10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549   

FORM 10-Q 

☒ Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2017

☐ Transition report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to _______

000-55152

(Commission file number)

ZNERGY, INC.

(Exact name of registrant as specified in its charter)

Nevada	46-1845946
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6102 South MacDill Avenue, Suite G Tampa, FL 33611	33611
(Address of principal executive offices)	(Zip Code)

800-931-5662

(Registrant’s telephone number, including area code)

MAZZAL HOLDING CORP.

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☐                                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 ☐  (Do not check if a smaller reporting company)	Smaller reporting company   ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if he 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 ☒

On August 9, 2017, there were 226,024,960 shares of the registrant’s common stock outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION			3
	Item 1.	Condensed Consolidated Financial Statements	3
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
	Item 4.	Controls and Procedures	16
Part II - OTHER INFORMATION			18
	Item 1.	Legal Proceedings	18
	Item 5.	Other Information	18
	Item 6.	Exhibits	19
SIGNATURES			20

PART I - FINANCIAL INFORMATION

Item 1.          Condensed Consolidated Financial Statements

ZNERGY, INC.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS:
Condensed Consolidated Balance Sheets as of June 30, 2017 (unaudited), and December 31, 2016	4
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2017 and 2016 (unaudited)	5
Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the six months ended June 30, 2017 (unaudited)	6
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016 (unaudited)	7
Notes to Condensed Consolidated Unaudited Interim Financial Statements	8

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ZNERGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

as of

	June 30,			December 31,
	2017			2016
	(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash	$	645,607		$	40,507
Accounts receivable		284,043			79,612
Prepaid expenses		1,250			3,750
Inventory		226,231			192,105
Total current assets		1,157,131			315,974
Furniture & equipment, net		2,100			2,567
Intangible assets, net		1,845			1,845
TOTAL ASSETS	$	1,161,076		$	320,386
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable	$	106,901		$	284,930
Accrued expenses		108,119			139,336
Customer deposits		3,545			6,605
Advances		-			60,000
Loan from related party		100,967			135,749
Total current liabilities		319,532			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; 221,324,960 and 193,150,000 shares issued   and outstanding at June 30, 2017 and December 31, 2016		22,132			19,315
Additional paid-in-capital		10,929,761			7,626,099
Accumulated deficit		(10,110,349	)		(7,951,648	)
Total stockholders’ equity (deficit)		841,544			(306,234	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	1,161,076		$	320,386

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

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ZNERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2017			2016			2017			2016
Revenue	$	284,562		$	6,160		$	428,241		$	12,240
Cost of revenue		115,281			-			173,327			-
Gross profit		169,281			6,160			254,914			12,240
Selling, general and administrative expenses		1,549,969			562,749			2,413,615			600,069
Loss from operations		(1,380,688	)		(556,589	)		(2,158,701	)		(587,829	)
Provision for income taxes		-			-			-			-
Net loss	$	(1,380,688	)	$	(556,589	)	$	(2,158,701	)	$	(587,829	)
Net loss per common share - basic and diluted	$	(0.01	)	$	(0.00	)	$	(0.01	)	$	(0.00	)
Weighted average number of shares outstanding    - basic and diluted		204,266,206			181,423,626			201,269,197			213,509,016

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

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ZNERGY, INC.

CONSOLIDATED STATEMENT OF CHANGE IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE SIX MONTHS ENDED JUNE 30, 2017

(Unaudited)

										Total
					Additional					Stockholders’
	Common Stock				Paid in		Accumulated			Equity
	Shares		Amount		Capital		Deficit			(Deficit)
Balance at December 31, 2016		193,150,000	$	19,315	$	7,626,099	$	(7,951,648	)	$	(306,234	)
Common Shares and Options issued for services		13,250,000		1,325		1,666,696		-			1,668,021
506b Offering:
Common Shares and Warrants issued for cash		10,600,000		1,059		793,941		-			795,000
Common Shares and Warrants issued for debt conversion		4,324,960		433		843,025		-			843,458
Net loss								(2,158,701	)		(2,158,701	)
Balance at June 30, 2017	$	221,324,960	$	22,132	$	10,929,761	$	(10,110,349	)	$	841,544

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			For the Six
	Months Ended			Months Ended
	June 30,			June 30,
	2017			2016
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net loss	$	(2,158,701	)	$	(587,829	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		467			2,500
Common stock and options issued for services		1,668,021			500,000
Accounts receivable		(204,431	)		(9,440	)
Prepaid expenses		2,500			-
Inventory		(34,126	)		-
Accounts payable & accrued expenses		318,940			47,436
Customer deposits		(3,060	)		-
Net cash used in operating activities		(410,390	)		(47,333	)
CASH FLOWS USED IN INVESTING ACTIVITIES:
Equipment & furniture		-			(1,213	)
Net cash used in  investing activities		-			(1,213	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock		795,000			-
Repayment of advances from third parties		(6,000	)
Payments of Loan from Related Parties		(260	)
Advances from third parties		226,750			48,900
Net cash provided by financing activities		1,015,490			48,900
INCREASE IN CASH		605,100			354
CASH, BEGINNING OF PERIOD		40,507			1,279
CASH, END OF PERIOD	$	645,607		$	1,633

Supplemental Disclosures
Non-cash investing and financing activities:
Transfer of assets and liabilities to related party for return of common shares	$	-	$	1,018,679
Common Stock and warrants issued for the Conversion of Debt	$	843,458	$	-

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

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ZNERGY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2017 (UNAUDITED)

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”), incorporated on January 23, 2013. The original business plan of the Company was the construction and management of multi-family home developments and the subsequent sale thereof.

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.  The Company is now focused solely on the EE marketplace with an emphasis on LED retrofitting and relamping.

Basis of Presentation

The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. All intercompany transactions have been eliminated in consolidation.

Certain information and footnote disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes have been condensed or omitted in these interim condensed consolidated financial statements. Accordingly, the unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited condensed consolidated financial statements for the year ended December 31, 2016, as filed with the Securities and Exchange Commission (“SEC”) on Form 10-K.

The results of operations presented in this quarterly report are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments and accruals, consisting only of normal recurring adjustments that are necessary for a fair presentation of the results of all interim periods reported herein.

Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation.

NOTE 2 – 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 30, 2017, while the Company has a working capital surplus of $837,599, the accumulated losses from operations aggregated $10,110,349 and it continutes to experience operating losses. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements through June 2018.

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. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3 – INTANGIBLE ASSETS

The Company was granted a federally registered trademark for “ZNERGY”. The cost of applying for and prosecuting this trademark was $1,845 which cost was accounted for as a non-amortizing intangible asset.

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NOTE 4 – LOANS FROM RELATED PARTY

	June 30, 2017		December 31, 2016
Loans from related party	$	100,967	$	135,749

The loan at December 31, 2016 is from B2 Opportunity Fund, LLC, a major shareholder of the Company, and is unsecured, bears no interest and is repayable on demand.  The loan at June 30, 2017 is from our Chairman and is secured by our inventory, bears 4% interest per annum, is due November 15, 2017 and has accrued interest of $967.

