U.S. SECURITIES
AND EXCHANGE COMMISSION

WASHINGTON,
D.C. 20549

FORM 10-K

(Mark One)

|x | ANNUAL REPORT PURSUANT TO UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------------

For Fiscal Year Ended: December 31, 2011

OR

| ̈ | TRANSITION REPORT PURSUANT TO UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------------



For the transition period from _______________
to _______________



Commission file number: 333-140148



|Loreto Resources Corporation                                                              
|------------------------------------------------------------------------------------------
|(Exact name of registrant as specified in its charter)                                    
|                                                                                          
|Nevada                                                                                    
|(State or other jurisdiction of
 incorporation or organization)                           
|                                                                                          
|c/o Gottbetter & Partners, LLP
        488 Madison Avenue, 12th Floor
        New York, NY
|(Address of principal executive offices)                                                  



Registrant’s telephone number: _(212) 400-6900



Securities registered under Section 12(b) of the Act: None



Securities registered under Section 12(g) of the Act: None



Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.

Yes  ̈  No x



Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes xNo  ̈



Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding past
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 xNo  ̈



Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K 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 this Form 10-K.  ̈



Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a smaller reporting company. See the definitions of the “large accelerated filer,”
“accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:



|Large Accelerated Filer  ̈                                                     |  | Accelerated Filer  ̈        
|----------------------------------------------------------------------------- |  | ---------------------------
|Non-Accelerated Filer  ̈
        (Do not check if a smaller reporting company) |  | Smaller reporting company x



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



Yes x
  No  ̈



On June 30, 2011, there were 70,298,322
shares of the registrant's common stock, par value $0.001, issued and outstanding. Of these, 40,680,000 shares were held by non-affiliates
of the registrant. The market value on June 30, 2011 of those shares held by non-affiliates was $10,170,000, based on the price
of $0.25 per share (split-adjusted) for the registrant’s common stock which was sold in a private placement that closed initially
on September 9, 2008. Shares of common stock held by each officer and director have been excluded from
this calculation because such persons may be deemed to be affiliates. This determination of officer or affiliate status is not
necessarily a conclusive determination for other purposes



DOCUMENTS INCORPORATED BY REFERENCE

Not Applicable.













TABLE OF CONTENTS





|Item Number and Caption    |                                                                                                              | Page
|-------------------------- | ------------------------------------------------------------------------------------------------------------ | ----
|Forward-Looking Statements |                                                                                                              | 3   
|                           |                                                                                                              |     
|PART I                     |                                                                                                              |     
|                           |                                                                                                              |     
|1.                         | Business                                                                                                     |     
|1A.                        | Risk Factors                                                                                                 |     
|1B.                        | Unresolved Staff Comments                                                                                    |     
|2.                         | Properties                                                                                                   |     
|3.                         | Legal Proceedings                                                                                            |     
|4.                         | (Removed and Reserved)                                                                                       |     
|                           |                                                                                                              |     
|PART II                    |                                                                                                              |     
|                           |                                                                                                              |     
|5.                         | Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities |     
|6.                         | Selected Financial Data                                                                                      |     
|7.                         | Management’s Discussion and Analysis of Financial Condition and Results of Operations                        |     
|8.                         | Financial Statements and Supplemental Data                                                                   |     
|9A.                        | Controls And Procedures                                                                                      |     
|9B.                        | Other Information                                                                                            |     
|                           |                                                                                                              |     
|PART III                   |                                                                                                              |     
|                           |                                                                                                              |     
|10.                        | Directors, Executive Officers, and Corporate Governance                                                      |     
|11.                        | Executive Compensation                                                                                       |     
|12.                        | Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters               |     
|13.                        | Certain Relationships And Related Transactions and Director Independence                                     |     
|14.                        | Principal Accountant Fees And Services                                                                       |     
|                           |                                                                                                              |     
|PART IV                    |                                                                                                              |     
|                           |                                                                                                              |     
|15.                        | Exhibits and Financial Statement Schedules                                                                   |     







2











FORWARD-LOOKING STATEMENTS



Except for historical
information, this report contains forward-looking statements. Such forward-looking statements involve risks and uncertainties,
including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses.
Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,”
“intends,” “believes” and similar language. Our actual results may differ significantly from those projected
in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to,
those discussed in the sections “Business” and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations.” You should carefully review the risks described in this Annual Report and in other documents
we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking
statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the
forward-looking statements or reflect events or circumstances after the date of this document.



Although we believe that
the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks
and uncertainties that could cause actual results to differ materially from such forward-looking statements.



