TRANSACT ENERGY CORP - Quarter Report: 2017 September (Form 10-Q)

A $2,980 short term loan dated May 24, 2017 is unsecured and was to be returned on June 14^th with a $600 bonus as interest. The loan was repaid Aug 28, 2017. Total interest paid was $2020.

The $100,000 convertible note payable to a company whose shareholders hold less than 10% in TransAct is unsecured, bears interest at 8% per annum and is due Dec 2, 2016. At September 6, 2016 accrued interest was $3945, the note was converted on June 6 and is considered paid in full see Note 6.

8

TRANSACT ENERGY CORP.

[A Development Stage Company]

NOTES TO FINANCIAL STATEMENTS

(Unaudited – Prepared by Management)

SEPTEMBER 30, 2017

NOTE 4 - NOTES PAYABLE – CONTINUED

A $10,000 convertible note dated September 18, 2017 is unsecured and bears interest at 12% per annum. The note is due on September 18, 2018 unless converted to common stock in advance of that date. The note was converted in October 2017 see Note 11 Subsequent Events.

A $5500 convertible note dated September 23, 2017 is unsecured and bears interest at 8% per annum. The note is due on September 21, 2018 unless converted to common stock in advance of that date. The note was converted in October 2017 see Note 11 Subsequent Events.

NOTE 5 - NOTES PAYABLE – RELATED PARTIES

Promissory notes were paid out up to and including the end of December 2015 to an officer and shareholder were secured by certain assets and equipment of the Company and bared interest at 8% and 10% per annum and were due on demand. All notes were paid including interest. At December 31, 2016, accrued and remaining interest was $0.

Accrued interest and late fees for the notes at September 30, 2017 and December 31, 2016 was $2,020,820 and $1,791,739 respectively.

NOTE 6 - CAPITAL STOCK

Preferred Stock - The Company has authorized 10,000,000 shares of preferred stock, $.001 par value, with such rights, preferences and designations and to be issued in such series as determined by the Board of Directors. No shares are issued and outstanding at June 30, 2017.

Common Stock - The Company has authorized 100,000,000 shares of common stock, $.001 par value, with such rights, preferences and designations and to be issued in such series as determined by the Board of Directors.

In December 2010 proceeds were received for 200,000 common shares at $.15 per share and 50,000 common shares at $.20 per share for a total of $ 40,000. These shares were issued in June 2011.

In January 2011 the Company issued 588,235 common shares at $.17 per share for total proceeds received of $100,000.

In February 2011 the Company issued 404,040 common shares pursuant to a convertible option of a note payable totaling $12,000 at $.0297 per share.

In June 2011 the Company issued 200,000 common shares for compensation services at a value of $.015 per share.

In June 2011 the Company issued 750,000 common shares pursuant to a convertible option of a note payable totaling $10,000 at $.013 per share.

In June 2011, the Company issued 175,739 common shares at a value of $.015 per share in exchange for consulting services accrued as a liability at December 31, 2010 in the amount of $ 37,500. The difference of $34,864 has been recorded as a gain on debt settlement.

In May 2012 the Company issued 3,316,500 common shares for consulting services at a value of $.035 per share (see Note 10).

In May 2012 the Company issued 275,000 common shares as a fee related to financing services at a value of $.0182 per share.

In May 2012 the Company issued 625,000 common shares for compensation services at a value of $.05 per share.

In May 2012 the Company issued 119,783 common shares for compensation services at a value of $.045 per share.

In May 2013 the Company issued 2,600,000 common shares as payment related to a technology purchase agreement at a value of $.0502 per share.

9

TRANSACT ENERGY CORP.

[A Development Stage Company]

NOTES TO FINANCIAL STATEMENTS

(Unaudited – Prepared by Management)

SEPTEMBER 30, 2017

NOTE 6 - CAPITAL STOCK – CONTINUED

In May 2013 the Company issued 500,000 common shares for compensation services at a value of $.0501 per share.

At June 30, 2013 the Company caused the cancellation of 250,000 shares that had been issued for compensation services 125,000 shares at a value of $.0501 and 125,000 shares at $.05.

In August 2013 the Company issued 555,556 common shares pursuant to a convertible option of notes payable totaling $20,000 at $.036 per share.

In March 2014 the Company authorized the issuance of 450,000 common shares for compensation services at a value of $.041 per share.

