SaviCorp - FORM 10-Q - March 25, 2015

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EXCEL - IDEA: XBRL DOCUMENT - SaviCorp	Financial_Report.xls
EX-32.2 - CERTIFICATION - SaviCorp	savicorp_10q-ex3202.htm
EX-31.1 - CERTIFICATION - SaviCorp	savicorp_10q-ex3101.htm
EX-31.2 - CERTIFICATION - SaviCorp	savicorp_10q-ex3102.htm
EX-32.1 - CERTIFICATION - SaviCorp	savicorp_10q-ex3201.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2012

Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____________ to ______________

For the Period Ended June 30, 2012

Commission file number 000-27727

SAVICORP

(Exact name of small business issuer as specified in its charter)

Nevada	91-1766174
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

2530 S. Birch Street

Santa Ana, California

92707

(877) 611-7284

(Address of principal executive office)

(Postal Code)

(Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:

Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.001 par value

Indicate by check mark whether the issuer (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 ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to Form 10-K.

Yes ¨ No x Delinquent filers are disclosed herein.

As of March 20, 2015 there were 5,982,260,962 shares of issuer’s common stock outstanding.

SAVI MEDIA GROUP, INC.

Quarterly Report on Form 10-Q for the

Quarterly Period Ending June 30, 2012

Table of Contents

PART I. FINANCIAL INFORMATION	3

Item 1. Unaudited Condensed Financial Statements	3

Balance Sheets:
June 30, 2012 and December 31, 2011	3

Statements of Operations:
For the three months and six months ended June 30, 2012 and 2011	4

Statement of Stockholders’ Deficit
For the period from December 31, 2010, to June 30, 2012	5

Statements of Cash Flows:
For the six months ended June 30, 2012 and 2011	6

Notes to Unaudited Financial Statements	7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3. Controls and Procedures	26

PART II. OTHER INFORMATION	27

Item 1. Legal Proceedings	27

Item 2. Changes in Securities	28

Item 3. Defaults Upon Senior Securities	28

Item 4. Submission of Matters to a Vote of Security Holders	28

Item 5. Other Information	28

Item 6. Exhibits	29

SIGNATURES	30

PART I - FINANCIAL INFORMATION

Item 1. Unaudited Condensed Financial Statements

SaviCorp

BALANCE SHEETS

June 30, 2012 and December 31, 2011

	June 30, 2012			December 31, 2011
	(unaudited)
ASSETS

Current assets:
Cash and cash equivalents	$	9,796		$	427
Accounts Receivable		433			861
Inventory		129,482			157,616
Prepaid expenses		172,155			16,669
Total current assets:		311,866			175,573

Long term assets:
Net fixed assets		15,707			–

Total assets	$	327,573		$	175,573

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Convertible debt, net of unamortized discount of $0 and $0, in default	$	526,440		$	588,440
Related party convertible debt, net of unamortized discount of $0 and $0, in default		204,302			204,302
Notes payable, in default		10,778			10,778
Notes payable, related party, in default		15,000			15,000
Accounts payable and accrued liabilities		1,669,530			1,475,710
Related party accounts payable		251,451			314,452
Accounts payable assumed in recapitalization		159,295			159,295
Settlements payable		1,580,252			–
Rescission Liability		103,749			–
Derivative liabilities - embedded derivatives		7,313,483			10,189,518
Derivative liabilities - warrants		1,876,009			6,041,518
Total current liabilities		13,710,289			18,999,013

Long term liabilities:
Convertible debt, net of unamortized discount of $0 and $0		40,000			–

Total liabilities		13,750,289			18,999,013

Commitments and contingencies		–			–

Stockholders' deficit:
Series A convertible preferred stock; $0.001 par value, 10,000,000 shares authorized, 6,058,233 and 6,312,733 issued and outstanding at June 30, 2012 and December 31, 2011, respectively		6,058			6,313
Series B convertible preferred stock; $0.001 par value, 10,000,000 shares authorized, none issued and outstanding		–			–
Series C convertible preferred stock; $0.001 par value, 10,000,000 shares authorized, 4,411,609 and 6,014,992 issued and outstanding at June 30, 2012 and December 31, 2011, respectively		4,412			6,015
Common stock: $0.001 par value, 6,000,000,000 shares authorized, 4,479,964,007 and 3,598,834,936 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively		4,479,964			3,598,835
Subscription Receivable		(29,800	)		–
Stock payable		1,406,768			1,981,768
Additional paid-in capital		268,991,578			264,112,848
Accumulated deficit		(288,281,696	)		(288,529,219	)

Total stockholders' deficit		(13,422,716	)		(18,823,440	)

Total liabilities and stockholders' deficit	$	327,573		$	175,573

The accompanying notes are an integral part of the unaudited financial statements

SaviCorp

STATEMENTS OF OPERATIONS

For the 3 and 6 Months Ended June 30, 2012 and 2011

(unaudited)

	For the three months ended:						For the six months ended:
	June 30, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Revenue	$	29,330		$	33,016		$	42,046		$	43,267

Cost of Goods Sold		21,121			32,378			30,632			42,251

Gross Profit		8,209			638			11,414			1,016

Operating costs and expenses:
General and administrative expenses	$	556,946		$	2,317,519		$	3,262,340		$	2,765,472

Loss from operations	$	(548,737	)	$	(2,316,881	)	$	(3,250,926	)	$	(2,764,456	)

Other income and (expenses):
Gain/(loss) on debt settlement		–			–			(928,000	)		–
(Loss) on legal settlement		–			–			(1,580,252	)		–
Change in fair value of financial instruments		3,779,313			24,230,475			6,156,137			56,354,953
Change in fair value of rescission liability		(74,902	)		–			(103,749	)		–
Interest expense		(21,985	)		(119,083	)		(45,687	)		(241,536	)
Registration rights expense		–			(148,200	)		–			(300,133	)

Total other income and (expenses), net		3,682,426			23,963,192			3,498,449			55,813,284

Net profit (loss)	$	3,133,689		$	21,646,311		$	247,523		$	53,048,828

Weighted average shares outstanding		4,331,371,117			2,467,827,152			4,089,206,850			2,414,201,886
Weighted average shares outstanding-diluted		6,376,052,740			68,080,446,880			6,133,888,473			68,026,821,614

Net profit (loss) per common share - basic	$	0.00		$	0.01		$	0.00		$	0.02
Net profit (loss) per common share - diluted	$	0.00		$	0.00		$	0.00		$	0.00

The accompanying notes are an integral part of the unaudited financial statements

SaviCorp

STATEMENT OF STOCKHOLDERS' DEFICIT

For the Period From December 31, 2010 to June 30, 2012

	Preferred Stock A					Preferred Stock C					Common Stock			Additional Paid-In		Subscription			Stock			Accumulated
	Shares		Amount			Shares		Amount			Shares	Amount		Capital		Receivable			Payable			Deficit			Total
Balance at December 31, 2010	9,956,483		$	9,956		7,887,275		$	7,887		2,313,878,184	$	2,313,878	251,848,925		$	–		$	705,000		$	(341,361,036	)	$	(86,475,390	)

Common stock issued in exchange for consulting services and employee compensation	–			–		–			–		261,399,579		261,400	3,108,873			–			–			–			3,370,273

Common and preferred stock issued for cash under Regulation D offering	–			–		20,000			20		589,363,479		589,363	1,238,159			–			–			–			1,827,542

Conversion of Preferred A to common	(1,143,750	)		(1,143	)	–			–		114,375,000		114,376	(113,233	)		–			–			–			–

Conversion of Preferred C to common	–			–		(1,392,333	)		(1,392	)	139,233,300		139,233	(137,841	)		–			–			–			–

Settlement of Cornell Debt and cancellation of Preferred A shares	(4,000,000	)		(4,000	)	–			–		–		–	9,466,292			–			–			–			9,462,292

Conversion of debt for common	–			–		–			–		9,000,000		9,000	120,406			–			–			–			129,406

Issuance of Common and Preferred A in exchange for Preferred C	1,500,000			1,500		(2,500,000	)		(2,500	)	100,000,000		100,000	(99,000	)		–			–			–			–

Imputed interest on related party debt	–			–		–			–		–		–	30,620			–			–			–			30,620

Common, Preferred A and Preferred C stock repaid/loaned to Company (net)	–			–		2,000,000			2,000		71,585,394		71,585	(1,350,353	)		–			1,276,768			–			–

Net income	–			–		–			–		–		–	–			–			–			52,831,817			52,831,817

Balance at December 31, 2011	6,312,733		$	6,313		6,014,942		$	6,015		3,598,834,936	$	3,598,835	264,112,848		$	–		$	1,981,768		$	(288,529,219	)	$	(18,823,440	)

Common stock issued in exchange for consulting services and employee compensation	–			–		–			–		237,865,833		237,866	2,388,425			–			–			–			2,626,291

Stock Options issued for consulting services	–			–		–			–		–		–	770			–			–			–			770

Common and preferred stock issued for cash and subscriptions under Regulation D offering	–			–		100,000			100		255,480, 238		255,480	331,020			(29,800	)		–			–			556,800

