Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 1 -
FINANCIAL STATEMENTS AND BASIS OF PRESENTATION
The
accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at September 30, 2009 and for all
periods presented have been made.
Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted. It is suggested that
these financial statements be read in conjunction with the financial statements
and notes thereto included in the Company's December 31, 2008 financial
statements. As noted in the footnote, “Restated Financial
Statements”, the Company discovered material errors in the December 31, 2008
financial statements and are cautioned to not relay on those financial
statements until such time as they are re-audited. The results of
operations for the period ended September 30, 2009 and September 30, 2008 are
not necessarily indicative of the operating results for the full
year.
Certain
amounts in prior periods have been reclassified to conform to current period
presentation
NOTE 2 -
GOING CONCERN
The
Company’s financial statements are prepared using generally accepted accounting
principles applicable to a going concern which contemplates the realization of
assets and liquidation of liabilities in the normal course of
business. The Company has not had significant revenues and has
generated losses from operations.
In order
to continue as a going concern and achieve a profitable level of operations, the
Company will need, among other things, additional capital resources and to
develop a consistent source of revenues. The continuation of the
Company as a going concern is dependent upon the continued financial support
from its shareholders, the ability to raise equity or debt financing, and the
attainment of profitable operations from the Company's planned
business.
The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plan described in the preceding paragraph
and eventually attain profitable operations. The accompanying
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
NOTE 3 -
SIGNIFICANT ACCOUNTING POLICIES
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 3 -
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Oil and gas
properties
The
Company follows the full cost method of accounting for its oil and natural gas
properties, whereby all costs incurred in connection with the acquisition,
exploration for and development of petroleum and natural gas reserves are
capitalized. Such costs include lease acquisition, geological and
geophysical activities, rentals on non-producing leases, drilling, completing
and equipping of oil and gas wells and administrative costs directly
attributable to those activities and asset retirement
costs. Disposition of oil and gas properties are accounted for as a
reduction of capitalized costs, with no gain or loss recognized unless such
adjustment would significantly alter the relationship between capital costs and
proved reserves of oil and gas, in which case the gain or loss is recognized to
income.
Depletion
and depreciation of proved oil and gas properties is calculated on the
units-of-production method based upon estimates of proved
reserves. Such calculations include the estimated future costs to
developed proved reserves. Oil and gas reserves are converted to a
common unit of measure based on the energy content of 6,000 cubic feet of gas to
one barrel of oil. Costs of undeveloped properties are not included in the costs
subject to depletion. These costs are assessed periodically for
impairment.
The fair
value of an asset retirement obligation is recognized in the period in which it
is incurred if a reasonable estimate of fair value can be made. The
present value of the estimated asset retirement costs is capitalized as part of
the carrying amount of the long-lived asset. For The Company,
asset retirement obligations (“ARO”) relate to the plugging and abandonment of
drilled oil and gas properties. The amounts recognized are
based upon numerous estimates including future retirement costs; future
recoverable reserve quantities and reserve lives; and the credit-adjusted
risk-free interest rate.
Ceiling
test
In
applying the full cost method, The Company performs an impairment test (ceiling
test) at each reporting date, whereby the carrying value of property and
equipment is compared to the “estimated present value,” of its proved reserves
discounted at a 10-percent interest rate of future net revenues, based on
current economic and operating conditions, plus the cost of properties not being
amortized, plus the lower of cost or fair market value of unproved properties
included in costs being amortized, less the income tax effects related to book
and tax basis differences of the properties. As of December 31, 2008
and September 30, 2009, the Company recorded an impairment expense of $674,321
(as noted in the footnote, “Restated Financial Statements”) and $-0-,
respectively.
Oil and gas properties, not
subject to amortization
The
amortization of the oil and gas properties not classified as proved begins when
the oil and gas properties become proved, or their values become
impaired. The Company assesses the realizability of its
properties not characterized as proved on at least an annual basis or when there
is or has been an indication that an impairment in value may have
occurred. The impairment of properties not classified as proved is
assessed based on management’s intention with regard to future exploration and
development of individually significant properties, and the
Company’s
ability to secure capital funding to finance such exploration and
development. If the result of an assessment indicates that a
property is impaired, the amount of the impairment is added to the capitalized
costs in its full cost pool and they are amortized over production from proved
reserves.
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 3 -
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Oil and gas properties, not
subject to amortization (continued)
As of
December 31, 2008 and September 30, 2009, the carrying value of all oil and gas
properties were subject to amortization. The Company has no carrying
value for properties not subject to amortization.
Revenue and cost
recognition
The
Company uses the sales method of accounting for natural gas and oil revenues.
Under this method, revenues are recognized based on the actual volumes of gas
and oil sold to purchasers. The volume sold may differ from the volumes to which
the Company is entitled based on our interest in the properties. Costs
associated with production are expensed in the period incurred.