In March 2014 the Company authorized the issuance of 14,210,235 common shares for $397,887 of compensation payable.

In April 2014 the Company authorized the issuance of 200,000 common shares for compensation services at a value of $.05 per share.

In April 2014 the Company authorized the issuance of 474,360 common shares pursuant to a convertible option of notes payable totaling $23,718 at $.05 per share.

In August 2014, the Company authorized the issuance of 221,778 common shares pursuant to a convertible option of notes payable totaling $9,980 at $.045 per share.

In August 2014 the Company authorized the issuance of 300,000 common shares pursuant to a convertible option of notes payable totaling $18,000 at $.06 per share.

In September 2014 the Company authorized the issuance of 665,750 common shares pursuant to a convertible option of notes payable totaling $39,975 at $.06 per share.

In September 2014, the Company authorized the issuance of 641,715 common shares pursuant to a convertible option of notes payable totaling $44,920 at $.07 per share.

In October 2014 the Company authorized the issuance of 229,750 common shares pursuant to a restricted securities agreement totaling $50,545 at $0.22 per share.

In December 2014, the Company authorized the issuance of 140,000 common shares for compensation services of $26,600 at $0.19 per share.

In December 2014, the Company authorized the issuance of 233,921 common shares for $33,333.68 of compensation payable at $0.1425.

In March 2015, the Company authorized the issuance of 99,750 common shares pursuant to a convertible option of notes payable totaling $9,975 at $.10 per share.

In March 2015, the Company authorized the issuance of 166,834 common shares pursuant to a convertible option of notes payable totaling $20,020 at $.12 per share.

In March 2015, the Company authorized the issuance of 66,667 common shares pursuant to a convertible option of notes payable totaling $7,000 at $.1050 per share.

In October 2015, the Company authorized the issuance of 124,750 common shares pursuant to a convertible option of notes payable totaling $4,990 at $.04 per share.

In November 2015, the Company authorized the issuance of 147,725 common shares pursuant to a convertible option of notes payable totaling $5,909 at $.04 per share.

10

TRANSACT ENERGY CORP.

[A Development Stage Company]

NOTES TO FINANCIAL STATEMENTS

(Unaudited – Prepared by Management)

SEPTEMBER 30, 2017

NOTE 6 - CAPITAL STOCK – CONTINUED

In November 2015, the Company authorized the issuance of 73,563 common shares pursuant to a convertible option of notes payable totaling $5,885 at $.08 per share.

In December 2015, the Company authorized the issuance of 536,000 common shares for compensation payable totaling $27,336 at $.051 per share.

In April 2016, the Company authorized the issuance of 104,688 common shares pursuant to a convertible option of notes payable totaling $8,375 at $.08 per share.

In August 2016, the Company authorized the issuance of 142,857 common shares pursuant to a convertible option of a note payable totaling $10,000 at $.07per share. In the same period the Company authorized the issuance of 305,522 common shares pursuant to a convertible option a of note payable totaling $19,975 at $.06538 per share.

In September 2016, the Company authorized the issuance of 142,643 common shares pursuant to a convertible option of notes payable totaling $9,985 at $.07 per share.

In December 2016, the company authorized the issuance of 185,249 common shares pursuant to convertible option of notes payable totaling $14,819.95 at a value of $.08 per share. In the same period the Company authorized the issuance of 645,000 common shares for compensation services totaling $38,700 at a value of $0.06 per share.

In January 2017, the Company authorized the issuance of 89,864 common shares pursuant to a convertible option of notes payable totaling $2,489 at $.0646per share and $2500 @ $0.487 per share.

In February 2017, the Company authorized the issuance of 200,000 common shares pursuant to a convertible option of notes payable totaling $10,000 at $.05 per share.

In July 2017, the Company authorized the issuance of 160,000 common shares pursuant to convertible option of a note payable totaling $8,000 at $0.05 per share.

In September 2017, the Company authorized the issuance of 1,703,882 common shares pursuant to convertible option of notes payable totaling $111,990 at $0.07 per share, $5,000 at $0.0782 and $5,261 at $0.13125 per share.

NOTE 7 – GOING CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has a working capital deficit and has incurred losses since its inception. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans and/or through additional sales of its common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

11

TRANSACT ENERGY CORP.