All references in this
Form 10-K to “Loreto,” “Loreto Resources,” the “Company,” “we,” “us”
or “our” are to Loreto Resources Corporation and its wholly owned subsidiaries.



3







PART I



ITEM 1.	BUSINESS



History and General Development of Our Business



Loreto Resources Corporation
was incorporated in the State of Nevada on June 28, 2006 under the name Loreto Corporation. The Company was formed to design, print,
market and sell greeting cards, wrapping paper, stationery products and collectibles in retail locations throughout Mexico (the
“Legacy Business”).



During the latter part
of 2007, we discontinued our Legacy Business and, in mid-2008, we decided to redirect our business focus and strategy towards identifying
and pursuing business opportunities in the mining sector in South America.



During the year ended
December 31, 2009, we entered into a number of letters of intent relating to the acquisition of various mining properties in Peru
and other South American countries.  We were seeking, at that time, development and production-stage zinc, copper, gold
and silver mining assets. For commercial reasons, we decided not to pursue any of the acquisitions proposed in those letters.



We recently changed
our focus and are now primarily seeking quality assets and investment opportunities.  During the quarter ended September
30, 2010, we closed our office in Lima, Peru.



On January 15, 2010
our Board of Directors declared an additional 2 for 1 forward stock split in the form of a dividend.  The record date
for the stock dividend was January 25, 2010, the payment date was January 28, 2010 and the “Ex” date was January 29,
2010.



We have begun identifying
and investigating new investment opportunities, but we have not yet finalized decisions to pursue any particular project.



Effective May 5, 2010,
we entered into a written agreement with Luis Saenz pursuant to which Mr. Saenz’s employment agreement with us dated July
21, 2008 was terminated. Pursuant to the terms of the termination agreement, Mr. Saenz released us from any and all obligations
to him relating to his employment agreement, including, but not limited to, any and all rights and claims to compensation, bonuses
and expense reimbursements. Mr. Saenz also agreed to terminate his option agreement with us dated July 21, 2008 and has relinquished
all rights originally granted under that agreement.



4







Additionally, during
the 12 months ended December 31, 2010, we reached settlements with all of our creditors in connection with outstanding bills relating
to our former proposed mining operations, and we terminated option agreements that we had in place with a number of consultants.
We also reached a settlement agreement with Gottbetter & Partners, LLP, our legal counsel (“G&P”), whereby
G&P agreed to forego payment of $49,580 in legal fees due for the 2009 fiscal year in exchange for and upon receipt of 198,322
restricted shares of our common stock (valued at $0.25 per share).  Those shares were issued to G&P on November 11,
2010.



On August 8, 2011,
we entered into a letter of intent with Eagleford Energy Inc. (“Eagleford”), a publicly held Ontario corporation, relating
to a potential farm-in by us of an up to 50% working interest in Eagleford’s net working interests in the Matthews and Murphy
oil and gas leases in Zavala County, Texas. On October 18, 2011, we terminated that letter of intent.



On August 18, 2011,
Nadine Smith resigned from her position as a director and Chairman of the Company.  Ms. Smith’s resignation did
not arise from any disagreement with the Company.



On August 25, 2011,
Luis F. Saenz resigned as our Chief Executive Officer. Mr. Saenz remains our President, Interim Chief Financial Officer and a member
of our Board of Directors. On that same date, our Board of Directors appointed Adam Zive as Interim Chief Executive Officer and
elected Mr. Zive as a director of the Company to fill the vacancy created by the resignation of Ms. Smith.



Mr. Zive, who is 33,
has since 2009 been the President and Chief Executive Officer of Dorian Financial Limited (Barbados), a private company owned by
Mr. Zive.  From 2008 until 2009, he was the head of Africa oil and gas research for Renaissance Capital, and from 2006
to 2008, the head of oil and gas research for Desjardins Securities.



Research and Development



We have not spent any
amounts on research and development activities during either of the last two fiscal years.



Employees



As of March 31, 2012,
we did not have any full time employees.



5







Expected Split-Off of Legacy Business



In connection with
the discontinuation of our Legacy Business and the redirecting of our business strategy, we have decided to split off and sell
all of the assets and liabilities of the Legacy Business (the “Split-Off”) to Magdalena Cruz, our founding stockholder.
The Split Off is expected to close sometime during 2012. We will contribute all of the assets and liabilities relating to the Legacy
Business, whether accrued, contingent or otherwise, and whether known or unknown, to a newly organized, wholly owned subsidiary
(“Split-Off Sub”), and immediately thereafter will sell all of the outstanding capital stock of Split-Off Sub to Ms.
Cruz in exchange for the 20,000,000 (post-January 2010 stock split) shares of our Common Stock previously surrendered by Ms. Cruz,
all of our Common Stock that Ms. Cruz currently owns, 24,000,000 (post-January 2010 stock split) shares,and the forgiveness by Ms. Cruz (which was effected as of June 30, 2008) of the $13,200 in loans she previously granted to us.



