|                                                        
|--------------------------------------------------------
|UNITED
 STATES                                          
|SECURITIES
 AND EXCHANGE COMMISSION                     
|WASHINGTON, D.C. 20549                                  
|                                                        
|                                                        
|FORM
 10-Q                                              
|                                                        
|QUARTERLY REPORT
 PURSUANT TO SECTION 13 OR 15(D) OF THE
|SECURITIES EXCHANGE ACT
 OF 1934                        
|                                                        
|FOR THE QUARTERLY
 PERIOD ENDED JUNE 30, 2011           
|                                                        
|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)
|                                                                                   
|                                                                                   

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 August 22, 2011, the registrant had a total of 19,901,239 shares of Common Stock
outstanding

---



11 GOOD ENERGY, INC. AND SUBSIDIARY

INDEX

|               |                                                                                                                                                                                        |    |             
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- | ------------
|               |                                                                                                                                                                                        |    | Page
 Number
|               |                                                                                                                                                                                        |    |             
|PART I         | Financial Information                                                                                                                                                                  |    |             
|               |                                                                                                                                                                                        |    |             
|Item 1.        | Financial
 Statements (unaudited)                                                                                                                                                      |    |             
|               |                                                                                                                                                                                        |    |             
|               | Condensed
 Consolidated Balance Sheets  June 30, 2011 (Unaudited) and December 31, 2010                                                                                               |    | 3           
|               |                                                                                                                                                                                        |    |             
|               | Unaudited
 Condensed Consolidated Statements of Operations  Three Months Ended June 30,
 2011 and June 30, 2010 and for the period May 23, 2007 (date of inception) to
 June 30, 2011 |    | 4           
|               |                                                                                                                                                                                        |    |             
|               | Unaudited
 Condensed Consolidated Statements of Stockholders Equity  For the Period May
 23, 2007 (Date of Inception) to June 30, 2011                                                |    | 5           
|               |                                                                                                                                                                                        |    |             
|               | Unaudited
 Condensed Consolidated Statements of Cash Flows  Six Months Ended June 30,
 2011 and June 30, 2010 and for the period May 23, 2007 (date of inception) to
 June 30, 2011   |    | 6-7         
|               |                                                                                                                                                                                        |    |             
|               | Notes to
 Unaudited Condensed Consolidated Financial Statements                                                                                                                        |    | 8           
|               |                                                                                                                                                                                        |    |             
|Item 2.        | Managements Discussion and Analysis of
 Financial Condition and Results of Operations                                                                                                 |    | 20-29       
|               |                                                                                                                                                                                        |    |             
|Item 3.        | Quantitative and Qualitative Disclosures
 About Market Risk                                                                                                                            |    | 30          
|               |                                                                                                                                                                                        |    |             
|Item 4.        | Controls and Procedures                                                                                                                                                                |    | 30          
|               |                                                                                                                                                                                        |    |             
|PART II        | Other Information                                                                                                                                                                      |    | 31          
|               |                                                                                                                                                                                        |    |             
|               | Exhibits                                                                                                                                                                               |    | 31-32       
|               |                                                                                                                                                                                        |    |             
|SIGNATURES     |                                                                                                                                                                                        | 33
|               |                                                                                                                                                                                        |    |             
|Certifications |                                                                                                                                                                                        |   

2

---



PART I.

FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

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

|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | ------------------ | - | ----------- | -
|                                                                                                                                                                                                                                                            |  | June 30,
 2011 |             | December 31,
 2010 |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |  
|                                                                                                                                                                                                                                                            |  | (unaudited)    |             |                    |  
|ASSETS                                                                                                                                                                                                                                                      |  |                |             |                    |   |             |  
|Current assets:                                                                                                                                                                                                                                             |  |                |             |                    |   |             |  
|Cash                                                                                                                                                                                                                                                        |  | $              | 12,519      |                    | $ | 29,879      |  
|Inventory                                                                                                                                                                                                                                                   |  |                | 469,949     |                    |   | 624,739     |  
|Accounts receivable, net                                                                                                                                                                                                                                    |  |                | 38,372      |                    |   | 51,801      |  
|Available for sale securities                                                                                                                                                                                                                               |  |                | 1,299       |                    |   | 576,990     |  
|Other current assets                                                                                                                                                                                                                                        |  |                | 47,357      |                    |   | 24,974      |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|Total current assets                                                                                                                                                                                                                                        |  |                | 569,496     |                    |   | 1,308,383   |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|Property, plant and equipment, net                                                                                                                                                                                                                          |  |                | 2,371,022   |                    |   | 2,562,675   |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|Other assets:                                                                                                                                                                                                                                               |  |                |             |                    |   |             |  
|Patents                                                                                                                                                                                                                                                     |  |                | 65,479      |                    |   | 58,272      |  
|Goodwill                                                                                                                                                                                                                                                    |  |                | 639,504     |                    |   | 639,504     |  
|Deposits                                                                                                                                                                                                                                                    |  |                | 2,163       |                    |   | 2,163       |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|Total other assets:                                                                                                                                                                                                                                         |  |                | 707,146     |                    |   | 699,939     |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|Total assets                                                                                                                                                                                                                                                |  | $              | 3,647,664   |                    | $ | 4,570,997   |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|LIABILITIES
 AND STOCKHOLDERS EQUITY                                                                                                                                                                                                                       |  |                |             |                    |   |             |  
|Current liabilities:                                                                                                                                                                                                                                        |  |                |             |                    |   |             |  
|Accounts payable and accrued liabilities                                                                                                                                                                                                                    |  | $              | 942,286     |                    | $ | 458,043     |  
|Note payable related party                                                                                                                                                                                                                                  |  |                | 50,000      |                    |   |             |  
|Advances, related party                                                                                                                                                                                                                                     |  |                | 132,641     |                    |   |            |  
|Convertible notes payable, net of debt
 discount                                                                                                                                                                                                            |  |                | 49,306      |                    |   |            |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|Total current liabilities                                                                                                                                                                                                                                   |  |                | 1,174,233   |                    |   | 458,043     |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|Stockholders equity:                                                                                                                                                                                                                                       |  |                |             |                    |   |             |  
|Series A
 Preferred stock, $0.0001 par value; 11,000,000 shares authorized, issued and
 outstanding at June 30, 2011 and December 31, 2010.                                                                                                                 |  |                | 1,100       |                    |   | 1,100       |  
|Common
 stock, $0.0001 par value; 65,000,000 shares authorized; 20,856,561 and
 20,811,561 issued as of June 30, 2011 and December 31, 2010, respectively;
 19,901,239 and 19,856,239 outstanding as of June 30, 2011 and December 31,
 2010, respectively. |  |                | 2,086       |                    |   | 2,081       |  
|Additional
 paid in capital                                                                                                                                                                                                                                 |  |                | 24,845,230  |                    |   | 22,498,920  |  
|Due from
 related party                                                                                                                                                                                                                                     |  |                | (78,519     | )                  |   | (53,519     | )
|Deficit
 accumulated during development stage                                                                                                                                                                                                               |  |                | (20,710,566 | )                  |   | (16,551,567 | )
|Accumulated other
 comprehensive income                                                                                                                                                                                                                     |  |                | (88,400     | )                  |   | (286,561    | )
|Treasury
 stock, 955,322 shares as of June 30, 2011 and December 31, 2010                                                                                                                                                                                   |  |                | (1,497,500  | )                  |   | (1,497,500  | )
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|Total stockholders equity                                                                                                                                                                                                                                  |  |                | 2,473,431   |                    |   | 4,112,954   |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  
|Total
 liabilities and stockholders equity                                                                                                                                                                                                                 |  | $              | 3,647,664   |                    | $ | 4,570,997   |  
|                                                                                                                                                                                                                                                            |  |                |             |                    |   |             |  

See the accompanying notes to these unaudited
condensed consolidated financial statements

3

---



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

|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|------------------------------------------------------------------------ |  | ---------------------------- | ---------- | -------------------------- | - | --------------------------------------------------------------- | - | ---- | ---------- | - | - | ---------- | - | - | ----------- | -
|                                                                         |  | Three
 months ended June 30, |            | Six
 months ended June 30, |   | From
 May 23, 2007
 (date of inception)
 through
 June 30, 2011 |  
|                                                                         |  | 2011                         |            | 2010                       |   | 2011                                                            |   | 2010 |            |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |  
|REVENUE:                                                                 |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Sales                                                                    |  | $                            | 68,291     |                            | $ | 30,080                                                          |   | $    | 97,513     |   | $ | 78,507     |   | $ | 567,513     |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Cost of sales                                                            |  |                              | 154,112    |                            |   | 97,747                                                          |   |      | 268,508    |   |   | 204,995    |   |   | 1,176,071   |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Gross loss                                                               |  |                              | (85,821    | )                          |   | (67,667                                                         | ) |      | (170,996   | ) |   | (126,488   | ) |   | (608,559    | )
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|OPERATING EXPENSES:                                                      |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|General, selling and
 administrative expenses                            |  |                              | 2,622,851  |                            |   | 1,135,332                                                       |   |      | 3,584,110  |   |   | 3,687,772  |   |   | 14,981,330  |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Research and development                                                 |  |                              | 23,162     |                            |   | 125,000                                                         |   |      | 123,713    |   |   | 226,323    |   |   | 935,695     |  
|Depreciation and
 amortization                                           |  |                              | 29,185     |                            |   | 42,373                                                          |   |      | 58,371     |   |   | 83,420     |   |   | 298,583     |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Total operating expenses                                                 |  |                              | 2,675,198  |                            |   | 1,302,705                                                       |   |      | 3,776,194  |   |   | 3,997,515  |   |   | 16,215,606  |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|NET (LOSS) FROM OPERATIONS                                               |  |                              | (2,761,019 | )                          |   | (1,370,372                                                      | ) |      | (3,937,190 | ) |   | (4,124,003 | ) |   | (16,824,165 | )
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Other income/(expense):                                                  |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Interest income                                                          |  |                              |           |                            |   |                                                                |   |      |           |   |   |           |   |   | 55,384      |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Interest expense                                                         |  |                              | (8,726     | )                          |   |                                                                |   |      | (8,726     | ) |   | (7,077     | ) |   | (3,858,708  | )
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Realized (loss) gain on
 sale of securities                              |  |                              | (195,300   | )                          |   |                                                                |   |      | (213,083   | ) |   |           |   |   | (84,277     | )
|Gain on sale of property,
 plant and equipment                           |  |                              |           |                            |   |                                                                |   |      |           |   |   |           |   |   | 1,200       |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Net loss before provision
 for income taxes                              |  |                              | (2,965,045 | )                          |   | (1,370,372                                                      | ) |      | (4,158,999 | ) |   | (4,131,080 | ) |   | (20,710,566 | )
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Provision for income taxes                                               |  |                              |           |                            |   |                                                                |   |      |           |   |   |           |   |   |            |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|NET LOSS ATTRIBUTABLE TO
 COMMON SHAREHOLDERS                            |  | $                            | (2,965,045 | )                          | $ | (1,370,372                                                      | ) |      | (4,158,999 | ) | $ | (4,131,080 | ) | $ | (20,710,566 | )
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Net loss per common share
 (basic and fully diluted)                     |  | $                            | (0.15      | )                          | $ | (0.07                                                           | ) | $    | (0.21      | ) | $ | (0.25      | ) | $ | (1.34       | )
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Weighted average number of
 shares outstanding (basic and fully diluted) |  |                              | 19,877,996 |                            |   | 19,443,803                                                      |   |      | 19,867,177 |   |   | 16,813,814 |   |   | 15,504,532  |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Comprehensive loss:                                                      |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Net loss                                                                 |  | $                            | (2,965,045 | )                          | $ | (1,370,372                                                      | ) | $    | (4,158,999 | ) | $ | (4,131,080 | ) | $ | (20,710,566 | )
|Unrealized (loss) gain on
 securities available for sale                 |  |                              | (193,320   | )                          |   | (353,839                                                        | ) |      | 198,161    |   |   | (527,175   | ) |   | (88,400     | )
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  
|Comprehensive loss                                                       |  | $                            | (2,771,725 | )                          | $ | (1,724,211                                                      | ) | $    | (3,960,838 | ) | $ | (4,658,255 | ) | $ | (20,798,966 | )
|                                                                         |  |                              |            |                            |   |                                                                 |   |      |            |   |   |            |   |   |             |  