[A Development Stage Company]

NOTES TO FINANCIAL STATEMENTS

(Unaudited – Prepared by Management)

SEPTEMBER 30, 2017

NOTE 8 - RELATED PARTY TRANSACTIONS

Management Compensation – The Company has accrued executive compensation of $1,554,149 to the President of the Company from inception to the period ended September 30, 2017 (See Note 10).

The Company has accrued executive compensation of $115,601 to the SVP Technology of the Company to the period ended April 1, 2016 (See Note 10).

NOTE 9 - LOSS PER SHARE

The following data shows the amounts used in computing loss per share for the periods presented:

Dilutive loss per share was not presented; as the Company had no common equivalent shares for all periods presented that would affect the computation of diluted loss per share.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Compensation agreement – The President and Chief Executive Officer agreement pays an annual base salary of $250,000, with a cash bonus annually based on 5% of EBITDA and a stock bonus formulated around the return on invested capital where the issued and outstanding stock of the Company times the rate of return divided by ten will equate to the stock issued.

Compensation agreement – The Senior Vice President of Technology agreement pays an annual base salary of $100,000 Starting June 2013, with a cash bonus annually based on 0.25% of EBITDA and a stock bonus formulated around the return on invested capital where the issued and outstanding stock of the Company times the rate of return divided by forty will equate to the stock issued. This contract was terminated effective April 1, 2016.

Consulting Agreement-On May 3, 2012 the company entered into an agreement whereby 3,015,000 free trading shares are to be issued in exchange for a $20,000 advance to the Company and the settlement of any and all obligations given to the parties of the agreement. These shares are intended to be sold to cover their costs including the advances and any balance of these shares not used in settlement would be used to raise capital and split evenly between the parties. The portion that goes to the consulting company will be expensed as consulting fees. To facilitate the terms of this agreement the Company by way of special resolution identified certain shareholders of the Company that had sufficient unrestricted common shares and agreed to replace the unrestricted shares with restricted common shares plus an incentive of an additional 10% of bonus shares. In May 30, 2012 the Company issued 3,316,500 common shares, including 301,500 bonus shares, valued at $.036 per share. In June 2014, the company returned the original $20,000, the shares remain outstanding.

Loan Agreement-Pursuant to an Agreement on June 28^th, 2012 that was extended to August 31, 2012 and then on Aug 30^th, 2012 to November 15^th, 2012, and was extended to May 15, 2014; where originally on May 11, 2012 the Company arranged for 3,005,000 free trading shares to be placed as additional security for a $100,000 loan as a retainer for a financing of 100 million dollars. The Company had a Memorandum of Understanding (MOU) to receive one third or 30 million dollars of this financing. The financing was not completed. If these shares are used to repay the loan the Company will have to issue the shares used plus 10% additional shares to the contributing shareholders and expense whatever shares used as financing costs. The shares remain outstanding.

12

TRANSACT ENERGY CORP.

[A Development Stage Company]

NOTES TO FINANCIAL STATEMENTS

(Unaudited – Prepared by Management)

SEPTEMBER 30, 2017

NOTE 10 – COMMITMENTS AND CONTINGENCIES (Continued)

Share-purchase Agreement – On January 30, 2014 the Company entered a share-purchase agreement for shares in a proposed subsidiary that would own and operate a zero-emissions waste optimization plant (Z.E.W.O.P._TM) in Puebla, Mexico. The agreement provided for the purchaser to own up to 45% of the subsidiary. The Purchaser advanced $300,000 of the proposed 30% of CAPEX to the Company to facilitate a phase one engineering review. With a positive outcome to the review the Company has now formed the subsidiary in question Puebla ZEWOP 1 and was formalizing the share purchase agreement between our wholly owned subsidiary TransAct Mexico and the Puebla Waste Consortium (“PWC”).

The Puebla ZEWOP 1 share purchase agreement was not updated and the terms of the original agreement have not been fulfilled by the consortium resulting in the termination of the same. The subsidiary is currently not committed to build and operate a 1320 tonne per day Z.E.W.O.P._TM estimated at $320 Million USD. The Company has a receivable due from the subsidiary at March 31, 2016 of $96,755.

Consulting Agreement-On August 20^th, 2014 the company entered into an Engineering Services Agreement to facilitate the design/build of the proprietary reactors for the Puebla, MX Zero Emissions Waste Optimization Plant. The estimated cost of the contract is $450,000 over 12 months, out of pocket reimbursements, cost plus 10% on all material and outside labor and a stock bonus of 150,000 common shares upon completion of the scope of work. This agreement will be amended to reflect the new location of the plant. All amounts under the agreement are current. This agreement was amended see Note 11, Subsequent Events.

