UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~June~~September 30, 2019

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

For the transition period from to

Commission File Number: 000-55152

ZNERGY, INC.

(Exact Name of Registrant As Specified In Its Charter)

Nevada		46-1845946
(State or other jurisdiction of incorporation or organization)		IRS I.D.
808 A South Huntington Street Syracuse, Indiana 46567
1120 N Main Street Elkhart, Indiana 46514
(Address of principal executive offices) (800) 931 5662 (Registrant’s telephone number, including area code)

Securities registered under 12(b) of the Exchange Act:

None

Securities registered under 12(g) of the Exchange Act:

Common Stock, par value $0.0001

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☐ No ☒

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

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
Emerging growth company ☐

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 provide 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 ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Symbol	Name of each exchange on which registered
Common	ZNRG	OTC

On ~~August~~May 3130, ~~2021~~2022 there were ~~308~~349,~~565~~922,~~436~~579 shares of the registrant's common stock outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
	Item 1.	Condensed Consolidated Financial Statements (Unaudited)	4
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1819
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2021
	Item 4.	Controls and Procedures	2021
Part II - OTHER INFORMATION
	Item 1.	Legal Proceedings	22
	Item 5.	Other Information	22
	Item 6.	Exhibits	23
SIGNATURES			24

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ZNERGY, INC.

INDEX

CONTENTS:
Condensed Consolidated Balance Sheets as of June 30, 2019 (unaudited) and December 31, 2018	5
Condensed Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018	5
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018 (unaudited)	6
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018 (unaudited)	6
Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the periods ended June 30, 2019 and 2018 (unaudited)	7
Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the periods ended September 30, 2019 and 2018 (unaudited)	7
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018 (unaudited)	8
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)	8
Notes to Unaudited Condensed Consolidated Interim Financial Statements	9

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ZNERGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	September 30,			December 31,
	2019			2018
	(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash	$	30222,~~898~~478		$	593
Accounts receivable, net of allowance		112,420			-
Accounts receivable, net		88,778			-
Prepaid expenses		105,871			61,457
Employee advances		42,936			-
Prepaid expenses		90,385			61,457
Inventory		351,268			299,428
Total current assets		~~600~~795,~~457~~845			361,478
Building, furniture and equipment, net		147,~~183~~099			28,352
TOTAL ASSETS	$	~~614~~802,~~640~~944		$	389,830
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable	$	~~580~~460,~~531~~907		$	403,307
Accrued expenses		~~343~~333,~~201~~195			341,556
Customer deposits		~~527~~404,~~529~~988			30,642
Advances from related parties		270,788			222,788
Loan from related parties		1,453,387			1,290,304
Short term debt		126,177			-
Total current liabilities		3,175,436			2,288,597
Loan from related parties		2,206,814			1,290,304
COMMITMENTS AND CONTINGENCIES (Note 11)
Total current liabilities		3,802,869			2,288,597
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDERS' 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; 260,724,960 and 236,724,960 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively		26,072			23,672
Common stock, $0.0001 par value; 500,000,000 shares authorized; 288,124,960 and 236,724,960 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		28,812			23,672
Additional paid-in-capital		1618,~~508~~786,~~001~~174			14,220,537
Accumulated deficit		(1921,~~094~~814,~~869~~911	)		(16,142,976	)
Total stockholders' deficit		(2,~~560~~999,~~796~~925	)		(1,898,767	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	~~614~~802,~~640~~944		$	389,830

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

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ZNERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND ~~SIX~~NINE MONTHS ENDED

(Unaudited)

	For the Three Months Ended						For the ~~Six~~Nine Months Ended
	June 30,			June 30,			June 30,			June 30,
	September 30,			September 30,			September 30,			September 30,
	2019			2018			2019			2018
Revenue	$	~~416~~997,~~774~~518		$	~~259~~556,~~582~~142		$	~~603~~1,~~392~~600,910		$	~~742~~1,~~554~~298,696
Cost of revenue		~~391~~914,~~571~~197			~~176~~259,~~368~~158			~~566~~1,~~973~~481,169			~~405~~665,~~996~~154
Gross profit		2583,~~203~~321			83296,~~214~~984			36119,~~419~~741			~~336~~633,~~558~~542
Selling, general and administrative expenses		~~842~~2,~~801~~766,166			~~583~~668,~~649~~000			25,~~933~~699,~~465~~631			12,~~818~~444,~~001~~393
Loss on sale of assets		-			~~43,488~~-			-			4341,~~488~~608
Total operating expenses		~~842~~2,~~801~~766,166			~~627~~668,~~137~~000			25,~~933~~699,~~465~~631			12,~~861~~486,~~489~~001
Loss from operations		(~~817~~2,~~598~~682,845	)		(~~543~~371,~~923~~016	)		(25,~~897~~579,~~046~~890	)		(1,~~524~~852,~~931~~459	)
Other income (expense)
Other income (expense):
Other income(expense)		1,~~777~~732			-7,730			34,~~236~~967			-(35,758	)
Interest expense		(4238,~~708~~929	)		(643,~~591~~749	)		(5897,~~083~~012	)		(~~176~~179,~~150~~899	)
Total other expense		(4037,~~931~~197	)		~~(64~~3,~~591~~981	)		(5492,~~847~~045	)		(~~176~~215,~~150~~657	)
Provision for income taxes		-			-			-			-
Net loss	$	(2,720,042	)	$	(367,035	)	$	(5,671,935	)	$	(2,068,116	)
Net loss	$	(858,529	)	$	(608,514	)	$	(2,951,893	)	$	(1,701,081	)
Net loss per common share - basic and diluted	$	(0.01	)	$	(0.00	)	$	(0.02	)	$	(0.01	)
Net loss per common share - basic and diluted	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.01	)
Weighted average number of shares outstanding - basic and diluted		273,064,090			229,024,960			262,905,180			228,991,993
Weighted average number of shares outstanding - basic and diluted		258,746,938			229,024,960			257,741,535			228,961,627

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

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ZNERGY, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS'’ ~~EQUITY~~DEFICIT

~~FOR~~For ~~THE~~the ~~THREE~~three ~~AND~~and ~~SIX~~nine ~~MONTHS~~months ~~ENDED~~ended ~~JUNE~~September 30, 2019 ~~AND~~and September 30, 2018

(Unaudited)

										Total
					Additional					Stockholders'
	Common Stock				Paid in		Accumulated			Equity
	Shares		Amount		Capital		Deficit			(Deficit)
Balance at January 1, 2019		236,724,960	$	23,672	$	14,220,537	$	(16,142,976	)	$	(1,898,767	)
Stock based compensation		-		-		90,183		-			90,183
Shares issued for services		20,000,000		2,000		1,798,000		-			1,800,000
Net loss		-		-		-		(2,093,364	)		(2,093,364	)
Balance at March 31, 2019		256,724,960		25,672		16,108,720		(18,236,340	)		(2,101,948	)
Stock based compensation		-		-		103,681		-			103,681
Shares issued for services		4,000,000		400		295,600		-			296,000
Net loss		-		-		-		(858,529	)		(858,529	)
Balance at June 30, 2019		260,724,960	$	26,072	$	16,508,001	$	(19,094,869	)	$	(2,560,796	)
Stock based compensation		-		-		122,735		-			122,735
Shares issued for cash		3,700,000		370		203,130		-			203,500
Shares issued for services		12,500,000		1,250		1,135,750		-			1,137,000
Issuance of common stock in exchange for stock options		11,200,000		1,120		816,558		-			817,678
Net loss		-		-		-		(2,720,042	)		(2,720,042	)
Balance at September 30, 2019		288,124,960	$	28,812	$	18,786,174	$	(21,814,911	)	$	(2,999,925	)

										Total
					Additional					Stockholders'
	Common Stock				Paid in		Accumulated			Equity
	Shares		Amount		Capital		Deficit			(Deficit)
Balance at January 1, 2018		230,724,960	$	23,072	$	12,444,488	$	(12,439,218	)	$	28,342
Stock options and deferred compensation						771,129		-			271,829
Options issued for services		-		-		771,129		-			322,370
Shares issued for services		5,000,000		500		50,741		-			500,000
Net loss		-		-		-		(1,092,567	)		(1,092,567	)
Balance at March 31, 2018		235,724,960		23,572		13,266,358		(13,531,785	)		(241,855	)
Stock options and deferred compensation						107,472		-			107,472
Options issued for services		-		-		107,472		-			107,472
Net loss		-		-		-		(608,514	)		(608,514	)
Balance at June 30, 2018		235,724,960	$	23,572	$	13,373,830	$	(14,140,299	)	$	(742,897	)
Options issued for services						229,596					229,596
Shares issued for cash		1,000,000		100		74,900		-			75,000
Net loss		-		-		-		(367,120	)		(367,120	)
Balance at September 30, 2018		236,724,960	$	23,672	$	13,678,326	$	(14,507,419	)	$	(805,421	)

