UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-Q



(Mark One)

|S | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



|For the quarterly period ended | September 30,
    2013
|------------------------------ | ----------------------



or



|£ | 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 S
NO £



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). YES S 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   | £ | (Do not check if a smaller reporting company) | 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 £
NO S



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.



2,056,055,314 as of September 30, 2013
















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 September 30, 2013 are not necessarily
indicative of the results that may be expected for the full fiscal year.























































1







SUNERGY, INC. (An Exploration Stage Company)

CONDENSED CONSOLIDATED BALANCE SHEETS





|                                                                                                                                                                                    |  | September 30, |            |   | December 31, |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | - | ------------ | -
|                                                                                                                                                                                    |  | 2013          |            |   | 2012         |  
|ASSETS                                                                                                                                                                              |  |               |            |   |              |  
|                                                                                                                                                                                    |  |               |            |   |              |  
|Current assets                                                                                                                                                                      |  |               |            |   |              |  
|Cash and cash equivalents                                                                                                                                                           |  | $             | 1,342      |   |              | $
|Prepaid expenses                                                                                                                                                                    |  |               | –          |   |              |  
|                                                                                                                                                                                    |  |               |            |   |              |  
|Total current assets                                                                                                                                                                |  |               | 1,342      |   |              |  
|                                                                                                                                                                                    |  |               |            |   |              |  
|Long-term assets                                                                                                                                                                    |  |               |            |   |              |  
|Exploratory properties                                                                                                                                                              |  |               | 1,753,497  |   |              |  
|Property and equipment, net                                                                                                                                                         |  |               | 142,089    |   |              |  
|                                                                                                                                                                                    |  |               |            |   |              |  
|Total long-term assets                                                                                                                                                              |  |               | 1,895,585  |   |              |  
|                                                                                                                                                                                    |  |               |            |   |              |  
|Total assets                                                                                                                                                                        |  | $             | 1,896,927  |   |              | $
|                                                                                                                                                                                    |  |               |            |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                |  |               |            |   |              |  
|                                                                                                                                                                                    |  |               |            |   |              |  
|Current liabilities                                                                                                                                                                 |  |               |            |   |              |  
|Accounts payable and accrued liabilities                                                                                                                                            |  | $             | 418,293    |   |              | $
|Notes payable, current portion                                                                                                                                                      |  |               | 48,085     |   |              |  
|Convertible debt, net of discount                                                                                                                                                   |  |               | 103,854    |   |              |  
|Accrued interest                                                                                                                                                                    |  |               | 481,500    |   |              |  
|Accounts payable to related parties                                                                                                                                                 |  |               | 123,552    |   |              |  
|Derivative liability                                                                                                                                                                |  |               | 9,871      |   |              |  
|                                                                                                                                                                                    |  |               |            |   |              |  
|Total current liabilities                                                                                                                                                           |  |               | 1,185,155  |   |              |  
|                                                                                                                                                                                    |  |               |            |   |              |  
|Total liabilities                                                                                                                                                                   |  |               | 1,185,155  |   |              |  
|                                                                                                                                                                                    |  |               |            |   |              |  
|Commitments and Contingencies                                                                                                                                                       |  |               |            |   |              |  
|                                                                                                                                                                                    |  |               |            |   |              |  
|Stockholders' equity                                                                                                                                                                |  |               |            |   |              |  
|Common stock, authorized 3,750,000,000 shares, par value $0.001, issued and outstanding on September 30, 2013 and December 31, 2012 is 2,056,055,314 and 1,852,288,983 respectively |  |               | 2,056,057  |   |              |  
|Additional paid-in capital                                                                                                                                                          |  |               | 4,571,449  |   |              |  
|Accumulated deficit during exploration stage                                                                                                                                        |  |               | (5,915,734 | ) |              |  
|                                                                                                                                                                                    |  |               |            |   |              |  
|Total stockholders' equity                                                                                                                                                          |  |               | 711,772    |   |              |  
|                                                                                                                                                                                    |  |               |            |   |              |  
|Total liabilities and stockholders' equity                                                                                                                                          |  | $             | 1,896,927  |   |              | $



The accompanying notes are an integral part
of these statements.





