- Quarterly Report (10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2010

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number 000-52767

SUNERGY, INC.
(Exact name of registrant as specified in its charter)

 Nevada 26-4828510
(State or other jurisdiction of (IRS Employer
 incorporation or organization) Identification No.)

14362 N. Frank Lloyd Wright Blvd., Suite 1000, Scottsdale, AZ 85260
 (Address of principal executive offices) (Zip Code)

480.477.5810
(Registrant's telephone number, including area code)

n/a
(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 [X] NO

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

Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act [ ] YES [X] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. [ ] YES [ ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

1,272,257,340 common shares issued and outstanding as June 29, 2011

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The interim financial statements included herein are unaudited but reflect, in management's opinion, all adjustments, consisting only of normal recurring adjustments that are necessary for a fair presentation of our financial position and the results of our operations for the interim periods presented. Because of the nature of our business, the results of operations for the quarterly period ended March 31, 2010 are not necessarily indicative of the results that may be expected for the full fiscal year.

SUNERGY, INC.
(An Exploration Stage Company)

Balance Sheets

 March 31, December 31,
 2010 2009
 ---------- ----------
 (unaudited) (audited)
 ASSETS
Current assets
 Cash and cash equivalents $ 649 $ 54
 Prepaid expense-stock related -- 50,000
 ---------- ----------
 Total current assets 649 50,054

Long term assets
 Mineral properties 1,000,000 1,000,000
 ---------- ----------

 Total assets $1,000,649 $1,050,054
 ========== ==========

 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
 Accounts payable and accrued liabilities $ 30,222 $ 31,222
 Accruals - Related party 122,859 93,859
 Operational advances - Related party 32,078 22,950
 Notes payable 237,500 237,500
 Notes payable - Related party 250,000 250,000
 ---------- ----------
 Total current liabilities 672,659 635,531
 ---------- ----------

 Total liabilities 672,659 635,531

Stockholders' equity
 Common stock, authorized 3,750,000,000 shares, par value
 $0.001, issued and outstanding on March 31, 2010 and
 December 31, 2009 is 537,975,000 and 537,975,000, respectively 537,975 537,975
 Additional paid in capital 444,283 440,283
 Subscriptions payable-(Note 5) 143,400 143,400
 Accumulated deficit during exploration stage (797,668) (707,135)
 ---------- ----------

 Total stockholders' equity 327,990 414,523
 ---------- ----------

 Total liabilities and stockholders' equity $1,000,649 $1,050,054
 ========== ==========

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

SUNERGY, INC.
(An Exploration Stage Company)

Statements of Operations
(Unaudited)

 Three Months Ended Inception
 March 31, (January 28, 2003) to
 ------------------------------- March 31,
 2010 2009 2010
 ------------ ------------ ------------
Revenue $ -- $ -- $ --
 ------------ ------------ ------------
Operating Expenses
 General and administrative 11,033 2,642 64,528
 Management salary 18,000 13,500 171,000
 Rent-related party -- -- 37,500
 Accounting and audit fees -- 12,225 97,131
 Legal fees -- 10,085 52,876
 Consulting fees 50,000 25,000 296,435
 Exploration costs 6,500 -- 45,120
 ------------ ------------ ------------

 Total expenses 85,533 63,452 764,590
 ------------ ------------ ------------

Net loss from operations (85,533) (63,452) (764,590)

Other expenses
 Interest expense-related party (5,000) (5,000) (33,078)
 ------------ ------------ ------------

 Total other expenses (5,000) (5,000) (33,078)
 ------------ ------------ ------------

Net loss $ (90,533) $ (68,452) $ (797,668)
 ============ ============ ============

Basic loss per share $ (0.00) $ (0.00)
 ------------ ------------
Basic weighted average number of shares 537,975,000 533,424,440
 ------------ ------------

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

SUNERGY, INC.
(An Exploration Stage Company)

Statement of Stockholders' Equity

From Inception (28-Jan-2003) to 31-Mar-2010

 Deficit
 Accumulated
 Common Stock During the
 -------------------- Paid in Subscriptions Exploration Total
 Shares Amount Capital Receivable Stage Equity
 ------ ------ ------- ---------- ----- ------
BALANCE AT INCEPTION, JANUARY 28, 2003 -- $ -- $ -- $ -- $ -- $ --
Common shares issued for cash 500,000,000 500,000 (490,000) -- -- 10,000
Common shares issued for cash 6,975,000 6,975 6,975 -- -- 13,950
Net loss (30,313) (30,313)
 ------------ -------- --------- -------- --------- ---------
BALANCE, DECEMBER 31, 2003 506,975,000 506,975 (483,025) -- (30,313) (6,363)
Contributed capital -- -- 401 -- -- 401
Net loss (41,362) (41,362)
 ------------ -------- --------- -------- --------- ---------
BALANCE, DECEMBER 31, 2004 506,975,000 506,975 (482,624) -- (71,675) (47,324)
Contributed capital -- -- 938 -- -- 938
Net loss (26,093) (26,093)
 ------------ -------- --------- -------- --------- ---------
BALANCE, DECEMBER 31, 2005 506,975,000 506,975 (481,686) -- (97,768) (72,479)
Contributed capital -- -- 1,959 -- -- 1,959
Net loss (39,746) (39,746)
 ------------ -------- --------- -------- --------- ---------
BALANCE, DECEMBER 31, 2006 506,975,000 506,975 (479,727) -- (137,514) (110,266)
Net loss (55,103) (55,103)
 ------------ -------- --------- -------- --------- ---------
BALANCE, DECEMBER 31, 2007 506,975,000 506,975 (479,727) -- (192,617) (165,369)
Common shares issued for cash 6,000,000 6,000 144,000 -- -- 150,000
Common shares issued to acquire
 mineral property 20,000,000 20,000 480,000 -- -- 500,000
Common shares subscribed -- -- -- 5,000 -- 5,000
Net loss (98,445) (98,445)
 ------------ -------- --------- -------- --------- ---------
BALANCE, DECEMBER 31, 2008 532,975,000 532,975 144,273 5,000 (291,062) 391,186
Common shares subscribed -- -- -- 138,400 -- 138,400
Common shares issued for services 5,000,000 5,000 295,000 -- -- 300,000
Contributed capital -- -- 1,010 -- -- 1,010
Net loss (416,073) (416,073)
 ------------ -------- --------- -------- --------- ---------
BALANCE, DECEMBER 31, 2009 537,975,000 537,975 440,283 143,400 (707,135) 414,523
Contributed capital -- -- 4,000 -- -- 4,000
Net loss (90,533) (90,533)
 ------------ -------- --------- -------- --------- ---------

BALANCE, MARCH 31, 2010 (UNAUDITED) 537,975,000 $537,975 $ 444,283 $143,400 $(797,668) $ 327,990
 ============ ======== ========= ======== ========= =========

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

SUNERGY, INC.
(An Exploration Stage Company)

Statements of Cash Flows
(Unaudited)