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

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ZNERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Six Months Ended
	For the Nine Months Ended
	June 30,			June 30,
	September 30,			September 30,
	2019			2018
Cash flows from operating activities:
Net loss	$	(25,~~951~~671,~~893~~935	)	$	(12,~~701~~068,~~081~~116	)
Adjustments to reconcile net loss to net cash
Adjustments to reconcile net loss to net cash used in operating activities:
used in operating activities:
Depreciation and amortization		21,253			27,478
Depreciation and amortization		14,169			20,394
Loss on sale of fixed assets		-			41,608
Loss on sale of fixed assets		-			43,488
Non-cash interest expense		75,583			173,652
Non-cash interest expense		58,083			169,902
Stock based compensation		316,599			-
Stock based compensation		193,864			879,101
Common stock issued for services		3,233,000			1,183,611
Common stock issued for services		2,096,000			-
Options exchanged for common stock		817,678			-
Bad debt expense		-			3853,~~034~~348
Gain on extinguishment of accounts payable		(70,421	)
Changes in operating assets and liabilities:
Accounts receivable		(~~112~~88,~~420~~778	)		~~(12~~1,~~683~~686	)
Prepaid expenses		(44,414	)		(6,334	)
Prepaid expenses and employee advances		(71,864	)		(10,576	)
Inventory		(51,840	)		(61385,~~980~~551	)
Accounts payable and accrued expenses		~~178~~119,~~869~~660			~~(182~~117,~~375~~304	)
Customer deposits		~~496~~374,~~887~~346			~~(39~~11,~~453~~553	)
Net cash used in operating activities		(~~122~~996,~~695~~719	)		(~~852~~854,~~987~~003	)
Cash flows from investing activities:
Purchase of fixed assets		-			(63,~~566~~564	)
Proceeds from sale of fixed assets		-			4750,~~918~~218
Net cash used in investing activities		-			(1513,~~648~~346	)
Cash flows from financing activities:
Repayment of advances from related parties		(2,000	)		(2,967	)
Proceeds from common stock		203,500			-
Proceeds of advances from related parties		50,000			320,190
Repayment of advances from related parties		(2,000	)		(187	)
Repayment of loan from related parties		-			(10,000	)
Proceeds of advances from related parties		50,000			322,411
Proceeds of loan from related parties		105,000			445,000
Repayment of loan from related parties		(28,200	)		(10,000	)
Net cash provided by financing activities		153,000			752,223
Proceeds of advances from third parties		126,177			-
Increase/(decrease) in cash		30,305			(116,412	)
Proceeds of loan from related parties		869,127			445,000
Net cash provided by financing activities		1,218,604			757,224
Net change in cash		221,885			(110,125	)
Cash, beginning of period		593			116,481
Cash, end of period	$	30222,~~898~~478		$	696,356
Supplemental disclosures of cash flow information:
Non-cash investing and financing activities:
Common Stock and Warrants issued for Conversion of Debt and Advances	$	-		$	75,000
Related party advance paid directly to vendor	$	-		$	125,000
Transfer of building to related party in exchange for payment of loan	$	-		$	225,000

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

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ZNERGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~FOR~~SEPTEMBER ~~THE THREE AND SIX MONTHS ENDED JUNE~~ 30, 2019 AND DECEMBER 31, 2018

NOTE 1 - – NATURE OF BUSINESS AND BASIS OF PRESENTATION

Znergy, Inc.~~, (formerly Mazzal Holding Corp., formerly Boston Investment and Development Corp.)~~ is a Nevada corporation (the “Company” or “Znergy”), incorporated on January 23, 2013. The Company is a provider of energy-efficient lighting products, lighting controls and energy management solutions. The Company offers a full turn-key lighting solution which includes economic assessments, energy efficient analysis, installation and rebate support for the Company’s customers. The Company’s business primarily involves retrofitting existing lighting solutions from traditional high intensity metal halide and fluorescent lighting to energy efficient LED (Light Emitting Diode) technology.

The spread of a novel strain of coronavirus (COVID-19) around the world in the first half of 2020 has caused significant volatility in U.S. and international markets. There iswere significant ~~uncertainty around the breadth and duration of~~ business disruptions related to COVID-19, asand ~~well~~it asimpacted ~~its impact on~~ the U.S. and international economies and, as such, the Company ishad ~~unable to determine if it will have~~ a material impact to its operations.

The Company is unsure of the outcome of the COVID-19 novel Coronavirus pandemic on its business. The duration of the pandemic, its effect on business in general and its effect on the Company specifically are unknown to management. For example, the Company’s largest client, one of the world’s largest clothing retail stores, was forced to close its doors at the onset of the pandemic and ~~only recently~~ re-opened some of its stores, thereby allowing the Company to continue to retrofit these limited stores with its LED lighting system. We were able to convert 27 stores starting November 26, 2019 through November 20, 2020, with the majority converted in the first quarter of 2020 before the full impact of the pandemic. ~~The~~Due ~~expectation~~to isthe ~~that~~long-term byeffects on the ~~middle~~retail ~~of 2021~~industry, ~~this~~the retailer ~~will~~is ~~have~~currently ~~opened~~evaluating ~~more~~its ~~stores,~~footprint ~~allowing~~prior ~~for~~to ~~the~~continuing ~~LED~~to retrofit toadditional ~~move forward~~stores. AAfter ~~continuation of~~ the ~~pandemic~~COVID-19 lockdown, awe ~~second~~were ~~surge~~never ofgiven ~~the~~any ~~pandemic,~~additional orlocations ato ~~failure~~convert tothrough ~~find~~the ~~and~~filing ~~commercialize~~date. aThe ~~vaccine~~Company ~~for~~performed ~~COVID-19~~warranty ~~could~~work ~~materially~~and ~~impact~~small ~~the~~amounts ~~Company’s~~of ~~revenues~~emergency ~~and~~light ~~its~~replacements ~~operations~~only.

On September 22, 2021, the Company formed RluxRV, LLC. This LLC is joint owned by the Company and Royalux Lighting, LLP (RoyaLux), an Indian company. The purpose of this LLC is to supply lighting and technology parts to the recreational vehicle (“RV”) market. The parts manufacturing will be done exclusively by Royalux Lighting. All of the sales and distribution of the parts will the responsibility of RluxRV. This business is meant for a strategic change in Znergy’s business. All the Company’s employees with the exception of the Chief Executive Officer were terminated in December 2021 in order to conserve cash and evaluate RluxRV’s potential impact. A limited liability operating agreement was executed between the Company and RoyaLux on November 15, 2021. As of the date of filing, the Company has not rehired any of its terminated employees.

Basis of Presentation

The unaudited condensed consolidated financial statements of the Company for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the Company's financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2018 was derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K filed with the SEC on September 4, 2020. These financial statements should be read in conjunction with that report.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts or revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates, judgments, and assumptions used in these consolidated financial statements include those related to revenues, accounts receivable and related allowances, contingencies, and the fair values of stock-based compensation. These estimates, judgments, and assumptions are reviewed periodically and the effects of material revisions in estimates are reflected in the financial statements prospectively from the date of the change in estimate.

Revenue Recognition

The Company accounts for revenue in accordance with ASC 606-10. The Company generally has two revenue sources - installation contracts and sales of lighting products. The installation contracts are short term in duration, typically within a week. The disaggregation of revenue for the three months ended June 30, 2019 was $394,157 and $22,617 for installation contracts and sale of lighting products, respectively. For the six months ended June 30, 2019, the amounts were $554,924 and 48,467 for installation contracts and sale of lighting products, respectively. The disaggregation of revenue for the three months ended June 30, 2018 was $228,974 and $30,608 for installation contracts and sale of lighting products, respectively. For the six months ended June 30, 2018, the amounts were $687,852 and $54,702 for installation contracts and sale of lighting products, respectively.

Table of Contents

~~When~~Revenue Znergy receives an order from a customer, either verbally or through a written purchase order for products such as individual lights or fixtures, but is not part of an installation contract, the Company recognizes the revenue when the goods are shipped, and title has passed to the customer. In these arrangements, we have determined that there is one performance obligation, and that revenue should be recognized at the point in time that title passes to the customer. Recognition

~~Installation~~Revenue ~~contract revenue~~ is ~~recognized~~measured ~~when~~based ~~the~~on ~~contract is considered complete by~~ the ~~customer,~~amount ~~through a written customer acceptance form. Each contract for installation~~ of ~~lighting~~consideration ~~and~~specified ~~fixtures,~~in ~~consists of labor and materials, and is given~~ a ~~unique number in the system. Each~~ contract iswith ~~accounted~~a ~~for individually~~customer. ~~The~~Revenue ~~Company identifies the performance obligations, which include labor and materials and are accounted for as one contract. The transaction price~~ is ~~identified~~recognized inwhen ~~advance with an agreed proposal between the Company~~ and ~~the customer and the price can be adjusted if, during the installation process, changes are made during the process. Under this method, contract costs are accumulated~~ as ~~deferred~~performance ~~assets~~obligations ~~and~~under ~~billings and/or cash receipts are recorded to a deferred revenue liability account during~~ the ~~contract~~terms ~~period, but no revenues, costs, or profits are recognized in operations until the completion~~ of the contract. ~~Costs include direct material, direct labor, subcontract labor, and allocable indirect costs. All unallocated indirect costs and corporate general and administrative costs~~ are ~~charged~~satisfied inwhich ~~the~~generally ~~periods~~occurs aswith ~~incurred. However, in~~ the ~~event~~transfer aof ~~loss~~control onof ~~a contract is foreseen,~~ the ~~Company~~goods ~~will~~or ~~recognize~~services ~~the~~to ~~loss when such loss is determined. A contract is considered complete when accepted by~~ the customer ~~that the Company has satisfied its performance obligations~~. ~~There were no contracts which were not complete by the end of the quarter.~~

Contracts are considered to have a single performance obligation if the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts primarily because the Company provides a significant service of integrating a complex set of tasks and components into a single project or capability. The Company’s contracts generally have a single performance obligation.