2







SUNERGY, INC. (An
Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



|                                            |  | Three Months Ended September 30, |               |   | Nine Months Ended September 30, |   |               | January 28, 2003 (Inception) to September 30, | 
|------------------------------------------- |  | -------------------------------- | ------------- | - | ------------------------------- | - | ------------- | --------------------------------------------- | 
|                                            |  | 2013                             |               |   | 2012                            |   |               | 2013                                          | 
|                                            |  |                                  |               |   |                                 |   |               |                                               | 
|Revenue                                     |  | $                                | –             |   |                                 | $ | –             |                                               | 
|                                            |  |                                  |               |   |                                 |   |               |                                               | 
|Operating expenses                          |  |                                  |               |   |                                 |   |               |                                               | 
|Depreciation and amortization               |  |                                  | 13,468        |   |                                 |   | 13,038        |                                               | 
|General and administrative                  |  |                                  | 33,221        |   |                                 |   | 54,746        |                                               | 
|Management salary                           |  |                                  | 10,500        |   |                                 |   | 11,696        |                                               | 
|Exploration and development                 |  |                                  | 16,711        |   |                                 |   | 20,032        |                                               | 
|Professional fees                           |  |                                  | 24,536        |   |                                 |   | 83,623        |                                               | 
|                                            |  |                                  |               |   |                                 |   |               |                                               | 
|Total expenses                              |  |                                  | 98,436        |   |                                 |   | 183,135       |                                               | 
|                                            |  |                                  |               |   |                                 |   |               |                                               | 
|(Loss) from operations                      |  |                                  | (98,436       | ) |                                 |   | (183,135      | )                                             | 
|                                            |  |                                  |               |   |                                 |   |               |                                               | 
|Other income (expenses)                     |  |                                  |               |   |                                 |   |               |                                               | 
|Interest expense                            |  |                                  | (95,534       | ) |                                 |   | (59,400       | )                                             | 
|Financing costs                             |  |                                  | –             |   |                                 |   | –             |                                               | 
|Loss on change in fair value of derivatives |  |                                  | (474          | ) |                                 |   | –             |                                               | 
|Gain on sale of fixed assets                |  |                                  | 1,142         |   |                                 |   | –             |                                               | 
|                                            |  |                                  |               |   |                                 |   |               |                                               | 
|(Loss) before income taxes                  |  |                                  | (193,302      | ) |                                 |   | (242,535      | )                                             | 
|                                            |  |                                  |               |   |                                 |   |               |                                               | 
|Provision for income taxes                  |  |                                  | –             |   |                                 |   | –             |                                               | 
|                                            |  |                                  |               |   |                                 |   |               |                                               | 
|Net (loss)                                  |  | $                                | (193,302      | ) |                                 | $ | (242,535      | )                                             | 
|                                            |  |                                  |               |   |                                 |   |               |                                               | 
|Loss per common share:                      |  |                                  |               |   |                                 |   |               |                                               | 
|Basic & Diluted                             |  | $                                | (0.00         | ) |                                 | $ | (0.00         | )                                             | 
|                                            |  |                                  |               |   |                                 |   |               |                                               | 
|Weighted average shares outstanding:        |  |                                  |               |   |                                 |   |               |                                               | 
|Basic & Diluted                             |  |                                  | 1,998,979,952 |   |                                 |   | 1,786,027,080 |                                               | 



The accompanying notes are an integral part
of these statements.





