UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~December 31,~~June ~~2016~~30, 2017

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

For the transition period from ______to______.

3Power Energy Group, Inc.

(Exact name of registrant as specified in its charter)

Nevada	333-103647	98-0393197
(State or other jurisdiction of incorporation or	(Commission File Number)	(I.R.S. Employee Identification No.)
organization)

PO Box 50006

Sh. Rashid Building

Sh. Zayed Road

Dubai, United Arab Emirates

(Address of principal executive office, Zip Code)

011 97 14 3210312

(Registrant’s telephone number, including area code)

Not Applicable.

(Former name, former address and former fiscal year, if changed since last report)

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 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 ¨ No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No ¨

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

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ ~~(Do~~Smaller ~~not check if a smaller~~ reporting company) ~~Smaller~~x ~~reporting~~Emerging growth company x¨

If an emerging growth company, indicate by check mark 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 Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common equity: As of ~~February~~August 1721, 2017, ~~249~~274,~~949~~295,~~923~~110 shares of Common Stock, par value $0.0001 per share are issued and outstanding.

3POWER ENERGY GROUP, INC.

QUARTERLY REPORT ON FORM 10-Q

~~December~~June 3130, 2016

TABLE OF CONTENTS

		PAGE
PART I: FINANCIAL INFORMATION		4
Item 1:	Financial Statements
	Condensed Consolidated Balance Sheets as of December 31, 2016 (unaudited) and March 31, 2016	4
	Condensed Consolidated Balance Sheets as of June 30, 2017 (unaudited) and March 31, 2017	4
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended December 31, 2016 and 2015	5
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended June 30, 2017 and 2016	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2016 and 2015	6
	Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2017 and 2016	6
	Notes to the Unaudited Condensed Consolidated Financial Statements	7
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operation	1615
Item 3:	Quantitative and Qualitative Disclosures about Market Risk	2019
Item 4:	Controls and Procedures	20
PART II: OTHER INFORMATION		2120
Item 1:	Legal Proceedings	2120
Item 1A:	Risk Factors	2120
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	2120
Item 3:	Defaults Upon Senior Securities	2120
Item 4:	Mine Safety Disclosures	2221
Item 5:	Other Information	2221
Item 6:	Exhibits	2221
SIGNATURES		2322

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The following cautionary statements identify important factors that could cause our actual results to differ materially from those projected in forward-looking statements made in this Quarterly Report on Form 10-Q (this “Report”) and in other reports and documents published by us from time to time. Any statements about our beliefs, plans, objectives, expectations, assumptions, future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “believes,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intend,” “plan,” “projection,” “outlook” and the like, constitute “forward-looking statements” . Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of our Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned to carefully read all “Risk Factors” set forth under Item 1A under the Company’s Annual Report on Form 10-K and not to place undue reliance on any forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments, except as required by the Exchange Act. New factors emerge from time to time, and it is not possible for us to predict which will arise or to assess with any precision the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Unless otherwise provided in this Report, references to the “Company,” the “Registrant,” the “Issuer,” “we,” “us,” and “our” refer to 3Power Energy Group Inc. and its subsidiaries.

PART I: FINANCIAL INFORMATION

Item 1.

Financial Statements

3POWER ENERGY GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31,			March 31,
	June 30,			March 31,
	2016			2016
	2017			2017
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	24,~~215~~581		$	919,~~097~~495
Prepaid and other current assets		1011,~~863~~104			10,~~857~~735
Total current assets		1315,~~078~~685			1930,~~954~~230
Property and equipment, net		35,~~266~~166			3732,~~825~~936
Total assets	$	4850,~~344~~851		$	5763,~~779~~166
LIABILITIES AND DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	54,~~125~~949,~~174~~039		$	54,~~252~~860,~~098~~927
Accrued interest		~~909~~1,~~071~~011,843			~~768~~958,~~893~~870
Notes payable		~~494~~536,~~229~~867			~~533~~502,~~699~~035
Due to related parties		1767,~~133,000~~177			~~845~~605,~~129~~989
Total current liabilities		7,~~661~~264,~~474~~926			76,~~399~~927,~~819~~821
Commitments and contingencies		-			-
Deficit
Common stock,$0.0001 par value, 300,000,000 shares authorized, 249,949,923 shares issued and outstanding as of December 31, 2016 and March 31, 2016		24,995			24,995
Common stock,$0.0001 par value, 300,000,000 shares authorized, 274,295,110 shares issued and outstanding as of June 30, 2017 and March 31, 2017		27,430			27,430
Additional paid in capital		1112,~~468~~440,~~714~~089			1112,~~468~~440,~~714~~089
Other comprehensive income		~~336~~223,~~948~~764			83337,~~147~~686
Accumulated deficit		(19,~~123~~561,~~393~~236	)		(1819,~~635~~337,~~088~~016	)
Total deficit attributable to 3Power Energy Group, Inc.		(76,~~292~~869,~~736~~953	)		(76,~~058~~531,~~232~~811	)
Non-controlling interest		(~~320~~344,~~394~~122	)		(~~283~~332,~~808~~844	)
Total deficit		(7,~~613~~214,~~130~~075	)		(76,~~342~~864,~~040~~655	)
Total liabilities and deficit	$	4850,~~344~~851		$	5763,~~779~~166

See the accompanying notes to these unaudited condensed consolidated financial statements

3POWER ENERGY GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

	Three months ended December 31,						Nine months ended December 31,
	Three months ended June 30,
	2016			2015			2016			2015
	2017			2016
Operating expenses:
Selling, general and administrative	$	~~137~~146,~~157~~696		$	~~191~~149,~~077~~642		$	~~421,162~~		$	~~691,300~~
Depreciation		~~1,021~~864			~~1,006~~987			~~3,005~~			~~2,764~~
Total operating expenses		~~138~~147,~~178~~560			~~192~~150,~~083~~629			~~424,167~~			~~694,064~~
Loss from operations		(~~138~~147,~~178~~560	)		(~~192~~150,~~083~~629	)		~~(424,167~~	)		~~(694,064~~	)
Other income (expense):
Interest expense		(4653,~~869~~106	)		(4245,~~244~~792	)		~~(140,194~~	)		~~(122,868~~	)
Foreign currency transaction gain (loss)		32,664			14,570			39,470			(2,632	)
Foreign currency transaction (loss) gain		(34,832	)		11,821
Net loss before income taxes		(~~152~~235,~~383~~498	)		(~~219~~184,~~757~~600	)		~~(524,891~~	)		~~(819,564~~	)
Provision for income taxes		-			-			-			-
Net loss		(~~152~~235,~~383~~498	)		(~~219~~184,~~757~~600	)		~~(524,891~~	)		~~(819,564~~	)
Net loss attributable to Non-controlling interest		1311,~~141~~278			1113,~~552~~101			~~36,586~~			~~52,213~~
NET LOSS ATTRIBUTABLE TO 3POWER ENERGY GROUP, INC.	$	(~~139~~224,~~242~~220	)	$	(~~208~~171,~~205~~499	)	$	~~(488,305~~	)	$	~~(767,351~~	)
Loss per common share (basic and diluted):	$	(0.00	)	$	(0.00	)	$	~~(0.00~~	)	$	~~(0.00~~	)
Weighted average number of shares outstanding (basic and diluted)		~~249~~274,~~949~~295,~~923~~110			249,949,923			~~249,949,923~~			~~249,949,923~~
Comprehensive loss:
Net loss	$	(~~152~~235,~~383~~498	)	$	(~~219~~184,~~757~~600	)	$	~~(524,891~~	)	$	~~(819,564~~	)
Foreign currency translation income		73,830			44,122			253,801			3,900
Foreign currency translation (loss) income		(113,922	)		119,817
Comprehensive loss:		(78349,~~553~~420	)		(~~175~~64,~~635~~783	)		~~(271,090~~	)		~~(815,664~~	)
Comprehensive loss attributable to non-controlling interest		1311,~~141~~278			1113,~~552~~101			~~36,586~~			~~52,213~~
Comprehensive loss attributable to 3Power Energy Group, Inc.	$	(65338,~~412~~142	)	$	(~~164~~51,~~083~~682	)	$	~~(234,504~~	)	$	~~(763,451~~	)