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

4

---



|                                                         
|---------------------------------------------------------
|11 GOOD ENERGY, INC. AND SUBSIDIARY                      
|(a development stage company)                            
|CONDENSED
 CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
|FROM MAY 23, 2007 (DATE OF INCEPTION)
 THROUGH JUNE 2011 
|(UNAUDITED)                                              

|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |   |          |   |   |   |  |   |   |  |   |            |   |   |            |  
|---------------------------------------------------------------------------- |  | --------- | ---------- | ------ | - | ------------------------------------------- |  | ------------------------ | ---------- | ---------------------------- | - | ----------------------- |  | --------------- | - | ---------------------------- | - | ----------------------------------------------- |  | ----- | - |  | - | - |  | - | --------- |  | - | -------- | - | - | - |  | - | - |  | - | ---------- | - | - | ---------- | -
|                                                                             |  | Preferred |            | Common |   | Common stock
 subscribed
 Convertible Notes |  | Common stock
 Subscribed |            | Additional
 Paid in
 Capital |   | Due from
 Related party |  | Treasury
 Stock |   | Other
 Comprehensive
 Income |   | Accumulated
 Deficit during
 Development
 Stage |  | Total |  
|                                                                             |  | Stock     |            | Amount |   | Stock                                       |  | Amount                   |            | Stock                        |   | Amount                  |  | Stock           |   | Amount                       |   |                                                 |  |       |   |  |  
|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |  
|May 23, 2007, date of inception                                              |  |           | 11,000,000 |        | $ | 1,100                                       |  |                          | 9,700,000  |                              | $ | 970                     |  |                 |  |                              | $ |                                                |  | $     |  |  | $ |  |  | $ |          |  | $ |         |   | $ |  |  | $ |  |  | $ |           |   | $ | 2,070      |  
|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |   |          |   |   |   |  |   |   |  |   |            |   |   |            |  
|Common stock issued for services to be rendered                              |  |           |           |        |   |                                            |  |                          | 300,000    |                              |   | 30                      |  |                 |  |                              |   |                                                |  |       |  |  |   |  |  |   | 155,970   |  |   |         |   |   |  |  |   |  |  |   |           |   |   | 156,000    |  
|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |   |          |   |   |   |  |   |   |  |   |            |   |   |            |  
|Common stock issued to acquire 11 Goods Energy LTD                          |  |           |           |        |   |                                            |  |                          | 4,285,714  |                              |   | 429                     |  |                 |  |                              |   |                                                |  |       |  |  |   |  |  |   |          |  |   |         |   |   |  |  |   |  |  |   |           |   |   | 420        |  
|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |   |          |   |   |   |  |   |   |  |   |            |   |   |            |  
|Beneficial conversion feature relating to the issuance of convertible
 notes |  |           |           |        |   |                                            |  |                          |           |                              |   |                        |  |                 |  |                              |   |                                                |  |       |  |  |   |  |  |   | 639,719   |  |   |         |   |   |  |  |   |  |  |   |           |   |   | 639,710    |  
|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |   |          |   |   |   |  |   |   |  |   |            |   |   |            |  
|Increase in due from related party                                           |  |           |           |        |   |                                            |  |                          |           |                              |   |                        |  |                 |  |                              |   |                                                |  |       |  |  |   |  |  |   |          |  |   | (211,034 | ) |   |  |  |   |  |  |   |           |   |   | (211,034   | )
|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |   |          |   |   |   |  |   |   |  |   |            |   |   |            |  
|Net loss                                                                     |  |           |           |        |   |                                            |  |                          |           |                              |   |                        |  |                 |  |                              |   |                                                |  |       |  |  |   |  |  |   |          |  |   |         |   |   |  |  |   |  |  |   | (771,405   | ) |   | (771,405   | )
|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |   |          |   |   |   |  |   |   |  |   |            |   |   |            |  
|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |   |          |   |   |   |  |   |   |  |   |            |   |   |            |  
|Balance, December 31, 2007                                                   |  |           | 11,000,000 |        |   | 1,100                                       |  |                          | 14,285,714 |                              |   | 1,429                   |  |                 |  |                              |   |                                                |  |       |  |  |   |  |  |   | 795,689   |  |   | (211,034 | ) |   |  |  |   |  |  |   | (771,405   | ) |   | (184,221   | )
|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |   |          |   |   |   |  |   |   |  |   |            |   |   |            |  
|Beneficial conversion feature relating to the issuance of convertible
 notes |  |           |           |        |   |                                            |  |                          |           |                              |   |                        |  |                 |  |                              |   |                                                |  |       |  |  |   |  |  |   | 613,254   |  |   |         |   |   |  |  |   |  |  |   |           |   |   | 613,254    |  
|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |   |          |   |   |   |  |   |   |  |   |            |   |   |            |  
|Increase in due from related party                                           |  |           |           |        |   |                                            |  |                          |           |                              |   |                        |  |                 |  |                              |   |                                                |  |       |  |  |   |  |  |   |          |  |   | (297,654 | ) |   |  |  |   |  |  |   |           |   |   | (297,654   | )
|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |   |          |   |   |   |  |   |   |  |   |            |   |   |            |  
|Net loss                                                                     |  |           |           |        |   |                                            |  |                          |           |                              |   |                        |  |                 |  |                              |   |                                                |  |       |  |  |   |  |  |   |          |  |   |         |   |   |  |  |   |  |  |   | (2,064,728 | ) |   | (2,064,728 | )
|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |   |          |   |   |   |  |   |   |  |   |            |   |   |            |  
|                                                                             |  |           |            |        |   |                                             |  |                          |            |                              |   |                         |  |                 |   |                              |   |                                                 |  |       |   |  |   |   |  |   |           |  |   |          |   |   |   |  |   |   |  |   |            |   |   |            |  
|Balance, December 31, 2008                                                   |  |           | 11,000,000 |        | $ | 1,100                                       |  |                          | 14,285,714 |                              | $ | 1,429                   |  |                 |  |                              | $ |                                                |  | $     |  |  | $ |  |  | $ | 1,408,943 |  | $ | (508,688 | ) | $ |  |  | $ |  |  | $ | (2,836,133 | ) | $ | (1,933,349 | )

See the accompanying notes to these unaudited
condensed consolidated financial statements

5

---



|                                                        
|--------------------------------------------------------
|11 GOOD ENERGY, INC. AND SUBSIDIARY                     
|(a development stage company)                           
|CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
|FROM MAY 23, 2007 (DATE OF INCEPTION) THROUGH JUNE 2011 
|(UNAUDITED)                                             

|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|-------------------------------------------------------------------------------------------------- |  | --------- | ---------- | ------ | - | -------------------------------------------- |  | ------------------------- | ---------- | ---------------------------- | - | ------------------------ |  | --------------- | --------- | ---------------------------- | - | ----------------------------------------------- |  | ----- | --------- |  | - | --------- |  | - | --------- |  | - | -------- | - | - | ---------- | - | - | ------ |  | - | ---------- | - | - | ---------- | -
|                                                                                                   |  | Preferred |            | Common |   | Common
 stock
 subscribed
 Convertible Notes |  | Common
 stock
 Subscribed |            | Additional
 Paid in
 Capital |   | Due
 from
 Related party |  | Treasury
 Stock |           | Other
 Comprehensive
 Income |   | Accumulated
 Deficit during
 Development
 Stage |  | Total |          
|                                                                                                   |  | Stock     |            | Amount |   | Stock                                        |  | Amount                    |            | Stock                        |   | Amount                   |  | Stock           |           | Amount                       |   |                                                 |  |       |           |  |  
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |  
|Balance, January 1, 2009                                                                           |  |           | 11,000,000 |        | $ | 1,100                                        |  |                           | 14,285,714 |                              | $ | 1,429                    |  |                 |          |                              | $ |                                                |  | $     |          |  | $ |          |  | $ | 1,408,943 |  | $ | (508,688 | ) | $ |           |   | $ |       |  | $ | (2,836,133 | ) | $ | (1,933,349 | )
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|Beneficial conversion feature relating to the issuance of convertible
 notes                       |  |           |           |        |   |                                             |  |                           |           |                              |   |                         |  |                 |          |                              |   |                                                |  |       |          |  |   |          |  |   | 2,054,806 |  |   |         |   |   |           |   |   |       |  |   |           |   |   | 2,054,806  |  
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|Common stock to be issued in exchange for convertible notes and
 accrued interest                  |  |           |           |        |   |                                             |  |                           |           |                              |   |                         |  |                 | 2,540,290 |                              |   | 6,477,739                                       |  |       |          |  |   |          |  |   |          |  |   |         |   |   |           |   |   |       |  |   |           |   |   | 6,477,739  |  
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|Compensation of services by a related party                                                        |  |           |           |        |   |                                             |  |                           |           |                              |   |                         |  |                 |          |                              |   |                                                |  |       |          |  |   |          |  |   | 531,000   |  |   |         |   |   |           |   |   |       |  |   |           |   |   | 531,000    |  
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|Compensation of services by a consultant                                                           |  |           |           |        |   |                                             |  |                           |           |                              |   |                         |  |                 |          |                              |   |                                                |  |       |          |  |   |          |  |   | 59,000    |  |   |         |   |   |           |   |   |       |  |   |           |   |   | 59,000     |  
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|Sale of common stock                                                                               |  |           |           |        |   |                                             |  |                           | 770,000    |                              |   | 77                       |  |                 |          |                              |   |                                                |  |       | 2,931,333 |  |   | 7,137,223 |  |   | 2,309,923 |  |   |         |   |   |           |   |   |       |  |   |           |   |   | 9,447,223  |  
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|Fair value of options granted to directors                                                         |  |           |           |        |   |                                             |  |                           |           |                              |   |                         |  |                 |          |                              |   |                                                |  |       |          |  |   |          |  |   | 200,205   |  |   |         |   |   |           |   |   |       |  |   |           |   |   | 200,205    |  
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|Increase in due from related party                                                                 |  |           |           |        |   |                                             |  |                           |           |                              |   |                         |  |                 |          |                              |   |                                                |  |       |          |  |   |          |  |   |          |  |   | (278,456 | ) |   |           |   |   |       |  |   |           |   |   | (278,456   | )
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|Common stock re-acquired for cash                                                                  |  |           |           |        |   |                                             |  |                           |           |                              |   |                         |  |                 |          |                              |   |                                                |  |       |          |  |   |          |  |   |          |  |   |         |   |   | (450,000   | ) |   |       |  |   |           |   |   | (450,000   | )
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|Common stock re-acquired for receivable due from related party and
 issuance of related party note |  |           |           |        |   |                                             |  |                           |           |                              |   |                         |  |                 |          |                              |   |                                                |  |       |          |  |   |          |  |   |          |  |   | 787,144  |   |   | (850,000   | ) |   |       |  |   |           |   |   | (62,856    | )
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|Unrealized gain on securities available for sale                                                   |  |           |           |        |   |                                             |  |                           |           |                              |   |                         |  |                 |          |                              |   |                                                |  |       |          |  |   |          |  |   |          |  |   |         |   |   |           |   |   | 49,504 |  |   |           |   |   | 49,504     |  
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|Net loss                                                                                           |  |           |           |        |   |                                             |  |                           |           |                              |   |                         |  |                 |          |                              |   |                                                |  |       |          |  |   |          |  |   |          |  |   |         |   |   |           |   |   |       |  |   | (6,549,809 | ) |   | (6,549,809 | )
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|                                                                                                   |  |           |            |        |   |                                              |  |                           |            |                              |   |                          |  |                 |           |                              |   |                                                 |  |       |           |  |   |           |  |   |           |  |   |          |   |   |            |   |   |        |  |   |            |   |   |            |  
|Balance, December 31, 2009 (Restated)                                                              |  |           | 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  |  

