~2019, ~~the~~Kinerja ~~Company~~Pay ~~entered~~Ltd. ~~into~~a anwholly-owned ~~advisory~~subsidiary ~~agreement~~of ~~with~~PT ~~Blockchain Industries~~Kinerja, ~~Inc.,~~was aincorporated ~~public~~in ~~Nevada~~the ~~corporation (OTC:~~State ~~BCII),~~of ~~and~~Nevada. ~~Fintech~~The ~~Financial~~subsidiary has ~~Consultants,~~no ~~Inc.,~~employees aor ~~private~~operations, ~~Nevada~~aside ~~corporation~~from ~~(the~~a ~~“Advisory~~bank ~~Agreement”).~~account ~~During the~~to ~~fourth~~receive ~~quarter~~cash ofproceeds ~~2018,~~from ~~the~~security ~~Company~~purchase ~~decided~~agreements toand ~~terminate~~convertible debentures, ~~the~~which ~~Advisory~~is ~~Agreement~~then ~~and~~transferred ~~not~~to ~~pursue~~its ~~the~~parent ~~development~~company ofor aother ~~token- based~~entities ~~Payment~~owned ~~and~~by ~~Coin-~~KinerjaPay ~~Trading Platform~~Corp.

OnMaterial ~~August~~Developments ~~31,~~During ~~2018,~~Fiscal ~~the~~2019 ~~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. 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. The Company believes that the acquisition will make the Company more cost efficient. The terms of the acquisition provide for the payment of $1,200,000 to PT Kinerja Indonesia’s shareholders pursuant to a promissory note due in twenty-four (24) months, bearing interest at 6% per annum, which note may be prepaid by the Company at any time. As of August 31, 2018~~, the Service Agreement between the Company and PT Kinerja Indonesia was terminated.~~

On August 31, 2018, the Company completed its acquisition of PT. Kinerja Indonesia, the former corporate parent and licensor of the Company’s IP technology, which entity was controlled by Edwin Ng, our CEO, sole director and principal shareholder. The purpose of this acquisition was to enable the Company to consolidate all of its previous accumulated gross revenue to the date of the acquisition. In addition, acquisition enabled the Company to consolidate its IP technology and manage its 1,500 square-feet data center located in North Sumatra. The Company believes that the acquisition will make the Company more cost efficient. The terms of the acquisition provide for the payment of $1,200,000 to PT Kinerja Indonesia’s shareholders pursuant to a promissory note due in twenty-four (24) months, bearing interest at 6% per annum, which note may be prepaid by the Company at any time. As of August 31, 2018, the Service Agreement between the Company and PT Kinerja Indonesia was terminated. The note issued to PT Kinerja Indonesia’s shareholders on August 31, 2018 had a maturity date of August 31, 2020. The parties are negotiating a long-term extension of the note, which should be completed during the 4^th quarter of 2020 at terms and conditions satisfactory to the Company.

On September 13, 2018, the Company incorporated PT. Kinerja SimpanPinjam (“KSP”), a new wholly-owned subsidiary, for the purpose of managing its a peer-to-peer (P2P) lending platform focusing on micro-lending activities under the KFUND brand. At present, KSP is in the process of being registered with Otoritas Jasa Keuangan (“OJK”), an Indonesian governmental agency overseeing and regulating the financial service sector in Indonesia. KSP was incorporated with capital of Rp1,000,000,000 or approximately $70,000 and we expect to increase the capital of KSP within the next year by an additional Rp2,500,000,000 or approximately $175,000.

On October 4, 2018, we entered into a Preliminary Share Sale and Purchase Agreement between PT Kinerjapay Indonesia and PT Mitra Distribusi Utama (“PTMDU”) to acquire PTMDU for Rp40,000,000,000 or approximately $2,758,621. Depending on the amount raised in this Offering, we intend to use $2,500,000 to $3,000,000 for financing the acquisition of PTMDU.

PT. PTMDU has been providing as mobile prepaid data package to all telecommunications operators in Indonesia since 2007. PTMDU generated sales of exceeding $30 million in 2017, mainly by selling prepaid data plans for internet usage to Indonesia’s fast-growing mobile internet users. Depending on the amount raised in this Offering, we intend to use $2,500,000 to $3,000,000 for financing the acquisition of PTMDU.

Results of Operations

Comparison of the year ended December 31, ~~2018~~2019 to the year ended December 31, ~~2017~~2018

Revenue

During the year ended December 31, ~~2018~~2019, we generated gross revenues of $2449,~~825~~434,~~676,~~ with costs of sales of $2431,~~821,191~~604 for net revenues of $417,~~485~~830, compared to ~~net~~gross revenues ~~from a related party~~ of ( $~~106~~2,~~262) for the twelve months ended December 31~~825,676, ~~2017. The revenues in 2017 were recognized under the license agreement~~ with ~~PT.~~costs ~~Kinerja~~of ~~only~~sales onof a$2,821,191 ~~net~~for ~~basis~~gross asprofit anof ~~agent~~$4,485 ~~which~~for ~~resulted in negative net revenue. Since~~ the ~~acquisition~~year ~~in August of~~ended ~~2018~~December 31, ~~the revenue is no longer under a license agreement and is recognized on a gross basis as principal~~2018.

Expenses

Our expenses for the year ended December 31, ~~2018~~2019 are summarized as follows in comparison to the year ended December 31, ~~2017~~2018:

	Year Ended December 31,
	2018			2017
	2019			2018
Marketing Expenses	$	~~228~~188,~~686~~645		$	~~148~~228,~~187~~686
General and administrative		68,~~282~~622,~~352~~461			56,~~446~~282,~~336~~352
Depreciation		6544,~~086~~855			265,~~875~~086
Other income (expense)		(1,822,021	)		(462,133	)
Other expense		(11,109,859	)		(1,822,021	)

Marketing expenses for the year ended December 31, 2018 increased by 54% compared to marketing expenses for the same period in 2017. The increase was the result of the Company trying to grow their business on their portal.46

~~General~~Marketing ~~and administrative~~ expenses for the year ended December 31, ~~2018~~2019 ~~increased~~decreased by 1317.5% compared to ~~general~~marketing ~~and administrative~~ expenses for the same period in ~~2017~~2018. The higher ~~main~~amount ~~components of general and administrative expenses~~ in 2018 consisted of approximately $2,088,000 in consulting fees, approximately $3,358,000 in shares issued for services, and approximately $865,000 in legal and professional fees. Included in the shares issued for services was ~~$871,000 for~~ the ~~Series~~result ~~B preferred shares issued to the CEO for 51%~~ of the ~~voting~~ ~~control of the~~ Company. ~~The~~trying ~~legal~~to ~~and~~grow ~~professional~~their ~~fees~~business ~~are~~on ~~primarily~~their ~~fees related to the convertible debentures~~portal, ~~the activity of~~ which has ~~increased~~been inreduced ~~2018, both for issuance and opinion letters related to the conversions of the convertible debentures.~~during ~~Included in general and administrative expenses in~~ the ~~year~~current ~~ending December 31, 2017 was approximately $4,627,000 in shares issued for services~~year. ~~Legal fees in 2017 was approximately $80,000.~~

~~Depreciation expense~~General ~~increased~~and ~~over~~administrative expenses ~~2000%~~for in the year ended December 31, ~~2018~~2019 asincreased by 37.2% compared to general and administrative expenses for the same period in ~~2017~~2018. The main components of general and administrative expenses in 2019 consisted of approximately $2,979,000 ~~due~~in toconsulting fees, substantially all of which were in stock based compensation; approximately $758,000 of which is for the ~~fixed~~current ~~assets~~year amortization ~~associated~~of the Series D preferred shares issued to FRS Lending in connection with their 3 year employment agreement; approximately $3,559,000 for the Series E preferred shares issued to the CEO for his services in the negotiation with PT ~~Kinerja~~Investa ~~acquisition~~Wahana Group related to a presumed subscription to purchase shares of Series G and Series F Preferred Stock under a Reg S Subscription Agreement that has not yet closed; approximately $586,000 in legal and professional fees; and approximately $200,000 for audit and accounting services. The legal and professional fees are primarily fees related to the convertible debentures, both for issuance and opinion letters related to the conversions of the convertible debentures. Included in general and administrative expenses in the year ending December 31, 2018 was approximately $2,088,000 in consulting fees, approximately $3,358,000 in shares issued for services, and approximately $865,000 in legal and professional fees. Included in the shares issued for services was $871,000 for the Series B preferred shares issued to the CEO for 51% of the voting control of the Company.

32Depreciation expense decreased 31.1% in the year ended December 31, 2019 as compared to the same period in 2019, due to a re-evaluation of the useful life of the fixed assets associated with the PT Kinerja acquisition.

Other expense in the year ended December 31, 2019 increased by approximately $9,289,000 as compared to the same period in 2018, substantially due to the increase in expense items arising from the convertible debentures. Amortization of the debt discount, the majority of which is related to the valuation of the derivatives and warrants issued in connection with the convertible debentures, increased by approximately $4,172,000; Financing costs which are mostly the result of the fair value of the bifurcated derivative liability at inception resulting in the debt discount being greater than the face amount of the debt and the excess amount being immediately expensed as financing costs, increased by approximately $2,752,000, and the expense related to the change in the fair value of the Warrant liability increased by $979,000. Additionally, Penalties and loss on conversion of debt increased by approximately $1,337,000, significantly all of which is from the recognition of a loss on the modification of the conversion price of the Series A preferred stock.

Working Capital

	December 31,
	2018			2017
	2019			2018
Current assets	$	~~401~~2,~~785~~236,390		$	~~248~~401,~~227~~785
Current liabilities		38,~~996~~495,~~097~~709			~~641~~3,~~777~~996,097
Working capital (deficiency)	$	(3,594,312	)	$	(393,550	)
Working capital deficiency	$	(6,259,319	)	$	(3,594,312	)

Current assets increased by approximately $~~154~~1,835,000, which was primarily attributable to the following: (i) ~~the~~approximately $~~120~~308,000 ~~note~~in additional notes receivable ~~related~~; toand ~~the~~(ii) ~~back~~an ~~end~~increase ~~note~~in ~~with~~prepaid GSexpenses, ~~Capital~~consisting ~~(see~~of ~~Note~~approximately 6$1,130,000 inof the ~~consolidated~~current ~~financial~~portion of ~~statements);~~shares issued to consultants, and ~~(ii)~~the an$322,000 ~~increase~~related to finder’s fees paid to various parties in ~~inventory~~connection with an ~~due~~expected toequity investment in the ~~acquisition~~Company ofand PTa ~~Kinerja~~related standby letter of credit. Current liabilities increased by approximately $24,~~354~~500,000, which was primarily attributable to the following: (i) an increase of approximately $~~835~~370,000 in convertible debentures, net of the debt discount; ~~and~~ (ii) ~~the addition~~an increase of ~~the~~ $~~807~~2,901,000 in the derivative liability, ~~which~~related ~~arose~~to ~~out of~~ the convertible features of the current year outstanding convertible debentures meeting the qualification for derivative accounting, (iii) ~~the~~an ~~addition~~increase of ~~the~~ $~~374~~821,000 in the warrant liability, which arose out of the convertible features of the convertible debentures requiring the warrants to be classified out of equity, due to not being able to determine if there are sufficient authorized and unissued common shares of the Company, ~~and~~mostly ~~(iv)~~related ~~$600,000~~to ~~for~~new warrants issued in the current ~~portion~~year ofand ~~the~~(iv) ~~promissory~~increases ~~note~~in ~~related~~accounts topayable ~~the~~and ~~acquisition~~accrued expenses, ofincluding PTaccrued ~~Kinerja~~interest asrelated ~~well~~to as the ~~assumed~~convertible ondebentures ~~demand~~and ~~officer~~the ~~loan~~promissory ofnote, ~~approximately~~related ~~$708,000~~party.

Liquidity and Capital Resources

	Year Ended December 31,
	2018			2017
	2019			2018
Net loss	$	(819,~~393~~947,~~660~~990	)	$	(68,~~165~~393,~~793~~660	)
Net cash used in operating activities		(23,~~037~~300,~~691~~532	)		(12,~~423~~037,~~517~~691	)
Net cash used in investing activities		(11506,~~650~~173	)		(11,~~626~~650	)
Net cash provided by financing activities		23,~~119~~648,~~000~~543			12,~~547~~119,000
(Decrease)/Increase in cash and cash equivalents	$	(10,538	)	$	111,857
Decrease in cash and cash equivalents, including foreign currency translation amount	$	(49,924	)	$	(90,735	)

Net cash used in operating activities increased by approximately 4362.0% for the year ended December 31, ~~2018~~2019, as compared with the same period in ~~2017~~2018. The increase in cash used was a result of the increase in the net loss of approximately 34138%, plus the ~~increase~~ increase in non-cash activities, including the ~~penalties~~increase ~~and~~to the loss on ~~conversions of common and~~ preferred stock, ~~and~~of ~~warrant exercise modification totaling~~ approximately $~~928~~1,335,000, the ~~financing~~increase in financing costs of approximately $~~495~~2,952,000, the net decrease in the fair value of the derivative and warrant liabilities of $611,000 compared to $123,000 in 2018, and the amortization of debt discount of $~~183~~4,~~500.~~355,000 ~~None~~for ~~of these same charges occurred in~~ the year ended December 31, ~~2017~~2019 as compared to $183,500 for fiscal 2018. The expenses arising from stock issued for services, ~~including~~decreased ~~the~~by ~~Series~~approximately B$1,535,000. ~~preferred~~The ~~stock~~changes in ~~2018,~~net assets and liabilities were fairly consistent between years, asaside ~~were~~from ~~the~~increases ~~changes~~ in ~~net assets~~accrued liabilities and ~~liabilities~~accrued interest.

Net cash used in investing activities for the year ended December 31, 2018 was ~~fairly~~primarily ~~consistent~~for to the ~~same~~purchase ~~period~~of inconvertible ~~2017.~~notes receivable. Net cash used in investing activities in 2018 was primarily for the purchase of fixed assets, offset in ~~2018~~ by the cash received in the PT Kinerja KI acquisition.

During the year ended December 31, ~~2018~~2019, ~~our~~ financing activities consisted of approximately $14,~~519~~344,000 in proceeds from convertible debentures, and approximately $~~100~~146,000 in ~~cash received~~proceeds infrom ~~warrants~~the ~~exercise~~issuance ~~and~~of common stock, offset by approximately $~~500~~445,000 in ~~proceeds~~payments ~~from~~on the convertible ~~issuance~~debentures, the payment of ~~Series~~approximately A$304,000 ~~Preferred~~on ~~Stock~~the promissory note, related party and approximately $86,000 for the repurchase of common shares. Our financing activities during the year ended December 31, ~~2017~~2018, consisted of $~~952~~1,519,000 in ~~for~~proceeds ~~the~~from ~~sale~~convertible ofdebentures, ~~common stock~~$100,000 in cash received in warrants exercise and $~~595~~500,000 in proceeds onfrom ~~debt~~the issuance of Series A Preferred Stock.

Convertible Note Agreements

OnDuring ~~October 11, 2018,~~ the ~~Company~~year ~~entered~~ended ~~into~~December ~~three convertible notes with Armada Investment Fund LLC~~31, ~~BHP Capital NY, Inc, and Jefferson Street Capital, for the principal amount of $55,000 each, convertible into shares of common stock of the Company, which mature on July 11,~~ 2019~~. The notes bear interest at 8%~~, ~~which increases to 24% upon an event of default. In an event of default as set forth in~~ the ~~notes, the default sum becomes 150% of the principal outstanding and accrued interest, and if the~~ Company ~~cannot deliver~~issued ~~conversion~~numerous ~~shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The s are~~ convertible atdebentures ~~the~~consisting ~~lesser~~ of: (i) $1.75; and (ii) 65% multiplied by lowest end of day VWAP during the previous 20 days before the Issue date of the note, and (iii) 65% multiplied by the market price (as defined in the note. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. The discount is increased to 50% if the Company is not DTC eligible, or if the conversion price falls to below $0.01, and the principal ~~amount~~ of ~~the note~~approximately ~~shall increase by~~ $154,251,000~~. Additionally~~, ifwith ~~the~~varying ~~Company~~convertible ~~enters~~rates. ~~into~~See aItem ~~Section~~5 ~~3(a)(9)~~above orfor 3(a~~)(10)~~ ~~transaction,~~detailed ~~there~~discussion ~~shall be liquidation damages~~ of ~~25% of~~ the ~~outstanding~~individual principal balance of the debt, but not to be less than $15,000. Per the agreements, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of each note. During the first 180 days the convertible ~~redeemable notes are in effect, the Company may redeem~~debentures ~~the~~issued ~~notes~~during ~~at amounts ranging from 115% to 145% of~~ the ~~principal~~year ~~and~~ended ~~accrued~~December ~~interest balance~~31, ~~based on the redemption date’s passage of time ranging from the date of issuance of the debenture~~2019. ~~In connection with each note, the Company issued 150,000 warrants (for a total of 450,000 warrants), exercisable at $0.34, with a five year term.~~

On October 16, 2018, the Company entered into a 12% convertible note with Power Up Lending for the principal amount of $43,000, convertible into shares of common stock of the Company, which matures on July 30, 2019. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The note was in default due to the Company being delinquent in their filings under the Exchange Act, and therefore the principal was increased 50%, to $64,500, with the increase being recognized as a penalty expense in the accompanying Statement of Operations. The note is convertible during first 180 days after issuance at a fixed conversion price of $1.75. After the initial conversion period, the conversion price shall equal the lesser of: (i) the fixed price; and (ii) 65% multiplied by the market price (as defined in the note). During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note.

On October 29, 2018, the Company entered into a 12% convertible note for the principal amount of $118,000 with JSJ Investments, Inc, which matures on October 29, 2019, and has a $5,000 OID. The note is convertible commencing 180 days after issuance of the note (or upon an event of Default), with a variable conversion rate at 60% of market price (as defined in the note). The conversion rate adjusts if there are common stock equivalents issued and in which the aggregate per share price is below the original conversion price, in which case the adjusted conversion price is the lower of the original conversion price or 25% of the aggregate price. The discount increases to a 55% discount if there is a DTC “chill” in effect and an additional 5% if the Company is not DWAC or DTC eligible, as well as an additional 5% discount for each event of default. The debenture also includes various liquidated damages for various events, as set forth in the agreement, such as inability or delay issuing shares upon conversion request. Per the agreement, the Company is required at all times to have authorized and reserved eight times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture, and at 150% after 180 days.

On October 31, 2018, the Company entered into a 12% convertible promissory note in the principal amount of $150,000 with Auctus Funds, which matures on July 31, 2019. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The note is convertible at a variable conversion rate lessor of (i) lowest closing price during the previous 25 trading day period, prior to the date of note and (ii) the variable price, which is 60% by market price (lowest closing price for 25 days prior to conversion). The discount increases by 15% discount if there is a DTC “chill” in effect., and an additional 10% if the Company is not DWAC eligible. Additionally, if the Company enters into a Section 3(a)(9) or 3(a)(10) transaction, there shall be liquidation damages of 25% of the outstanding principal balance of the debt, but not to be less than $15,000. The conversion price is adjusted if any 3rd party has the right to convert monies at a discount to market greater than the conversion price in effect at that time then the holder, may utilize such greater discount percentage. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note. If the Company does not maintain the reserve shares, or fails to replenish then within 3 days of request, the principal balance increases by $5,000. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 150% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. In connection with the note, the Company issued 375,000 warrants, exercisable at $0.20, with a five year term.

On October 31, 2018, the Company entered into a 12% convertible promissory note in the principal amount of $150,000 with EMA Financial LLC, which matures on July 31, 2019. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 200% of the principal outstanding and accrued interest. Additionally, if the market price of the Company’s common stock falls below $0.01, the principal shall increase by $25,000. The note is convertible at a variable conversion rate lessor of (i) the closing price on the day preceding the issue date and (ii) 60% of either the lowest closing price during 25 days prior to and including the conversion date, or the closing bid price, whichever is lower. The discount increases by 15% discount if there is a DTC “chill” in effect, or closing price falls below $0.05875. Additionally, if the Company enters into a Section 3(a)(9) or 3(a)(10) transaction, there shall be liquidation damages of 25% of the outstanding principal balance of the debt, but not to be less than $15,000. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 150% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. In connection with the note, the Company issued 312,500 warrants, exercisable at $0.24, with a five year term.

On December 3, 2018, the Company entered into a 12% convertible note with Power Up Lending, for the principal amount of $53,000, convertible into shares of common stock of the Company, which matures on September 15, 2019. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The note is convertible during first 180 days after issuance at a fixed conversion price of $1.75. After the initial conversion period, the conversion price shall equal the lesser of: (i) the fixed price; and (ii) 65% multiplied by the market price (as defined in the note). Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture.

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 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. The note has been fully converted to common stock on several occasions in July and August 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, which was due on September 7, 2018. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The note was in default due to the Company being delinquent in their filings under the Exchange Act, and therefore the principal was increased 50%, to $94,500, with the increase being recognized as a penalty expense in the accompanying Statement of Operations. The note is convertible during first 180 days after issuance at a fixed conversion price of $1.75. After the initial conversion period, the conversion price shall equal the lesser of: (i) the fixed price; and (ii) 65% multiplied by the market price (as defined in the note). Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. During September 2018, the note was fully converted into 352,782 shares of common stock, at an average price of $0.24.

On June 13, 2018, the Company executed a 10% convertible promissory note payable to Crown Bridge Partners in the principal amount of $225,000, with an OID of $22,500. The first tranche of the note, in the principal amount of $75,000, with an OID of $7,500 for net cash receipt of $67,500, was paid at closing. Cross Bridge Partners may pay, in its sole discretion, such additional amounts of the consideration and at such dates as the holder may choose in its sole discretion. On August 21, 2018, a second tranche, for a 10% convertible promissory note in the amount of $25,000 was executed. Each tranche shall be due twelve months after payment. In an event of default as set forth in the note, the interest rate increases to a default amount of 15%, and the default sum due becomes 150% of the principal outstanding and accrued interest. The note is convertible at a variable conversion rate of 65% of the lowest closing price during 20 days prior to the conversion date. If at any time while the note is outstanding, the conversion price is equal to or lower than $0.50, then an additional fifteen percent (15%) discount shall be factored into the conversion price. The discount will also be increased by 10% if the Company’s common shares are not DTC deliverable. Additionally, if the Company fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late or delinquent in its filings, even if the Company subsequently cures such delinquency), the discount shall be increased an additional 15%. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note.

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, and is due on March 27, 2019. The note is convertible into shares of Common Stock at a conversion price of $1.30 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.

On July 19, 2018, the Company entered into two 10% convertible redeemable notes to GS Capital in the aggregate principal amount of $250,000, convertible into shares of common stock of the Company, with maturity dates of July 19, 2019. Each note was in the face amount of $125,000, with an original issue discount of $5,000, resulting in a purchase price for each note of $120,000. The first of the two notes was paid for by the buyer in cash upon closing, with the second note initially paid for by the issuance of an offsetting $120,000 secured promissory note issued to the Company by the buyer (“Buyer Note”). The notes are convertible beginning six months after issuance, at the lower of (i) $0.60 or (ii) 65% of the lowest of trading price for last 20 days, with the discount increased to 45% in the event of a DTC chill. The second note is not convertible until the buyer has settled the Buyer Note in cash payment, which must be funded by March 20, 2019. The Buyer Note was funded on January 17, 2019, for gross proceeds of $114,000. During the first six months, the convertible redeemable notes are in effect, the Company may redeem the note at amounts ranging from 113% to 137% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from 60 days to 180 days from the date of issuance of each debenture.

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, and is due on May 15, 2019. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The note was in default due to the Company being delinquent in their filings under the Exchange Act, and therefore the principal was increased 50%, to $94,500, with the increase being recognized as a penalty expense in the accompanying Statement of Operations. The note is convertible for 180 days from inception into shares of Common Stock at a conversion price of $1.75 per share, subject to adjustment based upon the terms of the note. After the 180 days the conversion price shall equal the lesser of: (i) $1.75; and (ii) 65% multiplied by the market price, as defined in the agreement. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture.

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, due on June 30, 2019. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The note was in default due to the Company being delinquent in their filings under the Exchange Act, and therefore the principal was increased 50%, to $94,500, with the increase being recognized as a penalty expense in the accompanying Statement of Operations. The note is convertible for 180 days from inception into shares of Common Stock at a conversion price of $1.75 per share, subject to adjustment based upon the terms of the note. After the 180 days the conversion price shall equal the lesser of: (i) $1.75; and (ii) 65% multiplied by the market price, as defined in the agreement. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture.

On January 18, 2019, the Company entered into a convertible note with Tangiers Global, LLC for the principal amount of $165,000, with an OID of $15,000, convertible into shares of common stock of the Company, which matures on January 18, 2020. The note bears interest at 10%, which increases to 20% upon an event of default. In an event of default as set forth in the note, the outstanding principal balance increases by 40%.. The note is convertible at 65% multiplied by the lowest closing price during the 15 days prior to the conversion. The discount increases by 5% discount if there is a DTC “chill” in effect., and an additional 5% if the Company is not DWAC eligible. Per the agreement, the Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 120% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture.

On January 25, 2019, the Company entered into a convertible note with Armada Investment Fund LLC for the principal amount of $38,500 for a purchase price of $35,000, convertible into shares of common stock of the Company, which matures on October 25, 2019. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The note is convertible at 65% multiplied by the lowest closing price during the 20 days prior to the conversion. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture.

On January 25, 2019, the Company entered into a convertible note with Jefferson Street Capital LLC for the principal amount of $38,500 for a purchase price of $35,000, convertible into shares of common stock of the Company, which matures on October 25, 2019. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The note is convertible at 65% multiplied by the lowest closing price during the 20 days prior to the conversion. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture.

On January 25, 2019, the Company entered into a convertible note with BHP Capital NY, Inc. for the principal amount of $38,500 for a purchase price of $35,000, convertible into shares of common stock of the Company, which matures on October 25, 2019. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The note is convertible at 65% multiplied by the lowest closing price during the 20 days prior to the conversion. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture.

On January 28, 2019, the Company executed an 12% convertible promissory note payable to Power Up Lending, LLC in the principal amount of $48,000, which is due on November 30, 2019. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The note is convertible during first 180 days after issuance at a fixed conversion price of $1.75. After the initial conversion period, the conversion price shall equal the lesser of: (i) the fixed price; and (ii) 61% multiplied by the market price (as defined in the note). Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture.

On January 30, 2019, the Company executed an 10% convertible promissory note payable to Firstfire Global Opportunities Fund, LLC in the principal amount of $131,250, for a purchase price of $125,000, which is due on September 30, 2019. In an event of default as set forth in the note, the interest rate increases to a default amount of 15%, and the default sum due becomes 150% of the principal outstanding and accrued interest. The note is convertible at 65% multiplied by the lowest closing price during the 25 days prior to the conversion. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 125% to 135% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture.

On February 11, 2019, the Company executed an 8% convertible promissory note payable to Crown Bridge Partners in the principal amount of $150,000, with an OID of $10,500. The first tranche of the note, in the principal amount of $50,000, with an OID of $3,500 for net cash receipt of $46,500, was paid at closing. Crown Bridge Partners may pay, in its sole discretion, such additional amounts of the consideration and at such dates as the holder may choose in its sole discretion. Each tranche shall be due eighteen months after payment. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest. The note is convertible at a variable conversion rate of 55% of the lowest closing price during 20 days prior to the conversion date. If at any time while the note is outstanding, the conversion price is equal to or lower than $0.01 or the Company is not DTC eligible, then an additional fifteen percent (15%) discount shall be factored into the conversion price, and the principal will be increased by $15,000. The discount will also be increased by 10% if the Company’s common shares are not DWAC deliverable. Additionally, if the Company fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late or delinquent in its filings, even if the Company subsequently cures such delinquency), the discount shall be increased an additional 15%. Per the agreement, the Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the note.

On February 28, 2019, the Company executed an 10% fixed convertible promissory note payable to Crossover Capital Fund I, LLC in the principal amount of $115,000 with a $10,000 OID, which is due on November 28, 2019. In the case of a sale event, as defined in the agreement, the principal amount of the note increases to 150%. The note is convertible into shares of Common Stock at a conversion price of the lower of (i) $1.00 per share or (ii) 65% of the lowest trading price for the 20 prior trading days including the day upon which a notice of conversion is received by the Company or its transfer agent. The discount increases 10% if there is a DTC “chill” in effect. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 125% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the note.

