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, 2015

 

or

 

o	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 incorporation or organization)		(IRS Employer 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 o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO o

 

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	o		Accelerated filer	o
Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO x

 

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 o NO o

 

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.

 

2,688,310,103 as of May 20, 2015.

 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

The condensed 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, 2015 are not necessarily indicative of the results that may be expected for the full fiscal year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUNERGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		March 31,				December 31,
		2015				2014
		(Unaudited)				(Audited)
ASSETS
Current assets
Cash		$	24,735			$	521
Accounts receivable			–				12,490
Prepaid expenses			–				202
Total current assets			24,735				13,213
Long-term assets
Property and equipment, net			152,824				179,924
Other assets			71,751				70,303
Total long-term assets			224,575				250,227
Total assets		$	249,310			$	263,440
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities		$	750,987			$	697,201
Notes payable			323,333				266,336
Convertible debt, net of discount			35,000				67,500
Accrued interest			829,756				776,205
Accounts payable to related parties			29,100				43,753
Total current liabilities			1,968,176				1,850,995
Total liabilities			1,968,176				1,850,995
Commitments and Contingencies
Stockholders' deficit
Common stock, authorized 3,750,000,000 shares, par value $0.001, issued and outstanding on March 31, 2015 and December 31, 2014 is 2,688,310,103 and 2,573,976,770 respectively			2,688,312				2,573,979
Additional paid-in capital			5,053,220				5,010,180
Accumulated deficit			(9,460,398	)			(9,171,714	)
Total stockholders' deficit			(1,718,866	)			(1,587,555	)
Total liabilities and stockholders' deficit		$	249,310			$	263,440

 

 

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

 

 

SUNERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

		Three Months Ended March 31,
		2015				2014
Revenue		$	–			$	–
Operating expenses
Depreciation and amortization			27,101				13,467
General and administrative			21,545				48,565
Management salary			10,500				10,500
Exploration and development			49,255				46,755
Professional fees			33,742				7,311
Total expenses			142,143				126,598
Loss from operations			(142,143	)			(126,598	)
Other income (expenses)
Interest expense			(102,968	)			(87,587	)
Derivative expense			(12,180	)			–
Gain/(Loss) on change in fair value of derivatives			(31,393	)			465
Loss before income taxes			(288,684	)			(213,720	)
Provision for income taxes			–				–
Net loss		$	(288,684	)		$	(213,720	)
Loss per common share:
Basic & Diluted		$	(0.00	)		$	(0.00	)
Weighted average shares outstanding:
Basic & Diluted			2,636,635,103				2,172,456,184

 

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

 

SUNERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

		Three months ended March 31,
		2015				2014
Operating activities
Net loss		$	(288,684	)		$	(213,720	)
Adjustments to reconcile net loss
Depreciation and amortization			27,101				13,467
Non-cash interest expense			102,968				33,587
Gain/Loss on change in fair value of derivative liability			31,393				(465	)
Derivative expense			12,180				–
Change in assets and liabilities
(Increase)/decrease in accounts receivable			12,490				–
(Increase)/decrease in prepaid expenses			201				(21,911	)
Increase/(decrease) in accrued interest payable			–				54,000
Increase/(decrease) in accounts payable and accrued liabilities			53,786				141,889
Increase/(decrease) in accounts payable to related party			(14,653	)			(100,884	)
Net cash used in operating activities			(63,218	)			(94,037	)
Investment activities
Investment in Global Builders Group			(1,448	)			–
Acquisition of property and equipment			–				(15,875	)
Net cash provided/(used) by investment activities			(1,448	)			(15,875	)
Financing activities
Proceeds from issuance of debt			65,080				75,000
Repayments of debt			(25,000	)			(4,000	)
Proceeds from the sale of stock			48,800				45,000
Net cash provided by financing activities			88,880				116,000
Net increase in cash			24,214				6,088
Cash, beginning of period			521				2,463
Cash, end of period		$	24,735			$	8,551
Supplemental Information:
Interest paid		$	–			$	–
Income taxes paid		$	–			$	–
Non-cash activities:
Stock issued to settle debt		$	32,500			$	15,500

 

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

 

 

SUNERGY, INC.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

March 31, 2015

 

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 located within the property interests held by the Company, 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.