See the accompanying notes to these unaudited
condensed consolidated financial statements

6

---



|                                                         
|---------------------------------------------------------
|11 GOOD ENERGY, INC. AND SUBSIDIARY                      
|(a development stage company)                            
|CONDENSED CONSOLIDATED STATEMENT OF
 STOCKHOLDERS EQUITY
|FROM MAY 23, 2007 (DATE OF INCEPTION)
 THROUGH JUNE 2011 
|(UNAUDITED)                                              

|                                                                                  |  |           |            |        |   |                                              |  |                           |            |                              |   |                                                |  |                 |            |                              |   |                                                 |   |       |            |   |   |            |   |   |            |  |   |         |   |   |            |   |   |          |   |   |             |   |   |            |  
|--------------------------------------------------------------------------------- |  | --------- | ---------- | ------ | - | -------------------------------------------- |  | ------------------------- | ---------- | ---------------------------- | - | ---------------------------------------------- |  | --------------- | ---------- | ---------------------------- | - | ----------------------------------------------- | - | ----- | ---------- | - | - | ---------- | - | - | ---------- |  | - | ------- | - | - | ---------- | - | - | -------- | - | - | ----------- | - | - | ---------- | -
|                                                                                  |  | Preferred |            | Common |   | Common
 stock
 subscribed
 Convertible Notes |  | Common
 stock
 Subscribed |            | Additional
 Paid in
 Capital |   | Receivable
 from
 purchase of
 treasury
 stock |  | Treasury
 Stock |            | Other
 Comprehensive
 Income |   | Accumulated
 Deficit during
 Development
 Stage |   | Total |           
|                                                                                  |  | 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 reacquired                                                           |  |           |           |        |   |                                             |  |                           |           |                              |   |                                               |  |                 |           |                              |   |                                                |   |       |           |   |   |           |   |   |           |  |   |        |   |   | (197,500   | ) |   |         |   |   |            |   |   | (197,500   | )
|                                                                                  |  |           |            |        |   |                                              |  |                           |            |                              |   |                                                |  |                 |            |                              |   |                                                 |   |       |            |   |   |            |   |   |            |  |   |         |   |   |            |   |   |          |   |   |             |   |   |            |  
|Receivable from purchase of treasury stock                                        |  |           |           |        |   |                                             |  |                           |           |                              |   |                                               |  |                 |           |                              |   |                                                |   |       |           |   |   |           |   |   |           |  |   | (53,519 | ) |   |           |   |   |         |   |   |            |   |   | (53,519    | )
|                                                                                  |  |           |            |        |   |                                              |  |                           |            |                              |   |                                                |  |                 |            |                              |   |                                                 |   |       |            |   |   |            |   |   |            |  |   |         |   |   |            |   |   |          |   |   |             |   |   |            |  
|Unrealized loss on securities available for sale                                  |  |           |           |        |   |                                             |  |                           |           |                              |   |                                               |  |                 |           |                              |   |                                                |   |       |           |   |   |           |   |   |           |  |   |        |   |   |           |   |   | (336,065 | ) |   |            |   |   | (336,065   | )
|                                                                                  |  |           |            |        |   |                                              |  |                           |            |                              |   |                                                |  |                 |            |                              |   |                                                 |   |       |            |   |   |            |   |   |            |  |   |         |   |   |            |   |   |          |   |   |             |   |   |            |  
|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                                                                          |  |           |           |        |   |                                             |  |                           |           |                              |   |                                               |  |                 |           |                              |   |                                                |   |       |           |   |   |           |   |   |           |  |   |        |   |   |           |   |   |         |   |   | (7,165,625  | ) |   | (7,165,625 | )
|                                                                                  |  |           |            |        |   |                                              |  |                           |            |                              |   |                                                |  |                 |            |                              |   |                                                 |   |       |            |   |   |            |   |   |            |  |   |         |   |   |            |   |   |          |   |   |             |   |   |            |  
|                                                                                  |  |           |            |        |   |                                              |  |                           |            |                              |   |                                                |  |                 |            |                              |   |                                                 |   |       |            |   |   |            |   |   |            |  |   |         |   |   |            |   |   |          |   |   |             |   |   |            |  
|Balance, December 31, 2010                                                        |  |           | 11,000,000 |        | $ | 1,100                                        |  |                           | 20,811,561 |                              | $ | 2,081                                          |  |                 |           |                              | $ |                                                |   |       |           |   | $ |           |   | $ | 22,498,920 |  | $ | (53,519 | ) | $ | (1,497,500 | ) | $ | (286,561 | ) | $ | (16,551,567 | ) | $ | 4,112,954  |  
|                                                                                  |  |           |            |        |   |                                              |  |                           |            |                              |   |                                                |  |                 |            |                              |   |                                                 |   |       |            |   |   |            |   |   |            |  |   |         |   |   |            |   |   |          |   |   |             |   |   |            |  

See the accompanying notes to these unaudited condensed consolidated financial statements

7

---



11 GOOD ENERGY, INC. AND SUBSIDIARY
(a development stage company)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
FROM JANUARY 1, 2011 TO JUNE 2011
(UNAUDITED)

|                                                                                         |  |           |            |        |   |                              |  |                                                |            |                 |   |                              |  |                                                 |            |       |   |         |   |   |            |   |   |          |   |   |             |   |   |            |  
|---------------------------------------------------------------------------------------- |  | --------- | ---------- | ------ | - | ---------------------------- |  | ---------------------------------------------- | ---------- | --------------- | - | ---------------------------- |  | ----------------------------------------------- | ---------- | ----- | - | ------- | - | - | ---------- | - | - | -------- | - | - | ----------- | - | - | ---------- | -
|                                                                                         |  | Preferred |            | Common |   | Additional
 Paid in
 Capital |  | Receivable
 from
 purchase of
 treasury
 stock |            | Treasury
 Stock |   | Other
 Comprehensive
 Income |  | Accumulated
 Deficit during
 Development
 Stage |            | Total |  
|                                                                                         |  |           |            |        |   |                              |  |                                                |           
|                                                                                         |  |           |            |        |   |                              |  |                                                |           
|                                                                                         |  |           |            |        |   |                              |  |                                                |           
|                                                                                         |  | Stock     |            | Amount |   | Stock                        |  | Amount                                         |            |                 |   |                              |  |                                                 |           
|                                                                                         |  |           |            |        |   |                              |  |                                                |            |                 |   |                              |  |                                                 |            |       |   |         |   |   |           
|                                                                                        
|Balance, January 1, 2011                                                                 |  |           | 11,000,000 |        | $ | 1,100                        |  |                                                | 20,811,561 |                 | $ | 2,081                        |  | $                                               | 22,498,920 |       | $ | (53,519 | ) | $ | (1,497,500 | ) | $ | (286,561 | ) | $ | (16,551,567 | ) | $ | 4,112,954  |  
|                                                                                         |  |           |            |        |   |                              |  |                                                |            |                 |   |                              |  |                                                 |            |       |   |         |   |   |            |   |   |          |   |   |             |   |   |            |  
|Receivable from purchase of treasury stock                                               |  |           |           |        |   |                             |  |                                                |           |                 |   |                             |  |                                                 |           |       |   | (25,000 | ) |   |           |   |   |         |   |   |            |   |   | (25,000    | )
|Sale of common stock                                                                     |  |           |           |        |   |                             |  |                                                | 45,000     |                 |   | 5                            |  |                                                 | 224,995    |       |   |        |   |   |           |   |   |         |   |   |            |   |   | 225,000    |  
|Unrealized gain on securities available for sale                                         |  |           |           |        |   |                             |  |                                                |           |                 |   |                             |  |                                                 |           |       |   |        |   |   |           |   |   | 198,161  |   |   |            |   |   | 198,161    |  
|Fair value of stock options                                                              |  |           |           |        |   |                             |  |                                                |           |                 |   |                             |  |                                                 | 1,911,895  |       |   |        |   |   |           |   |   |         |   |   |            |   |   | 1,911,895  |  
|Beneficial conversion feature and value of warrants in conjunction with convertible debt |  |           |            |        |   |                              |  |                                                |            |                 |   |                              |  |                                                 | 209,420    |       |   |         |   |   |            |   |   |          |   |   |             |   |   | 209,420    |  
|Net loss                                                                                 |  |           |           |        |   |                             |  |                                                |           |                 |   |                             |  |                                                 |           |       |   |        |   |   |           |   |   |         |   |   | (4,158,999  | ) |   | (4,158,999 | )
|                                                                                         |  |           |            |        |   |                              |  |                                                |            |                 |   |                              |  |                                                 |            |       |   |         |   |   |            |   |   |          |   |   |             |   |   |            |  
|                                                                                         |  |           |            |        |   |                              |  |                                                |            |                 |   |                              |  |                                                 |            |       |   |         |   |   |            |   |   |          |   |   |             |   |   |            |  
|Balance, June 30, 2011                                                                   |  |           | 11,000,000 |        | $ | 1,100                        |  |                                                | 20,856,561 |                 | $ | 2,086                        |  | $                                               | 24,845,230 |       | $ | (78,519 | ) | $ | (1,497,500 | ) | $ | (88,400  | ) | $ | (20,710,566 | ) | $ | 2,473,431  |  
|                                                                                         |  |           |            |        |   |                              |  |                                                |            |                 |   |                              |  |                                                 |            |       |   |         |   |   |            |   |   |          |   |   |             |   |   |            |  

See the accompanying notes to these unaudited condensed consolidated
financial statements