See the accompanying notes to these unaudited condensed consolidated financial statements

3POWER ENERGY GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Nine months ended December 31,
	Three months ended June 30,
	2016			2015
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(~~524~~235,~~891~~498	)	$	(~~819~~184,~~564~~600	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation		~~3,005~~864			~~2,764~~987
Foreign currency transaction (gain) loss		(39,470	)		2,632
Foreign currency transaction loss (gain)		34,832			(11,821	)
Changes in operating assets and liabilities:
Advances from related party		~~287~~106,~~871~~783			~~525~~114,~~271~~246
Prepaid and other current assets		(6-	)		~~(35,787~~15	)
Accounts payable and accrued expenses		~~126~~24,~~431~~262			~~243~~40,~~371~~162
Accrued interest		~~140~~52,~~178~~973			~~122~~45,~~069~~287
Net cash (used in) provided by operating activities:		(615,~~882~~784	)		404,~~756~~276
CASH FLOWS FROM INVESTING ACTIVITIES:
Effective of currency rate change on cash		870			-
Purchase of equipment		-			(40,342	)
Net (decrease) increase in cash and cash equivalents		(14,914	)		4,276
Net cash used in investing activities		-			(40,342	)
Cash and cash equivalents-beginning of period		19,495			9,097
Net (decrease) increase in cash and cash equivalents		(6,882	)		414
Cash and cash equivalents-end of period	$	4,581		$	13,373
Cash and cash equivalents-beginning of period		9,097			1,585
Cash and cash equivalents-end of period	$	2,215		$	1,999
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	-		$	-
Income taxes	$	-		$	-
Non cash investing and financing activities:	$	-		$	-

See the accompanying notes to these unaudited condensed consolidated financial statements

3POWER ENERGY GROUP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~DECEMBER~~JUNE 3130, ~~2016~~2017

NOTE 1 —– ORGANIZATION AND BUSINESS

3Power Energy Group, Inc. (the “Company”) was incorporated in the State of Nevada on December 18, 2002 under the name ATM Financial Corp. On April 1, 2008, the Company changed its name from ATM Financial Corp. to Prime Sun Power Inc. On March 30, 2011, the Company changed its name from Prime Sun Power Inc. to 3Power Energy Group, Inc. and increased its authorized share capital to 300,000,000 shares. The Company isplans into ~~the~~pursue a business ofmodel producing renewable generated electrical power and other alternative energies.

The Company's primary ~~effort~~efforts is to sell electricity generated by solar, wind, hydro, biomass and other renewable energy resources and to develop, build and operate power plants based on these technologies. The core approach of the Company's business is to deliver energy in markets where there is an inherent energy gap between supply and demand or where there exists long term, stable, government back by financial support for development of renewable energy.

On May 13, 2011, pursuant to a Stock Purchase Agreement (the “Stock Purchase Agreement”), the Company consummated a reverse merger (“Merger”) with Seawind Energy Limited (“Seawind Energy”), Seawind Services Limited (“Seawind Services”, and together with Seawind Energy, the “Seawind”) and the shareholders of Seawind Energy (the “Seawind Group Shareholders” and together with the Company, and the Seawind Companies, the “Parties”). The Seawind Companies were formed under the laws of the United Kingdom.

In connection with the Merger, the Company issued 40,000,000 restricted shares of the Company’s common stock to the Seawind Group Shareholders (such acquisition is referred to herein as the “Seawind Acquisition”).

Upon completion of the Stock Purchase Agreement, Seawind became 3Power Group, Inc.'s wholly-owned subsidiary. For accounting purposes, the acquisition has been treated as a recapitalization of Seawind with Seawind as the acquirer (reverse acquisition). The historical financial statements prior to May 13, 2011 are those of Seawind Energy. The Merger was accounted for as a “reverse merger”, since the stockholders of Seawind owned a majority of the Company’s common stock immediately following the transaction and their management has assumed operational, management and governance control.

The transaction was accounted for as a recapitalization of Seawind pursuant to which Seawind was treated as the surviving and continuing entity. The Company did not recognize goodwill or any intangible assets in connection with this transaction. Accordingly, the Company’s historical financial statements are those of Seawind immediately following the consummation of the reverse merger. The accompanying consolidated financial statements give retroactive effect to the recapitalization.

In anticipation of the closing of the Stock Purchase Agreement, the Company changed its name to 3Power Energy Group Inc. and increased its authorized share capital to 300,000,000 shares.

On July 4, 2011, the Seawind Energy Limited and Seawind Service Limited changed their name to 3Power Energy Limited and 3Power Project Service Limited, respectively.

Acquisition of Shala Energy sh .p .k:

On June 5, 2012, the Company and Shala Energy sh.p.k ("Shala") executed a master acquisition agreement (the “Acquisition Agreement”) where Shala agreed to transfer and the Company agreed to acquire 75% of the equity of Shala. Under the Acquisition Agreement (the “Acquisition”), the closing of the acquisition is subject to the Company’s completion and satisfaction of the due diligence on Shala and Shala’s partners with respect to their shares in Shala and upon the Company’s payment of the first year premium for the insurance bond premium issued in favor of the Ministry of Economy, Trade and Energy of Republic of Albania in replacement of the then existing bank guarantee issued in favor of Ministry of Economy, Trade and Energy of Republic of Albania for the Shala River Concession Agreement, in the amount of 7,230,315 Euro (the “Required Insurance Bond Premium”). Shala is a firm specializing in developing hydro-electric projects, owning and operating sustainable energy projects in the hydro, wind and solar power sectors in Albania.

3POWER ENERGY GROUP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~DECEMBER~~JUNE 3130, ~~2016~~2017

Acquisition of Shala Energy sh .p .k:

On June 5, 2012, the Company and Shala Energy sh.p.k ("Shala") executed a master acquisition agreement (the “Acquisition Agreement”) where Shala agreed to transfer and the Company agreed to acquire 75% of the equity of Shala. Under the Acquisition Agreement (the “Acquisition”), the closing of the acquisition was subject to the Company’s completion and satisfaction of the due diligence on Shala and Shala’s partners with respect to their shares in Shala and upon the Company’s payment of the first year premium for the insurance bond premium issued in favor of the Ministry of Economy, Trade and Energy of Republic of Albania in replacement of the then existing bank guarantee issued in favor of Ministry of Economy, Trade and Energy of Republic of Albania for the Shala River Concession Agreement, in the amount of 7,230,315 Euro (the “Required Insurance Bond Premium”). Shala is a firm specializing in developing hydro-electric projects, owning and operating sustainable energy projects in the hydro, wind and solar power sectors in Albania.

On August 10, 2012, after the conclusion of the due diligence efforts, the Company made the first year payment of required Insurance Bond Premium in the amount of 164,851 Euro ($211,972), and as such the Acquisition closed. The acquisition resulted in the Company acquiring 75% of the interest in a hydro-electrical project of a total installed power of 127.6 MW of Shala River in Albania. The Shala River project finalization is in process with the Ministry of Albania.

In connection the acquisition of Shala, the Company is obligated for an aggregate of 4% of the total project costs as facilitator fees in either cash or the Company's common stock to Capital Trust Holding AG, as advisor for the Shala acquisition transaction. During the year ended March 31, 2013, the Company accrued $600,000 due to the facilitator fees for feasibility studies in process and recorded as expenses. In December 2013, the Company issued to Capital Trust Holding AG and its affiliates, 15,000,000 shares of its common stock, valued at $0.04 per share in settlement of the facilitator fees for feasibility studies.

During the year ended March 31, 2016, Shala began operations, acquiring assets and incurring costs. As such, its activity is including in the consolidated balance sheet and statement of operations for the current period.

Liquidation/winding up of international subsidiaries:

On October 8, 2012, the High Court of Justice in the United Kingdom issued a winding-up order for the liquidation and winding up of the affairs of 3Power Project Services Limited, a wholly owned subsidiary of the Company’s Subsidiary, 3Power Energy Limited.