It is expected that
Ms. Cruz will indemnify us and our officers and directors against any third party claims relating to the Legacy Business. 
It is expected that Split-Off Sub and Ms. Cruz will also agree to release us and our officers, directors, stockholders, employees
and agents from all liabilities incurred by Split-Off Sub or Ms. Cruz arising from, relating to, or in any way connected with,
any fact, event, transaction, action or omission that occurred or failed to occur on or prior to the closing date of the Split-Off.
Following the Split-Off, Ms. Cruz will no longer be one of our stockholders.



ITEM 1A.	RISK FACTORS



Because
we are a “smaller reporting company” as that term is defined by the SEC, we are not required to present risk factors
at this time.



ITEM 1B.	UNRESOLVED STAFF COMMENTS



None.



ITEM 2.	PROPERTIES



None.



ITEM 3.	LEGAL PROCEEDINGS



No
legal or governmental proceedings are presently pending or, to our knowledge, threatened, to which we are a party.



ITEM 4.	(REMOVED AND RESERVED)



6









PART II



ITEM
5.	      MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES



Our Common Stock is
currently listed on the OTC Bulletin Board under the symbol “LRTC.OB”.



For the period from
January 2, 2010 to December 31, 2011, the table sets forth the high and low closing bid prices based upon information obtained
from inter-dealer quotations on the OTC Bulletin Board without retail markup, markdown, or commission and may not necessarily represent
actual transactions. Although our Common Stock was approved for listing on the OTC Bulletin Board on May 2, 2007, there has been
minimal trading to date:



|Fiscal Year Ended December 31, 2011 Quarter Ended |  | High Bid |        |  | Low Bid |  
|------------------------------------------------- |  | -------- | ------ |  | ------- | -
|March 31, 2011                                    |  | $        | 0.044  |  |         | $
|                                                  |  |          |        |  |         |  
|June 30, 2011                                     |  | $        | 0.045  |  |         | $
|                                                  |  |          |        |  |         |  
|September 30, 2011                                |  | $        | 0.0121 |  |         | $
|                                                  |  |          |        |  |         |  
|December 31, 2011                                 |  | $        | 0.75   |  |         | $



|Fiscal Year Ended December 31, 2010 Quarter Ended |  | High Bid |       |  | Low Bid |  
|------------------------------------------------- |  | -------- | ----- |  | ------- | -
|January 2, 2010 through January 30, 2010          |  | $        | 0.40  |  |         | $
|                                                  |  |          |       |  |         |  
|February 2, 2010 through March 31, 2010 (1)       |  | $        | 0.05  |  |         | $
|                                                  |  |          |       |  |         |  
|June 30, 2010                                     |  | $        | 0.03  |  |         | $
|                                                  |  |          |       |  |         |  
|September 30, 2010                                |  | $        | 0.01  |  |         | $
|                                                  |  |          |       |  |         |  
|December 31, 2010                                 |  | $        | 0.043 |  |         | $








|(1) | Pricing from February 1, 2010 reflects the January 2010 2:1 forward stock split.
|--- | --------------------------------------------------------------------------------



7







Because
our Common Stock is thinly traded, bid information on our Common Stock does not necessarily represent its fair market value.



Holders



As of April 16, 2012,
we had 70,298,322 shares of our Common Stock issued and outstanding held by __ shareholders
of record.



Securities Authorized For Issuance Under
Equity Compensation Plans



On
July 3, 2008, our Board of Directors and stockholders adopted the 2008 Equity Incentive Plan (the “2008 Plan”) which
reserves a total of 16,000,0001shares of Common Stock for issuance under the 2008 Plan. If an incentive award granted under the 2008 Plan expires, terminates, is unexercised or is forfeited, or if any shares
are surrendered to us in connection with an incentive award, the shares subject to such award and the surrendered shares will
become available for further awards under the 2008 Plan. As of December 31, 2011, we have not issued any shares and there are
no outstanding grants under the 2008 Plan.