 Three Months Ended Inception
 March 31, (January 28, 2003) to
 ------------------------------- March 31,
 2010 2009 2010
 ------------ ------------ ------------
Operating Activities
 Net loss $ (90,533) $ (68,452) $ (797,668)
 Adjustments to reconcile net loss to cash:
 Prepaid expenses-stock related 50,000 -- --
 Stock issued for services -- 25,000 300,000
 Stock issued to acquire mineral property -- -- 500,000
 Changes in assets and liabilities
 Increase/(decrease) in accounts payable and accruals (1,000) 11,104 45,103
 Increase/(decrease) in related party liabilities 29,000 -- 107,978
 ------------ ------------ ------------
Net cash provided by operating activities (12,533) (32,348) 155,413
 ------------ ------------ ------------
Investment Activities
 Acquisition of mineral property -- -- (1,000,000)
 ------------ ------------ ------------
Cash used by investment activities -- -- (1,000,000)
 ------------ ------------ ------------
Financing Activities
 Proceeds from sale of common stock -- -- 173,950
 Subscriptions received -- 31,700 143,400
 Operational advances 9,128 -- 32,078
 Contributed capital 4,000 -- 8,308
 ------------ ------------ ------------
Cash provided by financing activities 13,128 31,700 357,736
 ------------ ------------ ------------

Net increase/(decrease) in cash 595 (648) 649

Cash and cash equivalents, beginning of period 54 648 --
 ------------ ------------ ------------

Cash and cash equivalents, end of period $ 649 $ -- $ 649
 ============ ============ ============
Supplemental disclosure of cash flows for:
 Interest $ -- $ -- $ --
 ------------ ------------ ------------
 Income taxes $ -- $ -- $ --
 ------------ ------------ ------------
Supplemental disclosure of non-cash financing:
 Stock issued for services $ -- $ 25,000 $ 300,000
 ------------ ------------ ------------
 Stock issued to acquire mineral property $ -- $ -- $ 500,000
 ------------ ------------ ------------

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

SUNERGY, Inc.
(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

NOTE 1. GENERAL ORGANIZATION AND BUSINESS

SUNERGY, Inc. (The Company) was organized in the state of Nevada on January 28, 2003 and is an exploration phase mineral and mining company.

The Company has mineral properties located in the Republic of Ghana and has not yet determined whether these properties contain reserves that are economically recoverable. The recoverability of amounts from these properties will be dependent upon the discovery of economically recoverable reserves, confirmation of the Company's interest in the underlying properties, the ability of the Company to obtain necessary financing to satisfy the expenditure requirements under the property agreements to complete the development of the properties and upon future profitable production or proceeds for the sale thereof.

These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2009 and notes thereto included in the Company's 10-K annual report and all amendments. The Company follows the same accounting policies in the preparation of interim reports.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

The relevant accounting policies and procedures are listed below.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and financial instruments which mature within three months of the date of purchase.

Reclassification

Certain reclassifications have been made to the prior years' financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings. The Company reclassified pre-paid expenses-stock related from the equity section of the balance sheet to the current assets section.

Cash Balances

The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (FDIC). This government corporation insured balances up to $100,000 through October 13, 2008. As of October 14, 2008 all non-interest bearing transaction deposit accounts at an FDIC-insured institution, including all personal and business checking deposit accounts that do not earn interest, are fully insured for the entire amount in the deposit account. This unlimited insurance coverage remained in effect for participating institutions until June 30, 2010.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (CONT.)

Cash Balances-Cont.

On July 21, 2010 FDIC-insured institutions are permanently insured up to at least $250,000 per depositor. On January 1, 2010, FDIC deposit insurance for all deposit accounts, except for certain retirement accounts, will return to at least $100,000 per depositor. Insurance coverage for certain retirement accounts, which include all IRA deposit accounts, will remain at $250,000 per depositor.

Accounting Basis

The statements were prepared following generally accepted accounting principles of the United States of America. The Company operates on a December 31 fiscal year end.

Revenue Recognition

Revenues from services are recognized when there is persuasive evidence of an arrangement, the fee is fixed or determinable, services have been rendered, payment has been contractually earned and it is reasonably assured that the related receivable or unbilled revenue is collectable.

Earnings per Share

Basic earnings per share excludes dilution and is computed by dividing net income (loss) by the weighted-average common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Currently the Company has no potentially dilutive securities. On September 16, 2008 and August 27, 2010 the Company authorized a 5:1 and 10:1 forward stock split respectively that have been retroactively applied to these statements.

Dividends

The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (CONT.)

Income Taxes-Cont.

reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Stock Based Compensation

The Company has on occasion issued stock in lieu of cash to various vendors for services rendered. In so doing the Company issued the stock at fair value defined as the current market value.

Exploration Stage Company

The Company complies with Accounting Standards Codification (ASC) Topic 915 and for its characterization of the Company as exploration stage. All losses accumulated since inception has been considered as part of the Company's exploration stage activities.

The Company is subject to several categories of risk associated with its exploration stage activities. Mineral exploration and production is a speculative business, and involves a high degree of risk. Among the factors that have a direct bearing on the Company's prospects are uncertainties inherent in estimating mineral deposits, future mining production, and cash flows, particularly with respect to properties that have not been fully proven with economic mineral reserves; access to additional capital; changes in the price of the underlying commodity; availability and cost of services and equipment; and the presence of competitors with greater financial resources and capacity.

Recent Accounting Guidance Not Yet Adopted

In January 2010, the FASB issued guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. The guidance requires new disclosures on the transfers of assets and liabilities between Level 1 (quoted prices in active market for identical assets or liabilities) and Level 2 (significant other observable inputs) of the fair value measurement hierarchy, including the reasons and the timing of the transfers. Additionally, the guidance requires a roll forward of activities on purchases, sales, issuance, and settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements). The guidance will become effective for us with the reporting period beginning January 1, 2010, except for the disclosure on the roll forward activities for Level 3 fair value measurements, which will become effective for us with the reporting period beginning July 1, 2011. Other than requiring additional disclosures, adoption of this new guidance will not have a material impact on our financial statements.

The Company has reviewed other recently issued accounting pronouncements and believe none will have any material impact on our financial statements.

Mineral Property Costs

Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. The Company assesses the carrying costs for impairment at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (CONT.)

Environmental Costs

Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or the Company's commitments to plan of action based on the then known facts.

Asset Retirement Obligation

The Company records asset retirement obligations as a liability in the period in which a legal obligation associated with the retirement of tangible long-lived assets result from the acquisition, construction, development and/or normal use of the assets. At March 31, 2010, the Company had not undertaken any drilling activity on its properties and had not incurred significant reclamation obligations. Consequently no asset retirement obligation was accrued in the March 31, 2010 and December 31, 2009 financial statements.

Impairment of Long-Lived Assets

The Company reviews the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The estimated future cash flows are based upon, among other things, assumptions about future operating performance, and may differ from actual cash flows. Long-lived assets evaluated for impairment are grouped with other assets to the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows (excluding interest) is less than the carrying value of the assets, the assets will be written down to the estimated fair value in the period in which the determination is made. During the quarter ended March 31, 2010 and the year ended December 31, 2009 no impairment was recorded.

NOTE 3. GOING CONCERN

The accompanying 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. However, the Company has accumulated a loss of $797,668 during its exploration stage. This raises substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.

Managements Plan

Management has no formal plan in place to address this concern but is considering obtaining additional funds by debt financing to the extent there is a shortfall from operations. Management continues to seek funding from its shareholders and other qualified investors to pursue its business plan however there is no assurance that such activity will generate the necessary funds for operations.