By the letter of The Insolvency Service dated October 12, 2012, the Company was required to provide information relating to 3Power Project Services Limited to the Official Receiver’s Office (a government body of Plymouth, the United Kingdom) and attend an interview with staff of the Official Receiver’s Office to review the prospect of recovering the assets of 3Power Project Services Limited for the benefit of creditors.

The Company was also required to deliver to the Official Receiver’s Office certain assets (cash or cheque) and accounting records that are still in its possession or control. The Company has attended the interview and delivered all the available accounting records to the Officer Receiver’s Office. No order confirming a plan of reorganization, arrangement or liquidation has been entered as of this filing.

On January 17, 2013, the Company filed a Strike off application with the Registrar of Companies in the United Kingdom to dissolve 3Power Energy Limited, a wholly owned subsidiary of the Company. Such strike-off application has yet to be approved as of the date of this report.

Consolidated 3Power Energy Limited (including liabilities of 3Power Project Services Limited) had liabilities as of December 31, 2016 as below:

Current liabilities $ 1,503,607

3POWER ENERGY GROUP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2016

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The following (a) condensed consolidated balance sheet as of March 31, ~~2016~~2017, which has been derived from audited consolidated financial statements, and (b) the unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three ~~and nine~~ months ended ~~December~~June 3130, ~~2016~~2017 are not necessarily indicative of results that may be expected for the year ending March 31, ~~2017~~ 2018. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated ~~financial~~ financial statements and notes thereto for the year ended March 31, ~~2016~~2017 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on July 14, ~~2016~~2017.

Basis of presentation:

The unaudited condensed consolidated financial statements include the accounts of the Company and it’s wholly and majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

ASC 605-10 incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arraignments (“ASC 605-25”). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing 605-25 on the Company's financial position and results of operations was not significant.

Use of estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

9Comprehensive Income (Loss)

The Company applies Accounting Standards Codification subtopic 220-10, Comprehensive Income (“ASC 220-10”). ASC 220-10 establishes standards for the reporting and displaying of comprehensive income and its components. Comprehensive income is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

3POWER ENERGY GROUP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~DECEMBER~~JUNE 3130, ~~2016~~2017

Comprehensive Income (Loss)

The Company applies Statement of Accounting Standards Codification subtopic 220-10, Comprehensive Income (“ASC 220-10”). ASC 220-10 establishes standards for the reporting and displaying of comprehensive income and its components. Comprehensive income is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. ASC 220-10 requires other comprehensive income (loss) to include foreign currency translation adjustments and unrealized gains and losses on available for sale securities.

Cash and Cash Equivalents

For purposes of the Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalents.

Functional currency

The accompanying unaudited condensed consolidated financial statements are presented in U.S. dollars ("USD"). The Company's functional currencies are British pounds ("GBP") and Albania Lek (“LEK”). The consolidated financial statements are translated into USD in accordance with Codification ASC 830, Foreign Currency Matters. All assets and liabilities were translated at the current exchange rate, at respective balance sheet dates, shareholders' equity is translated at the historical rates and income statement items are translated at ~~the~~an average exchange rate for the reporting periods. The resulting translation adjustments are reported as other comprehensive income ~~(loss)~~ and accumulated other comprehensive income in the shareholders' equity in accordance with Codification ASC 220,

~~Comprehensive~~Transaction ~~Income~~gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into GBP or LEK, as applicable at the rate on the date of the transaction and included in the results of operations as incurred.

Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into GBP at the rate on the date of the transaction and included in the results of operations as incurred. There were no material transaction gains or losses in the periods presented.

The exchange rates used to translate amounts in GBP and LEK into USD for the purposes of preparing the consolidated financial statements were as follows:

Balance sheet:

	December 31,		March 31,
	June 30,		March 31,
	2016		2016
	2017		2017
Period-end GBP: USD exchange rate	$	1.~~233~~30017	$	1.~~436~~24866
Period-end LEK: USD exchange rate	$	0.~~008~~008527	$	0.~~008~~00779

Income statement:

	December 31,		December 31,
	June 30,		June 30,
	2016		2015
	2017		2016
Average Nine Month GBP: USD exchange rate	$	1.243	$	1.533
Average Quarterly GBP: USD exchange rate	$	N/A	$	1.331
Average Nine Month LEK: USD exchange rate	$	0.0080	$	0.0078
Average Quarterly LEK: USD exchange rate	$	0.008095	$	0.008

10Per share data

The Company accounts for net loss per share in accordance with Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”), which requires presentation of basic and diluted earnings per share (“EPS”) on the face of the statement of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS.

Basic net loss per common share is calculated by dividing net loss, by the weighted average number of outstanding shares of common stock, adjusted to give effect to the exchange ratio in the Share Exchange in May 2011 (see Note 1), which was accounted for as recapitalization of the Company. Diluted loss per share is calculated by dividing the net loss attributable to Common shareholders by the sum of the weighted average number of Common shares outstanding plus potential dilutive common shares outstanding during the period. The Company had no common stock equivalents as of June 30, 2017 and 2016.

3POWER ENERGY GROUP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~DECEMBER~~JUNE 3130, ~~2016~~2017

Per share data:

Basic and diluted net loss per common share is calculated by dividing net loss, by the weighted average number of outstanding shares of common stock, adjusted to give effect to the exchange ratio in the Merger in May 2011 (see Note 1), which was accounted for as recapitalization of the Company. The Company had no common stock equivalents as of December 31, 2016 and 2015.

Income taxes

~~Deferred~~Income ~~income~~ tax ~~assets~~provisions ~~and~~or ~~liabilities~~benefits for interim periods are ~~determined~~computed based on the Company’s estimated ~~future~~annual effective tax ~~effects~~rate. ofBased ~~net~~on ~~operating~~the ~~loss~~Company's historical losses and ~~credit~~its ~~carry~~expectation ~~forwards~~of ~~and~~continuation ~~temporary~~of ~~differences between~~losses for the ~~tax~~foreseeable ~~basis~~future, ofthe Company has determined that it is not more likely than not that deferred tax assets ~~and~~will ~~liabilities~~be realized and, ~~their~~accordingly, ~~respective~~has ~~financial~~provided ~~reporting~~a ~~amounts~~full ~~measured~~valuation atallowance. As the ~~current~~Company ~~enacted~~anticipates or anticipated that its net deferred tax ~~rates.~~assets ~~The~~at ~~Company~~June ~~records~~30, an2017 ~~estimated~~and March 31, 2017 would be fully offset by a valuation allowance, there onis ~~its~~no ~~deferred~~federal or state income tax ~~assets~~benefit iffor itthe isthree ~~not~~months ~~more~~ended ~~likely~~June ~~than not~~30, ~~that~~2017 ~~these~~and ~~deferred~~2016 ~~income~~related ~~tax~~to ~~assets~~losses ~~will~~incurred beduring such ~~realized~~periods.

The Company recognizes a 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 taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of ~~December~~June 3130, ~~2016~~2017 and March 31, ~~2016~~2017, the Company has not recorded any unrecognized tax benefits.

Segment Information

Accounting Standards Codification subtopic Segment Reporting 280-10 (“ASC 280-10”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment.

Accounting for Stock-Based Compensation

The Company ~~accounts~~measures ~~for~~the ~~stock,~~cost ~~stock~~of ~~options~~services ~~and~~received ~~warrants~~in ~~using~~exchange for an award of equity instruments based on the fair value ~~method~~of ~~promulgated~~the byaward. ~~Accounting~~For ~~Standards~~employees ~~Codification~~and ~~subtopic 480-10~~directors, ~~Distinguishing Liabilities~~the ~~from~~fair ~~Equity~~value ~~(“ASC~~of ~~480-10”)~~the ~~which~~award ~~addresses~~is measured on the ~~accounting~~grant date and for ~~transactions~~non-employees, inthe ~~which~~fair anvalue ~~entity~~of ~~exchanges~~the ~~its~~award ~~equity~~is generally re-measured ~~instruments~~on ~~for~~vesting ~~goods~~dates orand ~~services.~~interim ~~Therefore,~~financial ~~results~~reporting ~~include~~dates ~~non-cash~~until ~~compensation~~the ~~expense~~service asperiod ais ~~result~~complete. ofThe ~~the~~fair ~~issuance~~value ofamount ~~stock,~~is then recognized ~~stock~~over ~~options~~the ~~and~~period ~~warrants~~during ~~and~~which weservices ~~expect~~are required to ~~record~~be ~~additional~~provided ~~non-cash~~in exchange for the award, usually the vesting period. Stock-based compensation expense is recorded by the Company in the ~~future~~same expense classifications in the statement of operations, as if such amounts were paid in cash.

