Znergy Reports Third Quarter 2017 Results; Robust and Growing Sales Pipeline of Opportunities Will Spur Growth in 2018

TAMPA, FL / ACCESSWIRE / November 16, 2017 / Znergy Inc. (OTC PINK: ZNRG) (the “Company”), a provider of energy efficient lighting products, lighting controls, and energy management solutions, today announced its financial and operational results for the quarter ended September 30, 2017.

Znergy is focused on the LED retrofit market and is executing a growth strategy through the regional rollout of sales and installation teams across the United States.

Third Quarter Financial Highlights:

Record revenues of $873,976
Gross margin of 51.6%
Of note, the operating and net loss of $953,747 includes non-cash stock-based compensation of $584,875 from stock and option issuances to management, Board and advisors in lieu of cash, which is typical of small emerging companies
Accounts receivable of $697,389

Third Quarter Business Highlights:

Awarded and Completed $1,000,000 contract with Wawasee Community School Corporation
Appointed Ryan Smith as Senior Vice President
Strengthened Board of Directors with addition of Jennifer Peel

Znergy is targeting LED retrofit opportunities in the education, office, commercial, high rise residential, healthcare and manufacturing and warehouse markets. The Znergy complete turn-key lighting solution program includes economic assessments, energy efficient analysis, portfolio of products, installation, and rebate support.

“We are excited about our record quarter, but believe this is just the beginning. We have built a strong variable expense platform, which will enable us to scale our business. From our back office infrastructure to our front-end operations and installers, we have assembled a flexible team that will grow as we win business and grow. We are confident in sustaining approximate 50% gross margins as we ramp our business,” commented Dave Baker, Energy’s Chief Executive Officer. “We look forward to executing on our business plan and sales pipeline. We will be increasing our communication and transparency in regards to our business progress as we seek to increase our awareness and visibility with shareholders and Wall Street.”

Revenue Ramp Thru Q3 2017:

Financial Results for the Three Months Ended September 30, 2017:

Revenue for the three months ended September 30, 2017 was $873,976, compared to $2,461 for the three months ended September 30, 2016, and a 207% increase sequentially from the second quarter of 2017. Revenues in 2017 comprise LED installation projects and associated rebates from utilities while revenues in 2016 consist of consulting services. The increase in revenues is due to the increase in personnel, implementing formalized training programs, resulting in increased sales and marketing efforts.

Gross profit of $450,642 was recorded in the third quarter ended September 30, 2017, compared to a gross profit of $2,461 in the third quarter of 2016. This represented a gross profit margin of 51.6%. Costs of revenue in 2017 comprised primarily LED product and installation costs, including labor and rental equipment.

Selling, general and administrative expenses increased by $1,172,635 to $1,404,389 for the three months ended September 30, 2017, compared to $231,754 for the three months ended September 30, 2016. General and administrative costs for the three months ended September 30, 2017 were comprised of stock-based compensation and consulting costs of $584,875 and personnel expenses of $229,815.

Operating and net loss for the three months ended September 30, 2017 increased by $724,454 to $953,747, compared to a $229,293 operating and net loss in the three months ended September 30, 2016. Of note, the operating and net loss for the three months ended September 30, 2017 included non-cash stock-based compensation of $584,875.

As of September 30, 2017, Znergy had $131,444 of cash, $697,389 of accounts receivable, $0 traditional debt and 227.6 million shares issued and outstanding.

Financial Results for the Nine Months Ended September 30, 2017:

Revenue for the nine months ended September 30, 2017 was $1,302,217, compared to $14,701 for the nine months ended September 30, 2016. Revenues in 2017 comprise LED installation projects and associated rebates from utilities while revenues in 2016 consist of consulting services. The increase in revenues is due to the increase in personnel, implementing formalized training programs, resulting in increased sales and marketing efforts.

Gross profit of $705,556 was recorded in the nine months ended September 30, 2017, compared to a gross profit of $14,701 in the nine months ended September 30, 2016. This represented a gross profit margin of 54.2%. Costs of revenue in 2017 comprised primarily LED product and installation costs, including labor and rental equipment.

Selling, general and administrative expenses increased by $3,444,514 to $3,818,004 for the nine months ended September 30, 2017, compared to $373,490 for the nine months ended September 30, 2016. General and administrative costs for the nine months ended September 30, 2017 were comprised of $2,656,325 in common stock and options issued for services and $519,085 in common stock and warrants issued for interest related to the conversion of debt.

Operating and net loss for the nine months ended September 30, 2017 increased by $2,760,795 to $3,112,448, compared to a $351,653 operating and net loss in the nine months ended September 30, 2016. Of note, the operating and net loss for the nine months ended September 30, 2017 included non-cash stock-based compensation of $3,175,410.

About Znergy, Inc.