On March 14, 2019, the Company entered into a 12% convertible note for the principal amount of $118,000 with JSJ Investments, Inc, which matures on March 14, 2020, and has a $5,000 OID. The holder will also deduct $13,000 from the purchase price for legal and due diligence fees. The note is convertible commencing 180 days after issuance of the note (or upon an event of Default), with a variable conversion rate at 60% of market price (as defined in the note). The conversion rate adjusts if there are common stock equivalents issued and in which the aggregate per share price is below the original conversion price, in which case the adjusted conversion price is the lower of the original conversion price or 25% of the aggregate price. The discount increases to a 55% discount if there is a DTC “chill” in effect and an additional 5% if the Company is not DWAC or DTC eligible, as well as an additional 5% discount for each event of default. The debenture also includes various liquidated damages for various events, as set forth in the agreement, such as the Company’s inability or delay in the timely issuance of the shares upon receipt of a conversion request. In an event of default, as defined in the note, the “default amount” shall be calculated at the product of (A) the then outstanding principal amount of the note, plus accrued interest, divided by (B) the conversion price as determined on the issuance date, multiplied by (C)the highest price at which the common stock traded at any time between the issuance date and the date of the event of default .Per the agreement, the Company is required at all times to have authorized and reserved eight times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture, and at 150% after 180 days.

On March 25, 2019, the Company executed an 8% convertible promissory note payable to Belridge Capital L.P. in the principal amount of $137,500, for a purchase price of $125,000, which is due on March 24, 2020. In an event of default as set forth in the note, the interest rate increases to a default amount of 18%, and the default sum due becomes 130% of the principal outstanding and accrued interest (the “default redemption amount”). Alternatively, at the election of the holder, the Holder may require the Company to redeem all or part of the default redemption amount through the issuance of such number of shares of common stock equal to (x) the default redemption amount, divided by (y) or 55% of the lowest traded price in the 20 trading days prior to the conversion date. The note is convertible into shares of common stock at a conversion price of the lower of (i) $1.00 per share or (ii) 61% of the lowest trading price for the 20 prior trading days prior to the conversion date. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. The Company may redeem the note at any time the note is outstanding and there is not an event of default, at amounts ranging in the first 90 days from the date of issuance from 115% to 135% of the principal and accrued interest balance, based on the redemption date’s passage of time. The note also includes a “most favoured nation” clause, whereby when the Company enters into any future financing transactions with a third-party investor, the Company must provide the holder notification of the terms of the new financing transaction, and if the holder determines that the terms of the subsequent investment are preferable to the original terms of the March 25, 2019 convertible promissory note, the original terms of the note will be amended and restated, which may include the conversion terms.

Going Concern

The accompanying ~~audited~~ consolidated financial statements ~~contained in this annual report on Form 10-K~~ 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 operating costs, and as such, has incurred an operating loss since inception. For the year ended December 31, ~~2018~~2019, the Company had a net loss of approximately $819,~~394~~948,000. At December 31, ~~2018~~2019, the Company had an accumulated deficit of approximately $1838,~~145~~093,000 and a working capital deficit of approximately $36,~~594~~259,000. These factors raise substantial doubt about the Company’s ability to continue as a going concern, within one year from the issuance date of this filing. The Company’s ability to continue as a going concern is dependent on its ability to raise the required additional capital or debt financing to meet short and long-term operating requirements. During the year ended December 31, ~~2018~~2019, the Company received net cash proceeds of approximately $14,~~519~~224,000 from the issuance of new convertible debentures. Subsequent to December 31, ~~2018~~2019, the Company received approximately $~~771~~496,000 in ~~net~~ cash proceeds from the issuance of new convertible debentures. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict our operations. The Company continues to pursue external financing alternatives to improve its working capital position. The ~~consolidated~~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.

Future Financing

We will require additional funds to implement our growth strategy for our business. Subsequent to year end, we have raised approximately an additional $~~920~~496,000, ~~net of OID,~~ from convertible debentures. Additionally, on December 10, 2018, we entered into a signed commitment with PT. Investa Wahana Group, Indonesia to invest $200 million, subscribing for $100 million in shares of the Company’s ~~Series~~ Series F Convertible Preferred Stock and an addition $100 million in shares of the Company’s Series G Convertible Preferred Stock. In addition, during the year-ended December 31, 2019, the Company has negotiated with third parties who also expressed an interest in subscribing for shares of the Company’s authorized Series F and Series G Preferred Stock. To date, we have not received the subscription proceeds, ~~but~~from weany ~~reasonably~~third-party ~~expect~~investors who have expressed interest in subscribing for Series F and G Preferred Stock nor can there be any assurance that the Company will be able to ~~receive~~successfully ~~these~~close ~~proceeds~~any orof athe ~~significant~~pending proposals from third-party ~~portion~~investors ~~thereof~~for ~~during~~such ~~April~~securities. ~~2019~~Nevertheless, the Company has continued discussions, albeit intermittently, for the purpose of closing one or more subscriptions for the Series F and Series G Preferred Stock.

However, not including funds needed for capital expenditures or to pay down existing debt and trade payables, we anticipate that we will need to raise an additional $3,000,000 to cover all of our operational expenses over the next 12 months. These funds ~~may~~ may be raised through equity financing, debt financing, the sale by the Company of shares of common stock of third-party public companies issued upon conversion by the Company of convertible notes issued to the Company, or other sources, some of which may result in further dilution in the equity ownership of our shares. There can be no assurance that additional financing will be available to us when needed or, if available, that such financing can be obtained on commercially reasonable terms. If we are not able to obtain the additional necessary financing on a timely basis, or if we are unable to generate significant revenues from operations, we will not be able to meet our other obligations as they become due, and we will be forced to scale down or perhaps even cease our operations.

Critical Accounting Policies and Estimates

Our significant accounting policies are more fully described in the notes to our financial statements included in this Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018~~2019. We believe that the accounting policies below are critical for one to fully understand and evaluate our financial condition and results of operations.

Fair Value Measurement

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 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:

● Level 2: Inputs to the valuation methodology include:

	-	Quoted prices for similar assets or liabilities in active markets;
	-	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.

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 Company did not have any Level 1 or Level 2 assets and liabilities at December 31, ~~2018~~2019. The Derivative and warrant ~~liabilities~~ liabilities at December 31, ~~2018~~2019, are Level 3 fair value measurements. ~~The Company did not have any Level 1, Level 2 or Level 3 financial assets and liabilities as of and for the year ended December 31, 2017.~~

Revenue Recognition

~~Effective~~The ~~January 1, 2018, the~~ Company ~~adopted~~has ~~ASC~~eight ~~606~~different ~~— Revenue from Contracts with Customers. Under ASC 606, the Company recognizes~~ revenue ~~from the commercial sales of~~ products, ~~licensing~~including, ~~agreements~~Mobile ~~and~~phone ~~contracts~~prepaid, toKinerja ~~perform~~Store, ~~pilot~~Payment ~~studies~~Gateway byServices, ~~applying the following~~Instant ~~steps:~~Pay ~~(1)~~Fees ~~identify~~Collection, ~~the~~Marketplace ~~contract~~Merchant ~~with~~Partners, aMarketplace ~~customer;~~Merchant ~~(2)~~Users, ~~identify~~Remittance, ~~the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract;~~ and ~~(5) recognize revenue when each performance obligation is satisfied~~Unipin. ~~For~~To ~~the~~date ~~comparative periods, revenue has not been adjusted and continues to be~~substantially ~~reported~~all ~~under~~our ~~ASC 605 — Revenue Recognition. Under ASC 605,~~ revenue ~~is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service~~ has been ~~rendered~~earned toin ~~a customer or delivery has occurred; (3)~~ the ~~amount~~mobile ofhome ~~fee~~prepaid ~~to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured~~product. ~~There was no impact on the Company’s financial statements as a result of adopting Topic 606 for the year ended December 31, 2018.~~

~~For~~Effective ~~the~~January ~~year ended December 31~~1, ~~2017~~2018, ~~pursuant~~the toCompany adopted ASC ~~605,~~606 ~~the~~— ~~Company~~Revenue ~~recognized~~from ~~their~~Contracts ~~revenue~~with atCustomers. ~~net~~Under ~~since~~ASC ~~they~~606, ~~were~~the anCompany ~~agent and~~recognizes ~~not~~revenue afrom ~~principal to~~ the ~~various~~commercial ~~transactions~~sales ~~with~~of ~~other~~products, ~~financial~~licensing ~~institutions~~agreements and orcontracts ~~technology~~to ~~companies~~perform ~~through~~pilot ~~their~~studies ~~leased portal.~~by ~~Gross~~applying ~~cost~~the offollowing steps: ~~goods~~(1) ~~sold~~identify ~~exceeded~~the ~~gross~~contract ~~revenues~~with ~~for~~a ~~the~~customer; ~~year~~(2) ~~ended~~identify ~~December~~the ~~31,~~performance ~~2017.~~obligations Wein ~~recognized~~the ~~revenue~~contract; ~~when~~(3) determine the ~~four~~transaction ~~criteria~~price; of(4) ~~revenue~~allocate ~~have~~the ~~been~~transaction ~~met~~price ~~which~~to ~~includes~~each 1)performance ~~Persuasive~~obligation ~~evidence~~in ofthe ancontract; ~~arrangement,~~and 2(5) ~~services~~recognize ~~and or delivery being~~revenue ~~rendered,~~when 3)each ~~the~~performance ~~price~~obligation is ~~fixed or determinable and 4) collectability is reasonably assured~~satisfied.

Income Taxes

Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

In addition, our management performs an evaluation of all uncertain income tax positions taken or expected to be taken in the course of preparing our income tax returns to determine whether the income tax positions meet a “more likely than not” standard of being sustained under examination by the applicable taxing authorities. This evaluation is required to be performed for all open tax years, as defined by the various statutes of limitations, for federal and state purposes.

41Earnings per Common Share:

OnThe ~~December~~Company ~~22,~~computes ~~2017~~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 ~~President~~face of the ~~United~~income ~~States~~statement. ~~signed~~Basic ~~and~~EPS ~~enacted~~is ~~into~~computed ~~law~~by ~~H.R.~~dividing 1net income (loss) available to common shareholders (numerator) by the ~~“Tax~~weighted ~~Reform~~average ~~Law”~~number of shares outstanding (denominator) during the period. Diluted ~~The~~EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method ~~Tax~~and ~~Reform~~convertible ~~Law~~preferred stock using the if-converted method. In computing Diluted EPS, ~~effective~~the average stock price for ~~tax~~the ~~years~~period is ~~beginning~~used onin determining the number of shares assumed to be purchased from the exercise of stock options or ~~after~~warrants. ~~January~~Diluted 1EPS excludes all dilutive potential shares if their effect is anti-dilutive. For the year ended December 31, ~~2018~~2019, ~~except~~the ~~for~~Company ~~certain~~had approximately ~~provisions~~$2,768,000 ~~resulted~~ in ~~significant~~convertible debentures whose approximately 84,472,000 underlying shares are convertible at the holders’ ~~changes~~option at conversion prices ranging from fixed conversion prices of $1.75 through $0.15 and variable conversion rates of 60% to 65% ~~existing~~of ~~United~~the ~~States~~defined ~~tax~~trading ~~law~~price and approximately 8,452,000 ~~including~~warrants ~~various~~with ~~provisions~~an ~~that~~exercise ~~are~~price ~~expected~~of $3.00 to ~~impact us~~$0.15, ~~The~~certain ~~Tax~~warrants having ~~Reform~~exercise ~~Law~~prices ~~reduces~~which reset to 65% of defined trading price upon future dilutive issuances, which were not included in the ~~federal~~calculation ~~corporate~~of ~~tax~~diluted ~~rate~~EPS ~~from~~as ~~35%~~their toeffect ~~21%~~would ~~effective~~be ~~January~~anti-dilutive. 1For the year ended December 31, 2018., Wethe ~~have~~Company ~~analyzed~~had approximately $1,742,000 in convertible debentures whose approximately 11,906,000 underlying shares are convertible at the ~~provisions~~holders’ option at conversion prices ranging from – a fixed conversion price of ~~the~~$1.75 ~~Tax~~to ~~Reform~~a ~~Law~~variable conversion rate of 60% to 65% of the defined trading price and approximately 4,293,000 warrants with an exercise price of $2.00 to ~~assess~~$0.20, which were not included in the ~~impact~~calculation onof ~~our~~diluted ~~consolidated~~EPS ~~financial~~as ~~statements~~their effect would be anti-dilutive.

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.

Embedded derivatives are separated from the host contract and carried at fair value when (1) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract and (2) a separate, standalone instrument with the same terms would qualify as a derivative instrument. The derivative is measured both initially and in subsequent periods at fair value, with changes in fair value recognized on the Statement of Operations.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” ~~(“ASU~~The ~~2016-02”),~~standard ~~which~~requires ~~supersedes~~all ~~the~~leases that have a term of ~~existing~~over ~~guidance~~12 months to be recognized on the balance sheet with the liability for lease ~~accounting,~~payments ~~“Leases~~and ~~(Topic~~the ~~840)”.~~corresponding ~~ASU 2016~~right-02of-use asset ~~requires~~initially ~~lessees~~measured at the present value of amounts expected to ~~recognize~~be paid over the term. Recognition of the costs of these leases on ~~their~~ ~~balance~~the ~~sheets,~~income ~~and~~statement ~~leaves~~will ~~lessor~~be ~~accounting~~dependent ~~largely~~upon ~~unchanged.~~their ~~The~~classification ~~amendments~~as ineither ~~ASU~~an ~~2016-02~~operating ~~are~~or ~~effective~~a ~~for~~financing ~~fiscal~~lease. ~~years~~Costs ~~beginning~~of ~~after~~an ~~December~~operating ~~15,~~lease ~~2018~~will ~~and~~continue ~~interim~~to ~~periods~~be ~~within~~recognized ~~those~~as ~~fiscal~~a ~~years.~~single ~~Early~~operating ~~application~~expense ison ~~permitted~~a ~~for~~straight-line ~~all~~basis ~~entities~~over the lease term. ~~ASU~~Costs ~~2016-02~~for ~~requires~~ a ~~modified~~financing ~~retrospective~~lease ~~approach~~will ~~for~~be ~~all~~disaggregated ~~leases~~and ~~existing~~recognized ~~at,~~as orboth ~~entered~~an ~~into~~operating ~~after,~~expense (for the ~~date~~amortization of ~~initial~~the right-of-use ~~application,~~asset) ~~with~~and aninterest ~~option~~expense to(for ~~elect~~interest toon ~~use~~the ~~certain~~lease ~~transition relief~~liability). WeThis ~~expect~~standard towas ~~apply~~effective ~~the~~for ~~ASU~~interim ~~without~~and ~~adjusting~~annual ~~the comparative~~ periods beginning ~~and~~January 1, if2019 ~~applicable,~~and ~~recognizing~~must be applied on a ~~cumulative~~modified ~~effect~~retrospective ~~adjustment~~basis to ~~the~~leases ~~opening~~existing ~~balance~~at, or entered into after, the beginning of ~~retained~~the ~~earnings~~earliest comparative period presented in the ~~period of~~financial ~~adoption~~statements. WeThe ~~are~~Company ~~currently~~adopted ~~evaluating~~ASC ~~the~~842 ~~impact~~on ofJanuary 1, ~~this~~2019, ~~new~~with ~~standard~~no impact on ~~our~~their ~~consolidated~~ financial statements.

In June ~~2018~~2016, the FASB issued ASU ~~2018~~2016-0713, ~~“Compensation~~Financial –Instruments ~~Stock~~- ~~Compensation~~Credit Losses (Topic ~~718~~326): ~~Improvements~~Measurement toof ~~Nonemployee~~Credit Losses on ~~Share-Based~~Financial ~~Payment~~Instruments. ~~Accounting”~~ASU ~~that~~2016-13 ~~expands~~amends the ~~scope~~guidance ofon ~~ASC~~the ~~Topic~~impairment ~~718~~of tofinancial ~~include~~instruments. ~~share-based~~This ~~payment~~update ~~transactions~~adds ~~for~~an impairment ~~acquiring~~model ~~goods~~(known ~~and~~as ~~services~~the ~~from~~current ~~nonemployees.~~expected Ancredit ~~entity~~losses ~~should~~model) ~~apply~~that ~~the~~is ~~requirements~~based ofon ~~ASC~~expected ~~Topic~~losses ~~718~~rather tothan ~~nonemployee~~incurred ~~awards~~losses. Under ~~except~~the ~~for~~new ~~certain~~guidance, ~~exemptions~~an ~~specified~~entity inrecognizes, ~~the~~as ~~amendment.~~an ~~The~~allowance, ~~guidance~~its isestimate ~~effective~~of ~~for~~expected ~~fiscal~~credit ~~years~~losses. ~~beginning~~In ~~after~~November ~~December 15~~2018, ASU 2016-13 was amended by ASU 2018-19, ~~including~~Codification ~~interim~~Improvements ~~reporting~~to ~~periods~~Topic ~~within~~326, ~~that~~Financial ~~fiscal~~Instruments ~~year~~- Credit Losses. ~~Early~~ASU ~~adoption~~2018-19 changes isthe ~~permitted,~~effective ~~but~~date noof ~~earlier~~the ~~than~~credit anloss ~~entity’s~~standards (ASU 2016-13) to fiscal years beginning after December 15, 2021, including ~~adoption~~interim ~~date~~periods ofwithin ~~Topic~~those ~~606~~fiscal years. WeThe doCompany does not ~~expect~~believe that the ~~implementation~~impact of adopting this ~~new~~standard ~~pronouncement~~will to have a material ~~impact~~effect on ~~our~~its ~~consolidated~~ financial statements.

InOn ~~January~~July 13, 2017, the FASB issued a two-part Accounting Standards Update (ASU), No. 2017-0111, ~~“Clarifying~~I. ~~the~~Accounting ~~Definition~~for ofCertain aFinancial Instruments ~~Business.”~~With ~~The~~Down ~~new~~Round ~~guidance~~Features ~~clarifies~~and II. Replacement of the ~~definition~~Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a ~~business~~Scope ~~when~~Exception. ~~evaluating~~The ~~whether~~ASU ~~transactions~~is ~~should~~effective for bepublic ~~accounted~~business entities for asfiscal ~~acquisitions~~years, orand ~~disposals~~interim ofperiods ~~assets~~within orthose ~~businesses~~fiscal years, beginning after December 15, 2018. For all other organizations, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. This guidance was adopted January 1, 2018 and ~~did~~has ~~not~~been ~~have~~applied ato ~~material~~the ~~impact~~financial oninstruments issued during the ~~financial~~years ~~position~~ended orDecember ~~results~~31, of2019 ~~operations~~and 2018, which have down round features.

OnIn ~~July~~June 132018, ~~2017,~~ the FASB issued aASU ~~two~~2018-~~part~~07, ~~Accounting~~“Compensation ~~Standards~~– ~~Update~~Stock Compensation (~~ASU~~Topic 718),: ~~No.~~Improvements ~~2017~~to Nonemployee Share-~~11,~~Based I.Payment Accounting” ~~for~~that ~~Certain~~expands ~~Financial Instruments~~the ~~With~~scope ~~Down~~of ~~Round~~ASC ~~Features~~Topic ~~and~~718 ~~II.~~to ~~Replacement~~include ofshare-based ~~the~~payment ~~Indefinite~~transactions ~~Deferral~~ for ~~Mandatorily Redeemable Financial Instruments~~ ofacquiring ~~Certain~~goods ~~Nonpublic Entities~~ and ~~Certain~~services ~~Mandatorily~~from ~~Redeemable~~nonemployees. ~~Noncontrolling~~An ~~Interests~~entity ~~With~~should aapply ~~Scope~~the ~~Exception.~~requirements ~~The~~of ~~ASU~~ASC isTopic ~~effective for~~718 ~~public~~to ~~business~~nonemployee ~~entities~~awards except for ~~fiscal~~certain ~~years,~~exemptions ~~and~~specified ~~interim~~in ~~periods~~the ~~within those fiscal years, beginning after December 15, 2018~~amendment. ~~For~~ ~~all~~The ~~other~~guidance ~~organizations,~~is ~~the amendments are~~ effective for fiscal years beginning after December 15, ~~2019~~2018, ~~and~~including interim reporting periods within that fiscal ~~years beginning after December 15, 2020~~year. Early adoption is permitted. ~~This~~The ~~guidance~~adoption ~~was~~of ~~adopted~~ASU ~~January~~2017-09 1,did ~~2018, and~~not ~~has~~have ~~been~~any ~~applied~~impact toon the ~~financial~~Company’s ~~instruments~~consolidated ~~issued~~financial ~~during~~statements ~~the~~and ~~year ended December 31, 2018, which had down round features~~related disclosures.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information called for by Item 8 is included following the “Index to Financial Statements” on page F-1 contained in this Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROL AND PROCEDURES

We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation and subject to the foregoing, our principal executive officer and principal financial officer concluded that, our disclosure controls and procedures were not effective because of the material weaknesses in internal control over financial reporting described below.

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of its principal executive and principal financial officers and effected by the Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its consolidated financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

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Material Weakness in Internal Control over Financial Reporting

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2018~~2019 based on the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, ~~2018~~2019 was not effective.

A material weakness, as defined in the standards established by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The ineffectiveness of the Company’s internal control over financial reporting was due to the following material weaknesses which are indicative of many small companies with small number of staff:

●	inadequate segregation of duties consistent with control objectives;
●	lack of independent Board of Directors and absence of Audit Committee to exercise oversight responsibility related to financial reporting and internal control;
●	No formal written policy for the approval, identification and authorization of related party transactions currently exists; and
●	lack of documentation on policies and procedures that are critical to the accomplishment of financial reporting objectives.

Management’s Plan to Remediate the Material Weakness

Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned include:

●	continue to obtain sufficient resources to achieve adequate segregation of duties;
●	identify gaps in our skills base and the expertise of our staff required to meet the financial reporting requirements of a public company; and
●	continue to develop policies and procedures on internal control over financial reporting and monitor the effectiveness of operations on existing controls and procedures.

During the fiscal year ended December 31, 2018, we continued to execute upon our planned remediation actions which are all intended to strengthen our overall control environment. We have engaged additional key personnel to assist management in the operations of our key businesses. Mr. Christopher Danil, CEO of PT Kinerja, Mr Henful Pang, Commissioner of PT Kinerja, and Mr. Anoki Kiyosyi, CEO of PT Kinerja SP, oversee transactions and operations of individual subsidiaries. The appointment of these key roles is intended to maintain the independence in operations of each business and install checks and balances in daily processing of transactions. They collectively will create a more effective stream of information flow and communications to management, to enhance segregation of duties within the corporate structure. During the fiscal year ended December 31, 2018, we retained qualified third-party personnel with GAAP expertise, to assist in the preparation of annual report with management oversight during the process. We believe the addition of third-party expertise will enhance our current financial reporting processes and in a long run assist management to build effective processes to accomplish financial reporting objectives. Key personnel in charge of financial reporting of the Company and its subsidiaries have met in December 2018 to plan for a more streamlined financial reporting process with improved internal control in the light of recent business acquisition and new line of business. We plan to:

● standardize chart of accounts for the Company and its subsidiaries to facilitate financial statement consolidation; and ● migrate all business units to use a well-regarded third-party accounting software with built-in controls and documentation and hire qualified personnel with expertise in the use of such software, to enhance daily accounting procedures and period-end financial reporting process.

We are committed to maintaining a strong internal control environment and believe that these remediation efforts will represent significant improvements in our control environment. Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

Management’s report on internal control over financial reporting was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit a Smaller Reporting Company to provide only Management’s report in this annual report, which may increase the risk that weaknesses or deficiencies in our internal control over financial reporting go undetected.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended December 31, ~~2018~~2019 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

4553

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth certain information regarding our Directors and Executive Officers. The age of each Director and Executive Officer listed below is given as of December 31, ~~2018~~2019.

Name	Age	Position
Edwin Witarsa Ng	37	Chief Executive Officer and Chairperson of the Board of Directors
Windy Johan	42	Former Chief Financial Officer
Deddy Oktomeo	48	Chief Executive Officer of PT Kinerja Pay
Butet Evans	39	Interim Chief Financial Officer

Our Executive Officers

Edwin Witarsa Ng – Chief Executive Officer and Chairperson of the Board of Directors

Mr. Ng has served as our CEO and Chairperson of the Board of Directors since November 15, 2015, prior to which in 2007, Mr. Ng founded PT Kinerja, an Information Technology company organized under the laws of Indonesia with offices located in Medan, Indonesia and operations throughout Indonesia. PT Kinerja operates through the following units, among others: (i) KinerjaHosting, which is engaged in the business of providing data hosting to Companies and/or individuals, as well as website domains and VPS services; (ii) KinerjaNet, which is engaged in the business of Internet Service Provider by providing internet connectivity to corporate offices, households, and internet cafes; and (iii) Kinerja Technology, which is engaged in the business of Application Development, mobile app development, website development, and Software implementation such as ERP and CRM Software. PT Kinerja also partnered with IBM to build the first Tier 2+ Data Center in Medan City (KDC Medan). In February 2015, Mr. Ng started the business of KinerjaPay.com, under the corporate umbrella of PT Kinerja, an e-commerce payment gateway with marketplace platform. In August 2018, PT Kinerja was acquired by PT KinerjaPay Corp. and became a wholly-owned subsidiary. Since 2007, Mr. Ng has served as the CEO and President of PT Stareast Sejahtera Group, a real estate development company with operations in Medan, Pekanbaru, and Bintan Island, Indonesia. Since 2007, the company has built and operated hotels, apartment complexes, and conducted extensive real estate development in Indonesia. In 2012, Mr. Ng established PT GrahaPecatu Sejahtera, a real estate development company for which he has served as the CEO & President and built a four-star Condotel in Bali, Indonesia. Mr. Ng has other business interests in asset management, tire distribution, marketing consultancy and hospitality.

Mr. Ng intends to devote 20% of his professional time to the business affairs of the Registrant.

Mr. Ng received his undergraduate degree from the University of Southern California (USC) School of Engineering, Los Angeles, CA in 2002 with a major in Management Information Systems and a Minor in SAP Implementation Systems. He received his post-graduate degree from the University of Toronto in 2004 majoring in Information Science.

We believe Mr. Ng is qualified to serve on our Board of Directors because of his education, extensive business background, and experience with e-commerce industry.

Windy Johan – Former Chief Financial Officer

Mr. Johan has served as the Chief Financial Officer of our Company since December 7, 2017, prior to which in 2013, Mr. Johan served as the Financial Controller of PT. Loka Wisata Asri, a resort and hotel company owning and operating resorts in Bali, Kota Bunga (Bogor) and Anyer, Indonesia. From April 2014 through November 2017, Mr. Johan served as a Finance and Accounting Manager of Ancora Group, a corporate conglomerate investing in mining, mining services, and hospitality. Mr. Johan earned his accounting degree from Gadjah Mada University, Indonesia and MBA degree from University of Glouchestershire, United Kingdom. He is a registered Chartered Accountant with IAI, Indonesian Institute of Accountants. Mr. Johan resigned as the Company’s Chief Financial Officer on April 27, 2020.

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Deddy Oktomeo – Chief Executive Officer of PT Kinerja Pay

Mr. Oktomeo has served as the Chief Executive Officer of PT Kinerja Pay since July 2017 prior to which from 1998 to 2001, Mr. Oktomeo served as Consultant Director at Baan Bisnis Sistem Indonesia, a Baan Enterprise Resources Planning System Solution company that operates worldwide. From 2001 to 2004, Mr. Oktomeo served as the Chief Technical Officer at Azec Indonesia Management Services (“Azec”) responsible for developing Enterprise Resources Planning System for major shipping, pharmaceutical and telco companies. From 2004 to 2017, Mr. Oktomeo served as the Chief Executive Officer of Azec to bring company as major system solution provider in Hospitality Industry with worldwide products and local owned products as one-stop solution. Mr. Oktomeo has 17 years of experience as an entrepreneur in Hospitality Industry System Solution and 6 Years of experience in Corporate and ERP solution with responsibilities in Product Design and Development, Project Management, Business Development and Company Setup, Operation and Support, Sales and Marketing and Finance for hospitality industry (F&B and Hotel), retail, distribution and manufacturing, tour & travel, property and asset management. Mr. Oktomeo received his Bachelor Degree in Computer Science from STMIK Nina Nusantara, Jakarta, Indonesia in 1993.

Butet Evans – Interim Chief Financial Officer

In connection with the resignation of Mr. Johan as the Company’s CFO, on May 4, 2020, the Company appointed Mrs. Butet Evans, 39, as Interim CFO. During the past five years, Mrs. Evans has served on the accounting staff of the Registrant and its subsidiaries in Indonesia and has over 18 years of professional experience in finance, tax, accounting, auditing and budgeting. From April 2013 to 2015, Mrs. Evans served as Finance and Accounting Manager at Pt. Graha Andrawina Lestari, with responsibilities for recruiting, training and team management for the finance and accounting staffs, reporting directly to and preparing financial reports for Pt. Graha Andrawina Lestari’s Finance Director. She was also responsible for maintaining accounting controls, defining accounting policies and procedures, monitoring revenue and expenses and management of capital budgeting and discounted cash flow analysis, among other responsibilities.