NOTE 5 – STOCKHOLDERS’ EQUITY

Common Stock

On January 25, 2017 the Company appointed Richard Mikles as Chairman of the board of directors and issued to Mr. Mikles 3,000,000 shares of its common stock, valued at its trading price and vested immediately, and 4,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options vesting equally over eight quarters and having an expiration of three years from the date of issue. Concomitantly, the Company entered into a consulting agreement with Mr. Mikles to provide marketing, strategic, and organizational services to the Company. Upon execution of this consulting agreement the Company issued 2,000,000 shares of common stock, valued at its trading price and vested immediately, and 5,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options to vest quarterly in the amount of one option for every two dollars of revenue recognized by the Company.

On January 27, 2017 the Company appointed Kevin Harrington to its Board of Directors and issued 2,000,000 shares of its common stock, valued at its trading price and vested immediately, and 4,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options vesting equally over eight quarters and having an expiration of three years from the date of issue.

On February 2, 2017 the Company entered into a consulting agreement with Venture Legal Services, PLLC, to provide legal and strategic advisory services for the Company. In conjunction with the execution of this agreement, the Company granted Venture options to purchase up to 2,000,000 shares of its common stock at a price of $0.10 per share. The options have an expiration of three years from the date of issue and vest quarterly one option for every two dollars of revenue recognized by the Company.

On May 15, 2017, the Company entered into an employment agreement with Mr. Baker, our CEO.  Mr. Baker was granted 5,000,000 shares of common stock of the Company, valued at its trading price and vested immediately, and was granted 5,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company.

On May 15, 2017, the Company entered into an employment agreement with Mr. Floyd, our CFO.  Mr. Floyd was granted 10,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company.

On June 1, 2017, the Company entered into a service agreement with a provider of investor relations services. Under the agreement, the Company issued 1,000,000 shares of common stock to the provider, valued at its trading price, vesting 500,000 on June 1, 2017, 250,000 shares on October 1, 2017 and 250,000 shares on January 1, 2018.

On June 13, 2017, the Company entered into a service agreement with a provider of bookkeeping, accounting, payroll and human resources services.  Under the agreement, the Company issued 250,000 shares of common stock to the provider, valued at its trading price and vested immediately, and 1,000,000 options to purchase common stock of the Company at $0.10 per share.  These options have a three-year expiration and vest evenly over two years.

Private Offerings of Common Stock and Warrants

During the period ended June 30, 2017 the Company completed a private offering of common stock and warrants to accredited and unaccredited investors for gross proceeds of $1,119,372 which securities were offered under Regulation D, Rule 506(b) of the Securities and Exchange Act of 1933. The Company accepted subscriptions, in the aggregate, for 14,924,960 shares of common stock and one-year warrants to purchase 14,924,960 shares of common stock of which 10,600,000 shares of its common stock and 10,600,000 warrants were issued for $795,000 in cash and 4,324,960 shares of its common stock and 4,324,960 warrants were issued for $324,372 in the conversion of debt. Investors received one-year fully vested warrant to purchase up to 100% of the number of shares purchased in the offering. The warrants have an exercise price of $0.15 per share. The purchase price for each share of common stock together with the warrants was $0.075.

9

Options

There were 7,400,000 options issued and outstanding as of December 31, 2016. The following table shows the stock option activity during the period ended June 30, 2017:

			Weighted
	Number		Average
	Of		Exercise
	Options		Price
Options outstanding at beginning of year		7,400,000	$	0.10
Changes during the period:
Granted - at market price		31,600,000	$	0.10
Exercised		-
Expired		-
Options outstanding at end of period		39,000,000	$	0.10
Options exercisable at end of period		4,850,149	$	0.10
Weighted average fair value of options granted during the period	$	3,073,200	$	0.10

Options issued were valued using the Black-Sholes model assuming zero dividends, a $0.10 strike price, 3-year expiration, 1.47% average risk-free rate and 238% average volatility. Costs incurred in respect of stock based compensation for employees, advisors and consultants for the three and six-month periods ended June 30, 2017 were $215,374 and $274,563, respectively. Costs incurred in respect of stock based compensation for employees, advisors and consultants for the three and six-month periods ended June 30, 2016 were $-0- and $-0-, respectively.

Unrecognized compensation costs related to options was $3,631,029 which is expected to be recognized ratably over approximately 17 months.

Warrants

There were no warrants were issued and outstanding as of December 31, 2016. The following table shows the warrant activity during the period ended June 30, 2017:

			Weighted
	Number		Average
	Of		Exercise
	Warrants		Price
Warrants outstanding at beginning of year		-
Changes during the period:
Granted		14,924,960	$	0.15
Exercised		-
Expired		-
Warrants outstanding at end of period		14,924,960	$	0.15
Warrants exercisable at end of period		14,924,960
Weighted average fair value of warrants granted during the period	$	367,662
Total warrant costs incurred during the period	$	367,662

Warrants issued were valued using the Black-Sholes model assuming zero dividends, a $0.15 strike price, 1-year expiration, 1.49% risk-free rate and volatility of 238%. Costs incurred in respect of warrants issued to investors for the period ended June 30, 2017 was $367,662.

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NOTE 6 – LITIGATION

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 within 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.

VStock Transfer Communications

On January 26, 2017, the Company received an email from its transfer agent, VStock Transfer, LLC, (“VStock”) informing the Company that it had been served with a Summons and Complaint (B2 Opportunity Fund (“B2”) v. Trabelsi et al. - Index No.:17-CV-10043, the “Claim”) and further stating that the Company was obligated to indemnify VStock for fees and expenses incurred in defending the Claim.  The Company responded on February 24, 2017 stating that (1) we reviewed the Transfer Agent and Registrar Agreement between Mazzal and VStock dated May 20, 2014 and that in Article VI(c) of that agreement it states that indemnification will not be offered if the acts of VStock constitute bad faith or gross negligence, (2) we reviewed the lawsuit filed by B2 against VStock and others and find that VStock’s actions constitute gross negligence and perhaps bad faith, and we therefore deny indemnification of VStock relating to the Claim, and (3) should VStock take any action to seek indemnification by Znergy in any manner, Znergy will either join B2 in its lawsuit or will file an action on its own.  The Company terminated its agreement with VStock.  Management cannot at this time estimate what, if any, financial impact this matter will have on the Company.

NOTE 7 – SUBSEQUENT EVENTS

On July 10, 2017 the Company entered into an employment agreement with Ryan Smith, 60, to serve as Senior Vice President of the Company. The agreement has a term of three years, and Mr. Smith’s employment with the Company is on an at-will basis.  The agreement specifies an annual base salary of $100,000 and a performance based bonus within 45 days from the end of the Company’s fiscal year as determined by the Compensation Committee of the Board of Directors. In addition, Mr. Smith was granted 3,000,000 shares of common stock of the Company, vested immediately, and was granted 7,000,000 options to purchase common stock of the Company at $0.10 per share (the “Options”). The Options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company.