NOTE 4. MINERAL PROPERTIES

Hummingbird Claim

On April 10, 2003, the Company executed a mineral property staking and sales agreement and acquired an 100% undivided right, title and interest in and to the Hummingbird Claims located in the province of British Columbia, Canada. The Company incurred exploration costs of $933 and $1,834 respectively for the years ended December 31, 2009 and 2008 and inception to date exploration costs of $13,872 on the Hummingbird Claims. As of June 30, 2009, the Company decided to abandon the Hummingbird Claims and the asset was fully impaired.

Nyinahin Mining Concession

On October 31, 2008 and amended by agreement on December 5, 2008, the Company executed a mining acquisition agreement and acquired an 100% interest in a mineral concession located in the Ashanti region of Ghana, known as the Nyinahin concession. Agreed to consideration consisted of the following:

1. $500,000 to be paid within 5 days of the effective date of the agreement.

* $12,500 by November 5, 2008; (paid by issuance of a promissory note)
* $37,500 by December 31, 2008; (paid by issuance of a promissory note)
* $200,000 by December 31, 2008; (paid by issuance of a promissory note)
* $250,000 by April 30, 2009; (paid $12,500)

2. 2,000,000 restricted shares of common stock of the Company valued at $0.25 per share (based upon the price per share received on a private placement around the time of this agreement) for a total of $500,000.

On December 30, 2008, the Company entered into a promissory note in the amount of $250,000 with a shareholder of the Company (see Note 5) who satisfied the Company's aggregate consideration of $250,000 that were due by December 31, 2008.

During the year ended December 31, 2008, the Company paid $12,500 to the holder of the Nyinahin Mining Concession which was credited toward the $250,000 obligation due on April 30, 2009.

On July 30, 2009, the Company entered into an agreement to settle the final payment balance of $237,500. The holder agreed to receive 20,000,000 restricted shares of common stock valued at $0.0125 per share or $250,000 in settlement and the previous $12,500 payment recorded as interest expense for late payment. The common stock was not issued in a timely fashion and subsequently the holder assigned the debt. The Company has settled with the assignees (See the subsequent events note 8).

The vendor shall retain a 5% Net Smelter Return on the Property.

NOTE 5. STOCKHOLDERS' EQUITY

Common Stock

The Company originally authorized 75,000,000 shares of common stock at a $0.001 par value and on September 16, 2006 executed a 5:1 forward stock split bringing the authorized common shares to 375,000,000 with a par value of $0.001 per share and the issued and outstanding shares as of September 16, 2006 from 10,139,500 to 50,697,500 shares. On August 17, 2010 the Company executed a 10:1 forward stock split bringing the authorized common shares to 3,750,000,000 and the issued and outstanding shares from 94,619,788 to 946,197,880 shares. The stock splits are retroactively applied to these financial statements resulting in an increase in the number of shares outstanding and a decrease in issued price per share.

All shares issued for services are valued at fair value which is the current market price on the day shares are authorized to be issued.

A summary of shares issued follows:

* On January 31, 2003 the Company issued 500,000,000 common shares to the founders for $10,000 cash.
* On September 22, 2003 the Company issued 6,975,000 common shares for $13,950 cash.
* On October 10, 2008 the Company issued 6,000,000 common shares plus an equal number of two-year detachable warrants exercisable at $0.025 per share in a private placement for $150,000 or $0.025 per share.
* On December 10, 2008 the Company issued 20,000,000 common shares valued at $0.025 per share or $500,000 as partial payment for the acquisition of the Nyinahin Mining Concession.
* On March 23, 2009 the Company issued 5,000,000 common shares valued at $0.06 per share or $300,000 for one year consulting services and recorded as prepaid expense.

Subscriptions Payable

As of March 31, 2010, the Company has received the benefit of either cash or payment of outstanding liabilities with aggregate total of $143,400 from non-related individuals as prepaid subscriptions for common stock.

Contributed capital

During the year ended 2003, an officer donated services valued at $401 which was treated as contributed capital.

During the year ended 2004, an officer donated services valued at $938 which was treated as contributed capital.

During the year ended 2005, an officer donated services valued at $1,959 which was treated as contributed capital.

NOTE 5. STOCKHOLDERS' EQUITY (CONT.)

Contributed capital-Cont.

During the year ended 2009, an officer donated services valued at $1,010 which was treated as contributed capital.

During the quarter ended March 31, 2010, an officer pad expenses on behalf of the Company valued at $4,000 which was treated as contributed capital.

Outstanding Warrants

On October 20, 2008 the Company issued 6,000,000 two-year detachable warrants exercisable at $0.025 per share and considered the value of the warrants as a stock issue cost netted against paid in capital.

Outstanding Warrants-Cont.

Information relating to warrant activity during the reporting period follows:

 Weighted
 Average
 Number of Exercise
 Warrants Price
 -------- -----
Warrants Outstanding at December 31, 2009 6,000,000 $ 0.025
 Plus: Warrants Issued --
 Less: Warrants Exercised --
 Less: Warrants Expired --
 ---------
Total Warrants outstanding at March 31, 2010 6,000,000
 =========

On March 31, 2010 the Company had warrants outstanding for the purchase of an aggregate of 6,000,000 shares of its common stock, which are summarized in the table below:

 Warrants Exercised Expiration
Outstanding Price Date
----------- ----- ----
 6,000,000 $ 0.025 10-Oct-2010

NOTE 6. RELATED PARTY TRANSACTIONS

Accruals - Related party

Related party transactions include accruals of unpaid management and director fees, rent for facility owned by a corporate officer, and interest accrued on the note held by a shareholder. Summary of balances follow:

NOTE 6. RELATED PARTY TRANSACTIONS (CONT.)

Related party-Accruals 31-Mar-10 31-Dec-09
---------------------- --------- ---------
Management& Director Fees $ 82,978 $ 73,859
Interest 25,000 20,000
 -------- --------
Total Related party Accruals $107,978 $ 93,859
 ======== ========

Operational Advances - Related party

Operational advances are short term, unsecured, non-interest bearing operational advances made by various related parties to maintain day to day operations. Summary of balance follows:

 31-Mar-10 31-Dec-09
 --------- ---------
Operational Advances $ 32,078 $ 22,950

Notes Payable - Related party

On December 30, 2008, the Company issued a promissory note to a shareholder in the amount of $250,000 at 8% per annum with principal and interest due and payable on December 31, 2009. Proceeds of the note were used to make payment of an aggregate of $250,000 toward the acquisition of the Nyinahin Mining Concession.

On August 3, 2009, the Company entered into a debt settlement agreement with the shareholder to issue 21,000,000 common shares in full settlement of the $250,000 note including accrued interest. As of March 31, 2009 the shares had not been issued but have been issued in a subsequent period (see subsequent event note 8).

NOTE 7. NOTES PAYABLE

Notes Payable

On July 30, 2009, the Company entered into an agreement to settle the final payment balance of the Nyinahin Mining Concession agreement of $237,500. The holder agreed to receive 20,000,000 restricted shares of common stock valued at $0.0125 per share or $250,000 in settlement and the previous $12,500 payment recorded as interest expense for late payment.

