ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations

General Overview

Apolo Gold & Energy Inc. ("Company") was incorporated in March 1997 under the laws of the State of Nevada. Its objective was to pursue mineral properties in South America, Central America, North America and Asia. The Company incorporated a subsidiary - Compania Minera Apologold, C.A in Venezuela to develop a gold/diamond mining concession in Southeastern Venezuela. Project was terminated in August 2001, due to poor testing results and the property abandoned. This subsidiary company has been inactive since 2001 and will not be reactivated.

On April 16, 2002, the Company announced the acquisition of the mining rights to a property known as the Napal Gold Property, ("NUP"). This property is located 48 km south-west of Bandar Lampung, Sumatra, Indonesia. The property consists of 733.9 hectares and possesses a Production Permit (a KP) # KW. 098PP325.

The terms of the Napal Gold Property called for a total payment of $375,000 US over a six-year period of which a total of $250,000 had been made. Subsequent to the year ending June 30, 2008 the Company terminated its agreement on the NUP property and returned all exploration rights to the owner.

On October 29, 2010, shareholders approved an increase in the authorized capital of the Company to 300,000,000 shares of common stock from 200,000,000. In addition to this, shareholders also authorized a share consolidation of 20:1 effective immediately.

The Company continues to pursue opportunities in the natural resource industry and will consider an investment in any other energy related business in order to create value.

At December 31, 2011, the Company had funds on hand of $331

The Company recognizes that it does not have sufficient funds on hand to finance its operations on an ongoing basis. The Company further recognizes that it is dependent on the ability of its management team to obtain the necessary working capital in order to complete projects started and operate successfully. There is no assurance that the Company will be able to obtain additional capital as required, or if the capital is available, to obtain it on terms favorable to the Company. The Company may suffer from a lack of liquidity in the future that could impair its exploration efforts and adversely affect its results of operations.

Results of Operations

In the six months ended December 31, 2011, the Company incurred a loss of $22,527 vs. a loss of $35,948 for the six months ended December 31, 2010. Consulting and professional fees for the six months ended December 31, 2011 were reduced to $ 17,032 vs. $25,494 at December 31, 2010, mainly as a result of reduced legal and filing fees in the current period compared to additional costs incurred in preparation of special shareholder meeting which was held October 29, 2010 and reflected in the six month period ending December 31, 2010.

General and administrative costs are also reduced - being $5,495 in the period ending December 31, 2011 vs. $ 10,454 in the period ending December 31, 2010 again as a result of additional costs incurred in the previous year pertaining to shareholder meeting and adjustments to the share capital share rollback that was approved October 29, 2010.

Company operations are limited at the present time to seeking out and acquiring a desirable resource project that will be beneficial to shareholders. Expenses during the six months ending December 31, 2011 amounted in total to $22,527 vs. $35,948 in the period ending December 31, 2010.

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The Company recognizes that it will require additional capital in order to continue its search for a mineral property or other projects that will be beneficial to the shareholders of the company. There is no assurance at this time that said capital can be raised on terms and conditions acceptable to management.

At December 31, 2011 there were 6,503,276 shares outstanding. There were no shares issued in the six month period ending December 31, 2011.

The Company at December 31, 2011 had current trade accounts payable of $28,736 compared to $30,711 at June 30, 2011 and $ 24,530 at December 31, 2010. Loans owing to related parties at December 31, 2011 amounted to $38,496 vs. $14,087 at June 30, 2011 and $ nil at December 31, 2010.

Cash on hand at December 31, 2011 amounted to $331. The Company is aware that additional financing will be required in order to continue its pursuit of a mineral property opportunity or a comparable opportunity in a related field. There is no assurance that additional funding will be successfully completed.

The Company has no employees other than officers and uses consultants as and when necessary.

LIQUIDITY AND CAPITAL RESOURCES

The Company has limited financial resources at December 31, 2011 with funds on hand of $331 vs. $425 at June 30, 2011 and $615 at December 31, 2010.

During the six months ending December 31, 2011, the Company has pursued opportunities in the energy sector but to date negotiations have not advanced to the point of a Definitive Agreement. The Company continues to pursue opportunities and is in active negotiations at the present time.

The Company has current accounts payable at December 31, 2011 of $28,736 compared to $24,530 at December 31, 2010 and $30,711 at June 30, 2011.

Amounts due to related parties at December 31, 2011 amounted to $38,496 compared to $nil at December 31, 2010, and $14,087 at June 30, 2011. These loans are due to a director of the Company for cash advances to the company to retire current debt. While the Company continues to seek out additional capital, there is no assurance that they will be successful in completing this necessary financing. The Company recognizes that it is dependent on the ability of its management team to obtain the necessary working capital required.

While in the pursuit of additional working capital, the Company is also very active in reviewing other resource development opportunities and will continue with these endeavors.

Inflation has not been a factor during the six months ending December 31, 2011.

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