5

---



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

|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  
|---------------------------------------------------------------------------- |  | ------------------------- | ---------- | --------------------------------------------------------------- | - | ---------- | - | - | ----------- | -
|                                                                             |  | Six months ended June 30, |            | From May 23, 2007 
 (date of inception) through 
 June 30, 2011 |  
|                                                                             |  |                           |           
|                                                                             |  | 2011                      |            | 2010                                                            |   |           
|                                                                             |  |                           |            |                                                                 |   |            |  
|                                                                            
|Cash flows from operating activities:                                        |  |                           |            |                                                                 |   |            |   |   |             |  
|Net loss for the period                                                      |  | $                         | (4,158,999 | )                                                               | $ | (4,131,080 | ) | $ | (20,710,566 | )
|Adjustments to reconcile net loss to net
 cash used in operating activities: |  |                           |            |                                                                 |   |            |   |   |             |  
|Depreciation and amortization                                                |  |                           | 191,653    |                                                                 |   | 198,576    |   |   | 736,991     |  
|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  
|Amortization of debt discount                                                |  |                           | 8,726      |                                                                 |   |            |   |   | 3,316,503   |  
|Compensation of services by a related
 party                                 |  |                           |           |                                                                 |   | 1,493,840  |   |   | 2,024,840   |  
|Compensation of services to consultant                                       |  |                           |           |                                                                 |   |           |   |   | 59,000      |  
|                                                                            
|Fair value of options issued for services                                    |  |                           | 1,911,895  |                                                                 |   |           |   |   | 2,112,100   |  
|Gain on sale of property and equipment                                       |  |                           |           |                                                                 |   |           |   |   | (1,200      | )
|Realized loss (gain) on sale of
 securities available for sale               |  |                           | 213,083    |                                                                 |   |           |   |   | 84,277      |  
|Changes in operating assets and
 liabilities:                                |  |                           |            |                                                                 |   |            |   |   |             |  
|Inventory                                                                    |  |                           | 154,790    |                                                                 |   | (552,290   | ) |   | (443,713    | )
|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  
|Accounts receivable                                                          |  |                           | 13,429     |                                                                 |   | 32,786     |   |   | (38,372     | )
|Other current assets                                                         |  |                           | (22,383    | )                                                               |   | 114,703    |   |   | 110,653     |  
|Accounts payable and accrued liabilities                                     |  |                           | 484,243    |                                                                 |   | (110,476   | ) |   | 1,086,126   |  
|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  
|Net cash (used in) operating activities                                      |  |                           | (1,203,563 | )                                                               |   | (2,953,941 | ) |   | (11,663,361 | )
|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  
|Cash flows from investing activities:                                        |  |                           |            |                                                                 |   |            |   |   |             |  
|Acquisition, net of cash acquired                                            |  |                           |           |                                                                 |   |           |   |   | (588,952    | )
|Proceeds from sale of property and
 equipment                                |  |                           |           |                                                                 |   |           |   |   | 3,200       |  
|Purchase of property, plant and equipment                                    |  |                           |           |                                                                 |   | (138,623   | ) |   | (3,034,208  | )
|Payments for acquisition of patent                                           |  |                           | (7,207     | )                                                               |   |           |   |   | (65,479     | )
|Proceeds from sale of securities
 available for sale                         |  |                           | 560,769    |                                                                 |   |           |   |   | 1,108,516   |  
|Purchase of securities available for sale                                    |  |                           |           |                                                                 |   | (259,691   | ) |   | (1,282,492  | )
|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  
|Net cash (used in) investing activities                                      |  |                           | 553,562    |                                                                 |   | (398,314   | ) |   | (3,859,415  | )
|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  
|Cash flows from financing activities:                                        |  |                           |            |                                                                 |   |            |   |   |             |  
|Proceeds from sale of shares to founders                                     |  |                           |           |                                                                 |   |           |   |   | 2,070       |  
|Due from related party                                                       |  |                           | (25,000    | )                                                               |   |           |   |   | (865,663    | )
|Proceeds
         from note payable to related party                         |  |                           | 50,000     |                                                                 |   |            |   |   |             |  
|Proceeds from related party advance                                          |  |                           | 132,641    |                                                                 |   |           |   |   | 180,097     |  
|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  
|Proceeds from common stock                                                   |  |                           | 225,000    |                                                                 |   | 805,846    |   |   | 10,478,069  |  
|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  
|Proceeds from issuance of convertible
 notes                                 |  |                           | 250,000    |                                                                 |   |           |   |   | 8,130,000   |  
|Proceeds from related party note payable                                     |  |                           |           |                                                                 |   |           |   |   | 75,000      |  
|Purchase of treasury stock                                                   |  |                           |           |                                                                 |   | (122,500   | ) |   | (647,500    | )
|Payments of related party note payable                                       |  |                           |           |                                                                 |   | (25,000    | ) |   | (25,000     | )
|Payments of notes payable                                                    |  |                           |           |                                                                 |   |           |   |   | (84,322     | )
|Payments of convertible notes                                                |  |                           |           |                                                                 |   | (15,000    | ) |   | (1,710,000  | )
|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  
|Net cash provided by financing activities                                    |  |                           | 632,641    |                                                                 |   | 643,346    |   |   | 15,535,295  |  
|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  
|Net increase (decrease) in cash and cash
 equivalents                        |  |                           | (17,360    | )                                                               |   | (2,708,909 | ) |   | 12,519      |  
|Cash and cash equivalents at beginning of
 period                            |  |                           | 29,879     |                                                                 |   | 4,869,749  |   |   |            |  
|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  
|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  
|Cash and cash equivalents at end of
 period                                  |  | $                         | 12,519     |                                                                 | $ | 2,160,840  |   | $ | 12,519      |  
|                                                                             |  |                           |            |                                                                 |   |            |   |   |             |  

See the accompanying notes to these
unaudited condensed consolidated financial statements

6

---



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 
 June 30, 2011 |  
|                                                                                            |  | Six months ended June 30, |   |                                                                
|                                                                                            |  | 2011                      |   | 2010                                                            |   |  
|                                                                                            |  |                           |   |                                                                 |   |   | 
|Supplemental disclosures of cash flow
 information:                                         |  |                           |   |                                                                 |   |   |  |   |           | 
|Taxes paid                                                                                  |  | $                         |  |                                                                 | $ |  |  | $ |          | 
|Interest paid                                                                               |  | $                         |  |                                                                 | $ |  |  | $ |          | 
|                                                                                            |  |                           |   |                                                                 |   |   |  |   |           | 
|Non cash financing activities:                                                              |  |                           |   |                                                                 |   |   |  |   |           | 
|Common stock issued to acquire 11 Goods
 Energy, LTD                                       |  | $                         |  |                                                                 | $ |  |  | $ | 429       | 
|                                                                                           
|Common stock issued in exchange for
 convertible note and accrued interest                  |  | $                         |  |                                                                 | $ |  |  | $ | 20,970    | 
|Common stock subscribed for conversion of
 convertible notes                                |  | $                         |  |                                                                 | $ |  |  | $ | 6,498,709 | 
|                                                                                           
|Treasury stock received in exchange for
 related party note receivable and accrued interest |  | $                         |  |                                                                 | $ |  |  | $ | 787,144   | 

See the accompanying notes to these
unaudited condensed consolidated financial statements

7

---



11 GOOD ENERGY, INC. AND SUBSIDIARY 
(a development stage company)NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
June 30, 2011 AND 2010 (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, 2010 included in the Companys SEC on Form 10-K filed on
April 15, 2011. 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 three month and six months periods ended June
30, 2011, are not necessarily indicative of the results that may be expected
for the year ending December 31, 2011.

The condensed consolidated financial statements as
of December 31, 2010 have been derived from the audited consolidated financial
statements at that date but do not include all disclosures required by the accounting
principles generally accepted in the United States of America.

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 executive officers. 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  GOING CONCERN MATTERS

The
accompanying unaudited condensed consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. As shown
in the accompanying unaudited condensed consolidated financial statements
during the six months ended June 30, 2011, the Company incurred net losses
attributable to common shareholders of $4,158,999 and used $1,203,563 in cash
for operating activities during the six months ended June 30, 2011. The accumulated
    deficit during development stage amounted to $20,710,566. These factors among
    others may indicate that the Company will be unable to continue as a going
    concern for a reasonable period of time.

8

---



NOTE 2  GOING CONCERN MATTERS (cont)

The
Companys existence is dependent upon managements ability to develop
profitable operations and to obtain additional funding sources. There can be no
assurance that the Companys financing efforts will result in profitable
operations or the resolution of the Companys liquidity problems. The
accompanying statements do not include any adjustments that might result should
the Company be unable to continue as a going concern.

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 basis or more often if events and circumstances warrant. Any
write-downs will be included in results from operations.

During
the years ended December 31, 2010 and 2009, 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, 2010 and 2009. Considerable management judgment is
necessary to estimate the fair value. Accordingly, actual results could vary
significantly from managements estimates.

9

---



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 June 30, 2011 and December 31, 2010, inventories are comprised of the following:

|              |  |                 |         |                  |   |         | 
|------------- |  | --------------- | ------- | ---------------- | - | ------- | 
|              |  | June
 30,
 2011 |         | December 31,2010 |  
|              |  | (unaudited)     |         |                  |  
|              |  |                 |         |                  |  
|Raw materials |  | $               | 351,874 |                  | $ | 351,874 | 
|Finished fuel |  |                 | 118,075 |                  |   | 272,865 | 
|              |  |                 |         |                  |   |         | 
|Total         |  | $               | 469,949 |                  | $ | 624,739 | 
|              |  |                 |         |                  |   |         | 

NOTE 5  OTHER CURRENT ASSETS

Other assets as of June 30,
2011 and December 31, 2010 are comprised of the following:

|                              |  |                 |        |                  |   |        | 
|----------------------------- |  | --------------- | ------ | ---------------- | - | ------ | 
|                              |  | June
 30,
 2011 |        | December 31,2010 |  
|                              |  | (unaudited)     |        |                  |  
|                              |  |                 |        |                  |  
|Prepaid fuel/product
 testing |  |                 |       |                  |   | 19,637 | 
|Prepaid insurance             |  |                 | 26,001 |                  |   |       | 
|Prepaid Other                 |  |                 | 21,356 |                  |   | 5,337  | 
|                              |  |                 |        |                  |   |        | 
|Total                         |  | $               | 47,357 |                  | $ | 24,974 | 
|                              |  |                 |        |                  |   |        | 

NOTE 6  PROPERTY, PLANT AND EQUIPMENT

The
Companys property, plant and equipment at June 30, 2011 and December 31, 2010
consist of the following:

|                                 |  |                 |           |                    |   |           | 
|-------------------------------- |  | --------------- | --------- | ------------------ | - | --------- | 
|                                 |  | June
 30,
 2011 |           | December
 31, 2010 |  
|                                 |  | (unaudited)     |           |                    |  
|                                 |  |                 |           |                    |  
|Leasehold improvements           |  | $               | 345,381   |                    | $ | 345,381   | 
|Factory equipment                |  |                 | 2,381,478 |                    |   | 2,381,478 | 
|Furniture and fixtures           |  |                 | 21,709    |                    |   | 21,709    | 
|Office equipment                 |  |                 | 20,545    |                    |   | 20,545    | 
|Vehicles                         |  |                 | 131,225   |                    |   | 131,225   | 
|Computer equipment and
 software |  |                 | 148,300   |                    |   | 148,300   | 
|Web design                       |  |                 | 51,505    |                    |   | 51,505    | 
|                                 |  |                 |           |                    |   |           | 
|Total                            |  |                 | 3,100,143 |                    |   | 3,100,143 | 
|Less accumulated
 depreciation   |  |                 | 729,121   |                    |   | 537,468   | 
|                                 |  |                 |           |                    |   |           | 
|Net                              |  | $               | 2,371,022 |                    | $ | 2,562,675 | 
|                                 |  |                 |           |                    |   |           | 

10

---



NOTE 6  PROPERTY, PLANT AND EQUIPMENT (cont)

Property
and equipment are recorded on the basis of cost. For financial statement
purposes, property, plant and equipment are depreciated using the straight-line
method over their estimated useful lives.

Expenditures
for repair and maintenance which do not materially extend the useful lives of
property and equipment are charged to operations. When property or equipment is
sold or otherwise disposed of, the cost and related accumulated depreciation
are removed from the respective accounts with the resulting gain or loss
reflected in operations. Management periodically reviews the carrying value of
its property and equipment for impairment.