Because the Company did not complete the settlement of the balance for the purchase the Nyinahin Mining Concession the holder of the balance assigned its interest to various third parties. As of March 31, 2009 the shares had not been issued but have been issued in a subsequent period (see subsequent event note 7).

A summary of the principal balance follows:

 31-Mar-10 31-Dec-09
 --------- ---------
Notes Payable-Related Party $250,000 $250,000
Notes Payable $237,500 $237,500
 -------- --------
Total Notes Payable $487,500 $487,500
 ======== ========

NOTE 8. SUBEQUENT EVENTS

The Company did not execute the July 30, 2009 settlement of the $250,000 note through the issue of 20,000,000 shares so on June 3, 2010 the company, agreeable to the note holder, issued 75,000,000 common in full settlement of the of the $250,000 balance plus accumulated interest of $12,500. The fair value of the shares issued on the date of individual settlements was $432,500.

On June 3, 2010 the Company issued 40,992,880 common shares at $0.0035 per share for the $143,400 prepaid subscriptions.

On June 3, 2010 the Company issued 20,000,000 common shares to its officers for executive services of $18,000. The fair value of the shares on the date of issuance was $130,000.

On July 30 2010 the Company issued 25,000,000 common shares to its officers for executive services of $22,500. The fair value of the share on the date of issuance was $167,500.

On August 2, 2010 the Company issued 39,980,000 common shares at to settle $67,980 debts. The fair value of the shares on the date of issuance was $571, 850.

On August 4. 2010 the Company issued 14,700,000 common shares to settle $24,990 debt. The fair value of the shares on the date of issuance was $216,090.

On August 11, 2010 the Company issued 17,650,000 common shares to settle $30,000 of debt. The fair value of the shares on the date of issuance was $259,450.

Because the Company did not complete the settlement of the $237,500 balance for the purchase the Nyinahin Mining Concession the holder of the balance assigned its interest to various third parties. On August 15, 2010 the Company issued 150,000,000 common shares in settlement of the $237,500 balance plus $17,500 accumulated interest with the assignees. The fair value of the shares issued on the date of each individual settlement was $724,000.

On August 17, 2010 the Company executed a 10:1 forward stock split increasing its authorized common stock from 375,000,000 to 3,750,000,000 shares which increase its issued and outstanding share balance from 94,619,788 to 946,197,880 common shares.

On August 19, 2010 the company issued 10,800,000 common shares for executive services of $18,361 and 14,100,000 common shares for $23,932 of debt. The fair value of the shares on the date of issuance was $370,261.

On October 18, 2010, the Company entered into a membership purchase agreement with Allied Mining and Supply, LLC for the purchase of 100% of the issued and outstanding membership interest of Allied Mining, a Nevada Limited Liability company, which owns the rights to Exploration License #EXPL 5/2009 on the 140 sq km Pampana River concession in Sierra Leone, West Africa.

NOTE 8. SUBEQUENT EVENTS (CONT.)

In consideration for the purchase of the membership interests, the Company agreed to pay $18,000 cash and issue 100,000,000 units at a deemed price of $0.0025 to Allied Mining. Each unit consists of one share of restricted stock, one 12 month share purchase warrant exercisable at $0.0025 per share and one 12 month share purchase warrant exercisable at $0.005 per share.

On January 11, 2011, the Company issued 125,400,000 units in a private placement, raising gross proceeds of $313,500,000 at $0.0025 per unit. Each unit consists of one share of common stock and one 12 month share purchase warrant exercisable at $0.005 per share

On January 11, 2011, the Company issued 89,659,960 units in consideration for debt outstanding and for compensation to directors and advisory board members at a deemed price of $0.0025 per unit. Each unit consists of one share of common stock and one 12 month share purchase warrant exercisable at $0.005 per share. Total compensation was $84,250 and reimbursements for expenses (debt) was $46,211 for a total of $225,061.

On January 11, 2011, the Company authorized the issue of 10,000,000 common shares (2,500,000 to each of four new board members) with a market value of $70,000. The shares were issued during February 2011.

On May 3, 2011, the company issued 1,000,000 common shares for the conversion of 1,000,000 warrants at $0.005 per share.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States dollars and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common stock" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our", "our company" and "Sunergy" mean Sunergy, Inc. and our wholly owned subsidiary, Allied Mining and Supply, LLC, a Nevada limited liability company, unless otherwise stated.

HISTORICAL OVERVIEW

We were incorporated in the State of Nevada, USA, on January 28, 2003. We are a development stage company engaged in the acquisition, exploration and development of mineral properties with a view to exploiting any mineral deposits we discover that demonstrate economic feasibility.

On October 31, 2008, we entered into an agreement with General Metals Corporation for the acquisition of its 100% owned Nyinahin Mining Concession located in Ghana, West Africa. The aggregate purchase price was to consist of $500,000 payable cash and 2,000,000 restricted shares of our common stock valued at $0.25 per share. On December 5, 2008, we amended the agreement with General Metals Corporation to defer our payment obligations.

On December 30, 2008, a shareholder of our company, Global Partners LLC, agreed to settle the initial payment of $250,000 payable under the agreement with General Metals Corporation on our behalf. As a result of this, we entered into a promissory note with Global Capital Partners LLC on December 30, 2008, wherein we agreed to pay the principal amount of $250,000 including interest at a rate of 8% per annum by December 31, 2009. As of December 31, 2008, we had paid an additional $12,500 to General Metal Corporation toward the purchase of the Nyinahin Mining Concession and issued 2,000,000 restricted shares of our common stock at a fair market value of $0.25 per share.

On July 30, 2009, we entered into a settlement agreement with General Metals Corporation in respect of the final balance of $237,500 payable for our acquisition of the Nyinahin Mining Concession. Pursuant to the settlement agreement, General Metals agreed to receive 20,000,000 restricted shares of our common stock valued at $0.0125 per share or $250,000 in the aggregate as full and final consideration for our acquisition of the Nyinahin Mining Concession. However, we did not issue the 20,000,000 shares in a timely manner and subsequently, on June 3, 2010, we issued 75,000,000 common shares to General Metals Corporation valued $0.0035 per share ($262,500 in the aggregate) in full settlement of the acquisition of the Nyinahin Mining Concession. The fair value

of the shares issued on the date of each individual settlement was $432,500, resulting in the company allocating $250,000 to the note and $182,500 to interest expense.

General Metals Corporation retains a 5% net smelter return on the property.

DEVELOPMENTS DURING AND SUBSEQUENT TO THE THREE MONTHS ENDED MARCH 31, 2010

We did not execute the July 30, 2009 settlement of the $250,000 note through the issue of 20,000,000 shares therefor, on June 3, 2010, with the consent of the note holder, we issued 75,000,000 common shares in full settlement of the of the $250,000 balance plus accumulated interest of $12,500. The fair value of the shares issued on the date of individual settlements was $432,500.

On June 3, 2010 we issued 40,992,880 common shares at $0.0035 per share in respect of $143,400 received by us in prepaid subscriptions.

On June 3, 2010 we issued 20,000,000 common shares to our officers in consideration of executive compensation of $18,000. The fair value of the shares on the date of issuance was $130,000.

On July 30 2010 we issued 25,000,000 common shares to our officers for executive services of $22,500. The fair value of the share on the date of issuance was $167,500.