Conversion of Preferred A to common	(254,500	)		(255	)	–			–		25,450,000		25,450	(25,195	)		–			–			–			–

Conversion of Preferred C to common	–			–		(1,703,333	)		(1,703	)	170,333,000		170,333	(168,630	)		–			–			–			–

Conversion of debt for common	–			–		–			–		142,000,000		142,000	1,813,407			–			–			–			1,955,407

Imputed interest on related party debt	–			–		–			–		–		–	13,933			–			–			–			13,933

Common stock repaid by Company	–			–		–			–		50,000,000		50,000	525,000			–			(575,000	)		–			–

Net income	–			–		–			–		–		–	–			–			–			247,523			247,523

Balance at June 30, 2012 (unaudited)	6,058,233		$	6,058		4,411,609		$	4,412		4,479,964,007	$	4,479,964	268,991,578		$	(29,800	)	$	1,406,768		$	(288,281,696	)	$	(13,422,716	)

The accompanying notes are an integral part of the unaudited financial statements

SaviCorp

STATEMENTS OF CASH FLOWS

For the Periods Ended June 30, 2012 and 2011

	For the six months ended:
	June 30, 2012			June 30, 2011
Cash flows from operating activities:
Net profit	$	247,523		$	53,048,828
Adjustments to reconcile net income to net cash used by operating activities:
Compensatory common, preferred stock and warrant issuances		2,627,061			2,002,421
Imputed Interest		13,933			15,438
Change in fair value of derivatives		(6,156,137	)		(56,354,953	)
Change in fair value of rescission liability		103,749			–
(Gain) Loss on extinguishment of debt		928,000			–
(Gain) Loss on legal settlement		1,580,252			–
Depreciation expense		776			–
Changes in operating assets and liabilities:
Changes in accounts receivable		428			(10,355	)
Changes in inventory		28,134			(163,408	)
Changes in pre-paid assets		(155,486	)		(58,334	)
Changes in other current assets		–			(54,000	)
Accrued registration rights expense		–			300,133
Changes in related party accounts payable		(63,001	)		162,197
Changes in accounts payable and accrued liabilities		193,820			376,434
Net cash used by operating activities		(650,948	)		(735,599	)

Cash flows from investing activities:
Acquisition of equipment		(16,483	)		–
Net cash used in investing activities		(16,483	)		–

Cash flows from financing activities:
Proceeds from note payable		120,000			–
Proceeds from sale of common and preferred stock		556,800			735,200
Net cash provided by financing activities		676,800			735,200

Net increase (decrease) in cash and cash equivalents		9,369			(399	)
Cash and cash equivalents at beginning of year		427			6,381
Cash and cash equivalents at end of the period	$	9,796		$	5,982

The accompanying notes are an integral part of the unaudited financial statements

SAVICORP

NOTES TO FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2012 and June 30, 2011 (unaudited)

1.	Organization and Significant Accounting Policies

SaviCorp (the "Company") is a Nevada Corporation that has acquired rights to "blow-by gas and crankcase engine emission reduction technology" which it intends to develop and market on a commercial basis. The technology is a relatively simple gasoline and diesel engine emission reduction device that the Company intends to sell to its customers for effective and efficient emission reduction and engine efficiency for implementation in both new and presently operating automobiles. The Company is considered a development stage enterprise because it currently has no significant operations, has not yet generated revenue from new business activities and is devoting substantially all of its efforts to business planning and the search for sources of capital to fund its efforts.

The Company was originally incorporated as Energy Resource Management, Inc. on August 13, 2002 and subsequently adopted name changes to Redwood Energy Group, Inc. and Savi Media Group, Inc., upon completion of a recapitalization on August 26, 2002. The re-capitalization occurred when the Company acquired the non-operating public shell of Gene-Cell, Inc. Gene-Cell Inc. had no significant assets or operations at the date of acquisition and the Company assumed all liabilities that remained from its prior discontinued operation as a biopharmaceutical research company. The historical financial statements presented herein are those of Savi Media Group, Inc. and its predecessors, Redwood Energy Group, Inc. and Energy Resource Management, Inc.

The non-operating public shell used to recapitalize the Company was originally incorporated as Becniel and subsequently adopted name changes to Tzaar Corporation, Gene-Cell, Inc., Redwood Energy Group, Inc., Redwood Entertainment Group, Inc., Savi Media Group, Inc., and finally its current name SaviCorp.

Significant Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 dates of the financial statements and the reported amounts of revenues and expenses during the periods. Actual results could differ from estimates making it reasonably possible that a change in the estimates could occur in the near term.

Cash and Cash Equivalents

The Company considers all highly liquid short-term investments with an original maturity of three months or less when purchased, to be cash equivalents. The Company had cash equivalents of $427 as of December 31, 2011 and $9,796 as of June 30, 2012.

Concentration of Credit Risk

Cash and cash equivalents are the primary financial instruments that subject the Company to concentrations of credit risk. The Company maintains its cash deposits with major financial institutions selected based upon management’s assessment of the financial stability. Balances periodically exceed the $100,000 federal depository insurance limit; however, the Company has not experienced any losses on deposits.

Inventory

Inventories are stated at the lower of cost, computed using the first-in, first-out method, or market. If the cost of the inventories exceeds their market value, provisions are made currently for the difference between the cost and the market value.

Furniture and Equipment

Furniture and equipment is recorded at cost. The cost and related accumulated depreciation of assets sold, retired or otherwise disposed of are removed from the respective accounts, and any resulting gains or losses are included in the results of operations. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Repairs and maintenance costs are expensed as incurred.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of long-lived assets when events and circumstances indicate that such assets might be impaired and determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts. Impairments are charged to operations in the period to which events and circumstances indicate that such assets might be impaired.

Intangible Assets

Intangible assets are amortized using the straight-line method over their estimated period of benefit. We evaluate the recoverability of intangible assets periodically and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists.

Income Taxes

The Company uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to reduce deferred tax assets to their net realizable value.

Stock-Based Compensation

The Company adopted FASB guidance on stock based compensation on January 1, 2006. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. Stock and stock options issued for services and compensation totaled $2,002,421 and $2,627,061 for the periods ended June 30, 2011 and June 30, 2012, respectively.

Valuation of Derivatives

The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. We analyzed the derivative financial instruments (the Convertible Notes), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale.

The derivative liabilities result in a reduction of the initial carrying amount (as unamortized discount) of the Convertible Notes. This derivative liability is marked-to-market each quarter with the change in fair value recorded in the income statement. Unamortized discount is amortized to interest expense using the effective interest method over the life of the Convertible Note. If the Note is converted or the warrants are exercised, the derivative liability is released and recorded as additional paid in capital.

Profit/Loss Per Share

Basic and diluted net profit or loss per share is computed on the basis of the weighted average number of shares of common stock outstanding during each period. See Note 10 for a discussion of potentially dilutive instruments.

Fair Value of Financial Instruments

The Company includes fair value information in the notes to financial statements when the fair value of its financial instruments is different from the book value. When the book value approximates fair value, no additional disclosure is made.

New Accounting Pronouncements

In April 2011, the FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”. This amendment explains which modifications constitute troubled debt restructurings (“TDR”). Under the new guidance, the definition of a troubled debt restructuring remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructuring occurring on or after the beginning of the fiscal year of adoption. The Company does not expect that the guidance effective in future periods will have a material impact on its financial statements.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”, which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 will become effective for the Company on January 1, 2012. The Company is currently evaluating ASU 2011-04 and has not yet determined the impact that adoption will have on its financial statements.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”, which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 will become effective for the Company on January 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. The adoption of ASU 2011-05 is not expected to have a material impact on the Company’s financial position or results of operations.

In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. The guidance in ASU 2011-08 is intended to reduce complexity and costs by allowing an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. The amendments also improve previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Also, the amendments improve the examples of events and circumstances that an entity having a reporting unit with a zero or negative carrying amount should consider in determining whether to measure an impairment loss, if any, under the second step of the goodwill impairment test. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The adoption of this guidance is not expected to have a material impact on the Company’s financial position or results of operations.

We have adopted recently issued accounting pronouncements and have determined that they have no material effect on our financial position, results of operations, or cash flow. We do not expect any recently issued but not yet adopted accounting pronouncements to have a material effect on our financial position, results of operations or cash flow.

2.	Going Concern Considerations

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. In 2012, the Company had limited operations and resources. At June 30, 2012, the Company is in a negative working capital position of $13,398,423 and has a stockholders' deficit of $13,422,716. Additionally, as of June 30, 2012 the Company faced substantial challenges to future success as follows:

The Company is delinquent on critical liabilities such as payments to key consultants.

Such matters raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustment that might result from the outcome of this uncertainty.

The goals of the Company will require a significant amount of capital and there can be no assurances that the Company will be able to raise adequate short-term capital to sustain its current operations in the development stage, or that the Company can raise adequate long-term capital from private placement of its common stock or private debt to emerge from the development stage. There can also be no assurances that the Company will ever attain profitability. The Company's long-term viability as a going concern is dependent upon certain key factors, including:

The Company's ability to obtain adequate sources of funding to sustain it during its growth stage.