Depreciation
expense was $95,826 and $100,015 for the three months ended June 30, 2011 and
2010, respectively, of which $66,641 and $57,642 was included as part of cost
of sales for the three months ended June 30, 2011 and 2010, respectively.

Depreciation
expense was $191,653 and $198,575 for the six months ended June 30, 2011 and
2010, respectively, of which $133,282 and $115,155 was included as part of cost
of sales for the six months ended June 30, 2011 and 2010, respectively.

NOTE 7  AVAILABLE-FOR-SALE SECURITIES

Cost
and fair value of marketable equity securities at June 30, 2011 and December
31, 2010 are as follows:

|                                                                |  |                 |         |                  |   |          |  
|--------------------------------------------------------------- |  | --------------- | ------- | ---------------- | - | -------- | -
|                                                                |  | June
 30,
 2011 |         | December 31,2010 |  
|                                                                |  | (unaudited)     |         |                  |  
|                                                                |  |                 |         |                  |  
|                                                                |  |                 |         |                  |   |          |  
|Available for sale
 securities:                                 |  |                 | 1,299   |                  |   | 576,990  |  
|Equity securities:                                              |  |                 |         |                  |   |          |  
|Fair value                                                      |  | $               | 1,299   |                  | $ | 576,990  |  
|Total (losses) gains in
 accumulated other comprehensive income |  | $               | (88,400 | )                |   | (286,561 | )

During
the three months ended June 30, 2011 and 2010, the Company realized an
aggregate loss of $195,300 and $0 with the sales of marketable securities,
respectively. Unrealized gains (losses) are accounted for as other
comprehensive income (loss).

During
the six months ended June 30, 2011 and 2010, the Company realized an aggregate
loss of $213,083 and $0 with the sales of marketable securities, respectively.
Unrealized gains (losses) are accounted for as other comprehensive income
(loss).

NOTE 8  COMMON STOCK

Between
August 2009 and February 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 year ended December 31, 2010. In the six months ended
June 30, 2011, the Company received additional gross proceeds of $225,000 from
    the sale of 22,500 shares of Common Stock and two year Warrants to purchase
    45,000 shares, exercisable at $7.50 per share from date of issuance through
    June 30, 2013.

11

---



NOTE 9  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.

Due
to related party

During
the six months ended June 30, 2011, the Companys President and CEO advanced
an aggregate of $132,641 for working capital purposes to the Company. The advances
are short term and are due upon demand.

During
the quarter ended June 30, 2011, the Company borrowed $50,000 from a related
party. In connection with this transaction, the Company issued Notes in the
principal amount of $50,000. The Notes charge interest at 9% per annum and is
callable on demand.

Receivable
from purchase of treasury stock

During
the six months ended June 30, 2011, the Company advanced $25,000 to acquire the
Companys common stock (treasury stock). As of June 30, 2011, the common stock
has not been received.

Consistent
with ASC 505-10-45 (Equity-Other Presentation), the amount recorded on the
balance sheet is presented as a deduction from stockholders equity (deficit).
This is also consistent with Rule 5-02.30 of Regulation S-X of the Code of
Federal Regulations.

12

---



NOTE 10  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 June
30, 2011:

|                               |  |       |       |                                                                         |   |                                                 |  |                                            |   |  |   |   | 
|------------------------------ |  | ----- | ----- | ----------------------------------------------------------------------- | - | ----------------------------------------------- |  | ------------------------------------------ | - |  | - | - | 
|                               |  | Total |       | Quoted
 Prices in
 Active
 Markets for
 Identical
 Instruments
 Level 1 |   | Significant
 Other
 Observable
 Inputs
 Level 2 |  | Significant
 Unobservable
 Inputs
 Level 3 |  
|                               |  |       |       |                                                                         |   |                                                 |  |                                            |  
|Assets:                        |  |       |       |                                                                         |   |                                                 |  |                                            |   |  |   |   | 
|Securities available for
 sale |  | $     | 1,299 |                                                                         | $ | 1,299                                           |  | $                                          |  |  | $ |  | 
|                               |  |       |       |                                                                         |   |                                                 |  |                                            |   |  |   |   | 
|Total                          |  | $     | 1,299 |                                                                         | $ | 1,299                                           |  | $                                          |  |  | $ |  | 
|                               |  |       |       |                                                                         |   |                                                 |  |                                            |   |  |   |   | 

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 June 30, 2011 was
grouped as Level 1 valuation as the market price was readily available.

13

---



NOTE 11 - LOAN TRANSACTION

Convertible Note

A
summary of convertible debentures payable at June 30, 2011 and December 31,
2010 is as follows:

|                                                                                                                                                                           |  |                |          |                  |  |   | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | -------- | ---------------- |  | - | 
|                                                                                                                                                                           |  | June 30,
 2011 |          | December 31,2010 | 
|                                                                                                                                                                           |  |                |          |                  | 
|Senior Convertible Debentures, accrue interest at 11% per annum and
 mature on December 31, 2011                                                                           |  | $              | 250,000  |                  |  |  | 
|Debt Discount - beneficial conversion feature, net of accumulated
 amortization of $4,363 and $0 at June 30, 2011 and December 31, 2010,
 respectively.                    |  |                | (100,347 | )                |  |  | 
|Debt Discount - value attributable to warrants attached to notes, net
 of accumulated amortization of $4,363 and $0 at June 30, 2011 and December
 31, 2010, respectively. |  |                | (100,347 | )                |  |  | 
|                                                                                                                                                                           |  |                |          |                  |  |   | 
|                                                                                                                                                                           |  |                |          |                  |  |   | 
|Total Current Portion                                                                                                                                                      |  | $              | 49,306   |                  |  |  | 
|                                                                                                                                                                           |  |                |          |                  |  |   | 

On
June 24, 2011 the Company issued $250,000 in Convertible Promissory Notes that
matures December 31, 2011. The Promissory Notes bear interest at a rate of 11%
and will be convertible into 50,000 shares of the Companys common stock,
at a conversion rate of $5.00 per share. Interest can also be converted into
common stock at the conversion rate of $5.00 per share. In connection with the
issuance of the Convertible Promissory Notes, the Company issued 62,500
warrants to purchase the Companys common stock at $5.00 per share over
2 years.

In
accordance ASC 470-20, the Company recognized an embedded beneficial conversion
feature present in the note. 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 $104,710 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 note. The debt
discount attributed to the beneficial conversion feature is amortized over the
notes maturity period (192 days) as interest expense.

In
connection with the issuance of the promissory notes, the Company issued
detachable warrants granting the holder the right to acquire an aggregate of
62,500 shares of the Companys common stock at $5.00 per share. The warrants
expire two years from the issuance. In accordance with ASC 470-20, the Company
recognized the value attributable to the warrants in the amount of $104,710 to
additional paid in capital and a discount against the note. The Company valued
the warrants in accordance with ASC 470-20 using the Black-Scholes pricing
model and the following assumptions: contractual terms of 2 years, an average
risk free interest rate of 4.95%, a dividend yield of 0%, and volatility of
108%. The debt discount attributed to the value of the warrants issued is
amortized over the notes maturity period (192 days) as interest expense.

The Company amortized debt discount of $8,726 to current period
operations as interest expense for the three and six months ended June 30,
2011.

14

---



NOTE 12  OPTIONS AND WARRANTS

The following table summarizes options outstanding and the related
prices for the shares of the Companys common stock issued to consultants and
employees as of June 30, 2011:

|                 |      |                     |  |                                                        |  |                                    |      |                     |   |                                    |  |  |           |  |   |      | 
|---------------- | ---- | ------------------- |  | ------------------------------------------------------ |  | ---------------------------------- | ---- | ------------------- | - | ---------------------------------- |  |  | --------- |  | - | ---- | 
|                 |      | Options Outstanding |  |                                                        |  | Options Exercisable                |     
|Exercise
 Prices |      | Number
 Outstanding |  | Weighted Average
 Remaining
 Contractual Life
 (Years) |  | Weighted
 Average
 Exercise
 Price |      | Number
 Exercisable |   | Weighted
 Average
 Exercise
 Price | 
|                 |      |                     |  |                                                        |  |                                    |      |                     |   |                                    | 
|$                | 3.00 |                     |  | 500,000                                                |  |                                    | 1.00 |                     | $ | 3.00                               |  |  | 500,000   |  | $ | 3.00 | 
|                 | 3.00 |                     |  | 150,000                                                |  |                                    | 2.08 |                     |   | 3.00                               |  |  | 45,833    |  |   | 3.00 | 
|                 | 5.00 |                     |  | 785,000                                                |  |                                    | 3.00 |                     |   | 5.00                               |  |  | 567,500   |  |   | 5.00 | 
|                 |      |                     |  | 1,435,000                                              |  |                                    | 2.21 |                     |   | 4.09                               |  |  | 1,113,333 |  |   | 4.02 | 

Transactions
involving stock options issued are summarized as follows:

|                                  |  |                   |           |                                     |   |      | 
|--------------------------------- |  | ----------------- | --------- | ----------------------------------- | - | ---- | 
|                                  |  | Number of
 Shares |           | Weighted
 Average
 Price
 Per Share |  
|                                  |  |                   |           |                                     |  
|                                 
|Outstanding at December 31, 2010: |  |                   | 650,000   |                                     |   | 3.00 | 
|Granted                           |  |                   | 785,000   |                                     |   | 5.00 | 
|Exercised                         |  |                   |          |                                     |   |     | 
|Canceled or expired               |  |                   |          |                                     |   |     | 
|                                  |  |                   |           |                                     |   |      | 
|                                  |  |                   |           |                                     |   |      | 
|Outstanding at June 30, 2011:     |  |                   | 1,335,000 |                                     | $ |      | 
|                                  |  |                   |           |                                     |   |      | 

On June 24, 2011, the Company granted an aggregate of 567,500 fully
vested stock options to consultants and employees in connection with services
rendered at the exercise price of $5.00 over three years.

The fair values of the vested options were determined using the Black
Scholes option pricing model with the following assumptions:

|                      |  |  |         |  
|--------------------- |  |  | ------- | -
|Dividend
 yield:      |  |  | -0-     | %
|Volatility            |  |  | 108.00  | %
|Risk free
 rate:      |  |  | 4.95    | %
|Expected
 option life |  |  | 3 years |  

The fair value of vested options in the amount
    of $1,911,895 was charged to operations during the three and six months ended
    June 30, 2011.