Our director and executive officers have not, within the past ten years, filed any bankruptcy petition, been convicted in or been the subject of any pending criminal proceedings, or has any such person been the subject or any order, judgment or decree involving the violation of any state or federal securities laws.

Board of Directors

Mr. Ng is the single member of our Board of Directors and currently serves as the Chairperson. Each director holds office until the next annual meeting of stockholders. At each annual meeting of stockholders, the successors to directors whose terms then expire are elected to serve from the time of election and qualification until the next annual meeting following election. We do not compensate our Board of Directors.

Management has been delegated the responsibility for meeting defined corporate objectives, implementing approved strategic and operating plans, carrying on our business in the ordinary course, managing cash flow, evaluating new business opportunities, recruiting staff and complying with applicable regulatory requirements. The Board of Directors exercises its supervision over management by reviewing and approving long-term strategic, business and capital plans, material contracts and business transactions, and all debt and equity financing transactions and stock issuances.

Director Independence

In determining director independence, the Company uses the definition of independence in Rule 5605(a)(2) of the listing standards of The Nasdaq Stock Market. The Board has concluded that Mr. Ng is not considered “independent” based on the listing standards of the Nasdaq Stock Market.

Board Committees

We do not have any standing committees as of December 31, ~~2018~~2019.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires officers and directors of the Company and persons who beneficially own more than ten percent (10%) of the Common Stock outstanding to file initial statements of beneficial ownership of Common Stock (Form 3) and statements of changes in beneficial ownership of Common Stock (Forms 4 or 5) with the SEC. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish us with copies of all such forms they file.

Our records reflect that all reports which were required to be filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, were filed on a timely basis.

ITEM 11. EXECUTIVE COMPENSATION

~~During the fiscal year~~The ~~ended~~following ~~December~~table ~~31,~~shows ~~2018,~~the ~~our~~total ~~Chief~~compensation ~~Financial~~paid ~~Officer~~during of the ~~Company~~fiscal ~~and~~year ~~Chief~~ended ~~Executive~~December ~~Officer~~31, of2019 PTand ~~Kinerja~~2018, ~~Pay~~to ~~did not receive any compensation from~~ our ~~Company~~Chief orExecutive Officer ~~any~~ of the ~~subsidiaries~~Company.

The following table shows the total compensation paid during the fiscal year ended December 31, 2018, to our Chief Executive Officer of the Company.

Summary Compensation Table

Name and principal position

Year

Stock awards ($)(1)(3)

Total ($)(2)

Edwin Witarsa Ng

~~2018~~2019

~~871~~3,~~000~~559,417

CEO

~~2017~~2018

-871,000

(1)	On December 17, 2018, 500,000 shares of Series B Preferred Stock were issued to the Company’s CEO, in consideration for his services performed to the Company during the fiscal year ended December 31, 2018.
(2)	No other forms of compensation were paid or accrued during the reported years other than stock awards disclosed in the table above.
(3)	On January 15, 2019, 200,000 shares of Series E Preferred Stock were issued to the Company’s CEO, in consideration for services related to the negotiation with PT. Investa Wahana Group for the commitment agreement for the subscription of preferred stock.

There was no outstanding Equity Awards at December 31, 2019 and 2018.

There were no option grants issued or exercised during the ~~year~~years ended December 31, 2019 and 2018.

Director Compensation

Our Chief Executive Officer of the Company also serves as the Chairperson of the Board of Directors. He did not receive any compensation related to his directorship for the year ended December 31, ~~2018~~2019.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information with respect to the beneficial ownership of our Common Stock as of ~~April~~October 227, ~~2019~~2020 for (a) the named executive officers, (b) each of our directors, (c) all of our current directors and executive officers as a group and (d) each stockholder known by us to own beneficially more than 5% of our Common Stock. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. We deem shares of Common Stock that may be acquired by an individual or group within 60 days of ~~April~~October 227, ~~2019~~2020 pursuant to the exercise of options or warrants to be outstanding for the purpose of computing the percentage ownership of such individual or group but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. Except as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them based on information provided to us by these stockholders. Percentage of ownership is based on 351,~~485~~513,~~275~~872,948 shares of common stock outstanding on ~~April~~October 227, ~~2019:~~2020.

Security Ownership of 5% or Greater Beneficial Owners

None.

Security Ownership of Directors and Executive Officers

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership (1) (2)			Percent(1)(2)
Edwin Witarsa Ng Jl. Multatuli, No. 8A Medan, 20151, Indonesia		19,364,157	(1)(2)		5451.5710	%
Windy Johan Jl. Multatuli, No. 8A Medan, 20151, Indonesia		-			0.00	%
Beneficial Owners as a Group (1 person)		19,364,157			51.10	%
Beneficial Owners as a Group (2 persons)		19,364,157			54.57	%

Notes:

(1) Percentage of ownership is based on 35,485,275 shares of our common stock outstanding as of April 22, 2019. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

⁽¹⁾	Percentage of ownership is based on shares of our common stock outstanding as of October 7, 2020. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

⁽²⁾	Mr. Ng, the Company’s CEO and Chairman, is the sole beneficial owner of all issued and outstanding Series B Preferred Shares. The holder of Series B Preferred Stock shall vote together as a single class with the holders of the Corporation’s Common Stock and the holders of any other class or series of shares entitled to vote with the Common Stock. Mr. Ng. is entitled to a number of votes constituting fifty-one percent (51%) of the total votes on all such matters subject to the vote of holders of Common Stock, which, as of October 7, 2020, provided Mr. Ng with votes the Company based upon the shares of Common Stock outstanding on such date.

(2) Mr. Ng, the Company’s CEO and Chairman, is the sole beneficial owner of all issued and outstanding Series B Preferred Shares. The holder of Series B Preferred Stock shall vote together as a single class with the holders of the Corporation’s Common Stock and the holders of any other class or series of shares entitled to vote with the Common Stock. Mr. Ng. is entitled to a number of votes constituting fifty-one percent (51%) of the total votes on all such matters subject to the vote of holders of Common Stock, which, as of April 22, 2019, provided Mr. Ng with 18,097,490 votes the Company based upon the 35,485,275 shares of Common Stock outstanding on such date.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORS INDEPENDENCE

Transactions with Related Persons

As of December 31, ~~2018~~2019, payable to related party consists of the note payable of $50,000 with the Company’s CEO and expenses paid on behalf of the CEO. The loan is due on demand and accrues interest at 8% per annum. During the year ended December 31, 2018, approximately $4,000 in interest was expensed. In addition, during the year ended December 31, 2018, ~~upon~~in connection with the closing of the acquisition of PT Kinerja in August 2018, the Company assumed the liability of $83,929 owed by the Company’s CEO on the building owned/used by PT Kinerja. Additionally, the Company assumed an officer loan in the amount of $672,810, which is non-interest bearing and due on demand.

Except as set out below, as of December 31, ~~2018~~2019, there have been no transactions, or currently proposed transactions, in which we were or are to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any of the following persons had or will have a direct or indirect material interest:

●	any director or executive officer of our company;
●	any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;
●	any promoters and control persons; and
●	any member of the immediate family (including spouse, parents, children, siblings and in laws) of any of the foregoing persons.

Acquisition of PT Kinerja

Effective August 31, 2018, the Company completed the acquisition of PT Kinerja, its former licensor and affiliated company, owned, operated and controlled by our CEO and principal shareholder. The License Agreement dated December 1, 2015 was terminated in conjunction with the acquisition. The terms of the acquisition provide for the payment of $1,200,000 to PT Kinerja’s previous shareholders pursuant to the terms of a promissory note due in twenty-four (24) months, bearing the interest at the rate of 6% per annum, which note the Company can 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. Mr. Ng owned 75% common shares of PT Kinerja prior to acquisition. Upon closing of the acquisition, PT Kinerja had 20 million authorized shares of capital stock at par value of $0.001 and of which 18 million shares were issued and outstanding. Prior to the acquisition, 75% or 13.5 million the shares were owned by Edwin Ng, Chairman and CEO of the Company and the remaining 25% of the 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 latter entity is controlled by Mr. Deny Rahardjo, a resident of Indonesia.

Named Executive Officers and Current Directors

For information regarding compensation for our named executive officers and current directors, see “Executive Compensation.”

Director Independence

For information regarding director independence, see Director Independence under Item 10 above.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Board of Directors of the Company has appointed M&K CPAs, PLLC (“M&K”) as our independent registered public accounting firm (the “Independent Auditor”) for the fiscal year ending December 31, ~~2018~~2019. The following table sets forth the fees billed to the Company for professional services rendered by M&K for the years ended December 31, ~~2018~~2019 and ~~2017~~2018:

Services	~~2018~~2019		~~2017~~2018
Audit Fees (1)	$	3235,~~750~~000	$	1532,~~500~~750
Audit-Related fees (2)		-		-
Tax fees (3)		-		-
Total fees	$	3235,~~750~~000	$	1532,~~500~~750

(1)	Audit fees consisted of audit work performed in the preparation of financial statements, as well as work generally only the independent registered public accounting firm can reasonably be expected to provide, such as statutory audits.
(2)	Audit related fees consisted principally of audits of employee benefit plans and special procedures related to regulatory filings in 2019 and 2018.
(3)	The tax fees were paid for reviewing various tax related matters.

As of December 31, ~~2018~~2019, the Company did not have an Audit Committee. The Board of Directors did not have a formal policy in place to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm. We did not engage M&K for any non-audit related service during the ~~year~~years ended December 31, 2019 and 2018.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

	(1)	Financial Statements

		Our consolidated financial statements are set forth in Part II, Item 8 of this Annual Report on Form 10-K and are incorporated herein by reference.

	(2)	Financial Statement Schedules

		No financial statement schedules have been filed as part of this Annual Report on Form 10-K because they are not applicable or are not required or because the information is otherwise included herein.

	(3)	Exhibits required by Regulation S-K

EXHIBIT INDEX

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Exhibit	Filing Date/Period End Date
3.1	Certificate of Amendment of Certificate of Incorporation of the Registrant effective as of ~~January~~November 1525, ~~2016~~2019.	~~8-K~~DEF 14C	~~3.1 (i)~~B	212/115/~~2016~~2019
3.1.1	Certificate of Designation of Series A Convertible Preferred Stock effective as of January 2, 2018.	S-1	10.36	5/8/2018
3.1.2	Certificate of Designation of Series B Preferred Stock effective as of September 30, 2018.	S-1	10.41	11/2/2018
3.1.3	Certificate of Designation of Series C Preferred Stock effective as of October 5, 2018.	S-1	10.42	11/2/2018
3.1.4*	Certificate of Designation of Series D Preferred Stock effective as of December 11, 2018.		3.1.4
3.1.5*	Certificate of Designation of Series E Preferred Stock effective as of December 11, 2018.		3.1.5
3.2	Restated Bylaws of the Registrant effective as of July 1, 2016.	8-K	3.2	9/7/2016
4.1	Form of Common Stock Certificate of the Registrant effective as of July 7, 2010.	S-1	3.3	7/12/2010
10.1	~~Exclusive~~12% ~~License~~Convertible ~~Agreement~~Promissory ~~effective~~Note asdated ofApril ~~December~~ 1, ~~2015~~2019 ~~between~~with ~~the~~Power ~~Registrant~~Up ~~and~~Lending PTGroup ~~Kinerja Indonesia.~~LTD	810-KQ	10.51	128/214/~~2015~~19
10.2	~~Amendment~~8% toConvertible ~~Exclusive~~Promissory ~~License~~Note ~~Agreement~~dated ~~effective~~April ~~as of December 29~~25, ~~2015~~2019 ~~between~~with ~~the~~Tiger ~~Registrant~~Trout ~~and~~Capital ~~PT Kinerja Indonesia.~~LLC	810-KQ	10.62	18/414/~~2016~~19
10.3	~~Service~~12% ~~Agreement~~Convertible ~~effective~~Promissory asNote ofdated ~~February~~May 199, ~~2016~~2019 bywith ~~and~~Labrys ~~among KinerjaPay Corp.~~Fund, ~~PT KinerjaPay Indonesia and PT Kinerja Indonesia.~~LP	810-KQ	10.73	38/1514/~~2016~~19
10.4	~~Form~~10% ofConvertible ~~Regulation~~Promissory SNote ~~Subscription~~dated ~~Agreement~~May 17, 2019 with Crossover Capital Fund I, LLC	S10-~~1/A~~Q	10.84	78/2014/~~2016~~19
10.5	~~Addendum~~Securities toPurchase ~~Service~~ Agreement ~~effective~~dated asMay ~~of August 22~~17, ~~2016~~2019 bywith ~~and~~Crossover ~~among~~Capital ~~KinerjaPay~~Fund ~~Corp.~~I, ~~PT KinerjaPay Indonesia and PT Kinerja Indonesia.~~LLC	810-KQ	10.295	98/714/~~2016~~19
10.6	~~Cooperation~~12% ~~and~~Convertible ~~Service~~Promissory ~~Agreement~~Note ~~effective~~dated asMay ~~of August 31~~15, ~~2016~~2019 ~~between~~with ~~the~~Auctus ~~Registrant~~Fund ~~and Black Grace Investment Limited.~~LLC	810-KQ	10.306	98/2614/~~2016~~19
10.7	~~Cooperation~~10% ~~and~~Convertible ~~Service~~Promissory ~~Agreement~~Note ~~effective~~dated asMay ~~of September 8~~29, ~~2016~~2019 ~~between~~with PTIliad ~~Kinerja~~Research ~~Pay Indonesia~~ and PTTrading, ~~Indonesia Enam Dua~~L.P.	810-KQ	10.317	98/2614/~~2016~~19
10.8	~~Investment~~Securities Purchase Agreement ~~effective~~dated asMay ~~of November 3~~29, ~~2017~~2019 ~~between~~with ~~the~~Iliad ~~Registrant~~Research and ~~Tangiers Global~~Trading, ~~LLC~~L.P.	S10-1Q	10.328	5/8/~~2018~~14/19
10.9	~~Registration~~10% ~~Rights~~Convertible ~~Agreement~~Promissory ~~effective~~Note asdated ofJune ~~November~~ 3, ~~2017~~2019 ~~between~~with ~~the~~GS ~~Registrant~~Capital ~~and Tangiers Global, LLC.~~Partners	S10-1Q	10.339	5/8/~~2018~~14/19
10.10	~~10%~~Securities ~~Commitment~~Purchase ~~Fee~~Agreement ~~Convertible~~dated ~~Note~~June ~~effective as of November~~ 3, ~~2017~~2019 ~~between~~with ~~the~~GS ~~Registrant~~Capital ~~and Tangiers Global LLC.~~Partners	S10-1Q	10.3410	5/8/~~2018~~14/19
10.11	1012% ~~Fixed~~ Convertible Promissory Note ~~effective~~dated asJune ~~of November 9~~28, ~~2017~~2019 ~~between~~with ~~the~~JSJ ~~Registrant~~Investment, ~~and Tangiers Global LLC~~Inc.	S10-1Q	10.3511	511/814/~~2018~~19
10.12	Series A Convertible Preferred Stock Securities Purchase Agreement effective as of January 8, 2018 between the Registrant and Lawrence Partners LLC.	S-1	10.37	5/8/2018
10.13	Class N Warrant Agreement effective as of January 8, 2018 between the Registrant and Lawrence Partners LLC.	S-1	10.38	5/8/2018
10.14	Advisory Agreement effective as of January 11, 2018 between the Registrant and Blockchain Industries, Inc.	S-1	10.39	5/8/2018
10.15	Share Purchase Agreement between the Registrant and the Shareholders of PT Kinerja Pay Indonesia effective as of August 31, 2018.	S-1/A	10.44	12/21/2018
10.16	Amended Share Purchase Agreement between the Registrant and the Shareholders of PT KinerjaPay Indonesia effective as of August 31, 2018.	S-1/A	10.45	12/21/2018
10.17	Preliminary Share Sale and Purchase Agreement between PT Kinerja Pay Indonesia and PT Mitra Distribusi Utama effective as of October 3, 2018.	S-1/A	10.46	12/21/2018
21.1*	Subsidiaries of the Registrant.

5159

31.1**	Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
10.12	12% Convertible Promissory Note dated July 8, 2019 with EMA Financial, LLC	10-Q	10.12	11/14/19
31.2**	Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
10.13	12% Convertible Promissory Note dated July 31, 2019 with Auctus Fund, LLC	10-Q	10.13	11/14/19
32.1**	Section 1350 Certification of Chief Executive Officer.
10.14	10% Convertible Promissory Note dated August 23, 2019 with Black Ice Advisors, LLC	10-Q	10.14	11/14/19
32.2**	Section 1350 Certification of Chief Financial Officer.
10.15	Securities Purchase Agreement dated August 23, 2019 with Black Ice Advisors, LLC	10-Q	10.15	11/14/19
10.16	10% Convertible Promissory Note dated August 27, 2019 with LG Capital Funding, LLC	10-Q	10.16	11/14/19
10.17	Securities Purchase Agreement dated August 27, 2019 with LG Capital Funding, LLC	10-Q	10.17	11/14/19
10.18	8% Convertible Promissory Note dated September 3, 2019 with Armada Investment Fund, LLC	10-Q	10.18	11/14/19
10.19	8% Convertible Promissory Note dated September 3, 2019 with BHP Capital NY Inc.	10-Q	10.19	11/14/19
10.20	8% Convertible Promissory Note dated September 3, 2019 with Jefferson Street Capital, LLC	10-Q	10.20	11/14/19
10.21	12% Convertible Promissory Note dated September 24, 2019 with Granite Global Value Investments, Ltd	10-Q	10.21	11/14/19
10.22	12% Convertible Promissory Note dated September 16, 2019 with Auctus Fund, LLC	10-Q	10.22	11/14/19
10.23	Securities Purchase Agreement dated September 16, 2019 with Auctus Fund, LLC	10-Q	10.23	11/14/19
10.24	8% Convertible Promissory Note dated September 24, 2019 with Adar Alef, LLC	10-Q	10.24	11/14/19
10.25*	8% Convertible Promissory Note dated October 1, 2019 with Morningview Financial LLC		10.25
10.26*	Securities Purchase Agreement dated October 1, 2019 with Morningview Financial LLC		10.26
10.27*	12% Convertible Promissory Note dated October 17, 2019 with JSJ Investment, Inc.		10.27
10.28*	8% Convertible Promissory Note dated October 29, 2019 with Armada Capital Partners LLC		10.28
10.29*	8% Convertible Promissory Note dated October 29, 2019 with Jefferson Street Capital LLC		10.29
10.30*	8% Convertible Promissory Note dated October 29, 2019 with BHY Capital NY, Inc.		10.30
10.31*	Securities Purchase Agreement dated October 29, 2019 with Armada Capital Partners, LLC, Jefferson Street Capital, LLC and BHY Capital NY, LLC		10.31
10.32*	8% Convertible Promissory Note dated December 10, 2019 with Adar Alef, LLC		10.32
10.33*	Securities Purchase Agreement dated December 10, 2019 with Adar Alef, LLC		10.33
10.34*	10% Convertible Promissory Note dated December 19, 2019 (effective May 29,2019) with Draper, Inc.		10.34
10.35*	8% Convertible Promissory Note dated December 23, 2019 with BHP Capital NY Inc.		10.35
10.36*	Securities Purchase Agreement dated December 23, 2019 with BHP Capital NY Inc.		10.36
10.37*	8% Convertible Promissory Note dated December 23, 2019 with Jefferson Street Capital LLC		10.37
10.38*	Securities Purchase Agreement dated December 23, 2019 with Jefferson Street Capital LLC		10.38
21.1*	Subsidiaries of the Registrant.
31.1*	Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
31.2*	Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
32.1*	Section 1350 Certification of Chief Executive Officer.
32.2*	Section 1350 Certification of Chief Financial Officer.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.INS*	XBRL Instance Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.SCH*	XBRL Taxonomy Extension Schema Document
* Filed herewith.
** Furnished herewith.

* Provided herewith

ITEM 16. FORM 10-K SUMMARY

Not applicable.

5260

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

KINERJAPAY CORP.

KINERJAPAY CORP.

By:	/s/ Edwin Witarsa Ng
	Edwin Witarsa Ng
	Chief Executive Officer and Chairperson of the Board of Directors
Date:	October 7, 2020

By:	/s/ ~~Edwin~~Butet ~~Witarsa Ng~~Evans
	Edwin Witarsa Ng
	Butet Evans
	Chief Executive Officer and Chairperson of the Board of Directors
	Interim Chief Financial Officer
Date: April 24, 2019
Date:	October 7, 2020

By:	/s/ Windy Johan
	Windy Johan
	Chief Financial Officer
Date: April 24, 2019

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Edwin Witarsa Ng
	Edwin Witarsa Ng
	Chief Executive Officer and Director (Principal Executive Officer)
Date: April 24, 2019
Date:	October 7, 2020

By:	/s/ ~~Windy~~Butet ~~Johan~~Evans
	Windy Johan
	Butet Evans
	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
	Interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
Date: April 24, 2019
Date:	October 7, 2020

5361

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

KINERJAPAY CORP.

CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 AND 2018

TABLE OF CONTENTS

	Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-2
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations and Comprehensive Loss	F-45
Consolidated Statements of Stockholders’ Deficit	F-56
Consolidated Statements of Cash Flows	F-67
Notes to Consolidated Financial Statements	F-7 to F-3064

F-1

clip_image002

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of KinerjaPay Corp.

Stockholders of KinerjaPay Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of KinerjaPay Corp. (the Company) as of December 31, ~~2018~~2019 and ~~2017~~2018, and the related consolidated statements of operations, and comprehensive ~~income~~loss, stockholders’ ~~equity~~deficit, and consolidated cash flows for each of the years in the two-year period ended December 31, ~~2018~~2019, and the related notes ~~and schedules~~ (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2018~~2019 and ~~2017~~2018, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, ~~2018~~2019, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ M&K CPAS, PLLC We have served as the Company’s auditor since 2013. Houston, TX ~~April~~October 247, ~~2019~~2020

F-2

KINERJAPAY CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31, 2018			December 31, 2017
	December 31, 2019			December 31, 2018
ASSETS
Current assets
Cash	$	150,091		$	160,629
Cash and cash equivalents	$	95,972		$	150,091
Accounts receivable, net		547,~~778~~865			5,778
Accounts receivable - related party		~~6,295~~-			206,~~900~~295
Other receivable		1472,~~036~~610			214,~~687~~036
Notes receivable		~~120~~428,~~000~~134			-120,000
Prepaid expenses		791,~~012~~527,034			2279,~~861~~012
Inventory		1516,~~712~~692			-15,712
Deposits		1048,~~861~~083			4110,~~150~~861
Total current assets		~~401~~2,~~785~~236,390			~~248~~401,~~227~~785
Other assets, net of amortization		52,415			266,045
Prepaid expenses, net of amortization		823,726			-
Fixed assets, net of accumulated depreciation of $327,192 and $3,196, respectively		649,698			12,596
Other assets, net of amortization		-			52,415
Total assets	$	1,103,898		$	526,868
Fixed assets, net of accumulated depreciation of $411,492 and $327,192, respectively		662,882			649,698
Total assets	$	3,722,998		$	1,103,898
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	52114,~~555~~543		$	252,~~794~~555
Tax payable		12,198			8,092
Accrued expenses		198,071			2,972
Accrued interest		84151,~~298~~049			4460,~~851~~232
Accrued expenses		2,972			53,022
Accrued interest, related party		91,559			24,066
Payable to Related party		758,221			52,673
Tax payable		11,611			12,198
Promissory note, related party		600,000			-
Payable to Related party		750,882			758,221
Convertible debentures, net of discount of $435,000 and $39,655, as of December 31, 2018 and 2017, respectively		1,304,853			480,345
Promissory note, related party		600,000			600,000
Derivative liability		807,000			-
Convertible debentures, net of discount of $1,106,571 and $435,000 as of December 31, 2019 and December 31, 2018, respectively		1,674,994			1,304,853
Warrant liability		374,000			-
Derivative liability		3,708,000			807,000
Total current liabilities		3,996,097			641,777
Warrant liability		1,195,000			374,000
Promissory note, related party, less current portion		600,000			-
Total current liabilities		8,495,709			3,996,097
Total liabilities		4,596,097			641,777
Promissory note, related party, less current portion		296,240			600,000
Commitments and contingencies (Note 10)
Total liabilities		8,791,949			4,596,097
Commitments and contingencies (Note 11)
Stockholders’ deficit
Preferred stock, par value $0.0001 per share; 10,000,000 shares authorized:
Series A Preferred Stock, 400,000 authorized, 200,000 issued and outstanding		20			-
Series A Preferred Stock, 400,000 authorized, none issued and outstanding at December 31, 2019 and 200,000 issued and outstanding at December 31, 2018		-			20
Series B Preferred Stock, 500,000 authorized, 500,000 issued and outstanding		50			-50
Series C Preferred Stock, 2,000,000 authorized, none issued and outstanding		-			-
Series D Preferred Stock, 200,000 authorized, none issued and outstanding		-			-
Series D Preferred Stock, 200,000 authorized, 200,000 issued and outstanding at December 31, 2019, and none issued and outstanding at December 31, 2018		20			-
Series E Preferred Stock, 200,000 authorized, none issued and outstanding		-			-
Series E Preferred Stock, 200,000 authorized, 200,000 issued and outstanding at December 31, 2019, and none issued and outstanding at December 31, 2018		20			-
Common stock, par value $0.0001 per share; 500,000,000 shares authorized; 22,089,033 issued and outstanding at December 31, 2018 and 12,461,036 issued and outstanding at December 31, 2017		2,208			1,245
Common stock, par value $0.0001 per share; 2,000,000,000 and 500,000,000 shares authorized as of December 31, 2019 and 2018, respectively; 103,709,986 issued and outstanding at December 31, 2019 and 22,089,033 issued and outstanding at December 31, 2018		10,370			2,208
Additional paid-in capital		14,696,799			9,457,265
Treasury stock, at cost; 616,000 shares at December 31, 2019		(86,340	)		-
Accumulated deficit		(18,145,079	)		(9,751,419	)
Additional paid-in capital		33,042,152			14,696,799
Stock payable		34,000			178,000
Accumulated deficit		(38,093,069	)		(18,145,079	)
Accumulated other comprehensive income		(80,197	)		-
Stock payable		34,000			34,000
Total stockholders’ deficit		(3,492,199	)		(114,909	)
Accumulated other comprehensive income		23,846			(80,197	)
Total liabilities and stockholders’ deficit	$	1,103,898		$	526,868
Total stockholders’ deficit		(5,068,951	)		(3,492,199	)
Total liabilities and stockholders’ deficit	$	3,722,998		$	1,103,898

The accompanying notes are an integral part of these consolidated financial statements.

F-3

KINERJAPAY CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS ~~and Comprehensive Loss~~

	For the Years Ended
	December 31, 2018			December 31, 2017
	December 31, 2019			December 31, 2018
Revenue	$	2449,~~825,676~~434		$	-2,825,676
Net revenue - related party		-			(106,262	)
Cost of sales		431,604			2,821,191
Cost of sales		2,821,191			-
Gross profit	$	17,830		$	4,485
Gross profit	$	4,485		$	-
Operating expenses:
Marketing Expense		~~228~~188,~~686~~645			~~148~~228,~~187~~686
General and administrative		68,~~282~~622,~~352~~461			56,~~446~~282,~~336~~352
Depreciation		6544,~~086~~855			265,~~875~~086
Total operating expenses		68,~~576~~855,~~124~~961			56,~~597~~576,~~398~~124
Operating loss before other income (expense)		(68,~~571~~838,~~639~~131	)		(56,~~703~~571,~~660~~639	)
Other income (expense):
Interest expense		(96367,~~230~~487	)		(4468,~~851~~164	)
Amortization of debt discount		(183,500	)		(21,275	)
Interest expense, related party		(71,493	)		(28,066	)
Financing costs		(927,009	)		-
Amortization of debt discount		(4,355,449	)		(183,500	)
Change in fair value of derivative and warrant liability		123,000			-
Financing costs		(3,678,742	)		(927,009	)
Loss on extinguishment of debt		-			(396,007	)
Change in fair value of derivative liability		227,417			(17,000	)
Penalties and loss on conversion of debt		(666,744	)		-
Change in fair value of warrant liability		(839,000	)		140,000
Other expenses		(71,538	)		-
Penalties and loss on conversion of debt		(2,003,921	)		(666,744	)
Total other income (expense)		(1,822,021	)		(462,133	)
Other expenses		(21,184	)		(71,538	)
Loss before income taxes		(8,393,660	)		(6,165,793	)
Total other expense		(11,109,859	)		(1,822,021	)
Loss before income taxes		(19,947,990	)		(8,393,660	)
Provision for income taxes		-			-
Net loss	$	(8,393,660	)	$	(6,165,793	)
		-			-
Net loss	$	(19,947,990	)	$	(8,393,660	)
Other comprehensive loss adjustments, net of tax:
Foreign currency translation adjustments		~~(80~~104,~~197~~043	)		-(80,197	)
Total other comprehensive income, net of tax		~~(80~~104,~~197~~043	)		-(80,197	)
Total comprehensive loss, net of tax		(819,~~473~~843,~~857~~947	)		-(8,473,857	)
Loss per share - Basic and diluted	$	(0.5139	)	$	(0.5351	)
Weighted average shares outstanding - Basic and diluted		1651,~~525~~010,~~360~~857			1116,~~628~~525,~~462~~360

The accompanying notes are an integral part of these consolidated financial statements.