~~The~~Recent ~~Company follows~~ Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”) which requires that all share-based payments to both employees and non-employees be recognized in the income statement based on their fair values.Pronouncements

In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS.

3POWER ENERGY GROUP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~DECEMBER~~JUNE 3130, ~~2016~~2017

~~Recent~~Convertible ~~Accounting~~instruments ~~Pronouncements~~with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception.

~~There~~Those ~~were~~amendments ~~various~~do ~~updates~~not ~~recently~~have ~~issued~~an accounting byeffect. ~~the~~For ~~Financial~~public ~~Accounting~~business ~~Standards Board~~entities, ~~most~~the amendments in Part I of ~~which~~this ~~represented~~Update ~~technical~~are ~~corrections~~effective tofor ~~the~~fiscal ~~accounting~~years, ~~literature~~and orinterim ~~application~~periods towithin ~~specific~~those ~~industries~~fiscal ~~and~~years, ~~are~~beginning ~~not~~after ~~expected~~December to15, a2018. ~~have~~Early aadoption ~~material~~is ~~impact~~permitted onfor all entities, including adoption in an interim period. If an entity early adopts the ~~Company's~~amendments ~~consolidated~~in ~~financial~~an ~~position~~interim period, ~~results~~any adjustments should be reflected as of the beginning of ~~operations~~the orfiscal ~~cash~~year ~~flows~~that includes that interim period. The Company is currently reviewing the impact of adoption of ASU 2017-11on its unaudited condensed consolidated financial statements.

~~NOTE~~There 3are —various ~~GOING~~other ~~CONCERN~~updates ~~MATTERS~~recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

~~The~~NOTE ~~accompanying~~3 ~~unaudited~~- ~~condensed~~GOING ~~consolidated financial~~CONCERN ~~statements~~AND ~~have been prepared on a basis that assumes the Company will continue as a going concern. As of~~MANAGEMENT’S ~~December~~LIQUIDITY 31, 2016, the Company has accumulated deficit of $19,123,393 applicable to controlling interest as compared with a deficit of $18,635,088 applicable to controlling interest as of March 31, 2016, and has incurred significant operating losses and negative cash flows. For the nine months ended December 31, 2016, the Company sustained a net loss of $488,305 compared to a net loss of $767,351 for the nine months ended December 31, 2015. The Company will need additional financing which may take the form of equity or debt and the Company has converted certain liabilities into equity. In the event the Company are not able to increase its working capital, the Company will not be able to implement or may be required to delay all or part of its business plan, and their ability to attain profitable operations, generate positive cash flows from operating and investing activities and materially expand the business will be materially adversely affected. The accompanying unaudited condensed consolidated financial statements do not include any adjustments relating to the classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the company be unable to continue in existence.PLANS

The accompanying unaudited condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern. As of June 30, 2017, the Company has a deficit of $19,561,236 applicable to controlling interest compared with deficit of $19,337,016 applicable to controlling interest for the year ended March 31, 2017, and has incurred significant operating losses and negative cash flows. For the three months ended June 30, 2017, the Company sustained a net loss attributable to the Company of $224,220 compared to a net loss of $171,499 for the three months ended June 30, 2016.

The Company's primary source of operating funds has been cash proceeds from related party loans. The Company intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.

Accordingly, the accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The unaudited condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

NOTE 4 — PROPERTY AND EQUIPMENT

Property and equipment as of ~~December~~June 3130, ~~2016~~2017 and March 31, ~~2016~~ 2017 summarized as follows:

	December 31, 2016			March 31, 2016
	June 30, 2017			March 31, 2017
Furniture and equipment	$	1415,~~698~~471		$	14,~~382~~125
IT and other equipment		2728,~~438~~880			2726,~~192~~367
		42,136			41,574
		44,351			40,492
Less accumulated depreciation		(69,~~870~~185	)		(37,~~749~~556	)
	$	35,~~266~~166		$	3732,~~825~~936

3POWER ENERGY GROUP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2017

Property and equipment are recorded on the basis of cost. For financial statement purposes, property, plant and equipment are depreciated using the straight-line method over their estimated useful lives.

Expenditures for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its property and equipment for impairment in accordance with the guidance for impairment of long lived assets.

During the three ~~and nine~~ months ended ~~December~~ 31June 30, 2017 and 2016, the Company charged to operations depreciation expense of $~~1,021~~864 and $3987,~~005,~~ respectively~~, and $1,006 and $2,764 for the three and nine months ended December 31, 2015~~.

NOTE 5 - NOTES PAYABLE

On March 2, 2010, the Company issued an unsecured Senior Promissory Note ("Note") for 470,000 Euros ($536,867 at June 30, 2017) initially due on December 31, 2010 including interest at 7.5% per annum. Upon default by the Company on January 1, 2011, the interest rate of 15% per annum applies. The Note has not been paid by the Company. As of June 30, 2017 and March 31, 2017, accrued interest on this note was $928,721 and $875,748 respectively. During three months ended June 30, 2017 and 2016, the Company recognized a loss of $34,832 and gain of $11,821 respectively, on foreign currency translation due to the change in exchange rates between the Euro and the USD.

On November 14, 2012, CRG Finance AG (“CRG”) filed a complaint in the District Court for Southern District of New York for allegedly beaching a promissory note. However, the Company’s contention is that the promissory note was satisfied by a third party, Rudana Investment Group AG.

On January 17, 2013, the Company filed a motion to compel arbitration and on May 23, 2013, the Court granted the Company’s Motion to Compel and ordered that CRG file its claims as a AAA arbitration. On June 5, 2013, CRG filed its statement of claim with the AAA in the International Center for Disputed Resolution division. The Company filed its statement answer on July 8, 2013. The Company denies the allegations in the complaint and claims it is without merit. In defense of the action, the Company’s counsel vigorously sought documents from Rudana in an effort to establish the Company’s defense. However, due to the fact that Rudana was in the midst of a bankruptcy action in the Swiss Bankruptcy Court, the Company’s counsel sought an order from the AAA Arbitrator authorizing the Swiss Bankruptcy Court to provide documents establishing Rudana’s satisfaction of the debt. On or about December 13, 2013, the AAA Arbitrator entered such an order and the Company’s counsel requested the documents. However, after the Company’s counsel made several requests to postpone the arbitration to allow time to receive the requested documents, the Company was not able to obtain the necessary documents from the Swiss Bankruptcy Court.

The Final Hearing in the AAA arbitration took place on February 27, 2014, wherein the Company was not able to establish its defense due to the lack of evidence from Rudana. The AAA Arbitrator entered an award of Euro 470,000 plus interest at the annual rate of 7.5% against the Company. As of March 31, 2014, the total award against the Company is Euro 728,241 ($1,012,401). On or about April 4, 2014, in an effort to perfect this award against the Company, CRG filed a petition with the Southern District of New York seeking to confirm the award. In addition, the Company accrued total of $56,835 as reimbursement of attorney fees and cost incurred by CRG and $15,500 as administrative fees and compensation to the Arbitrator. On July 8, 2014, a judgment has been entered against 3Power in the Southern District of New York in the amount of $1,086,186. That judgment remains unpaid.

NOTE 6 - COMMON STOCK

The Company is authorized to issue 300,000,000 shares of $0.0001 par value common stock. As of June 30, 2017 and March 31, 2017, 274,295,110 shares were issued and outstanding.