On July 13, 2017, the Company entered into a service agreement with a provider of tax services.  Under the agreement, the Company issued 100,000 shares of common stock to the provider, valued at its trading price and vested immediately, and 400,000 options to purchase common stock of the Company at $0.10 per share.  These options have a three-year expiration and vest evenly over two years.

On July 13, 2017, the Company amended and extended a consulting agreement, originally executed on January 23, 2017, with its Chairman, Rick Mikles.  Under the amended and extended agreement, the Company issued 1,600,000 shares of common stock to Mr. Mikles, valued at its trading price and vested immediately.

On July 22nd, 2017, the Company entered into a purchase agreement for a property located at 808 A South Huntington Street, Syracuse, Indiana.  The agreement stipulates a purchase price of $255,000 of which $30,000 was paid on July 22, 2017 with the balance of $225,000 due 180 days after closing.  There is no interest payable on the balance due.  The square footage of the building is approximately 2,348.  The property also includes 27 storage units generating approximately $19,000 per year rental income.  The Company expects to close on the property in August 2017.

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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.”

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.

Subsequently, on October 26, 2015, the Company acquired Global ITS, Inc., a Wyoming corporation (“Global”), and its wholly owned subsidiary, Znergy, Inc., a Florida corporation (“Znergy”), 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, which shares were cancelled. The Company is now focused solely on the EE marketplace.  Both of these transactions are discussed in more detail below.

Recent Developments

Global ITS Transaction

Share Exchange Agreement

On October 26, 2015, the Company entered into a Share Exchange Agreement (the “Agreement”) with Global ITS, Inc., a Wyoming corporation (“Global”), and the shareholders of Global, pursuant to which we exchanged 120,000,000 of our common shares (the “Company Shares”) for 24,000,000 Global common shares held by Global’s shareholders representing 100% of Global’s outstanding shares (the “Share Exchange”). The transaction was reported in, and the Agreement was filed as an exhibit to, a Current Report filed with the SEC on October 27, 2015.

Change in Control Transaction

On February 9, 2016, the Company, Nissim Trabelsi, Shawn Telsi, the Mazzal Living Trust, the majority shareholder of the Company (the “Trust”), and B2 Opportunity Fund, LLC, a Nevada limited liability company (“B2”), entered into an Amended Master Stock Purchase Agreement (the “Master Agreement”).

Pursuant to the Master Agreement, Mr. Trabelsi and Mr. Telsi agreed to sell all of the shares of the Company’s common stock owned by them, 45,800,000 shares and 9,500,000 shares, respectively, to B2 or B2’s designees. In connection with the Master Agreement, B2 paid $315,000 to Mr. Trabelsi for his and Mr. Telsi’s shares.

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Also in connection with the Master Agreement, the Company agreed to sell to the Trust all of its real property with a carrying value of $1,897,000, and the Trust assumed the related party loan with a carrying value of $853,521 and accounts payable and accrued expenses with a carrying value of $24,500. In exchange, 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. In connection with the execution of the Master Agreement, the Company canceled the 149,950,000 shares of common stock conveyed by the Trust.

In connection with his sale of his and Mr. Telsi’s shares, Mr. Trabelsi appointed Christopher J. Floyd to the Board of Directors of the Company and to the Board of Directors of Command Control Center Corp. (“Command Control”), a wholly owned subsidiary of the Company. Mr. Trabelsi also appointed Mr. Floyd as the CEO, CFO, and Secretary of both the Company and of Command Control. Following Mr. Trabelsi’s appointment of Mr. Floyd to the boards of directors and as an officer of the Company and Command Control, Mr. Trabelsi resigned from all positions with the Company and with Command Control, effective immediately.

Results of Operations

The Company had revenues of $428,241 and $12,240 for the six-month periods ended June 30, 2017, and June 30, 2016, respectively. The Company had revenues of $284,562 and $6,160 for the three-month periods ended June 30, 2017, and June 30, 2016, respectively. Revenues in 2017 comprise LED installation projects and associated rebates from utilities while revenues in 2016 consist of consulting services.

The Company incurred costs of revenue of $173,327 and $-0- for the six-month periods ended June 30, 2017, and June 30, 2016, respectively. The Company incurred costs of revenue of $115,281 and $-0- for the three-month periods ended June 30, 2017, and June 30, 2016, respectively. Costs of revenue in 2017 comprise primarily LED product and installation costs.

The Company had general and administrative expenses of $2,413,615 and $600,069 for the six-month periods ended June 30, 2017, and June 30, 2016, respectively. The Company had general and administrative expenses of $1,549,969 and $562,749 for the three-month periods ended June 30, 2017, and June 30, 2016, respectively. General and administrative expenses in 2017 comprised primarily of $1,688,021 in common stock and options issued for services, $367,662 in warrants issued in the conversion of debt, $73,566 in salaries and wages, and $48,415 in legal and auditing fees. General and administrative costs in 2016 consisted primarily of $522,401 in consulting fees and $54,730 in legal and auditing fees.

The Company had net losses of $2,158,701 and $587,829 for the six-month periods ended June 30, 2017 and June 30, 2016, respectively. The Company had net losses of $1,380,688 and $556,589 for the three-month periods ended June 30, 2017 and June 30, 2016, respectively.

Liquidity and Capital Resources

As of June 30, 2017, the Company had a working capital surplus of $837,599 with total current assets of $1,157,131 comprising $645,607 in cash, $284,043 in accounts receivable, $1,250 in prepaid expenses and $226,231 in inventory, and total current liabilities of $319,532 comprising $106,901 in accounts payable, $108,119 in accrued expenses, $3,545 in customer deposits and $100,967 in a loan from a related party. Use of cash for operating activities totaled $410,390 primarily for funding an increase in accounts receivable of $204,431 and inventory of $34,126, and for payments on accounts payable and accrued expenses of $202,401. The primary source of funds was loans from related parties in the amount of $226,750 and proceeds from the offering of our common stock in the amount of $795,000.

Going Concern Discussion

For the year ending December 31, 2016, our auditors issued an explanatory note regarding our ability to continue as a going concern. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next 12 months. Our auditor’s opinion is based on our suffering recurring losses. Accordingly, we must raise cash from sources other than operations. Our only other source for cash at this time is investments by third parties and loans from others in our company.

At the time of this filing, we have three officers, David Baker, our CEO, Christopher Floyd, our CFO and Secretary, and Ryan Smith, our Senior Vice President. Mr. Baker and Mr. Floyd are responsible for our managerial and organizational structure which will include preparation and implementation of disclosure and accounting controls under the Sarbanes Oxley Act of 2002. When these controls are implemented, Mr. Baker and Mr. Floyd, together with any other executive officers in place at that time, will be responsible for the administration of these controls.