The Company recognizes revenues for fixed price and modified fixed price contracts over time, as performance obligations are satisfied, for substantially all contracts due to the continuous transfer of control to the customer. For most of the Company’s contracts, the customer contracts with the Company to provide a significant service of integrating a complex set of tasks and components into a single project or capability and are, therefore, accounted for as single performance obligations.

The Company recognizes revenue using the cost-to-cost input method, based primarily on contract costs incurred to date compared to total estimated contract costs. This method is the most accurate measure of the Company’s contract performance because it directly measures the value of the goods and services transferred to the customer. Contract costs include all direct material, labor and subcontractors and indirect costs related to contract performance. Pre-contract costs are expensed as incurred unless they are expected to be recovered from the client.

The payment terms for the Company’s contracts from time to time require the customer to make advance payments as well as interim payments as work progresses. The advance payment generally is not considered a significant financing component as the Company expects to recognize those amounts in revenue within a year of receipt as work progresses on the related performance obligation.

Consolidation

The Company has no active subsidiaries as of September 30, 2019, therefore the condensed consolidated financial statements include the accounts of the Company. ~~and~~As ~~its~~of ~~wholly~~the ~~owned~~filing ~~subsidiaries~~date, ~~Znergy~~the ~~(FL)~~Company’s condensed consolidated financial statements will include the accounts of the Company and ~~Znergy~~its ~~Holdings~~wholly ~~(FL)~~owned subsidiaries, RluxRV, LLC. All intercompany transactions ~~have~~will ~~been~~be eliminated in consolidation.

Inventory

Inventory consists of a variety of LED lamps, all of which are valued at the lower of cost or net realizable value. Inventory is accounted for using the FIFO basis.

Reclassification

Certain amounts reported in prior years in the financial statements have been reclassified to conform to the current year’s presentation. The 2018 statement of cash flows reclassified certain accounts within the operating cash flows of the Company and the income statement reclassified certain operating expenses.

Adoption of recent accounting standards

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance in this ASU requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company has adopted Topic 606 as of January 1, 2018 utilizing the full retrospective method of adoption. The adoption of Topic 606 did not have any impact on its results of operations and financial condition.

In February 2016, the FASB issued ASU No. 2016-02, Leases, which supersedes the current lease accounting requirements. This standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than 12 months. In addition, this standard requires lessees to disclose certain key information about lease transactions. Upon implementation, an entity’s lease payment obligations will be recognized at their estimated present value along with a corresponding right-of-use asset. Lease expense recognition will be generally consistent with current practice. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which simplifies adoption of the new lease accounting requirements by allowing an additional transition method that will not require restatement of prior periods and providing a new practical expedient for lessors to avoid separating lease and non-lease components within a contract if certain requirements are met. The provisions of this guidance must be elected upon adoption of the new lease accounting requirements, which will be effective for interim and annual periods beginning after December 15, 2018.

We adopted the standard as required on January 1, 2019. Consequently, we did not update previously reported financial information and the disclosures under the new standard will not be provided for dates and periods prior to January 1, 2019, and elected all of the practical expedients available under the transition guidance. The new standard also provides practical expedients for ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify and did not recognize right of use assets or lease liabilities for those leases. We also elected the practical expedient to not separate lease and non-lease components for all of our leases.

The adoption did not impact the business as no long-term, reportable leases existed as of June 30, 2019. We do not expect that this standard will have a material impact on our financial statements. While we continue to assess all of the effects of adoption, we currently believe the most significant effects relate to the recognition of new right of use assets and lease liabilities on our balance sheet for our real estate and equipment operating leases, and the significant new required disclosures regarding our leasing activities. We do not expect a significant change in our leasing activities between now and adoption.

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The adoption did not impact the business as no long-term, reportable leases existed as of September 30, 2019. We currently believe the most significant effects relate to the recognition of new right of use assets and lease liabilities on our balance sheet for our real estate and equipment operating leases, and the significant new required disclosures regarding our leasing activities.

Recent accounting standards

In April 2019, the FASB issued ASU No. 2019-04 “Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments”, which provides updates and clarifications to three previously-issued ASUs: 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”; 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”; and 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”. The adoption of this standards update is not expected to have a material impact on the Company’s financial statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes”. This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The guidance is effective non-public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The adoption method is dependent on the specific amendment included in this update as certain amendments require retrospective adoption, modified retrospective adoption, an option of retrospective or modified retrospective, and prospective adoption. The adoption of this standards update is not expected to have a material impact on the Company’s financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity and improves and amends the related EPS guidance for both Subtopics. The ASU will be effective for annual reporting periods after December 15, ~~2023~~2021 and interim periods within those annual periods and early adoption is permitted in annual reporting periods ending after December 15, 2020. We are still assessing the impact of ASU 2020-06 on our condensed consolidated financial statements

The Company does not believe that there are any new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

NOTE 3 -– GOING CONCERN

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of ~~June~~September 30, 2019, the Company has a working capital deficit of $23,~~574~~007,~~979~~024, insufficient cash resources to meet its planned business objectives and recurring losses of ($~~858,529) and ($~~2,~~951~~720,~~893~~042) ~~for the three~~ and ~~six months ended June 30, 2019 and~~ ($~~608~~5,~~514) and ($1~~671,~~701,081~~935) for the three and ~~six~~nine months ended ~~June~~September 30, ~~2018~~2019. The Company intends to fund operations through debt and equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements through ~~January~~June ~~2022~~2023, one year from the date the consolidated financial statements were issued.

The Company is dependent upon, among other things, obtaining additional financing to continue operations and to execute its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings. No assurances can be made that management will be successful in pursuing any of these strategies.

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern ~~for the next twelve months from the date these consolidated financial statements were issued~~. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~NOTE~~The 4following -funding ~~BUILDING,~~was ~~EQUIPMENT~~received ~~AND~~by ~~FURNITURE~~the company subsequent September 30, ~~NET~~2019:

~~Building~~Since September 30, ~~furniture~~2019, through the filing date of this report the Company has received $1,055,705 in additional advances and ~~equipment~~loans ~~were~~from ~~comprised~~the Chairman of the ~~following:~~Board. This amount includes $367,205 for inventory purchases used by RluxRV. The $367,205 was repaid by the Company, $100,000 was repaid December 6, 2021 and $267,205 was repaid April 20, 2022, as well as an additional $348,579. On April 18, 2022, the Company agreed to consolidate the total loans, advances and accrued interest into a single Note in the amount of $1,126,955, the full amount of which is payable upon demand bearing an interest rate of 10%.

	June 30			December 31
	2019			2018
Equipment and Furniture		59,609			59,609
		59,609			59,609
Accumulated Depreciation		(45,426	)		(31,257	)
Net	$	14,183		$	28,352

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~~Depreciation~~Since ~~included~~September in30, ~~Selling~~2019 through the filing date of this report the Company received $145,000 ~~general~~from related parties, On November 19, 2019, Richard and ~~administrative~~Jerald ~~expenses~~Horowitz each loaned the Company $10,000. The notes were due December 21, 2019 (Maturity Date). They have an interest rate of 10% per annum and a penalty of 15% if not paid by the maturity date. On September 4, 2020, Richard and Jerald Horowitz each loaned the Company $12,500. The notes were due November 4, 2020 (Maturity Date). They have an interest rate of 5% per annum with an increase to 12% if not paid by the maturity date. On February 8, 2021, Richard and Jerald Horowitz each loaned the Company $25,000. The notes were due May 15, 2021 (Maturity Date). They have an interest rate of 5% per annum with an increase to 12% if not paid by the maturity date. On June 30, 2021, Richard and Jerald Horowitz each loaned the Company $25,000. Repayment terms are 3% of project revenue until the loans and unpaid interest are satisfied. The notes bear interest of 12% per annum and have not been satisfied as of the date of this report.

	For the Three Months Ended				For the Six Months Ended
	June 30		June 30		June 30		June 30
	2019		2018		2019		2018
Depreciation Expense	$	7,084	$	7,231	$	14,169	$	20,394

On November 26, 2019, the Company received a third-party factoring loan from the Korenstra Family Foundation (“Korenstra”) for $150,000. This loan is factored against several open accounts receivable of the Company. The interest rate shall be $5,000 per month with the loan not exceeding 90 days. If delinquent, after 90 days, the interest rate will increase to $10,000 per month. On December 1, 2021, the Company executed a $550,000 convertible promissory note which satisfied the $150,000 factoring loan and loaned the Company an additional $400,000. The outstanding principal and interest shall be paid on or before December 31, 2024 (the “Maturity Date”). In order to satisfy the $134,000 of unpaid interest on the $150,000 note, the Company transferred 4,466,667 shares to Korenstra. Additionally, on December 1, 2021 Korenstra was issued 5,500,000 warrants with an exercise price of $.10 per share. The interest on this loan shall be 18% per annum. If the loan is not satisfied by the maturity date, the default interest rate shall be 24% on all unpaid principal and interest. The monthly payment amount shall be equal to 3% of the net sales for the previous month of the Company’s RluxRV subsidiary. Monthly payments will continue until the maturity date even if the payback is greater than the borrowed amount plus interest. In addition, the Company shall pay one third of one percent of the net sales of RluxRV in perpetuity. On May 27, 2022, the Korenstra Family Foundation increased the loan by $100,000 under the same terms as the convertible promissory note.