15

---



NOTE 12  OPTIONS AND WARRANTS (continued)

The following table summarizes in warrants outstanding and the related
prices for the shares of the Companys common stock issued as of June 30, 2011:

|               |      |                      |  |                                                  |  |                              |      |                   |   |                              |  |  |           |  |   |      | 
|-------------- | ---- | -------------------- |  | ------------------------------------------------ |  | ---------------------------- | ---- | ----------------- | - | ---------------------------- |  |  | --------- |  | - | ---- | 
|               |      | Warrants Outstanding |  |                                                  |  | Warrants Exercisable         |     
|ExercisePrices |      | NumberOutstanding    |  | Weighted AverageRemainingContractual Life(Years) |  | WeightedAverageExercisePrice |      | NumberExercisable |   | WeightedAverageExercisePrice | 
|               |      |                      |  |                                                  |  |                              |      |                   |   |                              | 
|$              | 2.55 |                      |  | 3,519,830                                        |  |                              | 1.00 |                   | $ | 2.55                         |  |  | 3,519,830 |  | $ | 2.55 | 
|               | 4.50 |                      |  | 2,383,599                                        |  |                              | 1.00 |                   |   | 4.50                         |  |  | 2,383,599 |  |   | 4.50 | 
|               | 7.50 |                      |  | 22,500                                           |  |                              | 2.00 |                   |   | 7.50                         |  |  | 22,500    |  |   | 7.50 | 
|               | 5.00 |                      |  | 62,500                                           |  |                              | 2.00 |                   |   | 5.00                         |  |  | 62,500    |  |   | 5.00 | 
|               |      |                      |  |                                                  |  |                              |      |                   |   |                              |  |  |           |  |   |      | 
|               |      |                      |  | 5,988,429                                        |  |                              | 1.33 |                   | $ | 3.37                         |  |  | 5,988,429 |  | $ | 1.33 | 

Transactions
involving warrants issued are summarized as follows:

|                                   |  |                 |           |                               |   |      | 
|---------------------------------- |  | --------------- | --------- | ----------------------------- | - | ---- | 
|                                   |  | Number ofShares |           | WeightedAveragePricePer Share |  
|                                   |  |                 |           |                               |  
|Outstanding
 at December 31, 2010: |  |                 | 5,903,429 |                               | $ | 3.34 | 
|                                   |  |                 |           |                               |   |      | 
|Issued on
 May 17, 2011            |  |                 | 22,500    |                               |   | 7.50 | 
|                                   |  |                 |           |                               |   |      | 
|Issued on
 June 24, 2011           |  |                 | 62,500    |                               |   | 5.00 | 
|                                   |  |                 |           |                               |   |      | 
|Outstanding
 at June 30, 2011:     |  |                 | 5,988,429 |                               |   |      | 

In connection with the sale of the common stock, the Company issued an
aggregate of 22,500 warrants to shareholders and placement agent to purchase
the Companys common stock for $5.00 per share expiring in June 2013.

In connection with the issuance of convertible
    notes (see Note 11 above), the Company issued 62,500 detachable warrants
    during the three and six months ended June 30, 2011 granting the holder the
    right to acquire an aggregate of shares of the Companys common stock
    at $5.00 per share. The warrants expire on June 30, 2013. 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 2 years,
    an average risk free interest rate of 4.95%, a dividend yield of 0%, and
    volatility of 108%. The debt discount attributed to the value of the warrant
    commitment issued is amortized over the notes maturity period (till
    December 31, 2011) as interest expense.

16

---



NOTE 13  SUBSEQUENT EVENTS

We are currently in the process of raising capital
    through a private placement sale of common stock dated July 27, 2011, which
    outlines the sale of up to 2,200,000 shares of common stock at $5 per share
    for an aggregate of up to $11,000,000. This placement has similar terms as
    the memorandum dated January 28, 2011 and updates the private placement memorandum
    with recent corporate developments occurring since January 2011. As of the
    date of this filing, we have raised and collected $20,000 as a result of
this private placement sale of equity.

17

---



NOTE 14  SUBSEQUENT EVENTS (cont)

On July 11, 2011, the Company and its recently formed subsidiary,
namely, 11 Good Energy Sciences, Inc. (hereinafter referred to as Sciences)
entered into a Stock Purchase Agreement (the Agreement) to acquire 100% of
the outstanding capital stock of KAI BioEnergy Corp. from the stockholders of
KAI (collectively hereinafter referred to as the Sellers). Sciences agreed to
pay to the Sellers and the Placement Agent, Oracle Capital LLC, the following:

|  |                                                                                                                                                                                                                                                                                                             
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | $300,000 in
 cash paid to Sellers and $330,000 paid in cash to Oracle;                                                                                                                                                                                                                                      
| | a 36%
 interest in Sciences paid to Sellers and a 4% interest in Sciences paid to
 Oracle;                                                                                                                                                                                                                  
| | reimburse
 Sellers legal fees up $53,000;                                                                                                                                                                                                                                                                  
| | payment at
 closing of the liabilities of KAI based upon a closing balance sheet up to a
 maximum of $180,000, it being understood that any liabilities above $180,000
 are at the sole and absolute discretion and written consent of Sciences; and                                                        
| | an Earn-Out
 of $3.3 million (the Earn-Out) in the event KAI on or before November 11,
 2013, subject to possible extension in the event of financing delays, is able
 to prove the viability of producing the aerial productivity equivalent of
 3,000 gallons per acre, per year of oil from microalgae.

The closing condition of the Agreement is the funding of Sciences with
at least $1.1 million by the Company on or before August 3, 2011. These funds
would be utilized to meet Sciences obligations which are specified above and
the balance will be allocated primarily for research and development of KAI.
The Agreement has a post closing condition that the Company will raise and
contribute to the capital of Sciences at least $2.2 million in accordance with
a schedule over a period of approximately two years. Such funding must timely
occur to avoid any dilution (up to a maximum of two-thirds) in ownership
interest of Sciences. In connection with the Agreement, the Company will enter
into employment agreements as well as a non-compete, non-solicitation and
non-disclosure agreement with the two stockholders of KAI. These agreements
will be for a period of two years, subject to possible extension as provided in
the agreements.

Extension of Agreement

Sciences and Sellers
agreed to extend the closing date up to a maximum of August 31, 2011. The
Company paid Kai $68,000 to extend the closing date through August 12, 201, it
paid Kai $68,000 to extend the closing date through August 19, 2011 and it paid
    $68,000 on August 14, 2011 to further extend the closing date to August 31,
    2011. All option payments are non-refundable, but shall be credited towards
    the $1.1 million closing condition referenced in the preceding paragraph.

Buy-Out Option

In the event that Sellers
receive the Earn-Out, Sciences has the option to buy-out Sellers and Oracles
collective 40% Common Stock position at a cost of $13.2 million, payable in
cash or under certain specified conditions in the Companys Common Stock.
Sellers and Oracle have the right to refuse the Buy-Out on up to one-half of
their position.

About KAI BioEnergy Corp.

Kai is a research and development company developing a platform series
of technologies that enable efficient and integrated continuous microalgal
processing. Focusing on the economics and development of an industrially
scalable processing system, KAI has been working on developing a platform
system that directly extracts oil from a water based algal-cultivation medium,
ultimately separating the oil-rich lipids, biomass, and water medium. A
biofuel company can then take these oil-rich lipids and use them to produce
algal biofuels. KAIs integrated continuous high flow system is expected to
offer low capital costs, ultra-low operating costs with no additives or
hazardous chemicals required, ultimately developing industrial scalability.

18

---



NOTE 14  SUBSEQUENT EVENTS (cont)

On July 22, 2011, the Company borrowed $100,000. In connection with
this transaction, a note payable in the principal amount of $100,000 was issued
and is convertible to common stock at $5.00 per share. The Company also issued
two-year Warrants to purchase 25,000 shares of Common Stock exercisable at
$5.00 per share at any time from the date of issuance through June 30, 2013.

On August 5, 2011, the Company borrowed $100,000 from a director of the
Company. In connection to this transaction, the Company issued a note payable
in the principal amount of $100,000 and warrants to purchase 100,000 shares of
common stock exercisable for $3.00 per share. In addition, the note carries the
right for the holder to vote the common stock of 11 Good Energy Sciences, Inc
until the note is paid in full.

On August 12, 2011, the Company borrowed $68,000 from a director of the
Company. In connection to this transaction, the Company issued a note payable
in the principal amount of $68,000 and warrants to purchase 40,000 shares of
common stock exercisable for $3.00 per share. With the exception of the
warrants issued, the note carries the same terms and conditions as the August
5, 2011 note payable.

On August 19, 2011, the Company borrowed $68,000 from a director of the Company. In connection
to this transaction, the Company issued a note payable in the principal amount of $68,000
and warrants to purchase 40,000 shares of common stock exercisable for $3.00 per share.
The note carries the same terms and conditions as the August 12, 2011 note payable.

22

---



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
Annual Report on Form 10-K for the year ended December 31, 2010 and such
information 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 10-K
and other Company filings with the Securities and Exchange Commission (SEC).

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 10-K for the fiscal year ended December 31, 2010.
The risk factors of said Form 10-K 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 our 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.

23

---



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 June 30, 2011, our revenues have totaled $567,513 and our
deficit accumulated during our development stage was $20,710,566. 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. Currently, 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.

24

---



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.

25

---



On
July 21, 2010, the company granted 150,000 stock options to consultants and
employees at an exercise price of $5.00 per share vesting over a period of
three years. We recorded the fair value of $51,379 as current period consulting
expense as a result of the vesting of these options. These options are for a
period of three years and approximately one year vested.

On
June 22, 2011, the company granted 567,500 stock options to consultants and
employees at an exercise price of $5.00 per share. We recorded the fair value
of $1,860,516 as current period consulting expense as a result of this
transaction. These options are for a period of three years and are fully
vested.

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.

Recent Developments

On
July 11, 2011, the Company and its recently formed subsidiary, namely, 11 Good
Energy Sciences, Inc. (hereinafter referred to as Sciences) entered into a
Stock Purchase Agreement (the Agreement) to acquire 100% of the outstanding
capital stock of KAI BioEnergy Corp. from the stockholders of KAI (collectively
hereinafter referred to as the Sellers). Sciences agreed to pay to the
Sellers and the Placement Agent, Oracle Capital LLC, the following:

|  |                                                                                                                                                                                                                                                                                                             
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | $300,000 in cash paid to
 Sellers and $330,000 paid in cash to Oracle;                                                                                                                                                                                                                                      
| | a 36% interest in Sciences
 paid to Sellers and a 4% interest in Sciences paid to Oracle;                                                                                                                                                                                                                   
| | reimburse Sellers legal
 fees up $53,000;                                                                                                                                                                                                                                                                  
| | payment at closing of the
 liabilities of KAI based upon a closing balance sheet up to a maximum of
 $180,000, it being understood that any liabilities above $180,000 are at the
 sole and absolute discretion and written consent of Sciences; and                                                        
| | an Earn-Out of $3.3
 million (the Earn-Out) in the event KAI on or before November 11, 2013,
 subject to possible extension in the event of financing delays, is able to
 prove the viability of producing the aerial productivity equivalent of 3,000
 gallons per acre, per year of oil from microalgae.

The
closing condition of the Agreement is the funding of Sciences with at least
$1.1 million by the Company on or before August 3, 2011. These funds would be
utilized to meet Sciences obligations which are specified above and the
balance will be allocated primarily for research and development of KAI. The
Agreement has a post closing condition that the Company will raise and
contribute to the capital of Sciences at least $2.2 million in accordance with
a schedule over a period of approximately two years. Such funding must timely
occur to avoid any dilution (up to a maximum of two-thirds) in ownership
interest of Sciences. In connection with the Agreement, the Company will enter
into employment agreements as well as a non-compete, non-solicitation and
non-disclosure agreement with the two stockholders of KAI. These agreements
will be for a period of two years, subject to possible extension as provided in
the agreements.

Extension
of Agreement

Sciences
and Sellers agreed to extend the closing date up to a maximum of August 31,
2011. The Company paid Kai $68,000 to extend the closing date through August
12, 201, it paid Kai $68,000 to extend the closing date through August 19, 2011
and it has a further option at a cost of an additional $68,000 to further
extend the closing date to August 31, 2011. All option payments are non-refundable,
but shall be credited towards the $1.1 million closing condition referenced in
the preceding paragraph.

