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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Savoy Energy Corp New (CE) | USOTC:SNVP | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.000001 | 0.00 | 01:00:00 |
x
|
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
For the quarterly period ended
September 30, 2009
|
|
¨
|
Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
|
For the transition period
_________
to
_________
|
|
Commission File Number: 333-151960
|
Nevada
|
26-0429687
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
¨
Large accelerated filer Accelerated filer
|
¨
Non-accelerated filer
|
x
Smaller reporting company
|
PART I – FINANCIAL
INFORMATION
|
||
Item
1:
|
Financial
Statements
|
3
|
Item
2:
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
23
|
Item
3:
|
Quantitative
and Qualitative Disclosures About Market Risk
|
27
|
Item
4T:
|
Controls
and Procedures
|
27
|
PART II – OTHER
INFORMATION
|
||
Item
1:
|
Legal
Proceedings
|
29
|
Item
1A:
|
Risk
Factors
|
29
|
Item
2:
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
29
|
Item
3:
|
Defaults
Upon Senior Securities
|
29
|
Item
4:
|
Submission
of Matters to a Vote of Security Holders
|
30
|
Item
5:
|
Other
Information
|
30
|
Item
6:
|
Exhibits
|
30
|
Item
1.
|
Financial
Statements
|
Our
consolidated financial statements included in this Form 10-Q are as
follows:
|
|
F-1
|
Consolidated
Balance Sheets as of September 30, 2009 (unaudited) and December 31, 2008
(unaudited);
|
F-2
|
Consolidated
Statements of Operations for the three and nine months ended September 30,
2009 and 2008 (unaudited);
|
F-3
|
Consolidated
Statements of Stockholders’ Equity (Deficit) for the period from December
31, 2007 to September 30, 2009 (unaudited)
|
F-4
|
Consolidated
Statements of Cash Flows for the nine months ended September 30, 2009 and
2008 (unaudited);
|
F-5
|
Notes
to Consolidated Financial
Statements;
|
September
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Restated)
|
||||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
|
$ | 4,480 | $ | - | ||||
Accounts
receivable
|
4,350 | 21,022 | ||||||
Total
Current Assets
|
8,830 | 21,022 | ||||||
OIL
AND GAS PROPERTIES, full cost method
|
||||||||
Costs
subject to amortization
|
22,432 | 24,168 | ||||||
Costs
not subject to amortization
|
- | - | ||||||
Oil
and Gas Properties, net
|
22,432 | 24,168 | ||||||
TOTAL
ASSETS
|
$ | 31,262 | $ | 45,190 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Bank
overdraft
|
$ | - | $ | 20,629 | ||||
Accounts
payable and accrued expenses
|
222,773 | 206,244 | ||||||
Officer
salary payable
|
84,000 | - | ||||||
Notes
payable
|
611,003 | 420,000 | ||||||
Related
party payables
|
14,655 | - | ||||||
Total
Current Liabilities
|
932,431 | 626,244 | ||||||
NON-CURRENT
LIABILITIES
|
||||||||
Asset
retirement obligation
|
9,683 | 9,102 | ||||||
TOTAL
LIABILITIES
|
942,114 | 635,346 | ||||||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
||||||||
$0.0001
par value, 28,996,000 and 20,000,000
shares issued and outstanding,
respectively
|
28,996 | 20,000 | ||||||
Additional
paid-in capital
|
375,574 | 16,000 | ||||||
Accumulated
deficit
|
(1,315,422 | ) | (646,785 | ) | ||||
Total
Stockholders' Equity (Deficit)
|
(910,852 | ) | (610,785 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 31,262 | $ | 24,561 |
For
the Three Months Ended
|
For
the Nine Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
REVENUES
|
||||||||||||||||
Oil
and gas revenues
|
$ | 5,862 | $ | 96,940 | $ | 25,005 | $ | 247,062 | ||||||||
OPERATING
EXPENSES
|
||||||||||||||||
Lease
operating expenses
|
8,890 | 26,744 | 51,463 | 368,251 | ||||||||||||
Depreciation
and depletion
|
452 | 12,414 | 2,317 | 51,762 | ||||||||||||
General
and administrative
|
173,426 | 48,157 | 605,531 | 84,417 | ||||||||||||
Total
Operating Expenses
|
182,768 | 87,315 | 659,311 | 504,430 | ||||||||||||
INCOME
(LOSS) FROM OPERATIONS
