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

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FORM 10-Q


QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE 
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
2010

COMMISSION FILE NUMBER: 000-54132

|                                                      
|------------------------------------------------------
|                                                      
|11 GOOD ENERGY, INC.                                  
|                                                      
|(Exact name of registrant as specified in its charter)

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|DELAWARE                                                       |  | 26-0299315                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

4450 Belden Village Street N.W., Suite 800 
Canton, OH 44718(Address of principal executive offices)

(330) 492-3835(Registrants telephone number, including area code)

NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)

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Indicate by
check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

Yes x No o

Indicate by
checkmark whether the registrant has submitted electronically and posted on its
corporate website, if any, every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T during the 12 preceding months (or such
shorter period that the registrant was required to submit and post such file).

Yes o No o

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

| |                         |   |  |                            |  
| | ----------------------- | - |  | -------------------------- | -
| | Large Accelerated Filer | o |  | Accelerated
 Filer         | o
| | Accelerated Filer       | o |  | Smaller
 Reporting Company | x

Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act).

Yes o No x

As of November
15, 2010, the registrant had a total of 19,856,239 shares of Common Stock
outstanding

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11 GOOD ENERGY, INC. AND SUBSIDIARY

INDEX

|           |                                                                                                                                                                                                                |    |             
|---------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- | ------------
|           |                                                                                                                                                                                                                |    | Page
 Number
|PART I     | Financial Information                                                                                                                                                                                          |    |             
|           |                                                                                                                                                                                                                |    |             
|Item 1.    | Financial
 Statements (unaudited)                                                                                                                                                                              |    |             
|           |                                                                                                                                                                                                                |    |             
|           | Condensed
 Consolidated Balance Sheets  September 30, 2010 (Unaudited) and December 31,
 2009                                                                                                                 |    | 3           
|           |                                                                                                                                                                                                                |    |             
|           | Unaudited
 Condensed Consolidated Statements of Operations  Three and Nine Months Ended
 September 30, 2010 and September 30, 2009 and for the period May 23, 2007
 (date of inception) to September 30, 2010 |    | 4           
|           |                                                                                                                                                                                                                |    |             
|           | Unaudited
 Condensed Consolidated Statements of Stockholders (Deficit) Equity  Nine
 Months Ended September 30, 2010                                                                                          |    | 5           
|           |                                                                                                                                                                                                                |    |             
|           | Unaudited
 Condensed Consolidated Statements of Cash Flows  Nine Months Ended September
 30, 2010 and September 30 2009 and for the period May 23, 2007 (date of
 inception) to September 30, 2010            |    | 6           
|           |                                                                                                                                                                                                                |    |             
|           | Notes to
 Unaudited Condensed Consolidated Financial Statements                                                                                                                                                |    | 7           
|           |                                                                                                                                                                                                                |    |             
|Item 2.    | Managements
 Discussion and Analysis of Financial Condition and Results of Operations                                                                                                                         |    | 13          
|           |                                                                                                                                                                                                                |    |             
|Item 3.    | Controls and
     Procedures                                                                                                                                                                                   |    | 22          
|           |                                                                                                                                                                                                                |    |             
|PART II    | Other Information                                                                                                                                                                                              |    |             
|           |                                                                                                                                                                                                                |    |             
|Item 1.    | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                                                    |    | 23          
|          
|Item 2.    | Exhibits                                                                                                                                                                                                       |    | 24          
|           |                                                                                                                                                                                                                |    |             
|SIGNATURES |                                                                                                                                                                                                                | 25
|           |                                                                                                                                                                                                                |    |             
|EX-31.1    |                                                                                                                                                                                                                |    |             
|           |                                                                                                                                                                                                                |    |             
|EX-31.2    |                                                                                                                                                                                                                |    |             
|           |                                                                                                                                                                                                                |    |             
|EX-32.1    |                                                                                                                                                                                                                |    |             
|           |                                                                                                                                                                                                                |    |             
|EX-32.2    |                                                                                                                                                                                                                |    |             

2

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PART I.

FINANCIAL INFORMATION


Item 1. FINANCIAL
STATEMENTS


11 GOOD ENERGY, INC. AND SUBSIDARY 
(a development stage company) 
CONDENSED CONSOLDATED BALANCE SHEETS

|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------- | ----------- | ------------------ | - | ---------- | -
|                                                                                                                                                                                                                                                                                                                                                          |  | September 30,
 2010 |             | December 31,
 2009 |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |  
|                                                                                                                                                                                                                                                                                                                                                          |  | (unaudited)         |             |                    |   |           
|ASSETS                                                                                                                                                                                                                                                                                                                                                    |  |                     |             |                    |   |            |  
|Current assets:                                                                                                                                                                                                                                                                                                                                           |  |                     |             |                    |   |            |  
|Cash                                                                                                                                                                                                                                                                                                                                                      |  | $                   | 714,156     |                    | $ | 4,869,749  |  
|Inventory                                                                                                                                                                                                                                                                                                                                                 |  |                     | 693,536     |                    |   | 274,479    |  
|Accounts receivable, net                                                                                                                                                                                                                                                                                                                                  |  |                     | 80,293      |                    |   | 47,351     |  
|Other current assets                                                                                                                                                                                                                                                                                                                                      |  |                     | 170,280     |                    |   | 270,834    |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|Total current assets                                                                                                                                                                                                                                                                                                                                      |  |                     | 1,658,265   |                    |   | 5,462,413  |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|Property, plant and equipment, net                                                                                                                                                                                                                                                                                                                        |  |                     | 2,656,732   |                    |   | 2,814,931  |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|Other assets:                                                                                                                                                                                                                                                                                                                                             |  |                     |             |                    |   |            |  
|Patents                                                                                                                                                                                                                                                                                                                                                   |  |                     | 50,071      |                    |   |           |  
|Available for sale securities                                                                                                                                                                                                                                                                                                                             |  |                     | 870,850     |                    |   | 980,724    |  
|Goodwill                                                                                                                                                                                                                                                                                                                                                  |  |                     | 639,504     |                    |   | 639,504    |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|Total other assets:                                                                                                                                                                                                                                                                                                                                       |  |                     | 1,560,425   |                    |   | 1,620,228  |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|Total assets                                                                                                                                                                                                                                                                                                                                              |  | $                   | 5,875,422   |                    | $ | 9,897,572  |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|LIABILITIES
 AND STOCKHOLDERS EQUITY                                                                                                                                                                                                                                                                                                                     |  |                     |             |                    |   |            |  
|Current liabilities:                                                                                                                                                                                                                                                                                                                                      |  |                     |             |                    |   |            |  
|Accounts payable and accrued liabilities                                                                                                                                                                                                                                                                                                                  |  | $                   | 276,381     |                    | $ | 292,565    |  
|Notes payable, related party                                                                                                                                                                                                                                                                                                                              |  |                     |            |                    |   | 25,000     |  
|Convertible notes payable, net of discount                                                                                                                                                                                                                                                                                                                |  |                     |            |                    |   | 35,000     |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|Total current liabilities                                                                                                                                                                                                                                                                                                                                 |  |                     | 276,381     |                    |   | 352,565    |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|Commitments and contingencies                                                                                                                                                                                                                                                                                                                             |  |                     |             |                    |   |            |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|Stockholders equity:                                                                                                                                                                                                                                                                                                                                     |  |                     |             |                    |   |            |  
|Series A Preferred stock, $0.0001 par
 value; 11,000,000 shares authorized, issued and outstanding                                                                                                                                                                                                                                                        |  |                     | 1,100       |                    |   | 1,100      |  
|Common stock, $0.0001 par value; 65,000,000
 and 38,000,000 shares authorized as of September 30, 2010 and December 31,
 2009, respectively; 20,811,561 shares issued as of September 30, 2010 and
 15,055,714 shares as of December 31, 2009; 19,856,239 and 14,180,714 shares
 outstanding as of September 30, 2010 and December 31, 2009, respectively |  |                     | 2,081       |                    |   | 1,506      |  
|Common stock subscribed-convertible note                                                                                                                                                                                                                                                                                                                  |  |                     |            |                    |   | 6,477,739  |  
|Common stock subscribed-other                                                                                                                                                                                                                                                                                                                             |  |                     |            |                    |   | 7,137,223  |  
|Additional paid in capital                                                                                                                                                                                                                                                                                                                                |  |                     | 22,498,920  |                    |   | 6,563,877  |  
|Deficit accumulated during development
 stage                                                                                                                                                                                                                                                                                                             |  |                     | (15,085,499 | )                  |   | (9,385,942 | )
|Accumulated other comprehensive income
 (loss)                                                                                                                                                                                                                                                                                                            |  |                     | (320,061    | )                  |   | 49,504     |  
|Treasury stock, at cost, 955,322 and
 875,000 shares as of September 30, 2010 and December 31, 2009, respectively                                                                                                                                                                                                                                         |  |                     | (1,497,500  | )                  |   | (1,300,000 | )
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|Total stockholders equity                                                                                                                                                                                                                                                                                                                                |  |                     | 5,599,041   |                    |   | 9,545,007  |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  
|Total liabilities and stockholders equity                                                                                                                                                                                                                                                                                                                |  | $                   | 5,875,422   |                    | $ | 9,897,572  |  
|                                                                                                                                                                                                                                                                                                                                                          |  |                     |             |                    |   |            |  