Znergy, Inc. (OTC PINK: ZNRG) is a provider of energy efficient lighting products, lighting controls, and energy management solutions. Management is executing a growth strategy through developing large regional and national accounts, rolling out sales and installation teams across the United States. Our solutions enable customers to reduce energy consumption, lower maintenance costs and realize environmental benefits. Znergy is headquartered in Tampa, Florida. For more information, please visit: www.znergyworld.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this press release are forward-looking statements. These statements relate to future events or to the Company’s future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause 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. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond the Company’s control which could, and likely will materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. Such risks, uncertainties, and other factors, which could impact the Company and the forward-looking statements contained herein are included in the Company’s filings with the Securities and Exchange Commission. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Contact Information

Znergy, Inc.
C. J. Floyd
(800) 931-5662
cj.floyd@znergyworld.com

Hayden IR
(917) 658-7878
hart@haydenir.com

Znergy, Inc. and Subsidiaries
Consolidated Balance Sheets

September 30,

December 31,

2017

2016

(UNAUDITED)

ASSETS

CURRENT ASSETS

Cash

131,444

40,507

Accounts receivable, net of allowance

697,389

79,612

Prepaid expenses

76,460

3,750

Inventory

389,768

192,105

Total current assets

1,295,061

315,974

Fixed Assets, net

306,189

2,567

Intangible assets, net

1,845

TOTAL ASSETS

1,603,095

320,386

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES

Accounts payable

251,131

284,930

Accrued expenses

185,588

139,336

Customer deposits

64,383

6,605

Advances

–

60,000

Loan, building

225,000

–

Loan from related party

892

135,749

Total current liabilities

726,994

626,620

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred stock, $0.0001 par value, 100,000,000

authorized shares; no shares issued and outstanding

–

Common stock, $0.0001 par value; 500,000,000 shares

authorized; 227,624,960 and 193,150,000 shares issued

and outstanding at September 30, 2017 and

December 31, 2016

22,762

19,315

Additional paid-in-capital

11,917,435

7,626,099

Accumulated deficit

(11,064,096

)

(7,951,648

)

Total Stockholders’ Equity (Deficit)

876,101

(306,234

)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

1,603,095

320,386

Znergy, Inc. and Subsidiaries
Consolidated Statements of Operations

For the Three Months Ended

For the Nine Months Ended

September 30,

2017

2016

2017

2016

Revenue

873,976

2,461

1,302,217

14,701

Cost of revenue

423,334

–

596,661

–

Gross profit

450,642

2,461

705,556

14,701

Selling, general and administrative expenses

1,404,389

231,754

3,818,004

373,490

Loss from operations

(953,747

)

(229,293

)

(3,112,448

)

(358,789

)

Other income (expense)

Other income

–

7,136

Total other income

–

7,136

Provision for income taxes

–

Net loss

(953,747

)

(229,293

)

(3,112,448

)

(351,653

)

Net loss per common share – basic and diluted

(0.00

)

(0.00

)

(0.02

)

(0.00

)

Weighted average number of shares outstanding

– basic and diluted

214,074,451

185,060,753

205,493,759

203,991,818

Znergy, Inc. and Subsidiaries
Consolidated Statements of Cash Flows

For the Nine

Months Ended

September 30,

2017

2016

CASH FLOWS USED IN OPERATING ACTIVITIES:

Net loss

(3,112,448

)

(351,653

)

Adjustments to reconcile net loss to net cash

used in operating activities:

Depreciation and amortization

1,862

2,500

Common stock and options issued for services

2,656,325

197,169

Common stock and options issued for interest on debt converted

519,085

–

Contributed services

–

10,640

Accounts receivable

(617,777

)

(23,480

)

Prepaid expenses

(72,710

)

–

Inventory

(197,663

)

(19,341

)

Accounts payable & accrued expenses

21,818

69,534

Customer deposits

57,778

–

Net cash used in operating activities

(743,730

)

(114,631

)

CASH FLOWS USED IN INVESTING ACTIVITIES:

Purchase of fixed assets

(80,483

)

(1,213

)

Net cash used in investing activities

(80,483

)

(1,213

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of common stock

795,000

–

Repayment of advances from third parties

(106,340

)

–

Payments of Loan from Related Parties

(260

)

–

Advances from third parties

226,750

123,526

Net cash provided by financing activities

915,150

123,526

INCREASE IN CASH

90,937

7,682

CASH, BEGINNING OF PERIOD

40,507

1,279

CASH, END OF PERIOD

131,444

8,961

Supplemental Disclosures

Non-cash investing and financing activities:

Transfer of assets and liabilities to related party for return of common shares

–

1,018,679

Purchase of building with note

225,000

–

Repayment of debt with common stock and options

324,372

–

SOURCE: Znergy Inc.

ReleaseID: 482091

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