3







SUNERGY, INC. (An Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS





|                                                                |  | Nine months ended September 30, |          |   | January 28, 2003 (Inception) to
                                                                               September 30, |  
|--------------------------------------------------------------- |  | ------------------------------- | -------- | - | ---------------------------------------------------------------------------------------------------------------------------- | -
|                                                                |  | 2013                            |          |   | 2012                                                                                                                         |  
|Operating activities                                            |  |                                 |          |   |                                                                                                                              |  
|Net loss                                                        |  | $                               | (715,613 | ) |                                                                                                                              | $
|Adjustments to reconcile net loss                               |  |                                 |          |   |                                                                                                                              |  
|Depreciation and amortization                                   |  |                                 | 39,316   |   |                                                                                                                              |  
|Stock-based compensation                                        |  |                                 | 88,750   |   |                                                                                                                              |  
|Non-cash interest expense                                       |  |                                 | 54,750   |   |                                                                                                                              |  
|Incentive shares                                                |  |                                 | –        |   |                                                                                                                              |  
|Loss on change in fair value of derivative liability            |  |                                 | 474      |   |                                                                                                                              |  
|Change in assets and liabilities                                |  |                                 |          |   |                                                                                                                              |  
|(Increase)/decrease in prepaid expenses                         |  |                                 | 1,000    |   |                                                                                                                              |  
|Increase/(decrease) in accrued interest payable                 |  |                                 | 163,800  |   |                                                                                                                              |  
|Increase/(decrease) in accounts payable and accrued liabilities |  |                                 | 232,839  |   |                                                                                                                              |  
|Increase/(decrease) in accrued-related party                    |  |                                 | 3,575    |   |                                                                                                                              |  
|                                                                |  |                                 |          |   |                                                                                                                              |  
|Net cash used by operating activities                           |  |                                 | (131,109 | ) |                                                                                                                              |  
|                                                                |  |                                 |          |   |                                                                                                                              |  
|Investment activities                                           |  |                                 |          |   |                                                                                                                              |  
|Acquisition of property and equipment                           |  |                                 | (6,500   | ) |                                                                                                                              |  
|Cash acquired through acquistion of subsidiary                  |  |                                 | –        |   |                                                                                                                              |  
|                                                                |  |                                 |          |   |                                                                                                                              |  
|Net cash provided/(used) by investment activities               |  |                                 | (6,500   | ) |                                                                                                                              |  
|                                                                |  |                                 |          |   |                                                                                                                              |  
|Financing activities                                            |  |                                 |          |   |                                                                                                                              |  
|Repayments of loans from related parties                        |  |                                 | –        |   |                                                                                                                              |  
|Proceeds from issuance of debt                                  |  |                                 | 25,000   |   |                                                                                                                              |  
|Proceeds from issuance of convertible debt                      |  |                                 | 75,000   |   |                                                                                                                              |  
|Proceeds from the sale of stock                                 |  |                                 | 38,500   |   |                                                                                                                              |  
|Contributed capital                                             |  |                                 | –        |   |                                                                                                                              |  
|                                                                |  |                                 |          |   |                                                                                                                              |  
|Net cash provided by financing activities                       |  |                                 | 138,500  |   |                                                                                                                              |  
|                                                                |  |                                 |          |   |                                                                                                                              |  
|Net increase / (decrease) in cash                               |  |                                 | 891      |   |                                                                                                                              |  
|                                                                |  |                                 |          |   |                                                                                                                              |  
|Cash, beginning of period                                       |  |                                 | 451      |   |                                                                                                                              |  
|                                                                |  |                                 |          |   |                                                                                                                              |  
|Cash, end of period                                             |  | $                               | 1,342    |   |                                                                                                                              | $
|                                                                |  |                                 |          |   |                                                                                                                              |  
|Supplemental Information:                                       |  |                                 |          |   |                                                                                                                              |  
|Interest paid                                                   |  | $                               | –        |   |                                                                                                                              | $
|Income taxes paid                                               |  | $                               | –        |   |                                                                                                                              | $
|                                                                |  |                                 |          |   |                                                                                                                              |  
|Non-cash activities:                                            |  |                                 |          |   |                                                                                                                              |  
|Stock issued for service as prepaid expenses                    |  | $                               | –        |   |                                                                                                                              | $
|Debt issued to acquire assets                                   |  | $                               | –        |   |                                                                                                                              | $
|Stock issued to acquire assets                                  |  | $                               | –        |   |                                                                                                                              | $
|Stock issued as reduction of accrued expenses                   |  | $                               | 101,669  |   |                                                                                                                              | $
|Assets acquired through acquisition of subsidiary               |  | $                               | –        |   |                                                                                                                              | $
|Liabilities assumed through acquisition of subsidiary           |  | $                               | –        |   |                                                                                                                              | $
|Shares issued to acquire subsidiary                             |  | $                               | –        |   |                                                                                                                              | $
|Stock issued to settle operational advances                     |  | $                               | –        |   |                                                                                                                              | $
|Stock issued to settle debt                                     |  | $                               | 110,000  |   |                                                                                                                              | $
|Warrants issued to acquire subsidiary                           |  | $                               | –        |   |                                                                                                                              | $



The accompanying notes are an integral part
of these statements.





4







SUNERGY, INC.

(An Exploration Stage Company)

Notes to the Condensed Financial Statements

September 30, 2013



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 precious and rare earth element
(“REE”) mineral properties located in the Republic of Ghana and Sierra Leone, Africa and has not yet determined whether
these properties contain reserves that are economically recoverable. The recoverability, if any, 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.



Since inception, through the date of this report,
the Company has not generated any revenue and is considered an exploration stage entity as defined by accounting principles generally
accepted in the United States (“US GAAP”).



NOTE 2. CONDENSED FINANCIAL STATEMENTS



The accompanying 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 September 30, 2013, 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 have been condensed or omitted. It is suggested that these condensed
financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December
31, 2012 audited financial statements. The results of operations for the period ended September 30, 2013 are not necessarily indicative
of the operating results for the full year.



The consolidated financial statements include
the accounts of Sunergy, Inc and its subsidiaries, Mikite Gold Resources Limited, a Ghanaian company, 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 financial statements. All material inter-company accounts
and transactions have been eliminated.



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.



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.





5







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 1,025,000,000
shares 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.



Recent Accounting Guidance Not Yet Adopted



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.



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 not generated any revenue and 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 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 professional and administrative fees to file our delinquent financial statements, 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.





6







NOTE 4. PROPERTY, PLANT AND EQUIPMENT



Property, Plant and Equipment consisted of
the following at September 30, 2013 and December 31, 2012:



|                               |  | September 30, |          |   | December 31, |  
|------------------------------ |  | ------------- | -------- | - | ------------ | -
|                               |  | 2013          |          |   | 2012         |  
|Exploration equipment          |  | $             | 253,760  |   |              | $
|Rolling stock                  |  |               | 13,500   |   |              |  
|Office furniture and equipment |  |               | 4,753    |   |              |  
|Subtotal                       |  | $             | 272,013  |   |              | $
|Less accumulated depreciation  |  |               | (129,924 | ) |              |  
|Property, and equipment – net  |  | $             | 142,089  |   |              | $



NOTE 5. NOTES PAYABLE



During the period ended September 30, 2013
we accrued $163,800 of penalty expense, $12,500 of original issue discount interest expense, $28,854 of debt discount on convertible
debt, $9,397 as initial derivative liability on the convertible debt agreement, and $4,000 of financing costs related to shares
issuance as an inducement to enter into a short-term commercial financing agreement. As of September 30, 2013, our outstanding
notes payable balance was $48,085 and $103,854 in convertible note agreements net of debt discount, of which $48,085 are in default
as of September 30, 2013. Balance of notes payable at December 31, 2012 totaled $100,585. The individual notes in default carry
daily interest penalties between $100 and $500.



