KinerjaPay Corp. - FORM 10-Q - August 14, 2013

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________

FORM 10-Q
___________________

ý                                  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2013

  

Commission File Number: 333-168068

 

SOLARFLEX CORP.

(Exact Name Of Registrant As Specified In Its Charter)

Delaware 42-1771817
(State of Incorporation) (I.R.S. Employer Identification No.)
   
40 Wall Street, 28th Floor, New York, NY 10005
(Address of Principal Executive Offices) (ZIP Code)

Registrant's Telephone Number, Including Area Code: (212) 400-7198

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act) or a smaller reporting company .

Large accelerated filer ¨ Accelerated filer ¨  Non-Accelerated filer ¨  Smaller reporting company x

On June 30, 2013, the Registrant had 13,500,000 shares of common stock outstanding.


TABLE OF CONTENTS

Item
 Description
 Page
 

PART I - FINANCIAL INFORMATION
 
ITEM 1.    FINANCIAL STATEMENTS. 3
     Balance Sheets 4
     Statements of Operations 5
     Statements of Cash Flows 6
     Notes to Financial Statements 7
ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDISTIONS AND PLAN OF OPERATIONS. 8
ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. 10
ITEM 4.    CONTROLS AND PROCEDURES. 10
   

PART II - OTHER INFORMATION
   
ITEM 1.    LEGAL PROCEEDINGS. 11
ITEM 1A.    RISK FACTORS. 11
ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. 11
ITEM 3.    DEFAULT UPON SENIOR SECURITIES. 11
ITEM 4.    MINE SAFETY DISCLOSURE. 11
ITEM 5.    OTHER INFORMATION. 11
ITEM 6.    EXHIBITS. 11



SOLARFLEX CORP.
(A Development Stage Company)
Balance Sheets
Back to Table of Contents
 
  June 30, 2013 December 31, 2012
(Unaudited) (Audited)

ASSETS
Current assets:
   Cash $ 3,914 $ -
      Total current assets 3,914 -
     
Equipment, net 210,000 -
 
        Total Assets $ 213,914 $ -
 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
 
Current liabilities:
   Accounts payable - trade $ - $ 19,476
   Advances payable to related parties - directors and stockholders 78,672 67,431
      Total current liabilities 78,672 86,907
 
      Total liabilities 78,672 86,907
 
Stockholders' Equity (Deficit):
   Common stock, par value $0.0001 per share; 500,000,000 shares authorized;
     13,500,000 and 5,500,000 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively 1,350 550
   Additional paid-in capital 288,950 49,750
   Deficit accumulated during the development stage (155,058) (137,207)
     Total stockholders' equity (deficit) 135,242 (86,907)
       Total Liabilities and Stockholders' Equity $ 213,914 $ -
 
See notes to unaudited interim financial statements.


SOLARFLEX CORP.
(A Development Stage Company)
Statements of Operations
(Unaudited)
Back to Table of Contents
 
Cumulative from
For the For the For the For the Inception
Three Months Ended Three Months Ended Six Months Ended Six Months Ended (February 12, 2010
June 30, 2013 June 30, 2012 June 30, 2013 June 30, 2012 to June 30, 2013
Revenue $ - $ - $ - - -
Expenses:
   General and administrative 8,393 4,000 17,851 21,500 157,377
Total general and administrative expenses 8,393 4,000 17,851 21,500 157,377
 
(Loss) from operations (8,393) (4,000) (17,851) (21,500) (157,377)
 
Other income (expense):
Other income - - - - 2,319
   Total costs and expenses 8,393 4,000 17,851 21,500 155,058
 
Net loss before income taxes (8,393) (4,000) (17,851) (21,500) (155,058)
Income taxes - - - - -
Net loss $ (8,393) $ (4,000) $ (17,851) (21,500) (155,058)
 
Basic and diluted per share amounts:
Basic and diluted net loss $ (0.00) $ (0.00) (0.00) (0.00)
 
Weighted average shares outstanding
(basic and diluted) 10,507,326 3,000,000 8,121,547 3,000,000
 
See notes to unaudited interim financial statements.