3POWER ENERGY GROUP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~DECEMBER~~JUNE 3130, ~~2016~~2017

NOTE 57 —- ~~NOTES~~RELATED ~~PAYABLE~~PARTY TRANSACTIONS

OnThe ~~March 2, 2010, the~~ Company’s ~~issued~~current anand former ~~unsecured~~officers ~~Senior~~and ~~Promissory~~stockholders ~~Note~~have ~~("Note")~~advanced ~~for~~funds ~~470,000 Euros ($494,228 at December 31, 2016) initially due~~ on ~~December 31,~~a ~~2010 including~~ non-interest atbearing ~~7.5%~~basis ~~per~~to ~~annum. Upon default by~~ the Company onfor ~~January~~travel 1,related ~~2011,~~and ~~the~~working ~~interest rate of 15% per annum~~capital ~~applies~~purposes. The ~~Note~~Company has not ~~been~~entered ~~paid~~into byany agreement on the ~~Company~~repayment terms for these advances. As of ~~December~~June 30, 2017 and March 31, ~~2016~~2017, ~~accrued~~there ~~interest~~were on$767,177 ~~this~~and ~~note~~$605,989 ~~was~~advances ~~$825~~outstanding,~~949~~ respectively.

OnAs ~~November~~of 14June 30, ~~2012~~2017 and March 31, ~~CRG~~2017, the ~~Finance~~Company AGowed approximately £117,918 (~~“CRG”~~$153,313) ~~filed~~ aand ~~complaint~~£117,918 in($147,239), ~~the~~respectively, ~~District~~to ~~Court~~Seawind ~~for~~Marine ~~Southern~~Limited, a ~~District~~company ofcontrolled ~~New~~by ~~York~~the ~~for~~former ~~allegedly~~directors, ~~beaching~~Mr. aT ~~promissory~~P ~~note~~G Adams and Mr. J R Wilson.

OnAs ~~January~~of 17June 30, ~~2013~~2017 and March 31, 2017, the Company ~~filed a~~owed ~~motion~~approximately to£177,548 ~~compel~~($230,843) ~~arbitration~~ and ~~on May 23~~£177,548 ~~2013~~($221,697), ~~the~~respectively ~~Court~~to ~~granted~~Seawind ~~the~~International ~~Company’s~~Limited, a ~~Motion~~company tocontrolled ~~Compel~~by ~~and~~the ~~ordered~~former ~~that~~directors, ~~CRG file~~Mr. ~~its~~T ~~claims~~P asG anAdams ~~AAA~~and ~~arbitration~~Mr. J R Wilson.

~~The~~As ~~Final Hearing in the AAA arbitration took place on February 27, 2014, wherein the Company was not able to establish its defense due to the lack~~ of ~~evidence~~June ~~from Rudana. The AAA Arbitrator entered an award of Euro 470~~30,~~000~~ ~~plus~~2017 ~~interest~~and ~~at the annual rate of 7.5% against the Company. As of~~ March 31, ~~2014,~~ 2017, the ~~total award against the~~ Company isowed ~~Euro~~approximately ~~728~~£88,~~241~~753 ($~~816~~115,~~795~~394). Onand ~~or about April 4~~£88,753 ~~2014~~($110,822), inrespectively ~~an effort~~ to ~~perfect~~Power ~~this~~Products ~~award~~Ltd (Enerserve ~~against~~Limited ~~the Company~~f/k/a), ~~CRG filed~~ a ~~petition~~company ~~with~~under the ~~Southern~~control ~~District~~ of ~~New York seeking to confirm the award~~Mr. InT ~~addition,~~P ~~the Company~~G ~~accrued~~Adams ~~total of $56,835 as reimbursement of attorney fees~~ and ~~cost incurred by CRG and $15,500 as administrative fees and compensation to the Arbitrator~~Mr. OnJ ~~July~~R 8Wilson, ~~2014,~~former adirectors ~~judgment has been entered against 3Power in the Southern District~~ of ~~New York in~~ the ~~amount of $1,086,186~~Company. ~~That judgment remains unpaid.~~

~~NOTE~~As 6of —June ~~COMMON~~30, ~~STOCK~~2017 and March 31, 2017, the company owed Mr. J R Wilson (ex-Director) £1,144 ($1,487) and £1,144 ($1,428), respectively.

~~The~~During ~~Company~~the isthree ~~authorized~~months toended ~~issue~~June ~~300~~30,~~000,000~~ ~~shares~~2017 ofand ~~$0.0001~~2016, ~~par~~the ~~value~~Company ~~common~~charged ~~stock.~~to Asoperation ~~of December 31~~$45,000 ~~2016~~ and ~~March 31~~$45,000 ~~2016,~~as ~~249,949,923~~salary ~~shares~~to ~~were~~Board ~~issued~~members, ~~and outstanding~~respectively.

NOTE 7 — RELATED PARTY TRANSACTIONS

The Company’s current and former officers and stockholders have advanced funds on a non-interest bearing basis to the Company for travel related and working capital purposes. The Company has not entered into any agreement on the repayment terms for these advances. As of December 31, 2016 and March 31, 2016, there were $1,133,000 and $845,129 advances outstanding, respectively.

As of December 31, 2016 and March 31, 2016, the Company owed approximately £117,918 ($145,464) and £117,918 ($169,421), respectively, to Seawind Marine Limited, a company controlled by the former directors, Mr. T P G Adams and Mr. J R Wilson, included in accounts payable and accrued expenses in balance sheet.

As of December 31, 2016 and March 31, 2016, the Company owed approximately £177,548 ($219,023) and £177,548 ($255,096), respectively to Seawind International Limited, a company controlled by the former directors, Mr. T P G Adams and Mr. J R Wilson, included in accounts payable and accrued expenses in balance sheet.

As of December 31, 2016 and March 31, 2016, the Company owed approximately £88,753 ($109,486) and £88,753 ($127,518), respectively to Power Products Ltd (Enerserve Limited f/k/a), a company under the control of Mr. T P G Adams and Mr. J R Wilson, former directors of the Company, included in accounts payable and accrued expenses in balance sheet.

As of December 31, 2016 and March 31, 2016, the company owed Mr. J R Wilson (ex-Director) £1,144 ($1,411) and £1,144 ($1,644), respectively, included in accounts payable and accrued expenses in balance sheet.

During the three months ended December 31, 2016 and 2015, the Company charged to operation $45,000 and $45,000 as salary to Board members, respectively.

3POWER ENERGY GROUP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2016

During the nine months ended December 31, 2016 and 2015, the Company charged to operation $135,000 and $135,000 as salary to Board members, respectively.

NOTE 8 — NON CONTROLLING INTEREST

The Company has a 50% interest in American Seawind Energy LLC, a company registered in the State of Texas, United States of America and as of ~~December~~June 3130, ~~2016~~2017, 75% interest in Shala Energy sh.pk, a Company registered in the Republic of Albania. American Seawind Energy LLC was inactive as of ~~December 31,~~June ~~2016~~30, 2017.