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

3

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11 GOOD ENERGY, INC. AND SUBSIDIARY 
(a development stage company) 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(unaudited)

|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|----------------------------------------------------------------------------------------------------------- |  | --------------------------------- | ---------- | -------------------------------- | - | -------------------------------------------------------------------- | - | ---- | ---------- | - | - | ---------- | - | - | ----------- | -
|                                                                                                            |  |                                   |            |                                  |   | From
 May 23, 2007
 (date of inception)
 through
 September 30, 2010 |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                     
|                                                                                                            |  | Three
 months ended September 30, |            | Nine
 months ended September 30, |   |                                                                     
|                                                                                                            |  | 2010                              |            | 2009                             |   | 2010                                                                 |   | 2009 |            |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |  
|REVENUE:                                                                                                    |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Sales                                                                                                       |  | $                                 | 118,947    |                                  | $ | 22,148                                                               |   | $    | 197,454    |   | $ | 22,148     |   | $ | 375,388     |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Cost of sales                                                                                               |  |                                   | 184,126    |                                  |   | 33,035                                                               |   |      | 389,121    |   |   | 33,035     |   |   | 548,901     |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Gross loss                                                                                                  |  |                                   | (65,179    | )                                |   | (10,887                                                              | ) |      | (191,667   | ) |   | (10,887    | ) |   | (173,513    | )
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|OPERATING EXPENSES:                                                                                         |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|General, selling and administrative expenses                                                                |  |                                   | 1,314,602  |                                  |   | 585,560                                                              |   |      | 5,002,374  |   |   | 1,384,549  |   |   | 10,345,112  |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Research and development                                                                                    |  |                                   | 145,445    |                                  |   | 1,565                                                                |   |      | 371,768    |   |   | 1,565      |   |   | 640,349     |  
|Depreciation and amortization                                                                               |  |                                   | 43,251     |                                  |   | 20,289                                                               |   |      | 126,671    |   |   | 44,168     |   |   | 240,831     |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Total operating expenses                                                                                    |  |                                   | 1,503,298  |                                  |   | 607,414                                                              |   |      | 5,500,813  |   |   | 1,430,282  |   |   | 11,226,292  |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|NET (LOSS) FROM OPERATIONS                                                                                  |  |                                   | (1,568,477 | )                                |   | (618,301                                                             | ) |      | (5,692,480 | ) |   | (1,441,169 | ) |   | (11,399,805 | )
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Other income/(expense):                                                                                     |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Interest income                                                                                             |  |                                   |           |                                  |   | 5,528                                                                |   |      |           |   |   | 18,203     |   |   | 55,239      |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Interest expense                                                                                            |  |                                   |           |                                  |   | (888,072                                                             | ) |      | (7,077     | ) |   | (2,872,950 | ) |   | (3,849,982  | )
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Realized gain on sale of securities                                                                         |  |                                   |           |                                  |   | 107,849                                                              |   |      |           |   |   | 107,849    |   |   | 107,849     |  
|Gain on sale of property, plant and equipment                                                               |  |                                   |           |                                  |   | 1,200                                                                |   |      |           |   |   | 1,200      |   |   | 1,200       |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Net loss before provision for income taxes                                                                  |  |                                   | (1,568,477 | )                                |   | (1,391,796                                                           | ) |      | (5,699,557 | ) |   | (4,186,867 | ) |   | (15,085,499 | )
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Provision for income taxes                                                                                  |  |                                   |           |                                  |   |                                                                     |   |      |           |   |   |           |   |   |            |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS                                                                |  | $                                 | (1,568,477 | )                                | $ | (1,391,796                                                           | ) | $    | (5,699,557 | ) | $ | (4,186,867 | ) | $ | (15,085,499 | )
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Net loss per common share (basic and fully diluted)                                                         |  | $                                 | (0.08      | )                                | $ | (0.10                                                                | ) | $    | (0.32      | ) | $ | (0.29      | ) | $ | (1.04       | )
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Weighted average number of shares outstanding (used
in loss per share calculation basic and fully
 diluted) |  |                                   | 19,871,399 |                                  |   | 14,285,714                                                           |   |      | 17,844,209 |   |   | 14,285,714 |   |   | 14,533,899  |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Comprehensive loss:                                                                                         |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Net loss                                                                                                    |  | $                                 | (1,568,477 | )                                | $ | (1,391,796                                                           | ) | $    | (5,699,557 | ) | $ | (4,186,867 | ) | $ | (15,085,499 | )
|Unrealized (loss) gain on securities available for sale                                                     |  |                                   | 157,610    |                                  |   | 173,824                                                              |   |      | (369,565   | ) |   | 173,824    |   |   | (320,061    | )
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  
|Comprehensive loss                                                                                          |  | $                                 | (1,410,867 | )                                | $ | (1,217,972                                                           | ) | $    | (6,069,122 | ) | $ | (4,013,043 | ) | $ | (15,405,559 | )
|                                                                                                            |  |                                   |            |                                  |   |                                                                      |   |      |            |   |   |            |   |   |             |  

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

4

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11 GOOD ENERGY, INC. AND SUBSIDIARY 
(a development stage company) 
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY 
From January 1 2010 through September 30, 2010 
(unaudited)

|                                                                                  |  |           |            |        |   |                                             |  |                           |            |                              |   |                 |  |                              |            |                                                 |   |            |   |  |            |   |   |            |   |   |            |  |   |            |   |   |          |   |   |             |   |   |            |  
|--------------------------------------------------------------------------------- |  | --------- | ---------- | ------ | - | ------------------------------------------- |  | ------------------------- | ---------- | ---------------------------- | - | --------------- |  | ---------------------------- | ---------- | ----------------------------------------------- | - | ---------- | - |  | ---------- | - | - | ---------- | - | - | ---------- |  | - | ---------- | - | - | -------- | - | - | ----------- | - | - | ---------- | -
|                                                                                  |  |           |            |        |   |                                             |  |                           |            | Additional
 Paid in
 Capital |   | Treasury
 Stock |  | Other
 Comprehensive
 Income |            | Accumulated
 Deficit during
 Development
 Stage |   | Total      |  
|                                                                                  |  | Preferred |            | Common |   | Common
 stock subscribed
 Convertible Notes |  | Common
 stock
 Subscribed |            |                             
|                                                                                  |  | Stock     |            | Amount |   | Stock                                       |  | Amount                    |            | Stock                        |   | Amount          |  | Stock                        |            | Amount                                          |   |           
|                                                                                  |  |           |            |        |   |                                             |  |                           |            |                              |   |                 |  |                              |            |                                                 |   |            |   |  |            |   |   |            |   |   |           
|                                                                                 
|Balance, January 1, 2010                                                          |  |           | 11,000,000 |        | $ | 1,100                                       |  |                           | 15,055,714 |                              | $ | 1,506           |  |                              | 2,540,290  |                                                 | $ | 6,477,739  |   |  | 2,931,333  |   | $ | 7,137,223  |   | $ | 6,563,877  |  | $ | (1,300,000 | ) | $ | 49,504   |   | $ | (9,385,942  | ) | $ | 9,545,007  |  
|                                                                                 
|Common stock to be issued in exchange for convertible notes and
 accrued interest |  |           |           |        |   |                                            |  |                           |           |                              |   |                |  |                              | 8,223      |                                                 |   | 20,970     |   |  |           |   |   |           |   |   |           |  |   |           |   |   |         |   |   |            |   |   | 20,970     |  
|Sale of common stock                                                              |  |           |           |        |   |                                            |  |                           |           |                              |   |                |  |                              |           |                                                 |   |           |   |  | 276,000    |   |   | 805,846    |   |   |            |  |   |            |   |   |          |   |   |             |   |   | 805,846    |  
|                                                                                 
|Contribution of services by a related party                                       |  |           |           |        |   |                                            |  |                           |           |                              |   |                |  |                              |           |                                                 |   |           |   |  |           |   |   |           |   |   | 1,493,840  |  |   |           |   |   |         |   |   |            |   |   | 1,493,840  |  
|                                                                                 
|Common stock re-acquired                                                          |  |           |           |        |   |                                            |  |                           |           |                              |   |                |  |                              |           |                                                 |   |           |   |  |           |   |   |           |   |   |           |  |   | (197,500   | ) |   |         |   |   |            |   |   | (197,500   | )
|                                                                                 
|Unrealized loss on securities available for sale                                  |  |           |           |        |   |                                            |  |                           |           |                              |   |                |  |                              |           |                                                 |   |           |   |  |           |   |   |           |   |   |           |  |   |           |   |   | (369,565 | ) |   |            |   |   | (369,565   | )
|                                                                                 
|Common stock issued in settlement of common stock subscriptions                   |  |           |           |        |   |                                            |  |                           | 5,755,847  |                              |   | 575             |  |                              | (2,548,513 | )                                               |   | (6,498,709 | ) |  | (3,207,333 | ) |   | (7,943,069 | ) |   | 14,441,203 |  |   |           |   |   |         |   |   |            |   |   |           |  
|                                                                                 
|Net loss                                                                          |  |           |           |        |   |                                            |  |                           |           |                              |   |                |  |                              |           |                                                 |   |           |   |  |           |   |   |           |   |   |           |  |   |           |   |   |         |   |   | (5,699,557  | ) |   | (5,699,557 | )
|                                                                                  |  |           |            |        |   |                                             |  |                           |            |                              |   |                 |  |                              |            |                                                 |   |            |   |  |            |   |   |            |   |   |            |  |   |            |   |   |          |   |   |             |   |   |            |  
|Balance, September 30, 2010 (unaudited)                                           |  |           | 11,000,000 |        | $ | 1,100                                       |  |                           | 20,811,561 |                              | $ | 2,081           |  |                              |           |                                                 | $ |           |   |  |           |   | $ |           |   | $ | 22,498,920 |  | $ | (1,497,500 | ) | $ | (320,061 | ) | $ | (15,085,499 | ) | $ | 5,599,041  |  
|                                                                                  |  |           |            |        |   |                                             |  |                           |            |                              |   |                 |  |                              |            |                                                 |   |            |   |  |            |   |   |            |   |   |            |  |   |            |   |   |          |   |   |             |   |   |            |  