On March 15, 2013, the Company entered into
a short-term commercial financing agreement of $25,000 due and payable in 180 days at an amount of $30,000. The Company issued
2,000,000 equity units at $0.002 with each unit consisting of one common share of stock and one 12 month share purchase warrant
exercisable at $0.004 per share as incentive to the lien holder to enter into the financing arrangement.



On May 15, 2013, the Company settled $60,000
of outstanding notes payable with payment of 30,000,000 common stock units consisting of one common share and one 12 month share
purchase warrant exercisable at $0.003.



On April 24, 2013, the Company entered into
a securities purchase agreement and convertible note agreement wherein the Company received $47,500 of principal which carries
an 8% per annum rate and is due and payable in 9 months. The note holder can convert the note into common stock of the Company
starting at 180 days after the date of the note. The conversion price has been set at the 56% of the average of the lowest three
trading days close prices in the 10 days prior to notice of conversions. Prepayment may be made but incur penalty of paying principal
plus accrued interest and an additional percentage based upon the number of days since the date of issuance of the note as follows:
1) 20% if paid within 30 days of the note date; 2) 25% if paid between 31 and 60 days of the note date; 3) 30% if paid between
61 and 90 days of the note date; 4) 35% if paid between 91 and 120 days of the note date; 5) 40% if paid between 121 and 150 days
of the note date; 6) 45% if paid between 151 and 180 days of the note date. After 180 days from the date of the note, the Company
has no right to prepay the note.



On June 17, 2013, the Company entered into
a convertible note agreement wherein the Company received $27,500 and carries an 8% per annum rate and is due and payable in 9
months. The convertible note carries the same terms as the April 24, 2013 convertible note.



On September 13, 2013, the Company settled
$30,000 of outstanding notes payable with payment of 30,000,000 common stock units of one common share and one 12 month share purchase
warrant exercisable at $0.002.



On October 31, 2013, the Company repaid the
securities purchase agreement and convertible not agreement to the lender in full with no conversion. Per the agreement, the Company
repaid the note at $67,000.





7







NOTE 6. STOCKHOLDERS’ EQUITY



Common Stock



The following provides additional information for certain stock
transactions that occurred since January 1, 2013. 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, 2012
and filed with the Securities Exchange Commission on April 16, 2013.



A summary of shares issued follows:



| | · | During the quarter ended March 31, 2013, the Company issued 2,500,000 equity units at $0.002 with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.005 per share for total cash of $5,000; , the Company issued 5,000,000 equity units at $0.0025 per unit for prepaid consulting services with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.005 per share.; the Company issued 2,000,000 equity units at $0.002 with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.004 per share for incentive to provide short-term commercial financing in the amount of $25,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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| | · | During the quarter ended June 30, 2013, the Company issued 12,366,332 equity units at $0.0015 with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.003 per share for total cash of $18,500; the Company issued 2,500,000 equity units at $0.002 with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.003 per share for total cash of $5,000; the Company issued 20,000,000 equity units at $0.002 per unit for consulting services with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.003 per share; the Company issued 30,000,000 equity units at $0.002 with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.003 per share to settle $60,000 in outstanding notes payable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
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| | · | During the quarter ended September 30, 2013, the Company issued 3,333,333 equity units at $0.0015 with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.003 per share for total cash of $5,000; the Company issued 5,000,000 equity units at $0.001 with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.002 per share for total cash of $5,000; the Company issued 10,000,000 equity units at $0.0015 per unit for consulting services with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.003 per share equivalently $15,000; the Company issued 67,733,333 equity units at $0.0015 per unit to settle outstanding accounts payable with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.003 per share equivalently $101,669; the Company issued 13,333,333 equity units at $0.0015 per unit to settle outstanding related party payables with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.003 per share or $20,000 equivalently; the Company issued 30,000,000 equity units at $0.001 with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.002 per share to settle $30,000 in outstanding notes payable. During the third quarter of 2013, the former chairman of the Board of Directors forgave outstanding amounts owed under his compensation due for 2012. The amount forgiven, $28,500, has been recorded as an increase in additional paid-in capital.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

Outstanding Warrants



On January 23, 2012 the Company extended the
expiration date of all outstanding warrants as of December 31, 2011 for six months. In accordance with the modification, the Company
recognized the estimated excess value of the modified award over the fair value of the original award
immediately before its terms were modified, based on the pertinent factors on the modification date. The excess value totaling
$160,281 was estimated by using a Black-Scholes pricing model, and comparison of the unregistered and restricted shares underlying
the warrants to those that are currently freely trading. The Company used a historically derived volatility rate of 151%; the remaining
contractual terms for each award between one month and one year; a risk free rate of 0.52%; and an estimated forfeiture rate of
55% for its Black-Scholes model assumptions.