~~NOTE~~On December 19, 2019, the Company issued 2,500,000 shares to an accredited non-related investor for $250,000. 5In –addition, ~~ADVANCES~~on ~~FROM~~December ~~RELATED~~19, ~~PARTIES~~2019 the Company issued 7,000,000 warrants with an exercise price of $.10 per share.

On December 7, 2020, the Company issued a convertible promissory note to Tysadco Partners, LLC for the sum of $156,750. The Note bears interest of 12% per annum until the Note becomes due and payable on December 7, 2022 (Maturity Date). Any amount of principal or interest on this Note which is note repaid by the Maturity Date shall then bear interest at 20% per annum. At any time after 180 days from the Note’s inception until the Maturity Date or payment date, Tysadco may convert the balance or any portion of the balance to Common Stock at the lower of $.15 per share or 80% of the Market Price. Where the Market Price is defined as the ten day trading period prior to the conversion date.

On October 7, 2021, a $100,000 loan factoring agreement was issued to Nancy White. The loan repayment is required within 180 days and shall have interest of $10,000. The amount of $110,000 was paid on April 28, 2022 which fully satisfied the loan.

On November 23, 2021, the Company issued a 10% convertible note to Joseph Acebel for the sum of $40,000. The principal and any unpaid interest was due prior to April 1, 2022. Interest shall accrue on any unpaid principal at 10% per annum. The note, or any part of at least $10,000 shall be convertible into shares of the Company common stock at a conversion price of $.02 per share. Prior to the filing date, the note has been satisfied in full in cash.

On February 10, 2022, the Company issued a promissory note to Wayne Miller for $1,190,000. This note includes satisfying all previous notes of $585,000 plus unpaid interest and an additional loan of $500,000. This note is due on June 10, 2024. This note is to be paid with 3% of the gross sales of RluxRV with the first payment made on June 10, 2022.

NOTE 4 – ADVANCES FROM RELATED PARTIES

Advances from related parties were comprised of the following:

	June 30		December 31
	September 30		December 31
	2019		2018
B2 Opportunity Fund	$	154,788	$	154,788
Cary Baskin		116,000		68,000
	$	270,788	$	222,788

During the ~~six~~nine months ended ~~June~~September 30, 2019, the Company received an aggregate of $50,000 of short-term advances from Cary Baskin ~~and paid back $2,000 short-term advance to Eco Energy~~. The amounts are non-interest bearing and payable on demand.

Since ~~June~~September 30, 2019, through the filing date of this report the Company has received $0 in additional advances from related parties to fund operations.

NOTE 6 - LOANS FROM RELATED PARTIES

The table below sets forth a summary of the Company’s loans from related parties at June 30, 2019 and December 31, 2018:

	June 30		December 31
	2019		2018
Rick Mikles	$	521,079	$	514,579
Wayne Miller		671,325		642,075
Paul Ladd		58,650		58,650
Cary Baskin		202,333		75,000
	$	1,453,387	$	1,290,304

Rick Mikles

On November 15, 2017, the Company executed an unsecured promissory note in the amount of $50,000, payable to the Company’s chairman, Rick Mikles. The note was payable on December 1, 2017 with interest at 4% per annum. On December 1, 2017, the payment date was extended to June 1, 2018. The balance remains outstanding.

On February 15, 2018, the Company executed a promissory note in the amount of $25,000 payable to Rick Mikles, the Company’s Chairman. The note was due and payable on June 1, 2018 together with interest at 4% per annum. Pursuant to the terms of the note, if the note and accrued interest is not paid by the due date, interest at 12% per annum shall be accrued on the outstanding balance until paid in full. The balance at December 31, 2018 was $27,125 which includes unpaid interest.

On March 2, 2018, the Company executed an unsecured promissory note in the amount of $200,000 payable to Rick Mikles, the Company’s Chairman. The note was due on June 1, 2018 together with interest of $2,500. Pursuant to the terms of the note, there was a 15-day grace period, which ended on June 16, 2018 at which time a 15% penalty of the unpaid balance became due and payable together with the unpaid principal and accrued interest. The balance at December 31, 2018 was $232,875, which includes unpaid interest and penalties.

During the year ended December 31, 2018, the Company received various loans from the Company’s chairman, Rick Mikles, with a balance of $475,000 as of December 31, 2018. These loans were non-interest bearing and payment is due on demand.

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~~Since~~NOTE ~~June~~5 ~~30,~~– ~~2019,~~LOANS ~~through~~FROM ~~the~~RELATED filing date of this report the company has received $496,238 in additional loans from Mr. Mikles. The notes bear interest at 10%. In February 2019 the Company and Mr. Mikles agreed to consolidate all outstanding debt and accrued interest into a single Note in the amount of $928,238. The Note is payable upon demandPARTIES

	September 30		December 31
	2019		2018
Rick Mikles	$	521,829	$	514,579
Wayne Miller		685,950		642,075
Paul Ladd		58,650		58,650
Cary Baskin		665,385		75,000
Randy Fluitt		275,000		-
	$	2,206,814	$	1,290,304

Rick Mikles

Since September 30, 2019, through the filing date of this report the Company has received $1,055,705 in additional advances and loans from the Chairman of the Board. This amount includes $367,205 for inventory purchases used by RluxRV. The $367,205 was repaid by the Company in cash as well as an additional $348,579. On April 18, 2022, the Company agreed to consolidate the total loans, advances and accrued interest into a single Note in the amount of $1,126,955, the full amount of which is payable upon demand.

Wayne Miller

OnDuring ~~November 27, 2017,~~ the ~~Company~~nine ~~executed~~months anended ~~unsecured~~September ~~promissory~~30, ~~note~~2019, in the ~~amount~~Company ofexecuted ~~$200,000,~~no ~~payable~~additional loans to Mr. ~~Wayne~~ Miller~~, a shareholder of the Company~~. The ~~note~~loan ~~was~~proceeds ~~due~~ and ~~payable~~accrued ~~with~~ interest offor ~~$2,000 on December 31, 2017. The note was repaid in full, with interest on December 22, 2017. Under~~ the ~~note~~period ~~agreement,~~were ~~the Company issued warrants to purchase 1,000,000 shares at an exercise price of~~ $0~~.15~~ ~~per share. The warrants expired on the first anniversary date of the initial exercise date of the warrants. The Company evaluated the warrants in accordance with ASC Topic No. 815 - 40, Derivatives~~ and Hedging – Contracts in Entity’s Own Stock and determined that the warrants did not meet the definition of a liability and therefore did not account for them as a separate derivative liability. The fair value of the warrants was calculated using the Black-Sholes model amounting to $5543,~~072~~875 ~~and was recorded as a debt discount and amortized over the term of the note~~respectively. ~~As of December 31, 2017, the debt discount was fully amortized.~~

OnCary December 6, 2017, the Company executed an unsecured promissory note in the amount of $150,000 payable to Mr. Wayne Miller, a shareholder of the Company. The note was due and payable on March 12, 2018, with interest of $6,000. Under the note agreement, the Company issued warrants to purchase 1,000,000 shares at an exercise price of $0.15 per share. The warrants expire on the first anniversary date of the initial exercise date of the warrants. The Company evaluated the warrants in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging – Contracts in Entity’s Own Stock and determined that the warrants did not meet the definition of a liability and therefore did not account for them as a separate derivative liability. The fair value of the warrants was calculated using the Black-Sholes model amounting to $42,345 and was recorded as a debt discount and amortized over the term of the note. As of December 31, 2018, the debt discount was fully amortized, and the principal balance of the note remains unpaid. Pursuant to the terms of the note, there was a 15-day grace period granted, which ended on March 27, 2018, at which a 15% penalty on the unpaid balance became due and payable along with the unpaid principal and any accrued interest.Baskin

On ~~January~~April 84, ~~2018~~2019, the Company executed an unsecured promissory note in the amount of $~~150~~100,000 payable to Mr. ~~Wayne~~Cary ~~Miller~~Baskin, a shareholder of the Company. The note ~~was~~has ~~due and payable on April 8, 2018, with~~ interest ofat ~~$6,000.~~accruing ~~Pursuant to the terms of the note, there was a 15-day grace period, which ended on April 23, 2018~~ at ~~which time a 15~~10% penalty of the unpaid balance became due and payable together with the unpaid principal December 31, 2018 was $179,700, which includes unpaid principal, interest, and penalties. Under the note agreement, the Company issued warrants to purchase 1,000,000 shares at an exercise price of $0.15 per ~~share~~annum. The ~~warrants~~Note ~~expire~~is payable on ~~the first anniversary date of the initial exercise date of the warrants~~demand. The Company evaluated the warrants in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging – Contracts in Entity’s Own Stock and determined that the warrants did not meet the definition of a liability and therefore did not account for them as a separate derivative liability. The fair value of the warrants was calculated using the Black-Sholes model amounting to $47,867 and was recorded as a debt discount and amortized over the term of the note. As of December 31, 2018, the debt discount was fully amortized, and the principal balance of the note remains unpaid.

On ~~March~~September 2213, ~~2018~~2019, the Company executed an unsecured promissory note in the amount of $20500,000 payable to Mr. ~~Wayne~~Cary ~~Miller~~Baskin, a shareholder of the Company. The note has interest at accruing at 10% per annum. The ~~balance~~Note atis ~~December~~payable ~~31,~~on ~~2018 was $10,250 which includes unpaid interest~~demand.