As of June 30, 2017, management believes that generating revenues in the next six to twelve months is important to support our planned ongoing operations. However, we cannot guarantee that we will generate such growth. If we do not generate sufficient cash flow to support our operations over the next 12 to 18 months, we will need to raise additional capital by issuing capital stock in exchange for cash or obtain loans in order to continue as a going concern. There are no formal or informal agreements to attain such financing. We cannot assure you that any financing can be obtained or, if obtained, that it will be on reasonable terms. Without realization of additional capital, it would be unlikely for us to continue as a going concern. No adjustments have been made to the financial statements to reflect our doubt to continue as a going concern.

13

Our management does not expect to incur significant research and development costs in 2017.

On July 22, 2017, the Company entered into a purchase agreement for a property located at 808 A South Huntington Street, Syracuse, Indiana.  The agreement stipulates a purchase price of $255,000 of which $30,000 was paid on July 22, 2017 with the balance of $225,000 due 180 days after closing.  There is no interest payable on the balance due.  The square footage of the building itself is approximately 2,348.  The property also includes 27 storage units generating approximately $19,000 per year rental income.  The Company expects to close on the property in August 2017.

Critical Accounting Policies

The Company’s most critical accounting policies include (a) use of estimates, (b) revenue recognition, (c) going concern, and (d) share based payments. The methods, estimates and judgments the Company uses in applying these most critical accounting policies have a significant impact on the results the Company reports in its financial statements.

(a) 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 any change in estimate.

 (b) Revenue Recognition

The Company accounts for revenue using the “completed contract method” in accordance with ASC 605-35. Under this method, contract costs are accumulated as deferred assets and billings and/or cash receipts are recorded to a deferred revenue liability account during the contract 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 unallocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined. A contract is considered complete when accepted by the customer. The Company quotes its customers the total costs of product installation and materials minus the expected rebates, if any, from a given utility. For projects larger than $10,000, rebates must be pre-approved by the utility.

(c) 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 30, 2017, while the Company has a working capital surplus of $837,599, the accumulated losses from operations aggregated $10,110,349 and it continues to experience operating losses. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements through June 2018.

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. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

14

(d) Share-Based Payments

Certain employees, officers, directors, and consultants of the Company participate in incentive plans that provide for granting stock options and performance-based awards. Time based stock options generally vest in equal increments over a two -year period and expire on the third anniversary following the date of grant. Performance-based stock options vest once the applicable performance conditions are satisfied.

The Company recognizes stock-based compensation for equity awards granted to employees, officers, directors and consultants as compensation and benefits expense in the consolidated statements of operations. The fair value of stock options is estimated using a Black-Scholes valuation model on the date of grant. Stock-based compensation is recognized over the requisite service period of the individual awards, which generally equals the vesting period. For performance-based stock options, compensation is recognized once the applicable performance condition is satisfied.

The Company recognizes stock-based compensation for equity awards granted as selling, general and administrative expense in the consolidated statements of operations.

The fair value of restricted stock awards is equal to the closing price of the Company’s stock on the date of grant multiplied by the number of shares awarded. Stock-based compensation is recognized over the requisite service period of the individual awards, which generally equals the vesting period.

JOBS Act

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growth company,” we have the option to delay adoption of new or revised accounting standards until those standards would otherwise apply to private companies, until the earlier of the date that (i) we are no longer an emerging growth company or (ii) we affirmatively and irrevocably opt out of the extended transition period for complying with such new or revised accounting standards. We have elected to opt out of this extended transition period. As noted, this election is irrevocable.

Our significant accounting policies, as described in our financial statements in the Summary of Significant Accounting Policies included in our Form 10-K filing of December 31, 2016, should be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, or ASU 2014-09. Pursuant to this update, an entity should recognize revenue to depict 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 amendments in this update are currently effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and are to be applied retrospectively, or on a modified retrospective basis. Early application is not permitted. In July 2015, the FASB approved a one-year deferral of the effective date for annual reporting periods beginning after December 15, 2017 with early adoption permitted for annual periods beginning after December 15, 2016. We are currently evaluating the impact of adopting ASU 2014-09 on our consolidated financial statements.

In August 2014, FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, or ASU 2014-15. ASU 2014-15 explicitly requires a company’s management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The new standard became effective in the first annual period ending after December 15, 2016. Management has evaluated the potential impact of the adoption of this standard and believes its adoption has no material impact on our consolidated statements of financial position, results of operations or cash flows.

In July 2015, the FASB issued ASU No. 2015-11, (“ASU 2015-11”), Inventory (Topic 330): Simplifying the Measurement of Inventory. ASU 2015-11 requires an entity to measure in scope inventory at the lower of cost and net realizable value. The amendment does not apply to inventory that is measured using the last-in, first-out or the retail inventory method. For public entities, ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, and is to be applied prospectively. Management has evaluated the impact of the adoption of this standard and believes its adoption has no material impact on our consolidated statements of financial position, results of operations or cash flows.

15

On February 24, 2016, the FASB issued ASU No. 2016-02, Leases, requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. Lessors will continue to classify leases as operating, direct financing or sales-type leases. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures.

On March 30, 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects related to the accounting and presentation of share-based payments. The amendments require entities to record all tax effects related to share-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. All tax-related cash flows resulting from share-based payments are required to be reported as operating activities in the statement of cash flows. The updates relating to the income tax effects of the share-based payments including the cash flow presentation may be adopted either prospectively or retrospectively. Further, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. Adoption of this standard did not have any effect on the Company’s financial statements.

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

Off-Balance Sheet Arrangements

None.

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.

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.

16

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. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending December 31, 2017: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

Changes in Internal Control over Financial Reporting

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

17

PART II.                 OTHER INFORMATION

Item 1. Legal Proceedings

Other than described below, we know of no pending legal proceedings to which we are a party which are material or potentially material, either individually or in the aggregate. We are from time to time, during the normal course of our business operations, subject to various litigation claims and legal disputes. We do not believe that the ultimate disposition of any of these matters will have a material adverse effect on our consolidated financial position, results of operations or liquidity.

On September 26, 2016, the Company 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, the Company 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 the Company 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 the Company 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, the Company has demanded the return of all such profits to Registrant plus the statutory payment of attorneys’ fees.

On January 26, 2017, the Company received an email from its transfer agent at that time, VStock Transfer, LLC, (“VStock”) informing the Company that it had been served with a Summons and Complaint (B2 Opportunity Fund (“B2”) v. Trabelsi et al. - Index No.:17-CV-10043, the “Claim”) and further stating that the Company was obligated to indemnify VStock for fees and expenses incurred in defending the Claim.  The Company responded on February 24, 2017 stating that (1) we reviewed the Transfer Agent and Registrar Agreement between Mazzal and VStock dated May 20, 2014 and that in Article VI(c) of that agreement it states that indemnification will not be offered if the acts of VStock constitute bad faith or gross negligence, (2) we reviewed the lawsuit filed by B2 against VStock and others and find that VStock’s actions constitute gross negligence and perhaps bad faith, and we therefore deny indemnification of VStock relating to the Claim, and (3) should VStock take any action to seek indemnification by Znergy in any manner, Znergy will either join B2 in its lawsuit or will file an action on its own. The Company terminated its agreement with VStock. Management cannot at this time estimate what, if any, financial impact this matter will have on the Company.

