RESTATEMENT

3 Months Ended

Jun. 30, 2012

NOTE 1 – RESTATEMENT

As disclosed in our Current Report on Form 8-K as filed with the Securities and Exchange Commission (“SEC”) on September 4, 2012, the Board of Directors of Savoy Energy Corporation (“Savoy” or the “Company”) determined that the consolidated financial statements for the three and six months ended June 30, 2011 included in our Quarterly Report on Form 10-Q for the period ended June 30, 2011 could no longer be relied upon as a result of errors in such reports.

The Company filed an Amendment on Form 10-Q/A (“Amendment”) on October 24, 2012 to amend its Quarterly Report on Form 10-Q for the three and six months ended June 30, 2011 (the “Form 10-Q”), as filed with the SEC on August 19, 2011, The Amendment was filed solely for the purpose of restating the Consolidated Financial Statements to correct an error in accounting for certain convertible promissory notes as explained more fully in Notes 1 and 6 of the accompanying notes to consolidated financial statements as well as to expense $20,000 in fees as explained more fully in Note 5 of the accompanying notes to consolidated financial statements, which were originally recorded as a reduction in additional paid-in capital.

The Company has restated its financial statements as at June 30, 2011 and for the three and six months then ended to reflect:

1) an adjustment to record the initial derivative liability of $37,634 with the corresponding note discount of $30,000 and interest expense of $7,634 for the new convertible note issued on March 7, 2011(the 2011 Note),

2) an adjustment to record the fair value change of the derivative liability from the issuance date of the March 7, 2011 Note to June 30, 2011, and the fair value change from December 31, 2010 to June 30, 2011 on the 2010 Notes, resulting in an increase in the derivative liability, and a charge to other expenses of $11,766 and $1,948 for the three and six months ended June 30, 2011, respectively.

3) an adjustment to record the amortization of the note discounts of $39,833 and $74,222 for three and six months ended June 30, 2011, respectively.

4) a reclassification of $10,000 and $20,000 from reducing additional paid in capital to general and administrative expenses for the three and six months ended June 30, 2011, respectively. See Note 5.

5) reversing the original entries made where the Company recorded the beneficial conversion feature at a discount to the market value of the common stock. The discount related to the beneficial conversion feature was valued at $2,258 at inception. For the three and six months ended June 30, 2011, $753 and $1,004 was initially charged to interest expense (for the three and six months ended June 30, 2011, respectively) associated with the amortization of the debt discount. These entries have been reversed in the restated consolidated financial statements.

6) reversing the original entry made of $10,667 for the three and six months ended June 30, 2011 related to recording a loss on debt settlements, that are now accounted for as a derivative liability. The cumulative effect of the restatements increased total liabilities by $96,305, increased additional paid- in - capital by $47,881 and increased the net loss for the three and six months ended June 30, 2011 by $52,735 and $94,689, respectively, and accumulated deficit by $144,187.

a) Balance sheet


	As of June 30, 2011

	As Reported		Adjustments			As Restated
CURRENT LIABILITIES
Notes payable, net of discount	$	453,258	$	(31,098 )	(1)(3)	$	422,160
Derivative liability		-		127,403	(1)(2)		127,403
Total current liabilities		871,966		96,305			968,271

TOTAL LIABILITIES		871,966		96,305			968,271

STOCKHOLDERS’ DEFICIT
Additional paid-in-capital		1,919,402		47,882	(4)		1,967,284
Accumulated deficit		(2,851,914)		(144,187)	(1)(2)(3)		(2,996,101)
Total stockholders’ deficit		(843,969)		(96,305)			(940,274)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	27,997	$	-		$	27,997

b) Statement of operations


	For the three months ended June 30, 2011

	As Reported		Adjustments			As Restated
General and administrative expense	$	96,023	$	10,000	(4)	$	106,023
Total costs and expenses		57,834		10,000			67,834
Operating loss		(55,595)		(10,000)			(65,595)

OTHER EXPENSES
Interest expense		(4,888)		(41,636)	(1,3,5)		(46,524)
Loss on settlement of debt		(39,896)		10,667	(6)		(29,229)
Change in fair value of derivative liability		-		(11,766)	(2)		(11,766)
Total other expenses		(44,784)		(42,735)			(87,519)

Net loss	$	(100,379)	$	(52,735)		$	(153,114)

Basic and diluted net loss per common share	$	(0.00)	$	(0.00)		$	(0.00)

Weighted average common shares outstanding - basic and diluted		77,429,981		-			77,429,981


	For the six months ended June 30, 2011

	As Reported		Adjustments			As Restated
General and administrative expense	$	192,545	$	20,000	(4)	$	212,545
Total costs and expenses		60,729		20,000			80,729
Operating loss		(54,974)		(20,000)			(74,974)

OTHER EXPENSES
Interest expense		(45,629)		(83,408)	(1,3,5)		(129,037)
Loss on settlement of debt		(51,896)		10,667	(6)		(41,229)
Change in fair value of derivative liability		-		(1,948)	(2)		(1,948)
Total other expenses		(97,525)		(74,689)			(172,214)

Net loss	$	(152,499)	$	(94,689)		$	(247,188)

Basic and diluted net loss per common share	$	(0.00)	$	(0.00)		$	(0.00)

Weighted average common shares outstanding - basic and diluted		71,908,664		-			71,908,664

- Definition

Tabular disclosure of the nature and effects of a restatement to correct an error in the reported results of operations of prior periods. When prior period adjustments are recorded, the resulting effects (both gross and net of applicable income tax) on the net income of prior periods are disclosed in the annual report for the year in which the adjustments are made, and amended filings of previously issued reports are typically issued.

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Savoy Energy Corp 10-Q