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

5

---



11 GOOD ENERGY, INC. AND SUBSIDIARY
(a development stage company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

|                                                                                           |  |                                 |            |      |   |                                                                  |   |   |             |  
|------------------------------------------------------------------------------------------ |  | ------------------------------- | ---------- | ---- | - | ---------------------------------------------------------------- | - | - | ----------- | -
|                                                                                           |  |                                 |            |      |   | From May 23, 2007
(date of inception) through
September 30, 2010 |  
|                                                                                           |  | Nine months ended September 30, |            |     
|                                                                                           |  | 2010                            |            | 2009 |   |                                                                 
|                                                                                           |  |                                 |            |      |   |                                                                  |  
|Cash flows from operating activities:                                                      |  |                                 |            |      |   |                                                                  |   |   |             |  
|Net loss for the period                                                                    |  | $                               | (5,699,557 | )    | $ | (4,186,866                                                       | ) | $ | (15,085,499 | )
|Adjustments to reconcile net loss to net
cash used in operating activities:                |  |                                 |            |      |   |                                                                  |   |   |             |  
|Depreciation and amortization                                                              |  |                                 | 299,757    |      |   | 44,168                                                           |   |   | 443,766     |  
|Amortization of debt discount                                                              |  |                                 |           |      |   | 2,512,085                                                        |   |   | 3,307,777   |  
|Compensation of services by a related party                                                |  |                                 | 1,493,840  |      |   |                                                                 |   |   | 2,024,840   |  
|Compensation of services to consultant                                                     |  |                                 |           |      |   | 43,178                                                           |   |   | 59,000      |  
|Fair value of options issued for services                                                  |  |                                 |           |      |   |                                                                 |   |   | 200,205     |  
|Gain on sale of property and equipment                                                     |  |                                 |           |      |   | (1,200                                                           | ) |   | (1,200      | )
|Realized gain on sale of securities
available for sale                                     |  |                                 |           |      |   | (107,849                                                         | ) |   | (107,849    | )
|Changes in operating assets and
liabilities:                                               |  |                                 |            |      |   |                                                                  |   |   |             |  
|Inventory                                                                                  |  |                                 | (419,057   | )    |   | (103,809                                                         | ) |   | (667,300    | )
|Accounts receivable                                                                        |  |                                 | (32,942    | )    |   | (23,184                                                          | ) |   | (80,293     | )
|Other current assets                                                                       |  |                                 | 100,554    |      |   | (18,203                                                          | ) |   | (10,107     | )
|Accounts payable and accrued liabilities                                                   |  |                                 | (15,214    | )    |   | (106,380                                                         | ) |   | 316,413     |  
|                                                                                           |  |                                 |            |      |   |                                                                  |   |   |             |  
|Net cash (used in) operating activities                                                    |  |                                 | (4,272,619 | )    |   | (1,948,060                                                       | ) |   | (9,600,247  | )
|                                                                                           |  |                                 |            |      |   |                                                                  |   |   |             |  
|Cash flows from investing activities:                                                      |  |                                 |            |      |   |                                                                  |   |   |             |  
|Acquisition, net of cash acquired                                                          |  |                                 |           |      |   |                                                                 |   |   | (588,952    | )
|Proceeds from sale of property and
equipment                                               |  |                                 |           |      |   | 3,200                                                            |   |   | 3,200       |  
|Purchase of property, plant and equipment                                                  |  |                                 | (141,558   | )    |   | (1,367,105                                                       | ) |   | (3,032,208  | )
|Payments for acquisition of patent                                                         |  |                                 | (50,071    | )    |   |                                                                 |   |   | (50,071     | )
|Proceeds from sale of securities available
for sale                                        |  |                                 |           |      |   | 204,752                                                          |   |   | 204,752     |  
|Purchase of securities available for sale                                                  |  |                                 | (259,691   | )    |   | (370,279                                                         | ) |   | (1,287,814  | )
|                                                                                           |  |                                 |            |      |   |                                                                  |   |   |             |  
|Net cash (used in) investing activities                                                    |  |                                 | (451,320   | )    |   | (1,529,432                                                       | ) |   | (4,751,093  | )
|                                                                                           |  |                                 |            |      |   |                                                                  |   |   |             |  
|Cash flows from financing activities:                                                      |  |                                 |            |      |   |                                                                  |   |   |             |  
|Proceeds from sale of shares to founders                                                   |  |                                 |           |      |   |                                                                 |   |   | 2,070       |  
|Due from related party                                                                     |  |                                 |           |      |   | (137,895                                                         | ) |   | (787,144    | )
|Proceeds from common stock subscription                                                    |  |                                 | 805,846    |      |   | 5,166,951                                                        |   |   | 10,253,069  |  
|Proceeds from issuance of convertible notes                                                |  |                                 |           |      |   | 4,830,000                                                        |   |   | 8,039,323   |  
|Proceeds from related party note payable                                                   |  |                                 |           |      |   |                                                                 |   |   | 25,000      |  
|Purchase of treasury stock                                                                 |  |                                 | (197,500   | )    |   |                                                                 |   |   | (647,500    | )
|Payments of related party note payable                                                     |  |                                 | (25,000    | )    |   |                                                                 |   |   | (25,000     | )
|Payments of notes payable                                                                  |  |                                 |           |      |   |                                                                 |   |   | (84,322     | )
|Payments of convertible notes                                                              |  |                                 | (15,000    | )    |   | (892,350                                                         | ) |   | (1,710,000  | )
|                                                                                           |  |                                 |            |      |   |                                                                  |   |   |             |  
|Net cash provided by financing activities                                                  |  |                                 | 568,346    |      |   | 8,966,706                                                        |   |   | 15,065,496  |  
|                                                                                           |  |                                 |            |      |   |                                                                  |   |   |             |  
|Net increase (decrease) in cash and cash
equivalents                                       |  |                                 | (4,155,593 | )    |   | 5,489,214                                                        |   |   | 714,156     |  
|Cash and cash equivalents at beginning of
period                                           |  |                                 | 4,869,749  |      |   |                                                                 |   |   |            |  
|                                                                                           |  |                                 |            |      |   |                                                                  |   |   |             |  
|                                                                                           |  |                                 |            |      |   |                                                                  |   |   |             |  
|Cash and cash equivalents at end of period                                                 |  | $                               | 714,156    |      | $ | 5,489,214                                                        |   | $ | 714,156     |  
|                                                                                           |  |                                 |            |      |   |                                                                  |   |   |             |  
|                                                                                           |  |                                 |            |      |   |                                                                  |   |   |             |  
|Supplemental disclosures of cash flow
information:                                         |  |                                 |            |      |   |                                                                  |   |   |             |  
|Taxes paid                                                                                 |  | $                               |           |      | $ |                                                                 |   | $ |            |  
|Interest paid                                                                              |  | $                               |           |      | $ |                                                                 |   | $ |            |  
|                                                                                           |  |                                 |            |      |   |                                                                  |   |   |             |  
|Non cash financing and investing
activities:                                               |  |                                 |            |      |   |                                                                  |   |   |             |  
|Common stock issued to acquire 11 Goods
Energy, LTD                                       |  | $                               |           |      | $ |                                                                 |   | $ | 429         |  
|Treasury stock received in exchange for
related party note receivable and accrued interest |  | $                               |           |      | $ |                                                                 |   | $ | 850,000     |  
|Common stock issued on settlement of debt
and related interest                             |  | $                               | 20,970     |      | $ |                                                                 |   | $ | 6,498,709   |  

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

6

---



11 GOOD ENERGY, INC. AND SUBSIDIARY
(a development stage company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
SEPTEMBER 30, 2010 AND 2009
(UNAUDITED)

NOTE 1  SIGNIFICANT ACCOUNTING POLICIES

Basis
and business presentation

The
accompanying unaudited condensed consolidated financial statements of 11 Good
Energy, Inc., (the Company), have been prepared in accordance with Regulation
S-X of the Securities and Exchange Act, as amended, and instructions to Form
10-Q and should be read in conjunction with the audited financials for the year
ended December 31, 2009 included elsewhere in the Companys SEC Registration
Statement on Form S-1/A filed on September 27, 2010. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.

In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. The
results from operations for the nine month period ended September 30, 2010, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2010.

The
consolidated financial statements include the accounts of the Company, and its
wholly-owned subsidiary 11 Goods Energy, LTD (11 Goods). All significant
intercompany balances and transactions have been eliminated in consolidation.

Dependency
on key management

The
future success or failure of the Company is dependent primarily upon the
continued services of its key executives and founder, in particular, the
services of Frederick C. Berndt, Chief Executive Officer, Gary R. Smith, the
companys Chief Operations Officer, and Daniel T. Lapp, the companys Chief
Financial Officer. The ability of the company to pursue its business strategy
effectively will also depend upon, among other factors, the successful
recruitment and retention of additional highly skilled and experienced
managerial, marketing, engineering and technical personnel. There can be no
assurance that the company will be able to retain or recruit such personnel.

New
accounting pronouncements

There
were various updates recently issued, most of which represented technical
corrections to the accounting literature or application to specific industries
and are not expected to a have a material impact on the Companys consolidated
financial position, results of operations or cash flows.

NOTE 2  LIQUIDITY

On
May 26, 2010, the Companys board of directors voted not to build a second
production facility until additional capital is obtained from either additional
debt or equity financing. As a result, the Company now anticipates that its
present cash balances to be sufficient to support its operations and budgeted
capital expenditures into 2011 even though the Company has incurred net losses
of $15,085,499 and used $9,600,247 of cash in operating activities from May 23,
2007 (date of inception) through September 30, 2010. Additionally, the Company
anticipates that more than nominal revenues will result by the end of 2010.