Item 5. Other Information.

Amendment of Articles of Incorporation; Name Change; Status

On May 31, 2016, the Company filed a definitive information statement on Schedule 14C to provide information to the Company’s stockholders relating to an action taken by the holders of a majority of the outstanding shares of common stock to amend the Company’s articles of incorporation to change the name of the Company from Mazzal Holding Company to Znergy, Inc. The Board of Directors of the Company approved the amendment and name change and recommended the amendment to the shareholders of the Company. On May 13, 2016, the holders of 94,498,335 shares of the Company’s common stock, constituting approximately 52.48% of the outstanding shares, approved the amendment and the name change. On July 15, 2016, the Company filed its Amended and Restated Articles of Incorporation with the State of Nevada to effectuate the name change.

18

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
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 15, 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 15, 2017)
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a).
31.2	Certification of the Chief Financial 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.
32.2	Certification of Chief Financial 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*

19

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 Officer)

Date: August 14, 2017

By: /s/ Christopher J. Floyd

Christopher J. Floyd

Chief Financial Officer and Director

(Principal Financial Officer)

Date: August 14, 2017

20

EX-31.1

Exhibit 31.1

Certification of the Chief Executive Officer

Pursuant to Rule 13a-14(a) or Rule 15d-14(a)

I, Dave Baker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Znergy, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 14, 2017	By:	/s/ Dave Baker
		Dave Baker
		Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of the Chief Financial Officer

Pursuant to Rule 13a-14(a) or Rule 15d-14(a)

I, Christopher J. Floyd, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Znergy, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 14, 2017	By:	/s/ Christopher J. Floyd
		Christopher J. Floyd
		Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Znergy, Inc. (the “Company”) for the three and six month periods ending June 30, 2017, as filed with the Securities and Exchange Commission as of and on the date hereof (the “Report”), Dave Baker, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1) The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 14, 2017	By:	/s/ Dave Baker
		Dave Baker
		Chief Executive Officer

This certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Znergy, Inc. (the “Company”) for the three and six month periods ending June 30, 2017, as filed with the Securities and Exchange Commission as of and on the date hereof (the “Report”), Christopher Floyd, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1) The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 14, 2017	By:	/s/ Christopher J. Floyd
		Christopher J. Floyd
		Chief Financial Officer

This certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 09, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	Znergy, Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		226,024,960
Amendment Flag	false
Entity Central Index Key	0001568875
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2017	Dec. 31, 2016
CURRENT ASSETS
Cash	$ 645,607	$ 40,507
Accounts receivable	284,043	79,612
Prepaid expenses	1,250	3,750
Inventory	226,231	192,105
Total current assets	1,157,131	315,974
Furniture & equipment, net	2,100	2,567
Intangible assets, net	1,845	1,845
TOTAL ASSETS	1,161,076	320,386
CURRENT LIABILITIES
Accounts payable	106,901	284,930
Accrued expenses	108,119	139,336
Customer deposits	3,545	6,605
Advances	0	60,000
Loan from related party	100,967	135,749
Total current liabilities	319,532	626,620
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.0001 par value, 100,000,000 authorized shares; no shares issued and outstanding	0	0
Common stock, $0.0001 par value; 500,000,000 shares authorized; 221,324,960 and 193,150,000 shares issued and outstanding at June 30, 2017 and December 31, 2016	22,132	19,315
Additional paid-in-capital	10,929,761	7,626,099
Accumulated deficit	(10,110,349)	(7,951,648)
Total stockholders’ equity (deficit)	841,544	(306,234)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$ 1,161,076	$ 320,386

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Preferred stock par value (in Dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	221,324,960	193,150,000
Common stock, shares outstanding	221,324,960	193,150,000

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenue	$ 284,562	$ 6,160	$ 428,241	$ 12,240
Cost of revenue	115,281	0	173,327	0
Gross profit	169,281	6,160	254,914	12,240
Selling, general and administrative expenses	1,549,969	562,749	2,413,615	600,069
Loss from operations	(1,380,688)	(556,589)	(2,158,701)	(587,829)
Provision for income taxes	0	0	0	0
Net loss	$ (1,380,688)	$ (556,589)	$ (2,158,701)	$ (587,829)
Net loss per common share - basic and diluted (in Dollars per share)	$ (0.01)	$ 0.00	$ (0.01)	$ 0.00
Weighted average number of shares outstanding - basic and diluted (in Shares)	204,266,206	181,423,626	201,269,197	213,509,016

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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - 6 months ended Jun. 30, 2017 - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2016	$ 19,315	$ 7,626,099	$ (7,951,648)	$ (306,234)
Balance (in Shares) at Dec. 31, 2016	193,150,000			193,150,000
Common stock issued for services	$ 1,325	1,666,696		$ 1,668,021
Common stock issued for services (in Shares)	13,250,000
506b Offering:
Stock issued for cash	$ 1,059	793,941		$ 795,000
Stock issued for cash (in Shares)	10,600,000			14,924,960
Stock issued for debt conversion	$ 433	843,025		$ 843,458
Stock issued for debt conversion (in Shares)	4,324,960
Net loss			(2,158,701)	(2,158,701)
Balance at Jun. 30, 2017	$ 22,132	$ 10,929,761	$ (10,110,349)	$ 841,544
Balance (in Shares) at Jun. 30, 2017	221,324,960			221,324,960

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net loss	$ (2,158,701)	$ (587,829)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	467	2,500
Common stock and options issued for services	1,668,021	500,000
Accounts receivable	(204,431)	(9,440)
Prepaid expenses	2,500	0
Inventory	(34,126)	0
Accounts payable & accrued expenses	318,940	47,436
Customer deposits	(3,060)	0
Net cash used in operating activities	(410,390)	(47,333)
CASH FLOWS USED IN INVESTING ACTIVITIES:
Equipment & furniture	0	(1,213)
Net cash used in investing activities	0	(1,213)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock	795,000	0
Repayment of advances from third parties	(6,000)	0
Payments of Loan from Related Parties	(260)	0
Advances from third parties	226,750	48,900
Net cash provided by financing activities	1,015,490	48,900
INCREASE IN CASH	605,100	354
CASH, BEGINNING OF PERIOD	40,507	1,279
CASH, END OF PERIOD	645,607	1,633
Non-cash investing and financing activities:
Transfer of assets and liabilities to related party for return of common shares	0	1,018,679
Common Stock and warrants issued for the Conversion of Debt	$ 843,458	$ 0

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NOTE 1 - NATURE OF BUSINESS AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2017

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

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”), incorporated on January 23, 2013. The original business plan of the Company was the construction and management of multi-family home developments and the subsequent sale thereof.

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.  The Company is now focused solely on the EE marketplace with an emphasis on LED retrofitting and relamping.

Basis of Presentation

The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. All intercompany transactions have been eliminated in consolidation.