Buy-Out
Option

In
the event that Sellers receive the Earn-Out, Sciences has the option to buy-out
Sellers and Oracles collective 40% Common Stock position at a cost of $13.2
million, payable in cash or under certain specified conditions in the Companys
Common Stock. Sellers and Oracle have the right to refuse the Buy-Out on up to
one-half of their position.

26

---



About
KAI BioEnergy Corp.

Kai
is a research and development company developing a platform series of
technologies that enable efficient and integrated continuous microalgal
processing. Focusing on the economics and development of an industrially
scalable processing system, KAI has been working on developing a platform
system that directly extracts oil from a water based algal-cultivation medium,
ultimately separating the oil-rich lipids, biomass, and water medium. A
biofuel company can then take these oil-rich lipids and use them to produce
algal biofuels. KAIs integrated continuous high flow system is expected to
offer low capital costs, ultra-low operating costs with no additives or
hazardous chemicals required, ultimately developing industrial scalability.

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 June 30, 2011 Compared to the Three months
Ended June 30, 2010

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

|                                       |  |                              |            |   |  |      |   |   |            |   |  |      |  
|-------------------------------------- |  | ---------------------------- | ---------- | - |  | ---- | - | - | ---------- | - |  | ---- | -
|                                       |  | Three
 Months Ended June 30, |           
|                                       |  |                              |           
|                                       |  | 2011                         |            | % |  | 2010 |   | % |           
|                                       |  |                              |            |   |  |      |   |   |           
|Revenue                                |  | $                            | 68,291     |   |  | 100  | % | $ | 30,080     |   |  | 100  |  
|Cost of goods sold                     |  |                              | 154,112    |   |  | >100 | % |   | 97,111     |   |  | >100 | %
|                                       |  |                              |            |   |  |      |   |   |            |   |  |      |  
|Gross loss                             |  |                              | (85,821    | ) |  |     |   |   | (67,031    | ) |  |     |  
|                                       |  |                              |            |   |  |      |   |   |            |   |  |      |  
|Operating expenses:                    |  |                              |            |   |  |      |   |   |            |   |  |      |  
|Selling, general and
 administrative   |  |                              | 2,622,851  |   |  | >100 | % |   | 1,135,332  |   |  | >100 | %
|Research and development               |  |                              | 23,162     |   |  | >100 | % |   | 125,000    |   |  | >100 | %
|Depreciation and
 amortization         |  |                              | 29,185     |   |  | <100 | % |   | 42,373     |   |  | <100 | %
|Total operating expenses:              |  |                              | 2,675,198  |   |  |      |   |   | 1,302,705  |   |  |      |  
|                                       |  |                              |            |   |  |      |   |   |            |   |  |      |  
|Net loss from operations               |  |                              | (2,761,019 | ) |  |      |   |   | (1,369,736 | ) |  |      |  
|                                       |  |                              |            |   |  |      |   |   |            |   |  |      |  
|Other income/expense:                  |  |                              |            |   |  |      |   |   |            |   |  |      |  
|Realized (loss) on sale of
 securities |  |                              | (195,300   | ) |  |      |   |   |           |   |  |      |  
|Interest Expense                       |  |                              | (8,726     | ) |  |      |   |   |           |   |  |      |  
|                                       |  |                              |            |   |  |      |   |   |            |   |  |      |  
|Net loss                               |  | $                            | (2,965,045 | ) |  |      |   | $ | (1,369,736 | ) |  |      |  
|                                       |  |                              |            |   |  |      |   |   |            |   |  |      |  

The
increase in revenues for the three months ended June 30, 2011 of $38,211
compared to the three months ended June 30, 2010 is the result of a customer
placing fuel orders in the second quarter of 2011 for one of their terminals
that completed a successful test program with G2 Diesel. This customer has
agreed to continue to place orders to supply this location and continue to
order G2 Diesel for several more terminals.

In
general, the testing and pilot programs have continued beyond our original time
estimates, which has also led to a longer sales order cycle than originally
anticipated. For our testing programs that completed in 2011, results continue
to show both efficiency and emissions improvements that remain of great
interest to metropolitan bus systems and the rail and trucking industries. We
are currently cultivating these pilot programs and relationships to generate
sales orders. We expect to complete more pilot programs and regulatory
approvals in 2011. The programs continue to show great promise to generate
significant demand over the next quarter leading to more significant sales
orders and contracts to purchase our fuel.

27

---



Our
most significant efforts have continued to be on the approval of our fuel
variance in the state of California. The fuel variance is required for our fuel
to meet California regulations to sell bio-diesel fuel, which is the result of
G2 Diesels flash point being less than traditional Biodiesel. This is the
result of the small amount of ethanol in our finished fuel, which creates a
lower flashpoint. We have spent considerable resources to meet Californias
requirements to meet this regulation and have received positive feedback from our
representatives that it should pass in 2011. We currently are licensed to sell
fuel in California; however, we must meet this regulation to sell G2 Diesel.
The variance requirement has delayed our ability to expand our market presence
in California and has delayed our ability to sell our fuel in California. Its
passage will allow many of our customers in California, which have tested and
approved the use of our fuel, to purchase G2 Diesel.

Cost
of goods sold was $154,112 for the three months ended June 30, 2011 and $97,111
for the three months ending June 30, 2010. The first quarter of 2011
experienced more sales activity as described in the preceding paragraph. For
the three months ended June 30, 2011, we allocated more factory costs
associated with operating the plant and selling fuel to cost of goods sold.

Current
margins for our testing programs resulted in gross losses of $85,821 for the
three months ended June 30, 2011 and $67,031 for the three months ending June
30, 2010. We expect sales margins to improve once we have sales contracts in
place at our scheduled premium prices after the testing programs are concluded.
Currently, our G2 Diesel is being sold to companies and governmental
organizations and municipalities to test our G2 Diesel as a blended product
for:

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

Research
and development costs were $23,162 for the three months ended June 30, 2011 and
$125,000 for the three months ending June 30, 2010. Our Research and
Development activities have decreased when compared to the three months ended
June 30, 2010.

Depreciation
and amortization decreased by $13,188. We allocated more Depreciation expense
to cost of goods sold during the three months ended June 30, 2011 when compared
to the three months ended June 30, 2010.

Selling,
general, and administrative expenses for the three months ended June 30, 2011
of $2,622,851 exceeded revenues by $2,554,560. Such costs include, among
others, payroll and related expenses, insurance costs and occupancy costs. The
increase in selling, general and administrative expenses of $1,487,519 in 2011
over the comparable period of the prior year is primarily related to consulting
and salaries expense, in the amount of $1,911,875, recorded in relation to the
stock options granted by the company to consultants and employees. The company
also experienced a decrease in consulting, legal and audit costs of $272,379.
Other overhead costs such as travel, marketing and promotional cost also decreased
$185,026 in comparison to the three months ended June 30, 2010.

Net
loss was $2,956,319 in the three months ended June 30, 2011 as compared to
$1,369,736 for the comparable period in 2010. Basic and fully diluted net loss
per share for the three months ended June 30, 2011 and June 30, 2010 was
$(0.15) and $(0.07), respectively. Basic and fully diluted weighted average
shares outstanding for the fiscal three months ended June 30, 2011 and June 30,
2010 was 19,877,996 and 19,443,803, respectively.

28

---



Six months Ended June 30, 2011 Compared to the Six months
Ended June 30, 2010

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

|                                      |  |                            |            |   |  |      |   |   |            |   |  |      |  
|------------------------------------- |  | -------------------------- | ---------- | - |  | ---- | - | - | ---------- | - |  | ---- | -
|                                      |  | Six
 Months Ended June 30, |           
|                                      |  |                            |           
|                                      |  | 2011                       |            | % |  | 2010 |   | % |           
|                                      |  |                            |            |   |  |      |   |   |           
|Revenue                               |  | $                          | 97,513     |   |  | 100  | % | $ | 78,507     |   |  | 100  |  
|Cost of goods sold                    |  |                            | 268,508    |   |  | >100 | % |   | 204,995    |   |  | >100 | %
|                                      |  |                            |            |   |  |      |   |   |            |   |  |      |  
|Gross loss                            |  |                            | (170,996   | ) |  |     |   |   | (126,488   | ) |  |     |  
|                                      |  |                            |            |   |  |      |   |   |            |   |  |      |  
|Operating expenses:                   |  |                            |            |   |  |      |   |   |            |   |  |      |  
|Selling, general and administrative   |  |                            | 3,584,110  |   |  | >100 | % |   | 3,687,772  |   |  | >100 | %
|Research and development              |  |                            | 123,713    |   |  | >100 | % |   | 226,323    |   |  | >100 | %
|Depreciation and amortization         |  |                            | 58,371     |   |  | <100 | % |   | 83,420     |   |  | >100 | %
|Total operating expenses:             |  |                            | 3,776,194  |   |  |      |   |   | 3,997,515  |   |  |      |  
|                                      |  |                            |            |   |  |      |   |   |            |   |  |      |  
|Net loss from operations              |  |                            | (3,937,190 | ) |  |      |   |   | (4,124,003 | ) |  |      |  
|                                      |  |                            |            |   |  |      |   |   |            |   |  |      |  
|Other income/expense:                 |  |                            |           |   |  | <100 | % |   |           |   |  |      |  
|Interest, net                         |  |                            | (8,726     | ) |  |      |   |   | (7,077     | ) |  | <100 | %
|Realized (loss) on sale of securities |  |                            | (213,083   | ) |  |      |   |   |           |   |  |      |  
|                                      |  |                            |            |   |  |      |   |   |            |   |  |      |  
|                                      |  |                            |            |   |  |      |   |   |            |   |  |      |  
|                                      |  |                            |            |   |  |      |   |   |            |   |  |      |  
|Net loss                              |  | $                          | (4,158,999 | ) |  | <100 | % | $ | (4,131,080 | ) |  | <100 | %
|                                      |  |                            |            |   |  |      |   |   |            |   |  |      |  

The
increase in revenues for the six months ended June 30, 2011 of $19,006 compared
to the three months ended June 30, 2010 is the result of a customer placing
fuel orders in the second quarter of 2011 for one of their terminals that
completed a successful test program with G2 Diesel. This customer has agreed to
continue to place orders to supply this location and continue to order G2
Diesel for several more terminals.

In
general, the testing and pilot programs have continued beyond our original time
estimates, which has also led to a longer sales order cycle than originally
anticipated. For our testing programs that completed in 2011, results continue
to show both efficiency and emissions improvements that remain of great
interest to metropolitan bus systems and the rail and trucking industries. We
are currently cultivating these pilot programs and relationships to generate
sales orders. We expect to complete more pilot programs and regulatory
approvals in 2011. The programs continue to show great promise to generate
significant demand over the next quarter leading to more significant sales
orders and contracts to purchase our fuel.

Our
most significant efforts have been focused on approval of our fuel variance in
the state of California. The fuel variance is required for our fuel to meet
California regulations to sell bio-diesel fuel, which is the result of G2 Diesels
flash point being less than traditional Biodiesel. This is the result of the
small amount of ethanol in our finished fuel, which creates a lower flashpoint.
We have spent considerable resources to meet Californias requirements to meet
this regulation and have received positive feedback from our representatives
that it should pass in 2011. We currently are licensed to sell fuel in
California; however, we must meet this regulation to sell G2 Diesel. The
variance requirement has certainly delayed our ability to expand our market
presence in California and has delayed our ability to sell our fuel in
California. Its passage will allow many of our customers in California, which
have tested and approved the use of G2 Diesel, to go to order and purchase G2
Diesel.