OnRandy October 4, 2018, the Company also borrowed $275,000 short-term payable to Wayne Miller. The balance as of December 31, 2018 is $281,875 which includes the unpaid principal and interest. This loan was due on April 3, 2019.Fluitt

~~During~~On ~~the~~September ~~six months ended June 30~~10, 2019, the Company executed ~~additional~~an ~~loans~~unsecured $275,000 promissory note payable to MrRandy Fluitt, a Company shareholder. ~~Miller~~The Note bears interest of 10% per annum. The ~~loan~~Note ~~proceeds~~is due and ~~accrued~~payable in the amount of $302,500 on or before the Maturity Date of February 1, 2020. The Company’s failure to pay the principal and interest ~~for~~within 15 days of the Maturity Date, will trigger a penalty of 10% of any amounts unpaid at the end of this period. ~~were~~The $0Company did not repay the loan by the Maturity Date and ~~$29,250~~accrued ~~respectively~~the penalty as interest expense.

~~Paul~~Since ~~Ladd~~September 30, 2019, through the filing date of this report the Company has received $175,000 in additional loans from other related parties. The notes bear interest at 10%. All of the additional Notes are due on demand.

OnTotal ~~March~~interest ~~22,~~expense ~~2018,~~under the ~~Company~~related ~~executed~~party anloans ~~unsecured~~was ~~promissory note in the amount of~~ $5075,~~000~~583 ~~payable to Paul Ladd, a shareholder. The note was due~~ and ~~payable on May 21, 2018 together with interest of~~ $1119,~~000.~~803 ~~Pursuant~~for to the ~~terms~~periods ofended ~~the~~September ~~note~~30, ~~there~~2019 ~~was~~and aDecember ~~15-day grace period~~31, ~~which ended on June 4~~2018, ~~2018~~respectively. atInterest ~~which~~expense ~~time~~under arelated ~~15%~~party ~~penalty~~loans offor the ~~unpaid~~three ~~balance became due~~ and ~~payable~~nine ~~together~~months ~~with~~ended ~~the~~September ~~unpaid principal and accrued interest. The balance at December31~~30, ~~2018~~2019 was $5817,~~650~~500 ~~which includes the unpaid principal, interest,~~ and ~~penalties. Under the note agreement, the Company issued warrants to purchase 50,000 shares at an exercise price of~~ $~~0.15 per share. The warrants expire on the first anniversary date of the initial exercise date of the warrants. The Company evaluated the warrants in accordance with ASC Topic No. 815 - 40~~173, ~~Derivatives~~652 and Hedging – Contracts in Entity’s Own Stock and determined that the warrants did not meet the definition of a liability and therefore did not account for them as a separate derivative liability. The fair value of the warrants was calculated using the Black-Sholes model amounting to $2,~~875~~250 and ~~was~~$90,929 ~~recorded~~for asthe athree ~~debt discount~~ and ~~amortized~~nine ~~over~~months ~~the~~ended ~~term~~September ~~of the note. As of December 31~~30, 2018,. ~~the~~Such ~~debt~~interest ~~discount~~ was ~~fully~~capitalized ~~amortized,~~as ~~and~~part ~~the principal balance~~ of the ~~note~~outstanding ~~remains~~loan ~~unpaid~~balance.

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~~Cary~~NOTE ~~Baskin~~6 – STOCKHOLDERS' EQUITY

On October 23, 2018, the Company also borrowed $75,000 in a non-interest bearing short-term payable to Cary Baskin and was secured by shares owned by the Company’s CEO. The balance as of December 31, 2018 is $75,000. This loan was due on December 31, 2018.

On April 4, 2019, the Company executed an unsecured promissory note in the amount of $100,000 payable to Mr. Cary Baskin, a shareholder of the Company. The note has interest at accruing at 10% per annum.

Total interest expense for the three and six months ended June 30, 2019 was $42,078 and $58,083 and $64,591 and $176,150 for the three and six months ended the three and six months ended June 30, 2018. Such interest was capitalized as part of the outstanding loan balance.

Since June 30, 2019, through the filing date of this report the company has received $489,127 in additional loans from Mr. Baskin. The notes bear interest at 10%.

Since June 30, 2019, through the filing date of this report the company has received an additional $450,000 in additional loans from related parties.

NOTE 8 - STOCKHOLDERS' EQUITY

Common Stock

During the Third Quarter of 2019, the Company issues 12,500,000 shares of Common Stock in payment for services. On ~~January~~September 13, 2019, ~~under~~Laura anKnepper ~~employment~~received ~~agreement~~1,000,000 shares of Common Stock for bookkeeping services provided. On September 10, 2019, Arthur Filmore, a Director in the Company, was issued 2010,000,000 shares tofor ~~its~~legal ~~Chief~~services ~~Executive Officer~~provided. ~~Under~~On ~~this~~September, ~~agreement~~20, ~~there~~2019, isthe noCompany ~~specific~~issued ~~performance~~1,500,000 orshares ~~time-based~~of ~~metrics~~Common Stock to Howard Nathan for CFO services. ~~The~~All shares were valued at fair on the date of issuance.

On ~~May~~July 153, 2019, the Company ~~issued~~received ~~4,000,000~~cash ~~shares~~of ~~to a Director~~$203,500 ~~Jerald~~in ~~Horowitz~~exchange for ~~business development efforts. The shares were valued at fair on the date of issuance. Through these efforts~~3,700,000 ~~the~~share ~~Company~~sold ~~was introduced~~ to aan ~~large~~unrelated ~~retailer~~accredited ~~which resulted in a multi-store contract~~investor.

On August 9, 2019, 11,200,000 shares were issued to the Company’s Chairman of the Board in exchange for the cancellation of 14,000,000 stock options. Expenses incurred in this transaction were $817,678 and included in selling, general and administrative expenses in the statement of operations.

Stock Based Compensation

The Company has issued and outstanding two types of options, time vesting and performance vesting.

Options - Time Vesting

The following table shows the stock option activity during the period ended ~~June~~September 30, 2019:

				Weighted
	Number of			Average
	Options			Exercise Price
Options outstanding at beginning of period	$	13,904,166		$	0.10
Changes during the period:
Granted - at market price		-			-
Exercised		-			-
Cancelled		(4,000,000	)		-
Forfeited		-			-
Adjustments		-			-
Options outstanding at end of period		9,904,166			0.10
Options outstanding at end of period		13,904,166			0.10
Options exercisable at end of period		9,904,166			0.10
Options exercisable at end of period		13,841,666			0.10
Weighted average fair value of options granted during the period	$	-		$	-

Costs incurred in respect of stock- based compensation for employees, advisors and consultants for the three and ~~six~~nine month periods ended ~~June~~September 30, 2019 were $178,~~563~~375 and $6675,~~791~~167, respectively. Costs incurred in respect of stock -based compensation for employees, advisors and consultants for the three and ~~six~~nine month periods ended ~~June~~September 30, 2018 were $~~119~~133,~~554~~129 and $~~249~~382,~~116~~246, respectively. The expense is included in selling, general and administrative expenses in the statement of operations.

~~Unrecognized~~On ~~compensation~~August ~~costs~~9, ~~related~~2019, 11,200,000 shares were issued to ~~options~~the asCompany’s Chairman of ~~June~~the 30Board in exchange for the cancellation of 14,000,000 ~~2019~~stock ~~was~~options, $84,~~375~~000,000 of which iswere time vesting options and 10,000,000 were performance vesting options. The Company expensed $817,678 ~~expected~~during tothe bethird ~~recognized~~quarter, ~~ratably~~2019 ~~over~~for athe ~~weighted~~value ~~average~~differential ~~period~~between ofthe ~~approximately~~restricted 9stock ~~months.~~and the cancelled options

Unrecognized compensation costs related to time vesting options as of September 30, 2019 was $-0-.

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Options - Performance Vesting

The options vest based on Company performance with one option vesting for every two dollars of revenue, vesting quarterly. The following table shows the stock option activity during the period ended ~~June~~September 30, 2019:

				Weighted
	Number of			Average
	Options			Exercise Price
Options outstanding at beginning of period		26,081,808		$	0.10
Changes during the period:
Granted - at market price					-
Exercised		-			-
Cancelled		(10,000,000	)		-
Expired/forfeited		(3641,~~967~~258	)		0.10
Adjustments					-
Options outstanding at end of period		2616,~~044~~040,~~841~~550			0.10
Options exercisable at end of period		109,~~690~~169,~~742~~905			0.10
Weighted average fair value of options granted during the period		-		$	-

These options were issued to individuals for their business development efforts. The costs incurred in respect of stock -based compensation for employees, advisors and consultants for the three and ~~six~~nine month periods ended ~~June~~September 30, 2019 were $86114,~~118~~360 and $~~127~~241,~~073,~~433 respectively. Costs incurred in respect of stock -based compensation for employees, advisors and consultants for the three and ~~six~~nine month periods ended ~~June~~September 30, 2018 were $~~(12~~96,~~082)~~466 and $~~118~~215,~~646~~113, respectively. The expense is included in selling, general and administrative expenses in the statement of operations.

Unrecognized compensation costs related to options as of ~~June~~September 30, 2019 was $1556,~~335,481~~ 790 which is expected to be recognized ratably over a weighted average period of approximately 108 months based on estimated future revenues.