 

On October 18, 2010, the Company acquired Allied Mining and Supply LLC., a Nevada limited liability company. Allied Mining and Supply LLC also has one subsidiary, a Sierra Leone company, Allied Mining and Supply Ltd. As part of the acquisition the Company now has a concession in Sierra Leone. The Company has been in the exploration phase of this concession since the purchase. The Company has three subsidiaries, Allied Mining and Supply, LLC a Nevada Limited Liability Company and Mikite Gold Resources, LTD, a Ghana corporation, and Sunergy Liberia LTD, a Liberia corporation which was formed in December 2013. During 2014, we generated other income $12,490 from the delivery of our first parcel of diamonds, which was not related to our development in mining concession. No material revenues have been generated as of yet. This concession, if determined to be economically feasible, may produce gold and rare metals.

 

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2015, and for all periods presented herein, have been made.

 

In accordance with Article 8-03 of Regulation S-X certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. It is suggested that these unaudited condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2014 audited financial statements. The results of operations for the period ended March 31, 2015 are not necessarily indicative of the operating results for the full year.

 

The unaudited condensed consolidated financial statements include the accounts of Sunergy, Inc. and its subsidiaries, Mikite Gold Resources Limited, a Ghanaian company, Sunergy Liberia Ltd., a Liberia corporation, and Allied Mining and Supply LLC, a Nevada limited liability company (100%). Allied Mining and Supply LLC also has one 100% owned subsidiary, a Sierra Leone company, Allied Mining and Supply Ltd. which are 100% consolidated in the condensed consolidated financial statements. All inter-company accounts and transactions have been eliminated.

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP 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. Significant estimates and assumptions included in our condensed consolidated financial statements relate to the valuation of long-lived assets, accruals for potential liabilities, and valuation assumptions related to derivative liability, equity instruments and share based compensation.

 

 

Cash

 

Cash include cash in banks and financial instruments which mature within three months of the date of purchase. The Company had no cash equivalents as of March 31, 2015 and December 31, 2014.

 

Mineral Property Costs

 

Mineral property acquisition costs are capitalized. Exploration and development costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs 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 the Company’s commitments to plan of action based on the then known facts.

 

Property and Equipment

 

Property and equipment are recorded at historical cost. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful life for property and equipment held at March 31, 2015 and December 31, 2014 is five years.

 

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. The Company has potentially dilutive common shares consisting of warrants, which are excluded from the diluted earnings per share computation in periods where the Company has incurred net loss.

  

Stock Based Compensation

 

The Company has on occasion issued equity and equity linked instruments to non-employees in lieu of cash to various vendors for the receipt of goods and services and, in certain circumstances the settlement of short-term loan arrangements. The applicable GAAP establishes that share-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.

 

In these transactions, we issue unregistered and restricted equity instruments along with equity-linked instruments that are convertible into unregistered and restricted shares of our common stock.

 

 

While we have an active market of freely-traded stock with a quoted market price (a Level 1 input within the GAAP hierarchy), the fair value of the unregistered and restricted shares issued as valued by the quoted market price does not reflect the economic substance of the transactions; correspondingly, the quoted market price is not the most reliably measurable fair value.

 

When unregistered common shares and equity-linked instruments convertible into unregistered common shares are issued for the settlement of short-term financing arrangements (that are not initially convertible), the reacquisition price of the extinguished financing arrangement is determined by the value of the debt which is more clearly evident, and no additional inducement expense is recognized.

 

In situations in which we issue unregistered restricted common shares and equity-linked instruments in exchange for goods and services, and the value of the goods and services are not the most reliably measurable, we recognize the fair value of the unregistered restricted equity instruments based on the value of similar instruments issued in private placements in exchange for cash in the most recent transactions (a Level 2 input within the GAAP hierarchy). We have determined this methodology reflects the risk adjusted fair value of our unregistered restricted equity instruments using a commercially reasonable valuation technique.

 

Derivative Financial Instruments

 

The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Black-Scholes option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

 

Recently Issued Accounting Pronouncements

 

The Company has reviewed recently issued accounting pronouncements and does not expect any to have a material impact on our financial position, results of operations, or cash flows. 

 

Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, “Income Taxes.” ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are 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.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s unaudited condensed consolidated financial statements.

 

 

NOTE 3. GOING CONCERN

 

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of March 31, 2015, the Company had an accumulated deficit of $9,460,398. The Company has begun to engage in revenue generating activities through our first diamond parcel sale as of the fourth quarter 2014.  The Company intends to continue with such activity through 2015. The Company continues to incur operating losses and negative cash flows. This raises substantial doubt about the Company’s ability to continue as a going concern. These condensed consolidated financials do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

 

While we have been successful in raising enough capital to pay for our exploration and general and administrative fees, we have not had the ability to raise any significant additional capital to materially advance our exploration and mining operations. We continue to actively pursue additional sources of capital, however, there is no guarantee these efforts will be successful.