F-4

KINERJAPAY CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

	Common Stock						Preferred Stock						Additional Paid-in			Stock			Accumulated			Accumulated Other Comprehensive			Total Stockholders’
																												Accumulated
	Shares			Amount			Shares			Amount			Capital			Payable			Deficit			Loss			Deficit
																			Additional									Other			Total
Balance January 1, 2017		8,627,013		$	862			-		$	-		$	3,508,529		$	-		$	(3,585,471	)	$	155		$	(76,080	)
	Preferred Stock						Common Stock						Treasury Stock						Paid-in			Stock			Accumulated			Comprehensive			Stockholders’
Issuance of shares for cash		1,359,000			136									901,864			50,000									952,000
	Shares			Amount			Shares			Amount			Shares			Amount			Capital			Payable			Deficit			Loss			Deficit
Issuance of shares for services		2,275,000			227									3,151,623			128,000									3,279,850
Balance December 31, 2017		-		$	-			12,461,013		$	1,245			-		$	-		$	9,457,265		$	178,000		$	(9,751,419	)	$	-		$	(114,909	)
Loss on warrants for debt conversion														138,007												138,007
Issuance of Series A Preferred Stock for cash		400,000			40															499,960												500,000
Beneficial conversion feature														51,638												51,638
Issuance of Series B Preferred Stock for services		500,000			50															870,950												871,000
Issuance of shares for compensation														1,347,624												1,347,624
Issuance of shares for cash								20,000			2									49,998			(50,000	)								-
Issuance of shares upon conversion		200,000			20									357,980												358,000
Issuance of shares for services								4,365,278			437									3,675,447			(94,000	)								3,581,884
Foreign currency translation adjustments																							(155	)		-
Issuance of shares upon conversion								4,162,948			416									890,761												891,177
Net loss																				(6,165,948	)					(6,165,948	)
Acquisition of PT Kinerja Indonesia																				(1,132,110	)											(1,132,110	)
Balance December 31, 2017		12,461,013			1,245			-			-			9,457,265			178,000			(9,751,419	)		-			(114,909	)
Penalties and loss on conversion of debt																				176,745												176,745
Issuance of Series A Preferred Stock for cash								400,000			40			499,960												500,000
Loss on modification of warrant exercise price																				71,117												71,117
Issuance of Series B Preferred Stock for services								500,000			50			870,950												871,000
Issuance of shares upon conversion of preferred stock		(200,000	)		(20	)		416,667			42									(22	)											-
Issuance of shares for cash		20,000			2									49,998			(50,000	)								-
Loss on modification of Series A preferred stock conversion price																				190,255												190,255
Issuance of shares for services		4,365,278			437									3,675,447			(94,000	)								3,581,884
Issuance of shares upon exercise of warrants								463,127			46									99,954												100,000
Issuance of shares upon conversion		4,162,948			416									890,761												891,177
Issuance of shares in connection with convertible debt								200,000			20									37,480												37,500
Acquisition of PT Kinerja Indonesia														(1,132,110	)											(1,132,110	)
Warrants issued in connection convertible debt																				262,000												262,000
Penalties and loss on conversion of debt														176,745												176,745
Reclass of warrant fair value to liability classification																				(514,000	)											(514,000	)
Loss on modification of warrant exercise price														71,117												71,117
Reclass of derivative liability upon conversion of related convertible debentures																				61,000												61,000
Issuance of shares upon conversion of preferred stock		416,667			42			(200,000	)		(20	)		(22	)											-
Foreign currency translation adjustments																													(80,197	)		(80,197	)
Loss on modification of Series A preferred stock conversion price														190,255												190,255
Net loss																										(8,393,660	)					(8,393,660	)
Issuance of shares upon exercise of warrants		463,127			46									99,954												100,000
Balance December 31, 2018		700,000		$	70			22,089,033		$	2,208			-		$	-		$	14,696,799		$	34,000		$	(18,145,079	)	$	(80,197	)	$	(3,492,199	)
Issuance of shares in connection with convertible debt		200,000			20									37,480												37,500
Issuance of Series D Preferred Stock for acquisition of FRS		200,000			20															2,372,925												2,372,945
Warrants issued in connection convertible debt														262,000												262,000
Issuance of Series E Preferred Stock for services		200,000			20															3,559,397												3,559,417
Reclass of warrant fair value to liability classification														(514,000	)											(514,000	)
Issuance of shares of common stock and warrant units for cash																							146,374									146,374
Reclass of derivative liability upon conversion of related convertible debentures														61,000												61,000
Issuance of shares of common stock for services								8,700,000			870									2,046,404												2,047,274
Foreign currency translation adjustments																							(80,197	)		(80,197	)
Issuance of shares of common stock upon conversion								63,395,488			6,340									3,326,630												3,332,970
Net loss																				(8,393,660	)					(8,393,660	)
Issuance of shares of common stock upon exercise of warrants								7,243,132			724									(724	)											-
Balance December 31, 2018		22,089,033		$	2,208			700,000		$	70		$	14,696,799		$	34,000		$	(18,145,079	)	$	(80,197	)	$	(3,492,199	)
Issuance of shares of common stock upon conversion of Sereis A Preferred Stock		(200,000	)		(20	)		1,250,000			125									(105	)											-
Loss on modification of Series A preferred stock conversion price								833,333			83									1,334,890												1,334,973
Warrants issued in connection convertible debt																				231,000												231,000
Reclass of warrant fair value to liability classification																				(231,000	)		(45,000	)								(276,000	)
Additional shares of common stock issued in conversion for penalties																				190,000												190,000
Reclass of derivative liability upon conversion and redemptions of related convertible debentures																				4,369,582												4,369,582
Reclass of warrant liability classification to equity upon exercise and expiration of warrants																				1,045,000												1,045,000
Issuance of common shares for stock payable								199,000			20									101,354			(101,374	)								-
Repurchase of common stock														(616,000	)		(86,340	)														(86,340	)
Foreign currency translation adjustments																													104,043			104,043
Net loss																										(19,947,990	)					(19,947,990	)
Balance December 31, 2019		900,000		$	90			103,709,986		$	10,370			(616,000	)	$	(86,340	)	$	33,042,152		$	34,000		$	(38,093,069	)	$	23,846		$	(5,068,951	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

KINERJAPAY CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended
	December 31, 2018			December 31, 2017
	December 31, 2019			December 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income/(loss)	$	(8,393,660	)	$	(6,165,793	)
Net loss	$	(19,947,990	)	$	(8,393,660	)
Adjustments to reconcile net income/(loss) to net cash used in operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		~~129~~44,~~231~~855			24129,~~150~~231
Amortization of debt discount		~~183~~4,~~500~~355,449			-183,500
Loss on extinguishment of debt		-			396,007
Common stock issued for services		2,047,274			3,581,884
Stock-based compensation		-			1,347,624
Change in fair value of derivative liability		(227,417	)		17,000
Common stock issued for services		3,581,884			3,279,850
Change in fair value of warrant liability		839,000			(140,000	)
Change in fair value of derivative and warrant liability		(123,000	)		-
Penalties and loss on conversion of debt		412,257			666,744
Penalties and loss on conversion of debt		666,744			-
Allowance for bad debt		20,000			-
Loss on conversion of preferred stock		~~190~~1,~~255~~524,973			-190,255
Loss on modificaiton of warrant exercise price		71,117			-
Loss on modification of warrant exercise price		-			71,117
Financing costs		~~495~~3,~~508~~447,742			-495,508
Series B Preferred stock issued for services		871,000			-
Preferred stock issued for services		3,559,417			871,000
Changes in net assets and liabilities:
(Increase) decrease in accounts receivable		25(35,~~015~~792	)		~~(23~~25,~~587~~015	)
(Increase) decrease in inventory		(13,204	)		-
(Increase) decrease in other receivable		(58,574	)		-
(Increase) decrease in prepaid expenses		29,106			(35,045	)
(Increase) decrease in inventory		(980	)		(13,204	)
(Increase) decrease in other assets		167,690			(200,337	)
(Increase) decrease in deposits		(37,223	)		-
Increase (decrease) in accounts payable		33,549			(90,152	)
(Increase) decrease in prepaid expenses		(1,480,766	)		29,106
Increase (decrease) in accrued liabilities		8,127			43,766
(Increase) decrease in other assets		1,634,378			167,690
Increase (decrease) in accrued interest		39,447			-
Increase (decrease) in accounts payable		40,370			33,549
CASH USED IN OPERATING ACTIVITIES		(2,037,691	)		(1,423,517	)
Increase (decrease) in accrued liabilities		195,099			8,127
Increase (decrease) in accrued interest		367,396			39,447
CASH USED IN OPERATING ACTIVITIES		(3,300,532	)		(2,037,691	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment		(2358,~~124~~039	)		(1123,~~626~~124	)
Cash received from acquisition		11,474
Cash paid for convertible notes receivable		(448,134	)		-
CASH USED IN INVESTING ACTIVITIES		(11,650	)		(11,626	)
Cash received from acquisition		-			11,474
CASH USED IN INVESTING ACTIVITIES		(506,173	)		(11,650	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock		-			952,000
Payments on promissory note, related party		(303,760	)		-
Proceeds on debt		-			595,000
Payments on payable to related party		(7,339	)		-
Proceeds from convertible debentures		1,519,000			-
Proceeds from issuance of common stock		146,374			-
Issuance of Series A PS for cash		500,000			-
Proceeds from convertible debentures		4,344,266			1,519,000
Shares issued upon exercise of warrants		100,000			-
Payments on convertible debentures		(444,658	)		-
CASH PROVIDED BY FINANCING ACTIVITIES		2,119,000			1,547,000
Issuance of Series A PS for cash		-			500,000
FOREIGN CURRENCY TRANSLATION ADJUSTMENT		(80,197	)		-
Repurchase of common stock		(86,340	)		-
NET CHANGE IN CASH		(10,538	)		111,857
Shares issued upon exercise of warrants		-			100,000
CASH AT BEGINNING OF YEAR		160,629			48,772
CASH PROVIDED BY FINANCING ACTIVITIES		3,648,543			2,119,000
CASH AT END OF YEAR	$	150,091		$	160,629
FOREIGN CURRENCY TRANSLATION ADJUSTMENT		104,043			(80,197	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(54,119	)		(10,538	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		150,091			160,629
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	95,972		$	150,091
Supplemental disclosure of cash flow information:
Interest expense paid	$	-		$	-
Non-cash Investment and Financing Activities:
Debt discount attributable to beneficial conversion feature	$	-		$	51,638
Common shares issued upon conversion of debt	$	3,332,970		$	891,177
Common Stock issued for debt settlement	$	-		$	100,000
Common shares issued upon conversion of preferred stock	$	125		$	22
Debt issued for equity commitment	$	-		$	75,000
Non-cash exercise of warrants	$	724		$	-
Shares issued upon conversion of debt	$	891,177		$	-
Issuance of preferred shares for acquisition	$	2,372,925		$	-
Common shares issued upon conversion of preferred stock		22
Notes receivable for convertible debentures	$	-		$	120,000
Notes receivable for convertible debentures	$	120,000		$	-
Issuance of promissory note for acquisition	$	-		$	1,200,000
Issuance of promissory note for acquisition	$	1,200,000		$	-

The accompanying notes are an integral part of these consolidated financial statements.

F-6

KINERJAPAY CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, ~~2018~~2019 AND ~~2017~~2018

Note 1 – description of business

KinerjaPay Corp. (the “Company”) is a Delaware corporation, was incorporated under the laws of the State of Delaware on February 12, 2010 as Solarflex Corp. On December 1, 2015, the Company entered into a license agreement with P.T. Kinerja Indonesia (“P.T. Kinerja” the “Licensor”), an entity organized under the laws of Indonesia and controlled by Mr. Edwin Ng, our chairman, CEO and control stockholder, 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, as Licensee, 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 this agreement, the Company changed its name from Solarflex Corp. to KinerjaPay Corp. On April 6, 2016, P.T. Kinerja Pay Indonesia, a wholly-owned subsidiary of the Company, was organized under the laws of Indonesia.

On August 31, 2018, the Company completed its acquisition of its licensor PTP.T. Kinerja which became a wholly-owned subsidiary of the Company (Note 3). The result of this acquisition enabled the Company to present its revenue on a gross basis as the principal going forward. Upon the closing of the acquisition of the Licensor by the Licensee, the License Agreement effectively ceased. In addition, the acquisition gave the Company 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.

On September 13, 2018, the Company incorporated PTP.T. 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. KFUND is still in preparation stage ~~and~~but ~~expected~~the Company expects to start operations of KFUND as its cash flow improves, in or about the ~~second~~first ~~quarter~~half of ~~2019~~2021.

As one of Indonesia’s fintech P2P lending companies, P.T. Kinerja SP is subject to supervision by the Financial Service Authority (Otoritas Jasa Keuangan – “OJK”) of Indonesia. OJK requested PT KSP to change its company name to comply with a recently issued regulation that states that a P2P company may not have the word “simpan” (meaning to save or to deposit) in its name because it is not allowed to deposit funds but is expected to channel funds by bringing together lenders and borrowers. Based on this requirement, the Company changed its name to PT Kinerja Sukses Gemilang (“PT Kinerja SG”), on August 30, 2019.

On February 28, 2019, Kinerja Pay Ltd. a wholly-owned subsidiary of P.T. Kinerja, was incorporated in Nevada. The subsidiary has no employees or operations, aside from a bank account to receive cash proceeds from security purchase agreements and convertible debentures, which is then transferred to the Parent company or other subsidiaries.

Going Concern

The accompanying consolidated 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 operating costs, and as such, has incurred an operating loss since inception. For the year ended December 31, ~~2018~~2019, the Company had a net loss of approximately $819,~~394~~948,000. At December 31, ~~2018~~2019, the Company had an accumulated deficit of approximately $1838,~~145~~093,000 and a working capital deficit of approximately $36,~~594~~259,000. These factors raise ~~substantial~~ substantial doubt about the Company’s ability to continue as a going concern, within one year from the issuance date of this filing. The Company’s ability to continue as a going concern is dependent on its ability to raise the required additional ~~capital~~ capital or debt financing to meet short and long-term operating requirements. During the year ended December 31, ~~2018~~2019, the Company ~~received~~ received net cash proceeds of approximately $14,~~519~~344,000 from the issuance of new convertible debentures. Subsequent to December 31, ~~2018~~2019, the Company received approximately $~~771~~496,000 ~~in net cash proceeds~~ from the issuance of new convertible debentures. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict our operations. The Company continues to pursue external financing alternatives to improve its working capital position. 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.

F-7

COVID-19 Pandemic

In December 2019, an outbreak of a novel strain of coronavirus originated in Wuhan, China (“COVID-19”) and has since spread worldwide, including to the Unites States as well as Indonesia, posing public health risks that have reached pandemic proportions (the “COVID-19 Pandemic”). The COVID-19 Pandemic poses a threat to the health and economic well-being of the Company’s employees, customers, and vendors. The Company’s business operations, that of its operating subsidiaries and their operating offices and primary banking relationships, as well as its chief executive officer, chief financial officer and key operating personnel, are all located in Indonesia. Like most businesses world-wide, the COVID-19 Pandemic has impacted the Company financially; however, management cannot presently predict the scope and severity with which COVID-19 will impact our business, financial condition, results of operations and cash flow. The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, and reduced operations.

Principles of Consolidation

The financial statements include the accounts of KinerjaPay Corp. and its wholly owned subsidiaries PTP.T. KinerjaPay, PTP.T. Kinerja, and P.T. Kinerja Sukses Gemilang and PT Kinerja ~~Simpan~~Pay ~~Pinjam~~Ltd. All significant inter-company balances and transactions have been eliminated.

Note 2 - Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, and related disclosure of contingent assets and liabilities at the financial statement date and the reported revenues and expenses during the reporting periods. On an on-going basis, wemanagement ~~evaluate~~evaluates ~~our~~their estimates, including those related to allowances for bad debt and inventory obsolescence, income taxes, and contingencies and litigation. WeManagement ~~base~~bases ~~our~~ their 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.

Foreign Currency

Non-U.S. entity operations are recorded in the functional currency of each entity. Results of operations for non-U.S. dollar functional currency entities are translated into U.S. dollars using average currency rates or actual action date currency rate. Assets and liabilities are translated using currency rates at period end. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

F-8

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 December 31, 2018 ~~and December 31, 2017~~.

Accounts Receivable

Accounts receivable consist primarily of trade receivables from customers. The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer’s trade accounts receivable. ~~The~~There ~~allowance~~was no allowance for doubtful trade receivables ~~was~~at $9December 31,~~439~~ 2019 and $0the atallowance ~~December~~for ~~31,~~doubtful ~~2018~~trade ~~and~~receivables ~~December~~was 31$9,439 ~~2017,~~at ~~respectively~~December 31, 2018.

Inventory

Inventories, which consist of finished goods, are stated at the lower of cost or market value, using the first-in, first-out convention. The Company regularly reviews its inventory quantities on hand, and when appropriate, records a provision for excess and slow-moving inventory.

Prepaid expenses

Prepaid expenses represent amounts paid in advance to suppliers for professional fees or rent, or other expenses.

F-8

Deposits

Deposits represents prepayments to third party vendors who provide the Company with vouchers, prepaid phone credit, etc., that the Company sells through itits licensed portal. The Company deposits cash to the vendors and once the sale is made, the vendors deduct the ~~deposit~~ deposit from their account. Each transaction is done electronically to record the purchase (to the vendors) and the sale (to the user), and the products are then transferred to the users. The unused funds can only be refunded to the Company upon the termination of the agreement with the vendors, and only after both parties settle their obligations.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 53 - 7 years, and 20 years for the building. Expenditures for renewals and betterments are capitalized. ~~Expenditures~~ 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

WeThe ~~review~~Company reviews the recoverability of ~~our~~their long-lived assets, including property and equipment, 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~~The Company’s primary type of share-based compensation consists of stock options. WeThe ~~use~~Company uses 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 stock options and the risk-free interest rate.

F-9

Accounting For Obligations And Instruments Potentially To Be Settled In The Company’s Own Stock

WeThe ~~account~~Company accounts 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 December 31, ~~2018~~2019 and ~~December31~~December 31, ~~2017~~2018, the carrying value of certain financial instruments (cash, and cash equivalents, accounts payable and accrued expenses, and notes payable) approximates fair value due to the short-term nature of the instruments or interest rates, which are comparable with current rates.

F-9

Fair Value Measurements

●	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:

●	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;
	-	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.

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 Company did not have any Level 1 or Level 2 assets and liabilities at December 31, 2019 and 2018. The Derivative liabilities at ~~December~~ December 31, 2019 and 2018, are Level 3 fair value measurements. ~~The Company did not have any Level 1, Level 2 or Level 3 financial assets and liabilities as of and for the year ended December 31, 2017.~~

The table below sets forth a summary of the changes in the fair value of the Company’s derivative liabilities classified as Level 3 for the year ended December 31, 2018:

	2018
Balance at beginning of the year	$	-
Initial recognition of conversion feature		851,000
Reclassification to equity		(61,000	)
Change in fair value		17,000
Balance at end of the year	$	807,000

The table below sets forth a summary of the changes in the fair value of the Company’s warrant liabilities classified as Level 3 for the year ended December 31, 2018:

	2018
Balance at beginning of the year	$	-
Initial recognition of conversion feature		514,000
Change in fair value		(140,000	)
Balance at end of the year	$	374,000

At December 31, 2018, the Company estimated the fair value of the conversion feature derivatives embedded in the convertible debentures based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consists, in part, of the price of the Company’s common stock, a risk free interest rate based on the average yield of a Treasury note and expected volatility of the Company’s common stock all as of the measurement dates, and the various estimated reset exercise prices weighted by probability.

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 periods ended December 31, 2018 and 2017, there were no significant transfers of financial assets or financial liabilities between the hierarchy levels.

F-10

The table below sets forth a summary of the changes in the fair value of the Company’s derivative liabilities classified as Level 3 for the years ended December 31, 2019 and 2018:

	2019			2018
Balance at beginning of the year	$	807,000		$	-
Initial recognition of conversion feature		7,498,000			851,000
Reclassification to equity		(4,369,583	)		(61,000	)
Change in fair value		(227,417	)		17,000
Balance at end of the year	$	3,708,000		$	807,000

The table below sets forth a summary of the changes in the fair value of the Company’s warrant liabilities classified as Level 3 for the year ended December 31, 2019 and 2018:

	2019			2018
Balance at beginning of the year	$	374,000		$	-
Initial recognition of warrant liability		1,027,000			514,000
Reclassed to equity upon exercise		(727,000	)		-
Reclassed to equity upon expiration		(318,000	)		-
Change in fair value		839,000			(140,000	)
Balance at end of the year	$	1,195,000		$	374,000

At December 31, 2019 and 2018, the Company estimated the fair value of the conversion feature derivatives embedded in the convertible debentures based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consists, in part, of the price of the Company’s common stock, a risk free interest rate based on the average yield of a Treasury note and expected volatility of the Company’s common stock all as of the measurement dates, and the various estimated reset exercise prices weighted by probability.

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 periods ended December 31, 2019 and 2018, there were no significant transfers of financial assets or financial liabilities between the hierarchy levels.

Earnings per Common Share

WeThe ~~compute~~Company computes net income (loss) per share in accordance with ASC 260, Earning per Share. ASC 260 requires presentation of both ~~basic~~ 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. For the year ended December 31, ~~2018~~2019, the Company had approximately $12,~~742~~768,000 in convertible debentures whose approximately 1184,~~906~~472,000 underlying shares are convertible at the holders’ option at conversion prices ranging from ~~– a~~ fixed conversion ~~price~~prices of $1.75 tothrough a$0.15 and variable conversion ~~rate~~rates of 60% to 65% of the defined trading price and approximately 48,~~293~~452,000 warrants with an exercise price of $23.00 to $0.2015, certain warrants having exercise prices which reset to 65% of defined trading price upon future dilutive issuances, which were not included in in the calculation of diluted EPS as their effect would be anti-dilutive. For the year ended December 31, ~~2017~~2018, the Company had ~~approximately~~ approximately $~~570~~1,742,000 in convertible debentures whose approximately 4611,~~170~~906,000 underlying shares are convertible at the holders’ ~~option~~ option at conversion prices ranging from – a fixed conversion price of $1.75 to a variable conversion rate of 60% to 65% of the defined trading price and approximately 34,~~556~~293,000 warrants with an exercise price of $2.00 to $10.0020, which were not included in the calculation of diluted EPS as their effect would be anti-dilutive.

Revenue from Purchased Products

We have eight different revenue products, including, Mobile phone prepaid, Kinerja Store,, Payment Gateway Services, Instant Pay Fees Collection, Marketplace Merchant Partners, Marketplace Merchant Users, Remittance, and Unipin. To date substantially all our revenue has been earned in the mobile home prepaid product.

Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured. There was no impact on the Company’s financial statements as a result of adopting Topic 606 for the year ended December 31, 2018.

For the year ended December 31, 2017, pursuant to ASC 605, the Company recognized their revenue at net since they were an agent and not a principal to the various transactions with other financial institutions and or technology companies through their leased portal. Gross cost of goods sold exceeded gross revenues for the year ended December 31, 2017. We recognized revenue when the four criteria of revenue have been met which includes 1) Persuasive evidence of an arrangement, 2) services and or delivery being rendered, 3) the price is fixed or determinable and 4) collectability is reasonably assured.

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.

F-11

InRevenue 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.Recognition

The Company’s revenue mostly focuses on e-commerce through their portal and mobile app. The Company launched their virtual marketplace (“KMALL”) during 2017 as a free platform for buyers to explore products and sellers to establish a low-cost online presence for their products from the local Indonesian market. Buyers and sellers can access KMALL from their electronic devices. In addition to the typical categories of consumer products offered similarly by other virtual marketplaces, KMALL offers mobile phone prepaid vouchers and computer-related goods. The Company also provides electronic payment service to consumers and merchants using the technology acquired in August 2018 from P.T. Kinerja on the Portal and Mobile App. The service provides an affordable, secure and convenient method for money transfer, bill payment and online transactions. To date substantially all the Company’s revenue has been earned in the mobile phone prepaid product.

Currently, while the Company is still working on developing the other future areas of their business, the Company’s revenue is substantially all in ecommerce. Revenue is recognized when control of the product transfers to the customer. The virtual marketplace revenue accounts for approximately $438,000 and $2,807,000 of the Company’s total revenue for the years ended December 31, 2019 and 2018, respectively.

Income Taxes

Pursuant to ASC 740, Accounting for Income Taxes, the Company is 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.

The Company 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 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 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.

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.

OnIn ~~December 22~~addition, ~~2017,~~ the ~~President~~Company’s management performs an evaluation of ~~the~~all ~~United~~uncertain ~~States~~income ~~signed~~tax ~~and~~positions ~~enacted~~taken ~~into~~or ~~law~~expected ~~H.R.~~to 1be taken (in the ~~“Tax~~course ~~Reform~~of ~~Law”).~~preparing ~~The Tax~~the ~~Reform~~Company’s ~~Law,~~income ~~effective~~tax ~~for~~returns to determine whether the income tax ~~years~~positions ~~beginning~~meet ona or“more likely ~~after~~than ~~January~~not” 1,standard ~~2018,~~of ~~except~~being ~~for~~sustained ~~certain~~under ~~provisions,~~examination ~~resulted~~by inthe ~~significant~~applicable taxing authorities. This evaluation is ~~changes~~required to ~~existing~~be ~~United~~performed ~~States~~for all open tax ~~law~~years, ~~including~~as defined by the various ~~provisions~~statutes ~~that~~of ~~are~~limitations, ~~expected~~for tofederal ~~impact~~and ~~the~~state ~~Company~~purposes. The ~~Tax~~Company’s ~~Reform Law~~practice ~~reduced~~is ~~the~~to ~~federal~~recognize ~~corporate~~interest ~~tax~~and ~~rate~~penalties, ~~from~~if ~~35%~~any, related to ~~21%~~uncertain ~~effective~~tax ~~January~~positions 1,in ~~2018~~income tax expense in the consolidated statements of operations.

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.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) The standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard will be effective for our interim and annual periods beginning January 1, 2019 and must be applied on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. We are currently evaluating the timing of adoption and the potential impact of this standard on our financial position, but we do not expect it to have a material impact on our results of operations.

In January 2017, FASB issued ASU 2017-01, “Clarifying the Definition of a Business.” The new guidance clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. This guidance was adopted January 1, 2018 and did not have a material impact on the financial position or results of operations.

F-12

OnRecent ~~July 13, 2017, the FASB issued a two-part~~ Accounting Standards Update (ASU), No. 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other organizations, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. This guidance was adopted January 1, 2018 and has been applied to the financial instruments issued during the year ended December 31, 2018, which had down round features.Pronouncements

In ~~August~~February ~~2018~~2016, the FASB ~~released~~issued ASU ~~2018~~No. 2016-1302, ~~Fair~~Leases ~~Value Measurement~~ (Topic ~~820~~842) ~~regarding~~The ~~Disclosure~~standard ~~Framework~~requires –all ~~Changes~~leases that have a term of over 12 months to be recognized on the ~~Disclosure~~ ~~Requirements~~balance sheet with the liability for ~~Fair~~lease ~~Value~~payments ~~Measurement~~and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. ~~The~~Recognition ~~amendments~~of ~~modify~~the costs of these leases on the ~~disclosure~~income ~~requirements~~statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on ~~fair~~a ~~value~~straight-line ~~measurements~~basis over the lease term. inCosts ~~Topic~~for ~~820,~~a ~~Fair~~financing ~~Value~~lease ~~Measurement~~will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard was effective for interim and annual periods beginning January 1, ~~based~~2019 and must be applied on a modified retrospective basis to leases existing at, or entered into after, the ~~concepts~~beginning of the earliest comparative period presented in the ~~Concepts~~financial ~~Statements~~statements. The Company adopted ASC 842 on January 1, ~~including~~2019, ~~the~~with ~~consideration~~no impact on ~~costs~~their ~~and benefits~~financial statements.