|
(176,906 | ) | 9,625 | (634,306 | ) | (257,368 | ) | |||||||||
OTHER
INCOME (EXPENSES)
|
||||||||||||||||
Interest
expense
|
(6,031 | ) | - | (34,331 | ) | - | ||||||||||
Total
Other Income (Expenses)
|
(6,031 | ) | - | (34,331 | ) | - | ||||||||||
NET
INCOME (LOSS) BEFORE INCOME TAXES
|
(182,937 | ) | 9,625 | (668,637 | ) | (257,368 | ) | |||||||||
Income
tax expense
|
- | - | - | - | ||||||||||||
NET
(INCOME) LOSS
|
$ | (182,937 | ) | $ | 9,625 | $ | (668,637 | ) | $ | (257,368 | ) | |||||
BASIC
AND DILUTED LOSS PER SHARE
|
$ | (0.01 | ) | $ | 0.00 | $ | (0.02 | ) | $ | (0.00 | ) | |||||
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING
|
28,996,000 | 60,400,000 | 39,352,835 | 60,400,000 |
For
the Nine Months Ended
|
||||||||
September
30,
|
||||||||
2009
|
2008
|
|||||||
OPERATING
ACTIVITIES
|
||||||||
Net
loss
|
$ | (668,637 | ) | $ | (257,368 | ) | ||
Adjustments
to reconcile net loss to net cash used by operating
activities:
|
||||||||
Depreciation
and depletion
|
2,317 | 51,762 | ||||||
Common
stock issued for services
|
186,750 | - | ||||||
Amortization
of stock compensation
|
181,820 | - | ||||||
Changes
in operating assets and liabilities
|
||||||||
Accounts
reveivable
|
16,672 | 5,975 | ||||||
Accounts
payable and accrued expenses
|
16,529 | (27,321 | ) | |||||
Related
party payables
|
98,655 | - | ||||||
Net
Cash Used in Operating Activities
|
(165,894 | ) | (226,952 | ) | ||||
INVESTING
ACTIVITIES
|
||||||||
Sale
of oil and gas property
|
- | 152,633 | ||||||
Purchase
of oil and gas property
|
- | (92,275 | ) | |||||
Net
Cash Provided by Investing Activities
|
- | 60,358 | ||||||
FINANCING
ACTIVITIES
|
||||||||
Repayment
of from bank overdraft
|
(20,629 | ) | - | |||||
Repayment
of demand loans
|
- | (200,000 | ) | |||||
Proceeds
from notes payable
|
191,003 | 390,000 | ||||||
Net
Cash Provided by Financing Activities
|
170,374 | 190,000 | ||||||
NET
INCREASE IN CASH
|
4,480 | 23,406 | ||||||
CASH
AT BEGINNING OF PERIOD
|
- | 22,626 | ||||||
CASH
AT END OF PERIOD
|
$ | 4,480 | $ | 46,032 | ||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||
CASH
PAID FOR:
|
||||||||
Interest
|
$ | - | $ | - | ||||
Income
Taxes
|
$ | - | $ | - |
|
The
Company agreed to issue Mr. Bertagnolli options to purchase 1,000,000
shares of our common stock at an exercise price of $1.00 per share that
will vest in 2 years from the date of the agreement. The fair value of the
options is $242,426 which was valued using the Black-Scholes pricing model
at the date of grant. Variables used in the Black-Scholes
pricing model include (1) discount rate of 1.35%, (2) expected term of 5
years, (3) expected volatility of 142% and (4) zero expected
dividends.
The
Company further agreed to issue Mr. Bertagnolli options to purchase up to
5% of our outstanding common stock at an exercise price of $1.00 per share
that will vest in 2 years from the date of the agreement. The
Company and Mr. Bertagnolli have since agreed that the number of options
issuable under the agreement was to be 2,000,000 options under the same
terms. The fair value of the options is $484,852 which was
valued using the Black-Scholes pricing model at the date of
grant. Variables used in the Black-Scholes pricing model
include (1) discount rate of 1.35%, (2) expected term of 5 years, (3)
expected volatility of 142% and (4) zero expected dividends.
The
company expensed $90,910 of compensation expense during each of the three
months ended June 30, 2009 and September 30, 2009,
respectively.
|
|
The
Company agreed to further compensate Mr. Bertagnolli in the event we are
able to raise capital in connection with a private placement. Mr.
Bertagnolli can only be terminated for
cause.
|
|
Mr.
Bertagnolli shall not engage any in business that competes with the
Company’s business in the United States of America during the two year
period beginning with the execution of the
agreement.
|
|
Mr.