Certain information and footnote disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes have been condensed or omitted in these interim condensed consolidated financial statements. Accordingly, the unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited condensed consolidated financial statements for the year ended December 31, 2016, as filed with the Securities and Exchange Commission (“SEC”) on Form 10-K.

The results of operations presented in this quarterly report are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments and accruals, consisting only of normal recurring adjustments that are necessary for a fair presentation of the results of all interim periods reported herein.

Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation.

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NOTE 2 - GOING CONCERN

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Substantial Doubt about Going Concern [Text Block]

NOTE 2 – 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 30, 2017, while the Company has a working capital surplus of $837,599, the accumulated losses from operations aggregated $10,110,349 and it continutes to experience operating losses. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements through June 2018.

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. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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NOTE 3 - INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2017

Disclosure Text Block [Abstract]

Intangible Assets Disclosure [Text Block]

NOTE 3 – INTANGIBLE ASSETS

The Company was granted a federally registered trademark for “ZNERGY”. The cost of applying for and prosecuting this trademark was $1,845 which cost was accounted for as a non-amortizing intangible asset.

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NOTE 4 - LOANS FROM RELATED PARTY

6 Months Ended

Jun. 30, 2017

Disclosure Text Block [Abstract]

Short-term Debt [Text Block]

NOTE 4 – LOANS FROM RELATED PARTY

	June 30, 2017		December 31, 2016
Loans from related party	$	100,967	$	135,749

The loan at December 31, 2016 is from B2 Opportunity Fund, LLC, a major shareholder of the Company, and is unsecured, bears no interest and is repayable on demand.  The loan at June 30, 2017 is from our Chairman and is secured by our inventory, bears 4% interest per annum, is due November 15, 2017 and has accrued interest of $967.

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NOTE 5 - STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2017

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 5 – STOCKHOLDERS’ EQUITY

Common Stock

On January 25, 2017 the Company appointed Richard Mikles as Chairman of the board of directors and issued to Mr. Mikles 3,000,000 shares of its common stock, valued at its trading price and vested immediately, and 4,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options vesting equally over eight quarters and having an expiration of three years from the date of issue. Concomitantly, the Company entered into a consulting agreement with Mr. Mikles to provide marketing, strategic, and organizational services to the Company. Upon execution of this consulting agreement the Company issued 2,000,000 shares of common stock, valued at its trading price and vested immediately, and 5,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options to vest quarterly in the amount of one option for every two dollars of revenue recognized by the Company.

On January 27, 2017 the Company appointed Kevin Harrington to its Board of Directors and issued 2,000,000 shares of its common stock, valued at its trading price and vested immediately, and 4,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options vesting equally over eight quarters and having an expiration of three years from the date of issue.

On February 2, 2017 the Company entered into a consulting agreement with Venture Legal Services, PLLC, to provide legal and strategic advisory services for the Company. In conjunction with the execution of this agreement, the Company granted Venture options to purchase up to 2,000,000 shares of its common stock at a price of $0.10 per share. The options have an expiration of three years from the date of issue and vest quarterly one option for every two dollars of revenue recognized by the Company.

On May 15, 2017, the Company entered into an employment agreement with Mr. Baker, our CEO.  Mr. Baker was granted 5,000,000 shares of common stock of the Company, valued at its trading price and vested immediately, and was granted 5,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company.

On May 15, 2017, the Company entered into an employment agreement with Mr. Floyd, our CFO.  Mr. Floyd was granted 10,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company.

On June 1, 2017, the Company entered into a service agreement with a provider of investor relations services. Under the agreement, the Company issued 1,000,000 shares of common stock to the provider, valued at its trading price, vesting 500,000 on June 1, 2017, 250,000 shares on October 1, 2017 and 250,000 shares on January 1, 2018.

On June 13, 2017, the Company entered into a service agreement with a provider of bookkeeping, accounting, payroll and human resources services.  Under the agreement, the Company issued 250,000 shares of common stock to the provider, valued at its trading price and vested immediately, and 1,000,000 options to purchase common stock of the Company at $0.10 per share.  These options have a three-year expiration and vest evenly over two years.

Private Offerings of Common Stock and Warrants

During the period ended June 30, 2017 the Company completed a private offering of common stock and warrants to accredited and unaccredited investors for gross proceeds of $1,119,372 which securities were offered under Regulation D, Rule 506(b) of the Securities and Exchange Act of 1933. The Company accepted subscriptions, in the aggregate, for 14,924,960 shares of common stock and one-year warrants to purchase 14,924,960 shares of common stock of which 10,600,000 shares of its common stock and 10,600,000 warrants were issued for $795,000 in cash and 4,324,960 shares of its common stock and 4,324,960 warrants were issued for $324,372 in the conversion of debt. Investors received one-year fully vested warrant to purchase up to 100% of the number of shares purchased in the offering. The warrants have an exercise price of $0.15 per share. The purchase price for each share of common stock together with the warrants was $0.075.

Options

There were 7,400,000 options issued and outstanding as of December 31, 2016. The following table shows the stock option activity during the period ended June 30, 2017:

			Weighted
	Number		Average
	Of		Exercise
	Options		Price
Options outstanding at beginning of year		7,400,000	$	0.10
Changes during the period:
Granted - at market price		31,600,000	$	0.10
Exercised		-
Expired		-
Options outstanding at end of period		39,000,000	$	0.10
Options exercisable at end of period		4,850,149	$	0.10
Weighted average fair value of options granted during the period	$	3,073,200	$	0.10

Options issued were valued using the Black-Sholes model assuming zero dividends, a $0.10 strike price, 3-year expiration, 1.47% average risk-free rate and 238% average volatility. Costs incurred in respect of stock based compensation for employees, advisors and consultants for the three and six-month periods ended June 30, 2017 were $215,374 and $274,563, respectively. Costs incurred in respect of stock based compensation for employees, advisors and consultants for the three and six-month periods ended June 30, 2016 were $-0- and $-0-, respectively.

Unrecognized compensation costs related to options was $3,631,029 which is expected to be recognized ratably over approximately 17 months.

Warrants

There were no warrants were issued and outstanding as of December 31, 2016. The following table shows the warrant activity during the period ended June 30, 2017:

			Weighted
	Number		Average
	Of		Exercise
	Warrants		Price
Warrants outstanding at beginning of year		-
Changes during the period:
Granted		14,924,960	$	0.15
Exercised		-
Expired		-
Warrants outstanding at end of period		14,924,960	$	0.15
Warrants exercisable at end of period		14,924,960
Weighted average fair value of warrants granted during the period	$	367,662
Total warrant costs incurred during the period	$	367,662

Warrants issued were valued using the Black-Sholes model assuming zero dividends, a $0.15 strike price, 1-year expiration, 1.49% risk-free rate and volatility of 238%. Costs incurred in respect of warrants issued to investors for the period ended June 30, 2017 was $367,662.

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NOTE 6 - LITIGATION

6 Months Ended

Jun. 30, 2017

Disclosure Text Block Supplement [Abstract]

Legal Matters and Contingencies [Text Block]

NOTE 6 – LITIGATION

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 within 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.