SOLARFLEX CORP.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)

Back to Table of Contents
 
Cumulative from
For the For the Inception
  Six Months Ended Six Months Ended (February 12, 2010)
  June 30, 2013 June 30, 2012 to June 30, 2013
Cash flows from operating activities:
Net loss $ (17,851) $ (21,500) $ (155,058)
Changes in net assets and liabilities:
   Increase (decrease) in accounts payable and accrued liabilities (8,235) 8,000 11,241
     Net cash used in operating activities (26,086) (13,500) (143,817)
 
Cash flows from investing activities:
Purchase of equipment (30,000) - (30,000)
     Net cash used in investing activities (30,000) - (30,000)
 
Cash flows from financing activities:
   Proceeds from issuance of common stock 60,000 - 135,300
   Offering costs - - (25,000)
   Related party advances - 13,500 67,431
     Net cash provided by financing activities 60,000 13,500 177,731
  
Net (decrease) increase in cash 3,914 - 3,914
Cash - Beginning of period - 562 -
Cash - End of period $ 3,914 $ 562 $ 3,914
 
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Common stock issued to purchase equipment $ 180,000 $ - $ 180,000
Payables assumed by related parties $ 11,241 $ - $ 11,241
 
See notes to unaudited interim financial statements.


SOLARFLEX CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
JUNE 30, 2013
Back to Table of Contents

1. The Company and Significant Accounting Policies

Solarflex Corp. (“Solarflex” or the “Company”) is a Delaware corporation in the development stage and has not commenced operations. The Company was incorporated under the laws of the State of Delaware on February 12, 2010. The business plan of the Company is to develop a commercial application of the design in a patent of a “Solar element and method of manufacturing the same”. The Company also intends to produce a prototype, and manufacture and market the product and/or seek third party entities interested in licensing the rights to manufacture and market the device. The accompanying financial statements of the Company were prepared from the accounts of the Company under the accrual basis of accounting.

Significant Accounting Policies
Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates.

Cash and Cash Equivalents: For financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents. There were no cash equivalents as of June 30, 2013 and December 31, 2012.

Property and Equipment: New property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 5 years. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place. The equipment carried on the June 30, 2013 balance sheet (a multiple target industrial vacuum) has not yet been placed in service.

Valuation of Long-Lived Assets: We review the recoverability of our long-lived assets including equipment, goodwill and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

Stock Based Compensation: Stock-based awards are accounted for using the fair value method in accordance with ASC 718, Share-Based Payments. Our primary type of share-based compensation consists of stock options. We use the Black-Scholes option pricing model in valuing options. The inputs for the valuation analysis of the options include the market value of the Company’s common stock, the estimated volatility of the Company’s common stock, the exercise price of the warrants and the risk free interest rate.

Accounting For Obligations And Instruments Potentially To Be Settled In The Company’s Own Stock: We account for obligations and instruments potentially to be settled in the Company’s stock in accordance with FASB ASC 815, Accounting for Derivative Financial Instruments. This issue addresses the initial balance sheet classification and measurement of contracts that are indexed to, and potentially settled in, the Company’s own stock.

Fair Value of Financial Instruments: As defined in ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), fair value is based on the price that would be received to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, ASC 820-10 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2: Other inputs that are observable, directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs.
Level 3: Unobservable inputs are used when little or no market data is available, which requires the Company to develop its own assumptions about how market participants would value the assets or liabilities. The fair value hierarchy gives the lowest priority to Level 3 inputs.
In determining fair value, the Company utilizes valuation techniques in its assessment that maximize the use of observable inputs and minimize the use of unobservable inputs.The following table presents the Company’s financial assets and liabilities that are carried at fair value, classified according to the three categories described above:

Fair Value Measurements at June 30, 2013

Quoted Prices in Active

Significant Other

Significant

Markets for Identical Assets

Observable Inputs

Unobservable Inputs

Total

(Level 1)

(Level 2)

(Level 3)

None

$

-

$

 -

$

-

$

-
Total assets at fair value

$

-

$

 -

$

-

$

-

 

Fair Value Measurements at December 31, 2012

Quoted Prices in Active

Significant Other

Significant

Markets for Identical Assets

Observable Inputs

Unobservable Inputs

Total

(Level 1)

(Level 2)

(Level 3)

None

$

-

$

 -

$

-

$

-
Total assets at fair value

$

-

$

 -

$

-

$

-

Earnings per Common Share: We compute net income (loss) per share in accordance with ASC 260, Earning per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.