In June ~~2018~~2016, the FASB ~~released~~issued ASU ~~2018~~2016-0713, ~~Compensation~~Financial –Instruments ~~Stock Compensation to improve the Nonemployee Share~~-~~Based~~ ~~Payment~~Credit ~~Accounting. The~~Losses ~~amendment~~(Topic ~~is as follow~~326): ~~(1)~~Measurement ~~Consistent~~of ~~with~~Credit ~~the~~Losses ~~accounting~~on Financial ~~requirement~~Instruments. ~~for~~ASU ~~employee share~~2016-~~based~~13 ~~payment~~amends ~~awards,~~the ~~nonemployee share-based~~guidance ~~payment~~on ~~award within~~ the ~~scope~~impairment of ~~Topic~~financial ~~718~~instruments. ~~are~~This ~~measured~~update atadds ~~grant-date~~an ~~fair~~impairment model ~~value~~(known ofas the ~~equity~~current ~~instruments~~expected ~~that~~credit ~~an entity~~losses ismodel) ~~obligated~~that tois ~~issue~~based ~~when~~on ~~the~~expected ~~good~~losses ~~has~~rather ~~been~~than ~~delivered~~incurred orlosses. Under the ~~service~~new ~~has~~guidance, ~~been~~an ~~rendered~~entity ~~and~~recognizes, ~~any~~as ~~other~~an ~~conditions~~allowance, ~~necessary to~~its ~~earn~~estimate ~~the~~of ~~right~~expected tocredit ~~benefit from the instruments have been satisfied~~losses. ~~(2)~~In ~~Equity-classified~~November ~~nonemployee~~2018, ~~share-~~ASU ~~based payment~~2016-13 ~~awards~~was ~~are~~amended ~~measured~~by atASU ~~grant~~2018-19, ~~date.~~Codification ~~The~~Improvements ~~definition of grant date is amended~~ to ~~generally~~Topic ~~state~~326, ~~the~~Financial ~~date~~Instruments at- ~~which~~Credit aLosses. ~~grantor~~ASU ~~and~~2018-19 achanges ~~grantee~~the ~~reach~~effective adate ~~mutual understanding~~ of the ~~key~~credit ~~terms~~loss ~~and~~standards ~~conditions~~(ASU of2016-13) ato ~~share-based~~fiscal ~~payment~~years ~~awards.~~beginning ~~(3)~~after ~~Consistent~~December ~~with~~15, ~~the~~2021, including ~~accounting~~interim ~~for~~periods ~~employee~~within ~~share-based~~those ~~payment~~fiscal ~~awards,~~years. anThe ~~entity~~Company ~~considers~~does not believe that the ~~probability~~impact of ~~satisfying~~adopting ~~performance~~this ~~conditions~~standard ~~when nonemployee~~will ~~share-based~~have ~~payment~~a material ~~awards~~effect ~~contain~~on ~~such~~its ~~conditions~~financial statements.

~~Management~~On ~~does~~July ~~not~~13, ~~anticipate~~2017, ~~that~~the FASB issued a two-part Accounting Standards Update (ASU), No. 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and II. Replacement of the ~~adoption~~Indefinite Deferral for Mandatorily Redeemable Financial Instruments of ~~these~~Certain ~~standards~~Nonpublic ~~will~~Entities ~~have~~and Certain Mandatorily Redeemable Noncontrolling Interests With a ~~material~~Scope ~~impact~~Exception. onThe ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other organizations, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. This guidance was adopted January 1, 2018 and has been applied to the financial ~~statements~~instruments issued during the years ended December 31, 2019 and 2018, which have down round features.

On May 10, 2017, the FASB issued ASU 2017-09 “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting”, which provides guidance to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The guidance was effective prospectively for all companies for annual periods beginning on or after December 15, 2017. Early adoption is permitted. The adoption of ASU 2017-09 did not have any impact on the Company’s consolidated financial statements and related disclosures.

Management’s Evaluation of Subsequent Events

The Company evaluates events that have occurred after the balance sheet date of December 31, ~~2018~~2019, through the date which the consolidated financial statements were issued. Based upon the review, other than described in Note 1112 – Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

Note 3 – Acquisition of PTP.T. KinerJa Indonesia

On August 31, 2018, the Company acquired 100% of the outstanding shares of its licensor, PTP. T. Kinerja, which had previously issued the Company, as licensee, the exclusive license of the Company’s IP technology. (Note 1) At the date of the closing of the acquisition, PTP.T. Kinerja had 18 million shares issued and outstanding, of which 75% or 13.5 million the shares were owned by the CEO of the Company. The consideration for the acquisition was $1,200,000, to be paid by a promissory note which was issued by the Company to PTP.T. Kinerja shareholders, all related parties. The promissory note (the “Note”) bears interest at the rate of 6% per annum and is due twenty-four months from the date of the agreement. As part of the acquisition, the Company terminated its Service agreement dated February 20, 2016, with PT Kinerja. In accordance with ASC 805-50-30-5, Transactions Between Entities Under Common Control, as the Company’s CEO and sole director was in control of both the Company and PTP.T. Kinerja, the acquisition was accounted for under common control accounting, and therefore the assets acquired and liabilities assumed were recognized at their historical cost basis.

F-13

During periods prior to their acquisition of PTP.T. Kinera, 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, the Company is now the principal, and the revenues can be recognized on a “gross basis.” 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 following table summarizes the allocation of the purchase price to the fair value of the assets acquired on the acquisition date:

Cash	$	23,814
Receivables		27,537
Prepaid expenses and other current assets		27,727
Inventory		2,538
Building and equipment, net		695,440
Accounts payable and accrued liabilities		(725,866	)
Net assets acquired	$	51,190

Due to the consideration for the acquisition being the promissory note in the amount of $1,200,000, the excess of the consideration over the carrying value of the net assets acquired from PT Kinerja, ofadjusted to $1,~~148~~132,~~810~~110 ~~will~~was be included in additional paid in capital, in accordance with ASC 805-50-30-5, Common Control Accounting.

~~PT Kinerja contributed revenues of approximately $39,000 and net loss of $255,000 to the Company for the period from August 31, 2018 to December 31, 2018.~~ The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, ~~2017~~2018:

	Pro Forma for the Year Ended December 31, 2018 (unaudited)			~~Pro Forma for the Year Ended December 31, 2017 (unaudited)~~
Revenue	$	2,954,914		$	~~165,421~~
Cost of goods sold		2,819,998			~~19,366~~
Operating expenses		6,558,479			~~6,099,169~~
Other income(expenses)		(1,822,021	)		~~(492,133~~	)
Net loss	$	(8,245,584	)	$	~~(6,445,247~~	)

Note 4 -– ~~Other~~CONVERTIBLE ~~Assets~~NOTES RECEIVABLE

~~Other~~On ~~assets~~May ~~consist~~29, of2019 ~~amounts~~the ~~related~~Company ~~to an agreement~~ entered into ona ~~July~~convertible ~~31,~~note ~~2017,~~receivable with ~~Ace~~Oncolix, ~~Legends~~Inc ~~Pte.~~in ~~Ltd.~~the inprincipal ~~connection~~amount of $20,000, with a ~~partnership~~maturity indate ~~game~~of ~~development~~November 29, ~~for~~2019. aThe ~~period~~note ofbears 18interest ~~months.~~at ~~The~~12%, ~~agreement~~which ~~was~~increases ~~amended~~ to ~~commence~~22% onupon ~~December~~an 1,event ~~2017~~of default. ~~The~~In ~~agreement~~certain ~~calls~~events ~~for~~of ~~the~~default ~~Company~~as toset ~~pay~~forth ~~$60,000~~ in ~~cash~~the ~~and~~note, tothe ~~issue~~outstanding ~~80,000~~principal ~~shares~~balance ofincreases ~~common~~by ~~stock~~50%. ofDuring the ~~Company.~~first ~~The~~180 ~~shares~~days ~~were valued~~the atconvertible ~~$128,000,~~note ~~based~~receivable onis in effect, the ~~trading~~borrower ~~value~~may ofredeem the ~~common~~note ~~stock~~at amounts ranging from 120% to 145% of the ~~Company~~principal and accrued interest balance, based on the redemption date’s passage of ~~the~~time ~~agreement.~~from ~~The~~the ~~shares~~date ~~were~~of ~~issued on~~issuance ~~March~~of ~~12,~~the ~~2018~~debenture. The Asnote ofis ~~December~~convertible ~~31,~~beginning ~~2018,~~on ~~and~~the ~~2017,~~date ~~$58,893~~180 ~~and~~days ~~$9,292,~~following ~~respectively,~~the ofissuance ~~amortization~~date, ~~expense~~at ~~has~~a ~~been recognized.~~variable ~~The~~conversion ~~balance~~price ~~net~~of 50% of ~~amortization~~the lowest astrading price of ~~December 31~~Oncolix, ~~2018~~Inc.’s ~~and~~common ~~December~~stock ~~31,~~over ~~2017~~the isthirty ~~$52,415~~days ~~and~~prior ~~$266,045,~~to ~~respectively~~the conversion date.

OnAs ~~November~~disclosed 3,in ~~2017,~~a ~~the~~Form ~~Company~~8K ~~issued~~filed awith ~~commitment~~the ~~fee~~SEC ~~note~~on ~~payable~~July of3, ~~$75~~2019,~~000~~ toon ~~Tangiers~~July ~~Global~~2, ~~LLC~~2019, inOncolix ~~connection~~received ~~with~~a anfinal ~~investment agreement~~notice ~~(Note~~of ~~6).~~default ~~The~~under ~~Company~~a license ~~did~~agreement ~~not~~with ~~receive~~its ~~cash~~product incandidate. ~~connection~~Additionally ~~with~~disclosed, ~~this~~was ~~commitment~~that ~~fee~~Oncolix ~~note.~~has ~~The~~been ~~Company~~unable ~~recognized the~~to ~~commitment~~finance ~~fee~~its ascontinuing operations anand ~~asset~~can ~~that~~no ~~will~~longer bemeet ~~netted~~its ~~with~~continuing ~~funds~~obligations, ~~received~~and ~~once~~as ~~shares~~such ofsubstantially ~~common~~all ~~stock~~of ~~are~~its ~~issued~~remaining ~~under~~assets ~~the~~are ~~investment~~pledged ~~agreement.~~to Asthe holders of ~~December~~its ~~31,~~convertible ~~2017~~notes. Therefore, nothe ~~shares~~Company ~~had~~has ~~yet~~fully ~~been~~reserved ~~issued~~this ~~under~~amount ~~the~~due ~~investment~~under ~~agreement, resulting in~~ the ~~outstanding asset~~convertible ~~of $75,000~~note receivable.

On November 9, 2018, the Company filed a Form NT to withdraw its registration statement related to the offering of shares relating to the investment agreement, and as a result the $75,000 asset was expensed as a financing cost on the consolidated Statement of Operations

Note 5 - Fixed Assets

Fixed assets consist of the following:

	December 31, 2018			December 31, 2017
Building	$	729,760		$	-
Vehicles		26,713			-
Office Equipment and Furniture		220,417			15,792
		976,890			15,792
Less: Accumulated Depreciation		(327,192	)		(3,196	)
	$	649,698		$	12,596

Depreciation expense for the years ended December 31, 2018 and 2017 was $65,086 and $2,875, respectively.

Note 6 – Convertible Notes Payable

On October 11, 2018, the Company entered into a convertible note with Armada Investment Fund LLC for the principal amount of $55,000, convertible into shares of common stock of the Company, which matures on July 11, 2019. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. As of December 31, 2018, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $27,500. As a result the outstanding balance of the note as of December 31, 2018, was $82,500. The note is convertible at the lesser of: (i) $1.75; and (ii) 65% multiplied by lowest end of day VWAP during the previous 20 days before the Issue date of the note, and (iii) 65% multiplied by the market price (as defined in the note. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. The discount is increased to 50% if the Company is not DTC eligible, or if the conversion price falls to below $0.01, and the principal amount of the note shall increase by $15,000. Additionally, if the Company enters into a Section 3(a)(9) or 3(a)(10) transaction, there shall be liquidation damages of 25% of the outstanding principal balance of the debt, but not to be less than $15,000. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability on the date the note becomes convertible.

F-14

InOn ~~connection~~June ~~with the note~~3, 2019 the Company ~~issued~~acquired ~~150,000~~from ~~warrants~~Power Up Lending Group LTD, ~~exercisable~~one atof ~~$0.34~~their noteholders (Note 7), ~~with~~a convertible note receivable payable by Mineral Mountain Mining & Mining, n/k/a ~~five~~Quad ~~year~~M ~~term~~Solutions, Inc. ~~The~~(“MMMM”), ~~Company~~for ~~estimated the~~a ~~fair~~purchase ~~value~~price of ~~the~~$96,816, with ~~warrants~~a ~~using~~maturity ~~the~~date ~~Black~~of ~~Scholes~~November ~~pricing~~30, ~~model~~2019. The ~~key~~note ~~valuation~~bears ~~assumptions~~interest ~~used~~at ~~consist~~12%, inwhich ~~part,~~increases to 22% upon an event of default. In ~~the~~certain ~~price~~events of default as set forth in the ~~Company’s~~note, ~~common~~the ~~stock~~outstanding ofprincipal $0balance increases by 50%.27 atThe ~~issuance~~note ~~date;~~is convertible at a ~~risk-free~~variable ~~interest~~conversion ~~rate~~price of ~~3.0~~58% ~~and~~of ~~expected~~the ~~volatility~~ average of the ~~Company~~lowest two trading prices of MMMM’s common stock, ofover ~~158.6%,~~the ~~resulting~~fifteen days inprior ato ~~fair~~the ~~value~~conversion ~~of $37,000~~date.

~~The~~On ~~Company~~July ~~estimated~~1, 2019 the ~~aggregate~~Company ~~fair~~entered ~~value~~into ofa ~~the~~second ~~conversion~~convertible ~~feature~~note ~~derivatives~~receivable ~~embedded~~with MMMM in the ~~debenture~~principal atamount ~~issuance~~of at $7034,000, with ~~based~~a onmaturity ~~weighted~~date ~~probabilities~~of April 7, 2020. The note bears interest at 10%, which increases to 22% upon an event of ~~assumptions~~default. ~~used~~In certain events of default as set forth in the ~~Black~~note, ~~Scholes~~the ~~pricing~~outstanding ~~model~~principal balance increases by 50%. ~~The~~During ~~key~~the ~~valuation~~first ~~assumptions~~180 ~~used~~days ~~consist,~~the inconvertible ~~part,~~note ofreceivable ~~the~~is ~~price~~in ofeffect, the ~~Company’s~~borrower ~~common~~may ~~stock~~redeem ofthe ~~$0.27~~note at ~~issuance~~amounts ~~date;~~ranging afrom ~~risk-free~~120% ~~interest~~to ~~rate~~145% of ~~2.66%~~the principal and ~~expected volatility~~accrued ofinterest balance, based on the ~~Company~~redemption date’s ~~common~~passage ~~stock,~~ of ~~141.14%,~~time ~~and~~from the ~~various~~date ~~estimated~~of ~~reset~~issuance ~~exercise~~of ~~prices~~the ~~weighted by probability~~debenture. ~~This~~The ~~resulted~~note inis convertible beginning on the ~~calculated~~date ~~fair~~180 ~~value~~days offollowing the ~~debt~~issuance ~~discount~~date, ~~being~~at ~~greater~~a ~~than~~variable ~~the~~conversion ~~face~~price ~~amount~~of 50% of the lowest ~~debt~~trading price of MMMM, ~~and~~Inc.’s ~~the~~common ~~excess amount~~stock ofover ~~$52,000~~the ~~was~~thirty ~~immediately~~days ~~expensed~~prior asto ~~financing~~the ~~costs~~conversion date.

On ~~October~~September 119, ~~2018,~~2019 the Company entered into a convertible note receivable with ~~BHP~~Accelerated ~~Capital~~Pharma, NY Inc. ~~for~~in the principal amount of $5520,000, ~~convertible into~~with ~~shares~~a ofmaturity ~~common~~date ~~stock~~ of ~~the~~April ~~Company~~9, ~~which matures on July 11, 2019~~2020. The note bears interest at 810%, which increases to 24 22% upon an event of default. In ancertain ~~event~~events of default as set forth in the note, the ~~default sum becomes 150% of the principal~~ outstanding ~~and~~ accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. As of December 31, 2018, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance ~~was~~increases ~~increased~~ by $27,500. As a result the outstanding balance of the note as of December 31, 2018, was $82,500. The note is convertible at the lesser of: (i) $1.75; and (ii) 65% multiplied by lowest end of day VWAP during the previous 20 days before the Issue date of the note, and (iii) 65% multiplied by the market price (as defined in the note. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. The discount is increased to 50% ~~if the Company is not DTC eligible, or if the conversion price falls to below $0~~.~~01,~~ and the principal amount of the note shall increase by $15,000. Additionally, if the Company enters into a Section 3(a)(9) or 3(a)(10) transaction, there shall be liquidation damages of 25% of the outstanding principal balance of the debt, but not to be less than $15,000. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 ~~days~~ days the convertible ~~redeemable~~ note receivable is in effect, the ~~Company~~borrower may redeem the note at amounts ranging from ~~115~~120% to 145% of the ~~principal~~ principal and accrued interest balance, based on the redemption date’s passage of time ~~ranging~~ from the date of issuance of the debenture. The ~~conversion~~note ~~feature~~is ~~meets~~convertible beginning on the ~~definition~~date of180 days following the issuance date, at a ~~derivative~~variable ~~and~~conversion ~~therefore~~price of ~~requires~~50% ~~bifurcation~~of ~~and~~the ~~will~~lowest betrading ~~accounted~~price ~~for~~of asAccelerated ~~a derivative~~Pharma, ~~liability~~Inc.’s oncommon ~~the~~stock ~~date~~over the ~~note~~thirty ~~becomes~~days ~~convertible~~prior to the conversion date.

InOn ~~connection~~September ~~with~~23, 2019 the Company entered into a convertible note, ~~the~~receivable ~~Company~~with ~~issued~~Bigfoot ~~150~~Project Investments,~~000~~ ~~warrants~~Inc., ~~exercisable~~n/k/a atLord Global Corporation (“LRDG”) in the principal amount of $~~0.34~~20,000, with a ~~five~~maturity ~~year~~date ~~term~~of March 23, 2020. The ~~Company~~note ~~estimated~~bears interest ~~the~~at ~~fair~~10%, ~~value~~which increases to 22% upon an event of ~~the~~default. ~~warrants~~In ~~using~~certain events of default as set forth in the ~~Black~~note, ~~Scholes~~the ~~pricing~~outstanding principal ~~model~~balance increases by 50%. ~~The~~During ~~key~~the ~~valuation~~first ~~assumptions~~180 ~~used~~days ~~consist,~~the convertible note receivable is in ~~part~~effect, ofthe borrower may redeem the ~~price~~note at amounts ranging from 120% to 145% of the ~~Company~~principal and accrued interest balance, based on the redemption date’s passage ~~common~~of ~~stock~~time from the date of $0issuance of the debenture.27 atThe note is convertible beginning on the date 180 days following the issuance date;, at a ~~risk-free~~variable ~~interest~~conversion ~~rate~~price of ~~3.0~~50% ~~and expected volatility~~ of the ~~Company~~lowest trading price of LRDG’s common stock, ofover ~~158.6%,~~the ~~resulting~~thirty days inprior ato ~~fair~~the ~~value~~conversion ~~of $37,000~~date.

~~The~~On ~~Company~~September ~~estimated~~27, 2019 the ~~aggregate~~Company ~~fair~~entered ~~value~~into ofa ~~the~~convertible ~~conversion~~note ~~feature~~receivable ~~derivatives~~with ~~embedded~~GEX inManagement, ~~the~~Inc. ~~debenture~~(“GEX”) atin ~~issuance~~the principal atamount of $7045,000, ~~based~~ onwith ~~weighted~~a ~~probabilities~~maturity date of ~~assumptions~~March ~~used~~27, in2020. ~~the~~The ~~Black~~note ~~Scholes~~bears ~~pricing~~interest ~~model.~~at ~~The~~10%, ~~key~~which ~~valuation~~increases ~~assumptions~~to ~~used~~22% ~~consist,~~upon inan ~~part,~~event of ~~the~~default. ~~price~~In certain events of default as set forth in the ~~Company’s~~note, ~~common~~the ~~stock~~outstanding ofprincipal $0balance increases by 50%.27 During atthe ~~issuance~~first ~~date;~~180 adays ~~risk-free~~the ~~interest~~convertible ~~rate~~note ofreceivable ~~2.66%~~is ~~and~~in ~~expected volatility~~effect, ofthe borrower may redeem the ~~Company’s~~note ~~common~~at ~~stock,~~amounts ofranging ~~141.14~~from 120%, ~~and~~to 145% of the ~~various~~principal ~~estimated~~and ~~reset~~accrued ~~exercise~~interest ~~prices~~balance, ~~weighted~~based byon ~~probability. This~~the ~~resulted~~redemption indate’s ~~the~~passage ~~calculated~~of ~~fair~~time ~~value~~from the date of issuance of the ~~debt~~debenture. ~~discount~~The ~~being~~note ~~greater~~is ~~than~~convertible beginning on the ~~face~~date ~~amount~~180 ofdays following the ~~debt~~issuance date, ~~and~~at ~~the~~a ~~excess~~variable ~~amount~~conversion price of ~~$52,000~~50% ~~was~~of ~~immediately~~the ~~expensed~~lowest astrading ~~financing~~price ~~costs~~of GEX’s common stock over the thirty days prior to the conversion date.

On October 1, 2019 the Company entered into a convertible note receivable with MMMM in the principal amount of $94,000, with a maturity date of September 30, 2020. The $34,000 July 1, 2019 note was cancelled and included in the principal balance of this new note. The note bears interest at 8%, which increases to 24% upon an event of default. In certain events of default as set forth in the note, the outstanding principal balance increases by 20%. During the first 180 days the convertible note receivable is in effect, the borrower may redeem the note at amounts ranging from 110% to 135% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. The note is convertible at a variable conversion price of 60% of the lowest trading price of MMMM’s common stock over the twenty days prior to the conversion date.

F-15

On October 114, 2018, the Company entered into a convertible note with Jefferson Street Capital, LLC for the principal amount of $55,000, convertible into shares of common stock of the Company, which matures on July 11, 2019. ~~The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in~~ the ~~note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the~~ Company ~~cannot~~acquired ~~deliver~~from ~~conversion~~Power ~~shares~~Up orLending ~~fails~~Group ~~to reserve sufficient authorized shares~~LTD, ~~then~~one ~~the default sum increases to 200%. As~~ of ~~December 31, 2018, the note was in default due to the Company being delinquent in~~ their ~~filings~~noteholders ~~under~~(Note ~~the Exchange Act with the SEC~~7), ~~and~~a ~~therefore~~promissory ~~the~~ note ~~principal balance was increased by $27,500.~~receivable Aswith aMedifirst ~~result the outstanding balance of the note as of December 31~~Solutions, ~~2018, was $82,500~~Inc. ~~The note is convertible at the lesser of:~~ (i“Medifirst”) ~~$1.75; and (ii) 65% multiplied by lowest end of day VWAP during the previous 20 days before the Issue date of the note~~, ~~and~~ ~~(iii)~~for ~~65% multiplied by the market price (as defined in the note. The conversion price shall be adjusted upon subsequent sales of securities at~~ a ~~price~~purchase ~~lower than the original conversion~~ price. ~~The discount is increased to 50% if the Company is not DTC eligible, or if the conversion price falls to below $0.01, and the principal amount~~ of ~~the note shall increase by~~ $1519,~~000. Additionally~~374, if ~~the~~which ~~Company~~bears ~~enters~~interest into a Section 3(a)(9) or 3(a)(10) transaction, there shall be liquidation damages of 25% of the outstanding principal balance of the debt, but not to be less than $15,000. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 1157% ~~to 145% of the principal and accrued interest balance~~, ~~based on the redemption date’s passage of time ranging from the date of issuance of the debenture. The conversion feature meets the definition of a derivative~~ and ~~therefore requires bifurcation and will be accounted~~with ~~for as~~ a ~~derivative~~revised ~~liability~~maturity ~~on the~~ date ~~the~~of ~~note~~October ~~becomes convertible~~4,2020.

InOn ~~connection~~November ~~with~~1, ~~the note~~2019, the Company ~~issued~~entered ~~150,000~~into ~~warrants,~~a ~~exercisable~~promissory atnote ~~$0.34,~~ with aToken ~~five year term~~Team.com, ~~The~~for ~~Company~~a ~~estimated the~~purchase ~~fair~~price ~~value~~ of ~~the warrants using the Black Scholes pricing model. The key valuation assumptions used consist~~$25,000, inwith ~~part,~~a ofmaturity ~~the~~date ~~price~~ of ~~the~~June ~~Company’s~~30, ~~common stock of $0~~2020.27 atThe ~~issuance~~note ~~date;~~bears ~~a risk-free~~ interest ~~rate~~at ~~of 3.0~~12%, ~~and~~which ~~expected~~increases ~~volatility of~~to ~~the Company’s common stock, of 158.6~~22%, ~~resulting~~upon inan aevent ~~fair value~~ of ~~$37,000~~default.

~~The~~On ~~Company~~November ~~estimated~~17, 2019 the ~~aggregate~~Company ~~fair~~acquired ~~value~~from Jefferson Street Capital, LLC, one of ~~the~~their ~~conversion~~noteholders ~~feature~~(Note ~~derivatives~~7), ~~embedded~~another inconvertible note ~~the~~receivable ~~debenture~~with atMMMM, ~~issuance~~for ata purchase price of $7099,~~000~~500, ~~based~~ onwith ~~weighted~~a ~~probabilities~~maturity date of ~~assumptions~~April ~~used~~30, in2020. ~~the~~The ~~Black~~note ~~Scholes~~bears ~~pricing~~interest ~~model.~~at 12%, ~~The~~which ~~key~~increases ~~valuation~~to ~~assumptions~~24% ~~used~~upon ~~consist, in~~an ~~part,~~event of ~~the~~default. ~~price~~In certain events of default as set forth in the ~~Company’s~~note, ~~common~~the ~~stock~~outstanding ofprincipal balance $0increases by 20%.27 atDuring ~~issuance~~the ~~date;~~first a180 ~~risk-free~~days ~~interest~~the ~~rate~~convertible ofnote ~~2.66%~~receivable ~~and~~is ~~expected volatility~~in ofeffect, the ~~Company’s~~borrower ~~common~~may ~~stock,~~redeem ofthe note ~~141.14~~at amounts ranging from 110%, ~~and~~to 135% of the ~~various~~principal ~~estimated~~and ~~reset~~accrued ~~exercise~~interest ~~prices~~balance, ~~weighted~~based byon ~~probability.~~the redemption date’s ~~This~~passage ~~resulted~~of intime from the ~~calculated~~date ~~fair~~of ~~value~~issuance of the ~~debt~~debenture. ~~discount~~The ~~being~~note ~~greater~~is ~~than~~convertible ~~the~~at ~~face~~a ~~amount~~variable conversion price of 60% of the lowest ~~debt,~~trading ~~and~~price of Quad M’s common stock over the ~~excess amount~~twenty ofdays ~~$52~~prior to the conversion date,~~000~~ ~~was~~with ~~immediately~~the ~~expensed~~conversion asprice not ~~financing~~to ~~costs~~be greater than $0.02.

