TAMPA, FL / ACCESSWIRE / November 16, 2017 / Znergy Inc. (OTC PINK: ZNRG) (the "Company"), a provider of energy efficient lighting products, lighting controls, and energy management solutions, today announced its financial and operational results for the quarter ended September 30, 2017.
Znergy is focused on the LED retrofit market and is executing a growth strategy through the regional rollout of sales and installation teams across the United States.
Third Quarter Financial Highlights:
- Record revenues of $873,976
- Gross margin of 51.6%
- Of note, the operating and net loss of $953,747 includes non-cash stock-based compensation of $584,875 from stock and option issuances to management, Board and advisors in lieu of cash, which is typical of small emerging companies
- Accounts receivable of $697,389
Third Quarter Business Highlights:
- Awarded and Completed $1,000,000 contract with Wawasee Community School Corporation
- Appointed Ryan Smith as Senior Vice President
- Strengthened Board of Directors with addition of Jennifer Peel
Znergy is targeting LED retrofit opportunities in the education, office, commercial, high rise residential, healthcare and manufacturing and warehouse markets. The Znergy complete turn-key lighting solution program includes economic assessments, energy efficient analysis, portfolio of products, installation, and rebate support.
"We are excited about our record quarter, but believe this is just the beginning. We have built a strong variable expense platform, which will enable us to scale our business. From our back office infrastructure to our front-end operations and installers, we have assembled a flexible team that will grow as we win business and grow. We are confident in sustaining approximate 50% gross margins as we ramp our business," commented Dave Baker, Energy's Chief Executive Officer. "We look forward to executing on our business plan and sales pipeline. We will be increasing our communication and transparency in regards to our business progress as we seek to increase our awareness and visibility with shareholders and Wall Street."
Revenue Ramp Thru Q3 2017:
Financial Results for the Three Months Ended September 30, 2017:
Revenue for the three months ended September 30, 2017 was $873,976, compared to $2,461 for the three months ended September 30, 2016, and a 207% increase sequentially from the second quarter of 2017. Revenues in 2017 comprise LED installation projects and associated rebates from utilities while revenues in 2016 consist of consulting services. The increase in revenues is due to the increase in personnel, implementing formalized training programs, resulting in increased sales and marketing efforts.
Gross profit of $450,642 was recorded in the third quarter ended September 30, 2017, compared to a gross profit of $2,461 in the third quarter of 2016. This represented a gross profit margin of 51.6%. Costs of revenue in 2017 comprised primarily LED product and installation costs, including labor and rental equipment.
Selling, general and administrative expenses increased by $1,172,635 to $1,404,389 for the three months ended September 30, 2017, compared to $231,754 for the three months ended September 30, 2016. General and administrative costs for the three months ended September 30, 2017 were comprised of stock-based compensation and consulting costs of $584,875 and personnel expenses of $229,815.
Operating and net loss for the three months ended September 30, 2017 increased by $724,454 to $953,747, compared to a $229,293 operating and net loss in the three months ended September 30, 2016. Of note, the operating and net loss for the three months ended September 30, 2017 included non-cash stock-based compensation of $584,875.
As of September 30, 2017, Znergy had $131,444 of cash, $697,389 of accounts receivable, $0 traditional debt and 227.6 million shares issued and outstanding.
Financial Results for the Nine Months Ended September 30, 2017:
Revenue for the nine months ended September 30, 2017 was $1,302,217, compared to $14,701 for the nine months ended September 30, 2016. Revenues in 2017 comprise LED installation projects and associated rebates from utilities while revenues in 2016 consist of consulting services. The increase in revenues is due to the increase in personnel, implementing formalized training programs, resulting in increased sales and marketing efforts.
Gross profit of $705,556 was recorded in the nine months ended September 30, 2017, compared to a gross profit of $14,701 in the nine months ended September 30, 2016. This represented a gross profit margin of 54.2%. Costs of revenue in 2017 comprised primarily LED product and installation costs, including labor and rental equipment.