 

NOTE 4. PROPERTY AND EQUIPMENT

 

Property and Equipment consisted of the following at March 31, 2015 and December 31, 2014:

 

		March 31,				December 31,
		2015				2014
		(Unaudited)				(Audited)
Exploration equipment		$	373,759			$	373,759
Rolling stock			13,500				13,500
Office furniture and equipment			4,753				4,753
Subtotal		$	392,012			$	392,012
Less accumulated depreciation			(239,188	)			(212,088	)
Property and equipment – net		$	152,824			$	179,924

 

NOTE 5. NOTES PAYABLE

 

During the period ended March 31, 2015 we accrued $54,000 of penalty expense, and $16,917 accretion of debt discount related to financing costs on debt issued during 2014. These amounts are recorded as part of our interest expense reported for the three months then ended. As of March 31, 2015, our outstanding notes payable balance was $323,333 and $35,000 in convertible note agreements net of debt discount, of which $48,085 are in default as of March 31, 2015. The individual notes in default carry daily interest penalties between $100 and $500. Balance of notes payable at December 31, 2015 totaled $266,336 and $67,500 of convertible debt, net of discount, respectively.

 

Transactions relating to short-term financing are as followings:

 

On February 9, 2015, the Company entered into an unsecured short-term commercial financing agreement for furthering diamond parcel shipments in the amount of $30,000 plus 10% interest and 10% share of net profit from the shipment due upon receipt of payment by the Company from our Foreign buyer.

 

On February 26, 2015, the Company entered into a short-term commercial financing agreement for the furtherance of diamond parcel shipments in the amount of $10,080 due and payable in one year.

 

On March 26, 2015, the Company entered into an unsecured short-term commercial financing agreement for the furtherance of work with Global Builders Group on housing projects within Africa in the amount of $25,000 due and payable in 180 days with interest of 15% annualized.

 

During the three months ended March 31, 2015, the Company recognized $16,917 of interest expense related accretion of debt discount to the short-term commercial financing agreements issued in 2014.

 

Transactions related to convertible debt are as follows:

 

In January 2015, the unpaid and unconverted principal balance due under the July 2014 convertible note of $32,500 was converted by the note holder into 56,333,333 common shares of the company.  In conjunction with conversion of the note, the Company recognized $1,296 of interest expense related to the amortization of the debt discount, $12,180 of interest expense on the related conversion of the note from fair value of common shares issued to the principal amount of debt relieved. The Company recognized a loss on the change in the value of the derivative related to the convertible note from the date the note was convertible till the date of conversion of $131,393.

 

As of March 31, 2014, Convertible Note #2014-4 from November 2014 in the amount of $35,000 remains outstanding. Convertible Note #2014-4 may be converted into approximately 29,761,905 common shares of the Company beginning at day 181 since date of issuance and up until the date maturity of the note.

 

NOTE 6. STOCKHOLDERS’ EQUITY

 

Common Stock

 

The following provides additional information for certain stock transactions that occurred since January 1, 2015. For additional details for all stock transactions please see the consolidated statement of changes in stockholders’ equity as reported in the Company’s 10-K for the period ended December 31, 2014 and filed with the Securities Exchange Commission on April 16, 2015.

 

A summary of shares issued follows:

 

·

During the three months March 31, 2015, the Company issued 56,833,333 shares upon the conversion of the note payable #3 dated July 2014 for outstanding principal balance of $32,500; 50,000,000 equity units at $0.0008 with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.0016 per share for total cash of $40,000; 8,000,000 equity units at $0.0011 with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.0022 per share for total cash of $8,800.