Bertagnolli will not solicit any employee, customer or potential customer
of the Company that he comes in contact with during two year period
beginning with the execution of the
agreement.
|
September
30,
2009
|
December
31,
2008
|
|||||||
Trade
accounts payables
|
$ | 177,742 | $ | 195,544 | ||||
Accrued
interest payable
|
45,031 | 10,700 | ||||||
$ | 222,773 | $ | 206,244 |
Number
of
Shares
|
Weighted
Average
Exercise
Price
|
|||||||
Outstanding
at 12/31/08
|
- | $ | - | |||||
Granted
|
3,000,000 | 1.00 | ||||||
Exercised
|
- | - | ||||||
Cancelled/Expired
|
- | - | ||||||
Outstanding
at 09/30/09
|
3,000,000 | $ | 1.00 |
Exercise Price
|
Number
of Shares
|
Remaining
Life
|
Intrinsic
Value
(In-the-
money)
Warrants
|
||||||
1.00
|
3,000,000 |
5 years
|
$ | - | |||||
3,000,000 | $ | - |
As of December 31, 2008
(Unaudited)
|
As Originally
Reported
|
Adjustments
|
As Restated
|
|||||||||
Cash
|
- | - | ||||||||||
Accrued
Production Revenues
|
21,022 | 21,022 | ||||||||||
Property
and equipment, net
|
99,080 | (99,080 |
)
[3]
|
- | ||||||||
Costs
subject to amortization
|
554,421 | 99,080 |
[3
]
|
24,168 | ||||||||
(629,333 |
)
[1]
|
|||||||||||
Costs
not subject to amortization
|
- | - | ||||||||||
Accounts
payable and accrued expenses
|
(206,244 | ) | (206,244 | ) | ||||||||
Notes
payable
|
(420,000 | ) | (420,000 | ) | ||||||||
Bank
overdraft
|
(20,629 | ) | (20,629 | ) | ||||||||
Asset
retirement obligation
|
(9,102 | ) | (9,102 | ) | ||||||||
Preferred
stock
|
- | - | ||||||||||
Common
stock
|
(20,000 | ) | (20,000 | ) | ||||||||
Additional
paid-in capital
|
(16,000 | ) | (16,000 | ) | ||||||||
Retained
earnings/(accumulated deficit)
|
17,452 | 629,333 | 646,785 | |||||||||
TWELVE MONTHS ENDED
|
||||||||||||
For the twelve months ended December 31, 2008
(Unaudited)
|
As Originally
Reported
|
Adjustments
|
As Restated
|
|||||||||
Oil
and gas revenues
|
(263,351 | ) | (263,351 | ) | ||||||||
Lease
operating expenses
|
383,369 | 383,369 | ||||||||||
Depreciation,
depletion and amortization
|
64,175 | 64,175 | ||||||||||
Impairment
of oil and gas properties
|
- |
629,333
|
[1]
|
674,321 | ||||||||
44,988 |
[1]
|
|||||||||||
Professional
fees
|
103,083 | (103,083 |
)
[2]
|
- | ||||||||
General
and administrative expenses
|
22,287 | 103,083 |
[2]
|
125,370 | ||||||||
Interest
expense
|
4,000 | 4,000 | ||||||||||
(Gain)/loss
on sale of assets
|
44,988 | (44,988 |
)
[1]
|
- | ||||||||
Income
tax expense
|
- | - | ||||||||||
Net
Loss
|
358,551 | 629,333 | 987,884 | |||||||||
Basic
and diluted
|
||||||||||||
net
loss per common share
|
$ | ( 0.02 | ) | $ | 0.00 | $ | (0.02 | ) | ||||
Weight
average common shares outstanding
|
20,000,000 | 40,400,000 | 60,400,000 |
Adjustment
Entry Description
for
December 31, 2009
|
|
[1]
|
Recapitalize
loss on sale of full cost properties to and record impairment of oil and
gas properties
|
[2]
|
Reclassify
for presentation.