The ability of the Company to successfully produce and market its gasoline and diesel engine emission reduction device in a manner that will allow it to ultimately achieve adequate profitability and positive cash flows to sustain its operations.

In order to address its ability to continue as a going concern, implement its business plan and fulfill commitments made in connection with its agreement for acquisition of patent rights, the Company hopes to raise additional capital from sale of its common stock. Sources of funding may not be available on terms that are acceptable to the Company and its stockholders, or may include terms that will result in substantial dilution to existing stockholders.

3.	Accounts Payable and Accrued Liabilities

Accounts Payable and Accrued Liabilities at June 30, 2012 and December 31, 2011, consisted of the following:

	6/30/2012		6/30/2011
Trade accounts payable	$	439,242	$	321,026
Accrued wages payable		1,063,078		1,019,042
Accrued interest expense		167,210		135,642

	$	1,669,530	$	1,475,710

4.	Accounts Payable and Accrued Liabilities – Related Party

The $15,000 amount due at December 31, 2011 and June 30, 2012 consist of $10,000 to Serge Monros and $5,000 to Greg Sweeney for payments made on behalf of the Company related to the Herrera Settlement.

5.	Accounts Payable Assumed in Recapitalization

Accounts payable assumed in recapitalization, represents the liabilities of the public shell, at the time, Gene-Cell, Inc. that the Company assumed as part of the recapitalization. This balance is comprised of liabilities for legal fees and trade payables incurred by Gene-Cell, Inc. (See Note 1).

6.	Settlement Payable

The Company received a letter dated June 7, 2013 with a Civil Complaint titled Arnold Lamarr Weese, et al v. SaviCorp filed in the Northern District of West Virginia. In addition to SaviCorp, Serge Monros and Craig Waldrop are being sued individually. Settlement discussions failed and Plaintiff's counsel began service of Process. The Company and Mr. Monros have hired Shustak and Partners to defend the claim. The defendants have sued for breach of contract, fraud, vicarious liability, and unlawful sale by an unregistered broker. The lawsuit attempts to hold the Company and Mr. Monros responsible for alleged improprieties of Waldrop. The Company is finalizing a negotiated settlement and expects to complete the settlement early in 2015. The Company has recorded a $1,580,252 liability based on the current settlement agreement offer.

7.	Rescission Liability

The Company received a letter from the Securities and Exchange Commission, Los Angeles Regional Office, dated May 9, 2011. The letter informed us that the SEC had entered into a “formal order of investigation” into “Savi Media Group, Inc.” The letter included a “Subpoena Duces Tecum,” meaning the Company was given a prescribed period of time to produce all requested documents and information contained in the subpoena. An index of the source of all such produced information and an authentication declaration were also to be supplied. The stated purpose of the investigation is a fact-finding inquiry to assist the SEC staff in determining if the Company has violated federal securities laws. The SEC states there is no implication of negativity or guilt at this stage of the investigation.

The Company initially hired the Los Angeles law firm of Troy Gould to represent us in the matter of this investigation. As of the date of this filing, the Company believes it has provided all requested material to the SEC. Updates on the investigation will be supplied by supplemental filings hereto.

Status of prior private investments; $0 in 2007 (although HDV sold $13,000 of its shares), $0 in 2008 (although HDV sold $445,750 of its shares), $0 in 2009 (although HDV sold $448,000 of its shares), $910,742 in 2010, $1,827,543 in 2011, and $629,500 in the first three quarters of 2012. There is concern that these private placement securities sales were not made in compliance with applicable law (lack of material disclosure and/or failure to file securities sales notices as required by federal law) and the Company may need to offer rescission rights to the investors.

In 2006, the Company issued shares for services valued at $611,768. There were issued shares for services valued at $1,416,060 in 2007; shares for services valued at $14,625 in 2008, shares for services valued at $380,500 in 2009, shares for services valued at $236,920 in 2010, shares for services valued at $3,370,273 in 2011, and shares for services valued at $3,165,039 during the first 3 quarters of 2012. We have no plans to offer rescission for these share issuances.

We offered rescission to many of the 2011 investors in late 2011 (“2011 rescission offer”). The legal sustainability of these rescission offers is also being looked at by Counsel. The results of our rescission offers, in terms of rescission offers accepted by shareholders, were very encouraging. We had four rescissions offers accepted and refunded $13,000 plus interest.

Generally, we believe we have good relationships with our shareholders. Our plan is to offer rescission to most shareholders obtaining privately offered shares from us since January 1, 2007 through 2011. The Company has pledged to use our best efforts, in good faith, to honor any accepted rescission offer. However, there is no assurance that rescission offer acceptances will not have a material effect on our finances or that we will be able to re-pay those electing to rescind in a complete and timely manner. As of the date hereof, the Company has postponed their plans to offer rescission to earlier purchasing shareholders, deeming it advisable to wait until the common stock price increases and they have more operating cash available to pay for the cost of undertaking this endeavor. The Company has booked a liability to account for this rescission liability and marks the liability to market on a quarterly basis. The rescission liability as of June 30, 2012 is $103,749.

8.	Derivatives

In connection with the sale of debt or equity instruments, the Company may sell options or warrants to purchase our common stock. In certain circumstances, these options or warrants may be classified as derivative liabilities, rather than as equity. Additionally, the debt or equity instruments may contain embedded derivative instruments, such as embedded derivative features which in certain circumstances may be required to be bifurcated from the associated host instrument and accounted for separately as a derivative instrument liability.

The Company's derivative instrument liabilities are re-valued at the end of each reporting period, with changes in the fair value of the derivative liability recorded as charges or credits to income in the period in which the changes occur. For options, warrants and bifurcated embedded derivative features that are accounted for as derivative instrument liabilities, the Company estimates fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques. The valuation techniques require assumptions related to the remaining term of the instruments and risk-free rates of return, our current common stock price and expected dividend yield, and the expected volatility of our common stock price over the life of the option.

The following table summarizes the convertible debt and warrant liabilities derivative activity for the period December 31, 2010 to June 30, 2012:

Description	Convertible Notes			Warrant Liabilities			Total
Fair value at December 31, 2010	$	21,196,771		$	56,229,420		$	77,426,191
Change in Fair Value due to Settlement/Issuance		(9,462,292	)		3,226,847			(6,235,445	)
Change due to Exercise/Conversion		(120,406	)		–			(120,406	)
Change in Fair Value		(1,424,255	)		(53,414,749	)		(54,839,304
Fair value at December 31, 2011	$	10,189,518		$	6,041,518		$	16,231,036
Change due to Exercise/Conversion		(885,407	)		–			(885,407	)
Change in Fair Value		(1,990,628	)		(4,165,509	)		(6,156,137	)
Fair value at June 30, 2012	$	7,313,483		$	1,876,009		$	9,189,492

For the six month period ended June 30, 2012, net derivative income was $6,156,137. For the year six month period ended June 30, 2011, net derivative income was $56,354,953.

The lattice methodology was used to value the convertible notes and warrants issued, with the following assumptions.

Assumptions	6/30/2012		6/30/2011
Dividend yield		0.00%		0.00%
Risk-free rate for term		0.33%		.02%-0.25%
Volatility		143%		130%
Maturity dates		0.0-2.42 years		0.28-2.58 years
Stock Price		0.0067		0.0090

The Cornell 7/10/06 convertible note ($2,470,000 balance) matured on 7/10/08. The Cornell 4/02/07 promissory note ($15,000 balance) became convertible upon default and matured. The Cornell 7/10/06 warrants (initial 2,900,000,000 warrants with exercise prices ranging from $0.003 to $0.150 and an expiration date of 7/10/11 reset to 66,000,000,000 warrants at $0.0005) had a term remaining of 0.522 years at 12/31/11. The Cornell debt and warrants were settled in 2011 (see Note 9). The HDV and DSE convertible notes matured on April 1, 2010 and are in default as of 12/31/11 and 6/30/12.

9.	Convertible Debt

Cornell:

On July 10, 2006, we entered into a Securities Purchase Agreement with Cornell Capital Partners L.P. providing for the sale by us to Cornell of our 10% secured convertible debentures in the aggregate principal amount of $2,970,000. In addition, Cornell issued a note payable of $15,000 on April 2, 2007 that on default became convertible. The Company was in default on all debt to Cornell as of December 31, 2010 due to not paying the balance due at maturity.

On or about July 28, 2011, the Company entered into a Repayment Agreement (the “Repayment Agreement”) with YA Global Investments, L.P., a Cayman Islands exempt limited partnership formerly known as Cornell Capital Partners, L.P. (“YA Global”).

Pursuant to the terms of the Repayment Agreement, all of the Company’s obligations under the Financing Documents have been terminated in full. Without limitation, all amounts otherwise due under the Debentures are deemed satisfied in full, the Prior Warrants are deemed cancelled, and any and all security interests granted by the Company in favor of YA Global pursuant to the Financing Documents have been extinguished, including the release of 4,000,000 shares of Series A Preferred Stock held in escrow. In exchange for the foregoing, the Company delivered to YA Global: (i) a one-time cash payment of US$550,000; and (ii) new warrants to purchase up to 25,000,000 shares of Common Stock at an exercise price of $0.0119 (the “Current Warrants”). The Current Warrants expire on or about July 28, 2014. A copy of the Repayment Agreement and Current Warrants have been attached as exhibits to the Form 8-K filed August 2, 2011 and are hereby incorporated in their entirety by reference. The Company recorded a gain on settlement of $19,139,391 based on the book value of the liabilities released and the fair value of the consideration paid.