Selling, general and administrative expenses increased by $3,444,514 to $3,818,004 for the nine months ended September 30, 2017, compared to $373,490 for the nine months ended September 30, 2016. General and administrative costs for the nine months ended September 30, 2017 were comprised of $2,656,325 in common stock and options issued for services and $519,085 in common stock and warrants issued for interest related to the conversion of debt.
Operating and net loss for the nine months ended September 30, 2017 increased by $2,760,795 to $3,112,448, compared to a $351,653 operating and net loss in the nine months ended September 30, 2016. Of note, the operating and net loss for the nine months ended September 30, 2017 included non-cash stock-based compensation of $3,175,410.
About Znergy, Inc.
Znergy, Inc. (OTC PINK: ZNRG) is a provider of energy efficient lighting products, lighting controls, and energy management solutions. Management is executing a growth strategy through developing large regional and national accounts, rolling out sales and installation teams across the United States. Our solutions enable customers to reduce energy consumption, lower maintenance costs and realize environmental benefits. Znergy is headquartered in Tampa, Florida. For more information, please visit: www.znergyworld.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this press release are forward-looking statements. These statements relate to future events or to the Company's future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond the Company's control which could, and likely will materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company's current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. Such risks, uncertainties, and other factors, which could impact the Company and the forward-looking statements contained herein are included in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Contact Information
Znergy, Inc.
C. J. Floyd
(800) 931-5662
[email protected]
Hayden IR
(917) 658-7878
[email protected]
Consolidated Balance Sheets
|
September 30,
|
December 31,
|
|||||||
|
2017
|
2016
|
|||||||
|
(UNAUDITED)
|
||||||||
|
ASSETS
|
||||||||
|
CURRENT ASSETS
|
||||||||
|
Cash
|
$
|
131,444
|
$
|
40,507
|
||||
|
Accounts receivable, net of allowance
|
697,389
|
79,612
|
||||||
|
Prepaid expenses
|
76,460
|
3,750
|
||||||
|
Inventory
|
389,768
|
192,105
|
||||||
|
Total current assets
|
1,295,061
|
315,974
|
||||||
|
Fixed Assets, net
|
306,189
|
2,567
|
||||||
|
Intangible assets, net
|
1,845
|
1,845
|
||||||
|
TOTAL ASSETS
|
$
|
1,603,095
|
$
|
320,386
|
||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
|
CURRENT LIABILITIES
|
||||||||
|
Accounts payable
|
$
|
251,131
|
$
|
284,930
|
||||
|
Accrued expenses
|
185,588
|
139,336
|
||||||
|
Customer deposits
|
64,383
|
6,605
|
||||||
|
Advances
|
-
|
60,000
|
||||||
|
Loan, building
|
225,000
|
-
|
||||||
|
Loan from related party
|
892
|
135,749
|
||||||
|
Total current liabilities
|
726,994
|
626,620
|
||||||
|
COMMITMENTS AND CONTINGENCIES
|
||||||||
|
STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
|
Preferred stock, $0.0001 par value, 100,000,000
authorized shares; no shares issued and outstanding
|
-
|
-
|
||||||
|
Common stock, $0.0001 par value; 500,000,000 shares
authorized; 227,624,960 and 193,150,000 shares issued
and outstanding at September 30, 2017 and
December 31, 2016
|
22,762
|
19,315
|
||||||
|
Additional paid-in-capital