  

Outstanding Warrants

 

On March 31, 2015, the Company had warrants outstanding summarized in the table below:

 

					Warrants				Exercise			Expiration
					Outstanding				Price			Date
					3,333,333				0.003			1-Apr-15
					1,200,000				0.005			2-Apr-15
					2,000,000				0.005			4-Apr-15
					3,333,333				0.003			7-Apr-15
					3,333,333				0.003			8-Apr-15
					6,666,667				0.003			17-Apr-15
					1,428,571				0.007			23-Apr-15
					1,428,571				0.007			29-Apr-15
					5,000,000				0.004			6-May-15
					10,000,000				0.004			6-May-15
					2,000,000				0.004			9-May-15
					30,000,000				0.002			9-May-15
					9,900,000				0.002			9-May-15
					19,000,000				0.002			12-May-15
					2,500,000				0.004			12-May-15
					1,100,000				0.002			12-May-15
					3,400,000				0.003			21-May-15
					17,333,333				0.003			6-Jun-15
					12,500,000				0.004			6-Jun-15
					1,400,000				0.003			16-Jun-15
					5,000,000				0.0025			18-Jun-15
					3,333,333				0.003			8-Jul-15
					5,000,000				0.003			11-Jul-15
					5,000,000				0.004			11-Jul-15
					28,333,000				0.001			18-Jul-15
					5,000,000				0.003			22-Jul-15
					5,000,000				0.003			29-Aug-15
					5,000,000				0.003			17-Sep-15
					7,000,000				0.002			30-Sep-15
					5,000,000				0.0025			24-Oct-15
					5,000,000				0.003			5-Nov-15
					2,000,000				0.003			26-Nov-15
					5,000,000				0.003			17-Dec-15
					5,000,000				0.002			15-Jan-16
					16,250,000				0.0016			13-Feb-16
					10,000,000				0.0016			27-Feb-16
					18,750,000				0.0016			3-Mar-16
					8,000,000				0.0022			12-Mar-16
	Total				222,523,474

 

 

Information relating to warrant activity during the reporting period follows:

 

						Weighted				Weighted
						Average				Average
		Number of				Exercise				Life
		Warrants				Price				Outstanding
Total Warrants outstanding at December 31, 2014			262,523,472				0.0026			0.42
Plus: Warrants Issued			58,000,000				0.00172			0.90
Less: Warrants Exercised			–				–			0.00
Less: Warrants Expired			(39,999,998	)			0.00225			0.00
Total Warrants outstanding at March 31, 2015			222,523,474				0.00312			0.45

 

NOTE 7. RELATED PARTY TRANSACTIONS

 

Certain related parties assist in financing operations by personally paying expenses which the Company considers to be in the nature of accounts payable since the obligations are incurred within the normal course of business and classified as related party accounts payable. Certain amounts for unpaid officer and director fees were classified as accounts payable to related parties in prior periods and have been reclassified for the current periods as accounts payable as they relate to normal operating business expenses of the Company. The balance due to related parties was $29,100, and $43,753 as of March 31, 2015 and December 31, 2014, respectively.

 

As of March 31, 2015, Garrett Hale, our CEO, is due $91,000 in wages due from the time he became our CEO in February 2013. Additionally, Mr. Hale incurs expenses in his role as CEO related to payment of expenses in country and travel. As of March 31, 2015, Mr. Hale is owed $88,359 for unpaid reimbursement requests. As these are incurred in the normal course of our business operations, these amounts are included in accounts payable. As of December 31, 2014, Mr. Hale was owed $156,393 for related wages and expenses which is included as accounts payable. Additionally at as of March 31, 2015 and December 31, 2014, Mr. Hale provided short-term funding in the amount of $29,100 and $43,753 respectively that was included in accounts payable to related party payables.

 

As of March 31, 2015, Mr. Robert Levich, a member of our Board of Directors and former Africa Country manager, is owed $107,967 for wages due to his time as our country manager or fees earned as a member of the Board of Directors. As these are incurred in the normal course of our business operations, these amounts are included in accounts payable. As of December 31, 2014, Mr. Levich was owed $101,967 which was included in accounts payable to related parties. No repayments were made to Mr. Levich during the period ended March 31, 2015. The amounts due Mr. Levich were reclassified to accounts payable due to the incurring of the wages and fees as a normal course of our operating business.

 

 

As of March 31, 2015, Mr. Larry Bigler, a member of our Board of Directors and former CEO, is owed $47,500 for wages due to his time as our CEO or fees earned as a member of the Board of Directors. As these are incurred in the normal course of our business operations, these amounts are included in accounts payable. As of December 31, 2014, Mr. Bigler was owed $41,500 which was included in accounts payable to related parties. No repayments were made to Mr. Bigler during the period ended March 31, 2015. 