VStock Transfer Communications

On January 26, 2017, the Company received an email from its transfer agent, VStock Transfer, LLC, (“VStock”) informing the Company that it had been served with a Summons and Complaint (B2 Opportunity Fund (“B2”) v. Trabelsi et al. - Index No.:17-CV-10043, the “Claim”) and further stating that the Company was obligated to indemnify VStock for fees and expenses incurred in defending the Claim.  The Company responded on February 24, 2017 stating that (1) we reviewed the Transfer Agent and Registrar Agreement between Mazzal and VStock dated May 20, 2014 and that in Article VI(c) of that agreement it states that indemnification will not be offered if the acts of VStock constitute bad faith or gross negligence, (2) we reviewed the lawsuit filed by B2 against VStock and others and find that VStock’s actions constitute gross negligence and perhaps bad faith, and we therefore deny indemnification of VStock relating to the Claim, and (3) should VStock take any action to seek indemnification by Znergy in any manner, Znergy will either join B2 in its lawsuit or will file an action on its own.  The Company terminated its agreement with VStock.  Management cannot at this time estimate what, if any, financial impact this matter will have on the Company.

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NOTE 7 - SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2017

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 7 – SUBSEQUENT EVENTS

On July 10, 2017 the Company entered into an employment agreement with Ryan Smith, 60, to serve as Senior Vice President of the Company. The agreement has a term of three years, and Mr. Smith’s employment with the Company is on an at-will basis.  The agreement specifies an annual base salary of $100,000 and a performance based bonus within 45 days from the end of the Company’s fiscal year as determined by the Compensation Committee of the Board of Directors. In addition, Mr. Smith was granted 3,000,000 shares of common stock of the Company, vested immediately, and was granted 7,000,000 options to purchase common stock of the Company at $0.10 per share (the “Options”). The Options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company.

On July 13, 2017, the Company entered into a service agreement with a provider of tax services.  Under the agreement, the Company issued 100,000 shares of common stock to the provider, valued at its trading price and vested immediately, and 400,000 options to purchase common stock of the Company at $0.10 per share.  These options have a three-year expiration and vest evenly over two years.

On July 13, 2017, the Company amended and extended a consulting agreement, originally executed on January 23, 2017, with its Chairman, Rick Mikles.  Under the amended and extended agreement, the Company issued 1,600,000 shares of common stock to Mr. Mikles, valued at its trading price and vested immediately.

On July 22nd, 2017, the Company entered into a purchase agreement for a property located at 808 A South Huntington Street, Syracuse, Indiana.  The agreement stipulates a purchase price of $255,000 of which $30,000 was paid on July 22, 2017 with the balance of $225,000 due 180 days after closing.  There is no interest payable on the balance due.  The square footage of the building is approximately 2,348.  The property also includes 27 storage units generating approximately $19,000 per year rental income.  The Company expects to close on the property in August 2017.

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NOTE 4 - LOANS FROM RELATED PARTY (Tables)

6 Months Ended

Jun. 30, 2017

Disclosure Text Block [Abstract]

Schedule of Short-term Debt [Table Text Block]

	June 30, 2017		December 31, 2016
Loans from related party	$	100,967	$	135,749

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NOTE 5 - STOCKHOLDERS' EQUITY (Tables)

6 Months Ended

Jun. 30, 2017

Stockholders' Equity Note [Abstract]

Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block]

There were 7,400,000 options issued and outstanding as of December 31, 2016. The following table shows the stock option activity during the period ended June 30, 2017:

			Weighted
	Number		Average
	Of		Exercise
	Options		Price
Options outstanding at beginning of year		7,400,000	$	0.10
Changes during the period:
Granted - at market price		31,600,000	$	0.10
Exercised		-
Expired		-
Options outstanding at end of period		39,000,000	$	0.10
Options exercisable at end of period		4,850,149	$	0.10
Weighted average fair value of options granted during the period	$	3,073,200	$	0.10

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

There were no warrants were issued and outstanding as of December 31, 2016. The following table shows the warrant activity during the period ended June 30, 2017:

			Weighted
	Number		Average
	Of		Exercise
	Warrants		Price
Warrants outstanding at beginning of year		-
Changes during the period:
Granted		14,924,960	$	0.15
Exercised		-
Expired		-
Warrants outstanding at end of period		14,924,960	$	0.15
Warrants exercisable at end of period		14,924,960
Weighted average fair value of warrants granted during the period	$	367,662
Total warrant costs incurred during the period	$	367,662

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NOTE 1 - NATURE OF BUSINESS AND BASIS OF PRESENTATION (Details) - shares	Feb. 09, 2016	Mar. 13, 2013
Disclosure Text Block [Abstract]
Stock Repurchased and Retired During Period, Shares	149,950,000
Stock Issued During Period, Shares, Acquisitions		150,000,000

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NOTE 2 - GOING CONCERN (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Working Capital	$ (837,599)
Retained Earnings (Accumulated Deficit)	$ (10,110,349)	$ (7,951,648)

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NOTE 3 - INTANGIBLE ASSETS (Details)	6 Months Ended
	Jun. 30, 2017 USD ($)
Disclosure Text Block [Abstract]
Finite-lived Intangible Assets Acquired	$ 1,845

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NOTE 4 - LOANS FROM RELATED PARTY (Details)	Jun. 30, 2017 USD ($)
Disclosure Text Block [Abstract]
Debt Instrument, Interest Rate, Stated Percentage	4.00%
Interest Payable, Current	$ 967

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NOTE 4 - LOANS FROM RELATED PARTY (Details) - Schedule of Related Party Loans - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Schedule of Related Party Loans [Abstract]
Loans from related party	$ 100,967	$ 135,749