7

---



11 GOOD ENERGY, INC. AND SUBSIDIARY
(a development stage company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010 AND 2009
(UNAUDITED)

NOTE 3  INTANGIBLE ASSETS

Patents

Patents
are capitalized at incurred costs and are amortized ratably over the lesser of
their economic or legal life. The patents are currently in development stage
not subject to current period amortization.

Goodwill

The
Company does not amortize goodwill. The Company recorded goodwill in the amount
of $639,504 as a result of the acquisition of 11 Goods Energy LTD during the
year ended December 31, 2007.

The
Company accounts for and reports acquired goodwill under Accounting Standards
Codification subtopic 350-10, Intangibles-Goodwill and Other (ASC 350-10). In
accordance with ASC 350-10, the Company tests its intangible assets for
impairment on an annual or more often if events and circumstances warrant. Any
write-downs will be included in results from operations.

During
the years ended December 31, 2009 and 2008, the Company management performed an
evaluation of its goodwill for purposes of determining the implied fair value
of the assets at the end of each respective year. The test indicated that the
recorded remaining book value of its goodwill did not exceed its fair value for
the years ended December 31, 2009 and 2008. Considerable management judgment is
necessary to estimate the fair value. Accordingly, actual results could vary
significantly from managements estimates.

NOTE 4 - INVENTORIES

Inventory
is stated at the lower of cost or market. The cost is determined using the
first-in first-out method. Costs of finished goods inventory include costs
associated with the procurement and transportation of Soybean oil and other raw
materials used in the manufacture of G2 Diesel.

As
of September 30, 2010 and December 31, 2009, inventories consisted of the
following:

|                |  |                    |         |                   |   |         | 
|--------------- |  | ------------------ | ------- | ----------------- | - | ------- | 
|                |  | September
30,
2010 |         | December
31,
2009 |  
|                |  |                    |         |                   |  
|Raw materials   |  | $                  | 350,815 |                   | $ | 174,152 | 
|Work in process |  |                    | 1,059   |                   |   |        | 
|Finished fuel   |  |                    | 341,662 |                   |   | 100,327 | 
|                |  |                    |         |                   |   |         | 
|Total           |  | $                  | 693,536 |                   | $ | 274,479 | 
|                |  |                    |         |                   |   |         | 

8

---



11 GOOD ENERGY, INC. AND SUBSIDIARY
(a development stage company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010 AND 2009
(UNAUDITED)

NOTE 5  OTHER CURRENTASSETS

Other
assets as of September 30, 2010 and December 31, 2009 are comprised of the
following:

|                             |  |                    |         |                   |   |         | 
|---------------------------- |  | ------------------ | ------- | ----------------- | - | ------- | 
|                             |  | September
30,
2010 |         | December
31,
2009 |  
|                             |  |                    |         |                   |  
|Prepaid inventory            |  | $                  |        |                   | $ | 110,000 | 
|Prepaid fuel/product
testing |  |                    |        |                   |   | 99,925  | 
|Prepaid consulting           |  |                    | 146,970 |                   |   | 45,000  | 
|Prepaid other                |  |                    | 16,969  |                   |   | 9,568   | 
|Accounts receivable, other   |  |                    | 4,178   |                   |   | 4,178   | 
|Rental deposit               |  |                    | 2,163   |                   |   | 2,163   | 
|                             |  |                    |         |                   |   |         | 
|Total                        |  | $                  | 170,280 |                   | $ | 270,834 | 
|                             |  |                    |         |                   |   |         | 

NOTE 6  PROPERTY, PLANT AND EQUIPMENT

The
Companys property, plant and equipment at September 30, 2010 and December 31,
2009 consist of the following:

|                                |  |                    |           |                   |   |           | 
|------------------------------- |  | ------------------ | --------- | ----------------- | - | --------- | 
|                                |  | September
30,
2010 |           | December
31,
2009 |  
|                                |  |                    |           |                   |  
|Leasehold improvements          |  | $                  | 345,381   |                   | $ | 312,927   | 
|Factory equipment               |  |                    | 2,379,477 |                   |   | 2,325,754 | 
|Furniture and fixtures          |  |                    | 21,709    |                   |   | 21,709    | 
|Office equipment                |  |                    | 20,545    |                   |   | 20,545    | 
|Vehicles                        |  |                    | 131,225   |                   |   | 91,642    | 
|Computer equipment and
software |  |                    | 148,300   |                   |   | 138,243   | 
|Web design                      |  |                    | 51,505    |                   |   | 40,250    | 
|                                |  |                    |           |                   |   |           | 
|Total                           |  |                    | 3,098,142 |                   |   | 2,951,070 | 
|Less accumulated
depreciation   |  |                    | 441,410   |                   |   | 136,139   | 
|                                |  |                    |           |                   |   |           | 
|Net                             |  | $                  | 2,656,732 |                   |   | 2,814,931 | 
|                                |  |                    |           |                   |   |           | 

Depreciation
expense was $299,757 and $44,168 for the nine month periods ended September 30,
2010 and 2009, respectively, of which $173,086 and $-0- was included as part of
cost of sales for the nine month period ended September 30, 2010 and 2009,
respectively.

9

---



11 GOOD ENERGY, INC. AND SUBSIDIARY
(a development stage company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010 AND 2009
(UNAUDITED)

NOTE 7  AVAILABLE-FOR-SALE SECURITIES

Cost
and fair value of marketable equity securities at September 30, 2010 and
December 31, 2009 are as follows:

|                                                               |  |                    |          |                   |   |         | 
|-------------------------------------------------------------- |  | ------------------ | -------- | ----------------- | - | ------- | 
|                                                               |  | September
30,
2010 |          | December
31,
2009 |  
|                                                               |  |                    |          |                   |  
|Available for sale
securities:                                 |  |                    |          |                   |   |         | 
|Equity securities:                                             |  |                    |          |                   |   |         | 
|Fair value                                                     |  | $                  | 870,850  |                   | $ | 980,724 | 
|                                                               |  |                    |          |                   |   |         | 
|Total (losses) gains in
accumulated other comprehensive income |  |                    | (320,061 | )                 |   | 49,504  | 
|                                                               |  |                    |          |                   |   |         | 

During
the nine month period ended September 30, 2010, the Company did not realize any
realized gains or losses with the sales of marketable securities. Unrealized
gains (losses) are accounted for as other comprehensive income (loss).

NOTE 8  NOTE PAYABLE, RELATED PARTY

Note
payable, related party is due to shareholder and officer and is comprised of a
non interest bearing demand note. The note was issued in exchange for
acquisition of treasury shares and paid during the nine month period ended
September 30, 2010.

NOTE 9  CONVERTIBLE NOTES PAYABLE

Since
inception, the Company issued an aggregate of $7,930,000 unsecured convertible
notes payable due June 30, 2009 bearing interest at 8% per annum.

The
convertible notes payable (which include principal and accrued interest
thereon) are convertible at a price (the Conversion Price) based upon a 15%
discount to the next established equity offering price per share (the
Conversion Shares).

In
accordance with Accounting Standards Codification subtopic 470-20, Debt-Debt
With Conversion and Other Options (ASC 470-20), the Company recognized an embedded
beneficial conversion feature present in the notes. The Company allocated a
portion of the proceeds equal to the intrinsic value of that feature to
additional paid-in capital. The Company recognized and measured an aggregate of
$2,353,595 of the proceeds, which is equal to the intrinsic value of the
embedded beneficial conversion feature, to additional paid-in capital and a
discount against the notes. The debt discount attributed to the beneficial
conversion feature was amortized over the notes maturity period (till June 30,
2009) as interest expense.

In
connection with the issuance of the notes, the Company issued a commitment to
issue detachable warrants granting the holders the right to acquire an
aggregate of 3,228,523 shares of the Companys common stock at $2.55 per share.
The warrants expire on June 30, 2012. In accordance with ASC 470-20, the
Company recognized the value attributable to the warrants in the amount of
$954,184 to additional paid in capital and a discount against the notes. The
Company valued the warrant commitment in accordance with ASC 470-20 using the
Black-Scholes pricing model and the following assumptions: contractual terms of
3 to 5 years, an average risk free interest rate of 1.30% to 4.22%, a dividend
yield of 0%, and volatility of 110.19% to 162.99%. The debt discount attributed
to the value of the warrant commitment issued was amortized over the notes
maturity period (till June 30, 2009) as interest expense.

10

---



11 GOOD ENERGY, INC. AND SUBSIDIARY 
(a development stage company) 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
SEPTEMBER 30, 2010 AND 2009(UNAUDITED)

NOTE 9  CONVERTIBLE NOTES PAYABLE
(Continued)

Amortization of $-0- and $2,512,085 was recorded for the nine month
periods ended September 30, 2010 and 2009, respectively.

During the period from issuance through September 30, 2010, the Company
paid $1,695,000 in settlement of certain convertible notes. No gain or loss was
recorded in the settlement of the notes.

During the nine month period ended September 30, 2010, the Company
issued an aggregate of 2,548,513 shares of its common stock subscribed for
convertible notes. The common stock subscribed for convertible notes was in
settlement of $6,498,709 convertible notes payable and accrued interest. The
value of the common shares issued did not materially differ from the face value
of the convertible notes and accrued interest.

NOTE 10  COMMON STOCK

As of September 30, 2010, the Company has received net proceeds of
$10,253,069, through the subscription for common stock consisting of 3,977,333
shares of common stock and 1,988,667 warrants. All common shares subscribed
were issued during the nine month period ended September 30, 2010.

NOTE 11  COMMITMENTS AND CONTINGENCIES

The Company has entered into consulting agreements with individuals
responsible for creating political liaisons, government agency and investor
relations. The agreements are generally for a term of one year or less from
inception and renewable unless either the Company or the consultant terminates
such agreement by written notice.