On August 2, 2010 we issued 39,980,000 common shares to settle debt of $67,980. The fair value of the shares on the date of issuance was $571, 850.

On August 4. 2010 we issued 14,700,000 common shares to settle debt of $24,990. The fair value of the shares on the date of issuance was $216,090.

On August 11, 2010 we issued 17,650,000 common shares to settle debt of $30,000. The fair value of the shares on the date of issuance was $259,450.

Because we did not complete the settlement of the $237,500 balance for the purchase the Nyinahin Mining Concession the holder of the balance assigned its interest to various third parties. On August 15, 2010 the we issued 150,000,000 common shares in settlement of the $237,500 balance plus $17,500 accumulated interest with the assignees. The fair value of the shares issued on the date of each individual settlement was $724,000.

On August 17, 2010 we executed a 10:1 forward stock split increasing our authorized common stock from 375,000,000 to 3,750,000,000 shares which increase our issued and outstanding share balance from 94,619,788 to 946,197,880 common shares.

On August 19, 2010 we issued 10,800,000 common shares for executive services of $18,361 and 14,100,000 common shares for debt of $23,932. The fair value of the shares on the date of issuance was $370,261.

On October 18, 2010, we entered into a membership purchase agreement with Allied Mining and Supply, LLC for the purchase of 100% of the issued and outstanding membership interest of Allied Mining, a Nevada Limited Liability company, which owns the rights to Exploration License #EXPL 5/2009 on the 140 sq km Pampana River concession in Sierra Leone, West Africa.

In consideration for the purchase of the membership interests, we agreed to pay $18,0000 cash and issue 100,000,000 units at a deemed price of $0.0025 to Allied Mining. Each unit consists of one share of restricted stock, one 12 month share purchase warrant exercisable at $0.0025 per share and one 12 month share purchase warrant exercisable at $0.005 per share.

On January 11, 2011, we issued 125,400,000 units in a private placement, raising gross proceeds of $313,500,000 at $0.0025 per unit. Each unit consists of one share of common stock and one 12 month share purchase warrant exercisable at $0.005 per share

On January 11, 2011, we issued 89,659,960 units in consideration for outstanding debt and for compensation to directors and advisory board members at a deemed price of $0.0025 per unit. Each unit consists of one share of common stock and one 12 month share purchase warrant exercisable at $0.005 per share. Total compensation was $84,250 and reimbursements for expenses (debt) was $46,211 for a total of $225,061.

On January 11, 2011, we authorized the issuance of 10,000,000 common shares (2,500,000 to each of four new board members) with a market value of $70,000. The shares were issued during February 2011.

On May 3, 2011, we issued 1,000,000 common shares for the conversion of 1,000,000 warrants at $0.005 per share.

OUR CURRENT BUSINESS

We are a development and exploration stage mining company engaged in the exploration or development of our minerals on properties located in Ghana and Sierra Leone, West Africa.

NYINAHIN MINING CONCESSION-GHANA

The 150 square kilometer Nyinahin mining concession is located between two geological gold belts, the Bibiani Belt to the west and the Asankrangwa to the east. Our license allows for the exploration and mining of gold, silver, base metals and diamonds. About 80% of the Nyinahin Concession lies to the west of the Offin River within the Ashanti Region of Ghana. There are several historical pits and adits with a strong clustering of artisan pits located along the Offin River. Three old gold prospects exist on the concession. The property is accessed via the main Kumasi-Bibiani trunk road. It falls under the jurisdiction of the Atwima Mponua District Assembly with headquarters at Nyinahin.

The Nyinahin Mining Concession is comprised of the Nyinahin Mineral Licence LVB 8936/05 and Land Registry No. 1535/2005, and subsequently converted into a Full Prospecting License (LVB 3857/08). The Concession is situated 20km northeast of Bibiani and about 48km Southwest of Kumasi. The concession, which covers an approximate area of 172 sq. km. has been reduced to 150 sq. km to conform to statutory requirements regarding the maximum size for Prospecting Licenses by the Minerals Commission of Ghana.

FUTURE EXPLORATION

We have designed a four-phased exploration program as detailed below:

We are committed in spending a total of US$286,000 over a two year period depending on the type and size of any deposit to be discovered. This estimate includes a 10% contingency cost. Phases II and III are contingent upon a favorable result from earlier phases. We anticipate:

PHASES I AND II (DURATION 12 MONTHS -END OF FIRST YEAR)

PROPOSED EXPLORATION

* Geological Mapping
* Line Cutting
* Geochemical Soil Sampling
* Trenching
* Pitting
* Geophysical Investigation

The fieldwork will begin with preliminary geological mapping and documentation to confirm the general structures and formations. A review of work done during the reconnaissance licence period will also be carried out.

Line cutting will be carried out on known mineralized zones identified within the concession at initial grid spacing of 800m. This will be in-filled with lines spaced at 400m and 200m over selected grounds. It is expected that about 100km of lines will be cut in all. Geochemical soil-sampling program will be conducted at an initial interval of 400 and in-filled at 100m and 50m along the grid lines.

Trenching, the most cost effective exploration method available in locating significant in-situ mineralization will be employed. Preliminary trenching based on results of the geochemical soil sampling will be carried out. An estimated 800m of trenches will be excavated.

Pitting will be carried out at some soil location points along the proposed mineralized trend where trenching is not merited. Areas without significant gold values along the mineralized trend will also be pitted to check the possibility of transported materials.

Geophysical methods (VLF-EM/SP) will be used to identify mineralized zones/anomalies within the concession area. Other work to be tackled are clarification of the general forms of the mineral deposits (or anomalies), the size of the main ore bodies, their quality, mineralogy and technical problems which will generally assist in the evaluation of the deposit.

Finally, other geological works will be carried out if considered necessary. It is hoped that any geophysical work already conducted in the area by the geological survey will help in the interpretation of the structural problems. At the end of this phase, an internal report will be prepared. The report will form the basis of the annual report and on which the detailed prospecting phase will be projected and carried out as the next phase of the project.

PHASE III (DURATION UP TO 6 MONTHS - BEGINNING OF SECOND YEAR)

DETAILED PROSPECTING

* Geochemical Investigations
* Trenching and Pitting
* Structural Geological Mapping
* Assay
* Survey work

Geochemical samples will be taken along the geophysical traverses and analyzed to cross check any prospects/anomalies picked up by the geophysics. All the geochemical anomalies recorded will be "prioritized".

Detailed soil sampling at a closer grid system of 200 X 50m, and 100 X 25m will be undertaken when it becomes necessary.

Trenching, pitting, sampling and structural geological mapping will be tightened up. Any other geological work deemed necessary would also be carried out.

Assaying of all samples will be carried out locally in the first instance. Some external cross checking of the assay values will also be made as and when appropriate.

Survey work - all work from this stage will be performed on a surveyed grid system. All trench locations from the previous phase and the subsequent ones will be surveyed and put on plan and sections. This will enable a more effective picture of the prospecting work to be viewed and interpreted.

Mineralogical and petrographical studies will be carried out.

A report will be prepared at the end of the period. This will involve project appraisal and projections for the next phase of the prospecting program.

PHASE IV (DURATION UP TO 6 MONTHS - END OF SECOND YEAR)

TARGET DELINEATION AND RESOURCE ESTIMATION

* Trenching, Pitting and Sampling
* RC Drilling (1000m)
* Other Detailed Geological Work
* Geological Report.