DS Enterprises:

On December 15, 2009, the Company converted accounts payable due to DS Enterprises, Inc. into a convertible promissory note. The note bears interest at 8%, matured on April 15, 2010, and converts into common shares at the conversion rate of $0.003 (reset to $0.0005) subject to anti-dilution protection. This note was in default as of June 30, 2012 due to lack of payment upon maturity.

Gross accounts payable converted on December 15, 2009	$	526,094
Plus accrued interest		71,346
Net due	$	597,440

Following is an analysis of convertible debt due DS Enterprises at June 30, 2012 and December 31, 2011:

	6/30/2012		12/31/2011
Contractual balance, in default	$	526,440	$	588,440
Less unamortized discount		–		–

Convertible debt	$	526,440	$	588,440

This note is considered a derivative instrument due to the anti-dilution protection related to the conversion feature. The Company recorded a derivative liability upon issuance on December 15, 2009 which resulted in the note discount ($597,440 at issuance) and a loss on modification recorded as interest expense in the amount of $344,157. The Company also recorded $79,945 in interest expense upon the conversion of accounts payable to notes payable. During the six month period ending June 30, 2012, $62,000 of the principal balance was converted to 62,000,000 shares of common stock.

His Divine Vehicle - Related Party:

On December 15, 2009, the Company converted $204,302 of accounts payable due to His Divine Vehicle, Inc. into a convertible promissory note. The note bears interest at 8%, matured on April 15, 2010, and converts into common shares at the conversion rate of $0.003 (reset to $0.0005) subject to anti-dilution protection. This note was in default as of June 30, 2012 due to lack of payment upon maturity.

Following is an analysis of convertible debt - related party at June 30, 2012 and December 31, 2011:

	6/30/2012		12/31/2011
Contractual balance, in default	$	204,302	$	204,302
Less unamortized discount		–		–

Convertible debt	$	204,302	$	204,302

10.

Notes Payable

In connection with the Herrera Settlement Agreement, the Company issued promissory notes to former officers who made payments on behalf of the company. The Notes were issued on November 15, 2008, bear interest of 12% and are due in one year from the date of issuance. The total due as of June 30, 2012 and December 31, 2011 includes $10,778 due to former officers who made payments or waived fees as part of the Herrera Settlement Agreement and the $15,000 due to Mr. Monros and Mr. Sweeney recorded as related party debt to Mr. Monros and Mr. Sweeney.

The Company issued Steve Botkin a note payable of $80,000 for accrued and unpaid wages. On February 7, 2012, the Company issued Steve Botkin 80,000,000 shares as full consideration for the note payable. Based on the market price of the stock at the conversion date, the Company recorded a loss on settlement of $928,000.

In the period ending June 30, 2012, Steve Botkin loaned the company $40,000.

11.

Income Taxes

The Company files a U.S. Federal income tax return. The components of the net loss before income tax benefit for the periods ended June 30, 2012 and December 31, 2011 are as follows:

		2012				2011
Net income/(loss) before income taxes		$	247,524			$	52,831,817

The components of the Company's deferred tax assets at June 30, 2012 and December 31, 2011 are as follows:

	2012			2011
Deferred tax assets
Liabilities
Loss carry-forwards	$	2,999,844		$	2,015,062
Valuation allowance		(2,999,844	)		(2,015,062	)
	$	–		$	–

At June 30, 2012, the Company had generated US net operating loss carry-forwards of approximately $8,823,072 which will expire in various years between 2012 and 2029. The benefit from utilization of net operating loss carry forwards incurred prior to December 30, 2004 is significantly limited in connection with a change in control of the Company. Such benefit could be subject to further limitations if significant future ownership changes occur in the Company. The Company believes that a significant portion of its unused net operating loss carry forwards will never be utilized due to expiration or limitations on use due to ownership changes.

At June 30, 2012 and December 31, 2011, the Company has no uncertain tax positions.

12.	Commitments and Contingencies

Legal Proceedings

From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business.

On or about July 28, 2011, SaviCorp, a Nevada corporation, formerly known as Savi Media Group, Inc. (the “Company”) entered into a Repayment Agreement (the “Repayment Agreement”) with YA Global Investments, L.P., a Cayman Islands exempt limited partnership formerly known as Cornell Capital Partners, L.P. (“YA Global”).

On or about July 10, 2006, the Company and YA Global, then known as Cornell Capital Partners, L.P., entered into a Securities Purchase Agreement which was subsequently amended and restated on August 17, 2006 (collectively the “SPA”) wherein the Company issued and sold to YA Global secured convertible debentures in the aggregate amount of approximately US$2,485,000 (collectively, the “Debentures”) and certain warrants (collectively the “Prior Warrants” and with the Debentures, the “Securities”) to purchase an aggregate of 2,900,000,000 shares of the Company’s common stock, par value $0.001 (the “Common Stock”).

In connection with the SPA, the Company and YA Global entered into ancillary agreements, including a Security Agreement, an Insider Pledge and Escrow Agreement, a Registration Rights Agreement, and other related documents (the SPA and such ancillary agreements are collectively referred to hereinafter as “Financing Documents”). Copies of the Financing Documents have been attached to the Company’s prior filings with the United States Securities and Exchange Commission (the “SEC”) and are hereby incorporated in their entirety by reference.

The Company received a letter dated June 7, 2013 with a Civil Complaint titled Arnold Lamarr Weese, et al v. SaviCorp filed in the Northern District of West Virginia. In addition to SaviCorp, Serge Monros and Craig Waldrop are being sued individually. Settlement discussions failed and Plaintiff's counsel began service of Process. The Company and Mr. Monros have hired Shustak and Partners to defend the claim. The defendants have sued for breach of contract, fraud, vicarious liability, and unlawful sale by an unregistered broker. The lawsuit attempts to hold the Company and Mr. Monros responsible for alleged improprieties of Waldrop. The Company is negotiating a settlement and expects to reach a settlement to release the Company and Mr. Monros of any alleged liability in early 2015. The Company has recorded a settlement liability of $1,580,282 which represents an estimate of the fair value of the consideration to be paid to the Plaintiffs based on most recent settlement discussions. This amount includes the current value of approximately 300,000,000 shares to be issued and the $100,000 in legal fees to be paid.

Lease Commitments

The Company is currently leasing office space and adjacent research and development space on an annual basis from CEE, LLC, for $110,000 per year.

13.	Stockholders' Equity

Common Stock

Following is a description of transactions affecting common stock for the periods ended December 31, 2011 and June 30, 2012.

Year Ended December 31, 2011

In January 2011, the Board of Directors authorized the issuance of 12,550,000 common shares to accredited and non-accredited investors for total proceeds of $41,500.

In February 2011, the Board of Directors authorized the issuance of 82,525,000 common shares to accredited and non-accredited investors for total proceeds of $411,500.

In March 2011, the Board of Directors authorized the issuance of 6,562,858 common shares to accredited and non-accredited investors for total proceeds of $41,100.

In April 2011, the Board of Directors authorized the issuance of 2,642,857 common shares to accredited and non-accredited investors for total proceeds of $12,100.

In May 2011, the Board of Directors authorized the issuance of 7,766,667 common shares to accredited and non-accredited investors for total proceeds of $24,000.

In June 2011, the Board of Directors authorized the issuance of 58,155,555 common shares to accredited and non-accredited investors for total proceeds of $185,000.

In July 2011, the Board of Directors authorized the issuance of 209,160,541 common shares to accredited and non-accredited investors for total proceeds of $696,343.

In July, 2011 His Divine Vehicle revised its licensing agreement to issue 1,500,000 Preferred A shares and 100,000,000 common shares in exchange for 2,500,000 Preferred C shares.

In August 2011, the Board of Directors authorized the issuance of 52,200,000 common shares to accredited and non-accredited investors for total proceeds of $68,000.

In September 2011, the Board of Directors authorized the issuance of 28,000,000 common shares to accredited and non-accredited investors for total proceeds of $44,000.

In October 2011, the Board of Directors authorized the issuance of 36,000,000 common shares to accredited and non-accredited investors for total proceeds of $88,000.

In November 2011, the Board of Directors authorized the issuance of 58,800,000 common shares to accredited and non-accredited investors for total proceeds of $126,000. The Company converted 9,000 of convertible debt and 57,803 of derivative liability into 9,000,000 common shares

In December 2011, the Board of Directors authorized the issuance of 35,000,001 common shares to accredited and non-accredited investors for total proceeds of $70,000.

Throughout the year, the Board of Directors also authorized the issuance of 261,399,579 common shares for services rendered by independent contractors issuances based on the market value of the stock.

Throughout the year, 1,143,750 Preferred A shares were converted to 114,375,000 common shares and 1,392,333 Preferred C shares were converted to 139,233,300 common shares.

In May, 2011, the Company borrowed 128,414,606 common shares from directors of the Company.