8







On September 30, 2013 the Company had warrants
outstanding summarized in the table below:



| |       | Warrants    |  | Exercise |             | Expiration
| | ----- | ----------- |  | -------- | ----------- | ----------
| |       | Outstanding |  | Price    |             | Date      
| |       |             |  |          | 2,000,000   |           
| |       |             |  |          | 5,000,000   |           
| |       |             |  |          | 5,000,000   |           
| |       |             |  |          | 2,500,000   |           
| |       |             |  |          | 2,000,000   |           
| |       |             |  |          | 1,333,333   |           
| |       |             |  |          | 15,000,000  |           
| |       |             |  |          | 1,666,666   |           
| |       |             |  |          | 30,000,000  |           
| |       |             |  |          | 2,500,000   |           
| |       |             |  |          | 1,333,333   |           
| |       |             |  |          | 1,333,000   |           
| |       |             |  |          | 6,700,000   |           
| |       |             |  |          | 5,000,000   |           
| |       |             |  |          | 10,000,000  |           
| |       |             |  |          | 6,400,000   |           
| |       |             |  |          | 3,333,333   |           
| |       |             |  |          | 40,000,000  |           
| |       |             |  |          | 8,000,000   |           
| |       |             |  |          | 13,333,333  |           
| |       |             |  |          | 13,333,333  |           
| |       |             |  |          | 30,000,000  |           
| |       |             |  |          | 5,000,000   |           
| | Total |             |  |          | 210,766,331 |           







9







Information relating to warrant activity during the reporting period
follows:



|                                                 |  |           |              |   |            |  |   | Weighted | 
|------------------------------------------------ |  | --------- | ------------ | - | ---------- |  | - | -------- | 
|                                                 |  |           |              |   |            |  |   | Average  | 
|                                                 |  | Number of |              |   | Contingent |  |   | Exercise | 
|                                                 |  | Warrants  |              |   | Warrants   |  |   | Price    | 
|Total Warrants outstanding at December 31, 2012  |  |           | 347,092,849  |   |            |  | – |          | 
|Plus: Warrants Issued                            |  |           | 203,766,331  |   |            |  | – |          | 
|Less: Warrants Exercised                         |  |           | –            |   |            |  | – |          | 
|Less: Warrants Expired                           |  |           | (340,092,849 | ) |            |  | – |          | 
|Total Warrants outstanding at September 30, 2013 |  |           | 210,766,331  |   |            |  |   |          | 



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. Unpaid officer and director
fees are classified as accounts payable as they are normal operating business expenses of the Company. The balance due to related
parties was $123,552, and $139,976 as of September 30, 2013 and December 31, 2012, respectively.



NOTE 8. SIGNIFICANT EVENTS



On August 13, 2013, Gary Houck, a member of
our Board of Directors, resigned from the Board of Directors. He has not been replaced as of the time of this filing.



NOTE 9. SUBSEQUENT EVENTS



Since September 30, 2013, our Company received
short-term loans totaling $67,000, of which the proceeds were used to repay the convertible debt agreement dated April 24, 2013.
CEO and President, Garrett Hale, has provided short-term operating loans to the Company in the amount of $10,000. Additionally,
we have raised $5,000 in funding from private placements with investors.



Our Pampana River Exploration License is a
renewable license, EXPL 5/2009 and our renewal was prepared and submitted on July 11, 2013. As of the date of this filing, our
renewable exploration license application is still pending, though we anticipate approval of such license, we have no guarantee
that it will be approved and should we not receive approval, an adjustment may be required at that time.





10







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 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. Our current exploration
efforts are focused on our two properties; one of which is located in Sierra Leone, Africa and the other is located in Ghana, Africa.
We are embarking on our development stage of operations by pursuing direct mining operations in Ghana, Sierra Leone and this year,
Liberia geared to producing cash flow from the extraction of Gold, Diamonds and Black Sands wherever available in our operations.



Nyinahin Concession, Ghana: Potential Joint
Development Proposed



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.





11







Due to our limited funding, our activities
during the current fiscal year have been limited to maintaining “good-standing” status of our concession. However,
we are now in discussion with a private American owned Ghanaian company who currently operates alluvial gold operations on the
Offin river in nearby Dunkwa, in Ghana and has adequate equipment and equipment manufacturing facilities to commence a bulk sampling
operation designed to determine the longer term viability of alluvial operations on our Nyinahin concession with the goal of establishing
a Joint Venture on our alluvial mineralization. We are currently preparing a request for permission to start this operation. Updates
will be provided.