On ~~October~~December 169, ~~2018~~2019, the Company entered into a ~~12%~~ convertible note receivable with ~~Power~~Accelerated UpPharma, ~~Lending~~Inc. ~~for~~in the principal amount of $4310,000, ~~convertible into~~with ~~shares~~a ofmaturity ~~common~~date ~~stock~~ of ~~the~~June ~~Company~~9, ~~which matures on July 30, 2019~~2020. InThe annote ~~event~~bears ofinterest ~~default~~at ~~as set forth in the note~~10%, ~~the interest~~which ~~rate~~ increases to ~~a default amount of~~ 22%, ~~and~~upon ~~the~~an ~~default~~event ~~sum due becomes 150%~~ of ~~the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the~~ default. ~~sum~~In ~~increases~~certain toevents ~~200%.~~of ~~The note was in~~ default ~~due~~as toset ~~the~~forth ~~Company being delinquent~~ in ~~their filings under~~ the ~~Exchange Act~~note, ~~and therefore~~ the outstanding principal ~~was~~balance ~~increased~~increases by 50%,. toDuring ~~$64,500, with~~ the ~~increase being recognized as a penalty expense in the accompanying Statement of Operations. The note is convertible during~~ first 180 days ~~after~~the ~~issuance~~convertible atnote areceivable ~~fixed~~is ~~conversion~~in ~~price of $1.75. After the initial conversion period~~effect, the ~~conversion~~borrower ~~price~~may ~~shall~~redeem ~~equal~~ the ~~lesser~~note ~~of:~~at ~~(i)~~amounts ~~the~~ranging ~~fixed~~from ~~price;~~120% ~~and~~to ~~(ii) 65~~145% ~~multiplied~~of by the principal ~~market~~and ~~price~~accrued ~~(as~~interest ~~defined~~balance, inbased on the ~~note).~~redemption ~~The~~date’s ~~conversion~~passage ~~feature~~of ~~does~~time ~~not~~from ~~meet~~ the ~~definition~~date of aissuance ~~derivative during the first 180 days but will meet the definition~~ of ~~a derivative when~~ the ~~conversion price becomes variable and will at that time require~~ ~~bifurcation~~debenture. ~~and~~The tonote beis ~~accounted~~convertible ~~for~~beginning ason ~~a derivative liability. During~~ the ~~first~~date 180 days following the ~~convertible~~issuance ~~redeemable note is in effect~~date, ~~the Company may redeem the note~~ at ~~amounts~~a ~~ranging~~variable ~~from~~conversion ~~115% to 140%~~ price of the ~~principal~~lower ~~and~~of ~~accrued~~$0.25 ~~interest~~or ~~balance,~~50% ~~based on the redemption date’s passage~~ of ~~time from~~ the ~~date~~lowest oftrading ~~issuance~~price of ~~the~~Accelerated ~~debenture~~Pharma, Inc.’s ~~Per~~common ~~the~~stock ~~agreement,~~over the ~~Company~~thirty ~~is required~~days atprior ~~all times~~ to ~~have~~the ~~authorized~~conversion ~~and~~date. ~~reserved~~Subsequent ~~six~~to ~~times~~ the ~~number~~year-ended ofDecember ~~shares~~31, ~~that~~2019, isthe ~~actually~~Company ~~issuable~~advanced ~~upon~~an ~~full~~additional ~~conversion~~$7,500 ofunder ~~the~~this note.

OnNote ~~October 29, 2018, the Company entered into a 12% convertible note for the principal amount of $118,000 with JSJ Investments, Inc, which matures on October 29, 2019, and has a $~~5~~,000~~ ~~OID.~~- ~~The~~Prepaid ~~note~~expenses is convertible commencing 180 days after issuance of the note (or upon an event of Default), with a variable conversion rate at 60% of market price (as defined in the note). The conversion rate adjusts if there are common stock equivalents issued and inOther which the aggregate per share price is below the original conversion price, in which case the adjusted conversion price is the lower of the original conversion price or 25% of the aggregate price. The discount increases to a 55% discount if there is a DTC “chill” in effect and an additional 5% if the Company is not DWAC or DTC eligible, as well as an additional 5% discount for each event of default. The debenture also includes various liquidated damages for various events, as set forth in the agreement, such as the Company’s inability or delay in the timely issuance of the shares upon receipt of a conversion request. Per the agreement, the Company is required at all times to have authorized and reserved eight times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture, and at 150% after 180 days. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability on the date the note becomes convertible, either 180 days after issuance or upon an event of default.Assets

Included in prepaid expenses is the long term portion of preferred shares issued in connection with the FRS acquisition and related employment agreement (See Note 9).

Also included in Prepaid expenses and other assets, current portion is $322,000 paid as finder’s fees to various parties in connection with an expected equity investment in the Company and a related standby letter of credit. The amount will be offset against the investment in equity when the transaction closes.

At December 31, 2018 other assets also included $31,815 of the unamortized balance related to an agreement entered into on July 31, 2017, with Ace Legends Pte. Ltd. in connection with a partnership in game development, for a period of 18 months. The agreement was amended to commence on December 1, 2017. The agreement called for the Company to pay $100,000 in cash and to issue 80,000 shares of common stock of the Company. The shares were valued at $128,000, based on the trading value of the common stock of the Company on the date of the agreement. As of December 31, 2019, the balance was fully amortized. For the years ended December 31, 2019 and 2018, $31,815 and $58,893, respectively, of amortization expense has been recognized.

Note 6 - Fixed Assets

Fixed assets consist of the following:

	December 31, 2019			December 31, 2018
Building	$	764,093		$	729,760
Vehicles		16,693			26,713
Office Equipment and Furniture		293,588			220,417

		1,074,374			976,890
Less: Accumulated Depreciation		(411,492	)		(327,192	)
	$	662,882		$	649,698

Depreciation expense for the years ended December 31, 2019 and 2018 was $44,855 and $65,086, respectively.

Subsequent to year end on March 9, 2020, the building was sold to an unrelated third party for $803,571. See Note 12.

F-16

OnNote ~~October~~7 ~~31,~~– ~~2018,~~Convertible ~~the~~Notes Company entered into a 12% convertible promissory note in the principal amount of $150,000 with Auctus Funds, which matures on July 31, 2019. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. As of December 31, 2018, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $75,000. As a result, the outstanding balance of the note as of December 31, 2018, was $225,000. The note is convertible at a variable conversion rate lessor of (i) lowest closing price during the previous 25 trading day period, prior to the date of note and (ii) the variable price, which is 60% by market price (lowest closing price for 25 days prior to conversion). The discount increases by 15% discount if there is a DTC “chill” in effect., and an additional 10% if the Company is not DWAC eligible. Additionally, if the Company enters into a Section 3(a)(9) or 3(a)(10) transaction, there shall be liquidation damages of 25% of the outstanding principal balance of the debt, but not to be less than $15,000. The conversion price is adjusted if any 3rd party has the right to convert monies at a discount to market greater than the conversion price in effect at that time then the holder, may utilize such greater discount percentage. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note. If the Company does not maintain the reserve shares or fails to replenish then within 3 days of request, the principal balance increases by $5,000. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 150% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability on the date the note becomes convertible.Payable

In2019 ~~connection~~Convertible ~~with~~notes the note, the Company issued 375,000 warrants, exercisable at $0.20, with a five year term. The Company estimated the fair value of the warrants using the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.24 at issuance date; a risk-free interest rate of 2.91% and expected volatility of the Company’s common stock, of 158.6%, resulting in a fair value of $83,000.payable:

~~The Company estimated~~January the fair value of the conversion feature derivative embedded in the debenture at issuance at $214,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.09 at issuance date; a risk-free interest rate of 2~~.24% and expected volatility of the Company’s common stock~~, of2019 272.06%, and the various estimated reset exercise prices weighted by probability. This plus the fair value of the warrants resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $147,000 was immediately expensed as financing costs.note

On ~~October~~January 312, ~~2018~~2019, the Company ~~entered~~executed ~~into~~an a 12% convertible promissory note payable to an accredited investor in the principal amount of $~~150~~43,000 ~~with EMA Financial LLC~~, which ~~matures~~was due on ~~July~~October 3130, 2019. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes ~~200~~150% of the principal outstanding and accrued interest~~. Additionally~~, and if the ~~market~~Company ~~price~~cannot ofdeliver ~~the~~conversion ~~Company’s~~shares ~~common~~or ~~stock~~fails ~~falls~~to ~~below~~reserve ~~$0.01~~sufficient authorized shares, then the ~~principal~~default ~~shall~~sum ~~increase~~increases byto ~~$25,000~~200%. AsOn April ~~of December 31~~15, ~~2018~~2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $~~150~~21,~~000~~500. As a result, the outstanding balance of the note as of ~~December 31~~June 30, ~~2018~~2019, was $~~300~~64,~~000~~500. The note is convertible atduring afirst ~~variable~~180 ~~conversion~~days ~~rate~~after ~~lessor~~issuance ofat ~~(i)~~a ~~the~~fixed ~~closing~~conversion price onof ~~the~~$1.75. ~~day preceding the~~After ~~issue~~the ~~date~~initial ~~and~~conversion ~~(ii)~~period, ~~60% of either~~ the ~~lowest~~conversion ~~closing~~ price ~~during~~shall 25equal ~~days prior to and including~~ the ~~conversion~~lesser ~~date,~~of: or(i) the ~~closing bid~~fixed price,; ~~whichever~~and is(ii) ~~lower. The discount increases by 15~~61% ~~discount~~multiplied ~~if there is a DTC “chill” in effect or closing~~by ~~price falls below $0.05875. Additionally, if~~ the ~~Company~~market ~~enters~~price ~~into a Section 3~~(~~a)(9)~~as ordefined ~~3(a)(10)~~in ~~transaction, there shall be liquidation damages of 25% of~~ the ~~outstanding principal balance of the debt, but not to be less than $15,000~~note). Per the agreement, the Company is required at all times to have authorized and reserved six ~~ten~~ times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from ~~135~~115% to ~~150~~140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. The conversion feature ~~meets~~does not meet the definition of a derivative ~~and~~during ~~therefore requires~~the ~~bifurcation~~first ~~and~~180 days but will bemeet ~~accounted~~the ~~for~~definition asof a derivative ~~liability~~when the onconversion ~~the~~price ~~date~~becomes ~~the~~variable ~~note~~and ~~becomes~~would ~~convertible~~at that time require bifurcation and to be accounted for as a derivative liability.

InThe ~~connection~~derivative ~~with~~liability ~~the~~was ~~note,~~recognized ~~the~~on ~~Company~~July ~~issued 312~~1,~~500~~ ~~warrants~~2019, ~~exercisable~~in ~~at $0.24, with a five year term. The Company estimated~~ the ~~fair~~initial ~~value~~amount of ~~the~~$81,000 ~~warrants~~based ~~using~~on the ~~Black Scholes pricing model. The~~ key ~~valuation~~valuations assumptions ~~used consist~~ consisting, in part, of the price of the Company’s common stock of $0.~~24 at issuance date~~23; a risk-free interest rate of 2.9121% and expected ~~volatility~~ volatility of the Company’s common stock, of ~~158~~172.614%, ~~resulting~~and inthe avarious ~~fair~~estimated ~~value~~reset ofexercise ~~$68,000~~prices weighted by probability.

On July 2, 2019, the Company exercised its option to redeem the January 2, 2019 debenture, for a redemption price at $85,000. The principal of $43,000 was derecognized with the additional $42,000 paid upon redemption recognized as a financing cost. The holder did not require the inclusion of the default penalty recognized by the Company on April 15, 2019, as such, the penalty was reversed upon the redemption. As a result of the redemption, the unamortized discount related to the redeemed balance of $64,500 was immediately expensed. As the derivative was originally valued and recognized on July 1, 2019, there was no change in fair value upon redemption and reclassification of the derivative into equity.

January 18, 2019 note

On January 18, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $165,000, with an OID of $15,000, convertible into shares of common stock of the Company, which matured on January 18, 2020. The note bears interest at 10%, which increases to 20% upon an event of default. In an event of default as set forth in the note, the outstanding principal balance increases by 40%. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $66,000. As a result the outstanding balance of the note as of June 30, 2019, was $231,000. On August 6, 2019, the accredited investor’s note was purchased from the holder by three other noteholders for a purchase price of $254,000, which included the default penalty and accrued interest. The note is convertible at 65% multiplied by the lowest closing price during the 15 days prior to the conversion. The discount increases by 5% discount if there is a DTC “chill” in effect., and an additional 5% if the Company is not DWAC eligible. Per the agreement, the Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 120% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability.

F-17

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $~~214~~228,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.0908 at issuance date; a risk-free interest rate of 2.2460% and expected volatility of the Company’s common stock, of ~~272~~148.0669%, and the various estimated reset exercise prices weighted by probability. This ~~plus the fair value of the warrants~~ resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $~~132~~63,000 was immediately expensed as financing costs.

On ~~December~~various 3,dates ~~2018,~~in ~~the~~August ~~Company~~and ~~entered~~September ~~into~~2019, ~~a 12% convertible note with Power Up Lending~~$165,508 ~~for~~of ~~the~~ principal ~~amount~~and of $5310,000~~, convertible~~ ~~into~~of ~~shares~~accrued ofinterest ~~common~~and ~~stock~~fees of the ~~Company,~~note ~~which~~was ~~matures on September 15, 2019. In an event of default as set forth~~converted inby the ~~note,~~new ~~the~~holders ~~interest~~into ~~rate increases to a default amount of 22%~~3,915,217 ~~and~~shares ~~the default sum due becomes 150%~~ of the ~~principal outstanding and accrued interest, and if the~~ Company’s ~~cannot~~common ~~deliver~~stock ~~conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The note is convertible during first 180 days after issuance~~ at a ~~fixed~~ conversion price of $10.~~75. After the initial conversion period~~05, ~~the~~at ~~conversion~~which ~~price~~time ~~shall equal~~ the ~~lesser of: (i) the fixed price; and (ii) 65%~~ ~~multiplied~~derivative byfair ~~the~~value ~~market~~of ~~price (as defined in the note). Per the agreement~~$280,000 ~~the~~relating ~~Company is required at all times~~ to ~~have authorized and reserved six times~~ the ~~number~~conversion offeature ~~shares~~was ~~that~~reclassified isto ~~actually issuable upon full conversion of the note~~equity. ~~During~~The ~~the~~derivative ~~first~~was ~~180~~revalued ~~days~~prior ~~the~~to ~~convertible~~reclassification, ~~redeemable~~with ~~note~~no ischange in ~~effect,~~ the ~~Company~~fair ~~may~~value, ~~redeem~~with the ~~note~~key atvaluations ~~amounts~~assumptions ~~ranging~~consisting, ~~from~~in ~~115%~~part, ~~to 140%~~ of the ~~principal and~~price ~~accrued interest balance, based on~~ of the ~~redemption date~~Company’s ~~passage~~common stock of ~~time~~$0.21; ~~from~~a ~~the~~risk-free ~~date~~interest ofrate ~~issuance~~ of ~~the debenture~~2. ~~The~~33% ~~conversion~~and ~~feature~~expected ~~does~~volatility ~~not meet the definition~~ of ~~a derivative during~~ the ~~first~~Company’s ~~180~~common stock ~~days but will meet the definition~~ of a ~~derivative~~172.14%, ~~when~~and the ~~conversion~~various ~~price~~estimated ~~becomes~~reset ~~variable~~exercise ~~and~~prices ~~will~~weighted atby ~~that time require bifurcation and to be accounted for as a derivative liability~~probability.

On ~~January~~various ~~12,~~dates ~~2018,~~in ~~the~~October ~~Company~~and ~~issued~~November a2019, ~~12%~~the ~~fixed convertible promissory~~ note ~~payable~~was tofully ~~Power~~converted Upinto ~~Lending~~1,212,023 ~~LLC~~shares inof the ~~principal amount~~Company’s ofcommon ~~$153,000,~~stock at ~~which~~conversion ~~note~~prices ~~was~~ranging isfrom ~~due~~$0.03 onto ~~July 12~~$0.04, ~~2018.~~at ~~The~~which ~~note~~time ~~was~~the ~~convertible~~derivative ~~into~~fair ~~shares~~value of ~~Common~~approximately ~~Stock~~$66,000 atrelating ato the conversion ~~price~~ offeature ~~$1.75~~was ~~per~~reclassified ~~share, subject~~ to ~~adjustment~~equity. ~~based~~The ~~upon~~derivative ~~the~~was ~~terms~~revalued ofprior ~~the~~to ~~note including~~reclassification, ~~among~~resulting ~~others,~~in ~~default~~a decrease in ~~payment~~the ~~at maturity~~fair orvalue aof ~~formula~~approximately ~~based~~$29,000, ~~upon~~with athe ~~discount~~key ~~from~~valuations ~~the~~assumptions ~~trading~~consisting, in part, of the price of the Company’s common ~~shares~~stock ~~during~~of $0.09 to $0.11; a ~~period~~risk-free ~~prior~~interest torate ~~notice~~ of ~~conversion~~1.58% ~~The~~to ~~note~~1.66% ~~has~~and ~~been~~expected ~~fully~~volatility ~~converted~~of tothe ~~common~~Company’s common stock onof ~~several~~313.58%, ~~occasions~~and inthe ~~July~~various ~~and~~estimated ~~August~~reset ~~2018~~exercise ~~into~~prices ~~478,533~~weighted ~~shares of~~by ~~common~~probability. ~~stock,~~Upon ~~based~~conversion ~~upon~~the anremaining ~~average~~unamortized debt ~~conversion~~discount ~~price~~was ofalso ~~$0.36~~immediately ~~per share~~expensed.

OnJanuary ~~March 7~~25, ~~2018,~~2019 the Company executed an 12% fixed convertible promissory note payable to Power Up Lending, LLC in the principal amount of $63,000, which was due on September 7, 2018. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. The note is convertible during first 180 days after issuance at a fixed conversion price of $1.75. After the initial conversion period, the conversion price shall equal the lesser of: (i) the fixed price; and (ii) 65% multiplied by the market price (as defined in the note). Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. The conversion feature does not meet the definition of a derivative during the first 180 days but will meet the definition of a derivative when the conversion price becomes variable and would at that time require bifurcation and to be accounted for as a derivative liability. During September 2018, the note was fully converted into 352,782 shares of common stock, at an average price of $0.24.

On January 25, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $38,500 for a purchase price of $35,000, convertible into shares of common stock of the Company, which matures on October 25, 2019. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $19,250. As a result the outstanding balance of the note as of June 30, 2019, was $57,750. The note is convertible at 65% multiplied by the lowest closing price during the 20 days prior to the conversion. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. The variable conversion price has been adjusted to 45% of the market price, based on the conversion price of a new note on May 9, 2019. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability.

In connection with the January 25, 2019 first note, the Company issued 115,500 warrants, exercisable at $0.49, with a five year term. The Company estimated the fair value of the warrants using the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.66 at issuance date; a risk-free interest rate of 2.23% and expected volatility of the Company’s common stock, of 158.6%, resulting in a fair value of $72,000. The warrants were exercised on December 2, 2019, in a cashless exercise, resulting in the issuance of 710,080 shares of the Company’s common stock.

F-18

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. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. As of December 2018, when converted as discussed below, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $26,500. As a result the balance of the note was $79,500. The ~~note is convertible for 180 days from inception into shares of Common Stock at a conversion~~ price of $1.75 per share, subject to adjustment based upon the terms of the note. After the 180 days the conversion price shall equal the lesser of: (i) $1.75; and (ii) 65% multiplied by the market price, as defined in the agreement. Therefore, as of November 1, 2018, the conversion feature met the definition of a derivative and required bifurcation and to be accounted for as a derivative liability. The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $6839,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used ~~as of the date the derivative was recognized~~ consist, in part, of the price of the Company’s common stock of $0.2405 at issuance date; a risk-free interest rate of 2.60% and expected volatility of the Company’s common stock, of ~~141~~177.1454%, and the various estimated reset exercise prices weighted by probability. This plus the fair value of the warrants resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $1572,~~000~~500 was immediately expensed as financing costs. The note was fully converted on several dates in December 2018, at which time the derivative fair value of $61,000 relating to the conversion feature was reclassified to equity. The derivative was revalued prior to reclassification with the key valuations assumptions consisting, in part, of the price of the Company’s common stock of $0.20; a risk-free interest rate of 2.45% and expected volatility of the Company’s common stock, of 178.15%, and the various estimated reset exercise prices weighted by probability.

~~On June 13, 2018, the~~The ~~Company~~January ~~executed a 10% convertible promissory note payable to Crown Bridge Partners in the principal amount of $225~~25,~~000,~~ ~~with an~~2019 ~~OID of $22,500. The~~ first ~~tranche of the~~ note, ~~in the principal amount of $75,000, with an OID of $7,500 for net cash receipt of $67,500,~~ was ~~paid~~fully atconverted ~~closing.~~on ~~Crown Bridge Partners may pay, in its sole discretion, such additional amounts of the consideration and at such dates as the holder may choose in its sole discretion. On~~ August 211, ~~2018~~2019, ainto ~~second tranche~~1, ~~for a 10% convertible promissory note in the amount of $25~~087,~~000~~685 ~~was~~shares ~~executed. Each tranche shall be due twelve months after payment. In an event~~ of ~~default as set forth in~~ the note, the interest rate increases to a default amount of 15%, and the default sum due becomes 150% of the principal outstanding and accrued interest. As of December 31, 2018, the note was in default due to the Company’s ~~being~~common ~~delinquent in~~stock ~~their filings under the Exchange Act with the SEC, and therefore the note principal balance on the first tranche was increased~~at ~~by $37,500. As~~ a result, the outstanding balance of the first tranche as of December 31, 2018, was $112,500. The note principal balance on the second tranche was increased by $12,500. As a result, the outstanding balance of the second tranche as of December 31, 2018, was $37,500. The note is convertible at a variable conversion ~~rate~~price of ~~65% of the lowest closing price during 20 days prior to the conversion date. If at any time while the note is outstanding, the conversion price is equal to or lower than~~ $0.5006, then an additional fifteen percent (15%) discount shall be factored into the conversion price. The discount will also be increased by 10% if the Company’s common shares are not DTC deliverable. Additionally, if the Company fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late or delinquent in its filings, even if the Company subsequently cures such delinquency), the discount shall be increased an additional 15%. Per the agreement, the Company is required at ~~all~~which ~~times~~time ~~to have authorized and reserved ten times~~ the ~~number of shares that is actually issuable upon full conversion of the note. The conversion feature met the definition of a~~ derivative ~~and required bifurcation and to be accounted for as a derivative liability. The Company estimated the~~ fair value of ~~the~~approximately ~~conversion feature derivative embedded in the first tranche at issuance at~~ $~~109~~66,000, ~~based~~relating onto ~~weighted probabilities of assumptions used in~~ the ~~Black~~conversion ~~Scholes pricing model.~~feature ~~The~~was ~~key~~reclassified ~~valuation~~to ~~assumptions~~equity. ~~used~~The ~~as of the date the~~ derivative was ~~recognized~~revalued ~~consist,~~prior into ~~part~~reclassification, ofresulting ~~the~~in ~~price of the Company’s common stock of $0.20;~~ a ~~risk-free~~decrease ~~interest rate of 2.69% and expected volatility of the Company’s common stock, of 158.40%, and the various estimated reset exercise prices weighted by probability. This resulted~~ in the ~~calculated~~ fair value of ~~the debt~~ ~~discount~~approximately ~~being greater than the face amount of the debt, and the excess amount of~~ $349,000 ~~was immediately expensed as financing costs. The Company estimated the fair value of the conversion feature derivative embedded in the second tranche at issuance at $36~~,~~000,~~ ~~based~~with ~~on weighted probabilities of assumptions used in~~ the ~~Black Scholes pricing model. The~~ key ~~valuation~~valuations assumptions ~~used~~ ~~as of the date the derivative was recognized consist~~consisting, in part, of the price of the Company’s common stock of $0.4617; a risk-free interest rate of 2.4544% and expected volatility of the Company’s common stock, of ~~167~~172.2914%, and the various ~~estimated~~ estimated reset exercise prices weighted by probability. ~~This~~Upon ~~resulted~~conversion in the ~~calculated~~remaining ~~fair~~unamortized ~~value of the~~ debt discount ~~being greater than the face amount of the debt, and the excess amount of $11,000~~ was ~~immediately~~also immediately expensed ~~as financing costs~~.

January 25, 2019 second note

On January 25, 2019, the Company entered into a convertible note with another accredited investor for the principal amount of $38,500 for a purchase price of $35,000, convertible into shares of common stock of the Company, which matures on October 25, 2019. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $19,250. As a result the outstanding balance of the note as of June 30, 2019, was $57,750. The note is convertible at 65% multiplied by the lowest closing price during the 20 days prior to the conversion. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. The variable conversion price has been adjusted to 45% of the market price, based on the conversion price of a new note on May 9, 2019. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability on the date the note becomes convertible.

In connection with the January 25, 2019 second note, the Company issued 115,500 warrants, exercisable at $0.49, with a five year term. The Company estimated the fair value of the warrants using the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.66 at issuance date; a risk-free interest rate of 2.23% and expected volatility of the Company’s common stock, of 158.6%, resulting in a fair value of $72,000.

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $39,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.05 at issuance date; a risk-free interest rate of 2.60% and expected volatility of the Company’s common stock, of 177.54%, and the various estimated reset exercise prices weighted by probability. This plus the fair value of the warrants resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $72,500 was immediately expensed as financing costs.

On various dates in August and September 2019, the January 25, 2019 second note was fully converted into 2,015,812 shares of the Company’s common stock at conversion prices ranging from of $0.04 to $0.06, at which time the derivative fair value of $70,000 relating to the conversion feature was reclassified to equity. The derivative was revalued prior to reclassification, resulting in a decrease in the fair value of $5,000, with the key valuations assumptions consisting, in part, of the price of the Company’s common stock on the dates of conversion; a risk-free interest rate of 2.29% and expected volatility of the Company’s common stock of 210.34%, and the various estimated reset exercise prices weighted by probability. Upon conversion the remaining unamortized debt discount was also immediately expensed.

F-19

OnJanuary ~~July 27~~25, ~~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, and is due on March 27,~~ 2019. ~~The~~third note is convertible into shares of Common Stock at a conversion price of $1.30 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. The conversion feature does not meet the definition of a derivative during the first 180 days but will meet the definition of a derivative when the conversion price becomes variable and will at that time require bifurcation and to be accounted for as a derivative liability.

On ~~July~~January 1925, ~~2018~~2019, the Company entered into ~~two~~a ~~10%~~ convertible ~~redeemable~~note ~~notes~~with toanother GSaccredited ~~Capital~~investor infor the ~~aggregate~~ principal amount of $38,500 for a purchase price of $~~250~~35,000, convertible into shares of common stock of the Company, ~~with~~which ~~maturity~~matures ~~dates~~on ofOctober ~~July 19~~25, 2019. ~~Each~~ The note ~~was~~bears ininterest ~~the~~at ~~face amount~~8%, ofwhich ~~$125,000,~~increases ~~with~~to an24% ~~original~~upon ~~issue~~an ~~discount~~event of ~~$5,000,~~default. ~~resulting~~In inan aevent ~~purchase~~of ~~price~~default ~~for~~as ~~each~~set ~~note~~forth ofin ~~$120~~the note,~~000.~~ ~~The first~~the default sum becomes 150% of the ~~two~~principal ~~notes~~outstanding ~~was~~and ~~paid~~accrued ~~for~~interest, byand if the ~~buyer~~Company incannot ~~cash~~deliver ~~upon~~conversion ~~closing,~~shares or ~~with~~fails ~~the~~to ~~second~~reserve ~~note~~sufficient ~~initially~~authorized ~~paid~~shares, ~~for~~then by the ~~issuance~~default ofsum ~~an offsetting~~increases ~~$120~~to 200%. On April 15,~~000~~ ~~secured~~2019, ~~promissory~~the note ~~issued~~was in default due to the Company bybeing delinquent in their filings under the ~~buyer~~Exchange ~~(“Buyer~~Act ~~Note”).~~with ~~The~~the ~~notes~~SEC, ~~are~~and ~~convertible beginning~~therefore ~~six~~the ~~months~~note ~~after~~principal ~~issuance~~balance was increased by $19,250. atAs a result the ~~lower~~outstanding balance of ~~(i)~~the note as of June 30, 2019, was $057,750.60 orThe ~~(ii)~~note is convertible at 65% ofmultiplied by the lowest ofclosing ~~trading~~ price ~~for~~during ~~last~~the 20 days, ~~with the~~prior ~~discount~~to ~~increased~~the toconversion. ~~45%~~The inconversion ~~the~~price ~~event~~shall ofbe aadjusted upon ~~DTC~~subsequent ~~chill.~~sales ~~The~~of ~~second~~securities ~~note~~at isa ~~not~~price ~~convertible~~lower ~~until~~than the ~~buyer~~original ~~has~~conversion ~~settled~~price. ~~the Buyer~~The ~~Note~~variable inconversion ~~cash~~price ~~payment,~~has ~~which~~been adjusted ~~must~~to be45% ~~funded~~of bythe ~~March~~market 20price, ~~2019.~~based ~~The~~on ~~Buyer~~the ~~Note~~conversion ~~was~~price ~~funded~~of a new note on ~~January~~May 179, 2019,. ~~for~~Per ~~gross~~the ~~proceeds~~agreement, the Company ofis ~~$114,000.~~required ~~The~~at ~~Buyer~~all ~~Note~~times isto ~~included~~have inauthorized ~~Notes~~and ~~Receivable~~reserved insix times the ~~accompanying~~number ~~financial~~of ~~statements~~shares asthat ofis ~~December~~actually ~~31,~~issuable ~~2018.~~upon full conversion of the note. During the first ~~six~~180 ~~months,~~days the convertible redeemable ~~notes~~note ~~are~~is in effect, the Company may redeem the note at amounts ~~ranging~~ ranging from ~~113~~115% to ~~137~~145% of the principal and accrued interest balance, based on the redemption date’s passage of time ~~ranging~~ ~~from~~ranging ~~60 days to 180 days~~ from the date of issuance of ~~each~~the debenture. The conversion feature ~~does~~meets ~~not meet~~ the definition of a ~~derivative~~ ~~during the first six months, but will meet the definition of a~~ derivative ~~when~~and ~~the conversion price becomes variable~~therefore ~~and~~requires ~~would at that time require~~ bifurcation and towill be accounted for as a derivative liability.