In August, 2011, the Company repaid 200,000,000 common shares that were loaned to the Company.

Period Ended June 30, 2012

In January 2012, the Board of Directors authorized the issuance of 14,603,571 common shares to accredited and non-accredited investors for total proceeds of $45,500.

In February 2012, the Board of Directors authorized the issuance of 119,500,000 common shares to accredited and non-accredited investors for total proceeds of $248,500. The Company converted $80,000 of debt, $22,000 of convertible debt, and $366,382 of derivative liability into 102,000,000 common shares. The Company recorded a loss on conversion of $928,000 of the $80,000 of debt.

In March 2012, the Board of Directors authorized the issuance of 37,866,667 common shares to accredited and non-accredited investors for total proceeds of $55,700 and a subscription receivable of $37,500. The Company converted $40,000 of convertible debt and $519,025 of derivative liability into 40,000,000 common shares.

In April 2012, the Board of Directors authorized the issuance of 57,260,000 common shares to accredited and non-accredited investors for total proceeds of $122,300.

In May 2012, the Board of Directors authorized the issuance of 12,000,000 common shares to accredited and non-accredited investors for total proceeds of $30,000.

In June 2012, the Board of Directors authorized the issuance of 14,250,000 common shares to accredited and non-accredited investors for total proceeds of $47,000.

Throughout the three month period ending June 30, 2012, the Company received $7,700 from subscriptions receivable.

Throughout the period through June 30, 2012, the Board of Directors also authorized the issuance of 237,865,833 common shares for services rendered by independent contractors issuances based on the market value of the stock.

Throughout the period through June 30, 2012, 254,500 Preferred A shares and 1,703,333 Preferred C shares were converted to 195,783,000 common shares.

In March 2012, the Company repaid 50,000,000 common shares previously borrowed from directors of the Company.

Stock Options

Gene-Cell, Inc., the company, used in the recapitalization (See Note 1) periodically issued incentive stock options to key employees, officers, and directors to provide additional incentives to promote the success of the Company's business and to enhance the ability to attract and retain the services of qualified persons. The Board of Directors approved the issuance of all stock options. The exercise price of an option granted was determined by the fair market value of the stock on the date of grant. Reverse stock splits by the Company resulted in the reduction of outstanding options to less than 85 shares with exercise prices that are so high that the exercise of the options will never be practical. Expiration dates ranged from March, 2012 through July, 2012. There are 38 stock options outstanding as of 6/30/12 at an exercise price of $2,700.

Incentive Stock Plan

During the year ended December 31, 2005 the 2005 Incentive Stock Plan was adopted by the Company’s Board of Directors and approved by the stockholders in August 2005. The 2005 Plan provides for the issuance of up to 25,000,000 shares and/or options. The primary purpose of the 2005 Incentive Stock Plan is to attract and retain the best available personnel for us in order to promote the success of our business and to facilitate the ownership of our stock by employees. The 2005 Incentive Stock Plan is administered by our Board of Directors. Under the 2005 Incentive Stock Plan, key employees, officers, directors and consultants are entitled to receive awards. The 2005 Incentive Stock Plan permits the granting of incentive stock options, non-qualified stock options and shares of common stock with the purchase price, vesting and expiration terms set by the Board of Directors. No options have been issued under the Plan as of December 31, 2011.

Stock Warrants

In connection with the securities purchase agreement, we agreed to issue Cornell warrants to purchase an aggregate 2,900,000,000 shares of common stock, exercisable for a period of five years as follows:

				Remaining
Number of		Exercise		Life
Warrants		Price		Years
	1,000,000,000	$	0.0030	0.0
	1,000,000,000		0.0060	0.0
	300,000,000		0.0100	0.0
	200,000,000		0.0150	0.0
	150,000,000		0.0200	0.0
	100,000,000		0.0300	0.0
	60,000,000		0.0500	0.0
	40,000,000		0.0750	0.0
	30,000,000		0.1000	0.0
	20,000,000		0.1500	0.0

	2,900,000,000	$	0.0114

These warrants issued to Cornell expired in 2011.

In connection with the repayment agreement (see Note 9), we agreed to issue to YA Global warrants to purchase an aggregate of 25,000,000 shares of common stock, exercisable for a period of three years at an exercise price of $0.0119. The warrants issued to YA Global provide for certain anti-dilution protection in the event that (i) we issue shares of our common stock for a purchase price below the exercise price of the various warrants or in the event we issue options or other convertible securities with a conversion price below the exercise price, (ii) we effectuate a stock split, stock dividend or other form of recapitalization, or (iii) we declare a dividend payment to the holders of our common stock. The exercise price was reset on August 8, 2011 to $0.0005 and the number of warrants increased to 595,000,000.

The Company issued 5,000,000 warrants in May 2010 to a law firm for services rendered valued at $137,000 using a Black-Scholes-Merton model using the following inputs (0.0% dividend yield, stock price of $0.0274, risk-free rate of 2.43%, volatility of 417%, 5 year remaining term). The warrants expire in five years with an exercise price of $0.01.

The Company issued 666,667 warrants in April 2012 to a law firm for services rendered valued at $770 using a lattice model using the following inputs (0.0% dividend yield, stock price of $0.009, risk-free rate of 0.53%, volatility of 139%, 2.5 year remaining term). The warrants expire in thirty months with an exercise price of $0.015.

As of June 30, 2012 the following warrants remain outstanding:

				Remaining
Number of		Exercise		Life
Warrants		Price		Years
	595,000,000	$	0.0005	2.07
	5,000,000		0.0100	2.84
	666,667		0.0150	2.26

	600,666,667	$	0.0006

Preferred Stock

During the year ended December 31, 2005, the Company set preferences for its Series A, B and C preferred stock. The Company is authorized to issue 40,000,000 shares of preferred stock, $0.01 par value per share. At December 31, 2010 the Company had 9,956,483 shares of series A preferred stock issued and outstanding and 7,887,275 shares of series C preferred stock issued and outstanding. The Company’s preferred stock may be issued in series, and shall have such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions providing for the issuance of such stock adopted from time to time by the board of directors.

The Series A and Series C preferred stock provides for conversion on the basis of 100 shares of common stock for each share of preferred stock converted, with conversion at the option of the holder or mandatory conversion upon restructure of the common stock and holders of the series A preferred stock vote their shares on an as-converted basis. Holders of the series A preferred stock participates on distribution and liquidation on an equal basis with the holders of common stock.

The series B preferred stock provides for conversion on the basis of 10,000 shares of common stock for each share of preferred stock converted, with conversion at the option of the holder or mandatory conversion upon restructure of the common stock and holders of the series A preferred stock vote their shares on an as-converted basis. Holders of the series B preferred stock participates on distribution and liquidation on an equal basis with the holders of common stock.

Following is a description of transactions affecting preferred stock for the year ended December 31, 2011 and the six month period ended June 30, 2012.

Year Ended December 31, 2011

In January 2011, the Board of Directors authorized the issuance of 20,000 Preferred C shares to accredited and non-accredited investors for total proceeds of $20,000.

In July 2011, 4,000,000 Preferred A shares were cancelled out of escrow as part of the settlement with Cornell Partners.

In July, 2011 His Divine Vehicle revised its licensing agreement to issue 1,500,000 Preferred A shares and 100,000,000 common shares in exchange for 2,500,000 Preferred C shares.

In August, 2011, the Company repaid 2,000,000 Preferred C shares that were loaned to the Company.

Throughout the year, 1,143,750 Preferred A shares were converted to 114,375,000 common shares and 1,392,333 Preferred C shares were converted to 139,233,300 common shares.

Period Ended June 30, 2012

In June 2012, the Board of Directors authorized the issuance of 100,000 Preferred C shares to accredited and non-accredited investors for total proceeds of $10,000.

Throughout the period, 254,500 Preferred A shares and 1,703,333 Preferred C shares were converted to 195,783,000 common shares.

Potentially Dilutive Equity Instruments

The following is an analysis of potentially dilutive equity instruments at June 30, 2012:

Series A Preferred Stock convertible to common stock on a 100 for 1 basis			605,823,300
Series C Preferred Stock convertible to common stock on a 100 for 1 basis			441,160,900

Total			1,046,984,200

Other Equity Transactions

Year Ended December 31, 2011

Interest was imputed on non-interest bearing related party debt in the amount of $30,620 and credited to additional paid in capital.

Period Ended June 30, 2012

Interest was imputed on non-interest bearing related party debt in the amount of $13,933 and credited to additional paid in capital. Subscriptions receivable of $29,800 represent amounts due from shareholders for stock issued during the period.

14.

Related Party Transactions

The Company engaged in various related party transactions involving the issuance of shares of the Company's common stock during the periods ended June 30, 2012 and December 31, 2011.

During 2007, 2008, 2009, 2010 and 2011 His Divine Vehicle, Inc. ("HDV") incurred costs on behalf of the Company. At December 31, 2012, the Company owed HDV $244,956 and Serge Monros $570,367 in accrued wages. At December 31, 2011, the Company owed HDV $314,452 and Serge Monros $437,167 in accrued wages. At June 30, 2012, the Company owed HDV $251,451 and Serge Monros $498,367.