Pampana River Concession, Sierra Leone: Pending
Renewal



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. This is a renewable license and all renewal applications, permits and associated fees have been paid and filed
with the Minerals Commission in Sierra Leone. Once the renewal is finalized, a 4 year EXPL license will be granted. Should
the renewal not be approved, there will be an adjustment to our financials to reflect any change in status. We are optimistic that
this matter will be resolved prior to year end 2013.



The license area 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 square kilometers. 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.



A report dated August
22, 2012 from Hazen Research in Colorado in part states as follows: (The complete report is available for review on our websitewww.sunergygold.com)



MINERALOGICAL EXAMINATION



“An initial
microscopic examination of the Stockpile sample showed major ilmenite, zircon, and subordinate monazite and quartz. To provide
evidence of the occurrence of randomly distributed free placer gold, a 100 g grab sample of the blended Stockpile sample was separated
using a high-intensity rare earth hand magnet to separate the paramagnetic ilmenite from the nonmagnetic constituents, including
the gold. Both magnetic products were assayed for gold and PGMs. The results show that about 99% of the gold is in the nonmagnetic
product which assayed 14.4 g/t Au and represents about 28% of the total weight of the sample. Based on the results of this preliminary
investigation, the Stockpile sand contains appreciable gold which is easily recoverable by magnetic and gravity separation.”



We are currently engaged in further mineralogical
studies to determine the final design of a pilot plant facility, which once finalized will be deployed in our operation in Sierra
Leone.



Management has changed its model of operations going forward by
adding a much needed cash flow component in addition to our exploration activities on the Pampana river. Exploration funding is
scarce at best and opportunities for operators with equipment and crews to operate that equipment are numerous to assist local
miners in advancing their operations dramatically. We have adopted this strategy of growth which should enable us to self-finance
both our mining and equipment expansion as well as our future exploration activities.



Commencement of Cash Flow Operations – Liberia proposed 2013
-2014



David Price, The Dredgemaster, who recently
joined our management team as Director of Alluvial Operations in Sierra Leone and Liberia, has plans to increase our dredging capacity
as required up to six dredges in Liberia and a further six dredges in Sierra Leone this year, subject only to financing. He will
arrive in Liberia by the end of November and meet our geologist from Sierra Leone, a local Liberian geologist and Management from
the US and Liberia to inspect and approve the deployment of a dredge and crew to Liberia to work in a sponsorship role with Liberian
owner operators in a profit share plan under existing class c mining licenses on the St. Paul river. This is a known diamond and
gold area and we are currently testing a quantity of recoverable black sands. Sand itself is also being looked at as a viable marketable
byproduct of a dredging operation. Results of this visit should be available in early December and rains permitting, operations
will be scheduled to begin. Diamonds, gold and black sands will be being recovered on a daily basis, once overburden is dredged
away and we expect to have reportable inventory and or cash flow by year end.





12







Commencement of Cash Flow Operations –
Sierra Leone proposed 2013 - 2014



David Price, Dredgemaster will travel to Sierra
Leone after his Liberian visit and accompany our geologist, Management and local owner operators of mining licenses to our proposed
mining sites for inspection and evaluation. We plan to deploy an initial dredge, wash plant and crew to an area on the Sewa river
in Sierra Leone in a Sponsorship arrangement with local Sierra Leonean operators to extract diamonds, gold and black sands under
a profit share plan. This is a proven diamond and gold mineralized area and we will be directly in charge of all operations. This
opportunity lends itself, on receipt of satisfactory results to grow dramatically in the near term. Implementation will commence
once the river is safe to operate with divers and our dredge(s). Again, this operation is projected to produce diamond, gold and
black sand recovery opportunities on a daily/weekly basis leading to reportable inventory/cash flow by year end if the rains cooperate
and most certainly by January 2014. Financial results from dredge production will be being used to design a dredge financing program,
whereby the actual cash flow that is Sunergy’s share may be directly assigned to pay the investor for the dredge. More details
on this as we progress.



Management intends to work closely with local
artisanal operators in both Liberia and Sierra Leone so that cash flow becomes the focus of 2013- 2014 operations. Expansion of
operations focused on cash flow is being pursued in a highly prospective diamond, gold and black sands areas that are in addition
to the Pampana project.



Affordable Housing Project: Humanitarian Results
Providing Sustainable Villages At A Profit



During this reporting period, our Company entered
into an Exclusive Partnership Agreement with ATA Systems of Orland, Florida to represent their affordable manufactured housing,
and building products throughout Africa. This representation allows equal profit sharing on developments that occur under our agreement.
This agreement requires no capital contribution on our part. The Company will participate akin to a real estate broker and paid
upon the facilitation of successful projects. Initial response has been excellent, and while no contracts have resulted as yet,
our opportunity has already grown through Africa. We continue to build relationships and work with government entities to see where
we may assist in satisfy the critical affordable and safe housing needs. Other surrounding countries also have such a need and
have expressed interest in housing units as well as Hospitals, Schools and Clinic facilities. Management is optimistic that this
business will grow rapidly and the factories that manufacture these buildings are prepared to put factories in the countries that
are using their products. This creates both jobs and trade items for export.