|
[3]
|
Reclassify
all PPE into Costs Subject to Amortization in accordance with full cost
method
|
As
of March 31, 2009 (Unaudited)
|
As
Originally
Reported
|
Adjustments
|
As
Restated
|
|||||||||
Cash
|
- | - | ||||||||||
Accrued
Production Revenues
|
17,044 | 17,044 | ||||||||||
Property
and equipment, net
|
96,668 | (96,668 |
)
[1]
|
- | ||||||||
Costs
subject to amortization
|
540,983 | 96,668 |
[1]
|
23,171 | ||||||||
16,044 |
[3]
|
|||||||||||
(629,333 |
)
[2]
|
|||||||||||
(1,191 | ) [4] | |||||||||||
Costs
not subject to amortization
|
- | - | ||||||||||
Accounts
payable and accrued expenses
|
(222,912 | ) | (240,162 | ) | ||||||||
(17,250 | ) | |||||||||||
Notes
payable
|
(450,000 | ) | (5,000 | ) [6] | (455,000 | ) | ||||||
Bank
overdraft
|
(8,834 | ) | (8,834 | ) | ||||||||
Asset
retirement obligation
|
(9,296 | ) | (9,296 | ) | ||||||||
Preferred
stock
|
- | - | ||||||||||
Common
stock
|
(7,000 | ) | (7,000 | ) | ||||||||
Additional
paid-in capital
|
(29,000 | ) | (29,000 | ) | ||||||||
Retained
earnings/(accumulated deficit)
|
72,347 | 636,730 | 709,077 |
THREE MONTHS ENDED
|
||||||||||||
For the three months ended March 31, 2009
(Unaudited)
|
As Originally
Reported
|
Adjustments
|
As Restated
|
|||||||||
Oil
and gas revenues
|
(15,464 | ) | 5,068 | [6] | (10,396 | ) | ||||||
Lease
operating expenses
|
18,841 | 18,841 | ||||||||||
Depreciation,
depletion and amortization
|
16,044 | (16,044 | ) [3] | 1,191 | ||||||||
1,191 | [4] | |||||||||||
Professional
fees
|
5,260 | (5,260 | ) [5] | - | ||||||||
General
and administrative expenses
|
28,146 | 5,260 | [5] | 33,406 | ||||||||
Interest
expense
|
2,068 | (68 | ) [6] | 19,250 | ||||||||
17,250 | [7] | |||||||||||
Income
tax expense
|
- | - | ||||||||||
54,895 | 7,397 | 62,292 | ||||||||||
Opening
Retained Earnings/(Accumulated deficit)
|
17,452 | 629,333 | [2] | 646,785 | ||||||||
Ending
Retained Earnings/(Accumulated deficit)
|
72,347 | 636,730 | 709,077 | |||||||||
Net
loss
|
(54,895 | ) | (7,397 | ) | (62,292 | ) | ||||||
Basic and diluted | ||||||||||||
net
loss per common share
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||
Weight
average common shares outstanding
|
28,000,000 | 32,400,000 | 60,400,000 |
[1]
|
Reclassify
all PPE into Costs Subject to Amortization in accordance with full cost
method
|
[2]
|
To
record impairment of oil and gas
properties
|
[3]
|
To
reverse prior DDA expense
|
[4]
|
To
record proper DDA expense
|
[5]
|
Reclassification
for presentation.
|
[6]
|
Adjustment
to correct previous error
|
[7]
|
Record
issuance of 30,000 shares to OIL and interest on OIL shares (5,000/month)
per agreement on 1/27/09
|
As of June 30, 2009 (Unaudited)
|
As Originally
Reported
|
Adjustments
|
As Restated
|
|||||||||
Cash
|
13,115 | 13,115 | ||||||||||
Accrued
Production Revenues
|
16,640 | 16,640 | ||||||||||
Property
and equipment, net
|
98,785 | (98,785 | ) [1] | - | ||||||||
Costs
subject to amortization
|
523,015 | 98,785 | [1] | 22,690 | ||||||||
32,088 | [2 ] | |||||||||||
(629,333 | ) [4] | |||||||||||
(1,865 | ) [5] | |||||||||||
Costs
not subject to amortization
|
- | - | ||||||||||
Accounts
payable and accrued expenses
|
(214,367 | ) | (24,300 | ) | (238,667 | ) | ||||||
Officer
salary payable
|
- | (42,000 | ) [8] | (42,000 | ) | |||||||
Notes
payable
|
(576,113 | ) | (5,000 | ) [12] | (581,113 | ) | ||||||
Asset
retirement obligation
|
(9,490 | ) | (9,490 | ) | ||||||||
Preferred
stock
|
- | - | ||||||||||
Common
stock
|
(28,996 | ) | (28,996 | ) | ||||||||
Additional
paid-in capital
|
(754,004 | ) | (90,910 | ) [9] | (284,664 | ) | ||||||
560,250 | [10 ] | |||||||||||