Income Taxes: We have adopted ASC 740, Accounting for Income Taxes. Pursuant to ASC 740, we are required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

Deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax basis of assets and liabilities using the tax rates and laws in effect when the differences are expected to reverse. ASC 740 provides for the recognition of deferred tax assets if realization of such assets is more likely than not to occur. Realization of our net deferred tax assets is dependent upon our generating sufficient taxable income in future years in appropriate tax jurisdictions to realize benefit from the reversal of temporary differences and from net operating loss, or NOL, carryforwards. We have determined it more likely than not that these timing differences will not materialize and have provided a valuation allowance against substantially all of our net deferred tax asset. Management will continue to evaluate the realizability of the deferred tax asset and its related valuation allowance. If our assessment of the deferred tax assets or the corresponding valuation allowance were to change, we would record the related adjustment to income during the period in which we make the determination. Our tax rate may also vary based on our results and the mix of income or loss in domestic and foreign tax jurisdictions in which we operate.

In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and to the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we will reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We will record an additional charge in our provision for taxes in the period in which we determine that the recorded tax liability is less than we expect the ultimate assessment to be.

ASC 740 which requires recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income tax is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized.

Uncertain Tax Positions
The Financial Accounting Standards Board issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109, Accounting for Income Taxes” (“FIN No. 48”) which was effective for the Company on January 1, 2007. FIN No. 48 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN No. 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. FIN No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure requirements.

Our federal and state income tax returns are open for fiscal years ending on or after June 30, 2013. We are not under examination by any jurisdiction for any tax year. At June 30, 2013 we had no material unrecognized tax benefits and no adjustments to liabilities or operations were required under FIN 48.

Recent Accounting Pronouncements
In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:
-    Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and
-    Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.
The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

The Financial Statements presented herein have been prepared by us in accordance with the accounting policies described in our December 31, 2012 Annual Report and should be read in conjunction with the Notes to Financial Statements which appear in that report.

The preparation of these financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on going basis, we evaluate our estimates, including those related intangible assets, income taxes, insurance obligations and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other resources. Actual results may differ from these estimates under different assumptions or conditions.

In the opinion of management, the information furnished in these interim financial statements reflects all adjustments necessary for a fair statement of the financial position and results of operations and cash flows as of and for the three and six-month periods ended June 30, 2013 and 2012. All such adjustments are of a normal recurring nature. The Financial Statements do not include some information and notes necessary to conform to annual reporting requirements.

2. Stockholders' Equity

Stock Issued for cash
During the six months ended June 30, 2013 we issued 2,000,000shares of our common stock in exchange for $60,000. The shares were sold for $0.03 per share. 1,500,000 of those shares, resulting in proceeds of $45,000, were issued during the three months ended June 30, 2013. We also issued 6,000,000 shares valued at $0.03 or $180,000 as consideration for the purchase of equipment during the three months ended June 30, 2013.

3. Development Stage Activities and Going Concern

The Company is currently in the development stage and has limited operations. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has not established any source of revenue to cover its operating costs, and as such, has incurred an operating loss since inception. Further, as of June 30, 2013, the cash resources of the Company were insufficient to meet its current business plan. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

4. Subsequent Events

On July 15, the Company issued a $5,000 convertible note for working capital purposes.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

As used in this Form 10-Q, references to the “SOLARFLEX CORP ,” Company,” “we,” “our” or “us” refer to SOLARFLEX CORP . Unless the context otherwise indicates.

Forward-Looking Statements

The following discussion should be read in conjunction with our financial statements, which are included elsewhere in this Form 10-Q (the “Report”). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our 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.