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.





13







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 September 30, 2013 and 2012



The following discussion should be read in
conjunction with our unaudited financial statements and the related notes contained in this report for the period ended September
30, 2013. 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 September 30, 2013 and 2012 are outlined in the table below:



|                              |  | Three Months Ended September 30, |        |  |      |  
|----------------------------- |  | -------------------------------- | ------ |  | ---- | -
|                              |  | 2013                             |        |  | 2012 |  
|Depreciation and amortization |  | $                                | 13,468 |  |      | $
|General and administrative    |  | $                                | 33,221 |  |      | $
|Management salary             |  | $                                | 10,500 |  |      | $
|Exploration and development   |  | $                                | 16,711 |  |      | $
|Professional fees             |  | $                                | 24,536 |  |      | $



Revenue



We are an exploration stage entity and have
not commenced any revenue producing activities since our inception. We do not anticipate earning revenues until such time as we
have entered into commercial production on the Nyinahin or Pampana River concessions.



Expenses



The decrease in operating
expenses for the three months ended September 30, 2013, compared to the same period in fiscal 2012, was mainly due to a decrease
in Management salary due to a change in our officers in the third quarter of 2012 at reduced compensation rates and a reduction
of Professional fees due to a reduction of additional audit and accounting fees incurred in 2012 in curing our caveat emptor status
and making all necessary filings. During the period, our CEO and President and other members of the Company’s exploration
team were able to visit operations in Sierra Leone and Ghana and expended funds to further exploration operations.



Other Expenses



|                                            |  | Three Months Ended September 30, |        |   |      |  
|------------------------------------------- |  | -------------------------------- | ------ | - | ---- | -
|                                            |  | 2013                             |        |   | 2012 |  
|Interest expense                            |  | $                                | 95,534 |   |      | $
|Loss on change in fair value of derivatives |  | $                                | 474    |   |      | $
|Gain on sale of fixed assets                |  | $                                | (1,142 | ) |      | $





Interest and financing expenses increased by
$36,134 primarily relating to the recognition of the discount on debt of the convertible note agreements dated April 2013 and June
2013. Correspondingly, the loss on derivative related to the change in the fair value of the convertible instrument as of the close
of the quarter. The Company was able to liquidate a vehicle held in Sierra Leone that was of no worth and primarily would be used
to part pieces. This provided short term funding for various tasks within Sierra Leone.





14







Results of Operations – Nine months
Ended September 30, 2013 and 2012



Our operating expenses for the nine months
ended September 30, 2013 and 2012 are outlined in the table below:



|                              |  | Nine Months Ended September 30, |         |  |      |  
|----------------------------- |  | ------------------------------- | ------- |  | ---- | -
|                              |  | 2013                            |         |  | 2012 |  
|Depreciation and amortization |  | $                               | 39,316  |  |      | $
|General and administrative    |  | $                               | 158,094 |  |      | $
|Management salary             |  | $                               | 31,500  |  |      | $
|Exploration and development   |  | $                               | 79,860  |  |      | $
|Professional fees             |  | $                               | 188,960 |  |      | $



Expenses



The decrease in operating expenses for the
six months ended June 30, 2013, compared to the same period in fiscal 2012, was mainly due to a decrease in professional fees due
to the reduction of accounting and auditing costs incurred in 2012 to cure the caveat emptor status and exploration which related
to decreased funding available to further exploration work at the concessions. Management salary decreased $47,196 due to the change
in management during the first quarter of 2013 at reduced compensation rates and having only a single officer.



Other Expenses



|                                            |  | Nine Months Ended September 30, |         |   |      |  
|------------------------------------------- |  | ------------------------------- | ------- | - | ---- | -
|                                            |  | 2013                            |         |   | 2012 |  
|Interest expense                            |  | $                               | 214,551 |   |      | $
|Financing costs                             |  | $                               | 4,000   |   |      | $
|Loss on change in fair value of derivatives |  | $                               | 474     |   |      | $
|Gain on sale of fixed assets                |  | $                               | (1,142  | ) |      | $



Interest and financing expenses increased by
$27,751 primarily as the result of an increase in the amounts recognized due to the debt discount on the convertible note agreements.
Financing costs decreased $156,281 primarily related to the non-recurring incremental cost associated with the modification of
the warrant expiration date that occurred in the first quarter of 2012. Correspondingly, the loss on derivative related to the
change in the fair value of the convertible instrument as of the close of the quarter. The Company was able to liquidate a vehicle
held in Sierra Leone that was of no worth and primarily would be used to part pieces. This provided short term funding for various
tasks within Sierra Leone.