 

NOTE 8. MINERAL PROPERTIES

 

Nyinahin Mining Concession

 

Through its wholly-owned subsidiary, Mikite Gold Resources Limited, the Company holds a 100% interest in a mineral concession located in the Ashanti region of Ghana, known as the Nyinahin concession. The Company acquired the concession for total consideration of $1,000,000 in 2008.

 

As of March 31, 2014, the Company has not identified any proven or probable reserves within the Nyinahin Concession, correspondingly, all exploration activities since the acquisition have been expensed.

 

Additionally, the prior concession owner retained a 5% net smelter royalty for future production from the property, if any.

 

During 2014, management evaluated the feasibility of sufficient funds to either finance further development and exploration or feasibility in receiving funds from a joint venture partner or acquirer to recover our acquisition costs and determined based upon the remote likelihood of the aforementioned factors that the property was impaired from its current carrying value and has recorded a charge to impairment against the exploratory property for $1,000,000.

 

Pampana River Concession

 

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.

 

The Company issued 100,000,000 equity units for total consideration of $753,497 to acquire the Pampana River concession. The warrants issued in conjunction with the purchase were not exercised and have since expired.

 

As of March 31, 2015 the Company has not identified any proven or probable reserves within the Pampana River Concession, correspondingly, all exploration activities since the acquisition have been expensed.

 

During 2014, management evaluated the ability to provide ongoing exploration and operations funding and for the achievement of positive cash flows from operations on the Pampana Concession and determined that the future cash flows were less than the current carrying value of the project. As such, Management recorded a charge to impairment for $753,497 as of the end of the year. The Company continues to seek alternatives to trade into a diamond bearing concession as it reenergizes its focus on generating cash flow to continue to fund operations.

 

NOTE 9. SUBSEQUENT EVENTS

 

Since March 31, 2015, our CEO has provided additional short-term funding in the amount of $52,495 as we continue to seek out opportunities to sell diamond parcels.

 

 

 

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

 

FORWARD-LOOKING STATEMENTS

 

This quarterly and unaudited 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 and unaudited 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 and unaudited report, the terms "we", "us", "our", "our company" and "Sunergy" mean Sunergy, Inc. and our wholly owned subsidiaries, Mikite Gold Resources Limited, a Ghanaian company, Allied Mining and Supply LLC, a Nevada limited liability, which wholly owns Allied Mining and Supply Limited, a Sierra Leone Company and our newly incorporated wholly owned subsidiary Sunergy Sierra Leone, Limited a Sierra Leone Company, unless otherwise stated.

 

Overview and Current Business

 

We were incorporated in the State of Nevada, USA, on January 28, 2003. We are an exploration stage mining company engaged in the exploration of minerals on properties located in Ghana, Liberia and Sierra Leone West Africa. Our mining concession in Ghana and our mining concession in Sierra Leone have been the focus of our immediate exploration and development activities historically. In mid 2013, due to the fact that exploration funding was virtually non-existent for small mining companies, we changed our focus and operating model from doing exploration activities to pursuing cash flow from putting our existing equipment, 3 dredges, vehicles and our wash plant in Sierra Leone to work in licensed mining activities capable of generating cash flow. These licensed activities involve sponsorship relationships with local artisanal miners and Chiefs where we use our equipment, trained personnel and financial support and earn an interest in their operations. We were invited to Liberia to pursue the same business model there and we have started operations there as well.

 

Nyinahin Concession, Ghana:

 

We continue to see a reliable and substantial Joint Venture partner to handle alluvial gold extraction and recovery, but have not been able to finalize any contract to date. Additional licensing and permitting are required to do so, and we have not had adequate funding to do so.

 

The Nyinahin concession is located between two geological gold belts, the Bibiani Belt to the west and the Asankrangwa to the east.  The 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 Offin River area offers strong alluvial operations potential as well as the underlying bedrock is a continuation of the Keegan Esaase-Jeni Project. The large area west of the Offin River area contain some significant geological anomalies that warrant additional exploration activities. In the overall, this concession represents a significant future development opportunity for our Company.

 

 

Pampana River Concession, Sierra Leone:

 

The Pampana River concession is an alluvial mining concession consisting of Exploration License No. EXPL 5/2009 which was issued to Allied Mining and Supply Ltd. (AMS) on August 12, 2009. In July 2013, we have submitted an application for the renewal of such license with the Sierra Leone Ministry of Mines. During this process of renewal, we were required to identify certain areas that could be shed from the exploration licenses as part of the requirement of renewal. We identified approximately 25 sq km of non-river and non-gold bearing land that was shed in the pending application.