Work will be concentrated in areas, which have shown positive results during the previous phases and carried out according to the importance of the results. Area(s), which could be mined first, will be prospected in more detail. The aim will be to accurately define the geological structure, forms, attitude of the ore bodies or the ore deposit.

Trenching will continue at an aggressive rate and at closer grid spacing than before. Sampling, survey work and structural geological mapping of all exploration work will be carried out.

RC drilling of the gold deposit for resource estimation will be carried out. It is estimated that about 800m of RC drilling will be carried out.

Assay of all samples will be done locally and externally as and when necessary.

Resource estimation based on trench and RC drilling will be carried out.

Reserves estimation will be attempted at this stage to determine the extent of the economic mineral potential of the concession area.

PAMPANA RIVER MINING CONCESSION--SIERRA LEONE

On October 18, 2010 we entered into a membership purchase agreement with Allied Mining and Supply, LLC for the purchase of 100% of the issued and outstanding membership interest of Allied Mining, a Nevada limited liability company, which owns the rights to Exploration License #EXPL 5/2009 on the 140 sq km Pampana River concession in Sierra Leone, West Africa. As a result of the transaction Allied Mining became our wholly owned subsidiary.

Exploration Licence No. EXPL 5/2009 was issued to Allied Mining and Supply Ltd. (AMS) on August 12, 2009 and is valid for a period of three years from the date of issuance, subject to any renewals. The licence is located in the Kholifa Rowalla, Kafe Simiria and Tane Chiefdoms in the Tonkolili District of the Northern Province of Sierra Leone covering an area of 141.3 kms. The concession is situated on the western fringes of the southern Sula Mountains greenstone belt and for most of the northern and central part it straddles the Pampana River. On the west of the southern part, the concession runs along the Pampana River.

The property is in the heart of one of Sierra Leone's richest alluvial gold mining fields, South of the Sula Mountains in the Greenstone belt on the North Pampana River, around 120 miles east of the capital, Freetown.

Most recently, in January, 2011, our company purchased and implemented 3 custom built commercial dredges to further explore and develop the Pampana claim.

RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our unaudited financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this quarterly report, particularly in the section entitled "Risk Factors" beginning on page 26 of this quarterly report.

Our unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2010 AND MARCH 31, 2009, AND FROM INCEPTION
(JANUARY 28, 2003) TO MARCH 31, 2010

 Inception
 (January 28, 2003)
 Three Months Ended to
 March 31, March 31,
 2010 2009 2010
 --------- --------- ---------
Revenue $ Nil $ Nil $ Nil
Operating Expenses $ 85,533 $ 63,452 $ 764,590
Net Loss $ (90,533) $ (68,452) $(797,668)

EXPENSES

Our operating expenses for the three months ended March 31, 2010 and March 31, 2009, and for the period from inception (January 28, 2003) and March 31, 2010 are outlined in the table below:

 Inception
 (January 28, 2003)
 Year Ended to
 December 31, March 31,
 2010 2009 2010
 -------- -------- --------
General and Administrative $ 11,033 $ 2,642 $ 64,528
Management Salary $ 18,000 $ 13,500 $171,000
Rent - Related party $ -- $ -- $ 37,500
Accounting and Audit Fees $ -- $ 12,225 $ 97,131
Legal Fees $ -- $ 10,085 $ 52,876
Consulting Fees $ 50,000 $ 25,000 $296,435
Exploration Costs $ 6,500 $ -- $ 45,120

Operating expenses for the three months ended March 31, 2010, increased by approximately 35% as compared to the same period in 2009 primarily as a result of an increase in consulting fees, general and administrative expense and exploration costs.

REVENUE

We have not earned any revenues since our inception on January 28, 2003. We do not anticipate earning revenues until such time as we have entered into commercial production on the Nyinahin property. We have not commenced the exploration stage of our business and can provide no assurance that we will discover economic mineralization on the property, or if such minerals are discovered, that we will enter into commercial production.

EQUITY COMPENSATION

We currently do not have any stock option or equity compensation plans or arrangements.

LIQUIDITY AND FINANCIAL CONDITION

Working Capital

 At At
 March 31, December 31, Increase/
 2010 2009 (Decrease)
 ----------- ----------- -----------
Current Assets $ 649 $ 54 $ 595
Current liabilities $ 672,659 $ 635,531 $ 37,128
Working Capital (deficit) $(672,010) $(635,477) $ (36,533)

Cash Flows

 Inception
 Three Months Three Months (January 28, 2003)
 Ended Ended to
 March 31, March 31, March 31,
 2010 2009 2010
 ----------- ----------- -----------
Net Cash (Used) by Operating Activities $ (12,533) $ (32,348) $ 155,413
Net Cash (Used) by Investing Activities $ -- $ -- $(1,000,000)
Net Cash Provided by Financing Activities $ 13,128 $ 31,700 $ 357,736
INCREASE (DECREASE) IN CASH DURING THE
 PERIOD $ 595 $ (648) $ 649

CONTRACTUAL OBLIGATIONS

As a "smaller reporting company", we are not required to provide tabular disclosure obligations.

GOING CONCERN

We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.

OFF-BALANCE SHEET ARRANGEMENTS

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

EXPLORATION STAGE COMPANY

Our company complies with Accounting Standards Codification (ASC) Topic 915 and for its characterization of our company as exploration stage. All losses accumulated since inception has been considered as part of our company's exploration stage activities.

Our company is subject to several categories of risk associated with its exploration stage activities. Mineral exploration and production is a speculative business, and involves a high degree of risk. Among the factors that have a direct bearing on our company's prospects are uncertainties inherent in estimating mineral deposits, future mining production, and cash flows, particularly with respect to properties that have not been fully proven with economic mineral reserves; access to additional capital; changes in the price of the underlying commodity; availability and cost of services and equipment; and the presence of competitors with greater financial resources and capacity.

MINERAL PROPERTY COSTS

Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. Our company assesses the carrying costs for impairment at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units of production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

ENVIRONMENTAL COSTS

Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or our company's commitments to plan of action based on the then known facts.

ASSET RETIREMENT OBLIGATION

Our company records asset retirement obligations as a liability in the period in which a legal obligation associated with the retirement of tangible long-lived assets result from the acquisition, construction, development and/or normal use of the assets. At March 31, 2010, our company had not undertaken any drilling activity on its properties and had not incurred significant reclamation obligations. Consequently no asset retirement obligation was accrued in the March 31, 2010 and December 31, 2009 financial statements.

IMPAIRMENT OF LONG-LIVED ASSETS

Our company reviews the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The estimated future cash flows are based upon, among other things, assumptions about future operating performance, and may differ from actual cash flows. Long-lived assets evaluated for impairment are grouped with other assets to the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows (excluding interest) is less than the carrying value of the assets, the assets will be written down to the estimated fair value in the period in which the determination is made. During the period ended March 31, 2010 and the year ended December 31, 2009 no impairment was recorded.

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

value measurements, which will become effective for us with the reporting period beginning July 1, 2011. Other than requiring additional disclosures, adoption of this new guidance will not have a material impact on our financial statements.