A reconciliation of the non-controlling loss attributable to the Company:

Net loss Attributable to the Company and transfers (to) from non-controlling interest for the three months ended ~~December~~June 3130, ~~2016~~2017:

	American			Shala
	Seawind			Energy
	Energy LLC			sh pk
Net loss	$	-		$	5245,~~563~~113
Average Non-controlling interest percentage		50.0	%		25.0	%
Net loss attributable to the non-controlling interest	$	-		$	1311,~~141~~278

Net loss Attributable to the Company and transfers (to) from non-controlling interest for the ~~nine~~three months ended ~~December~~June 3130, 2016:

	American			Shala
	Seawind			Energy
	Energy LLC			sh pk
Net loss	$	-		$	~~146~~52,~~345~~404
Average Non-controlling interest percentage		50.0	%		25.0	%
Net loss attributable to the non-controlling interest	$	-		$	3613,~~586~~101

~~Net loss Attributable to the Company and transfers (to) from non-controlling interest for the three months ended December 31, 2015:~~13

	American			Shala
	Seawind			Energy
	Energy LLC			sh pk
Net loss	$	-		$	46,209
Average Non-controlling interest percentage		50.0	%		25.0	%
Net loss attributable to the non-controlling interest	$	-		$	11,552

Net loss Attributable to the Company and transfers (to) from non-controlling interest for the nine months ended December 31, 2015:

	American			Shala
	Seawind			Energy
	Energy LLC			sh pk
Net loss	$	-		$	208,851
Average Non-controlling interest percentage		50.0	%		25.0	%
Net loss attributable to the non-controlling interest	$	-		$	52,213

3POWER ENERGY GROUP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~DECEMBER~~JUNE 3130, ~~2016~~2017

The following table summarizes the changes in Non-controlling Interest from April 1, ~~2015~~2016 through ~~December~~June 3130, ~~2016~~2017:

	American
	Seawind		Shala
	Energy LLC		Energy sh pk			Total
Balance, April 1, 2015	$	608	$	(202,993	)	$	(202,385	)
Balance, April 1, 2016	$	608	$	(284,416	)	$	(283,808	)
Net loss attributable to the non-controlling interest		-		(8149,~~423~~036	)		(8149,~~423~~036	)
Balance, March 31, 2016		608		(284,416	)		(283,808	)
Balance, March 31, 2017		608		(333,452	)		(332,844	)
Net loss attributable to the non-controlling interest		-		(3611,~~586~~278	)		(3611,~~586~~278	)
Balance, December 31, 2016	$	608	$	(321,002	)	$	(320,394	)
Balance, June 30, 2017	$	608	$	(344,730	)	$	(344,122	)

NOTE 9 — COMMITMENTS AND CONTINGENCIES

Wuersch Settlement

In November 2011, the Company entered into a Settlement Agreement (the “Wuersch Agreement”) with Wuersch & Gering LLP (“Wuersch”). The Wuersch Agreement provided that Wuersch will accept a cash payment of $50,000, payable in five equal installments, and 2,000,000 options to purchase shares of our common stock at $0.54 per share as full satisfaction of debt obligations to Wuersch of $518,359. The five cash payment installments of $10,000 were due on the 15th calendar day of each month beginning November 15, 2011 and ending on March 15, 2012. Two installment payments were made to Wuersch. The total outstanding balance as of ~~December~~June 3130, ~~2016~~2017 and March 31, 2017 ~~2016~~ is $504,518.

Hellenic Settlement

On November 15, 2011, the Company entered into a Settlement Agreement (the “Hellenic Agreement”) with Hellenic Technologies (“Hellenic”). The Hellenic Agreement provided that Hellenic will accept cash payments of $70,000, payable in five equal installments, and 1,260,000 shares of common stock as full satisfaction of debt obligations to Hellenic of $700,000. The five cash payment installments of $14,000 were due beginning November 14, 2011 and continuing on the 15th calendar day of each month thereafter until paid in full. Two installments were paid as of March 31, 2012. The Company has also issued 1,260,000 of Common stock valued at $630,000 during the year ended March 31, 2012. The outstanding balance as of ~~December~~June 3130, ~~2016~~2017 and March 31, ~~2016~~2017 is $28,000.

Litigation

The Company is subject to certain legal proceedings and claims, which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.

NOTE 10 — SUBSEQUENT EVENTS

The Company has evaluated subsequent events through, the date of unaudited condensed consolidated financial statements are available to be issued. There are no subsequent events.

1514

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto contained elsewhere in this Report. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.

Overview

We were incorporated in the State of Nevada on December 18, 2002, as ATM Financial Corp.

On May 13, 2011 the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Seawind Energy Limited (“Seawind Energy”) and its subsidiary Seawind Services Limited (“Seawind services”), pursuant to which the Company acquired 100% of the issued and outstanding common stock of Seawind Energy, in exchange for the issuance of 40,000,000 restricted shares of the Company’s common stock (such transaction as “Seawind Acquisition”). The acquisition was accounted for as a reverse merger and, accordingly, the Company is the legal survivor and Seawind Energy is the accounting survivor.

For accounting purposes, Seawind Energy was the surviving entity. The transaction was accounted for as a recapitalization of Seawind Energy pursuant to which Seawind Energy was treated as the surviving and continuing entity. The Company did not recognize goodwill or any intangible assets in connection with this transaction. Accordingly, the Company’s historical financial statements are those of Seawind Energy immediately following the consummation of the reverse merger.

In anticipation of the closing of the Stock Purchase Agreement, on March 30, 2011 the Company changed its name to 3Power Energy Group Inc. and increased its authorized share capital to 300,000,000 shares. On July 4, 2011, Seawind Energy and Seawind Service changed their name to 3Power Energy Limited (“3Power Energy”) and 3Power Project Service Limited (“3Power Service”), respectively. Both 3Power Energy and 3Power Service ~~are~~were ~~inactive~~been dissolved as of ~~December~~June 3130, ~~2016~~2017.

The Business

The principle planned business of the Company is to sell electricity generated by solar, wind, hydro, biomass and other renewable energy resources and to develop, build and operate power plants based on these technologies. The core approach of the Company’s planned business is to deliver energy in markets where there is an inherent energy gap between supply and demand or where there exists long term, stable, government backed financial support for the development of renewable energy. The strategic plan of the Company is to develop power plants and sell electricity in mature and emerging international energy markets at secure rates with the highest potential margins for return on investment.

Acquisition of Shala Energy sh .p .k:

On June 5, 2012, the Company and Shala Energy sh.p.k ("Shala") executed a master acquisition agreement (the “Acquisition Agreement”) whereby Shala agreed to transfer and the Company agreed to acquire 75% of the equity of Shala. Under the Acquisition Agreement (the “Acquisition”), the closing of the acquisition was subject to the Company’s completion and satisfaction of the due diligence on Shala and Shala’s partners with respect to their shares in Shala and upon the Company’s payment of the first year premium for the insurance bond premium issued in favor of the Ministry of Economy, Trade and Energy of Republic of Albania in replacement of the then existing bank guarantee issued in favor of Ministry of Economy, Trade and Energy of Republic of Albania for the Shala River Concession Agreement, in the amount of 7,230,315 Euro (the “Required Insurance Bond Premium”). Shala is a firm specializing in developing hydro-electric projects, owning and operating sustainable energy projects in the hydro, wind and solar power sectors in Albania.

1615

On August 10, 2012, after the conclusion of the due diligence efforts, the Company made the first year payment of required Insurance Bond Premium in the amount of 164,851 Euro ($211,972), and as such the Acquisition closed. The Acquisition resulted in the Company acquiring 75% of the interest in a hydro-electrical project of a total installed power of 127.6 MW of Shala River in Albania. The Shala River project finalization is in process with the Ministry of Albania.

During the ~~nine~~year ~~months~~ ended ~~December~~March 31, 2016, Shala began operations, acquiring assets and incurring costs. As such, this activity is including in our ~~unaudited condensed~~ consolidated balance sheet and statement of operations for the current period.

Current Focus

WeDuring ~~currently~~the ~~have~~current ~~only~~fiscal ~~one project~~year, aShala ~~hydro-electrical~~has ~~project~~continued ofto adevelop ~~total~~hydro ~~installed~~ power ofand ~~127.6~~solar MWplant ofconcessions ~~Shala River~~ in ~~Albania, and~~ the ~~commercialization~~Republic of ~~this project is in its infancy~~Albania. ~~Our intended markets may not utilize our producible products, and it may not be commercially successful.~~

WeIn ~~intend~~February to2017 ~~develop~~the ~~additional~~Albanian ~~projects~~Government ~~but~~passed a further law enhancing the national consumption of renewable energy by 8% to ~~date~~38% of nationally consumed electricity. Albania’s rivers are a national natural resource which potentially can provide a capacity of 4,000 ~~none~~MW ~~have~~of ~~proven~~which tocurrently beonly ~~commercially~~approximately 600 ~~viable~~MW orare ~~successful~~being utilised.

~~Results~~Albania’s ofMediterranean ~~Operations~~climate ~~for~~also provides the ~~Three Months~~perfect ~~Ended~~environment ~~December~~for ~~31,~~Solar ~~2016~~PV ~~And~~produced ~~2015~~energy.