 

The renewable exploration license 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 115 km2. 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 south of the Sula Mountains in the Greenstone belt, around 120 miles east of the capital, Freetown.

 

When we purchased the Pampana River concession Allied Mining and Supply had been conducting exploration there for two years and had laid out a program to exploit the newly discovered rare earth elements in the heavy mineral sands that exist in association with the gold.

 

Rare earth elements are a unique group of chemical elements that exhibit a range of special electronic, magnetic, optical and catalytic properties. REEs are used in a wide range of alloys and compounds, and can greatly affect the performance of complex engineered systems. They occur in a variety of chemical forms and have a wide variety of applications, including the processing of materials. REEs are used in components in engineered products, and their uses include fluid cracking catalysts, automotive catalytic convertors, polishing materials, permanent magnets, energy storage, phosphors, and glass additives. In modern society, many of these uses are critical for high tech devices including electronics, jet planes and rocks, and vital engineered components.

 

Our work in 2014, and our continued efforts in 2015, consist of focusing our efforts on cash producing mining activities through sponsorships within the concession. Preliminary separations with an Australian equipment company selected to build our proposed pilot plant showed us that rare earth separation would be very expensive in the field. We deferred decisions on deploying the proposed Pilot Plant until we investigated the gold recovery aspect on our Pampana River Concession. Because we wished to be able to sell the recovered gold, we elected to enter into sponsorship agreements with local Artisanal miners. Under these agreements we are allowed to sell the recovered minerals.

 

In December 2014 we shipped our first diamond parcel to our foreign buyers and in March 2015 received payment against the shipment. We have shipped our second parcel and are currently in the process of selecting and shipping our third parcel and will show income from the diamond sales in Q2 2015. Our expenditures for the next 12 months from March 31, 2015 are projected to be approximately $250,000 inclusive of operations and equipment purchases.

 

Allied/Sunergy's steadfast commitment to community development has led to our current standing in the district of Tonkolli which has never been higher. Our employees, some of whom have been with us for three years, are capable, hard working and well respected among the villages on our concession. Allied has typically employed 70 to 80 men and women each year during the mining season. Most are full-time, while others are part-time or temporary help. This effort is important to maintain a high level of confidence in the communities and the country of Sierra Leone, which gives Sunergy a strong foundation to develop additional business in the Country.

 

Liberia, Sunergy Liberia Limited

 

In addition, we continue our development work of relationships across the African region which included the opening of a wholly-owned subsidiary in Liberia, Sunergy Liberia Ltd. We started visiting Liberia in October 2013, pursuant to an invitation by a local businessman to come and see what mining and business opportunities were available. Since that time, we have entered into formal agreements to engage in support of existing artisanal (Class C) licensed operations. During the first quarter of 2015, we were unable to identify property with sufficient minerals worthy of continue exploration effort. As such, we are in the process of relocation all dredge and wash plant equipment to Sierra Leone as we continue our increased focus on generating consist revenue. We are now making arrangements to move that equipment to Sierra Leone in May 2015. This equipment will be deployed immediately in support of our mining and sponsorship operations in Sierra Leone. Our expenditures for the 12 months from March 31, 2015 are budgeted to be $10,000 inclusive of operations and equipment purchases.

 

 

Liquidity and Capital Requirements

 

As we do not have all the funds necessary to cover our projected operating expenses for the next twelve month period, we will be required to raise additional funds through the issuance of equity securities, through loans or through debt financing. There can be no assurance that we will be successful in raising the required capital or that actual cash requirements will not exceed our estimates. We intend to fulfill any additional cash requirement through the sale of our equity securities.

 

If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to scale down or perhaps even cease the operation of our business.

 

The continuation of our business is dependent upon obtaining further financing, a successful program of exploration and/or development, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

 

There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.

 

We continue to explore opportunities for the receipt of funding in either equity or financing transactions. As we receive these funds, the Board of Directors and Management evaluate the best use of the funding received so as to continue on the path of fast ramp up to production.

 

Management is currently working on closing certain finance commitments that have been made to advance our operations plan immediately. Details will follow in an appropriate 8-K.

 

Results of Operations – Three months Ended March 31, 2015 and 2014

 

The following discussion should be read in conjunction with our unaudited financial statements and the related notes contained in this report for the three months ended March 31, 2015. 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 in this interim report.