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NOTE 5 - STOCKHOLDERS' EQUITY (Details) - USD ($)							3 Months Ended	6 Months Ended
	Jun. 13, 2017	Jun. 01, 2017	May 15, 2017	Feb. 02, 2017	Jan. 27, 2017	Jan. 25, 2017	Jun. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Dec. 31, 2015
NOTE 5 - STOCKHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross	250,000				2,000,000	2,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	1,000,000			2,000,000	4,000,000	5,000,000		31,600,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share)	$ 0.10			$ 0.10	$ 0.10	$ 0.10		$ 0.10
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	2 years			3 years	24 months
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	3 years				3 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights				vest quarterly one option for every two dollars of revenue recognized by the Company.		vest quarterly in the amount of one option for every two dollars of revenue recognized by the Company
Stock Issued During Period, Shares, New Issues		1,000,000						14,924,960
Proceeds from Issuance or Sale of Equity (in Dollars)								$ 1,119,372
Class of Warrant or Rights, Granted								14,924,960
Offering Description								Investors received one-year fully vested warrant to purchase up to 100% of the number of shares purchased in the offering.
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)							$ 0.15	$ 0.15
Offering, Price per unit (in Dollars per share)								$ 0.075
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number							39,000,000	39,000,000	7,400,000	7,400,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate								0.00%
Share Price (in Dollars per share)							$ 0.10	$ 0.10
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term								3 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate								1.47%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate								238.00%
Share-based Compensation (in Dollars)							$ 215,374	$ 274,563
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options (in Dollars)							$ 3,631,029	$ 3,631,029
Private Offering #1 [Member]
NOTE 5 - STOCKHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, New Issues								10,600,000
Proceeds from Issuance or Sale of Equity (in Dollars)								$ 795,000
Class of Warrant or Rights, Granted								10,600,000
Private Offering #2 [Member]
NOTE 5 - STOCKHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, New Issues								4,324,960
Proceeds from Issuance or Sale of Equity (in Dollars)								$ 324,372
Class of Warrant or Rights, Granted								4,324,960
Employee Stock Option [Member]
NOTE 5 - STOCKHOLDERS' EQUITY (Details) [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition								17 months
Warrant [Member]
NOTE 5 - STOCKHOLDERS' EQUITY (Details) [Line Items]
Share Price (in Dollars per share)							$ 0.15	$ 0.15
Fair Value Assumptions, Expected Dividend Rate								0.00%
Fair Value Assumptions, Expected Term								1 year
Fair Value Assumptions, Risk Free Interest Rate								1.49%
Fair Value Assumptions, Expected Volatility Rate								238.00%
Board of Directors Chairman [Member]
NOTE 5 - STOCKHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross						3,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross						4,000,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share)						$ 0.10
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period						24 months
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period						3 years
Chief Executive Officer [Member]
NOTE 5 - STOCKHOLDERS' EQUITY (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			5,000,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share)			$ 0.10
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights			vest quarterly one option for every two dollars of revenue recognized by the Company
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures			5,000,000
Chief Financial Officer [Member]
NOTE 5 - STOCKHOLDERS' EQUITY (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			10,000,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share)			$ 0.10
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights			vest quarterly one option for every two dollars of revenue recognized by the Company
Share-based Compensation Award, Tranche One [Member]
NOTE 5 - STOCKHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, New Issues		500,000
Share-based Compensation Award, Tranche Two [Member]
NOTE 5 - STOCKHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, New Issues		250,000
Share-based Compensation Award, Tranche Three [Member]
NOTE 5 - STOCKHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, New Issues		250,000

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NOTE 5 - STOCKHOLDERS' EQUITY (Details) - Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable - USD ($)					6 Months Ended
	Jun. 13, 2017	Feb. 02, 2017	Jan. 27, 2017	Jan. 25, 2017	Jun. 30, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Abstract]
Options outstanding at beginning of year					7,400,000
Options outstanding at beginning of year (in Dollars per share)					$ 0.10	$ 100,000
Changes during the period:
Granted - at market price	1,000,000	2,000,000	4,000,000	5,000,000	31,600,000
Granted - at market price (in Dollars per share)	$ 0.10	$ 0.10	$ 0.10	$ 0.10	$ 0.10
Exercised					0
Expired					0
Options outstanding at end of period					39,000,000
Options outstanding at end of period (in Dollars per share)					$ 0.10	$ 100,000
Options exercisable at end of period					4,850,149
Options exercisable at end of period (in Dollars per share)					$ 100,000
Weighted average fair value of options granted during the period (in Dollars)					$ 3,073,200
Weighted average fair value of options granted during the period (in Dollars per share)					$ 0.10

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NOTE 5 - STOCKHOLDERS' EQUITY (Details) - Schedule of Stockholders' Equity Note, Warrants or Rights	6 Months Ended
	Jun. 30, 2017 USD ($) $ / shares shares
Schedule of Stockholders' Equity Note, Warrants or Rights [Abstract]
Warrants outstanding at beginning of year	0
Changes during the period:
Granted	14,924,960
Granted (in Dollars per share) | $ / shares	$ 0.15
Exercised	0
Expired	0
Warrants outstanding at end of period	14,924,960
Warrants outstanding at end of period (in Dollars per share) | $ / shares	$ 0.15
Warrants exercisable at end of period	14,924,960
Weighted average fair value of warrants granted during the period (in Dollars) | $	$ 367,662
Total warrant costs incurred during the period (in Dollars) | $	$ 367,662

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NOTE 6 - LITIGATION (Details)	Sep. 26, 2016 USD ($)
Disclosure Text Block Supplement [Abstract]
Loss Contingency, Damages Sought, Value	$ 1,695,689

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NOTE 7 - SUBSEQUENT EVENTS (Details)								6 Months Ended
	Jul. 22, 2017 USD ($) ft²	Jul. 13, 2017 $ / shares shares	Jul. 10, 2017 $ / shares shares	Jun. 13, 2017 $ / shares shares	Feb. 02, 2017 $ / shares shares	Jan. 27, 2017 $ / shares shares	Jan. 25, 2017 $ / shares shares	Jun. 30, 2017 USD ($) $ / shares shares	Jun. 30, 2016 USD ($)
NOTE 7 - SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross				250,000		2,000,000	2,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				1,000,000	2,000,000	4,000,000	5,000,000	31,600,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $ / shares				$ 0.10	$ 0.10	$ 0.10	$ 0.10	$ 0.10
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period				3 years		3 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights					vest quarterly one option for every two dollars of revenue recognized by the Company.		vest quarterly in the amount of one option for every two dollars of revenue recognized by the Company
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				2 years	3 years	24 months
Payments to Acquire Property, Plant, and Equipment (in Dollars) | $								$ 0	$ 1,213
Board of Directors Chairman [Member]
NOTE 7 - SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross							3,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross							4,000,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $ / shares							$ 0.10
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period							3 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period							24 months
Subsequent Event [Member]
NOTE 7 - SUBSEQUENT EVENTS (Details) [Line Items]
Agreement, Term			3 years
Employment Agreement, Description			The agreement specifies an annual base salary of $100,000 and a performance based bonus within 45 days from the end of the Company’s fiscal year as determined by the Compensation Committee of the Board of Directors.
Stock Issued During Period, Shares, Share-based Compensation, Gross			3,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross		400,000	7,000,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $ / shares		$ 0.10	$ 0.10
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			3 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights			vest quarterly one option for every two dollars of revenue recognized by the Company
Stock Issued During Period, Shares, Issued for Services		100,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		2 years
Property, Plant and Equipment, Additions (in Dollars) | $	$ 255,000
Payments to Acquire Property, Plant, and Equipment (in Dollars) | $	$ 30,000
Area of Real Estate Property (in Square Feet) | ft²	2,348
Rental Income, Nonoperating (in Dollars) | $	$ 19,000
Subsequent Event [Member] | Board of Directors Chairman [Member]
NOTE 7 - SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Shares, Issued for Services		1,600,000
Subsequent Event [Member] | Due 180 days After Closing [Member]
NOTE 7 - SUBSEQUENT EVENTS (Details) [Line Items]
Payments to Acquire Property, Plant, and Equipment (in Dollars) | $	$ 225,000