OnIn ~~July~~connection ~~30,~~with ~~2018,~~ the ~~Company~~January ~~executed an 12% fixed convertible promissory note payable to Power Up Lending~~25, ~~LLC in the principal amount of $53,000, and is due on May 15,~~ 2019. Inthird ~~an event of default as set forth in the~~ note, the ~~interest~~Company ~~rate~~issued ~~increases to a default amount of 22%~~115,500 ~~and the default sum due becomes 150% of the principal outstanding and accrued interest~~warrants, ~~and~~exercisable ifat ~~the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares~~$0.49, ~~then~~with ~~the~~a ~~default~~five ~~sum~~year ~~increases to 200%~~term. As ofThe ~~December~~Company ~~31,~~estimated ~~2018,~~ the ~~note~~fair ~~was~~value inof ~~default due to~~ the ~~Company~~warrants ~~being~~using ~~delinquent in their filings under~~ the ~~Exchange~~Black ~~Act~~Scholes ~~with the~~pricing ~~SEC, and therefore the note principal balance was increased by $26,500~~model. AsThe akey ~~result,~~valuation ~~the~~assumptions ~~outstanding balance of the note as~~used ~~of December 31~~consist, ~~2018,~~in ~~was $79~~part,~~500.~~ ~~The note is convertible for 180 days from inception into shares~~ of ~~Common~~the ~~Stock at a conversion~~ price of ~~$1.75 per share, subject to adjustment based upon~~ the ~~terms~~Company’s ofcommon ~~the~~stock ~~note. After the 180 days the conversion price shall equal the lesser~~ of: ~~(i)~~ $10.~~75;~~66 ~~and (ii) 65% multiplied by the market price, as defined in the agreement. Per the agreement, the Company is required~~ at ~~all~~issuance ~~times~~date; toa ~~have~~risk-free ~~authorized~~interest ~~and~~rate ~~reserved six times the number~~ of ~~shares that is actually issuable upon full conversion of the note~~2. ~~During the first 180 days the convertible redeemable note is in effect, the Company may redeem the~~23% ~~note~~and atexpected ~~amounts~~volatility ~~ranging from 115% to 140%~~ of the ~~principal and accrued interest balance, based on the redemption date~~Company’s ~~passage~~ ofcommon ~~time~~stock, ~~from the date~~ of ~~issuance of the debenture~~158.6%, ~~The~~resulting ~~conversion~~in ~~feature does not meet the definition of~~ a ~~derivative during~~fair ~~the~~value ~~first 180 days, but will meet the definition~~ of ~~a derivative when the conversion price becomes variable and would at that time require bifurcation and to be accounted for as a derivative liability~~$72,000.

OnThe ~~September~~Company ~~11,~~estimated ~~2018,~~ the ~~Company~~fair ~~executed~~value anof ~~12%~~the ~~fixed~~conversion ~~convertible~~feature ~~promissory~~derivative ~~note~~embedded ~~payable to Power Up Lending, LLC~~ in the ~~principal amount~~debenture ofat issuance at $5339,000, ~~due~~ based on ~~June~~weighted ~~30,~~probabilities ~~2019. In an event~~ of ~~default~~assumptions asused ~~set forth~~ in the ~~note,~~Black ~~the~~Scholes ~~interest~~pricing ~~rate~~model. ~~increases~~The tokey avaluation ~~default amount~~assumptions ofused ~~22%~~consist, ~~and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot~~ ~~deliver~~in ~~conversion shares or fails to reserve sufficient authorized shares~~part, ~~then~~of the ~~default~~price ~~sum increases to 200%. As~~ of ~~December 31, 2018,~~ the ~~note was in default due to the~~ Company’s ~~being~~common ~~delinquent~~stock inof ~~their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by~~ $~~26,500~~0.05 Asat aissuance ~~result,~~date; ~~the~~a ~~outstanding~~risk-free ~~balance~~interest ofrate ~~the note as~~ of ~~December 31, 2018, was $79,500~~2.60% ~~The~~and ~~note is convertible for 180 days from inception into shares of Common Stock at a conversion price~~expected ofvolatility ~~$1.75 per share, subject to adjustment based upon the terms~~ of the ~~note.~~Company’s ~~After~~common ~~the~~stock, ~~180 days the conversion price shall equal the lesser~~ of: ~~(i) $1~~177.~~75; and (ii) 65~~54% ~~multiplied by the market price~~, ~~as defined in the agreement. Per the agreement, the Company is required at all times to have authorized~~ and ~~reserved six times~~ the ~~number~~various ofestimated ~~shares~~reset ~~that~~exercise isprices ~~actually~~weighted ~~issuable~~by ~~upon full conversion~~probability. ofThis ~~the~~plus ~~note. During~~ the ~~first~~fair ~~180~~value ~~days~~of the ~~convertible~~warrants ~~redeemable~~resulted ~~note is~~ in ~~effect,~~ the ~~Company~~calculated ~~may~~fair ~~redeem~~value ~~the note at amounts ranging from 115% to 140%~~ of the ~~principal~~debt ~~and~~discount ~~accrued~~being ~~interest~~greater ~~balance,~~than ~~based on~~ the ~~redemption date’s passage of time~~face ~~from~~amount ~~the date~~ of ~~issuance of~~ the ~~debenture.~~debt, ~~The~~and ~~conversion feature does not meet~~ the ~~definition~~excess amount of ~~a derivative during the first 180 days~~$72,500 ~~but~~was ~~will~~immediately ~~meet~~expensed ~~the definition of a derivative when the conversion price becomes variable and would at that time require bifurcation and to be accounted for~~ as afinancing ~~derivative liability~~costs.

The January 25, 2019 third note was fully converted on August 1, 2019, into 1,107,685 shares of the Company’s common stock at a conversion price of $0.06, at which time the derivative fair value of approximately $66,000 relating to the conversion feature was reclassified to equity. The derivative was revalued prior to reclassification, resulting in a decrease in the fair value of approximately $9,000, with the key valuations assumptions consisting, in part, of the price of the Company’s common stock of $0.17; a risk-free interest rate of 2.44% and expected volatility of the Company’s common stock of 172.14%, and the various estimated reset exercise prices weighted by probability. Upon conversion the remaining unamortized debt discount was also immediately expensed.

F-20

OnJanuary ~~November 1~~28, ~~2017,~~2019 ~~the Company executed an 8% fixed 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 $1.30 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) 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. On separate occasions in June and August 2018, the note has been fully converted into 525,815 shares of common stock based upon an average conversion price of $0.28.

On ~~November~~January 328, ~~2017~~2019, the Company ~~entered~~executed ~~into~~an 12% convertible promissory note payable to an ~~investment~~accredited ~~agreement~~investor (in the ~~“Investment~~principal ~~Agreement”)~~amount of ~~with~~$48,000, ~~Tangiers~~which ~~Global LLC~~is ~~(“Tangiers”)~~due ~~pursuant~~on toNovember ~~which~~30, 2019. In an event of default as set forth in the ~~Company~~note, ~~agreed~~the tointerest ~~file~~rate increases to a ~~registration~~default ~~statement~~amount ~~with~~of 22%, and the ~~SEC~~default ~~registering~~sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares ~~underlying~~or fails to reserve sufficient authorized shares, then the ~~Investment~~default ~~Agreement~~sum increases to 200%. On April 15, ~~which~~2019, ~~permitted~~the note was in default due to the Company tobeing ~~“put”~~delinquent upin totheir ~~ten~~filings ~~million~~under ~~dollars~~the (Exchange Act with the SEC, and therefore the note principal balance was increased by $1024,000. As a result the outstanding balance of the note as of June 30, 2019, was $72,000~~) in~~. ~~shares~~The ofnote ~~our~~is ~~Common~~convertible ~~Stock~~during tofirst ~~Tangiers~~180 ~~over~~days after issuance at a fixed conversion price of $1.75. After the initial conversion period, the conversion price shall equal the lesser of: up(i) tothe ~~thirty-six~~fixed price; and (36ii) ~~months~~61% ormultiplied ~~until~~by the ~~$10~~market price (as defined in the note). Per the agreement,~~000~~ the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect,~~000~~ the Company may redeem the note at amounts ranging from 115% to 140% of ~~such~~the ~~shares~~principal ~~have~~and accrued ~~been~~interest ~~put~~balance, (based on the ~~“Registration~~redemption ~~Statement”)~~date’s passage of time from the date of issuance of the debenture. The conversion feature does not meet the definition of a derivative during the first 180 days but will meet the definition of a derivative when the conversion price becomes variable and would at that time require bifurcation and to be accounted for as a derivative liability.

InThe ~~connection~~derivative ~~with~~liability ~~the~~was ~~Company’s~~recognized ~~Investment~~on ~~Agreement~~July ~~with~~27, ~~Tangiers~~2019, ~~the Company issued Tangiers a commitment fee note~~ in the initial amount of $7590,000, ~~bearing~~based ~~interest rate of 10% which was due~~ on ~~June~~the ~~17,~~key ~~2018.~~valuations ~~The commitment fee note had a conversion price~~assumptions ~~of $1.25~~consisting, ~~but~~ in ~~case~~part, of ~~maturity default,~~ the ~~conversion~~ price ~~was~~of ~~subject~~the toCompany’s ~~adjustment~~common tostock aof ~~price~~$0.23; ~~equal~~a torisk-free ~~the~~interest ~~lower~~rate of: ~~(i) the conversion price or (ii) 65~~2.12% ofand ~~the~~expected volatility ~~average~~ of the ~~two~~Company’s ~~(2)~~common ~~lowest~~stock, ~~trading prices~~ of ~~the~~172.14%, ~~Common~~and ~~Stock during~~ the ~~twenty~~various ~~(20) trading~~estimated ~~days~~reset ~~prior~~exercise toprices ~~Tangiers~~weighted ~~notice~~by ~~to convert all or part of this $75,000 note~~probability.

On ~~June~~several 25dates in August 2019, ~~2018~~$45,000 ~~Tangiers~~of ~~elected~~the toJanuary ~~convert~~28, ~~$75~~2019 note was converted into 702,~~000~~028 inshares of the ~~principal~~Company’s ~~amount~~common stock, at which time the derivative fair value of approximately $49,000 relating to the ~~commitment~~conversion ~~fee~~feature ~~note~~was reclassified to equity. The derivative was revalued prior to reclassification, ~~plus~~resulting in a ~~default~~decrease ~~fee~~in the fair value of $712,~~500~~000, with the ~~into~~key ~~198,317~~valuations ~~shares~~assumptions ofconsisting, ~~Common~~in ~~Stock~~part, ~~based~~of ~~upon~~the aprice ~~default~~of ~~conversion~~the ~~price~~Company’s common stock of $0.4212; a risk-free interest rate of 2.45% and expected volatility of the Company’s common stock of 203.81%, and the various estimated reset exercise prices weighted by probability. The remaining balance and accrued interest was paid off by the Company.

OnFebruary ~~November 9~~28, ~~2017,~~2019 ~~the Company executed a 10% fixed convertible promissory~~ note payable to Tangiers Global LLC in the principal amount of $330,000. The note, which is due seven and a half months from the date of effective date of payment, was funded by the investor in the initial sum of $150,000, net of a $15,000 OID on November 15, 2017 and $150,000, net of a $15,000 OID on December 19, 2017. 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) 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. On four occasions during July through December 2018 the holder converted $320,000 of the note into 1,544,834 shares of the Company’s common shares at conversion prices ranging from $0.50 to $0.08. There is $10,000 of principal outstanding as of December 31, 2018.

~~The~~On ~~Tangiers~~February ~~Global~~28, 2019, the Company executed an 10% fixed convertible promissory ~~notes~~note payable ~~and~~to an accredited investor in the ~~commitment~~principal amount ~~fee~~of $115,000 with a $10,000 OID, which is due on November 28, 2019. In the case of a sale event, as defined in the agreement, the principal amount of the note ~~are~~increases ~~guaranteed~~to an150%. ~~interest~~The ~~payment~~note is convertible into shares of Common Stock at a conversion price of the lower of (i) $1.00 per share or (ii) 65% of the lowest trading price for the 20 prior trading days including the day upon which a notice of conversion is received by the Company or its transfer agent. The discount increases 10% if there is a DTC “chill” in effect. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the ~~beginning~~original conversion price. The variable conversion price has been adjusted to 45% of the market price, based on the conversion price of a new note on May 9, 2019. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 125% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. AsPer ~~such~~the agreement, the Company ~~had~~is required at all times to ~~immediately~~have ~~expense~~authorized and reserved five times the ~~balances~~number ~~during~~of ~~2017~~shares that is actually issuable upon full conversion of the note. The conversion feature met the definition of a derivative and required bifurcation and to be accounted for as a derivative liability.

OnThe ~~May~~Company ~~23,~~estimated ~~2017,~~the fair value of the ~~Company~~conversion ~~agreed~~feature toderivative ~~convert~~embedded in the debenture at issuance at $~~100~~119,000, inbased on ~~debt~~weighted ~~that~~probabilities ~~had~~of ~~been~~assumptions ~~entered~~used ~~into~~in onthe ~~May~~Black 7,Scholes ~~2017 to~~pricing ~~four~~model. ~~related~~The key valuation assumptions used consist, ~~parties~~in part, ~~into~~of ~~200,000~~the ~~shares~~price of the Company’s common stock ~~and~~of ~~200,000 warrants~~$0.07 ~~Under~~at ~~the~~issuance ~~original~~date; ~~terms~~a ~~the~~risk-free ~~debt~~interest ~~was~~rate ~~non-convertible~~of 2.54% and expected asvolatility aof ~~result,~~ the Company’s ~~incurred~~common astock, ~~loss~~ of ~~$396~~181.78%,~~007~~ and the various estimated reset exercise prices weighted by probability. This resulted in ~~connection~~the ~~with~~calculated fair value of the ~~shares~~debt ~~issued,~~discount ~~and~~being agreater ~~loss~~than the face amount of ~~$138~~the debt,~~007~~ inand ~~connection with~~ the ~~warrants~~excess amount ~~issued~~of $4,000 ~~which~~ was ~~recorded~~immediately expensed as ~~additional~~financing ~~paid-in capital~~costs.

InOn ~~accordance~~September ~~with~~6, ~~ASC 470~~2019, the ~~Company~~note ~~has~~was ~~analyzed~~fully ~~the~~converted ~~beneficial~~into ~~nature~~2,219,872 shares of the ~~initial~~Company’s ~~conversion~~common ~~terms~~stock ofat ~~the~~a ~~fixed~~conversion ~~convertible~~price ~~notes~~of ~~issued~~$0.05, ~~and~~at inwhich time the ~~year~~derivative ~~ended~~fair ~~December~~value ~~31,~~of ~~2017~~approximately ~~determined~~$139,000 ~~that~~relating ato ~~beneficial~~the conversion feature ~~(“BCF”)~~was ~~exists~~reclassified ~~because~~to ~~the~~equity. ~~effective~~The ~~conversion~~derivative ~~price~~ was ~~lower~~revalued ~~than~~prior ~~the~~to ~~quoted~~reclassification, ~~market~~resulting ~~price~~in ata ~~the~~decrease ~~time~~in of the ~~issuance.~~fair Asvalue of ~~December 31~~$109, ~~2017~~000, with the ~~Company~~key ~~recognized~~valuations aassumptions ~~$51~~consisting,~~638~~ ~~BCF~~in part, ~~and amortization expenses~~ of ~~$11,983 on~~ the ~~discount.~~price ~~The~~of ~~debt discount related to~~ the ~~BCF~~Company’s ~~was~~common ~~fully~~stock ~~amortized during the year ended December 31, 2018, upon recognition~~ of ~~an additional amortization expense of~~ $~~39,655~~0.13; ~~There~~a ~~was~~risk-free nointerest rate ~~BCF~~of ~~necessary~~2.33% toand ~~recognize~~expected involatility of the ~~year~~Company’s ~~ended~~common ~~December~~stock ~~31,~~of ~~2018~~210.34%, asand the ~~majority~~various ofestimated ~~stock~~reset exercise prices ~~were~~weighted ~~in excess~~by ofprobability. ~~the~~Upon ~~quoted~~conversion ~~market price at~~ the ~~time~~remaining ofunamortized ~~issuance,~~debt ordiscount ~~the conversion feature, as discussed above,~~ was ~~required~~also toimmediately ~~be bifurcated and accounted for as a derivative liability~~expensed.

As a result of default penalties as discussed above, as well as differences in conversion prices applied by the note holders as compared to the original terms of the convertible debentures, for the year ending December 31, 2018, the Company recognized a loss on debt conversion of $176,745.

Several of the notes were in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and in accordance with the default terms, the principal on these notes was increased 50%, with the increase of $490,000 being recognized as a penalty expense in the accompanying Statement of Operations.

F-21

~~The~~March ~~derivative liability arising from all of the above discussed debentures was revalued at December 31~~4, ~~2018,~~2019 resulting in an increase of the fair value of the remaining derivative liability of $24,000 for the year ended December 31, 2018. During the year ended December 31, 2018, there was a reclass of $61,000 of the derivative fair value to equity upon the conversions of approximately $53,000 of principal, and a decrease in the fair value of $7,000 immediately prior to conversion. The key valuation assumptions used as of December 31, 2018 consist, in part, of the price of the Company’s common stock of $0.20; a risk-free interest rate of 2.63% and expected volatility of the Company’s common stock ranging from 148.69% to 158.40%, and the various estimated reset exercise prices weighted by probability. There was not a derivative liability as of December 31, 2017.note

AsOn March 4, 2019, the ~~conversion~~Company ~~features~~executed onan ~~specified~~8% ~~notes~~fixed ~~have~~convertible ~~variable~~promissory ~~conversion~~note ~~prices~~payable ~~with~~to noan ~~stated~~accredited ~~floor,~~investor in the ~~warrants~~principal amount ~~issued~~of $55,000 with ~~both the~~a ~~units~~$5,000 ~~purchased~~OID, ~~(Note~~for 8)a aspurchase ~~well~~price asof ~~certain~~$50,000, ~~convertible~~which ~~notes,~~is ~~were~~due ~~required~~on toMarch be5, ~~classified~~2020. ~~out~~In the case of ~~equity~~an asevent ~~liabilities~~of default, as defined in ~~October~~the ~~2018~~agreement, ~~when~~the principal amount of the ~~first~~note ~~conversion~~increases ~~feature~~to ~~triggered~~150%. ~~liability~~On ~~classification~~April of15, 2019, the ~~warrants~~note ~~outstanding.~~was ~~The~~in ~~original~~default ~~fair~~due ~~value~~to ~~recognized~~the ~~for~~Company ~~the~~being ~~warrant~~delinquent ~~liability,~~in ~~which~~their ~~includes~~filings under the ~~warrants~~Exchange ~~issued~~Act with ~~convertible~~the ~~debentures~~SEC, ~~issued~~and intherefore ~~October~~the note principal balance ~~2018~~was increased by $27,500. As a result the outstanding balance of the note as ~~disclosed~~of ~~above~~June 30, ~~totaled~~2019, was $~~514~~82,~~000~~500. The ~~key~~note ~~valuation~~is ~~assumptions~~convertible into ~~used~~shares asof atCommon ~~inception~~Stock ~~consist,~~at ina ~~part,~~conversion price of ~~the~~65% ~~price~~ of the ~~Company’s~~market ~~common~~price, ~~stock~~as ~~ranging~~defined ~~from~~in $0the note.27 toThe ~~$0.20;~~discount aincreases ~~risk-free~~15% if ~~interest~~there ~~rate~~is ~~ranging~~an ~~from~~event ~~3.04~~of default, and 10% toif 2the shares are not deliverable via DWAC.~~28%~~ ~~and~~During ~~expected~~the first 180 days the convertible ~~volatility~~redeemable ofnote is in effect, the Company’s ~~common~~may ~~stock~~redeem the note at amounts ranging from ~~171.6~~115% to ~~158.60~~145%. ~~The~~of ~~warrant~~the ~~liability~~principal ~~was~~and ~~revalued at December~~accrued ~~31,~~interest ~~2018~~balance, ~~resulting~~based inon athe ~~decrease~~redemption ofdate’s ~~the~~passage ~~fair~~of ~~value~~time offrom the ~~warrant~~date ~~liability~~ of ~~$140,000~~issuance ~~for~~of the ~~year~~debenture. ~~ended~~Per ~~December~~the 31agreement, ~~2018.~~ ~~The~~the ~~key~~Company ~~valuation~~is ~~assumptions~~required ~~used~~at asall oftimes ~~December~~to ~~31,~~have ~~2018~~authorized ~~consist,~~and inreserved ~~part,~~eight oftimes the ~~price~~number of ~~the~~shares ~~Company’s~~that ~~common~~is ~~stock~~actually issuable upon full conversion of $0the note.~~20;~~ aThe ~~risk-free~~conversion ~~interest~~feature ~~rate~~met ~~ranging~~the ~~from~~definition ~~2.45%~~of toa ~~2.63%~~derivative and ~~expected~~required ~~volatility~~bifurcation ofand ~~the~~to ~~Company’s~~be accounted ~~common~~for ~~stock~~as ~~ranging from~~a ~~148.7%~~derivative ~~to 178~~liability.~~2%.~~

AsThe Company estimated the fair value of ~~December~~the ~~31,~~conversion ~~2018~~feature ~~and~~derivative ~~2017,~~embedded in the ~~Company~~debenture ~~has~~at ~~reserved~~issuance ~~approximately~~at ~~126~~$61,~~142,~~000, ~~and~~based on 3weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist,~~342~~ in part,~~000~~ ~~shares~~of ~~underlying~~the price of the ~~convertible~~Company’s common stock of $0.09 at issuance date; a risk-free interest rate of 2.54% and expected ~~notes~~volatility of the Company’s common stock, of 181.78%, and ~~warrants~~the ~~per~~various estimated reset exercise prices weighted by probability. This resulted in the ~~terms~~calculated fair value of the ~~agreements~~debt discount being greater than the face amount of the debt, and the excess amount of $6,000 was immediately expensed as ~~discussed~~financing ~~above~~costs.

~~For~~On September 6, 2019, the ~~years~~note ~~ended~~was ~~December~~fully 31converted into 1,786,022 ~~2018~~shares ~~and~~of ~~2017~~the Company’s common stock at a conversion price of $0.05, at which time the ~~Company~~derivative ~~has~~fair ~~recognized~~value of approximately $96110,000 ~~and~~relating to the conversion feature was reclassified to equity. The derivative was revalued prior to reclassification, resulting in a decrease in the fair value of $4514,000, with the key valuations assumptions consisting, in part, of the price of the Company’s common stock of $0.13; a risk-free interest rate ~~expense~~of 2.27% and expected volatility of the Company’s common stock of 193.89%, and the various estimated reset exercise ~~related~~prices toweighted by probability. Upon conversion the ~~notes~~remaining asunamortized ~~described~~debt ~~above~~discount was also immediately expensed.

~~Note~~March 75, -2019 ~~Related Party Transactions~~note

On ~~August~~March 315, ~~2018~~2019, the Company ~~acquired~~executed ~~100~~an 12% ofconvertible ~~the~~promissory ~~outstanding~~note ~~shares~~payable ofto ~~its~~an ~~licensor,~~accredited ~~PT.~~investor in the principal amount ~~Kinerja~~of $53,000, which ~~had~~is ~~previously~~due ~~issued~~on ~~the~~January ~~Company~~15, 2020. In an event of default as ~~licensee,~~set ~~the~~forth ~~exclusive~~in ~~license~~the ofnote, the ~~Company’s~~interest IPrate ~~technology.~~increases to ~~(Note~~a 1)default Atamount ~~the~~of ~~date~~22%, ofand the ~~closing~~default sum due becomes 150% of the ~~acquisition,~~principal ~~PT.~~outstanding ~~Kinerja~~and ~~had~~accrued 18interest, ~~million~~and if the Company cannot deliver conversion shares ~~issued~~or ~~and~~fails ~~outstanding~~to reserve sufficient authorized shares, ofthen ~~which~~the ~~75%~~default orsum 13increases to 200%.5 ~~million~~On April 15, 2019, the ~~shares~~note ~~were~~was ~~owned~~in bydefault due to the ~~CEO~~Company ofbeing delinquent in their filings under the ~~Company.~~Exchange ~~The~~Act ~~consideration~~with the SEC, ~~for~~and therefore the ~~acquisition~~note principal balance was increased by $126,~~200,000,~~500. toAs bea ~~paid~~result bythe aoutstanding ~~promissory~~balance of the note ~~which~~as of June 30, 2019, was ~~issued~~$79,500. byThe ~~the~~note ~~Company~~is toconvertible PTduring ~~Kinerja~~first ~~shareholders, all~~180 ~~related~~days ~~parties~~after issuance at a fixed conversion price of $1.75. ~~The~~After the ~~promissory~~initial ~~note~~conversion (period, the ~~“Note”)~~conversion ~~bears~~price ~~interest~~shall atequal the ~~rate~~lesser of: 6%(i) ~~per~~the ~~annum~~fixed price; and (ii) 61% multiplied by the market price (as defined in the note). Per the agreement, the Company is ~~due~~required ~~twenty-four~~at all times to have authorized and reserved ~~months~~six ~~from~~times the ~~date~~number of shares that is actually issuable upon full conversion of the ~~agreement~~note. AsDuring ~~part~~the offirst 180 days the ~~acquisition~~convertible redeemable note is in effect, the Company ~~terminated~~may ~~its~~redeem ~~Service~~the ~~agreement~~note ~~dated~~at ~~February~~amounts ranging from 115% to 140% of the principal and accrued ~~20,~~interest ~~2016~~balance, ~~with~~based PTon ~~Kinerja.~~the Inredemption ~~accordance~~date’s ~~with~~passage ~~ASC~~of ~~805-50-30-5,~~time ~~Transactions~~from ~~Between~~the ~~Entities Under~~date ~~Common~~of ~~Control,~~issuance asof the ~~Company’s~~debenture. ~~CEO~~The ~~and~~conversion feature ~~sole~~does ~~director~~not ~~was~~meet inthe ~~control~~definition of ~~both~~a derivative during the ~~Company~~first ~~and~~180 ~~PT.~~days ~~Kinerja,~~ but will meet the ~~acquisition~~definition ~~was~~of ~~accounted~~a ~~for~~derivative ~~under~~when the ~~common~~conversion ~~control~~price ~~accounting,~~becomes variable and ~~therefore~~would ~~the~~at ~~assets~~that ~~acquired~~time require bifurcation and ~~liabilities~~to ~~assumed~~be ~~were recognized~~accounted atfor ~~their~~as ~~historical~~a ~~cost~~derivative ~~basis~~liability.

OnThe ~~May~~derivative 9liability was recognized on September 1, ~~2017~~2019, in the ~~Company~~initial ~~entered~~amount ~~into~~of a $5070,000 ~~note~~based ~~payable~~on ~~with~~the ~~their~~key ~~CEO~~valuations ~~and~~assumptions consisting, ~~controlling~~in ~~stockholder.~~part, ~~The~~of ~~balance~~the isprice ~~due~~of ~~on demand~~the ~~and~~Company’s ~~accrues~~common ~~interest~~stock atof ~~8% per annum~~$0.17; ~~For~~a ~~the~~risk-free ~~years~~interest ~~ending~~rate ~~December~~of ~~31,~~1.98% ~~2018~~ and ~~2017,~~expected volatility ~~accrued~~of ~~interest~~the inCompany’s ~~the~~common ~~amount~~stock, of ~~approximately~~ $4210.34%,~~000~~ and ~~$2,500,~~the ~~respectively,~~various ~~was~~estimated ~~recognized~~reset exercise prices weighted by probability.