 

Our operating expenses for the three months ended March 31, 2015 and 2014 are outlined in the table below:

 

		Three Months Ended March 31,
		2015				2014
Depreciation and amortization		$	27,101			$	13,467
General and administrative		$	21,545			$	48,565
Management salary		$	10,500			$	10,500
Exploration and development		$	49,255			$	46,755
Professional fees		$	33,742			$	7,311

 

 

Revenue

 

We have begun to engage in revenue generating activities through our first diamond parcel sale as of the fourth quarter 2014. We intend to continue with such activity through 2015.

 

Expenses

 

The decrease in operating expenses for the three months ended March 31, 2015, compared to the same period in fiscal 2014, was mainly due to a decrease in general and administrative costs as we reduced our expenditures to focus on generating revenue through the sale of diamond parcels.

 

Due to the resignation of our predecessor auditor in the first quarter of 2014, there were no audit-related fees recorded in the three months ended March 31, 2014 as we sought a new audit firm to perform the service during that period as compared to March 31, 2015 that the Audit Firm selected to perform the 2014 audit continued through the 2015 audit period as such audit fees payable to the firm are recorded during the first three months ended March 31, 2015. Additionally the fees payable to the respective firm are higher than our predecessor auditor for both our reviews and audits thus causing an additional increase in the three months ended March 31, 2015.

 

Other Expenses

 

		Three Months Ended March 31,
		2015				2014
Interest expense		$	(102,968	)		$	(87,587	)
Gain/(Loss) on change in fair value of derivatives		$	(31,393	)		$	465	)
Derivative expense		$	(12,180	)		$	–

 

Interest and financing expenses increased primarily relating to accounting for convertible debt and accretion of discount on notes issued during the last three months of 2014 for the three months ended March 31, 2015 as compared to the three months ended March 31, 2014.

 

Equity Compensation

 

We currently do not have any formalized stock option or equity compensation plans or arrangements however; from time to time we settle obligations via the issuance of equity and equity-linked instruments.

 

Liquidity and Financial Condition

 

		March 31, 2015				December 31, 2014
Current assets		$	24,735			$	13,213
Current liabilities		$	1,968,176			$	1,850,995
Working Capital		$	(1,943,441	)		$	(1,837,782	)

 

Cashflow

 

		Three Months Ended March 31,
		2015				2014
Net cash used in operating activities		$	(63,218	)		$	(94,037	)
Net cash used in investing activities		$	(1,448	)		$	(15,875	)
Net cash provided by financing activities		$	88,880			$	116,000
Net increase in cash during period		$	24,214			$	6,088

 

During the three months ended March 31, 2015, our net cash used in operating activities decreased due to an increase in expenses being accrued but not paid as compared to March 31, 2015 due to less cash available from financing activities to pay down such accrued expenses. Our net cash used in investing activities decreased for the three months ended March 31, 2015 as compared to March 31, 2014 due to no purchases of equipment being completed in fiscal 2015 as compared to fiscal 2014. Our net cash provided by financing activities decreased for the three months ended March 31, 2015 as compared to March 31, 2014 as we paid down the dredge equipment purchase loan from 2014 and received less proceeds from the issuance of debt.

 

Our total assets at March 31, 2015 were $249,310. Our financial statements report a net loss of $288,684 for the three months ended March 31, 2015 and an accumulated deficit of $9,460,398. We had a cash balance of $24,735 as of March 31, 2015.

 

 

We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed. In this regard we have raised additional capital through equity offerings and loan transactions.  We have been successful in structuring deals in which expenses are paid for through the issuances of common shares.  In addition, we have raised additional funds and expect to continue to raise additional funds through private placement equity offerings sufficient to fund our current plan of operations.

 

We continue to explore and seek funding opportunities through either equity or loan transactions. As we receive funding, the use of available funding is evaluated by Management and the Board of Directors for its priority of use.

 

Our principal sources of funds have been from sales of our common stock and we expect this to be consistent for at least the next twelve months.

 

During the first three months, the Company has focused its efforts on deploying available equipment within Sierra Leone to mining concessions available to the Company under contract with the mineral concession owner or under our own license and focusing efforts on the continuation of diamond parcel sales to further funding of exploration activities. The company has been successful in covering our on-going operational expenses, through the issuance of equity instruments which will allow a larger percentage of incoming capital to be used to expand our exploration activity.

 

Contractual Obligations

 

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

 

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 Company has on occasion issued equity and equity linked instruments to non-employees in lieu of cash to various vendors for the receipt of goods and services and, in certain circumstances the settlement of short-term loan arrangements. The applicable GAAP establishes that share-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.