|
11,917,435
|
7,626,099
|
||||||
|
Accumulated deficit
|
(11,064,096
|
)
|
(7,951,648
|
)
|
||||
|
Total Stockholders' Equity (Deficit)
|
876,101
|
(306,234
|
)
|
|||||
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$
|
1,603,095
|
$
|
320,386
|
||||
Consolidated Statements of Operations
|
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
|
2017
|
2016
|
2017
|
2016
|
|||||||||||||
|
Revenue
|
$
|
873,976
|
$
|
2,461
|
$
|
1,302,217
|
$
|
14,701
|
||||||||
|
Cost of revenue
|
423,334
|
-
|
596,661
|
-
|
||||||||||||
|
Gross profit
|
450,642
|
2,461
|
705,556
|
14,701
|
||||||||||||
|
Selling, general and administrative expenses
|
1,404,389
|
231,754
|
3,818,004
|
373,490
|
||||||||||||
|
Loss from operations
|
(953,747
|
)
|
(229,293
|
)
|
(3,112,448
|
)
|
(358,789
|
)
|
||||||||
|
Other income (expense)
|
||||||||||||||||
|
Other income
|
-
|
-
|
-
|
7,136
|
||||||||||||
|
Total other income
|
-
|
-
|
-
|
7,136
|
||||||||||||
|
Provision for income taxes
|
-
|
-
|
-
|
-
|
||||||||||||
|
Net loss
|
$
|
(953,747
|
)
|
$
|
(229,293
|
)
|
$
|
(3,112,448
|
)
|
$
|
(351,653
|
)
|
||||
|
Net loss per common share - basic and diluted
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
(0.02
|
)
|
$
|
(0.00
|
)
|
||||
|
Weighted average number of shares outstanding
- basic and diluted
|
214,074,451
|
185,060,753
|
205,493,759
|
203,991,818
|
||||||||||||
Consolidated Statements of Cash Flows
|
For the Nine
|
For the Nine
|
|||||||
|
Months Ended
|
Months Ended
|
|||||||
|
September 30,
|
September 30,
|
|||||||
|
2017
|
2016
|
|||||||
|
CASH FLOWS USED IN OPERATING ACTIVITIES:
|
||||||||
|
Net loss
|
$
|
(3,112,448
|
)
|
$
|
(351,653
|
)
|
||
|
Adjustments to reconcile net loss to net cash
used in operating activities:
|
||||||||
|
Depreciation and amortization
|
1,862
|
2,500
|
||||||
|
Common stock and options issued for services
|
2,656,325
|
197,169
|
||||||
|
Common stock and options issued for interest on debt converted
|
519,085
|
-
|
||||||
|
Contributed services
|
-
|
10,640
|
||||||
|
Accounts receivable
|
(617,777
|
)
|
(23,480
|
)
|
||||
|
Prepaid expenses
|
(72,710
|
)
|
-
|
|||||
|
Inventory
|
(197,663
|
)
|
(19,341
|
)
|
||||
|
Accounts payable & accrued expenses
|
21,818
|
69,534
|
||||||
|
Customer deposits
|
57,778
|
-
|
||||||
|
Net cash used in operating activities
|
(743,730
|
)
|
(114,631
|
)
|
||||
|
CASH FLOWS USED IN INVESTING ACTIVITIES:
|
||||||||
|
Purchase of fixed assets
|
(80,483
|
)
|
(1,213
|
)
|
||||
|
Net cash used in investing activities
|
(80,483
|
)
|
(1,213
|
)
|
||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
|
Proceeds from issuance of common stock
|
795,000
|
-
|
||||||
|
Repayment of advances from third parties
|
(106,340
|
)
|
-
|
|||||
|
Payments of Loan from Related Parties
|
(260
|
)
|
-
|
|||||
|
Advances from third parties
|
226,750
|
123,526
|
||||||
|
Net cash provided by financing activities
|
915,150
|
123,526
|
||||||
|
INCREASE IN CASH
|
90,937
|
7,682
|
||||||
|
CASH, BEGINNING OF PERIOD
|
40,507
|
1,279
|
||||||
|
CASH, END OF PERIOD
|
$
|
131,444
|
$
|
8,961
|
||||
|
Supplemental Disclosures
|
||||||||
|
Non-cash investing and financing activities:
|
||||||||
|
Transfer of assets and liabilities to related party for return of common shares
|
$
|
-
|
$
|
1,018,679
|
||||
|
Purchase of building with note
|
$
|
225,000
|
$
|
-
|
||||
|
Repayment of debt with common stock and options
|
$
|
324,372
|
$
|
-
|
||||
SOURCE: Znergy Inc.