Warrants

The following table shows the warrant activity during the period ended ~~June~~September 30, 2019:

				Weighted
	Number of			Average
	Warrants			Exercise Price
Warrants outstanding at beginning of period		2,000,000		$	0.10
Changes during the period:
Granted					-
Exercised		-			-
Expired/forfeited		(2,000,000	)		0.10
Warrants outstanding at end of period		-			~~0.15~~-
Warrants exercisable at end of period		-		$	~~0.15~~-

~~Costs~~There ~~incurred for warrants issued to related parties for the conversion of debt~~ were ~~recorded~~no asWarrants ~~interest~~granted ~~expense~~ for the three and ~~six~~nine months ended ~~June~~September 30, 2019 ~~were $-0- and $367,662, respectively~~.

~~NOTE 9~~Costs -incurred ~~BASIC~~for ~~AND~~warrants ~~DILUTED~~issued ~~LOSS~~to ~~PER~~related ~~SHARE~~parties for the conversion of debt were recorded as interest expense for the three and nine months ended September 30, 2018 were $-0- and $50,741, respectively.

Basic net loss per share is calculated by dividing the loss by the weighted-average number of shares outstanding for the period. Diluted net loss per share is computed by dividing the net attributable to common stockholders by the sum of the weighted average number of shares of common stock outstanding and the dilutive common stock equivalent shares outstanding during the period. The Company's dilutive common stock equivalent shares, which include incremental common shares issuable upon i) the exercise of outstanding stock options and warrants and (ii) vesting of restricted stock units and restricted stock awards, are only included in the calculation of diluted net loss per share when their effect is dilutive. Since the Company had net losses for all periods presented, all potentially dilutive securities are anti-dilutive. Accordingly, basic and dilutive net loss per share are equal.

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NOTE 7 – BASIC AND DILUTED LOSS PER SHARE

The following potential common stock equivalents were not included in the calculation of diluted net loss per common share because the inclusion thereof would be anti-dilutive.

	For the Period Ended
	June 30,
	September 30,
	2019		2018
Stock Options		3925,~~949~~944,~~007~~716		42,841,094
Warrants		-		3,050,000
Total		3925,~~949~~944,~~007~~716		45,891,094

NOTE 10 -8 – COMMITMENTS AND CONTINGENCIES

16(b) Litigation

On September 26, 2016, Registrant filed in the United States District Court for the Middle District of Florida a Complaint against defendants The Mazzal Trust, Nissim S. Trabelsi and Shawn Telsi (collectively the “Defendants”), seeking the disgorgement of profits obtained by Defendants and certain of their shareholder affiliates defined under Rule 16a-1(a)(1) under the Exchange Act defined below (collectively, the “Group”) through “short swing profits” in violation of Section 16(b) of the Securities Exchange Act of 1934 (the “Exchange Act”). Specifically, Registrant alleged that the Group acted under the guidance and control of the Defendants, whose individual defendants had filed forms 3 and 4 with the Securities and Exchange Commission (the “SEC”, declaring themselves to be “insiders” for the purpose of Section 16(b). The Group owned 100% of the shares of Registrant at the time that members of the group were engaged in the sale and purchase of such shares. The sales and purchases referenced all occurred with six months of other sales and purchases, subjecting Defendants to disgorge to Registrant all profits made by the Group in such sales and purchases. As detailed in paragraphs 16-22 of the Complaint, the total profits received by the Group is $1,695,689. Accordingly, Registrant has demanded the return of all such profits to Registrant plus the statutory payment of attorneys’ fees.

On August 24, 2017, the Plaintiff received a Clerk’s Entry of Default against Nissim Trabelsi. The Plaintiff filed a Motion for Default Judgment for damages against Trabelsi on September 13, 2017, which to date has not been addressed by the Court. On March 5, 2018, Nissim Trabelsi filed a notice of bankruptcy. The Plaintiff is still pursuing its options in the Case and the Court has yet to address the service issues with the Mazzal Trust.

NOTE 119 -– CONCENTRATIONS

For the three months ended ~~June~~September 30, 2019, ~~four~~five customers represented 3073%, ~~29%, 18% and 11%~~ of net revenue. For the three months ended ~~June~~September 30, 2018, ~~one~~two ~~customer~~customers represented 3689% of net revenue.

For the ~~six~~nine months ended ~~June~~September 30, 2019, ~~three~~two customers represented 3027%, ~~23% and 14%~~ of net revenue. For the ~~six~~nine months ended ~~June~~September 30, 2018, ~~one~~five ~~customer~~customers represented 2454% ~~and one customer represented 12%~~ of net revenue.

At ~~June~~September 30, 2019, three customers represented 3567%, ~~32% and 25%~~ of accounts receivable.

The Company purchases substantially all of its inventory from one supplier. The Company does not have any commitments with this supplier for minimum purchases.

NOTE 12 - SUBSEQUENT EVENTS

Since June 30, 2019, through the filing date of this report the Company has received $496,000 in additional advances and loans from the Chairman of the Board. In February 2021, the Company agreed to consolidate the total loans, advances and accrued interest into a single Note in the amount of $928,238, the full amount of which is payable upon demand. Since June 30, 2019 through the filing date of this report the Company received $489,126 from Mr. Baskin and a further $450,000 from other related parties.

Subsequent to June 30, 2019 through the filing date, the Company has issued 44,983,333 shares of common stock. 11,200,000 shares were issued to the Chairman of the Board in exchange for the cancellation of 14,000,000 stock options outstanding.

On July 3, 2019, the Company issued 2,500,000 shares in exchange for $192,500, which was discounted from fair value, to an unrelated accredited investor.

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OnNOTE ~~November~~10 ~~26,~~– SUBSEQUENT ~~2019, the Company received a third-party loan from the Korenstra Family Foundation for $150,000.~~EVENTS

In April 2020, the Company received an unsecured loan (the "“SBA Loan"”) under the Small Business Administration ("“SBA"”) Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security Act CARES Act through Chase Bank (“Lender”). The SBA Loan has a two-year term expiring on April 2022. The SBA Loan has a principal amount of $87237,~~457~~ 458 with an interest rate of 1.0%. The Company expects that the full principal amount of the loan will be forgiven. Interest accrues during the period between funding date and the date the loan is forgiven. The Company ~~has not yet~~ applied for loan forgiveness ~~but~~on ~~plans~~July to30, in2021 aand ~~future~~was ~~period.~~granted on August 12, 2021

OnIn ~~February~~May ~~11,~~ 2020, the Company ~~entered~~received ~~into~~an aunsecured ~~Factoring~~loan ~~and~~under ~~Security~~the ~~Agreement~~Small ~~with~~Business ~~Factors~~Administration ~~Southwest, LLC~~ (“~~FSW~~SBA”)., ~~The~~Economic ~~Company~~Injury ~~agrees~~Disaster toLoan ~~offer~~(“EIDL”) ~~all~~program ~~of its accounts arising time~~ to ~~time~~assist ~~from the ordinary course of~~ business tobusinesses ~~FSW.~~effected ~~FSW~~by ~~accepts those accounts at its sole discretion and is under no obligation to purchase~~ the ~~accounts~~COVID-19 pandemic. The ~~purchase~~EIDL ~~price~~Loan ~~for~~has ~~each~~a ~~factored~~thirty-year ~~account~~term ~~will~~and behas ~~the net face account less~~ a ~~factoring~~principal ~~fee~~amount of ~~.58%. Upon purchase~~$149,900 ~~FSW~~with ~~will~~an ~~advance~~interest ~~the~~rate ~~Company the advanced purchase amount equal to 80%~~ of ~~the net face amount~~3. ~~The remaining amounts will be held by FSW in a reserve account until all obligations of the Company are met~~75%.

In ~~May~~March ~~2020~~2021, the Company received an unsecured loan (the “SBA Loan”) under the Small Business Administration ("“SBA"”), ~~Economic~~Paycheck ~~Injury~~Protection ~~Disaster~~Program ~~Loan~~of ~~(“EIDL”)~~the ~~program~~Coronavirus toAid, ~~assist~~Relief ~~business~~and ~~businesses~~Economic ~~effected~~Security byAct ~~the~~CARES ~~COVID-19~~Act ~~pandemic~~through Chase Bank (“Lender”). The ~~EIDL~~SBA Loan has a ~~thirty~~two-year term ~~and~~expiring on March 2023. The SBA Loan has a principal amount of $~~150~~216,~~000~~ 127 with an interest rate of 31.750%. The Company expects that ~~the~~a ~~full~~partial principal amount of the loan will be forgiven. Interest accrues during the period between funding date and the date the loan is forgiven. The Company ~~has not yet~~ applied for loan forgiveness ~~but~~on ~~plans~~May to25, in2022, and has not yet received a ~~future~~determination ~~period~~on forgiveness.