 

In these transactions, we issue unregistered and restricted equity instruments along with equity-linked instruments (warrants) that are convertible into unregistered and restricted shares of our common stock.

 

When unregistered common shares and equity-linked instruments convertible into unregistered common shares are issued for the settlement of short-term financing arrangements (that are not initially convertible), the reacquisition price of the extinguished financing arrangement is determined by the value of the debt which is more clearly evident, and no additional inducement expense is recognized.

 

In situations in which we issue unregistered restricted common shares and equity-linked instruments in exchange for goods and services, and the value of the goods and services are not the most reliably measurable, we recognize the fair value of the unregistered restricted equity instruments based on the value of similar instruments issued in private placements in exchange for cash in the most recent transactions (a Level 2 input within the GAAP hierarchy). We have determined this methodology reflects the risk adjusted fair value of our unregistered restricted equity instruments using a commercially reasonable valuation technique.

 

 

Mineral Property Costs

 

Mineral property acquisition costs are capitalized. Exploration and development costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs 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.

 

 

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 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 the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president(our principal executive officer) and our Chief Financial Officer (principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer) and our Chief Financial Officer ( principal 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 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

.

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control 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

 

We have had no material changes in our risk factors as disclosed in our Form 10-K for the year ended December 31, 2014 filed on April 16, 2015.

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

The following provides additional information for certain stock transactions that occurred during the three months ended March 31, 2015.  For additional details for all stock transaction please see the consolidated statement of changes in stockholders’ equity as reported in the Company’s 10-K for the period ended December 31, 2014 and filed with the Securities Exchange Commission on April 16, 2015.

 

During the three months March 31, 2015, the Company issued 56,833,333 shares upon the conversion of the note payable #3 dated July 2014 for outstanding principal balance of $32,500; 50,000,000 equity units at $0.0008 with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.0016 per share for total cash of $40,000; 8,000,000 equity units at $0.0011 with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.0022 per share for total cash of $8,800.

 

 

Item 3. Defaults Upon Senior Securities

 

None

 

 

Item 4. [Removed and Reserved]

 

None.

 

 

Item 5. Other Information

 

None.

 

 

Item 6. Exhibits

 

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)
3.3	Certificate of Change (incorporated by reference from our Current Report on Form 8-K filed on October 8, 2008)
3.4	Certificate of Amendment (incorporated by reference from our Current Report on Form 8-K filed on August 26, 2010)
(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)
10.4	Membership Purchase Agreement dated October 18, 2010 between our company and Allied Mining and Supply, LLC. (incorporated by reference from our Current Report on Form 8-K filed on February 4, 2011)
(14)	Code of Ethics
14.1	Code of Ethics and Business Conduct (incorporated by reference to our Annual Report on Form 10-K filed on April 20, 2009)
(21)	Subsidiaries of the Registrant
21.1	Allied Mining and Supply, LLC, a Nevada limited liability company Mikite Gold Resources Limited, a Ghanaian company
(31)	Rule 13a-14(a)/15d-14(a) Certifications
31.1*	Certification of the Principal Executive Officer, 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, Principal Financial Officer and Principal Accounting Officer filed pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Interactive Data Files
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

 

*

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.
Date:	May 20, 2015	By:	/s/ Garrett Hale
		Name:	Garrett Hale
		Title:	Chief Executive Officer, President, Director
		Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

 

 

EXHIBIT 31.1

 

CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Garrett Hale, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Sunergy, Inc.;

 

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

 

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

 

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

 

(a)

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

 

(b)

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

 

(c)

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

 

(d)

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

 

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

 

(a)

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

 

(b)

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

 

Date: May 20, 2015

 

/s/ Garrett Hale

Garrett Hale

President, Chief Executive Officer, Chief Financial Officer and Director

(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

Sunergy, Inc.

 

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Garrett Hale, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)

the Quarterly Report on Form 10-Q of Sunergy, Inc. for the quarter ended March 31, 2015 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Sunergy, Inc..

 

Dated: May 20, 2015
		/s/ Garrett Hale
		Garrett Hale
		President, Chief Executive Officer, Chief Financial Officer and Director
		(Principal Executive Officer, Principal Financial Officer, and Principal Accounting officer)
		Sunergy, Inc.

 

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided Sunergy, Inc. and will be retained by Sunergy, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.