NOTE 12  RELATED PARTY TRANSACTIONS

Facilities

Since April 1, 2008, the Company has occupied warehouse space provided
by one of the Companys founders. The Company agreed to pay a total of $1 per
month for the space. The Company records this fee as rent expense when
incurred. During this time period, the Company constructed a leasehold
improvement to the leased warehouse space for the purpose of locating our bio-
fuel manufacturing facility.

11

---



11 GOOD ENERGY, INC. AND SUBSIDIARY 
(a development stage company) 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
SEPTEMBER 30, 2010 AND 2009(UNAUDITED)

NOTE 13  FAIR VALUE

ASC 825-10 defines fair value as the price that would be received from
selling an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. When determining the fair
value measurements for assets and liabilities required or permitted to be
recorded at fair value, the Company considers the principal or most
advantageous market in which it would transact and considers assumptions that
market participants would use when pricing the asset or liability, such as
inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10
establishes a fair value hierarchy that requires an entity to maximize the use
of observable inputs and minimize the use of unobservable inputs when measuring
fair value. ASC 825-10 establishes three levels of inputs that may be used to
measure fair value:

Level 1 - Quoted prices in active markets for identical assets or
liabilities.

Level 2 - Observable inputs other than Level 1 prices such as quoted
prices for similar assets or liabilities; quoted prices in markets with
insufficient volume or infrequent transactions (less active markets); or
model-derived valuations in which all significant inputs are observable or can
be derived principally from or corroborated by observable market data for substantially
the full term of the assets or liabilities.

Level 3 - Unobservable inputs to the valuation methodology that are
significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less
observable or unobservable in the market, the determination of fair value
requires more judgment. In certain cases, the inputs used to measure fair value
may fall into different levels of the fair value hierarchy. In such cases, for
disclosure purposes, the level in the fair value hierarchy within which the
fair value measurement is disclosed is determined based on the lowest level
input that is significant to the fair value measurement.

Items recorded or measured at fair value on a recurring basis in the
accompanying consolidated financial statements consisted of the following items
as of September 30, 2010:

|                              |  |       |         |                                                                         |   |                                                 |  |                                                |   |  |   |   | 
|----------------------------- |  | ----- | ------- | ----------------------------------------------------------------------- | - | ----------------------------------------------- |  | ---------------------------------------------- | - |  | - | - | 
|                              |  | Total |         | Quoted
 Prices in
 Active
 Markets for
 Identical
 Instruments
 Level 1 |   | Significant
 Other
 Observable
 Inputs
 Level 2 |  | Significant
 Unobservable
 Inputs
 Level 3 (A) |  
|                              |  |       |         |                                                                         |   |                                                 |  |                                                |  
|Assets:                       |  |       |         |                                                                         |   |                                                 |  |                                                |   |  |   |   | 
|Securities available for sale |  | $     | 870,850 |                                                                         | $ | 870,850                                         |  | $                                              | 0 |  | $ | 0 | 
|                              |  |       |         |                                                                         |   |                                                 |  |                                                |   |  |   |   | 
|Total                         |  |       | 870,850 |                                                                         |   | 870,850                                         |  |                                                |   |  |   |   | 

The Company
adopted the provisions of ASC 825-10 prospectively effective as of the
beginning of Fiscal 2008. For financial assets and liabilities included within
the scope of ASC 825-10, the Company will be required to adopt the provisions
of ASC 825-10 prospectively as of the beginning of Fiscal 2009. The adoption of
ASC 825-10 did not have a material impact on our consolidated financial
position or results of operations.

The fair value of the assets, securities available for sale, at
September 30, 2010 was grouped as Level 1 valuation as the market price was readily
available.

12

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

Forward-Looking Statements

The information contained in this Form 10-Q and documents incorporated
herein by reference are intended to update the information contained in the
Companys Form S-1/A Registration Statement (File No. 333-166149), as amended,
which went effective with the SEC on September 30, 2010. Such Registration
Statement included the Companys audited financial statements for its fiscal
year ended December 31, 2009 and unaudited financial statements for the six
months ended June 30, 2010. This Form 10-Q presumes that readers have access
to, and will have read, the Managements Discussion and Analysis of Financial
Condition and Results of Operations, Risk Factors and other information
contained in such Form S-1/A Registration Statement, as amended.

This Quarterly Report on Form 10-Q contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended
(the Securities Act), and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements involve risks and uncertainties,
and actual results could be significantly different than those discussed in
this Form 10-Q. Certain statements contained in Managements Discussion and
Analysis, particularly in Liquidity and Capital Resources, and elsewhere in
this Form 10-Q are forward-looking statements. These statements discuss, among
other things, expected growth, future revenues and future performance. Although
we believe the expectations expressed in such forward-looking statements are
based on reasonable assumptions within the bounds of our knowledge of our
business, a number of factors could cause actual results to differ materially
from those expressed in any forward-looking statements, whether oral or
written, made by us or on our behalf. The forward-looking statements are
subject to risks and uncertainties identified under the Risk Factors section
of the aforementioned Form S-1/A Registration Statement, as amended. The risk
factors of said Registration Statement should not be construed as an exhaustive
list of all factors that could cause actual results to differ materially from
those expressed in forward-looking statements made by us. All forward-looking
statements included in this document are made as of the date hereof, based on
information available to the Company on the date thereof, and the Company
assumes no obligation to update any forward-looking statements.

Overview

11 Good Energy, Inc. is a Delaware corporation formed on May 23, 2007
for the purposes of developing, testing, manufacturing and distributing
bio-fuel with energy related plans and pursuits relying on the
commercialization of our proprietary fuel product, G2 Diesel, as discussed
below.

On October 23, 2007, we completed the purchase of an existing biodiesel
manufacturer, 11 Goods Energy, LTD, a limited liability company (becoming our
wholly-owned subsidiary), formed in the State of Ohio in February 2006.
Historically, our subsidiary has been a development stage company, which has
primarily engaged in research activities to develop a proprietary manufacturing
process to produce bio-fuel for diesel applications.

In early 2008, we began construction on a new manufacturing facility at
the location of our operating subsidiary in Magnolia, Ohio (Magnolia Plant). In
June 2008, we began placing tanks and constructing the infrastructure of the
Magnolia Plant. Unfortunately, the industry experienced changes in fire
suppression regulations requiring us to invest over $1,500,000 in additional
infrastructure not anticipated in the original capital expenditure budget. We
had to cease plant construction and operations from November 2008 to October
2009 in order to secure the financing and make the necessary changes to the
fire suppression system and design of the Magnolia Plant.

13

---



Acquisition of 11
Goods Energy, LTD

As a result of the purchase of 11 Goods Energy, LTD (11 Goods) all
of the assets, liabilities and proprietary technology of 11 Goods were
transferred to us by the former partners of 11 Goods in exchange for cash of
$611,900, $111,230 in assumed liabilities and 4,285,714 shares of common stock
of the company valued at $429. The assets and liabilities of 11 Goods were
recorded at fair market value at the time of acquisition. 11 Goods is our sole
subsidiary and operations and the management of 11 Goods and us are the same.
The consolidated financial statements include the accounts of us and our
wholly-owned subsidiary and all intercompany balances and transactions have
been eliminated.

The Company accounts for acquisitions in accordance with the provisions
of ASC 805-10. The Company assigns to all identifiable assets acquired, a
portion of the cost of the acquired company equal to the estimated fair value
of such assets at the date of acquisition. The Company records the excess of
the cost of the acquired company over the sum of the amounts assigned to
identifiable assets acquired as goodwill. Management determined the fair values
assigned to inventory based upon selling prices less cost of disposal and the
Companys profit allowance and the case of work in process less cost to
complete. The Fair value of plant and equipment are based on current
replacement costs. The Company recorded goodwill in the amount of $639,504 as a
result of the acquisition of 11 Goods Energy LTD during the year ended
December 31, 2007. The Company accounts for and reports acquired goodwill under
Accounting Standards Codification subtopic 350-10, Intangibles-Goodwill and
Other (ASC 350-10). The Company does not amortize goodwill. In accordance
with ASC 350-10, the Company tests its intangible assets for impairment on an
annual basis or more often if events and circumstances warrant. Any write-downs
will be included in results from operations.

Development Stage
Company - Product Development

We are currently in an early stage of our current business plan. We
have limited operating history with respect to the construction and operation
of biodiesel refineries for our own use. In this respect, from May 23, 2007
(date of inception) through September 30, 2010, our revenues have totaled
$375,388 and our deficit accumulated during our development stage was
$15,085,499. Further, our operating subsidiary incurred from February 2006
through October 2007, costs of approximately $100,000 in the development of our
subsidiarys proprietary manufacturing process and G2 Diesel product which are
not reflected in our accumulated deficit since their costs were incurred prior
to the acquisition date of our subsidiary. These costs were primarily comprised
of feedstock materials, labor and facilities costs. Since the acquisition, we
have further developed our process and product through testing and trials and
have expended money on labor, consulting, facilities and media productions in
order to further our product development. As of September 30, 2010, the development
of the fuels functionality is complete, although we continue to incur research
and development costs to develop new feedstock alternatives and to improve
materials procurement and fuel manufacturing techniques.

Critical Accounting
Policies

Our discussion and analysis of our financial condition and results of
operations are based upon our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of financial statements requires management to make estimates
and disclosures on the date of the financial statements. On an on-going basis,
we evaluate our estimates including, but not limited to, those related to
revenue recognition. We use authoritative pronouncements, historical experience
and other assumptions as the basis for making judgments. Actual results could
differ from those estimates. We believe that the following critical accounting
policies affect our more significant judgments and estimates in the preparation
of our financial statements.