Subscription Agreement- Pursuant to an Agreement on September 27^th, 2014 the company agreed to sell restricted securities of the Company in the form of common stock upon receipt of three tranches of capital equaling $1,200,000 each. The common stock was to be sold for $0.50 for the first tranche of 2,400,000 shares and was due in the week of September 28, 2014, $1.00 for the second tranche of 1,200,000 shares and was due in the week of March 1, 2015, $1.50 for the third tranche of 800,000 shares due on August 2^nd, 2015. February 2015 the subscribers of $3.6 Million dollars of our common stock advised us they would be unable to fulfill their commitment under the restricted securities agreement. We have received the same in writing and agreed to a settlement with the parties involved where they purchase 526,316 common shares @ $0.19. To date $12,440 has been received of the agreed $100,000. Under the terms of the agreement the funds received up to December 2015 were treated as forfeited and the settlement agreement terminated. We are now entitled to exercise any punitive rites of the original agreement.

Consulting Agreement – On June 1, 2017 the Company through its subsidiary Transact Energy Mexico S de R.L. de C. V. contracted with a private consultant to secure a binding Waste Management Agreement with the Municipality of Zapopan. The agreement pays $30 Million pesos (approximately $1.7 Million USD) as a success fee only. This group is responsible for helping us secure the September 13, 2017 waste supply agreement in Guadalajara. Once this plant is approved the fee is due.

Waste Supply and Disposal Agreement- On September 13, 2017 the Company through its subsidiary Puebla Z.E.W.O.P. 1, S.de R.L. de C.V. contracted with Hasars, S.A. de C.V. to purchase four-hundred and eighty-one thousand, eight hundred (481,800) metric tons (MT) per year at a cost of $180 Mexican Pesos per MT or approximately $2 Million USD per annum. The contract is for a ten-year period initially and conditional on us producing a certified operational Z.E.W.O.P. ^TM.

NOTE 11 – SUBSEQUENT EVENTS

In September 2017 convertible notes were issued in the amount of $15,500. These notes were converted to 128,916 common shares at $0.12 per share in October 2017.

In October three convertible notes totaling $24,965 were issued bearing interest at 8% per annum. The notes were converted, and 198,979 common shares subsequently issued 41,375 at $0.12 per share and the balance at $0.1269.

On October 25, 2017, our subsidiary Puebla Z.E.W.O.P. 1, S. de R.L. de C.V. entered into a conditional, Land Purchase Agreement for 18.4 hectares in the municipality of El Salto. The purchase price is the equivalent of approximately $10 Million USD.

On November 6, 2017 the Company amended an engineering contract for its reactors from a 150,000-common share bonus to a 250,000-common share bonus payable upon completion. The company paid a total of $25,000 towards this contract in October and November.

13

ITEM 2. PLAN OF OPERATIONS

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENT NOTICE

This Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate” or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.

OUR BUSINESS

We formed TransAct Energy Corp. as a Nevada corporation on March 15, 2006. Although our business plan called for the securing and managing of any energy leasehold, the Company focused on securing producing and non-producing oil and gas leases in Alberta, Canada. On September 7, 2006, we acquired a one hundred percent (100%) interest in a Petroleum and Natural Gas Lease, from the province of Alberta, Canada for twelve thousand and fifty-one dollars ($12,051), the MedHat Project. We did not develop this resource. We looked to expand our holdings in Alberta through acquisitions and joint ventures for the following two years. We have since allowed this lease to lapse and moved away from this focus.

In 2008, the Company was introduced to Dr. Mory Ghomshei one of the world’s leading geothermal experts and two of his geothermal power projects in British Columbia, Canada. We worked with independent companies Aqua Terra Power and Aqua Terra Geothermal through the balance of 2009 on the two geothermal power projects in British Columbia. Other than lending Aqua Terra funds no formal arrangement was entered pending them securing drill permits on the two projects. These licenses lapsed under their original owners and were re-posted by the government for public tender; an Ontario corporation associated with Dr. Ghomshei acquired most of the original licenses and has received drilling permits. We entered discussions with this entity in the latter half of 2011 to form a Farm-in relationship. We have put these discussions on hold pending the completion of our first waste optimization plant although we are maintaining dialogue with Dr. Ghomshei as it relates to utilizing Geothermal in the plants themselves.