For a description of such risks and uncertainties refer to our Registration Statement on Form S-1, filed with the Securities and Exchange Commission. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Corporate Background

We were incorporated in Delaware on February 12, 2010. We are a development stage company established for the purpose of developing, manufacturing and selling a solar photovoltaic element (also known as a photovoltaic cell) based on certain proprietary technology that is expected to enable an increase in solar energy conversion and thus provide energy at a lower cost. A photovoltaic element is a device that converts light into electrical flow.

On March 10, 2010, we entered into a patent sale agreement (the "Patent Sale Agreement ") with P.T Holding, represented by its owner, Dr. Boris Sigalov, whereby P.T. Holding sold to us all of P.T. Holding’s right, title, and interest in a patent application, Israel Patent Application Number 198369, (the “Patent Application”), for the design of and manufacturing method for a solar photovoltaic element. P.T. Holding transferred the Patent Application to us in exchange for our agreeing to pay P.T. Holding a sum equal to 10% of the royalties that we will receive in relation to the Patent Application.

Our Company’s future product is based on the design detailed in Israel Patent Application Number 198369, for the design of and manufacturing method for a solar photovoltaic element. If the product based on this technology is able to be successfully adopted and implemented in both home and business solar energy markets, we believe it will deliver a significant improvement in energy conversion efficiency and with that improvement, we believe the solar energy market will react favorably to a product that has the potential to deliver electricity at a lower cost. However, as our Directors and officers have no experience in operating a company that sells solar photovoltaic elements we can only confirm the expected results defined in the patent application by developing a working prototype of the product. If that is accomplished, we hope that a product based on our technology will be able to achieve efficiency improvement compared to existing solar photovoltaic elements based on thin film technologies manufactured by First Solar and GE Solar. Until that prototype is developed and proven to deliver these results, we cannot verify or confirm such expectations. Nevertheless, we recognize that we still need to establish that the technology will work as expected, and that we can implement the technology in the production cycle of photovoltaic cells at low cost. Once a working prototype has been developed and produced and the patent application design is validated, which believe these positive results will enable us to develop and manufacture the device in commercial quantities, or license the manufacturing and related marketing and selling rights to a third party.

Although a working prototype has not yet been developed all of the above assertions in relation to the expected efficiency improvement and related cost savings ( including throughout the prospectus ) are the assumptions of the current management based on the extensive and unique experience in the technology and software development industry of the CEO and upon the review in depth of the acquired patent and its ramifications . A further in depth explanation of the patent and its proposed efficiency and cost savings should be read in the section’ PHOTOVOLTIC ELEMENT TECHNOLOGY ”in the business section of the Prospectus.

The Patent Application is for the design and manufacture of a solar photovoltaic element that absorbs the solar spectrum and that is expected to enable an increase in solar energy conversion. The device will be manufactured on the basis of at least one vacuum chamber and will include five layers. As soon as we raise the necessary funds, we will use the raised proceeds to develop a working prototype of the invention. Although we have not yet engaged a manufacturer to construct a working prototype, based on our preliminary discussions with certain manufacturing vendors, we believe that it will take approximately twelve months to produce a working prototype, from design through construction. Once a working prototype has been developed and produced, we will work to develop and manufacture the device in commercial quantities.

Our Business

We were incorporated in Delaware on February 12, 2010, and we are a development stage company. We intend to engage in the development, manufacture, and distribution of a solar photovoltaic element (also known as a photovoltaic cell) based on certain proprietary technology that is expected to enable an increase in solar energy conversion and thus provide energy at a lower cost. A photovoltaic element is a device that converts light into electrical flow.

We plan to develop a working prototype of our invention for testing and evaluation. We then plan to develop a manufacturing process for producing the photovoltaic elements for sale to solar panel producers. We intend to manufacture and distribute the device ourselves.

W e believe that a product based on the Solarflex technology can be adopted for both businesses and homes and we expect to develop commercial products of appropriate sizes and configurations for each of these markets. Our primary marketing consideration initially will be to focus more on areas in which solar energy is already popular. It is possible that building owners will be interested in purchasing our products, government agencies, large campuses such as universities and hospitals, etc. Essentially, any company, industry, or individual that uses electricity should benefit from using an alternative source of power, such as a product based on our technology.