We have reviewed other recently issued accounting pronouncements and believe none will have any material impact on our financial statements.

ITEM 3. QUANTITATIVE DISCLOSURES ABOUT MARKET RISKS

As a "smaller reporting company", we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

MANAGEMENT'S REPORT ON DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the SECURITIES EXCHANGE ACT OF 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (who is acting as our principal executive officer) and our treasurer (who is acting as our principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our 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 our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. As of March 31, 2010, the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (who is acting as our principal executive officer) and our treasurer (who is acting as our principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (who is acting as our principal executive officer) and our treasurer (who is acting as our principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance's with US generally accepted accounting principles due to the existence of significant deficiencies constituting material weaknesses. A material weakness is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in our internal controls over financial reporting that occurred during our quarter ended March 31,2010 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS

In addition to other information in this quarterly report, the following risk factors should be carefully considered in evaluating our business because such factors may have a significant impact on our business, operating results, liquidity and financial condition. As a result of the risk factors set forth below, actual results could differ materially from those projected in any forward looking statements. Additional risks and uncertainties not presently known to us, or that we currently consider to be immaterial, may also impact our business, operating results, liquidity and financial condition. If any such risks occur, our business, operating results, liquidity and financial condition could be materially affected in an adverse manner. Under such circumstances, the trading price of our securities could decline, and you may lose all or part of your investment.

OUR PROPERTIES ARE IN THE EXPLORATION STAGE. THERE IS NO ASSURANCE THAT WE CAN ESTABLISH THE EXISTENCE OF ANY MINERAL RESOURCE ON OUR PROPERTIES IN COMMERCIALLY EXPLOITABLE QUANTITIES. UNTIL WE CAN DO SO, WE CANNOT EARN ANY REVENUES FROM OPERATIONS AND IF WE DO NOT DO SO WE WILL LOSE ALL OF THE FUNDS THAT WE EXPEND ON EXPLORATION. IF WE DO NOT DISCOVER ANY MINERAL RESOURCE IN A COMMERCIALLY EXPLOITABLE QUANTITY, OUR BUSINESS COULD FAIL.

Despite pre-exploration work on our mineral properties, we have not established that they contain any mineral reserve, nor can there be any assurance that we will be able to do so. If we do not, our business could fail.

A mineral reserve is defined by the Securities and Exchange Commission in its Industry Guide 7 (which can be viewed over the Internet at http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7) as that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. The probability of an individual prospect ever having a "reserve" that meets the requirements of the Securities and Exchange Commission's Industry Guide 7 is extremely remote; in all probability our mineral resource property does not contain any 'reserve' and any funds that we spend on exploration will probably be lost.

Even if we do eventually discover a mineral reserve on one of our properties, there can be no assurance that we will be able to develop our properties into producing mines and extract those resources. Both mineral exploration and development involve a high degree of risk and few properties which are explored are ultimately developed into producing mines.

The commercial viability of an established mineral deposit will depend on a number of factors including, by way of example, the size, grade and other attributes of the mineral deposit, the proximity of the resource to infrastructure such as a smelter, roads and a point for shipping, government regulation and market prices. Most of these factors will be beyond our control, and any of them could increase costs and make extraction of any identified mineral resource unprofitable.

MINERAL OPERATIONS ARE SUBJECT TO APPLICABLE LAW AND GOVERNMENT REGULATION. EVEN IF WE DISCOVER A MINERAL RESOURCE IN A COMMERCIALLY EXPLOITABLE QUANTITY, THESE LAWS AND REGULATIONS COULD RESTRICT OR PROHIBIT THE EXPLOITATION OF THAT MINERAL RESOURCE. IF WE CANNOT EXPLOIT ANY MINERAL RESOURCE THAT WE MIGHT DISCOVER ON OUR PROPERTIES, OUR BUSINESS MAY FAIL.

Both mineral exploration and extraction require permits from various foreign, federal, state, provincial and local governmental authorities and are governed by laws and regulations, including those with respect to prospecting, mine development, mineral production, transport, export, taxation, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. There can be no assurance that we will be able to obtain or maintain any of the permits required for the continued exploration of our mineral property or for the construction and operation of a mine on our property at economically viable costs. If we cannot accomplish these objectives, our business could fail.

We believe that we are in compliance with all material laws and regulations that currently apply to our activities but there can be no assurance that we can continue to remain in compliance. Current laws and regulations could be amended and we might not be able to comply with them, as amended. Further, there can be no assurance that we will be able to obtain or maintain all permits necessary for our future operations, or that we will be able to obtain them on reasonable terms. To the extent such approvals are required and are not obtained, we may be delayed or prohibited from proceeding with planned exploration or development of our mineral properties.

IF WE ESTABLISH THE EXISTENCE OF A MINERAL RESOURCE ON ONE OF OUR PROPERTIES IN A COMMERCIALLY EXPLOITABLE QUANTITY, WE WILL REQUIRE ADDITIONAL CAPITAL IN ORDER TO DEVELOP THE PROPERTY INTO A PRODUCING MINE. IF WE CANNOT RAISE THIS ADDITIONAL CAPITAL, WE WILL NOT BE ABLE TO EXPLOIT THE RESOURCE, AND OUR BUSINESS COULD FAIL.

If we do discover mineral resources in commercially exploitable quantities on our property, we will be required to expend substantial sums of money to establish the extent of the resource, develop processes to extract it and develop extraction and processing facilities and infrastructure. Although we may derive substantial benefits from the discovery of a major deposit, there can be no assurance that such a resource will be large enough to justify commercial operations, nor can there be any assurance that we will be able to raise the funds required for development on a timely basis. If we cannot raise the necessary capital or complete the necessary facilities and infrastructure, our business may fail.

MINERAL EXPLORATION AND DEVELOPMENT IS SUBJECT TO EXTRAORDINARY OPERATING RISKS. WE DO NOT CURRENTLY INSURE AGAINST THESE RISKS. IN THE EVENT OF A CAVE-IN OR SIMILAR OCCURRENCE, OUR LIABILITY MAY EXCEED OUR RESOURCES, WHICH WOULD HAVE AN ADVERSE IMPACT ON OUR COMPANY.

Mineral exploration, development and production involve many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Our operations will be subject to all the hazards and risks inherent in the exploration for mineral resources and, if we discover a mineral resource in commercially exploitable quantity, our operations could be subject to all of the hazards and risks inherent in the development and production of resources, including liability for pollution, cave-ins or similar hazards against which we cannot insure or against which we may elect not to insure. Any such event could result in work stoppages and damage to property, including damage to the environment. We do not currently maintain any insurance coverage against these operating hazards. The payment of any liabilities that arise from any such occurrence would have a material adverse impact on our company.

MINERAL PRICES ARE SUBJECT TO DRAMATIC AND UNPREDICTABLE FLUCTUATIONS.

We expect to derive revenues, if any, either from the sale of our mineral resource property or from the extraction and sale of precious and base metals. The price of those commodities has fluctuated widely in recent years, and is affected by numerous factors beyond our control, including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities and increased production due to new extraction developments and improved extraction and production methods. The effect of these factors on the price of base and precious metals, and therefore the economic viability of any of our exploration properties and projects, cannot accurately be predicted.