TransAct in mid-2009 started introducing the concept of geothermal power to markets in Western and South Asia with the plan to enter joint venture relationships to develop geothermal power projects in these areas. To enter these markets as a power producer the Company found it strategic to develop traditional carbon fueled power projects in addition. After discussions with the Republic of Iraq regarding geothermal opportunities in Northern Iraq, the Company, together with Spectrum Energy Project Investments (a UAE power company), submitted applications to the Basra Investment Commission to develop/manage three natural gas power plants. These multi-billion dollar projects come with long-term power purchase agreements (PPA) and sovereign guarantees and our application through Spectrum was shortlisted. We were unsuccessful in completing our acquisition of 50% of Spectrum and the initial offering lapsed.

On August 31, 2009, TransAct Energy completed and closed its initial public offering at twenty-five cents ($0.25) per share selling one million one hundred and two thousand shares (1,102,000) for a total capital raise of two-hundred and seventy-four thousand three hundred and ninety-eight dollars ($274,398 USD). The majority of these funds were placed with Aqua Terra Power as convertible notes to secure and develop the four (4) geothermal licenses in British Columbia, Canada; the balance was used to pay the costs of the offering and a small amount went to working capital. The Company was approved for listing on the OTCBB in December 2009 and received the trading symbol “TEGY.”

Throughout 2010 we laid the ground work for large power projects in South Europe, Asia and Africa; smaller projects for solar, waste to energy and hydrogen fuel cells specifically in India. We worked to secure markets for geothermal, new solar photo-voltaic, waste to energy and hydrogen fuel cell generators.

Joint development agreement negotiations took place in December 2010 clearing the way for Transact to enter one major project in South East Asia in 2011. The 2011 year was frustrated with the company’s inability to collect raised or earned funds into the company’s bank account. Thus projects, joint ventures and previous efforts were postponed or lost permanently. While we did maintain the company’s trading status the year was taken up with collection efforts and supporting business relationships while in limbo. We did initiate discussions on new waste to energy technologies to leverage the work we had done previously in this sector.

14

The Company’s 2012 efforts were focused on building out a Waste Optimization division. We completed a Business Plan for this division and entered a Joint Development Agreement with the owners of a small scale, proprietary, zero emissions waste optimization plant (“ZEWOP”) that had been operating a 20 tonne per day plant for two years. We reconnected with clients in India and Brazil for future waste optimization opportunities. From the second quarter, through to the end of 2012 we worked to raise the necessary funds to build a municipal scale plant (500 tonnes per day) in Scotland.

2013 continued as a building year for both the company and its Waste Optimization division. We completed the acquisition of the ZEWOP technology from the Scottish Inventor and brought him on as a long-term member of our team. We successfully negotiated a relationship with the international firm Fichtner Consulting Engineers to complete the certification of our plants going forward. We identified suppliers of waste for the proposed United Kingdom plants, initiated the relationships for the uptake of the Natural Gas and Electricity in the United Kingdom and tentatively sourced the capital required for the first plant in the United Kingdom. Globally we negotiated the intent to build a plant in Mexico that includes the required equity and waste. Initial talks have taken place with potential development partners for a few of the major Brazil markets pending the success of the Mexico plant.

Throughout 2014 TransAct worked to finalize the engineering review and agreements necessary to develop the first Zero Emissions Waste Optimization Plants _TM (Z.E.W.O.P. _TM) in Puebla, Mexico. The plant under design is capable of processing 1320 metric tons per day of Municipal Solid Waste (“MSW”) and is estimated to cost approximately three hundred million dollars. In late November Fichtner Consulting Engineers reported they believed the Z.E.W.O.P. _TM could process the MSW 100% into useable products without emissions. The Fichtner report provided TransAct the opportunity to submit the Waste Supply Agreement to the Municipality of Puebla, prepare off-take agreements for interested buyers of the Z.E.W.O.P. _TM products and formalize the share purchase agreement with the Puebla Waste Consortium (“PWC”). PWC intended on providing 30% of the capital required to build the Z.E.W.O.P. _TM, while TransAct negotiates third party lenders for the remaining 70% of the cost through debt instruments.