HDV, an affiliate of Mr. Monros, manufactures the “DynoValve” and “DynoValve Pro” products and then sells them to the Company for resale pursuant to the Product Licensing Agreement entered into on November 15, 2008. As consideration for HDV entering into the Product Licensing Agreement, the Company agreed to issue to Mr. Monros and HDV, if and when available, an aggregate of 500 Million shares of Common Stock, 5 Million shares of Series A Preferred Stock and 5 Million shares of Series C Preferred Stock. HDV loaned 1,000,000 Preferred A shares to the Company in 2008. As additional consideration for the Licensing Agreement, HDV waived $332,786 owed to it by the company and Mr. Monros waived $306,000 in accrued wages. The excess value of the shares issued (common and preferred) over the debt waived was expensed to research and development. In July, 2011, the stock consideration paid for the licensing agreement was modified to increase the common shares by 100,000,000, increase the Series A Preferred Stock by 1,500,000 and reduce the Series C Preferred Stock by 2,500,000.

On December 15, 2009, the Company converted $204,302 of accounts payable due to His Divine Vehicle, Inc. into a convertible promissory note. The note bears interest at 8%, matured on April 15, 2010, and converts into common shares at the conversion rate of $0.003 (reset to $0.0005) subject to anti-dilution protection. The note matured and is currently in default due to lack of payment at maturity. The note principal balance as of December 31, 2011 and June 30, 2012 is $204,302.

In August 2011 His Divine Vehicle loaned 2,000,000 Preferred C shares and the 200,000,000 common shares to the Company.

15.

Non-Cash Investing and Financing Transactions and Supplemental Disclosure of Cash Flow Information

During the six month periods ended June 30, 2012 and June 30, 2011, the Company engaged in various non-cash investing and financing activities as follows:

	2012			2011
Settlement of Convertible Debt and Derivative Liabilities with common stock	$	1,955,407		$	–

Conversion of Preferred Stock into Common Stock	$	195,783		$	58,898

Preferred Stock Loaned/Common Stock Issued for Stock Payable	$	(575,000	)	$	360,000

During the periods ended June 30, 2012 and June 30, 2011, the Company made no interest payments and no income tax payments.

16.

Fair Value of Financial Instruments.

The Company’s financial instruments consist of cash and cash equivalents, accounts payable, accrued liabilities and convertible debt. The estimated fair value of cash, accounts payable and accrued liabilities approximate their carrying amounts due to the short-term nature of these instruments.

The Company utilizes various types of financing to fund its business needs, including convertible debt with warrants attached. The Company reviews its warrants and conversion features of securities issued as to whether they are freestanding or contain an embedded derivative and, if so, whether they are classified as a liability at each reporting period until the amount is settled and reclassified into equity with changes in fair value recognized in current earnings. At December 31, 2012, the Company had convertible debt and warrants to purchase common stock, the fair values of which are classified as a liability. Some of these units have embedded conversion features that are treated as a discount on the notes. Such financial instruments are initially recorded at fair value and amortized to interest expense over the life of the debt using the effective interest method.

Inputs used in the valuation to derive fair value are classified based on a fair value hierarchy which distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels:

Level one – Quoted market prices in active markets for identical assets or liabilities;

Level two – Inputs other than level one inputs that are either directly or indirectly observable; and

Level three – Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The Company’s derivative liability is measured at fair value on a recurring basis. The Company classifies the fair value of these convertible notes and warrants derivative liability under level three. The Company’s settlement payable is measured at fair value on a recurring basis based on the most recent settlement offer. The Company classifies the fair value of the settlement payable under level three. The Company’s rescission liability is measured at fair value on a recurring basis based on the most recent stock price. The Company classifies the fair value of the rescission liability under level one.

Based on ASC Topic 815 and related guidance, the Company concluded the convertible notes and common stock purchase warrants are required to be accounted for as derivatives as of the issue date due to a reset feature on the conversion/exercise price. At the date of issuance the convertible subordinated financing, warrant derivative liabilities were measured at fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques. The Company records the fair value of these derivatives on its balance sheet at fair value with changes in the values of these derivatives reflected in the consolidated statements of operations as “Gain (loss) on derivative liabilities.” These derivative instruments are not designated as hedging instruments under ASC 815-10 and are disclosed on the balance sheet under Derivative Liabilities.

The following table presents liabilities that are measured and recognized at fair value as of June 30, 2012 on a recurring and non-recurring basis:

Description	Level 1		Level 2		Level 3		Gains (Losses)
Derivatives	$	–	$	–	$	9,189,492	$	6,156,137
Settlements Payable		–		1,580,252		–		–
Rescission Liability		–		103,749		–		(103,749	)
Fair Value at June 30, 2012	$	–	$	1,684,001	$	9,189,492	$	6,052,388

The following table presents liabilities that are measured and recognized at fair value as of December 31, 2011 on a recurring and non-recurring basis:

Description	Level 1		Level 2		Level 3		Gains (Losses)
Derivatives	$	–	$	–	$	16,231,036	$	54,839,304
Fair Value at December 31, 2011	$	–	$	–	$	16,231,036	$	54,839,304

17.

Subsequent Events.

Stock Issuances:

Since June 30, 2012, the Board of Directors authorized the issuance of an aggregate of 656,527,694 shares of its common stock, 21,751,666 shares of its Preferred A shares, 219,013 shares of its Preferred B shares and 4,488,500 of its Preferred C shares to accredited and non-accredited investors for total proceeds of $2,942,950. In addition, the Board of Directors has authorized the issuance of an aggregate of 926,877,612 shares of its common stock, 3,051,667 shares of its Preferred A shares, 94,950 shares of its Preferred B shares and 60,000 of its Preferred C shares to accredited and non-accredited investors for services rendered valued at an aggregate of $5,970,116. No sales commissions were paid in connection with these issuances and all investors reviewed or had access to all of the Company’s filing pursuant to the Securities Exchange Act of 1934, as amended.

Convertible Debt:

On July 17, 2012, the Company converted the Botkin loan into a convertible promissory note with Steve Botkin. The note bears interest at 12%, matures on July 17, 2015 and converts into common shares at the conversion rate of 80% of market.

Legal Proceedings:

We hired the Los Angeles law firm of Troy Gould to represent us in the matter of this investigation. As of the date of this filing, we believe we have provided all requested material to the SEC.

Status of prior private investments; $0 in 2007 (although HDV sold $13,000 of its shares), $0 in 2008 (although HDV sold $445,750 of its shares), $0 in 2009 (although HDV sold $448,000 of its shares), $910,742 in 2010, $1,827,543 in 2011. There is concern that these private placement securities sales were not made in compliance with applicable law (lack of material disclosure and/or failure to file securities sales notices as required by federal law) and the Company may need to offer rescission rights to the investors.

In 2006, the Company issued shares for services valued at $611,768. There were issued shares for services valued at $1,416,060 in 2007; shares for services valued at $14,625 in 2008, shares for services valued at $380,500 in 2009, shares for services valued at $236,920 in 2010, and shares for services valued at $3,370,273 in 2011. We have no plans to offer rescission for these share issuances.

Licensing Events:

Mr. Monros has continued the process of preparing patent applications for the other versions of the DynoValve products & related IP. In March, 2013, the Company entered into a five (5) year Master Distribution Agreement with His Divine Vehicle to sell the DynoValve and DynoValve Pro in various international territories. The consideration for the agreement was guaranteeing a minimum annual volume, payment for the DynoValves acquired and a three percent (3%) royalty payment. The Company is currently in default on this agreement.

Major Contracts:

In 2013, the Company has entered into a 5 year licensing agreement with DynoGreen Tech, LLC ("DGT") to sell the DynoValve products in the licensed territories (UAE, Dubai, Malaysia, India, and Africa). DGT has ordered 3,000 DynoValves as of 9/30/13. The DynoValves were shipped in the third quarter of 2013. In order for them to fulfill and maintain this 5 year licensing agreement, they are required to purchase 500 additional DynoValves per quarter for a total of $3,000,000 over a 5 year span.

In 2014, the Company entered into a 5 year licensing agreement with Beijing FlyingGlob Environmental Technology Limited Company, a company established in the People’s Republic of China. According to the terms of the Agreement, FlyingGlob will promote, distribute and sell SaviCorp's signature line of DynoValve® automotive products within its exclusive territory, which is defined as the People's Republic of China and the Special Administrative Regions of Hong Kong and Macau.

FlyingGlob entered into the distribution agreement, which establishes a minimum annual purchase volume of 500,000 DynoValve® units during the first year. In support of this requirement, FlyingGlob is to purchase an initial order of 50,000 units at a price of $8.25 million. During the final four years of the contract, FlyingGlob has agreed to a minimum purchase of 5.5 million units, for a total minimum order of 6 million units during the five-year term of the agreement. The successful distribution and sale of the 6 million units is estimated to produce revenues of approximately $679.5 million. In addition, the agreement provides for a $30 million licensing fee to be paid by FlyingGlob that may be paid over the term of the agreement.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto set forth in Item 1 of this Quarterly Report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions, which could cause actual results to differ materially from Management’s expectations. Factors that could cause differences include, but are not limited to, expected market demand for the Company’s services, fluctuations in pricing for products that may be distributed by the Company and services offered by competitors, as well as general conditions of the marketplace.