14

---



Revenue Recognition.
We recognize revenue from product sales in accordance with ASC 605 Revenue
Recognition. Four basic criteria must be met before revenue can be recognized:
(1) persuasive evidence of an arrangement exists (through written sales
documentation); (2) delivery has occurred (through delivery into customers
tanks and acceptance); (3) the selling price is fixed and determinable; and (4)
collectability is reasonably assured. For criteria (1) we generate a sales
order and a shipping document defining number of gallons of fuel ordered,
delivery and payment terms based on standing customer data and the customers
purchase order. For criteria (2) we ensure delivery has occurred by documented
delivery terms defining where the customer accepts the fuel delivery. Fuel
stored off-site by the company remains as inventory until the customer receives
the fuel from the offsite storage facility. For criteria (3) management
determines the selling price based on feedstock costs and our desired margin
level. Our selling price fluctuates as feedstock prices increase or decrease,
primary the cost of soybean oil. Currently, management determines our selling
price on a weekly basis. For criteria (4) we establish creditworthiness of the
customer based on a review of established credit limits and current financial
health of the entity placing the fuel order. Provisions for estimated returns
and allowances, and other adjustments are provided for in the same period the
related sales are recorded, although we have not experienced any such items to
date and do not expect any significant provisions in the future. We have no
discount, rebate or warranty programs. Payments received in advance are
deferred until revenue recognition is appropriate. We have no post-delivery
obligations related to our products.

Inventory Valuation.
We are required to make judgments based on historical experience and future
expectations, as to the realizability of our inventory. We make these
assessments based on the following factors: (a) existing orders and usage, (b)
age of the inventory, and (c) historical experience.

Property and Equipment.We
are required to make judgments based on historical experience and future
expectations, as to the realizability of our property and equipment. We made
these assessments based on the following factors: (a) the estimated useful
lives of such assets, (b) technological changes in our industry, and (c) the
changing needs of our customers.

Fair Value of Intangible Assets.We
have adopted Statement of Accounting Standards Codification subtopic 805-10
(ASC 805-10). ASC 805-10 requires that long-lived assets and certain
identifiable intangibles held and used by the Company be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Events relating to
recoverability may include significant unfavorable changes in business
conditions, recurring losses, or a forecasted inability to achieve break-even
operating results over an extended period.

We evaluate the recoverability of long-lived assets based upon
forecasted undiscounted cash flows. Should impairment in value be indicated,
the carrying value of intangible assets will be adjusted, based on estimates of
future discounted cash flows resulting from the use and ultimate disposition of
the asset. ASC 805-10 also requires assets to be disposed of be reported at the
lower of the carrying amount or the fair value less costs to sell.

Stock-Based
Compensation

We account for our stock based compensation under ASC 718 Compensation
 Stock Compensation using the fair value based method. Under this method,
compensation cost is measured at the grant date based on the value of the award
and is recognized over the service period, which is usually the vesting period.
This guidance establishes standards for the accounting for transactions in
which an entity exchanges its equity instruments for goods or services. It also
addresses transactions in which an entity incurs liabilities in exchange for
goods or services that are based on the fair value of the entitys equity
instruments or that may be settled by the issuance of those equity instruments.

There were no employee stock options and employee stock purchases
granted to employees and directors during the period from May 23, 2007 (date of
inception) through December 31, 2008. On July 22, 2009, the company granted
500,000 stock options to outside directors at an exercise price of $3.00 per
share. We recorded the fair value of $200,205 as current period compensation
expense as a result of this transaction. These options are for a period of
three years and are fully vested. There were no unvested options outstanding as
of the date of adoption of FASB ASC Topic 718.

15

---



We use the fair value method for equity instruments granted to
non-employees (if any) and will use the Black-Scholes model for measuring the
fair value of options, if issued. The stock based fair value compensation is
determined as of the date of the grant or the date at which the performance of
the services is completed (measurement date) and is recognized over the vesting
periods.

Results of
Operations

By virtue of our purchase of 11 Goods, which became our sole
operations, the company is considered to be in the development stage in
accordance with the FASB ASC Topic 915  Development Stage Enterprises.Since its inception, the company has
devoted substantially all of its time to raising capital, obtaining financing,
research and development activities and obtaining many governmental
organizations, municipalities and corporations to test our G2 Diesel and its
performance as a blend with traditional #2 diesel fuel.

Three months Ended September 30, 2010
Compared to the Three months Ended September 30, 2009

The following table sets forth certain selected condensed consolidated
statement of operations data for the periods indicated:

|                                     |  |                                  |            |   |  |      |   |   |            |   |  |      |  
|------------------------------------ |  | -------------------------------- | ---------- | - |  | ---- | - | - | ---------- | - |  | ---- | -
|                                     |  | Three Months Ended September 30, |           
|                                     |  |                                  |           
|                                     |  | 2010                             |            | % |  | 2009 |   | % |           
|                                     |  |                                  |            |   |  |      |   |   |           
|Revenue                              |  | $                                | 118,947    |   |  | 100  | % | $ | 22,148     |   |  | 100  |  
|Cost of
 goods sold                  |  |                                  | 184,126    |   |  | >100 | % |   | 33,035     |   |  | >100 | %
|                                     |  |                                  |            |   |  |      |   |   |            |   |  |      |  
|Gross loss                           |  |                                  | (65,179    | ) |  |     |   |   | (10,887    | ) |  |     |  
|                                     |  |                                  |            |   |  |      |   |   |            |   |  |      |  
|Operating
 expenses:                 |  |                                  |            |   |  |      |   |   |            |   |  |      |  
|Selling,
 general and administrative |  |                                  | 1,314,602  |   |  | >100 | % |   | 585,560    |   |  | >100 | %
|Research and
 development            |  |                                  | 145,445    |   |  | >100 | % |   | 1,565      |   |  | 7    | %
|Depreciation
 and amortization       |  |                                  | 43,251     |   |  | <100 | % |   | 20,289     |   |  | <100 | %
|Total
 operating expenses:           |  |                                  | 1,503,298  |   |  |      |   |   | 607,414    |   |  |      |  
|                                     |  |                                  |            |   |  |      |   |   |            |   |  |      |  
|Net loss
 from operations            |  |                                  | (1,568,477 | ) |  |      |   |   | (618,301   | ) |  |      |  
|                                     |  |                                  |            |   |  |      |   |   |            |   |  |      |  
|Other
 income/expense:               |  |                                  |            |   |  |      |   |   |            |   |  |      |  
|Interest,
 net                       |  |                                  |           |   |  | <100 | % |   | (882,544   | ) |  | <100 | %
|Other
 income, net                   |  |                                  |           |   |  | <100 | % |   | 109,049    |   |  | <100 | %
|                                     |  |                                  |            |   |  |      |   |   |            |   |  |      |  
|Net loss                             |  | $                                | (1,568,477 | ) |  | <100 | % | $ | (1,391,796 | ) |  | <100 | %
|                                     |  |                                  |            |   |  |      |   |   |            |   |  |      |  

The increase in revenues for the three months ended September 30, 2010
of $96,799 compared to the three months ended September 30, 2009 is the result
of increased business activities. Operations were halted 2009 due to the
required re-engineering of our plant to meet fire suppression regulations. We
resumed operations in May 2009, however we had minimal activity. Many of our
testing programs were completed in 2008 and 2009 and the remaining existing
programs are expected to be finished in 2010. Management believes that the
results of these testing programs will likely result in increased demand and
sales orders for our G2 Diesel at premium prices which as of September 30, 2010
is approximately $4.50 per gallon compared to traditional #2 diesel fuel, which
price is approximately $2.50 per gallon.

16

---



Cost of goods sold was $184,126 for the three months ended September
30, 2010 and $33,035 for the three months ending September 30, 2009. The third
quarter of 2009 experienced less sales activity as described in the preceding
paragraph. For the three months ended September 30, 2010, we made an allocation
of manufacturing depreciation to cost of goods sold as a result of the plant
equipment capitalized in November 2009. We made no such allocation to cost of
goods sold for the third quarter of 2009. Currently, our G2 Diesel is being
sold to companies and governmental organizations and municipalities at reduced
prices equivalent to the cost of traditional #2 diesel fuel, to encourage them
to test our G2 Diesel as a blended product for:

| |   |                                                  
| | - | -------------------------------------------------
| |  | power
 performance, maintenance and engine noise;
| |  | emissions
 and exhaust smell; and                
| |  | fuel
 economy.                                   

Current margins for our testing programs resulted in gross losses of
$65,179 for the three months ended September 30, 2010 and $10,887 for the three
months ending September 30, 2009. The first nine months of 2009 had minimum
activity. We expect sales margins to improve once we have sales contracts in
place at our scheduled premium prices after the testing programs are concluded.

Research and development costs were $145,445 for the three months ended
September 30, 2010 and $1,565 for the three months ending September 30, 2009.
We halted research and development activities in the third quarter of 2009.
When compared to the three months ending September 30, 2010, we have increased
efforts to develop new feedstock alternatives and improve fuel manufacturing
techniques.

Depreciation and amortization increased by $22,962, primarily due to
the capitalization of $2.5 million in Leasehold Improvements and Manufacturing
Equipment, which began depreciating in November 2009.