Retained
earnings/(accumulated deficit)
|
931,415 | 201,070 | 1,132,485 |
THREE MONTHS ENDED
|
||||||||||||
For the six months ended June 30, 2009
(Unaudited)
|
As Originally
Reported
|
Adjustments
|
As
Restated
|
|||||||||
Oil
and gas revenues
|
(8,747 | ) | (8,747 | ) | ||||||||
Lease
operating expenses
|
11,866 | 11,866 | ||||||||||
Depreciation,
depletion and amortization
|
16,044 | (16,044 | ) [3] | 674 | ||||||||
674 | [5 ] | |||||||||||
Professional
fees
|
7,003 | (7,003 | ) [7] | - | ||||||||
General
and administrative expenses
|
830,902 | 7,003 | [7] | 410,565 | ||||||||
42,000 | [8] | |||||||||||
90,910 | [9] | |||||||||||
(560,250 | ) [10] | |||||||||||
Interest
expense
|
2,000 | 7,050 | [11] | 9,050 | ||||||||
Income
tax expense
|
- | - | ||||||||||
859,068 | (435,660 | ) | 423,408 | |||||||||
Opening
Retained Earnings/(Accumulated deficit)
|
72,347 | 629,333 | [4] | 701,680 | ||||||||
(16,044 | ) [2] | (16,044 | ) | |||||||||
1,191 | [6] | 1,191 | ||||||||||
17,250 | [11] | 17,250 | ||||||||||
Ending
Retained Earnings/(Accumulated deficit)
|
931,415 | 196,070 | 1,127,485 | |||||||||
Net
loss
|
859,068 | (435,660 | ) | 423,408 | ||||||||
Net
loss per common share
|
$ | (0.03 | ) | $ | (0.02 | ) | $ | (0.01 | ) | |||
Weight
average common shares outstanding
|
28,000,000 | 1,348,826 | 29,348.826 |
SIX
MONTHS
ENDED
|
||||||||||||
For
the
six
months
ended
June
30,
2009
(Unaudited)
|
As
Originally
Reported
|
Adjustments
|
As
Restated
|
|||||||||
Oil
and gas revenues
|
(24,211 | ) | 5,068 | [12] | (19,143 | ) | ||||||
Lease
operating expenses
|
30,707 | 30,707 | ||||||||||
Depreciation,
depletion and amortization
|
32,088 | (32,088 | ) [3] | 1,865 | ||||||||
1,865 | [5] | |||||||||||
Professional
fees
|
12,263 | (12,263 | ) [7] | - | ||||||||
General
and administrative expenses
|
859,048 | 12,263 | [7] | 443,971 | ||||||||
42,000 | [8] | |||||||||||
90,910 | [9] | |||||||||||
(560,250 | ) [10] | |||||||||||
Interest
expense
|
4,068 | 24,300 | [11] | 28,300 | ||||||||
(68 | ) [12] | |||||||||||
Income
tax expense
|
- | - | ||||||||||
913,963 | (428,263 | ) | 485,700 | |||||||||
Opening
Retained Earnings/(Accumulated deficit)
|
17,452 | 629,333 | [4] | 646,785 | ||||||||
Ending
Retained Earnings/(Accumulated deficit)
|
931,415 | 201,070 | 1,132,485 | |||||||||
Net
loss
|
913,963 | (428,263 | ) | 485,700 | ||||||||
Basic and Diluted | ||||||||||||
net
loss per common share
|
$ | (0.03 | ) | $ | (0.02 | ) | $ | (0.01 | ) | |||
Weight
average common shares outstanding
|
28,000,000 | 16,617,083 | 44,617,083 |
[1]
|
Reclassify
all PPE into Costs Subject to Amortization in accordance with full cost
method
|
[2]
|
To
reverse prior DDA expense from Q1
|
[3]
|
To
reverse prior DDA expense from Q2
|
[4]
|
To
record impairment of oil and gas
properties
|
[5]
|
To
record proper DDA for current Q
|
[6]
|
To
record proper DDA from prior Q
|
[7]
|
Reclassify
for presentation.
|
[8]
|
Record
accrued salary for CEO
|
[9]
|
Account
for warrants granted to CEO on
4/1/09
|
[10]
|
Revaluation
of shares issued to for services
|
[11]
|
Record
issuance of 30,000 shares to OIL and interest on OIL shares (5,000/month)
per agreement on 1/27/09
|
[12]
|
Adjustment
to correct previous error
|
Exhibit
Number
|
Description of Exhibit
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of
2002
|
SAVOY
ENERGY CORPORATION
|
|||
Date:
|
November
23, 2009
|
||
By:
|
/s/ Arthur Bertagnolli | ||
Arthur
Bertagnolli
|
|||
Title:
|
Chief
Executive Officer and Chief Financial
Officer
|
1 Year Savoy Energy (CE) Chart |
1 Month Savoy Energy (CE) Chart |
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