Overview

In 2011, SaviCorp began to generate revenue from new business activities. We were still devoting substantial efforts to business planning and the search for sources of capital to fund our efforts. We have acquired all rights to certain technology for the production of a gasoline and diesel engine emission reduction device which we believe delivers superior emission reduction technology and operating performance. This technology is an emission reduction device believed to reduce harmful exhaust emissions in gasoline and diesel engines, and increase fuel efficiency.

History

We were originally incorporated as Energy Resource Management, Inc. on August 13, 2002 and subsequently adopted name changes to Redwood Energy Group, Inc. and Redwood Entertainment Group, Inc., upon completion of a recapitalization on August 26, 2002. The re-capitalization occurred when we acquired the non-operating public shell of Gene-Cell, Inc., a public company. Gene-Cell had no significant assets or operations at the date of acquisition and we assumed all liabilities that remained from its prior discontinued operation as a biopharmaceutical research company. The historical financial statements presented herein are those of Redwood Entertainment Group, Inc. and its predecessors, Redwood Energy Group, Inc. and Energy Resource Management, Inc.

The public entity used to recapitalize the Company was originally incorporated as Becniel and subsequently adopted name changes to Tzaar Corporation, Gene-Cell, Inc., Redwood Energy Group, Inc., Redwood Entertainment Group, Inc., and finally its current name, Savi Media Group, Inc. In 2012, Savi Media Group, Inc. changed its name to SaviCorp.

Business History

Until 2011, we were considered a development stage enterprise because we had no significant operations, had not yet generated revenue from new business activities and were devoting substantially all of our efforts to business planning and the search for sources of capital to fund our efforts. We had acquired all rights to "blow-by gas and crankcase engine emission reduction technology" which we intended to develop and market on a commercial basis.

This technology is an emission reduction device believed to reduce harmful exhaust emissions in gasoline and diesel engines, and increase fuel efficiency. Phase one testing at California Environmental Engineering indicated notable reduction in tailpipe emissions and Particulate Matter (PM) while improving fuel economy. The reductions were 5.1% in hydrocarbons, 5.1% in carbon monoxide, 5.5% in nitrogen oxides, while increasing fuel economy by 0.3%.

We currently have the right to market and distribute the DynoValve and DynoValve Pro products, which provides for increased fuel economy and reduced emissions in automotive applications for both new and existing vehicles and may be used in other non-automotive applications. Personal watercraft, small engine powered lawn equipment, and stand alone power generation engines are additional markets that we intend to develop. The technology may be sold internationally and we are pursuing opportunities simultaneously domestically and internationally. We have no immediate plans to develop additional products at this time.

Critical Accounting Policies and Estimates

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 of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and our estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. These estimates and assumptions provide a basis for our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from our estimates under different assumptions or conditions, and these differences may be material.

We believe that the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:

Income Taxes

We use the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. We provide a valuation allowance to reduce deferred tax assets to their net realizable value.

Stock-Based Compensation

Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), Share-Based Payment (SFAS 123R), and began expensing at fair value on a straight-line basis the costs resulting from share-based payment transactions.

Prior to 2006, the Company elected to follow Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) and related interpretations in accounting for stock options granted to employees as permitted by SFAS No. 123, Accounting for Stock-Based Compensation (SFAS 123), as amended by SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure. Under APB 25, the Company did not recognize share-based payment expense in its financial statements because the stock option awards qualified as fixed awards and the exercise price of the Company’s employee stock options equaled the market price of the underlying stock on the date of grant.

Convertible Notes - Derivative Financial Instruments

The convertible notes issued to Cornell Capital in 2006 has been accounted for in accordance with SFAS No. 133 and EITF No. 00-19, "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock."

The Company has identified that the Cornell Capital debenture have embedded derivatives. These embedded derivatives have been bifurcated from the host debt contract and accounted for as derivative liabilities in accordance with EITF 00-19. When multiple derivatives exist within the convertible notes, they have been bundled together as a single hybrid compound instrument in accordance with SFAS No. 133 Derivatives Implementation Group Implementation Issue No. B-15, "Embedded Derivatives: Separate Accounting for Multiple Derivative Features Embedded in a Single Hybrid Instrument."

The embedded derivatives within the convertible notes have been recorded at fair value at the date of issuance and are marked-to-market each reporting period with changes in fair value recorded to the Company's income statement as "Net change in fair value of derivative liabilities." The Company has utilized a third party valuation firm to fair value the embedded derivatives using a lattice model with layered discounted probability-weighted cash flow methods.

The fair value of the derivative liabilities are subject to the changes in the trading value of the Company's common stock, as well as other factors. As a result, the Company's financial statements may fluctuate from quarter-to-quarter based on factors, such as the price of the Company's stock at the balance sheet date and the amount of shares converted by note holders. Consequently, our financial position and results of operations may vary from quarter-to-quarter based on conditions other than our operating revenues and expenses.

Results of Operations

During the period from inception, August 13, 2002, to December 31, 2010, we had not generated any revenue from operations. During the six months ending June 30, 2011, we generated revenues of $43,267. Costs of Goods Sold was $42,251 yielding a gross profit of $1,016. Loss from operations for the six months ending June 30, 2011 was $2,764,456. Other Income and Expense, net was $55,813,284 primarily due to the change in fair value of our derivative liabilities. During the six months ending June 30, 2012, we generated revenues of $42,046. Costs of Goods Sold was $30,632 yielding a gross profit of $11,414. These are slight improvements over the same period in 2011. Loss from operations for the six months ending June 30, 2012 was $3,250,926. The increase in the loss was primarily due to additional stock based compensation paid in 2012. Other Income and Expense, net was a gain of $3,498,449 primarily due to the change in fair value of our derivative liabilities offset by the legal settlement, loss on debt settlement, and change in fair value of the rescission liability.

During the three months ending June 30, 2011, we generated revenues of $33,016. Costs of Goods Sold was $32,378 yielding a gross profit of $638. Loss from operations for the three months ending June 30, 2011 was $2,316,881. Other Income and Expense, net was $23,963,192 primarily due to the change in fair value of our derivative liabilities. During the three months ending June 30, 2012, we generated revenues of $29,330. Costs of Goods Sold was $21,121 yielding a gross profit of $8,209. These are slight improvements over the same period in 2011. Loss from operations for the three months ending June 30, 2012 was $548,737. The decrease in the loss was primarily due to additional stock based compensation paid in the second quarter of 2011. Other Income and Expense, net was a gain of $3,682,426 primarily due to the change in fair value of our derivative liabilities offset by the change in fair value of the rescission liability.

As of June 30, 2012, we have accumulated net losses of $288,281,696. Additionally, at June 30, 2012, we are in a negative working capital position of $13,398,423 and a stockholders' deficit position $13,422,716. Our auditors have opined that such matters raise substantial doubt about our ability to continue as a going concern. We financed our operations mainly through the sale of common stock and have been entirely dependent on outside sources of financing for continuation of operations. For the remainder of fiscal 2012, we will continue to pursue funding for our business. There is no assurance that we will continue to be successful in obtaining additional funding on attractive terms or at all, nor that the projects towards which additional paid-in capital is assigned will generate revenues at all.

Plan of Operations

We believe that there are six critical elements for the building of a successful research & development company that has the capacity to manufacture technology for the implementation of immediate and long-term solutions to the global challenges of air, water, and land pollution.

	1.	People - this includes a qualified board of directors, advisory board members, management, employees, shop personnel, Q.C., project managers, journeymen, welders, machinists, CNC operators, cad cam, shop planners, senior engineers, tool & design, maintenance personnel, calibrators & inspectors, sheet metal fabricators, deburring and finishing personnel, purchasers, transporters, CNC trainers and consultants, etc.;

	2.	Projects - a credible portfolio of projects that have the appropriate risk-return ratio in order to generate potentially significant shareholder value;

	3.	Capital - based upon the reputation of the people and the quality of the projects, there must be sufficient capital in order to launch the company and to provide for additional funding;

	4.	Technology - the most advanced interpretation methods, techniques and methods should be utilized in order to maximize the potential for finding and developing immediate and long term solutions to the global challenges of air, water, and land pollution;

	5.	Favorable positioning - the international influence of the oil and gas companies along with the automotive & diesel industries requires a combination of secured relationships with their appointed leadership in these various industries as well as with all the various local and international governmental entities; and

	6.	Manufacturing capability and equipment- the competitive nature of the automotive &diesel industry requires a unique approach and a significant capital commitment in order to secure the latest in hi-tech equipment, technology, research, and the creation of numerous patents as well as to expedite mass production.

People:

In August 2004 Savi Media Group was founded by Serge Monros and Mario Procopio. Serge Monros sold the Crankcase Ventilation technologies to Savi Media that he personally developed over the last 17 years. Mario Procopio was hired as the President, Chief Executive Officer and director with a mandate to acquire the initial funding for the planned projects and to assist in aggressively transforming us into an emerging research and development company in the field of automotive and diesel retrofitting and pollution control. In August 2004, enough capital was obtained to acquire a bulletin board company, pay off many of its existing debts, and begin to launch the varied projects of which the DynoValve is one of several projects.