The Company delivered the results of the Fichtner Report to the Puebla City Staff in December of 2014. The cost of the plant was more than originally discussed because it included garbage pre-processing and their waste contained more water. This affected the required equity and although it was never stated appears to be cause of the PWC hesitation. We also found out subsequently there was legal wrangling and back room negotiations between the existing MSW concession holders and the municipal/state government, affecting their ability to sign with us. After 6 months with no movement forward for the MSW feedstock from the City of Puebla, Management set out in 2015 to secure an alternate source of MSW. After reviewing and discussing several alternative municipalities we are now negotiating the details of an MSW supply agreement. The agreement we had with the Puebla Waste Consortium is terminated however the sales efforts were all to National/International companies whose interest in our products will not change with a change in location. The one hundred-million-dollar equity for the plant in Puebla disappeared with the termination of the consortium contract. An alternative source of the plant equity is being sought during 2015/16 with a variety of investors coming forward during this period. As soon as we finalize the feed-stock and sales contracts we will seek to formalize the required equity.

Because of the specialized nature of many of the Z.E.W.O.P. _TM components, we initiated some of the equipment procurement; thus, we entered a design/supply agreement for our proprietary reactors with a specialized engineering firm.

2014 saw the Company form subsidiary corporations in Ireland and Mexico. In Ireland we established the wholly owned subsidiary “TransAct Energy Global Ltd”, this company will in turn wholly own each national subsidiary. The first national subsidiary of TransAct Global is “TransAct Energy Mexico S.DE R.L. DE C.V.” which will own a majority shareholding of each holding company that owns a Z.E.W.O.P. _TM like the Mexican corporation “Puebla ZEWOP 1, S. DE R.L. DE C.V.”.

At the beginning of 2015 we focused on finalizing the sale of the anticipated Z.E.W.O.P. _TM products. These efforts included getting signed letters of intent from qualified buyers and preparing formal legal agreements for the same. We now have letters of intent from multiple qualified buyers for all the expected product and agreements ready to be signed subject to finalizing our feed-stock agreement (Waste Supply Agreement) for the first plant.

In summary 2015’s efforts focused on completing the due-diligence for the Mexican candidate feed-stocks including matching equity partners and buyers of the resulting products. To that end we now have several feed-stock agreements to negotiate through to a final agreement or dismiss depending on the outcome of the negotiations. The potential equity partners have been identified subject to finalizing the feed-stock agreement and pre-sales of the future products. The clients that signed letters of intent for the products have also been briefed on the potential feed-stock cities to re-confirm their commitment. Every effort was made during the year to keep the candidate banks for debt financing informed of our progress and they appear to be continuing with their support.

15

The First Quarter 2017 continued with the negotiations around the Waste Supply Agreement with Technosilicatos Mexico, fine tuning the agreement which now awaits final signatures. In anticipation of this signing, both real estate acquisition and financing for the new plant were progressed.

Business development efforts at the start of 2017 included furthering discussions with another large waste management company in Mexico, the Municipality/its contractors in Asuncion, Paraguay, and the main contractor/haulers for Rio de Janeiro, Brazil.

The end of the second quarter found us no closer to concluding the contract with Tecnosilicatos of Mexico City, we are not abandoning the potential contract, however we have elected to engage the services of a local lobbyist to go direct to the new, Mexico City administration in regard to establishing our own direct concession for waste processing as per their new mandate. At the same time, we engaged a private consultant to work on our behalf to negotiate with the municipality of Zapopan our formal proposal for waste management presented a year ago.

In the third quarter of 2017 we signed the engagement letter with the Latin desk of the USA based international financial group (name under non-disclosure) for the raise of the debt portion of our first Z.E.W.O.P. ^TM’s development cost. We then went on to finalize a waste supply agreement with Hasars of Guadalajara, Mexico.

PLAN OF OPERATION

TransAct Energy Corp. has elected to focus entirely on the global development and dissemination of its zero emissions waste optimization plants (Z.E.W.O.P. TM). The Z.E.W.O.P. TM makes ecological, economic, cultural, and social sense. Becoming an engine that supports the circular economy in any community it enters, sustainably. Municipalities can now be paid instead of paying to manage their MSW. In the process TransAct is able to incorporate many of the energy technologies it has worked on including, geothermal and solar.