Selling, general, and administrative expenses for the three months
ended September 30, 2010 of $1,314,602 exceeded revenues by $1,195,655. Such
costs include, among others, payroll and related expenses, insurance costs and
occupancy costs. The increase in selling, general and administrative expenses
of $729,042 in 2010 over the comparable period of the prior years same period
is primarily related to personnel and service provider costs. Also, we experienced
reduced general and administrative costs during the third quarter of 2009 due
to stopping operations in order to redesign the plant. We had primarily closed
the front office and halted disbursements until May of 2009. Here are some more
details regarding the composition of the selling, general and administrative
expenses:

| |   |                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | More
 specifically, our payroll and related costs increased by approximately
 $325,321 in the three months ended September 30, 2010 due to hiring a new
 Accounting Controller and additional accounting and administrative staff in
 mid to late 2009.
| |   |                                                                                                                                                                                                                                                        
| |  | Consulting
 and service provider fees such as advisory, legal, accounting and general
 overhead were $448,313 in the three months ended September 30, 2010 compared
 to $145,299 for the third quarter of 2009.                                        

Net loss was
$1,568,477 in the first three months ended September 30, 2010 as compared to
$1,391,796 for the comparable period in 2009. Basic and fully diluted net loss
per share for the three months ended September 30, 2010 and September 30, 2009
was $(0.08) and $(0.10), respectively. Basic and fully diluted weighted average
shares outstanding for the fiscal three months ended September 30, 2010 and
September 30, 2009 was 19,871,399 and 14,285,714, respectively.

17

---



Nine months Ended September 30, 2010 Compared
to the Nine months Ended September 30, 2009

The following table sets forth certain selected condensed consolidated
statement of operations data for the periods indicated:

|                                    |  |                                 |            |   |  |      |   |   |            |   |  |      |  
|----------------------------------- |  | ------------------------------- | ---------- | - |  | ---- | - | - | ---------- | - |  | ---- | -
|                                    |  | Nine Months Ended September 30, |           
|                                    |  |                                 |           
|                                    |  | 2010                            |            | % |  | 2009 |   | % |           
|                                    |  |                                 |            |   |  |      |   |   |           
|Revenue                             |  | $                               | 197,454    |   |  | 100  | % | $ | 22,148     |   |  | 100  | %
|Cost of goods sold                  |  |                                 | 389,121    |   |  | >100 | % |   | 33,035     |   |  | >100 | %
|                                    |  |                                 |            |   |  |      |   |   |            |   |  |      |  
|Gross loss                          |  |                                 | (191,667   | ) |  |     |   |   | (10,887    | ) |  |     |  
|                                    |  |                                 |            |   |  |      |   |   |            |   |  |      |  
|Operating expenses:                 |  |                                 |            |   |  |      |   |   |            |   |  |      |  
|Selling, general and administrative |  |                                 | 5,002,374  |   |  | >100 | % |   | 1,384,549  |   |  | >100 | %
|Research and development            |  |                                 | 371,768    |   |  | >100 | % |   | 1,565      |   |  | 7    | %
|Depreciation and amortization       |  |                                 | 126,671    |   |  | 64   | % |   | 44,168     |   |  | >100 | %
|                                    |  |                                 |            |   |  |      |   |   |            |   |  |      |  
|Total operating expenses:           |  |                                 | 5,500,813  |   |  |      |   |   | 1,430,282  |   |  |      |  
|                                    |  |                                 |            |   |  |      |   |   |            |   |  |      |  
|Net loss from operations            |  |                                 | (5,692,480 | ) |  |      |   |   | (1,441,169 | ) |  |      |  
|                                    |  |                                 |            |   |  |      |   |   |            |   |  |      |  
|Other income/expense:               |  |                                 |            |   |  |      |   |   |            |   |  |      |  
|Interest, net                       |  |                                 | (7,077     | ) |  | 4    | % |   | (2,854,747 | ) |  | >100 | %
|Other income, net                   |  |                                 |            |   |  |      |   |   | 109,049    |   |  | >100 | %
|                                    |  |                                 |            |   |  |      |   |   |            |   |  |      |  
|                                    |  |                                 |            |   |  |      |   |   |            |   |  |      |  
|Net loss                            |  | $                               | (5,699,557 | ) |  | >100 | % | $ | (4,186,867 | ) |  | >100 | %
|                                    |  |                                 |            |   |  |      |   |   |            |   |  |      |  

The increase in revenues for the nine months ended September 30, 2010
of $175,306 compared to the nine months ended September 30, 2009 is the result
of minimum sales activity in same period of 2009. Operations were halted 2009
due to the required re-engineering of our plant to meet fire suppression
regulations. We resumed operations in May 2009, however we had minimal
activity. Many of our testing programs completed in 2008 and 2009 and the
remaining existing programs are expected to be finished in 2010. Management
believes that the results of these testing programs will likely result in
increased demand and sales orders for our G2 Diesel at premium prices which as
of September 30, 2010 is approximately $4.50 per gallon compared to traditional
#2 diesel fuel, which price is approximately $2.50 per gallon.

Cost of goods sold was $389,121 for the nine months ended September 30,
2010 and $33,035 for the nine months ending September 30, 2009. The first nine
months of 2009 experienced minimum cost of sales activity as a result of no
sales activity as described in the preceding paragraph. For the nine months
ended September 30, 2010, we made an allocation of manufacturing depreciation
to cost of goods sold as a result of the plant equipment capitalized in
November 2009. We made no such allocation to cost of goods sold for the first
nine months of 2009. Currently, our G2 Diesel is being sold to companies and
governmental organizations and municipalities at prices equivalent to the cost
of traditional #2 diesel fuel, to encourage them to test our G2 Diesel as a
blended product for:

|  |                                                  
|- | -------------------------------------------------
| | power
 performance, maintenance and engine noise;
| | emissions
 and exhaust smell; and                
| | fuel
 economy.                                   

Current margins for our testing programs resulted in gross losses of
$191,667 for the nine months ended September 30, 2010 and $10,887 for the nine
months ending September 30, 2009. We expect sales margins to improve once we
have sales contracts in place at our scheduled premium prices after the testing
programs are concluded.

18

---



Research and development costs were $371,768 for the nine months ended
September 30, 2010 and $1,565 for the nine months ending September 30, 2009. We
halted research and development activities in the first nine months of 2009.
When compared to the nine months ending September 30, 2009, we have increased
efforts to develop new feedstock alternatives and improve fuel manufacturing techniques.

Depreciation and amortization increased by $82,503, primarily due to
the capitalization of $2.5 million in Leasehold Improvements and Manufacturing
Equipment, which began depreciating in November 2009.

Selling, general, and administrative expenses for the nine months ended
September 30, 2010 of $5,002,374 exceeded revenues by $4,804,920. Such costs
include, among others, payroll and related expenses, insurance costs and
occupancy costs. The increase in selling, general and administrative expenses
of $3,617,825 in 2010 over the comparable period of the prior years same
period is primarily related to the $1.5 million of selling general and
administrative expense incurred as a result of shares of common stock
transferred to consultants and employees from various founders of the company;
payroll and service provider fees. Also, we experienced minimum activity during
the first nine months of 2009 due to stopping operations in order to redesign
the plant. We had primarily closed the front office and halted disbursements
until May of 2009. Here are some more details regarding the composition of the
selling, general and administrative expenses:

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | More specifically, our payroll and related costs increased by
 approximately $537,957 in the nine months ended September 30, 2010 due to
 hiring a new Chief Operating Officer, Plant Manager, Accounting Controller,
 and administrative staff in mid 2009.                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Consulting and service provider fees such as advisory,
     legal, accounting and general overhead were $2,408,574 in the nine months
     ended September 30, 2010 compared to $347,936 for first nine months of 2009.
     This increase included non cash compensation to consultants and employees
     in the amount of approximately $1.5 million in connection with shares of
     common stock contributed by various founders
     of the company.

Net loss was $5,699,557 in the first nine months ended September 30,
2010 as compared to $4,186,867 for the comparable period in 2009. Basic and
fully diluted net loss per share for the nine months ended September 30, 2010
and September 30, 2009 was $(0.32) and (0.29), respectively. Basic and fully
diluted weighted average shares outstanding for the fiscal nine months ended
September 30, 2010 and September 30, 2009 was 17,844,209 and 14,285,714,
respectively.

Liquidity and Capital Resources

The company had cash and cash equivalents of $714,156 at September 30,
2010. Net cash was used in operating activities of $4,272,619 for the nine
months ended September 30, 2010. Cash used in operations was a result of a net
loss for the period of $5,699,557; an increase in inventory of $419,057; an
increase in accounts receivable of $32,942 and a decrease in payables of
$15,214 partially offset by non cash compensation of services by a related
party of $1,493,840, depreciation and amortization of $299,757 and reduction in
other assets of $100,554. Net cash used in investing activities of $451,320 for
the nine months ended September 30, 2010, included purchase of property, plant
and equipment and patent costs of $191,629 and purchase of securities available
for sale of $259,691. Net cash provided by financing activities of $568,346 for
the nine months ended September 30, 2010, included proceeds from the sale of
Common Stock of $805,846, partially offset by the purchase of treasury stock of
$197,500, payments of related party note payable of $25,000 and payments of
convertible notes of $15,000.

19

---



The company had cash and cash equivalents of $5,489,214
    at September 30, 2009. Net cash was used in operating activities of $1,948,060
    for the nine months ended September 30, 2009. Cash used in operations was
    a result of a net loss for the period of $4,186,866, net changes in assets
    and liabilities in the amount of $251,576 and realized gain of sale of securities
    in the amount of $107,849, partially offset by amortization of debt discount
    of $2,512,085, depreciation and amortization of $44,168 and non cash compensation
    of $43,178. Net cash used in investing activities of $1,529,432 for the nine
    months ended September 30, 2009, primarily due to purchase of property, plant
    and equipment of $1,367,105 and purchase of securities available for sale
    of $370,279, partially offset by proceeds from the sale of securities available
    for sale of $204,752. Net cash provided by financing activities of $8,966,706
    for the nine months ended September 30, 2009, included proceeds from the
    sale of Common Stock of $5,166,951 and proceeds from the issuance of convertible
    notes of $4,830,000, partially offset by amounts due from a related party
    of $137,895 and payment of convertible notes in the amount of $892,350.