We have established a Strategic Advisory Board and recruited qualified individuals to develop marketing strategies, feasibility studies, and update our business plan. Among those are Retired U.S. General Alexander M. Haig, Jr., Alexander P. Haig, John Hewitt, Marketing Specialist, and John Dunlap, former Executive Director of CalTrans.

Projects:

During 2006, we further refined our strategic plan and have determined that the maximum value to all of our shareholders is best served by targeting three focused project areas that provide for long-term growth from our invested capital. The three major project areas are as follows:

An R & D lab and adjacent offices

We have established an R & D lab with its adjacent offices located at 2530 S. Birch St. Santa Ana, CA. 92707. We have also negotiated with G & K Auto in acquiring a 270,000 square foot R & D lab and office in Tian Jin, China in the Auto Trade - Free Trade Zone in order to test and retrofit internal combustion engines both stationary and in automotive applications.

Implement the initial testing phases in order to secure revenues, licensing agreements, and contracts.

We hope to continue to test our emission control device on select diesel engines in order to obtain certification and validation of our technology. However, we currently lack the financial resources to continue testing. We hope to obtain an Executive Order from the California Air Resource Board which allows us to legally sell our product in California. This will assist in obtaining contracts and purchase orders. The monthly cost for each product testing is approximately $60,000 and completion of testing should be accomplished in six to nine months assuming there are no delays. Phase one testing on a new diesel engine at California Environmental Engineering indicated notable reduction in tailpipe emissions and Particulate Matter (PM) while improving fuel economy. The reductions were 5.1% in hydrocarbons, 5.1% in carbon monoxide, 5.5% in nitrogen oxides, while increasing fuel economy by 0.3%.

Become a technology partner to the various entities that are focused on environmental solutions.

We are presently participating in a consortium of companies with emission reduction technologies for the problem solving of both our local environmental challenges and to assist in China’s pursuit of immediate solutions to the particular needs in their environment. At this time we have not engaged in formal agreements with any company or initiated any actions or plans and have not committed any funds.

As of June 30, 2012, we had limited operations and we expect to require additional cash of a minimum of approximately $2,000,000 over the next twelve months. Those funds, if available, will be used for continued operation. Additional financing will need to be obtained. Sources of funding may not be available on terms that are acceptable to management and existing stockholders, or may include terms that will result in substantial dilution to existing stockholders.

Liquidity and Capital Resources

As of June 30, 2012, the Company had $9,796 in cash.

Total current liabilities were $13,710,289 as of June 30, 2012, consisting of convertible debt, net, of $770,742, notes payable of $25,778, derivative liabilities of $9,189,492, accounts payable and accrued liabilities of $1,669,530, settlement payable of $1,580,252, rescission liability of $103,749 and accounts payable assumed in recapitalization of $159,295.

We incurred net losses of $288,281,696 during the period from inception, August 13, 2002, to June 30, 2012. In addition, at June 30, 2012, we were in a negative working capital position of $13,398,423 and had a stockholders' deficit of $13,422,716. As a result, our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.

Our average monthly operational expenses have been $543,723 per month, for the period ended June 30, 2012.

Our ability to continue as a going concern is dependent upon several factors. These factors include our ability to:

	·	further implement our business plan;
	·	obtain additional financing or refinancing as may be required;
	·	and generate revenues.

We believe it is imperative that we raise an additional $5,000,000 of capital in order to implement our business plan. We are attempting to raise additional funds through debt and/or equity offerings. We intend to use any funds raised to pay down debt and to provide us with working capital. There can be no assurance that any new capital would be available to us or that we would have adequate funds for our operations, whether from our revenues, financial markets, or other arrangements will be available when needed or on terms satisfactory to us. Any additional financing may involve dilution to our then-existing shareholders.

On July 10, 2006, we entered into a Securities Purchase Agreement with Cornell Capital Partners L.P. providing for the sale by us to Cornell of our 10% secured convertible debentures in the aggregate principal amount of $2,970,000. These notes matured and were in default due to non-payment as of December 31, 2010. On or about July 28, 2011, the Company entered into a Repayment Agreement (the “Repayment Agreement”) with YA Global Investments, L.P., a Cayman Islands exempt limited partnership formerly known as Cornell Capital Partners, L.P. (“YA Global”).

We have no other commitments from officers, directors or affiliates to provide funding. If we are unable to obtain debt and/or equity financing upon terms that we deem sufficiently favorable, or at all, it would have a materially adverse impact upon our ability to pursue our business strategy and maintain our current operations. As a result, it may require us to delay, curtail or scale back some or all of our operations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.

There were no recent accounting pronouncements that have had or are likely to have a material effect on our financial position or results of operations.

ITEM 3 - CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. As of June 30, 2012, the Company’s management carried out an evaluation, under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of the Company’s system of disclosure controls and procedures pursuant to the Securities and Exchange Act, Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were ineffective, as of the date of their evaluation, for the purposes of recording, processing, summarizing and timely reporting material information required to be disclosed in reports filed by the Company under the Securities Exchange Act of 1934. This assessment was made based on the need to amend prior filings due to embedded derivatives within various convertible securities and the lack of sufficient personnel to process transactions. We have hired an outside expert to evaluate and value derivative financial instruments in any and all convertible securities and when we obtain additional financing will hire additional personnel and implement procedures to properly account for and disclose all transactions.

b)	Changes in internal controls. There were no changes in internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is likely to materially effect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business.

We hired the Los Angeles law firm of Troy Gould to represent us in the matter of this investigation. As of the date of this filing, we believe we have provided all requested material to the SEC.

Status of prior private investments; $0 in 2007 (although HDV sold $13,000 of its shares), $0 in 2008 (although HDV sold $445,750 of its shares), $0 in 2009 (although HDV sold $448,000 of its shares), $910,742 in 2010, $1,827,543 in 2011. There is concern that these private placement securities sales were not made in compliance with applicable law (lack of material disclosure and/or failure to file securities sales notices as required by federal law) and the Company may need to offer rescission rights to the investors.

In 2006, the Company issued shares for services valued at $611,768. There were issued shares for services valued at $1,416,060 in 2007; shares for services valued at $14,625 in 2008, shares for services valued at $380,500 in 2009, shares for services valued at $236,920 in 2010, and shares for services valued at $3,370,273 in 2011. We have no plans to offer rescission for these share issuances.

We may become involved in material legal proceedings in the future.

ITEM 2 - UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

For the period ended June 30, 2012, the Company issued the following:

In January 2012, the Board of Directors authorized the issuance of 14,603,571 common shares to accredited and non-accredited investors for total proceeds of $45,500.

In February 2012, the Board of Directors authorized the issuance of 119,500,000 common shares to accredited and non-accredited investors for total proceeds of $248,500.

In March 2012, the Board of Directors authorized the issuance of 37,866,667 common shares to accredited and non-accredited investors for total proceeds of $63,400 and $29,800 in subscription receivable.

In April 2012, the Board of Directors authorized the issuance of 57,260,000 common shares to accredited and non-accredited investors for total proceeds of $122,300.

In May 2012, the Board of Directors authorized the issuance of 12,000,000 common shares to accredited and non-accredited investors for total proceeds of $30,000.

In June 2012, the Board of Directors authorized the issuance of 14,250,000 common shares to accredited and non-accredited investors for total proceeds of $47,000.

Since June 30, 2012, the Board of Directors authorized the issuance of an aggregate of 656,152,694 shares of its common stock, 21,751,666 shares of its Preferred A shares, 219,013 shares of its Preferred B shares and 4,488,500 of its Preferred C shares to accredited and non-accredited investors for total proceeds of $2,963,450. No sales commissions were paid in connection with these issuances and all investors reviewed or had access to all of the Company’s filing pursuant to the Securities Exchange Act of 1934, as amended.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

On July 10, 2006, we entered into a Securities Purchase Agreement with Cornell Capital Partners L.P. providing for the sale by us to Cornell of our 10% secured convertible debentures in the aggregate principal amount of $2,970,000. These notes matured and were in default due to non-payment as of December 31, 2010. On or about July 28, 2011, the Company entered into a Repayment Agreement (the “Repayment Agreement”) with YA Global Investments, L.P., a Cayman Islands exempt limited partnership formerly known as Cornell Capital Partners, L.P. (“YA Global”).

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5 - OTHER INFORMATION

None.

ITEM 6 - EXHIBITS

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended

31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended

32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer)

32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)

101.INS	XBRL Instances Document

101.SCH	XBRL Taxonomy Extension Schema Document

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SaviCorp

Date: March 26, 2015	By: /s/ SERGE MONROS
	Serge Monros
	President, Chief Executive Officer (Principal Executive Officer)
	and Director

Date: March 26, 2015	By: /s/ SERGE MONROS
	Serge Monros
	Chief Financial Officer (Principal Financial Officer and
	Principal Accounting Officer)

SaviCorp - FORM 10-Q - March 25, 2015

Attached files

SaviCorp Reports