In terms of entering into a licensing agreement with a company interested in licensing our technology, we believe there several potential opportunities that we can explore once we successfully develop a working prototype that can be used to show the potential of our technology. For example, we can approach building firms that are committed to including “green” technologies such as solar power in their projects.

The top three solar cell manufacturers in the field are Sharp Solar Corporation, based in Japan, Q-Cells from Germany, and Suntech Power Corporation, which has several bases, including in the United States, Europe and Africa. Other notable solar manufacturers around the world include BP Solar, First Solar, Shell Solar, Kyocera Solar, Mitsubishi Solar, and GE Solar. Each produces various solar devices based on its assets and technologies. We intend to develop and manufacture our solar photovoltaic element based on the manufacturing method detailed in the Patent Application. There are at least a dozen photovoltaic cell publicly traded companies in the world, several located in the United States and China. It is possible they would be interested in licensing our technology once we have a working prototype and can show affirmative results and energy savings beyond their current products or technologies. However, we also believe that there are other possible partnerships – including partnering or licensing to companies in the building industry, as previously mentioned.

Our proposed solar photovoltaic element will be comprised of five layers attached to a substrate. The top and bottom layers will be conductive. The three middle layers will be semi-conductive and consist of a positive layer (P-layer), an intrinsic layer (i-layer), and a negative layer (N-layer). The three semi-conductive layers will be made of silicon. The P-layer and the N-layer will be either a doped layer or a heterojunction metal oxide layer. The i-layer will be a graded band-gap layer.

A doped layer is a layer of material to which impurities have purposely been introduced (mechanically, electrically, or optically) in order to change the way the material reacts or performs in certain conditions. It is used in photovoltaic cells to absorb light. A heterojunction metal oxide layer is a layer of vanadium that changes its properties from conductor to semiconductor at 67C. The graded band-gap layer is a specially grown thin film made mainly of silicon with a variable band-gap. The device will be manufactured on the basis of at least one vacuum chamber.

The product will be based on our detailed patent application (Israel Patent Application Number 198369), which includes both the design and manufacturing details of the device. We believe that our solar photovoltaic (photoelectric) element, once manufactured, will provide the performance of a solar element.

Employees

Other than our current Directors and officers, we have three part-time employees.

Plan of Operation

We are a development stage company that has acquired the rights to a patent application for the design of and manufacturing method for a solar photovoltaic conversion element which is expected to reduce cost, enhance the flexibility of the manufacturing process, improve manufacturing efficiency and absorb the solar spectrum better than current models, which should enable our product to increase solar energy conversion rates.

Our goal in the next twelve months is to complete development and production of a fully operational prototype of our solar photovoltaic conversion element, identify sub-contractors or licensees which will have the ability to design and manufacture our product in commercial quantities, and market our product to solar panel producers.

Although we have not yet engaged a manufacturer to develop a fully operational prototype of the solar photovoltaic conversion element, based on our preliminary discussions with certain manufacturing vendors, we believe that it will take approximately twelve months, from design to manufacture, to produce a basic prototype of our product. Once the prototype has been produced, we plan for the design and development of a commercial product to be carried out by specialist subcontractors offering expertise in several relevant disciplines, including plastics and metal, electricity and electronics, device design, operation and control, automation and mechanics, computer and microcomputers, and others.

We initially intend to focus on the following activities:

•     Locating third parties to perform research and development and engineering services   
•     Completing development of our solar photovoltaic conversion element.   
•     Producing a working prototype of our product.    
•     Locating sub-contractors or licensees to design and manufacture our product in commercial quantities   
•     Marketing our product to solar panel producers.

We estimate the cost to develop and produce the prototype at $14,000, which include $10,500 in technology development and engineering costs, and $3,500 for the manufacture of the prototype

The design and development of a working prototype of our product will be divided into three stages:

a) Technical Concept/Definition (three months) – to be performed by management and a third party contractor.
b) Engineering Specification (four months) – to be performed by management and a third party contractor.
c) Engineering & Preparation for Production & Actual Manufacture (four months) – to be performed by management and a third party contractor

If and when we have a viable prototype, depending on the availability of funds, we estimate that we would need approximately an additional four to six months to bring this product to market. Our objective is either to manufacture the product ourselves through third party sub-contractors, and market the product as an off-the-shelf device, and/or to license the manufacturing rights to the product and related technology to third party manufacturers who would then assume responsibility for marketing and sales.

