Sunergy, Inc (the "Company") (PINKSHEETS: SNEY) is pleased to report it is filing its Form 10-K for the year ending, December 31, 2011 with the SEC today. Our 10Q for March 31, 2012 will be the next and last financial report required to be filed to become fully compliant with our SEC reporting requirements and www.otcmarkets.com will be notified of the updated financials and disclosure statements so that the Company can be listed as "Current" in its filings, thereby removing the Caveat Emptor. Management expects this to be completed in the next few weeks.
The following discussion will highlight items from our 10-K and put them in perspective to show how we have brought our mining business in both Ghana and Sierra Leone to the level that an infusion of new capital will result in development focused on establishing sustainable cash flow in each project.
- Caveat Emptor and Capital Raised during 2011 -- $992,050 -- On December 13, 2010, we received the Caveat Emptor designation from Pink Sheets which has made raising either equity or debt difficult. In 2011 we managed to raise $992,050 of Capital comprised of $782,050 of equity and $210,000 in secured debt financing. $157,500 of this debt was settled with restricted shares in 2011. While we have been successful in raising enough capital to buy and pay for the dredge equipment and the 2011 exploration operations and to pay for audit and accounting fees to file our delinquent financial statements which are now nearly complete, we previously have not had the ability to raise any significant additional capital to advance our exploration and mining operations. We do, however, have a substantial amount of existing warrants that once the market price of Sunergy stock is above the warrant strike price by an attractive amount ("in the money") then the warrants could be exercised which would inject more than $2,000,000 of new capital. This will enable us to ramp up operations in both Ghana and Sierra Leone with an eye to developing sustainable cash flow. We have already received exercise notices for over 25,000,000 warrants in the last 18 months.
- Operating Expenses 2011 -- $1,201,916 -- Operating expenses for the year ended December 31, 2011, increased by approximately 74% as compared to the comparative period in 2010 primarily as a result of an increase in exploration costs and administrative expense. Our exploration efforts increased predominantly because we implemented a dredging operation on the Pampana River Concession in Sierra Leone with our 8" dredges purchased for this purpose. The material recovered is now being tested at Hazen Research Laboratory in Denver Colorado to determine the specific mineralogical content and to design a pilot plant for separation of the most marketable precious and rare earth minerals. Exploration and development cost are expected to go up substantially over the next three years as we ramp up pilot and small scale production operations. With over 40 KM of river on our concession, future exploration designed to develop resources and reserves will be undertaken limited only by our future financial capabilities. Our Ghana project is looking for a joint venture partner for immediate gold recovery and cash flow.
- Asset Growth 2011 to $2,064,019 -- Purchased new equipment
- Debt Incurred 2011 -- $544,000 -- Includes Management Compensation and Accounts Payable Related Parties which may be settled for restricted shares.
- Management Compensation 2011 -- $141,000 -- There were no shares issued for Management Compensation in 2011 due to the Caveat Emptor operating to prevent these shares from becoming unrestricted and entering the market system. Management also was not paid cash during this period so the collective Management salaries of $141,000 is shown as a debt or liability on our balance sheet and is included in our Accounts Payable.
- Accounts Payable Related Parties -- $172,202 -- This amount is owed to related parties that have advanced funds for operations of the Company during 2011. The parties have indicated their willingness to convert this debt to restricted shares.
- Shareholder Equity -- Our Shareholder Equity decreased in 2011 from $1,811,410 to $1,519,443 because of our increase in debt from $91,592 in 2010 to $544,576 in 2011. The above amounts of Debt, once settled will reduce our debt by $313,202 and allow additional cash contributions through equity placements or existing warrant exercise to fuel the future growth of our business in West Africa. These debt settlements will increase our shareholders equity.
Chairman P.K. Medhi said: "Management is pleased that we have reached this milestone with the filing of our 2011 10-K. While our growth has been slowed by our inability to raise adequate capital to advance our projects as we would like, we have paid all bills that were required and are current in our payments of fees required in both Sierra Leone and Ghana. This is no small achievement under these circumstances. Also, we have very friendly debt, which once compliant in our filings will mostly go away so that new money in the enterprise will be able to launch our future cash flow opportunities."
Mark Shelley, the Company's CFO, views the financials for 2011 in a positive light. He says: "The Company's financial position at the end of 2011 shows small growth from 2010 which showed remarkable growth. We are now stabilized and have brought all our operations to a current and ready to roll status pending the injection of additional capital. We expect to be fully compliant in our 1934 act filings with the SEC in the next few weeks and anticipate our additional funding to follow."
Please see attached comparative Balance Sheet for the years ended December 31, 2010 and December 31, 2009. Make sure to review the notes to the Financial Statements contained in their entirety in the 10-K filed on www.sec.gov or on www.sunergygold.com under SEC Filings.
About Sunergy: The Company is an aggressive junior mining exploration and development Company that is production oriented at the earliest possible profitable opportunity. We control 100% of the 150 sq. km. Nyinahin mining concession with a full prospecting license in Ghana, West Africa and the 140.1 sq. km. Pampana River Rare Earth, Gold and Diamond concession in Sierra Leone, West Africa. We are focused on near term production of these properties. We are production and acquisitions oriented and are considering several additional projects suitable for near term production in West Africa.
Notice Regarding Forward-Looking Statements
This current report contains "forward-looking statements," as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future, including but not limited to, any mineralization, development or exploration of the Nyinahin and Pampana Mining Concessions.
Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with mineral exploration and difficulties associated with obtaining financing on acceptable terms. We are not in control of metals prices and these could vary to make development uneconomic. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our most recent annual report for our last fiscal year, our quarterly reports, and other periodic reports filed from time-to-time with the Securities and Exchange Commission.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
Cash and cash equivalents $ 85,515 $ 97,251
Deposits - 50,000
Total current assets 85,515 147,251
Exploratory properties 1,753,497 1,753,497
Property and equipment, net 225,007 2,254
Total assets $ 2,064,019 $ 1,903,002
Liabilities and stockholders' equity
Accounts payable and accrued liabilities $ 205,089 $ 7,601
Accrued interest 101,700 -
Accounts payable-related parties 172,202 83,991
Notes payable 65,585 -
Total current liabilities 544,576 91,592
Total liabilities 544,576 91,592
Commitments and contingencies - -
Common Stock, authorized 3,750,000,000
shares, par value $0.001, issued and
outstanding on December 31, 2011 and
December 31, 2010 is 1,557,717,831 and
1,046,197,880, respectively 1,557,718 1,046,198
Additional paid in capital 3,787,902 2,709,122
Subscriptions payable - 414,861
Deficit accumulated during exploration stage (3,826,177) (2,358,771)
Total stockholders' equity 1,519,443 1,811,410
Total liabilities and stockholders' equity $ 2,064,019 $ 1,903,002
The accompanying notes are an integral part of these statements.
Contact: Sunergy Inc.
14362 N. FRANK LLOYD WRIGHT BLVD.
SCOTTSDALE AZ 85260