WeShala, through its operating office in Tirana, Albania, has developed concession opportunities of approximately 300 MW hydroelectric and 50 MW of Solar PV plants. ~~had~~ Of these concessions approximately 100 MW are construction (shovel) ready but no ~~revenues~~construction ~~from~~has ~~operations~~yet ~~for~~commenced. ~~the~~We ~~three~~estimate ~~months~~but ~~ended~~cannot ~~December~~guarantee ~~31,~~that ~~2016~~construction will commence by late 2017. A further 100 MW are awaiting final construction permits and the ~~2015~~remaining capacity is currently in the planning and permission application phase.

WeShala ~~incurred~~is ~~operating~~in ~~expenses~~on-going ofnegotiations ~~$138,178~~with ~~for~~international ~~the~~EPC ~~three~~and ~~months~~O&M ~~ended~~providers ~~December~~on ~~31, 2016 compared to $192,083 for~~ the ~~three~~basis ~~months~~of ~~ended~~a ~~December 31~~“design, ~~2015. The decrease is due to less consulting fees~~finance, ~~travel~~build and ~~other~~operate” cost in the current period as compared to prior year in addition to depreciation expense of $1,021 incurred with our majority owned subsidiary Shala Energy as compared to $1,006 for the same period last yearmodel.

~~Our~~Shala ~~interest~~continues ~~expense~~to ~~was~~be ~~$48,269~~financially ~~for the~~supported ~~three~~by ~~months~~its ~~ended~~shareholders, ~~December~~but ~~31,~~infrastructure ~~2016~~and asconstruction ~~compared~~development tophase ~~$42,244~~will ~~for~~require ~~the~~substantial ~~same~~additional ~~period~~equity inand ~~2015~~senior debt. ~~The~~There ~~increase~~is ofno ~~$6,025~~assurance orthat ~~due~~such ~~primarily to~~financing ~~compounding~~will ofbe ~~interest~~available ~~associated~~and ~~with~~if ~~note~~it ~~obligations.~~is ~~Additionally~~not, wethat ~~recognized~~would ahave ~~foreign~~an ~~currency~~adverse ~~transaction~~effect ~~gain~~on ~~of $14,570 during~~ the ~~three~~Company’s ability ~~months ended December 31, 2015 as compared~~ to ~~$32,664~~move ~~for~~into the ~~current~~construction ~~period~~phase.

Results of Operations for the ~~Nine Months~~Three Months Ended ~~December~~June 3130, ~~2016~~2017 And ~~2015~~2016

We had no revenues from operations for the ~~nine~~three months ended ~~December~~June 3130, ~~2016~~2017 and ~~2015~~2016.

We incurred operating expenses of $~~424~~147,~~167~~560 for the ~~nine~~three months ended ~~December~~June 3130, ~~2016~~2017 compared to $~~694~~150,~~064~~629 for the ~~nine~~three months ended ~~December~~June 3130, ~~2015~~2016. The decrease is due to to less, consulting fees, travel and other cost in the current period as compared to prior year in addition, ~~offset~~to by depreciation ~~expense~~ expense of $~~3,005~~864 incurred with our majority owned subsidiary Shala Energy as compared to $~~2,764~~987 for the same period last year.

Our interest expense was $140,194 for the nine months ended December 31, 2016 as compared to $122,868 for the same period in 2015. The increase of $17,326 or due primarily to compounding of interest associated with note obligations. Additionally, we recognized a foreign currency transaction gain of $39,470 during the nine months ended December 31, 2016 as compared to a loss of $2,632 last year.16

17Our interest expense was $53,106 for the three months ended June 30, 2017 as compared to $45,792 for the same period in 2016. The increase of $7,314 or due primarily to compounding of interest associated with note obligations. Additionally, we recognized a foreign currency transaction loss of $34,832 during the three months ended June 30, 2017 as compared to $11,821 gain for the same period, last year.

Liquidity and Capital Resources

Our total cash and cash equivalents as of ~~December~~June 3130, ~~2016~~2017 was $24,~~215~~581 compared to the total cash and cash equivalents of $919,~~097~~495 as of March 31, ~~2016~~2017.

As of ~~December~~June 3130, ~~2016~~2017, our total current assets were $1315,~~078~~685 compared to total current assets $1930,~~954~~230 as of March 31, ~~2016~~2017 and the total current liabilities were $7,~~661~~264,~~474~~926 as of ~~December~~June 3130, ~~2016~~2017 compared to $76,~~399~~927,~~819~~821 as of March 31, ~~2016~~2017. The increase in current liabilities was primarily due to increase in of $~~287~~161,~~871~~188 in related party debt and increase in accounts payable and accrued expenses of $13141,~~254~~085.

Net cash used in operating activities was $615,~~882~~784 for the ~~nine~~three months ended ~~December~~June 3130, ~~2016~~2017 compared to net cash provided by operating activities of $404,~~756~~276 for the ~~nine~~three months ended ~~December~~June 3130, ~~2015~~2016. The cash flow used in operating activities consists of $~~524~~235,~~891~~498 net loss, with payments on the Company’s behalf by related party of $~~287~~106,~~871~~783, ~~and~~ depreciation of $3864,~~005,~~ foreign currency transaction ~~gain~~loss of $3934,~~470~~832, an increase in ~~prepaid and other assets of $6, increase in~~ accounts payable and accrued expenses of $~~126~~24,~~431~~262 and an increase in accrued interest of $~~140~~52,~~178~~973.

Net cash used in investing activities was $-0- ~~and $40,342~~ for the ~~nine~~three months ended ~~December~~June 3130, ~~2016~~2017 and ~~2015, respectively~~2016. ~~Cash used in 2015 reflects purchases of equipment by our majority owned subsidiary, Shala Energy.~~

Net cash provided by financing activities was $~~Nil~~-0- for the ~~nine~~three months ended ~~December~~June 3130, ~~2016~~2017 and ~~2015~~2016.

Our pre-operational activities to date have consumed substantial amounts of cash. Our negative cash flow from operations is expected to continue and accelerate in the foreseeable future as the Company invests in capital expenditures to commence operations.

We will need to raise additional capital to implement our business plan and continue operations for any length of time. We are seeking alternative sources of financing, through private placement of securities and loans from our shareholders in order for us to maintain our operations. We cannot guarantee that we will be successful in raising additional cash resources for our operations.

The independent registered public accounting firm’s report on our March 31, ~~2016~~2017 consolidated financial statements included in our Form 10-K states that our difficulty in generating sufficient cash flow to meet our obligations and sustain operations raise substantial doubts about our ability to continue as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. In consultation with our Board of Directors, we have identified several accounting principles that we believe are key to the understanding of our financial statements. These important accounting policies require management’s most difficult, subjective judgments.

1817

Revenue Recognition

Comprehensive Income (Loss)

The Company applies ~~Statement of~~ Accounting ~~Standards~~ Standards Codification subtopic 220-10, Comprehensive Income (“ASC 220-10”). ASC 220-10 establishes standards for the ~~reporting~~ reporting and displaying of comprehensive income and its components. Comprehensive income is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. ~~ASC 220-10 requires other comprehensive income (loss) to include foreign currency translation adjustments and unrealized gains and losses on available for sale securities.~~

Foreign Currency Translation and Transactions

The accompanying unaudited condensed consolidated financial statements are presented in U.S. dollars (“USD”). The functional currency of our subsidiaries is British pounds (“GBP”) and Albania Lek (“LEK”). The financial statements of subsidiaries are translated into USD in accordance with the Codification ASC 830, “Foreign Currency Matters”. All assets and liabilities were translated at the current exchange rate, at respective balance sheet dates, shareholders’ equity is translated at the historical rates and income statement items are translated at the average exchange rate for the reporting periods. The resulting translation adjustments are reported as other comprehensive income and accumulated other comprehensive income in shareholders’ equity in accordance with the Codification ASC 220, “Comprehensive Income.”