Stock-Based
Compensation
Stock-based
compensation expense includes the estimated fair value of equity awards vested
during the reporting period. The expense for equity awards vested
during the reporting period is determined based upon the grant date fair value
of the award and is recognized as expense over the applicable vesting period of
the stock award using the straight-line method.
Recent Accounting
Pronouncements
In May
2009, the FASB issued SFAS 165 (ASC 855-10) entitled “Subsequent
Events”. Companies are now required to disclose the date through
which subsequent events have been evaluated by management. Public entities (as
defined) must conduct the evaluation as of the date the financial statements are
issued, and provide disclosure that such date was used for this evaluation. SFAS
165 (ASC 855-10) provides that financial statements are considered “issued” when
they are widely distributed for general use and reliance in a form and format
that complies with GAAP. SFAS 165 (ASC 855-10) is effective for interim and
annual periods ending after June 15, 2009 and must be applied prospectively. The
adoption of SFAS 165 (ASC 855-10) during the quarter ended September 30, 2009
did not have a significant effect on the Company’s financial statements as of
that date or for the quarter or year-to-date period then ended. In connection
with preparing the accompanying unaudited financial statements as of September
30, 2009 and for the three and nine month periods ended September 30, 2009,
management evaluated subsequent events through the date that such financial
statements were issued (filed with the SEC)..
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 3 -
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting
Pronouncements (continued)
In June
2009, the FASB issued SFAS 168 (ASC 105-10), The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles. (“SFAS 168” pr ASC 105-10) SFAS 168 (ASC 105-10) establishes the
Codification as the sole source of authoritative accounting principles
recognized by the FASB to be applied by all nongovernmental entities in the
preparation of financial statements in conformity with GAAP. SFAS 168 (ASC
105-10) was prospectively effective for financial statements issued for fiscal
years ending on or after September 15, 2009 and interim periods within those
fiscal years. The adoption of SFAS 168 (ASC 105-10) on July 1, 2009 did not
impact the Company’s results of operations or financial condition. The
Codification did not change GAAP, however, it did change the way GAAP is
organized and presented. As a result, these changes impact how companies
reference GAAP in their financial statements and in their significant accounting
policies. The Company implemented the Codification in this Report by providing
references to the Codification topics alongside references to the corresponding
standards.
With the
exception of the pronouncements noted above, no other accounting standards or
interpretations issued or recently adopted are expected to have a material
impact on the Company’s financial position, operations or cash
flows.
NOTE 4 –
MERGER
On March
31, 2009, the Company entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Plantation Exploration, Inc., a privately held Texas
corporation (“Plantation Exploration”), and Plantation Exploration Acquisition,
Inc. (“Acquisition Sub”), the Company’s newly formed wholly-owned Nevada
subsidiary. In connection with the closing of this merger transaction,
Acquisition Sub merged with and into Plantation Exploration (the “Merger”)
on April 2, 2009, with the filing of articles of merger with the Texas
secretary of state. As a result of the Merger, Plantation Acquisition
no longer exists and Plantation Exploration became the Company’s wholly-owned
subsidiary.
Subsequently,
on April 3, 2009, the Company merged with another wholly-owned subsidiary, known
as Savoy Energy Corporation, in a short-form merger transaction under Nevada law
and, in connection with this short form merger, changed the Company’s name to
Savoy Energy Corporation.
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 4 –
MERGER (CONTINUED)
In
addition, pursuant to the terms and conditions of the Merger
Agreement
The sole
shareholder of all of the capital stock of Plantation Exploration issued and
outstanding immediately prior to the closing of the Merger exchanged his shares
into 2,000,000 shares of the Company’s common stock. As a result, the sole
shareholder of Plantation Exploration received 2,000,000 newly issued shares of
the Company’s common stock.
Our board
of directors was reconstituted to consist of Arthur Bertagnolli who, prior to
the Merger, was the sole director of Plantation Exploration. In
connection with such, we entered into an employment agreement (“Employment
Agreement”) with Mr. Bertagnolli to serve as CEO and director of our
company. The terms of the Employment Agreement are set forth
below.
We
entered into a non-competition and non-solicitation agreement (“Non-Competition
and Non-Solicitation Agreement”) with Mr. Bertagnolli. The terms of
the Non-Competition and Non-Solicitation Agreement are set forth
below.
Employment
Agreement
Pursuant
to the terms and conditions of the Employment Agreement:
Mr.
Bertagnolli will serve as President, CEO, Chairman and sole director of the
Company and Plantation Exploration. The Company agreed to compensate Mr.
Bertagnolli $14,000 per month for the first 12 months and $20,000 per month for
the second 12 month period. As of September 30, 2009 we have accrued
$84,000 as payable to Mr. Bertagnolli for his salary. Subsequent to
September 30, 2009, we issued 400,000 shares of common stock to Mr. Bertagnolli
as payment for $70,000 of his salary payable.