Our near-term strategy going forward is too exploit the work and relationships that have been established in Mexico. Despite the delays and setbacks of Puebla our efforts will continue throughout 2017 to finalize the Waste Supply Agreement in a large Mexican market, signing off on 75-80% of our product sales under off-take agreements and initiating the engineering review of our selected site for the plant in Mexico. These agreements completed should lead to the financing commitment we have been seeking for the $200 Million (+/-) debt portion of the first Z.E.W.O.P._TM. In 2017 we should be able to complete the Z.E.W.O.P. _TM building/plant design and initiate the permit/permission application process. Simultaneously we intend to work through an EPC contract and its related subcontracts. TransAct hopes to establish manufacturing of our proprietary reactors in Mexico to supply the demand for both Mexico South America, Central America, Canada and the USA. Subject to our funding draw down schedule and the permit/permission process we intend on site preparation and initial construction of the Z.E.W.O.P. _TM buildings in the latter part of 2018. Provided all equipment manufacturers can supply their components we intend on assembling the plant and commissioning the same in 2019.

Once TransAct is confident the development of the first Z.E.W.O.P._TM is well underway it will proceed with the scheduling and planning of additional plants. This will include another plant in Mexico, our first European Z.E.W.O.P. _TM. South America, including Paraguay, Brazil and Argentina have generated multiple opportunities for Z.E.W.O.P. _TM including the capital required to develop these opportunities. We intend on continuing to work these opportunities to secure a foothold in these markets.

Z.E.W.O.P. _TM can demonstrate to Mexico and the World a municipal scale solution to managing waste without emissions and land filling. Although we have been approached to build in the other North American cities we feel the market is best approached when the first Z.E.W.O.P. _TM is fully operational to garner government agency support. This will insure a smoother entry into the other North American markets, once we break ground we will make sure major municipalities throughout the US and Canada are aware of our process so we get on the technology review lists.

Besides finding capital for individual projects, until the first revenues from operations come in, our corporate operations will continue to be funded by raising money through private placements or public offerings. We anticipate bringing on an expanded management team to oversee our operational growth throughout this year and plan to raise additional capital as required. The first $4 Million of this budgeted capital should come in after the signing of the Waste Supply Agreement in 2017.

16

For the balance of the 2017 year the Company’s focus is to:

1.)Secure working capital for the Company significant enough to maintain accounts payable as current and fund day to day corporate costs through to cash-flow from first operations, including expansion of corporate management team in order facilitate global dissemination of Z.E.W.O.P. ^TM; 

2.)Complete the development of the Z.E.W.O.P. ^TM in Mexico as follows; 

a.Finalize Waste Supply (now completed) and Product Purchase Agreements; 

b.Secure all required permits and permissions (initiated);  

c.Finalize debt portion of plant cost (initiated); 

d.Complete EPC contracts and supplier agreements; 

e.Initiate site development, construction, and assembly of plant. 

3.)Initiate second Mexico Z.E.W.O.P. TM contracts to launch development in 2018(initiated). 

4.)Enter waste supply contracts in Brazil. 

5.)Continue with European market entrance towards end of 2017. 

SUBSEQUENT EVENTS

In September 2017 convertible notes were issued in the amount of $15,500. These notes were converted to 128,916 common shares at $0.12 per share in October 2017.

In October three convertible notes totaling $24,965 were issued bearing interest at 8% per annum. The notes were converted, and 198,979 common shares subsequently issued 41,375 at $0.12 per share and the balance at $0.1269.

On October 25, 2017, our subsidiary Puebla Z.E.W.O.P. 1, S. de R.L. de C.V. entered into a conditional, Land Purchase Agreement for 18.4 hectares in the municipality of El Salto. The purchase price is the equivalent of approximately $10 Million USD.

On November 6, 2017 the Company amended an engineering contract for its reactors from a 150,000-common share bonus to a 250,000-common share bonus payable upon completion. The company paid a total of $25,000 towards this contract in October and November.

RESULTS OF OPERATIONS

Results of Operations for Three Months Ending June 30, 2017 Compared to Three Months Ending June 30, 2016

We did not generate any material revenue from July 1, 2017 to September 30, 2017 as was the same for the three-month period in 2016. For the three months ended September 30, 2017 our general and administrative expenses were $102,368 compared to $80,973 for the same period in 2016. Expenses consisted primarily of compensation of $62,800, Consulting $12,429, Travel $9,183 and accounting $7,722. Compensation was $62,500, Consulting $6,250, Travel $753 with Accounting of $8,197 for the same period ending September 30, 2016.