Transaction gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into GBP or LEK, as applicable at the rate on the date of the transaction and included in the results of operations as incurred. ~~There were no material transaction gains or losses in the periods presented.~~

Income taxes

Income tax provisions or benefits for interim periods are computed based on the Company’s estimated annual effective tax rate. Based on the Company's historical losses and its expectation of continuation of losses for the foreseeable future, the Company has determined that it is not more likely than not that deferred tax assets will be realized and, accordingly, has provided a full valuation allowance. As the Company anticipates or anticipated that its net deferred tax assets at ~~December~~June 3130, ~~2016~~2017 and March 31, ~~2016~~2017 would be fully offset by a valuation allowance, there is no federal or state income tax benefit for the ~~nine~~three months ended ~~December~~June 3130, ~~2016~~2017 and ~~2015~~2016 related to losses incurred ~~during~~ during such periods.

The Company recognizes a 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 taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of June 30, 2017 and March 31, 2017, the Company has not recorded any unrecognized tax benefits.

Off Balance Sheet Transactions

We do not have any off-balance sheet transactions.

1918

Recently Issued Accounting Pronouncements

~~There~~In ~~were~~July ~~various~~2017, ~~updates~~the ~~recently~~Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic ~~most~~260), ofDistinguishing ~~which~~Liabilities ~~represented~~from ~~technical~~Equity ~~corrections~~(Topic to480), Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the ~~accounting~~classification ~~literature~~analysis of certain equity-linked financial instruments (or ~~application~~embedded tofeatures) ~~specific~~with ~~industries~~down ~~and~~round features. ~~are~~When ~~not~~determining whether certain financial instruments should be classified as liabilities or equity instruments, a down ~~expected~~round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a ~~have~~result, a ~~material~~freestanding equity-linked ~~impact~~financial oninstrument ~~our~~(or ~~consolidated~~embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial ~~position~~instruments, ~~results~~the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of ~~operations~~the ordown round ~~cash~~feature ~~flows~~when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception.

Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently reviewing the impact of adoption of ASU 2017-11on its financial statements.

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our unaudited condensed consolidated financial position, results of operations or cash flows.

Inflation

We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could adversely affect our business, financial condition and results of operations.

Disclosure of Contractual Obligations

The Company does not have any significant contractual obligations which could negatively impact our results of operations and financial condition.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Smaller reporting companies are not required to provide the information required by this item.

Item 4.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As ofrequired ~~the~~under ~~end~~Rules of13a-15(e) and 15d-15(e) under the ~~period~~Securities ~~covered~~Exchange ~~by this~~Act ~~Report~~of 1934, anas ~~evaluation~~amended ~~was~~(the “Exchange Act”), we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer/ and Chief Financial Officer, of the effectiveness of ~~our~~the ~~disclosure~~design ~~controls~~ and ~~procedures,~~operation asof ~~defined~~our indisclosure ~~Rule~~controls ~~13a-15(e) promulgated under the Securities~~ and ~~Exchange~~procedures ~~Act~~as of ~~1934~~June ~~(the~~30, ~~“Exchange Act”)~~2017. InBased ~~carrying~~upon ~~out~~ that evaluation, ~~management~~ ~~identified~~the aChief ~~material~~Executive ~~weakness~~Officer ~~(as~~and ~~defined~~Chief inFinancial ~~Public~~Officer ~~Company~~concluded ~~Accounting~~that ~~Oversight Board Standard No. 2) in~~ our disclosure controls and procedures ~~regarding~~as ~~a lack~~ of ~~adequate~~June ~~personnel~~30, ~~and adequate segregation of duties. Based on management’s~~2017 ~~evaluation~~were ofnot ~~our~~effective, ~~disclosure~~for ~~controls~~the ~~and~~same ~~procedures~~reasons as ofpreviously ~~December~~disclosed ~~31,~~under ~~2016,~~Item ~~our~~9A. ~~Chief~~“Controls ~~Executive~~and ~~Officer/Chief~~Procedures” ~~Financial~~in ~~Officer~~our Annual ~~has~~Report ~~concluded~~on ~~that,~~Form as10-K offor ~~that date,~~ our ~~disclosure~~fiscal ~~controls~~year ~~and~~ended ~~procedures~~March ~~were~~31, ~~not effective~~2017.

~~Our~~Changes size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties within our internal control system. Therefore while there are some compensating controls in ~~place,~~Internal itControls isover ~~difficult to ensure effective segregation~~Financial ~~of accounting and financial reporting duties. Management reported a material weakness resulting from the combination of the following significant deficiencies:~~Reporting

•There ~~Lack~~have ofbeen ~~segregation~~no ofchanges ~~duties~~ in ~~certain~~our ~~accounting~~internal controls ~~and~~over financial reporting ~~processes~~(as ~~including~~defined ~~the~~in ~~approval~~Rule 13a-15(f) and ~~execution~~15d-(f) of ~~disbursements;~~the Exchange Act) that occurred during the our last fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

• The Company’s corporate governance responsibilities are performed by the Board of Directors; we do not have independent Board of Directors, we do not have an audit committee or compensation committee. Because our Board of Directors only meets periodically throughout the year, several of our corporate governance functions are not performed concurrent (or timely) with the underlying transaction, evaluation, or recordation of the transaction.

While we strive to segregate duties as much as practicable, there is an insufficient volume of transactions at this point in time to justify additional full time staff. We may not be able to fully remediate the material weakness until we increase operations at which time we would expect to hire more staff.

Plan for Remediation of Material Weaknesses

To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of legal and accounting professionals. As we grow, we expect to increase our number of employees and engage outsourced accounting professionals, which will enable us to implement adequate segregation of duties within the internal control framework. We will continue to monitor and assess the costs and benefits of additional staffing.

Changes in Internal Control over Financial Reporting

No changes were made to our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II: OTHER INFORMATION

Item 1.

Legal Proceedings

On November 14, 2012, CRG Finance AG (“CRG”) filed a complaint in the District Court for Southern District of New York for allegedly beaching a promissory note (See Note 5 above).

On January 17, 2013, the Company filed a motion to compel arbitration and on May 23, 2013, the Court granted the Company’s Motion to Compel and ordered that CRG file its claims as an AAA arbitration.

The Final Hearing in the AAA arbitration took place on February 27, 2014, wherein the Company was not able to establish its defense due to the lack of evidence from Rudana. The AAA Arbitrator entered an award of Euro 470,000 plus interest at the annual rate of 7.5% against the Company. As of March 31, 2014, the total award against the Company is Euro 728,241 ($816,795). On or about April 4, 2014, in an effort to perfect this award against the Company, CRG filed a petition with the Southern District of New York seeking to confirm the award. In addition, the Company accrued total of $56,835 as reimbursement of attorney fees and cost incurred by CRG and $15,500 as administrative fees and compensation to the Arbitrator.

On July 8, 2014, a judgment has been entered against 3Power in the Southern District of New York in the amount of $1,086,186. That judgment remains unpaid.

Item 1A.

Risk Factors

Smaller reporting companies are not required to provide the information required by this item.

Item 2.

Unregistered Sales of Equity Securities And Use Of Proceeds

None

Item 3.

Defaults Upon Senior Securities

The information regarding CRG Finance contained under Item 1 of Part II above is incorporated herein by reference in response to this item.

2120

Item 4.

Mine Safety Disclosures

Not Applicable.

Item 5.

Other Information

None.

Item 6.

Exhibits.

(a) Exhibits

Exhibit Number		Description

31.1*		Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1+		Certification of Principal Executive officer and Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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.LAB*		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document.

* Filed herewith.

+ In accordance with the SEC Release 33-8238, deemed being furnished and not filed.

2221

SIGNATURES

Pursuant to the requirements 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.

	3POWER ENERGY GROUP, INC.
Dated: February 21, 2017	By:	/s/ Sharif Rahman
Dated: August 21, 2017	By:	/s/ Sharif Rahman
		Name:	Sharif Rahman
		Title:	Chief Executive Officer and Chief Financial Officer
			(Principal Executive Officer, Principal Financial and Chief Accounting Officer)

2322

Filing Compare · 3Power Energy Group Inc.