On ~~December~~October 727, 2020, ~~the~~Jerald ~~Company~~Horowitz, ~~issued~~ a ~~convertible~~Company ~~promissory note to Tysadco Partners~~Director, ~~LLC~~received ~~for the sum of $156~~10,~~750.~~000,000 ~~The~~shares ~~Note bears interest~~ of ~~12%~~restricted ~~per annum until the Note becomes due and payable on December 7~~stock, ~~2022 (Maturity Date). Any amount of principal or interest on this Note~~ which isvested ~~note~~immediately ~~repaid~~for byhis ~~the~~service Maturity Date shall then bear interest at 20% per annum. At any time after 180 days from the Note’s inception until the Maturity Date or payment date, Tysadco may convert the balance or any portion of the balance to ~~Common Stock at~~ the ~~lower of $~~Company.~~15 per share or 80% of the Market Price. Where the Market Price is defined as the ten day trading period prior to the conversion date.~~

On March 11, 2021, the Company closed a purchase agreement between the Company and Quantum Energy and the Company and Quantum’s owner, Jim Collins. Customer lists and name recognition were acquired from Quantum for $1. Further, the Company shall pay a 10% commission for any sales derived from Quantum’s pre-existing sales or audits that generate revenue for the Company. Quantum’s owner, Jim Collins agreed to a consulting agreement with the Company for a three year period. This consulting agreement states that Mr. Collins shall act as a sales manager, primarily in the Washington State area and he shall receive an 8% commission on any new sale generated. During this three year period, Mr. Collins shall receive 2,000,000 shares of the Company, vesting one third each year. The Company executed a consulting agreement with Justin Collins to be the Company’s National Project Manager. Under this agreement, Mr. Justin Collins, shall receive a commission of 6% on new sales and an additional bonus of 20% on the differential between budgeted and actual expense, should budgeted expense exceed actual. After a 90 day period, the Company has agreed to negotiations, at its sole discretion, for Mr. Justin Collins to become the Company’s Chief Operating Officer. The stated salary for this position is $80,000 per annum.

On March 25, 2021, the Company executed an employment agreement with Justin Collins to become the Company’s National Project Manager. The term of the employment agreement is three (3) years commencing on March 29, 2021. This position reports to the Company’s CEO and will encompass the head of Company operations and management of the Company’s Washington location. The salary for this position shall be $80,000 per annum. Under this agreement, Mr. Justin Collins, shall receive a commission of 6% on new sales and an additional bonus of 20% on the differential between budgeted and actual expense, should budgeted expense exceed actual. Mr. Justin Collins also receives 1,000,000 options with a strike price of $.10 per share with annual vesting over a three year time period and expiring three years from the grant date.

On August 10, 2021, we announced the appointment of Mr. Bruce R. Albertson to our Board of Directors. Mr. Albertson replaces Jennifer Peek, whose business demands, and travel schedule prevent her from continuing to fulfill her role. Mr. Albertson will also serve as Chair of Znergy’s Audit Committee, a position formerly held by Ms. Peek. Mr. Albertson was issued 2,000,000 shares of Znergy stock in compensation for actively serving on the Board of Directors.

On March 21, 2022, the company issued restricted stock which was immediately vested. 25,000,000 shares were issued to Rick Mikles, Chairman of the Board. 10,000,000 shares were issued to Dave Baker, CEO. Both share grants were approved by the Board of Directors on September 10, 2020 due to market volatility.

On March 21, 2022, 2,000,000 restricted common stock shares were issued to both Brett Swift and Steven Paulik for accounting services performed. The restricted stock immediately vested.

On June 1, 2022, the Company moved its headquarters, warehouse and distribution center to 1120 N. Main St., Elkhart, Indiana 46514.

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CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements on our current expectations and projections about future events, and they are applicable on as of the dates of such statement. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our 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 such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "would," "forecast," "expect," "plan," anticipate," believe," estimate," continue," or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those listed under the heading "Risk Factors" and those listed in our other SEC filings. You should not put undue reliance on any forward-looking statements. These statements speak only as of the date of this Quarterly Report on Form 10-Q, even if subsequently made available on our website or otherwise, and we undertake no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q. The following discussion should be read in conjunction with our Financial Statements and related Notes thereto included elsewhere in this report. Throughout this Quarterly Report on Form 10-Q we will refer to Znergy, Inc., together with its subsidiaries, as the "Company," "we," "us," and "our"

The following discussion and analysis of our financial condition should be read together with our unaudited Consolidated Financial Statements and related notes included in this Form 10-Q as well as our audited Financial Statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC on September 4, 2020.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

The Company was formed in January 2013 as a Nevada corporation. The original business plan of the Company was to build and sell multi-family housing projects. The Company acquired a parcel of land in Taunton, Massachusetts, from The Mazzal Trust, a trust of which the founder of the Company, Nissim Trabelsi, was the Trustee, in exchange for shares of the Company's common stock, and began development of the project and construction of multi-family units.

On October 26, 2015, the Company acquired Global ITS, Inc. and its wholly owned subsidiary, Znergy, Inc. in order to expand into the Energy Efficiency (EE) marketplace, focusing on commercial lighting and green project financing. On February 9, 2016, the Company agreed to sell to the Mazzal Trust the real property which the Trust had previously sold to the Company and the Trust returned to the Company 149,950,000 of the 150,000,000 shares of the Company's common stock owned by the Trust. This transaction caused a change of control with Global being the accounting acquirer. The Company is now focused solely on the EE marketplace with an emphasis on LED retrofitting and installing new lamps.

The Company determined that Global ITS, Inc. served no purpose for the Company. It held no assets or operations, had been dormant for over a year, except for the operations of its wholly owned Subsidiary. On October 1, 2018, the Company sold 100% of its shares in Global to Peter Peterson, a shareholder of the Company and a creditor of Global for a nominal amount. The sale did not include Global's investment in its subsidiary.

The Company is a provider of energy-efficient lighting products, lighting controls and energy management solutions. The Company offers a full turn-key lighting solution which includes economic assessments, energy efficient analysis, installation and rebate support for the Company's customers. The Company's business primarily involves retrofitting existing lighting solutions from traditional high intensity metal halide and fluorescent lighting to energy efficient LED (Light Emitting Diode) technology.

Managing energy consumption and the associate costs is increasingly important to building owners. Technological advancements in LED, together with significant private and public incentives for sustainability initiatives have made lighting infrastructure changes an effective way for building owners to cut energy costs. LED lighting provides energy efficiency, long life, low running temperatures and increasing technology such as dimmable lights.

The Company does not have long term contracts with its customers and the Company's revenue comes from the sales of lighting systems involving the replacement of existing lighting fixtures with new energy efficient LED fixtures. In addition, the Company generates revenue from available utility incentives and rebate programs.

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The Company provides its turn-key service though a detailed evaluation of the customer's needs and performing an audit of the customer's current energy consumptions and costs, together with an analysis of the benefits of retrofitting their lights. Typically, the customer experiences an average payback on their investment between 12 and 24 months.

The Company intends to grow organically by selling energy efficiency (EE) and commercial security (CS) products to industrial and commercial businesses as well as municipal and state governments, universities and colleges, K-12 schools, and hospitals (the "MUSH" market). Strained government budgets have convinced state and local governments across the United States to embrace a new form of performance-based investments in energy efficiency offered by Energy Services Companies, or ESCOs. An ESCO provides energy-efficiency-related and other value-added services and for which performance contracting is a core part of its energy-efficiency services business. In a performance contract, the ESCO guarantees energy or financial savings for the project, which means ESCOs only make money if the project performs as promised. A study prepared by Allied Market Research indicated that the market is expected to grow at a Compound Annual Growth Rate of 13.76% during the forecast period 2014-2020 and reach $44.4 billion by 2020.

The Company plans to increase its competitive position by providing financing to customers for installation projects through a strategic partnership the Company has developed with a well-established funding group focused on energy efficiency projects.

On September 22, 2021, the Company formed RluxRV, LLC. This LLC is joint owned by the Company and Royalux Lighting, LLP (RoyaLux), an Indian company. The purpose of this LLC is to supply lighting and technology parts to the recreational vehicle (“RV”) market. The parts manufacturing will be done exclusively by Royalux Lighting. All of the sales and distribution of the parts will the responsibility of RluxRV. This business is meant for a strategic change in Znergy’s business. All the Company’s employees with the exception of the Chief Executive Officer were terminated in December, 2021 in order to conserve cash and evaluate RluxRV’s potential impact. As of the date of filing, there were limited sales by RluxRV in a test market of RV manufactures. The Company is leasing warehouse space and purchased of two (2) vehicles for expected business growth.

Results of Operations

The Company had revenues of $~~416~~997,~~774~~518 and $~~259~~556,~~582~~142 for the three-month periods ended ~~June~~September 30, 2019, and 2018, respectively. The Company had revenues of $~~603~~1,~~392~~600,910 and $~~742~~1,~~554~~298,696 for the ~~six~~nine-month periods ended ~~June~~September 30, 2019, and 2018, respectively. Revenues in ~~2018~~2019 and 2018 comprise LED installation projects ~~and associated rebates from utilities~~. The increase in revenues for the three-month ~~period~~and isnine-month periods are due to continued organic growth of the core business. The decrease in revenues for the six-month period is due to lost contracts. The Company expects to continue to see increased revenue in future periods but can make no assumptions as to size of any increases or certainty thereof. Additionally, the normal sales cycle of the business contains variability period over period.

The Company incurred costs of revenue of $~~391~~914,~~571~~197 and $~~176~~259,~~368~~158 for the three-month periods ended ~~June~~September 30, 2019 and 2018, respectively. The Company incurred costs of revenue of $~~566~~1,~~973~~481,169 and $~~405~~665,~~996~~154 for the ~~six~~nine-month periods ended ~~June~~September 30, 2019 and 2018, respectively. Costs of revenue in 2019 and 2018 comprise primarily LED product and installation costs, including labor and rental equipment. Cost of revenue as a percentage of revenue can be impacted by the type of jobs and if the job requires customized lighting.