Payable to related party consists of the note payable with the Company’s CEO and expenses paid on behalf of the CEO. In addition, during the year ended December 31, 2018, upon the closing of the acquisition (Note 3) the Company assumed the liability of $119,340 owed by the Company’s CEO on the building owned/used by PT. Kinerja. Additionally, the Company assumed an officer loan in the amount of $672,810, which is nonF-~~interest bearing and due on demand.~~22

~~All~~On ~~revenue~~September ~~received~~7, ~~during~~2019, ~~2017~~the ~~was~~Company ~~received~~exercised ~~through~~its PToption ~~Kinerja.~~to PTredeem ~~Kinerja~~the ~~processed~~March ~~payments~~5, ~~from~~2019 ~~the~~debenture, ~~website~~for ~~that~~a ~~the~~redemption ~~Company~~price at $84,286. ~~licensed~~The ~~and~~principal ~~then~~of ~~remitted~~$53,000 ~~the~~was ~~funds~~derecognized towith the ~~Company.~~additional ~~The~~$31,286 ~~Company~~ paid PTupon ~~Kinerja~~redemption ~~$324,131~~recognized ~~for~~as ~~costs~~a ~~associated~~financing ~~with~~cost. ~~servicing~~As ~~customers~~a ~~and~~result ~~maintaining~~of the ~~website~~redemption, ~~and~~the ~~license~~unamortized ~~agreement~~discount ~~during~~related ~~2017.~~to Asthe ofconverted ~~December~~balance ~~31,~~of ~~2017~~$53,000 was immediately expensed. As the ~~Company~~derivative ~~owed~~was ~~$51~~originally valued and recognized on September 1,~~759~~ 2019, ~~which is~~there ~~reflected~~was no change in ~~accrued~~fair ~~expenses~~value upon redemption and reclassification of the derivative into equity.

AsMarch ~~of December 31~~14, ~~2018~~2019 and 2017, the Company was owed an accounts receivable balance of $6,295 and $20,900, respectively, from sales on the website. Once revenues are positively earned, the Company will owe a 1% royalty fee on net revenues on a quarterly basis.note

~~Note~~On 8March -14, ~~Stockholders~~2019, the Company entered into a 12% convertible note for the principal amount of $118,000 with an accredited investor, which matures on March 14, 2020, and has a $5,000 OID. The holder will also deduct $13,000 from the purchase price for legal and due diligence fees. The note is convertible commencing 180 days after issuance of the note (or upon an event of Default), with a variable conversion rate at 60% of market price (as defined in the note). The conversion rate adjusts if there are common stock equivalents issued and in which the aggregate per share price is below the original conversion price, in which case the adjusted conversion price is the lower of the original conversion price or 25% of the aggregate price. The discount increases to a 55% discount if there is a DTC “chill” in effect and an additional 5% if the Company is not DWAC or DTC eligible, as well as an additional 5% discount for each event of default. The debenture also includes various liquidated damages for various events, as set forth in the agreement, such as the Company’s ~~Equity~~inability or delay in the timely issuance of the shares upon receipt of a conversion request. In an event of default, as defined in the note, the “default amount” shall be calculated at the product of (A) the then outstanding principal amount of the note, plus accrued interest, divided by (B) the conversion price as determined on the issuance date, multiplied by (C)the highest price at which the common stock traded at any time between the issuance date and the date of the event of default. Per the agreement, the Company is required at all times to have authorized and reserved eight times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture, and at 150% after 180 days. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability on the date the note becomes convertible, either 180 days after issuance or upon an event of default.

The derivative liability was recognized on September 10, 2019, in the initial amount of $175,000 based on the key valuations assumptions consisting, in part, of the price of the Company’s common stock of $0.13; a risk-free interest rate of 1.89% and expected volatility of the Company’s common stock, of 193.89%, and the various estimated reset exercise prices weighted by probability.

On September 18, 2019, $60,000 of the March 14, 2019 note was converted into 813,008 shares of the Company’s common stock at a conversion price of $0.07, at which time the derivative fair value of approximately $89,000 relating to the conversion feature was reclassified to equity. The derivative was revalued prior to reclassification, resulting in no change in the fair value, with the key valuations assumptions consisting, in part, of the price of the Company’s common stock of $0.14; a risk-free interest rate of 2.27% and expected volatility of the Company’s common stock, of 193.89%, and the various estimated reset exercise prices weighted by probability.

On October 2, 2019, the remaining $58,000 of the note was converted into 954,059 shares of the Company’s common stock at a conversion price of $0.07, at which time the derivative fair value of approximately $96,000 relating to the conversion feature was reclassified to equity. The derivative was revalued prior to reclassification, resulting in an increase in $10,000 in the fair value, with the key valuations assumptions consisting, in part, of the price of the Company’s common stock of $0.11; a risk-free interest rate of 1.75% and expected volatility of the Company’s common stock, of 261.02%, and the various estimated reset exercise prices weighted by probability.

F-23

March 25, 2019 note

On March 25, 2019, the Company executed an 8% convertible promissory note payable to an accredited investor in the principal amount of $137,500, for a purchase price of $125,000, which is due on March 24, 2020. In an event of default as set forth in the note, the interest rate increases to a default amount of 18%, and the default sum due becomes 130% of the principal outstanding and accrued interest (the “default redemption amount”). Alternatively, at the election of the holder, the Holder may require the Company to redeem all or part of the default redemption amount through the issuance of such number of shares of common stock equal to (x) the default redemption amount, divided by (y) or 55% of the lowest traded price in the 20 trading days prior to the conversion date. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $41,250. As a result the outstanding balance of the note as of June 30, 2019, was $178,750. The note is convertible into shares of common stock at a conversion price of the lower of (i) $1.00 per share or (ii) 61% of the lowest trading price for the 20 prior trading days prior to the conversion date. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. The Company may redeem the note at any time the note is outstanding and there is not an event of default, at amounts ranging in the first 90 days from the date of issuance from 115% to 135% of the principal and accrued interest balance, based on the redemption date’s passage of time. The note also includes a “most favored nation” clause, whereby when the Company enters into any future financing transactions with a third-party investor, the Company must provide the holder notification of the terms of the new financing transaction, and if the holder determines that the terms of the subsequent investment are preferable to the original terms of the March 25, 2019 convertible promissory note, the original terms of the note will be amended and restated, which may include the conversion terms. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability.

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $165,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.46 at issuance date; a risk-free interest rate of 2.41% and expected volatility of the Company’s common stock, of 181.78%, and the various estimated reset exercise prices weighted by probability. This resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $27,500 was immediately expensed as financing costs.

On September 24, 2019, the Company exercised its option to redeem the debenture, for a redemption price at $192,582, 135% of the principal and accrued interest amount. The principal of $137,500 plus accrued interest was derecognized with the additional $49,929 paid upon redemption recognized as a financing cost. As a result of the redemption, the unamortized discount related to the converted balance of $103,125 was immediately expensed. Additionally, the derivative was remeasured upon redemption of the debenture, resulting in an estimated fair value of $259,000, for an increase in fair value of $7,000. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.13; a risk-free interest rate of 1.92% and expected volatility of the Company’s common stock, of 193.89%, and the various estimated reset exercise prices weighted by probability.

April 1, 2019 note

On April 1, 2019, the Company executed a 12% fixed convertible promissory note payable to an accredited investor in the principal amount of $43,000, and is due on February 15, 2020. In an event of default as set forth in the note, the interest rate increases to a default amount of 22%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. On April 15, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $21,500. As a result the outstanding balance of the note as of June 30, 2019, was $64,500. The note is convertible for 180 days from inception into shares of Common Stock at a conversion price of $1.75 per share, subject to adjustment based upon the terms of the note. After the 180 days the conversion price shall equal the lesser of: (i) $1.75; and (ii) 61% multiplied by the market price, as defined in the agreement. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. The conversion feature does not meet the definition of a derivative during the first 180 days, but will meet the definition of a derivative when the conversion price becomes variable and would at that time require bifurcation and to be accounted for as a derivative liability.

F-24

The derivative liability was recognized on September 28, 2019, in the initial amount of $93,000 based on the key valuations assumptions consisting, in part, of the price of the Company’s common stock of $0.12; a risk-free interest rate of 1.83% and expected volatility of the Company’s common stock, of 193.89%, and the various estimated reset exercise prices weighted by probability.

On October 1, 2019, the Company exercised its option to redeem the April 1, 2019 debenture, for a redemption price at $70,261. The principal of $64,500 was derecognized with the additional $5,792 paid upon redemption recognized as a financing cost. As a result of the redemption, the unamortized discount related to the converted balance of $16,125 was immediately expensed. As the derivative was originally valued and recognized on September 28, 2019, there was no change in fair value upon redemption and reclassification of the derivative into equity.

April 25, 2019 note

On April 25, 2019, the Company executed an 8% fixed convertible promissory note payable to an accredited investor in the principal amount of $110,000, and is due on May 17, 2020. The convertible note had a OID of $10,000, for a purchase price of $100,000. In an event of default as set forth in the note, the interest rate increases to a default amount of 18%, and the default sum due becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. On May 20, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $55,000. As a result the outstanding balance of the note as of June 30, 2019, was $165,000. On September 17, 2019, the outstanding note was acquired from Tiger Trout by Adar Alef, LLC. The note is convertible into shares of Common Stock at 65% of the lowest trading price 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. The conversion price is adjusted if any 3rd party has the right to convert monies at a discount to market greater than the conversion price in effect at that time then the holder, may utilize such greater discount percentage. The variable conversion price has been adjusted to 45% of the market price, based on the conversion price of a new note on May 9, 2019. Additionally, upon an event of default the conversion rate increases to 55% of the lowest trading price during the 20 days prior to conversion. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. The Company may redeem the note at amounts ranging from 110% to 150% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and requires bifurcation and will be accounted for as a derivative liability.

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $163,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.64 at issuance date; a risk-free interest rate of 2.42% and expected volatility of the Company’s common stock, of 176.09%, and the various estimated reset exercise prices weighted by probability. This resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $53,000 was immediately expensed as financing costs.

On November and December 2019, the note was fully converted into 5,000,396 shares of the Company’s common stock at a conversion prices of $0.04 to $0.02, at which time the derivative fair value of approximately $232,000 relating to the conversion feature was reclassified to equity. The derivative was revalued prior to reclassification, resulting in a decrease of $145,000 in the fair value, with the key valuations assumptions consisting, in part, of the price of the Company’s common stock of $0.07 to $0.10; a risk-free interest rate of 1.55% to 1.58% and expected volatility of the Company’s common stock, of 256.49% and 261.02%, and the various estimated reset exercise prices weighted by probability.

F-25

May 9, 2019 note

The note is convertible into shares of the Company’s common stock at a variable conversion rate that is equal to the lesser of the lowest trading price for the last 20 days prior to the issuance of the note or 45% of the lowest market price over the 20 days prior to conversion. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. There are additional 12% adjustments to the conversion price for events set forth in the agreement, including if the conversion price is less than $0.01, if the Company is not DTC eligible, the Company is no longer a reporting company, or the note cannot be converted into free trading shares on or after six months from issue date. The holder has the option to increase the principal by $5,000 per each default occurrence instead of applying further discounts to the conversion price. However, under no circumstances shall the principal amount exceed an additional $25,000 nor can the conversion price be less than 30% multiplied by the market price due to the cumulative effect. Per the agreement, the Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the note. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability.

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $608,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.54 at issuance date; a risk-free interest rate of 2.46% and expected volatility of the Company’s common stock, of 202.78%, and the various estimated reset exercise prices weighted by probability. This resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $498,000 was immediately expensed as financing costs.

On September 5, 2019, $50,000 of the May 9, 2019 note was converted into 1,000,100 shares of the Company’s common stock at a conversion price of $0.05, at which time the derivative fair value of approximately $77,000 relating to the conversion feature was reclassified to equity. The derivative was revalued prior to reclassification, resulting in a decrease in the fair value of $12,000, with the key valuations assumptions consisting, in part, of the price of the Company’s common stock of $0.13; a risk-free interest rate of 2.44% and expected volatility of the Company’s common stock of 210.74%, and the various estimated reset exercise prices weighted by probability.

In November and December 2019, another $119,380 of the note was converted into 5,900,000 shares of the Company’s common stock at a conversion prices of $0.04 to $0.02, at which time the derivative fair value of approximately $256,000 relating to the conversion feature was reclassified to equity. The derivative was revalued prior to reclassification, resulting in an increase of $63,000 in the fair value, with the key valuations assumptions consisting, in part, of the price of the Company’s common stock of $0.03 to $0.09; a risk-free interest rate of 1.57% and expected volatility of the Company’s common stock, of 261.02% to 297.11%, and the various estimated reset exercise prices weighted by probability. Subsequent to year end, the remaining balance was fully converted into 52,000,000 shares of the Company’s common stock at conversion prices ranging from $0.002 to $0.008.

F-26

May 17, 2019 note

On May 17, 2019, the Company executed a 10% fixed convertible promissory note payable to an accredited investor in the principal amount of $82,500, and is due on May 17, 2020. The convertible note had an OID of $7,500, for a purchase price of $75,000. In an event of default as set forth in the note, the interest rate increases to a default amount of 24%. The note is convertible into shares of Common Stock at a conversion price the lower of (i) the fixed price of $1.00 or (ii) 61% 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. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable. Additionally, if the Company fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late or delinquent in its filings, even if the Company subsequently cures such delinquency), the discount shall be increased an additional 15%. Per the agreement, the Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 120% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and requires bifurcation and will be accounted for as a derivative liability.

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $132,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.45 at issuance date; a risk-free interest rate of 2.35% and expected volatility of the Company’s common stock, of 177.33%, and the various estimated reset exercise prices weighted by probability. This resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $49,500 was immediately expensed as financing costs.

In December 2019, $55,980 of the note was converted into 2,450,000 shares of the Company’s common stock at a conversion prices of $0.04 to $0.02, at which time the derivative fair value of approximately $90,000 relating to the conversion feature was reclassified to equity. The derivative was revalued prior to reclassification, resulting in an increase in the fair value of $1,000, with the key valuations assumptions consisting, in part, of the price of the Company’s common stock of $0.03 to $0.07; a risk-free interest rate of 1.55% to 1.59% and expected volatility of the Company’s common stock, of 256.49%, and the various estimated reset exercise prices weighted by probability. Subsequent to the year end the note was fully converted into 3,152,791 shares of the Company’s common stock at a conversion price of $0.009.

May 15, 2019 note

On May 15, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $200,000, convertible into shares of common stock of the Company, which matures on February 15, 2020. In an event of default as set forth in the note, the interest rate increases to a default amount of 24%. In the event of default, the outstanding principal balance increases to 150%, and if the Company fails to maintain the required authorized share reserve, the outstanding principal increases to 200%. If certain events of default, relating to the reporting requirements or listing of the Company’s common stock, occur or continue after six months from the date of issuance of the note, the principal increases by $15,000. On May 20, 2019, the note was in default due to the Company being delinquent in their filings under the Exchange Act with the SEC, and therefore the note principal balance was increased by $100,000. As a result the outstanding balance of the note as of June 30, 2019, was $300,000. The note is convertible into shares of Common Stock at a conversion price the lower of (i) the lowest closing price (as defined) during the previous twenty trading days prior to the date of the note or (ii) 60% of the lowest trading price of the Common Stock as reported on the National Quotations Bureau OTC market on which the Company’s shares are traded, for the 20 prior trading days including the day upon which a notice of conversion is received by the Company or its transfer agent. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable, and increased by 15% if there is a DTC “chill”. Furthermore, if the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the conversion price is less than $0.01 at any time after the issue date, the principal amount of the note shall increase by $15,000. In addition, the variable conversion price shall be redefined to mean 40% multiplied by the market price. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. If the Company enters into a 3(a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 135% to 150% of the principal and accrued interest balance, based on the redemption date’s passage of time from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and requires bifurcation and will be accounted for as a derivative liability.

F-27

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $318,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.42 at issuance date; a risk-free interest rate of 2.30% and expected volatility of the Company’s common stock, of 191.41%, and the various estimated reset exercise prices weighted by probability. This resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $118,000 was immediately expensed as financing costs.

In December 2019, $90,713 of the note was converted into 5,000,000 shares of the Company’s common stock at a conversion prices of $0.04 to $0.02, at which time the derivative fair value of approximately $138,000 relating to the conversion feature was reclassified to equity. The derivative was revalued prior to reclassification, resulting in an increase in the fair value of $67,000, with the key valuations assumptions consisting, in part, of the price of the Company’s common stock of $0.05; a risk-free interest rate of 1.57% and expected volatility of the Company’s common stock, of 297.11%, and the various estimated reset exercise prices weighted by probability. Subsequent to the year end the note was fully converted into 16,160,163 shares of the Company’s common stock at conversion prices ranging from $0.01 to $0.006.

May 29, 2019 note

On May 29, 2019, the Company executed a 10% fixed convertible promissory note payable to an accredited investor for the principal amount of $115,000, which matures on May 29, 2020. The convertible note had an OID of $5,000, plus $5,000 was deducted from the purchase price for legal and due diligence fees for a purchase price of $100,000. In an event of default as set forth in the note, the interest rate increases to a default amount of 22% and the principal balance increases by 15%. The note is convertible into shares of Common Stock at a conversion price equal to 60% multiplied by the lowest closing trade price during the 20 trading days immediately preceding the applicable conversion. Per the agreement, the Company is required at all times to have 1,800,000 common shares reserved. The Company may prepay the note at 125% of the principal and accrued interest balance. The conversion feature meets the definition of a derivative and requires bifurcation and will be accounted for as a derivative liability.

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $168,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.47 at issuance date; a risk-free interest rate of 2.30% and expected volatility of the Company’s common stock, of 177.33%, and the various estimated reset exercise prices weighted by probability. This resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $53,000 was immediately expensed as financing costs.

On December 11, 2019, the Company exercised its option to redeem the debenture, for a redemption price at $151,363. The principal of $115,000 plus accrued interest was derecognized with the additional $36,363 paid upon redemption recognized as a financing cost. As a result of the redemption, the unamortized discount related to the converted balance of $76,667 was immediately expensed. Additionally, the derivative was remeasured upon redemption of the debenture, resulting in an estimated fair value of $189,000, for an increase in fair value of $2,000. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.05; a risk-free interest rate of 1.60% and expected volatility of the Company’s common stock, of 256.49%, and the various estimated reset exercise prices weighted by probability.

F-28

June 3, 2019 note

On June 3, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $192,500, convertible into shares of common stock of the Company, which matures on June 3, 2020. The convertible note had an OID of $17,500, for a purchase price of $175,000. The note bears interest at 10%, which increases to 24% upon an event of default. In an event of default as set forth in the note, including if the Company does not pay the note at maturity, or the common stock of the Company is delisted or loses its bid price, the default sum becomes 110% to 150% of the principal outstanding and accrued interest. The note is convertible beginning on the six month anniversary of the note, at the lesser of: (i) $1.00; or (ii) 60% multiplied by lowest end of day VWAP during the previous 20 days before the Issue date of the note. The discount shall increase to 50% if the Company experiences a DTC “chill”. If the Company is not current in their filings with the SEC after the six month anniversary of the note, the holder shall be entitled to use the lowest closing bid price during the delinquency period as a base price for the conversion. Per the agreement, the Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 120% to 140% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability on the date the note becomes convertible.

The derivative liability was recognized on December 3, 2019, in the initial amount of $316,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.23 at issuance date; a risk-free interest rate of 1.60% and expected volatility of the Company’s common stock, of 256.49%, and the various estimated reset exercise prices weighted by probability. This resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $123,500 was immediately expensed as financing costs.

On two dates in October and December 2019, the note was fully converted into 5,584,032 shares of the Company’s common stock at a conversion price of $0.04, at which time the derivative fair value of approximately $278,000 relating to the conversion feature was reclassified to equity. The derivative was revalued prior to reclassification, resulting in a decrease in the fair value of $38,000, with the key valuations assumptions consisting, in part, of the price of the Company’s common stock of $0.07 and $0.13; risk-free interest rates of 1.55% and of 1.66% and expected volatility of the Company’s common stock, of 256.49% and 261.02%, and the various estimated reset exercise prices weighted by probability.

June 28, 2019 note

F-29

The derivative liability was recognized on December 29, 2019, in the initial amount of $215,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.23 at issuance date; a risk-free interest rate of 1.60% and expected volatility of the Company’s common stock, of 256.49%, and the various estimated reset exercise prices weighted by probability. This resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $102,000 was immediately expensed as financing costs.

Subsequent to the year end the note was fully converted into 12,118,315 shares of the Company’s common stock at conversion prices ranging from $0.01 to $0.009.

July 8, 2019 note

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $239,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.22 at issuance date; a risk-free interest rate of 1.99% and expected volatility of the Company’s common stock, of 193.64%, and the various estimated reset exercise prices weighted by probability. This resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $89,000 was immediately expensed as financing costs.

Subsequent to the year end, approximately $143,000 of principal of the note was converted into 175,560,000 shares of the Company’s common stock at conversion prices ranging from $0.007 to $0.0001.

F-30

July 31, 2019 note

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $319,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.20 at issuance date; a risk-free interest rate of 2.0% and expected volatility of the Company’s common stock, of 193.64%, and the various estimated reset exercise prices weighted by probability. This resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $119,000 was immediately expensed as financing costs.

Subsequent to the year end, approximately $158,000 of principal of the note was converted into 182,671,762 shares of the Company’s common stock at conversion prices ranging from $0.006 to $0.0002.

August 23, 2019 note

Subsequent to the year end the note was fully converted into 30,777,250 shares of the Company’s common stock at conversion prices ranging from $0.01 to $0.002.

F-31

August 27, 2019 note

Subsequent to the year end, approximately $65,000 of principal of the note was converted into 31,698,739 shares of the Company’s common stock at conversion prices ranging from $0.006 to $0.0002.

September 3, 2019 first note

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $122,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.17 at issuance date; a risk-free interest rate of 1.72% and expected volatility of the Company’s common stock, of 204.06%, and the various estimated reset exercise prices weighted by probability. This plus the fair value of the warrants resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $39,500 was immediately expensed as financing costs.

F-32

Subsequent to the year end the note was fully converted into 97,347,476 shares of the Company’s common stock at conversion prices ranging from $0.004 to $0.0004.

September 3, 2019 second note

On September 3, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $82,500 with a purchase price of $75,000, convertible into shares of common stock of the Company, which matures on June 3, 2020. The note bears interest at 8%, which increases to 24% upon an event of default. In an event of default as set forth in the note, the default sum becomes 150% of the principal outstanding and accrued interest, and if the Company cannot deliver conversion shares or fails to reserve sufficient authorized shares, then the default sum increases to 200%. Additionally, if the Company is in default due to a failure to comply with the Exchange Act, is delisted, or the Company loses its bid price, the principal shall increase by $15,000. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note is convertible at the lessor of $0.40 or 65% multiplied by the lowest closing price during the 20 days prior to the conversion. The discount will be increased by 10% if the Company’s common shares are not DTC deliverable, and increased by 15% if there is a DTC “chill”. Furthermore, if the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the conversion price is less than $0.01 at any time after the issue date, the principal amount of the note shall increase by $15,000. In addition, the variable conversion price shall be redefined to mean 50% multiplied by the market price. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. Per the agreement, the Company is required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full conversion of the note. If the Company does not maintain or replenish the reserve amount within three days of request by the holder, the principal amount of the note shall increase by $5,000. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 115% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from the date of issuance of the debenture. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability.

Subsequent to the year end, approximately $65,000 of principal of the note was converted into 54,767,424 shares of the Company’s common stock at conversion prices ranging from $0.004 to $0.0009.

September 3, 2019 third note

F-33

Subsequent to the year end the note was fully converted into 90,470,630 shares of the Company’s common stock at conversion prices ranging from $0.004 to $0.0009.

September 13, 2019 note

On September 13, 2019, the Company entered into a convertible note with an accredited investor for the principal amount of $395,000, convertible into shares of common stock of the Company, which matures on April 21, 2020. The note has an OID of $39,500 for a purchase price of $335,500, which is to be paid in two tranches of $167,750 each. The first tranche was funded on September 19, 2019, and the second tranche is to be funded nine months after the funding of the first tranche. The note bears interest at 12%, which increases to 24% upon an event of default. Additionally, in the event of a default, for numerous events as set forth in the agreement, the outstanding principal shall increase by 50%. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note is convertible at the lesser of: (i) $0.40; and (ii) 60% multiplied by the lowest closing bid price during the 20 days prior to the conversion. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. The discount will be increased by 12% for various occurrences as set forth in the agreement, including if the Company is not DTC eligible or experiences a DTC “chill”, if the conversion price falls below $0.01, or if the Company is delisted or delinquent in their filings with the SEC. Or the holder has the option to increase the principal by $5,000 for each occurrence in place of increasing the discount to the conversion price. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at 140% of the principal and accrued interest balance. The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability.

In connection with the September 13, 2019 note, the Company granted a number of warrants equal to $395,000 divided by the market price which is defined as the conversion factor (60%) of the lowest closing bid price over the last 20 days to date of issuance at inception, and to exercise date when the warrants are exercised, exercisable at $0.12, with a five year term. The exercise price is adjustable upon any future dilutive issuance. The Company estimated the fair value of the warrants, which were calculated as 5,486,111 warrants at issuance, using the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.14 at issuance date; a risk-free interest rate of 1.66% and expected volatility of the Company’s common stock, of 175.0%, resulting in a fair value of $734,000.

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $376,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.16 at issuance date; a risk-free interest rate of 1.92% and expected volatility of the Company’s common stock, of 193.89%, and the various estimated reset exercise prices weighted by probability. This, plus the fair value of the warrants, resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $922,500 was immediately expensed as financing costs.

F-34

Subsequent to the year end, approximately $84,000 of principal of the note was converted into 123,100,000 shares of the Company’s common stock at conversion prices ranging from $0.001 to $0.0002.

September 16, 2019 note

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $333,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.12 at issuance date; a risk-free interest rate of 1.86% and expected volatility of the Company’s common stock, of 197.31%, and the various estimated reset exercise prices weighted by probability. This resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $200,000 was immediately expensed as financing costs.

September 24, 2019 note

F-35

Subsequent to the year end, approximately $67,000 of principal of the note was converted into 140,588,000 shares of the Company’s common stock at conversion prices ranging from $0.001 to $0.0002.

October 1, 2019 note

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $86,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.11 at issuance date; a risk-free interest rate of 1.73% and expected volatility of the Company’s common stock, of 234.03%, and the various estimated reset exercise prices weighted by probability. This resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $36,000 was immediately expensed as financing costs.

October 23, 2019 note

On October 23, 2019, a fifth tranche on the June 13, 2018, for a 10% convertible promissory note in the amount of $30,000 was executed. The note is due twelve months after payment. In an event of default as set forth in the note, the interest rate increases to a default amount of 15%, and the default sum due becomes 150% of the principal outstanding and accrued interest. The outstanding amount due under the note as of May 29, 2020, is in default as of the date of this filing as the Company is delinquent in its periodic reporting under the Securities Act of 1934. The note is convertible at a variable conversion rate of 65% of the lowest closing price during 20 days prior to the conversion date. If at any time while the note is outstanding, the conversion price is equal to or lower than $0.50, then an additional fifteen percent (15%) discount shall be factored into the conversion price. The discount will also be increased by 10% if the Company’s common shares are not DTC deliverable. Additionally, if the Company fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late or delinquent in its filings, even if the Company subsequently cures such delinquency), the discount shall be increased an additional 15%. Per the agreement, the Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the note. The conversion feature met the definition of a derivative and required bifurcation and to be accounted for as a derivative liability. In connection with the fifth tranche, the Company issued 40,000 warrants, exercisable at $0.75, with a five year term. The Company estimated the fair value of the warrants using the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.20 at issuance date; a risk-free interest rate of 1.58% and expected volatility of the Company’s common stock, of 175.0%, resulting in a fair value of $7,000.

F-36

The Company estimated the fair value of the conversion feature derivative embedded in the debenture at issuance at $46,000, based on weighted probabilities of assumptions used in the Black Scholes pricing model. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $0.20 at issuance date; a risk-free interest rate of 1.58% and expected volatility of the Company’s common stock, of 226.43%, and the various estimated reset exercise prices weighted by probability. This resulted in the calculated fair value of the debt discount being greater than the face amount of the debt, and the excess amount of $23,000 was immediately expensed as financing costs.

October 24, 2019 note

Subsequent to the year end, approximately $38,000 of principal of the note was converted into 110,140,665 shares of the Company’s common stock at conversion prices ranging from $0.0005 to $0.0002.

October 29, 2019 first note

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