Interest Expense for the three months ending September 30, 2017 was $77,724 compared to $78,093 for the same period in 2016. As a result, we have reported a net loss before taxes of ($180,0923) for the Three Months ended September 30, 2017 compared to a loss of ($156,132) for the same period last year.

Results of Operations for the Nine Months Ended September 30, 2017 Compared to the Nine Months Ended September 30, 2016

We did not generate any revenue from January 1, 2017 to September 30, 2017 as was the same for the nine-month period in 2016. For the nine months ended September 30, 2017 our general and administrative expenses were $251655 compared to $262,855 for the same period in 2016. The main expenses for both periods was compensation and interest. As a result, we have reported a net loss of $(485,929) for the Nine Month period ended September 30, 2017 compared to $(498,659) for the same period in 2016.

Stock-Based Compensation Costs

There was $0 stock based compensation for the period ended September, 2017 and the same for 2016. Any shares issued are a part of our executive compensation plan, and are issued to obtain, retain and motivate our directors, executives and employees.

17

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2017, our current assets are $242,368 made up of prepaid expenses of $110,124, receivables of $96,755 and $35,489 cash on hand. Our current liabilities consist of accounts payable in the amount of $287,484, accrued interest of $2,020,820, compensation payable of $1,669,750 and Notes payable, net of any discount of $258,715.

NEED FOR ADDITIONAL FINANCING

We estimate our upcoming operating expenses to increase substantially as we transcend from development stage to operating stage and could be as much as $4,000,000.00 per year or more. We have conditional commitments through our subsidiaries for capital expenditures related to the first plant in Mexico and anticipate entering into further commitments to secure additional plants going forwards. We believe we will need additional funds to cover our expenses and commitments for the next twelve months. Our need for capital may change dramatically as we pursue our business plan during that period. Further, we cannot assure that we will be successful in consummating business opportunities on favourable terms or we will be able to profitably manage any business opportunities. Should we require additional capital, we may seek additional advances from officers, sell common stock or find other forms of debt financing.

As per our previously filed 8K the Company raised $3.6 Million in capital to cover the next fourteen months to expected cash flow from our Z.E.W.O.P. _TM in Mexico. This financing fell through; however, we fully intend on replacing it which may result in further dilution of shares.

There is no guarantee the Company will not need to raise further significant capital over the next year, some of which may need to be done by way of selling equity in the Company or its subsidiaries. Depending on the market price and the terms that can be negotiated this will result in the dilution of current shareholders of the Company’s stock or earnings from proposed plants.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required by smaller reporting companies.

ITEM 4T. CONTROLS AND PROCEDURES.

(a)Evaluation of Disclosure Controls and Procedures. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). We are committed to maintaining disclosure controls and procedures designed to ensure that information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure.  

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures and implementing controls and procedures.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2017, the end of the period covered by this report.

(b)Changes in Internal Control over Financial Reporting. There were no changes in the Company's internal controls or procedures over financial reporting, known to the chief executive officer or the chief financial officer that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. 

18

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Our Company is not a party to any bankruptcy, receivership or other legal proceeding currently.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Year to date 2,530,953 common shares have been sold by way of conversion of notes payable into Company securities during the nine months ended September 30, 2017. The proceeds were used primarily for payables, general and administrative expenses.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4. REMOVED AND RESERVED

None.

ITEM 5. OTHER INFORMATION.

Up to the period ended September 30, 2017, the Company worked diligently on its business and maintaining its reporting status with the SEC. However due to finances we are forced to file our Annual Report without auditors review the company is delinquent in required filings with the SEC as determined by the NASD. Because of filing unaudited statements and changes to the over the counter bulletin board (“OTCBB”) we were downgraded from the OTCQB to the OTC Pinks. When we amend our filings to include audited statements for 2012, 2013, 2014, 2015, 2016 and 2017 we can reapply to the OTCBB for a OTCQB listing. We have started the process of engaging a US accounting firm to prepare all filings and financial statements for the auditors.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8K.

(a) Exhibits

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.

(b) Reports on Form 8-K (none)

*The Exhibit attached to this Form 10-Q shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing. 

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.

TRANSACT ENERGY CORP.

20