Mr.
Bertagnolli will receive a stock bonus from the Company for meeting certain
criteria, including: (i) 750,000 shares of our common stock if our company
generates 100 barrels of oil per day in 180 days; (ii) 750,000 shares of our
common stock if our company generates 300 or more barrels of oil per day in 365
days; and (iii) 1,000,000 shares of our common stock if our company completes a
lease with reserves equal to 35,000,000 or more barrels of oil. As of
September 30, 2009, in accordance with the probability criteria for recognition
under SFAS 123R (ASC 718-10), no compensation expense has been
recorded.
Within 15
days after our second and fourth fiscal quarters, the Company will pay to Mr.
Bertagnolli a cash bonus equal to 3% of our net revenues for the just completed
and prior fiscal quarter, and each subsequent second and fourth quarter
thereafter.
The
Company will pay Mr. Bertagnolli a cash bonus of 5% of the net proceeds of any
sale of our company to any larger oil and gas company, with an additional 5% if
Mr. Bertagnolli secures the purchaser.
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 4 –
MERGER (CONTINUED)
Employment Agreement
(continued)
|
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.
|
Non-Competition and
Non-Solicitation Agreement:
Pursuant
to the terms of the non-competition and non-solicitation agreement:
|
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.
|
Stock Purchase
Agreement
Immediately
following the closing of the Merger, in a separate transaction, the Company’s
former Chief Executive Officer and sole director, Mr. Arthur Kaplan, agreed to
purchase the Company’s former cosmetics business in exchange for the
cancellation and return all of his common stock into treasury and the
forgiveness of debts owed to him. Specifically, in the stock purchase agreement,
Mr. Kaplan retired 10,100,000 shares of the Company’s common stock and forgave
the Company $33,194 in related party payables in exchange for our prior business
of developing, manufacturing, and selling organic personal care products
specifically for men and any assets that relate to that
business.
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 4 –
MERGER (CONTINUED)
Stock Purchase Agreement
(continued)
The
shareholder of Plantation Exploration, Inc. became the controlling shareholder
of the Company following the merger. Accordingly, the transaction is accounted
for as a recapitalization of Plantation Exploration, Inc. The transaction is
accounted for as a reverse merger and the historical financial statements of
Plantation Exploration, Inc. are presented as those of the Company.
NOTE 5 –
SIGNIFICANT EVENTS
On April
1, 2009, the Company issued 3,000,000 options to purchase shares of its
restricted common stock at an exercise price of $1.00. These options
vest over a 2 year period. The Company has valued these shares using
the Black-Scholes model and is amortizing a total expense of $727,278 over the 2
year vesting period.
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.
Effective
June 2, 2009, the Company’s board of directors approved a forward split of the
Company’s common stock on the basis of four shares for each share issued and
outstanding (4:1 split). The total number of authorized shares has
not been changed. The Company’s financial statements reflect the reverse stock
split on a retro-active basis.
On June
4, 2009, the Company issued 996,000 shares of its common stock for services
which was initially valued at $0.75 per share. As noted in the
restatement footnote, the shares were subsequently valued at $0.19 per share for
a total fair value of $186,750.
NOTE 6 –
ACCRUED EXPENSES
As of
September 30, 2009 and December 31, 2008, the balance of accrued expenses and
accounts payable are composed of the following:
|
|
September
30,
2009
|
|
|
December
31,
2008
|
|
Trade
accounts payables
|
|
$
|
177,742
|
|
|
$
|
195,544
|
|
Accrued
interest payable
|
|
|
45,031
|
|
|
|
10,700
|
|
|
|
$
|
222,773
|
|
|
$
|
206,244
|
|
Accrued
interest payable includes $28,585 related to interest payable to Oil Investment
Leases, Inc. (OIL) in shares of the Company’s common stock. The
remaining $16,446 of interest payable is due to Lucas Energy, Inc. under a
demand loan.
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 7 –
NOTES PAYABLE
On May 4,
2009, the Company amended the January 27, 2009 agreement with OIL for advance
cash payments under the demand loan. The amended agreement provided
for total borrowings of $360,000 due on demand. As of December 31,
2008, the Company had received $320,000 from OIL. During the 9 months
ended September 30, 2009, the Company borrowed an additional $40,000 from
OIL. The debt bears interest at 5,000 shares of common stock of the
Company for each month the debt remains unpaid. Both the January 27,
2009 and May 4, 2009 agreements require the Company to issue 30,000 shares of
common stock to OIL as financing fees. The fair value of the common
stock is $13,500 and was expensed (see restatement footnote). As of
September 30, 2009 the Company was not in default of this loan.