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.





15







Liquidity and Financial Condition



|                    |  | September 30, 2013 |            |   | December 31, 2012 |   |          | Change | 
|------------------- |  | ------------------ | ---------- | - | ----------------- | - | -------- | ------ | 
|Current assets      |  | $                  | 1,344      |   |                   | $ | 22,699   |        | 
|Current liabilities |  | $                  | 1,185,155  |   |                   | $ | 873,884  |        | 
|Working Capital     |  | $                  | (1,183,811 | ) |                   | $ | (851,185 | )      | 



Cashflow

|                                                 |  | Nine Months Ended September 30, |          |   |      |  
|------------------------------------------------ |  | ------------------------------- | -------- | - | ---- | -
|                                                 |  | 2013                            |          |   | 2012 |  
|Net cash used in operating activities            |  | $                               | (131,582 | ) |      | $
|Net cash provided/(used) in investing activities |  | $                               | (6,501   | ) |      | $
|Net cash provided/(used) by financing activities |  | $                               | 63,500   |   |      | $
|Net increase/(decrease) in cash during period    |  | $                               | (74,583  | ) |      | $



Our total assets at September 30, 2013 were
$1,896,929. Our financial statements report a net loss of $715,613 for the nine months ended September 30, 2013 and a net loss
of $5,915,734 for the period from January 28, 2003 (date of inception) to September 30, 2013. We had a cash balance of $1,344 as
of September 30, 2013.



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 nine months, the Company has
focused its efforts on maintaining compliance with all applicable filing requirements and further explore funding opportunities
to progress completion of the work and start of operations at our properties in Ghana and Sierra Leone. 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.





16







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.



Of major significance
during the nine months period ended September 30, 2012 is the extension of all of the warrants for six months. The assumption was
made when these warrants were purchased that theCaveat Emptor would be removed shortly. The
filings took longer to complete than was expected. The board of directors felt that since the company had not been able to at that
point catch up with its government filings, it would be fair and prudent to extend the warrant date. Now that we are current in
our filings we have experienced an increase in the exercising of outstanding warrants.



In accordance with ASC 718, a modification
of the terms of an equity instrument for financial reporting purposes is treated as an exchange of the original award for a new
award. We recognized, as financing costs, the excess value of the modified award over the fair value of the original award immediately
before its terms were modified, based on the pertinent factors on the modification date, We estimated the excess value by using
a Black-Scholes pricing model, and comparison of the unregistered and restricted shares underlying the warrants to those that are
currently freely trading.



In addition to assuming a volatility rate of
approximately 151% (historically derived), we estimated a forfeiture rate of approximately 55% based on prior exercise history
and our prior experience with several of the warrant holders. Increases in the volatility rate assumption along with decreases
in the forfeiture would result in the recognition of additional excess value.



Item 3. Quantitative Disclosures About Market
Risks



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





17







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, 2012 filed on April 16, 2013.



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



The following provides
additional information for certain stock transactions that occurred during the months ended September 30, 2013.  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, 2012 and filed with the Securities Exchange Commission on
April 16, 2013.



During the quarter
ended September 30, 2013, the Company issued 3,333,333 equity units at $0.0015 with each unit consisting of one common share of
stock and one 12 month share purchase warrant exercisable at $0.003 per share for total cash of $5,000; the Company issued 5,000,000
equity units at $0.001 with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable
at $0.002 per share for total cash of $5,000; the Company issued 10,000,000 equity units at $0.0015 per unit for consulting services
with each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.003 per share
equivalently $15,000; the Company issued 67,733,333 equity units at $0.0015 per unit to settle outstanding accounts payable with
each unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.003 per share equivalently
$101,669; the Company issued 13,333,333 equity units at $0.0015 per unit to settle outstanding related party payables with each
unit consisting of one common share of stock and one 12 month share purchase warrant exercisable at $0.003 per share or $20,000
equivalently; the Company issued 30,000,000 equity units at $0.001 with each unit consisting of one common share of stock and one
12 month share purchase warrant exercisable at $0.002 per share to settle $30,000 in outstanding notes payable. During the third
quarter of 2013, the former chairman of the Board of Directors forgave outstanding amounts owed under his compensation due for
2012. The amount forgiven, $28,500, has been recorded as an increase in additional paid-in capital.





18







Item 3. Defaults Upon Senior Securities



None



Item 4. [Removed and Reserved]



None.



Item 5. Other Information



None.



Item 6. Exhibits



|ExhibitNumber | 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.                                             
|99.1*         | Temporary Hardship Exemption                                                                                                                                                                                                
|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                                                                         
| | -- | ---------------------------------------------------------------------------------------
| | ** | To be furnished by amendment per
    Temporary Hardship Exemption under Regulation S-T.







19







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: | November 14, 2013 | By:          
|      |                   | Name:        
|      |                   | Title:       
|      |                   | Title:       



























20