General Working Capital

During the six months ended June 30, 2013, the Company raised $60,000 through the issuance of 2,000,000 restricted shares.

Results of Operations during the three-month period ended June 30, 2013 as compared to the three-month period ended June 30, 2012

We have not generated any revenues since inception. We have operating expenses related to general and administrative expenses being a public company. During the three months ended June 30, 2013, we incurred a net loss of $8,393 due to general and administrative expenses in the same amount compared to a net loss of $4,000 during the same period in the prior year also due to general and administrative expenses in the same amount.

Results of Operations during the six-month period ended June 30, 2013 as compared to the six-month period ended June 30, 2012

We have not generated any revenues since inception. We have operating expenses related to general and administrative expenses being a public company. During the six months ended June 30, 2013, we incurred a net loss of $17,851 due to general and administrative expenses in the same amount compared to a net loss of $21,500 during the same period in the prior year also due to general and administrative expenses in the same amount.

Liquidity and Capital Resources

As of June 30, 2013, we had cash in the amount of $3,914. Cash and cash equivalents from inception to date have been sufficient to provide the operating capital necessary to operate to date. Our operating expenses and net loss for the six months ended June 30, 2013 and 2012 were $17,851 and $21,500, respectively.

We used $26,086 in our operating activities during the six-month period ended June 30, 2013, which was primarily due to a net loss of $17,851and a decrease in accounts payable of $8,235. We used $13,500 in our operating activities during the six-month period ended June 30, 2012, which was due to a net loss of $21,500 and an increase in accounts payable and accrued expenses of $8,000.

We financed our negative cash flow from operations during the six months ended June 30, 2013 through the issuance of common stock in the amount of $60,000. During the six months ended June 30, 2012, we financed our negative cash flow from operations through advances from related parties in the amount of $13,500.

During the three-months ended June 30, 2013, we purchased equipment valued at $180,000 in exchange for the issuance of 6,000,000 restricted shares and a $30,000 cash payment.

We had no investing activities during the three and six months ended June 30, 2012.

Going Concern Consideration

Our auditors have issued an opinion on our annual financial statements which includes a statement describing our going concern status. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills and meet our other financial obligations. This is because we have not generated any revenues and no revenues are anticipated until we begin marketing the product.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of disclosure controls and procedures. As of June 30, 2013, the Company's chief executive officer and chief financial officer conducted an evaluation regarding the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the  Exchange Act. Based upon the evaluation of these controls and procedures, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in internal controls. During the quarterly period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

ITEM 1A. RISK FACTORS.

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES UND USE OF PROCEEDS.

During the three months ended June 30, 2013, the Company issued 2,000,000 restricted shares to the following individuals in exchange for cash:

Title

Shares Issued

Persons

 Consideration Per Share

Common Stock

333,334

Amir Uziel

 $0.03 per share in cash pursuant to Section 4(2)

Common Stock

500,000

Isaac Berezovsky

 $0.03 per share in cash pursuant to Section 4(2)

Common Stock

500,000

Common Market Development Inc.

 $0.03 per share in cash pursuant to Section 4(2)

Common Stock

333,333

L+L Holding Ltd.

 $0.03 per share in cash pursuant to Section 4(2)

Common Stock

333,333

Levi Krasney

 $0.03 per share in cash pursuant to Section 4(2)

In addition, we issued 6,000,000 to International Executive Consulting SPRL in exchange for equipment valued at $180,000.

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

ITEM 3. DEFAULT UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURE.

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

Exhibit No. Description
31.1 Certification of CEO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Solarflex Corp
 
Date: August 14, 2013 By: /s/ Sergei Rogov
Name:  
Title: Chief Executive Officer and Chief Financial Officer
 

 

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