The Company had general and administrative expenses of $~~842~~2,~~801~~ 766,166 and $~~583~~668,~~649~~000 for the three-month periods ended ~~June~~ September 30, 2019 and 2018, respectively. The Company had selling, general and administrative expenses of $25,~~933~~699,~~465~~631 and $12,~~818~~486,~~001for~~001 for the ~~six~~nine-month periods ended ~~June~~ September 30, 2019 and 2018, respectively. The increase for the three-month period is also primarily due to anthe ~~increased~~issuance ~~equity-based~~of ~~compensation~~12,500,000 ~~costs~~shares for services rendered. The increase for the ~~six~~nine-month period is primarily due to an increase in stock-based compensation costs for the issuance of 20,000,000 shares to the Company’s CEO and 12,500,000 shares for services rendered as well as the conversion costs of the Company’s Chairman’s options to restricted stock.

The Company incurred interest expense of $42,708 and $58,083 for the three and six-month periods ended June 30, 2019. This is compared to $64,591 and $176,150 for the same periods in 2018. This is the result of the additional Notes Payable and Advances the company has entered into to finance the operations of the Company.19

~~The~~Table ~~Company had net losses~~ of $858,529 and $608,514 for the three-month periods ended June 30, 2019 and 2018, respectively, and net losses of $2,951,893 and $1,701,081 for the six-month periods ended June 30, 2019 and 2018, respectively.Contents

The Company incurred interest expense of $38,929 and $97,012 for the three and nine-month periods ended September 30, 2019. This is compared to $3,749 and $179,899 for the same periods in 2018. This is the result of the additional Notes Payable and Advances the company has entered into to finance the operations of the Company.

The Company had net losses of $2,720,042 and $367,035 for the three-month periods ended September 30, 2019 and 2018, respectively, and net losses of $5,671,935 and $2,068,116 for the nine-month periods ended September 30, 2019 and 2018, respectively.

Liquidity and Going Concern Discussion

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of ~~June~~September 30, 2019, the company had a working capital deficit of $23,~~574~~007,~~979~~025, insufficient cash resources to meet its planned business objectives, and recurring losses of ($~~858~~2,~~529~~720,042) and ($25,~~951~~671,~~893~~934) for the three and ~~six~~nine ~~month’s~~months ended ~~June~~September 30, 2019 and ($~~608~~367,~~514~~035) and ($12,~~701~~068,~~081~~116) for the three and ~~six~~nine ~~month’s~~months ended ~~June~~September 30, 2018. The Company intends to fund operations through equity and debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements through ~~April,~~June ~~2022~~2023. As a result, the Company is seeking additional funding through debt and equity financing arrangements, or other funding opportunities.

The Company's success is dependent upon, among other things, obtaining the additional financing to continue operations and to execute its business plan. No assurances can be made that management will be successful in pursuing any of these strategies.

These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Plan of Operation

The Company's anticipated plan of operation is to continue to (1) identify and train sales personnel in regions of the country that have advantageous utility company rebate programs, (2) identify and train lighting installation personnel where we have established sales personnel, (3) seek out the best current and incipient solutions in the Energy Efficiency marketplace and become a reseller of those solutions, (4) develop our own solutions for the EE marketplace, and (5) seek to acquire other businesses in the market where such acquisitions makes strategic sense and are accretive to earnings.

The Company continues to expand its solutions portfolio for both indoor and outdoor applications to capitalize on the evolving and growing market for intelligent networked systems that collect and exchange data to increase efficiency as well as provide a host of other economic benefits resulting from data analytics to better enable smart buildings and smart cities. The transition to solid-state lighting provides the opportunity for lighting to be integrated with other building automation systems to create an optimal platform for enabling the "Internet of Things" (IoT), which will support the advancement of smart buildings, smart cities, and the smart grid.

The Company's ability to grow its incipient operations is primarily dependent upon its ability to raise additional capital, most likely through the sale of additional shares of the Company's common stock or other securities. There can be no guarantee that the Company will be able raise additional capital on terms that are acceptable to the Company, or at all.

The realization of revenues in the next twelve months is important in the execution of the plan of operations. However, if the Company cannot raise additional capital by issuing capital stock in exchange for cash, or through obtaining commercial or bank financing, in order to continue as a going concern, the Company may have to curtail or cease its operations. As of the date of this Report, there were no formal or informal agreements to attain such financing. The Company cannot assure any investor that, if needed, sufficient financing can be obtained or, if obtained, that it will be on reasonable terms. Without realization of additional capital, it would be unlikely for operations to continue.

Critical Accounting Policies

There have been no changes to our critical accounting policies from those included in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on September 4, 2020.

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Recently Issued Accounting Pronouncements

We are required to adopt certain new accounting pronouncements. See Note 21 to the condensed consolidated financial statements included in Item 1 of this Form 10-Q.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements or issued guarantees to third parties.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are the controls and other procedures that are designed to provide reasonable assurance that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including the principal executive and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. We have carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this Quarterly Report.

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Based upon that evaluation we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report due to a material weakness in our internal control over financial reporting, which is described below.

Our management identified the following material weaknesses which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines although we plan to take steps to enhance and improve the design of our internal control over financial reporting, we have not been able to remediate the material weaknesses identified above.

The Company has not had sufficient internal accounting personnel working at their corporate office which has led to a lack of segregation of duties and timely closing processes, nor did we perform an effective assessment of our system of internal control. The accounting functions have been handled by a combination of third parties off-site and internal personnel which has hindered the Company’s ability to timely reconcile its accounts, maintain the proper controls under the underlying documentation and close its books and records. This was a result of the early stage in the Company's growth. The Company ~~will~~added ~~be adding internal~~ accounting ~~personnel~~expertise in 2020 which should allow the Company to start to remediate its internal control issues. The Company also hired a GAAP experienced consulting firm in January 2020 and other external consultants throughout 2020.

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the three-month period ended ~~June~~September 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On ~~June~~September 26, 2016, Registrant filed in the United States District Court for the Middle District of Florida a Complaint against defendants The Mazzal Trust, Nissim S. Trabelsi and Shawn Telsi (collectively the “Defendants”), seeking the disgorgement of profits obtained by Defendants and certain of their shareholder affiliates defined under Rule 16a-1(a)(1) under the Exchange Act defined below (collectively, the “Group”) through “short swing profits” in violation of Section 16(b) of the Securities Exchange Act of 1934 (the “Exchange Act”). Specifically, Registrant alleged that the Group acted under the guidance and control of the Defendants, whose individual defendants had filed forms 3 and 4 with the Securities and Exchange Commission (the “SEC”, declaring themselves to be “insiders” for the purpose of Section 16(b). The Group owned 100% of the shares of Registrant at the time that members of the group were engaged in the sale and purchase of such shares. The sales and purchases referenced all occurred with six months of other sales and purchases, subjecting Defendants to disgorge to Registrant all profits made by the Group in such sales and purchases. As detailed in paragraphs 16-22 of the Complaint, the total profits received by the Group is $1,695,689. Accordingly, Registrant has demanded the return of all such profits to Registrant plus the statutory payment of attorneys’ fees.

On August 24, 2017, the Plaintiff received a Clerk’s Entry of Default against Nissim Trabelsi. The Plaintiff filed a Motion for Default Judgment for damages against Trabelsi on ~~June~~September 13, 2017, which to date has not been addressed by the Court. On March 5, 2018, Nissim Trabelsi filed a notice of bankruptcy. The Plaintiff is still pursuing its options in the Case and the Court has yet to address the service issues with the Mazzal Trust.

Item 5. Other Information.

None

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Item 6. Exhibits

(a) Exhibits

Exhibit No.		Description
3.1		Articles of Incorporation for BIDC (previously filed as an exhibit to the Company's registration statement on Form S-1, filed with the Commission on June 10, 2013)
3.2		Bylaws of BIDC (previously filed as an exhibit to the Company's registration statement on Form S-1, filed with the Commission on June 10, 2013)
3.3		Amended and Restated Articles of Incorporation, as filed with the Nevada Secretary of State on July 15, 2016 (previously filed as an exhibit to the Company's information statement on Form Def 14C, filed with the Commission on May 31, 2016)
10.1		Share Exchange Agreement, dated as of October 26, 2015 (previously filed as an exhibit to the Company's Current Report on Form 8-K, filed with the Commission on October 27, 2015)
10.2		Master Stock Purchase Agreement (previously filed as an exhibit to the Company's Current Report on Form 8-K, filed with the Commission on February 12, 2016)
10.3		Employment Agreement with Dave Baker (previously filed as an exhibit to the Company's Current Report on Form 8-K, filed with the Commission on October 4, 2016)
10.4		Employment Agreement with Dave Baker (previously filed as an exhibit to the Company's Current Report on Form 8-K, filed with the Commission on May 19, 2017)
10.5		Employment Agreement with Christopher Floyd (previously filed as an exhibit to the Company's Current Report on Form 8-K, filed with the Commission on May 19, 2017)
10.6		Employment Agreement with Ryan Smith (previously filed as an exhibit to the Company's Current Report on Form 8-K, filed with the Commission on July 12, 2017)
31.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a).
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. §1350 as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
101 INS		XBRL Instance Document*
101 SCH		XBRL Schema Document*
101 CAL		XBRL Calculation Linkbase Document*
101 DEF		XBRL Definition Linkbase Document*
101 LAB		XBRL Labels Linkbase Document*
101 PRE		XBRL Presentation Linkbase Document*

Table of Contents

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.

ZNERGY, INC.

By: /s/ Dave Baker Dave Baker Chief Executive Officer and Director (Principal Executive and Financial Officer) Date: ~~August~~July 3122, ~~2021~~2022

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