From May 23, 2007 (date of inception) through December 31, 2009, the
company raised $7,930,000 by issuing notes payable convertible into Common
Stock, bearing 8% interest per annum. These Notes (including principal and
accrued interest thereon) became convertible at a price of $2.55 per share (the
Conversion Price) based upon a 15% discount to the companys equity raise
which was completed at an offering price of $3.00 per share between August 2009
and March 2010. In addition to the number of conversion shares to be delivered
to each Holder of this Note, upon conversion of the Principal Amount and
accrued interest thereon, the company also delivered Unclassified Warrants expiring
June 30, 2012 to purchase a number of shares of Common Stock equal to the
number of Conversion Shares. As of September 30, 2010 and December 31, 2009,
the company had outstanding $0 and $35,000 respectively, of these convertible
notes.

As of September 30, 2010, the company converted $6,498,709 of
Convertible notes payable to Common Stock issued at a price of $2.55 per share,
or 2,548,513 shares issued and warrants to purchase 3,228,523 shares of Common
Stock and the entire remaining balance of convertible notes was redeemed, with
principal and accrued interest paid to each redeeming note holder.

As of September 30, 2010, the company had raised $11,932,000 through
the sale of its Common Stock at a price of $3.00 per share, for a total of
3,977,333 shares, resulting in net proceeds to us of $10,253,069.

We have a history of losses from operations and an accumulated deficit
of $15,085,499 at September 30, 2010 and working capital of approximately
$1,381,884. As of September 30, 2010, we are operating one production facility,
currently have a total of 12 employees, with a burn rate of approximately
$210,000 per month. In the absence of significant revenues, management believes
that our capital and liquidity needs for our current plant operations will be
met through our existing working capital and equity securities available for
sale. While the company anticipates more than nominal revenues will result by
the end of 2010, our ability to achieve profitable operations may depend on our
ability in 2011 to raise additional financing, on terms satisfactory to us,
particularly if cash flow from operations is less than expected by management.
Further, there is no guarantee that we will ever be able to operate profitably
or derive any significant revenues from our operations.

We anticipate that our future liquidity requirements will arise from
the need to finance our accounts receivable and inventories, and from the need
to fund our current obligations and capital expenditures. The primary sources
of funding for our current operations will be the companys existing working
capital and equity securities available for sale, cash generated from
operations, and, if needed, raising additional capital either from the sale of
equity and/or debt securities.

20

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Our future plans include purchasing and/or leasing a site for the
purpose of constructing a second production facility with an estimated annual
output capacity of 30,000,000 gallons of G2 Diesel. To date, we have completed
engineering and construction plans for such a facility and have made inquiries
into potential sites in the State of Ohio for such a facility. However,
detailed milestones of these plans and the specific steps needed to accomplish
each milestone do not currently exist. Management estimates that once a site is
secured, that construction permitting and all the other steps necessary to have
such a site constructed and operational would take approximately one year to
complete. As of September 30, 2010, Management has adopted a board resolution
that no further material costs will be expended on a potential second
production facility until the construction and operational costs of such a
facility, which are estimated at approximately $6,000,000, are first secured so
that our plans for a new production facility will not be a burden to our
current liquidity and capital resource needs.

The actual costs of this new facility will depend upon many factors,
including, without limitation, the location and cost of the land, demolition
costs of existing facilities (if any) on the site, environmental concerns (if
any) and the size of the new plant. We can provide no assurances that the
company will be able to obtain adequate financing for its second production
facility on terms satisfactory to us, if at all.

New accounting pronouncements

There were various updates recently issued, most
    of which represented technical corrections to the accounting literature or
    application to specific industries and are not expected to a have a material
    impact on the Companys consolidated financial position, results of
    operations or cash flows.

21

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Item 3.  Controls and Procedures.

Our management, with the participation of our
    Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness
of our disclosure controls and procedures as of September 30, 2010. The term disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the companys management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed an

d operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2010, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

There were no changes in our internal control
    over financial reporting that occurred during the three months ended September
    30, 2010 that have materially affected, or are reasonably likely to materially
    affect, our internal control over financial reporting.

22

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PART II. OTHER
INFORMATION

ITEM 1.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Rule 463 of the Securities Act requires the Company to report on the
net proceeds of the offering following the effectiveness of its first
registration statement, File No. 333-166149. As reported in the registration
statement of which the prospectus is a part, we do not expect to receive any
net proceeds from the offering, as the offering is being made on behalf of
selling security holders

In the quarter ended September 30, 2010, there was only one repurchase
of securities transaction, as follows:

|                                                                                                                         |  |                               |  |                                |  |                                                                 |  |                                                                                 | 
|------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------- |  | ------------------------------ |  | --------------------------------------------------------------- |  | ------------------------------------------------------------------------------- | 
|Date                                                                                                                     |  | Total #
 of shares
 purchased |  | Average
 price
 paid per share |  | Total shares
 purchased as
 part of
 publicly
 announced
 plans |  | Maximum
 number
 or dollar amount
 that may yet be
 purchased under
 the
 plans | 
|                                                                                                                         |  |                               |  |                                |  |                                                                 |  |                                                                                 | 
|                                                                                                                         |  |                               |  |                                |  |                                                                 |  |                                                                                 | 
|Aug. 2010                                                                                                                |  | 30,322                        |  | 2.47                           |  | 30,322                                                          |  | (1)                                                                             | 
|                                                                                                                         |  |                               |  |                                |  |                                                                 |  |                                                                                 | 
|                                                                                                                        
|(1) At the
 time of each transaction, the company did not plan to repurchase any
 additional shares of our common stock.

23

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ITEM 2. EXHIBITS:

The following exhibits were previously filed under a Form S-1
Registration Statement, file No. 333-166149 unless otherwise noted:

|                  |  |                        |                                                                                                                                                                                     
|----------------- |  | ---------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 
 No.     |  | Description of Exhibit
|                  |  |                       
|                  |  |                        |                                                                                                                                                                                     
|2.1               |  |                        | Agreement
 and Plan of Organization between Registrant and 11 Goods Energy, LTD.                                                                                                   
|                  |  |                        |                                                                                                                                                                                     
|2.2               |  |                        | Corrections
 to Exhibit 2.1                                                                                                                                                         
|                  |  |                        |                                                                                                                                                                                     
|3.1               |  |                        | Certification
 of Incorporation                                                                                                                                                     
|                  |  |                        |                                                                                                                                                                                     
|3.2               |  |                        | By-Laws                                                                                                                                                                             
|                  |  |                        |                                                                                                                                                                                     
|3.3               |  |                        | Certificate
 of Amendment to Certificate of Incorporation                                                                                                                           
|                  |  |                        |                                                                                                                                                                                     
|3.4               |  |                        | Certificate
 of Designation                                                                                                                                                         
|                  |  |                        |                                                                                                                                                                                     
|10.1              |  |                        | Employment
 Contract - Frederick C. Berndt                                                                                                                                          
|                  |  |                        |                                                                                                                                                                                     
|10.2              |  |                        | Employment
 Contract - Daniel Lapp                                                                                                                                                  
|                  |  |                        |                                                                                                                                                                                     
|10.3              |  |                        | Employment
 Contract - Aaron Harnar                                                                                                                                                 
|                  |  |                        |                                                                                                                                                                                     
|10.4              |  |                        | Consulting
 Agreement with Clayton R. Livengood                                                                                                                                     
|                  |  |                        |                                                                                                                                                                                     
|10.5              |  |                        | Employment
 Agreement - Gary R. Smith                                                                                                                                               
|                  |  |                        |                                                                                                                                                                                     
|10.6              |  |                        | Finders
 Agreement - Jesup Lamont                                                                                                                                                  
|                  |  |                        |                                                                                                                                                                                     
|10.7              |  |                        | Consulting
 Agreement with Capital Keys                                                                                                                                             
|                  |  |                        |                                                                                                                                                                                     
|10.8              |  |                        | Consulting
 Agreement with California Strategies                                                                                                                                    
|                  |  |                        |                                                                                                                                                                                     
|10.9              |  |                        | Office Lease
 dated April 25, 2007 between the Registrant and Triad Realty, LLC, including
 a First Lease Amendment dated June 21, 2007 and a Second Amendment dated July
 15, 2009.
|                  |  |                        |                                                                                                                                                                                     
|21.1              |  |                        | Subsidiary
 of Registrant                                                                                                                                                           
|                  |  |                        |                                                                                                                                                                                     
|31.1              |  |                        | Chief
 Executive Officer Rule 13a-14(a)/15d-14(a) Certification (*)                                                                                                                 
|                  |  |                        |                                                                                                                                                                                     
|31.2              |  |                        | Chief
 Financial Officer Rule 13a-14(a)/15d-14(a) Certification (*)                                                                                                                 
|                  |  |                        |                                                                                                                                                                                     
|32.1              |  |                        | Chief
 Executive Officer Section 1350 Certification (*)                                                                                                                             
|                  |  |                        |                                                                                                                                                                                     
|32.2              |  |                        | Chief
 Financial Officer Section 1350 Certification (*)                                                                                                                             
|                  |  |                        |                                                                                                                                                                                     
|                  |  |                        |                                                                                                                                                                                     
|                 
|* Filed herewith. |  |                       

24

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                         |                                                               | 
|------------------------ | ------------------------------------------------------------- | 
|                         | 11 GOOD
 ENERGY, INC.                                         | 
|                         |                                                               | 
|Date: November
 15, 2010 | By: /s/
 Frederick C. Berndt                                  | 
|                         |                                                               | 
|                         | Frederick C.
 Berndt, President (principal executive officer)
|                         |                                                               | 
|                         |                                                               | 
|                         |                                                               | 
|Date:
 November 15, 2010 | By: /s/
 Daniel T. Lapp                                       | 
|                         |                                                               | 
|                         | Daniel T.
 Lapp,                                              | 
|                         | Chief
 Financial Officer (principal financial officer)       

25

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