As of
December 31, 2008 and September 30, 2009, the Company had borrowed $100,000 from
Lucas Energy, Inc.. The loan bears interest at 8% per annum and is
due on demand.
NOTE 8 –
STOCK OPTIONS AND WARRANTS
A summary
of stock option activity is as follows:
|
|
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
|
|
Options
outstanding and their relative exercise price at September 30, 2009 are as
follows:
|
|
Number
of Shares
|
|
Remaining
Life
|
|
Intrinsic
Value
(In-the-
money)
Warrants
|
|
1.00
|
|
|
3,000,000
|
|
5 years
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000,000
|
|
|
|
$
|
-
|
|
NOTE 9 –
RELATED PARTIES
The
$14,655 balance of related party payables relates to directors fees and payables
for professional services paid by company officers. The payables are
due on demand and bear no interest.
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 10 –
RESTATED FINANCIAL STATEMENTS
On August
27, 2009, the PCAOB revoked the registration of the Company’s prior
aauditorsMoore & Associated Chartered because of violations of PCAOB rules
and auditing standards in auditing financial statements, PCAOB rules and quality
controls standards, And Section 10(b) of the Securities Exchange Act of 1934 and
Rule 10b-5 thereunder, and noncooperation with a Board
investigation. The Company was notified by the SEC that a due to the
revocation, a reaudit of the Company’s financial statements for the year ended
December 31, 2008 would be required.
On
September 10, 2009 the Company began but has not completed the reaudit of
December 31, 2009 and has identified material errors in its previously issued
financial statements. These misstatements require that the financial
statements for the fiscal year ended December 31, 2008 and the quarters ended
March 31, 2009 and June 30, 2009 be restated.
The
largest error related to the impairment of the Company’s oil and gas properties
for the year ended December 31, 2008. It has been determined that the
oil and gas properties should have been impaired to a net value of $24,168 and
the Company should have recognized a corresponding impairment expense of
$674,321. Additionally, the Company has reclassified various account
classes to improve presentation and accuracy.
The
errors discovered relating to the year ended December 31, 2008 also led to
material errors in the quarterly reports filed for the periods ended March 31,
2009 and June 30, 2009. In these periods, oil and gas properties were
overstated. This overstatement led to overstated depreciation,
depletion and amortization expenses. The Company also neglected to
accrue interest payable on the OIL debt and salary expense related to an
employment agreement with the Company CEO. The Company also had
determined that they overestimated the value of shares issued for services
resulting in an overstatement of general and administrative expenses of
$560,250. In this restatement, the Company has reclassified various
account classes to improve presentation and accuracy.
Below is
a summary of the changes made to the financial statements previously filed for
the periods ended December 31, 2008, March 31, 2009 and June 30,
2009.
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 10 –
RESTATED FINANCIAL STATEMENTS (CONTINUED)
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
|
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 10 –
RESTATED FINANCIAL STATEMENTS (CONTINUED)
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
|
|
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 10 –
RESTATED FINANCIAL STATEMENTS (CONTINUED)
|
|
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
|
|
Adjustment Entry
Description
for
March 31, 2009
[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
|
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 10 –
RESTATED FINANCIAL STATEMENTS (CONTINUED)
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
|
|
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 10 –
RESTATED FINANCIAL STATEMENTS (CONTINUED)
|
|
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
|
|
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 10 –
RESTATED FINANCIAL STATEMENTS (CONTINUED)
|
|
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
|
|
Adjustment Entry Description
for June 30, 2009
[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
|
Savoy
Energy Corporation
(FKA
Plantation Exploration, Inc.)
Notes to
Financial Statements
September
30, 2009 and December 31, 2008
NOTE 11 –
COMMITMENTS, CONTINGENCIES AND LITIGATION
The
company has no commitments or contingencies and is currently not subject to any
litigation.
NOTE 12 –
SUBSEQUENT EVENTS
On
October 7, 2009 the Board of Directors granted 400,000 shares of common stock as
payment to Art Bertagnolli for salary payable.
On
October 7, 2009, the Board of Directors granted 300,000 shares of common stock
to directors of the Company for director fees. The $60,000 fair value
of the 400,000 shares was based on the Company’s stock price on the date of
grant and was expensed.
On
October 7, 2009 the Board of Directors granted 100,000 shares of common stock to
a consultant for services. The $15,000 fair value of the 100,000
shares was based on the Company’s stock price on the date of grant and was
expensed.
On
October 7, 2009 the Board of Directors approved the issuance of 2,750,000 shares
of common stock in contemplation of acquiring working interests. To
date, no acquisition has occurred.
On
November 18, 2009, the Board of Directors granted 1,000,000 shares of common
stock for financing fees. The $110,000 fair value of the 1,000,000
shares was based on the Company’s stock price on the date of
grant.