THE MINING INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE THAT WE WILL CONTINUE TO BE SUCCESSFUL IN ACQUIRING MINERAL CLAIMS. IF WE CANNOT CONTINUE TO ACQUIRE PROPERTIES TO EXPLORE FOR MINERAL RESOURCES, WE MAY BE REQUIRED TO REDUCE OR CEASE OPERATIONS.

The mineral exploration, development, and production industry is largely un-integrated. We compete with other exploration companies looking for mineral resource properties. While we compete with other exploration companies in the effort to locate and acquire mineral resource properties, we will not compete with them for the removal or sales of mineral products from our properties if we should eventually discover the presence of them in quantities sufficient to make production economically feasible. Readily available markets exist worldwide for the sale of mineral products. Therefore, we will likely be able to sell any mineral products that we identify and produce.

In identifying and acquiring mineral resource properties, we compete with many companies possessing greater financial resources and technical facilities. This competition could adversely affect our ability to acquire suitable prospects for exploration in the future. Accordingly, there can be no assurance that we will acquire any interest in additional mineral resource properties that might yield reserves or result in commercial mining operations.

RISKS RELATED TO OUR COMPANY

WE HAVE A LIMITED OPERATING HISTORY ON WHICH TO BASE AN EVALUATION OF OUR BUSINESS AND PROSPECTS.

We have been in the business of exploring mineral resource properties since 2003 and we have not yet located any mineral reserve. As a result, we have never had any revenues from our operations. In addition, our operating history has been restricted to the acquisition and exploration of our mineral properties and this does not provide a meaningful basis for an evaluation of our prospects if we ever determine that we have a mineral reserve and commence the construction and operation of a mine. We have no way to evaluate the likelihood of whether our mineral property contains any mineral reserve or, if it does that we will be able to build or operate a mine successfully. We anticipate that we will continue to incur operating costs without realizing any revenues during the period when we are exploring our properties. We therefore expect to continue to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from mining operations and any disposition of our property, we will not be able to earn profits or continue operations. At this early stage of our operation, we also expect to face the risks, uncertainties, expenses and difficulties frequently encountered by companies at the start up stage of their business development. We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition. There is no history upon which to base any assumption as to the likelihood that we will prove successful and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations.

THE FACT THAT WE HAVE NOT EARNED ANY OPERATING REVENUES SINCE OUR INCORPORATION RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE TO EXPLORE OUR MINERAL PROPERTIES AS A GOING CONCERN.

We have not generated any revenue from operations since our incorporation and we anticipate that we will continue to incur operating expenses without revenues unless and until we are able to identify a mineral resource in a commercially exploitable quantity on either of our mineral properties and build and operate a mine. We had cash in the amount of $649 as of March 31, 2010. At March 31, 2010, we had a working capital deficit of $672,010. We incurred a net loss of $90,533 for the three months ended March 31, 2010 and $797,668 since inception. We will have to raise additional funds to meet our currently budgeted operating requirements for the next 12 months. As we cannot assure a lender that we will be able to successfully explore and develop our mineral properties, we will probably find it difficult to raise debt financing from traditional lending sources. We have traditionally raised our operating capital from sales of equity and debt securities, but there can be no assurance that we will continue to be able to do so. If we cannot raise the money that we need to continue exploration of our mineral property, we may be forced to delay, scale back, or eliminate our exploration activities. If any of these were to occur, there is a substantial risk that our business would fail.

These circumstances lead our independent registered public accounting firm, in their report dated April 7, 2009, to comment about our company's ability to continue as a going concern. Management has plans to seek additional capital through a private placement of our capital stock. These conditions raise substantial doubt about our company's ability to continue as a going concern. Although there are no assurances that management's plans will be realized, management believes that our company will be able to continue operations in the future.

RISKS ASSOCIATED WITH OUR COMMON STOCK

TRADING ON THE OTCQB MAY BE VOLATILE AND SPORADIC, WHICH COULD DEPRESS THE MARKET PRICE OF OUR COMMON STOCK AND MAKE IT DIFFICULT FOR OUR STOCKHOLDERS TO RESELL THEIR SHARES.

Our common stock is quoted on the OTCQB service of the Financial Industry Regulatory Authority. Trading in stock quoted on the OTCQB is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTCQB is not a stock exchange, and trading of securities on the OTCQB is often more sporadic than the trading of securities listed on a quotation system like NASDAQ or a stock exchange like Amex. Accordingly, shareholders may have difficulty reselling any of their shares.

OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S PENNY STOCK REGULATIONS AND FINRA'S SALES PRACTICE REQUIREMENTS, WHICH MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in, and limit the marketability of, our common stock.

In addition to the "penny stock" rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the Financial Industry Regulatory Authority believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The Financial Industry Regulatory Authority requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.

OTHER RISKS

TRENDS, RISKS AND UNCERTAINTIES

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. [REMOVED AND RESERVED]

None.

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

Exhibits required by item 601 of Regulation S-K

Exhibit
Number Description
------ -----------

(3) ARTICLES OF INCORPORATION AND BY-LAWS

3.1 Articles of Incorporation (incorporated by reference from our
 Registration Statement on Form SB-2 filed on February 23, 2004)

3.2 Bylaws (incorporated by reference from our Registration Statement on
 Form SB-2 filed on February 23, 2004)

(10) MATERIAL CONTRACTS

10.1 Mineral Property Staking and Purchase Agreement dated April 10, 2003
 (incorporated by reference from our Registration Statement on Form
 SB-2/A filed on June 30, 2004)

10.2 Mining Acquisition Agreement dated October 31, 2008 between our company
 and General Metals Corporation (incorporated by reference from our
 Current Report on Form 8-K filed on December 10, 2008)

10.3 Amending Agreement to the Mining Acquisition Agreement dated December
 5, 2008 between our company and General Metals Corporation.
 (incorporated by reference from our Current Report on Form 8-K filed on
 December 10, 2008)

(14) CODE OF ETHICS

14.1 Code of Ethics and Business Conduct (incorporated by reference from our
 Annual Report on Form 10-K filed on April 20, 2009)

(21) SUBSIDIARIES OF THE REGISTRANT

21.1 Allied Mining and Supply, LLC

(31) RULE 13A-14(D)/15D-14(D) CERTIFICATIONS

31.1* Certification of the Principal Executive Officer filed pursuant to
 Section 302 of the Sarbanes-Oxley Act of 2002.

31.2* Certification of the Principal Financial Officer and Principal
 Accounting Officer filed pursuant to Section 302 of the Sarbanes-Oxley
 Act of 2002.

(32) SECTION 1350 CERTIFICATIONS

32.1* Certification of the Principal Executive Officer filed pursuant to
 Section 906 of the Sarbanes-Oxley Act of 2002.

32.2* Certification of the Principal Financial Officer and Principal
 Accounting Officer filed pursuant to Section 906 of the Sarbanes-Oxley
 Act of 2002.

----------

* Filed herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

SUNERGY, INC.
(Registrant)

Dated: June 29, 2011 /s/ Bryan Miller
 ------------------------------------------
 Bryan Miller
 President and Director
 (Principal Executive Officer)


Dated: June 29, 2011 /s/ Mark Shelley
 ------------------------------------------
 Mark Shelley
 Secretary, Treasurer and Director
 (Principal Financial Officer and Principal
 Accounting Officer)

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