Cost
of goods sold was $268,508 for the six months ended June 30, 2011 and $204,995
for the six months ending June 30, 2010. Cost of goods sold exceeded revenues
for both periods as a result of applying fixed factory depreciation and
overhead to cost of goods sold, even though only a small volume of sales were
generated. For the six months ended June 30, 2011, there was an increase in
factory costs associated with operating the plant and selling fuel applied to
cost of goods sold when compared to the six months ended June 30, 2010.

29

---



Current
margins for our testing programs resulted in gross losses of $170,966 for the
six months ended June 30, 2011 and $126,488 for the six months ending June 30,
2010. We expect sales margins to improve once we have sales contracts in place
at our scheduled premium prices after the testing programs are concluded.
Currently, our G2 Diesel is being sold to companies and governmental
organizations and municipalities to test our G2 Diesel as a blended product
for:

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

Research
and development costs were $123,713 for the six months ended June 30, 2011 and
$226,323 for the six months ending June 30, 2010. Our Research and Development
activities have decreased when compared to the three months ended June 30,
2010.

Depreciation
and amortization included in operating expenses decreased by $25,049. We have
allocated more depreciation to cost of goods sold during the six months ended
June 30, 2011 when compared to the six months ended June 30, 2010.

Selling,
general, and administrative expenses for the six months ended June 30, 2011 of
$3,584,110 exceeded revenues by $3,486,597. Such costs include, among others,
payroll and related expenses, insurance costs and occupancy costs. The decrease
in selling, general and administrative expenses of $103,662 in 2011 over the
comparable period of the prior year is primarily related to the following:
Common stock options to consultants, which was treated for accounting purposes
as operating expense, in the amount of $1,911,875. In comparison, during the
six months ended June 30, 2010, the company recorded payments of common stock
to consultants and employees from the Companys CEO and a founding shareholder,
which was treated for accounting purposes as operating expenses and donated
capital, in the amount of $1,493,850, contributing to a period to period
decrease of $477,408. The remaining decrease in Selling, general, and administrating
expenses is the result of a decrease in costs associated with consulting,
legal, audit and bonus costs of approximately $377,833. Other overhead costs
such as travel, marketing and promotional cost decreased approximately $277,024
and salaries and payroll costs decreased by approximately $14,150 in comparison
to the first six months of 2010.

Net
loss was $4,158,999 in the six months ended June 30, 2011 as compared to
$4,131,080 for the comparable period in 2010. Basic and fully diluted net loss
per share for the six months ended June 30, 2011 and June 30, 2010 was $(0.21)
and $(0.25), respectively. Basic and fully diluted weighted average shares
outstanding for the fiscal six months ended June 30, 2011 and June 30, 2010 was
19,867,177 and 16,813,814, respectively.

30

---



Liquidity and Capital Resources

The
company had cash and cash equivalents of $12,519 at June 30, 2011. Net cash was
used in operating activities of $1,203,563 for the six months ended June 30,
2011. Cash used in operations was a result of a net loss for the period of
$4,158,999; a decrease in inventory of $154,790; a decrease in accounts
receivable of $13,429; an increase in payables of $486,808, fair value of
options granted of $1,911,895, depreciation and amortization of $191,693, realized
loss on sale of securities of $213,083 and an increase in other assets of
$22,383. Net cash from investing activities of $553,562 for the six months
ended June 30, 2011, included patent costs of $7,027 and proceeds from the sale
of securities available for sale of $560,769. Net cash provided by financing
activities of $630,097 for the six months ended June 30, 2011, included
proceeds from common stock of $225,000, proceeds from issuing convertible debt
of $250,000, proceeds from issuing notes payable to related party of $50,000
and proceeds from a related party advance of $130,097, partially offset by
$25,000 due from a related party.

The
company had cash and cash equivalents of $2,160,840 at June 30, 2010. Net cash
was used in operating activities of $2,953,941 for the six months ended June
30, 2010. Cash used in operations was a result of a net loss for the period of
$4,131,080; an increase in inventory of $ 552,290 and a decrease in payables of
$110,476 partially offset by compensation of services by a related party of
$1,493,840. Net cash used in investing activities of $ 398,314 for the quarter
ended June 30, 2010, included purchase of property, plant and equipment of
$138,623 and purchase of securities available for sale of $259,691. Net cash provided
by financing activities of $643,346, for the quarter ended June 30, 2010,
included proceeds from the sale of Common Stock of $805,846, partially offset
by the purchase of treasure stock of $122,500, payments of related party note
payable of $25,000 and payments of convertible notes of $15,000.

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 June 30, 2011and December 31, 2010, the company
had outstanding $0 of these convertible notes.

Between
August 2009 and February 2010, the company received gross proceeds of $11,932,000
(net proceeds of $10,253,069) through the sale of its Common Stock at a price
of $3.00 per share, for a total of 3,977,333 shares.

In
the six months ended June 30, 2011, the Company received gross proceeds of
$225,000 from the sale of 45,000 shares of Common Stock and Warrants to
purchase 45,000 shares, exercisable at $7.50 per share from date of issuance
through June 30, 2013.

During
the quarter ended June 30, 2011, the Company borrowed $250,000. In connection
with this transaction, Notes in the principal amount of $250,000 were issued
and are convertible at $5.00 per share. The Company also issued Warrants to
purchase 62,500 shares of Common Stock exercisable at $5 per share at any time
from the date of issuance through June 30, 2013.

During
the quarter ended June 30, 2011, the Company borrowed $50,000 from a related
party. In connection with this transaction, the Company issued Notes in the
principal amount of $50,000. The Notes charge interest at 9% per annum and is
callable on demand.

We
have a history of losses from operations and an accumulated deficit of
$20,710,566 at June 30, 2011 and negative working capital (total current
liabilities in excess of total current liabilities) of $604,737. As of June 30,
2011, we are operating one production facility; currently have a total of 9
employees, with a burn rate of approximately $230,000 per month.

31

---



In
the absence of significant revenues, management believes that we will require
capital funding and liquidity needs for our current corporate and plant
operations. While the company anticipates more than nominal revenues will
result during 2011, our ability to achieve profitable operations will depend on
our ability to raise additional financing in 2011, on terms satisfactory to us,
particularly if cash flow from operations continues at its current level.
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 cash generated from operations and the sale of
current inventory and raising additional capital from the sale of equity
securities.

We
are currently in the process of raising capital through a private placement
sale of common stock. The current private placement memorandum outlines the
sale of up to 2,200,000 shares of common stock at $5 per share for an aggregate
of up to $11,000,000. As of the date of this filing, we have raised and
collected $20,000 as a result of a private placement sale of equity. Exemption
is claimed under Section 4(2) and/or Rule 506 of Regulation D of the Securities
Act of 1933, as amended.

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. 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.

32

---



Item 3. Quantitative and Qualitative Disclosures About
Market Risk

Market
risk is the risk of loss arising from adverse changes in market rates and
prices, such as interest rates, foreign currency exchange rates and commodity
prices. Our primary exposure to market risk is interest rate risk associated
with our short term money market investments. The Company does not have any
financial instruments held for hedging or other speculative purposes and does
not invest in derivative financial instruments, interest rate swaps or other
investments that alter interest rate exposure.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements

Item 4. Controls and Procedures

We
maintain disclosure controls and procedures, which are designed to ensure that
information required to be disclosed in the reports we file or submit under the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange
Commissions rules and forms, and that such information is accumulated and
communicated to our management, including our CEO and CFO, as appropriate, to
allow timely decisions regarding required disclosure.

Under
the supervision and with the participation of our management, including our CEO
and CFO, an evaluation was performed on the effectiveness of the design and
operation of our disclosure controls and procedures as of the end of the period
covered by this quarterly report. Based on that evaluation, our management,
including our CEO and CFO, concluded that our disclosure controls and
procedures were ineffective as of the end of the period covered by this report.

There
were no changes in the Companys internal controls over financial reporting
during the most recently completed fiscal quarter that have materially affected
or are reasonably likely to materially affect the Companys internal control
over financial reporting.

33

---



PART II. OTHER
INFORMATION

Item 1. Legal Proceedings

As
of the filing date of this Form 10-Q, we are not a party to any pending legal
proceedings.

Item 1A. Risk Factors

As a
Smaller Reporting Company as defined Rule 12b-2 of the Exchange Act and in item
10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting
obligations and therefore are not required to provide the information requested
by this Item 1A.

Item 2. Changes in Securities

From
January1, 2011 through July 31, 2011, we had limited private sales of our
securities, summarized as follows:

|                 |  |                            |  |                                                     |  |                                                                                                                                                     |  |                                            |  |                                                                                                                
|---------------- |  | -------------------------- |  | --------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------
|Date of
 Sale    |  | Title of
 Security         |  | Number Sold                                         |  | Consideration
 Received and
 Description of
 Underwriting or
 Other Discounts
 to
 Market Price or
 Convertible
 Security,
 Afforded to
 Purchasers |  | Exemption
 from
 Registration
 Claimed (3) |  | If Option,
 Warrant or
 Convertible
 Security, terms of
 exercise or
 conversion                               
|                 |  |                            |  |                                                     |  |                                                                                                                                                     |  |                                            |  |                                                                                                                
|April, 2011      |  | Common stock
 and warrants |  | 45,000
 Shares and 22,500 warrants                  |  | $225,000;
 22,500 commissions paid.                                                                                                                 |  | Rule 506                                   |  | Warrants
 exercisable at $7.50 per share through June 30, 2013                                                 
|                 |  |                            |  |                                                     |  |                                                                                                                                                     |  |                                            |  |                                                                                                                
|June -July
 2011 |  | Notes and
 warrants        |  | $350,000 principal
 amount of notes;87,500 warrants |  | $350,000:$35,000
 commissions paid.                                                                                                                 |  | Rule 506                                   |  | Notes are
 convertible at $5.00 per share. Warrants are exercisable at $5.00 per share
 through June 30, 2013..
|                 |  |                            |  |                                                     |  |                                                                                                                                                     |  |                                            |  |                                                                                                                
|June 2011        |  | Options                    |  | 567,500                                             |  | Services
 rendered; no commissions paid                                                                                                             |  | Section 4
 (2)                             |  | Exercisable
 through June 24, 2014 at $5.00 per share.                                                         

Item 3. Defaults Upon Senior Securities

None.

Item 4. Reserved

Item 5. Other Information

None

Item 6. Exhibits

Except
for the exhibits listed below, other required exhibits have been previously
filed with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended.

34

---



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         |  | Principal
 Executive Officer Rule 13a-14(a)/15d-14(a) Certification (*)                                                                                                             
|             |  |                                                                                                                                                                                     
|31.2         |  | Principal
 Financial Officer Rule 13a-14(a)/15d-14(a) Certification (*)                                                                                                             
|             |  |                                                                                                                                                                                     
|32.1         |  | Principal
 Executive Officer Section 1350 Certification (*)                                                                                                                         
|             |  |                                                                                                                                                                                     
|32.2         |  | Principal
 Financial Officer Section 1350 Certification (*)                                                                                                                         

|                   | 
|------------------ | 
|                   | 
|* Filed
 herewith.

35

---



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: August
 22, 2011 |  | By: /s/
 Frederick C. Berndt                                 
|                       |  |                                                              
|                       |  | Frederick C.
 Berndt, President (principal executive officer)
|                       |  |                                                              
|Date: August
 22, 2011 |  | By: /s/
 Daniel T. Lapp                                      
|                       |  |                                                              
|                       |  | Daniel T.
 Lapp,                                             
|                       |  | Chief
 Financial Officer (principal financial officer)       

36

---