Dividends



We have never declared
any cash dividends with respect to our Common Stock. Future payment of dividends is within the discretion of our board of directors
and will depend on our earnings, capital requirements, financial condition and other relevant factors. Although there are no material
restrictions limiting, or that are likely to limit, our ability to pay dividends on our Common Stock, we presently intend to retain
future earnings, if any, for use in our business and have no present intention to pay cash dividends on our Common Stock.



Recent Sales of Unregistered Securities



On November 17, 2010,
we completed a private placement offering (the “2010 Offering”) of our 10% Convertible Promissory Notes (the “2010
Notes”). We sold an aggregate principal amount of $149,960 of the 2010 Notes in the 2010 Offering. The 2010 Notes contained
a mandatory conversion feature pursuant to which they were to be automatically converted at the initial closing of our next private
placement, together with accrued interest, into those securities of the Company offered in the private placement. That next private
placement took place on March 15, 2011.



On March 15, 2011,
we closed a private placement offering (the “March 2011 Offering”) of our 10% convertible promissory notes (the “March
2011 Notes”). In the March 2011 Offering, we sold $90,000 in principal amount of the March 2011 Notes. As of March 1, 2011,
we deemed the 2010 Notes, along with accrued but unpaid interest, to have been converted, on a mandatory basis, into new notes
on the same terms, including a new maturity date of March 31, 2012, as the March 2011 Notes.












1. Adjusted for the July
24, 2008, February 2, 2009 and January 29, 2010 2 for 1 stock splits.



8







The March 2011 Notes
bear interest of 10%, mature on March 31, 2012, and both the principal and accrued interest will be mandatorily converted at a
price equal to either (a) the price per share of stock (or unit of stock and other securities) paid by investors in our next securities
offering or other financing, if the financing is an issuance of stock (or unit of stock and other securities), or (b) the price
paid by investors in our next securities offering or other financing, expressed as a percentage of the face amount of debt securities,
if the financing is an issuance of debt securities (or units of debt securities and other securities) (including debt securities
convertible into stock), upon the closing of, and into the securities issued in, the next financing in which we sell at least $1,000,000
of our securities.



On October 10, 2011,
we closed a private placement offering (the “October 2011 Offering”) of $52,500 principal amount of our 10% Convertible
Notes due April 9, 2013 (the “October 2011 Notes”).  At the Closing, we received gross proceeds of $52,500
from the sale of the October 2011 Notes.  The October 2011 Notes will be automatically converted at the initial closing
of our next private placement in which we sell at least $1,000,000 of our securities.



On February 1, 2012,
we closed a private placement offering (the “February 2012 Offering”) of our 10% convertible promissory notes (the
“February 2012 Notes”). In the February 2012 Offering, we sold $50,000 in principal amount of the February 2012 Notes
to one existing investor. The February 2012 Notes mature on July 31, 2013 and will be automatically converted at the initial closing
of the Company’s next private placement in which we sells at least $1,000,000 of our securities, so long as such offering
closes concurrent with the closing of a related merger or other acquisition transaction.



We intend to utilize
the proceeds of the February 2012 Offering for working capital and general corporate purposes.



All of the offerings
discussed above were conducted pursuant to the exemption from the registration requirements of the federal securities laws provided
by Regulation D and Regulation S promulgated under the Securities Act of 1933, as amended , and Section 4(2) of the Securities
Act. All of the notes were offered and sold only to “accredited investors,” as that term is defined by Rule 501 of
Regulation D, and/or to persons who were neither resident in, nor citizens of, the United States. No commissions were paid in connection
with any of these offerings.



ITEM 6.	SELECTED FINANCIAL DATA



Not applicable.



ITEM 7.	MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The following discussion
highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity
and capital resources for the periods described. This discussion contains forward-looking statements. Please see “Forward-Looking
Statements” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.



9







The following discussion
and analysis of the Company’s financial condition and results of operations are based on the preparation of our financial
statements in accordance with U.S. generally accepted accounting principles.  You should read the discussion and analysis
together with such financial statements and the related notes thereto.



Results of Operations



Fiscal year Ended December 31, 2011 and 2010



We are still in our
development stage and have generated no revenues to date.



We incurred operating
expenses of $234,267 and $1,042,149 for the years ended December 31, 2011 and 2010, respectively. These expenses consisted of general
operating expenses incurred in connection with the day to day operation of our business and the preparation and filing of our periodic
reports.



Our net losses for
years ended December 31, 2011 and 2010 were $211,751 and $1,007,873, respectively.



We have generated no
revenues and our net operating loss from inception through December 31, 2011 was $4,008,672.



Liquidity and Capital Resources



Our cash and cash equivalents
balance as of December 31, 2011 was $4,136.



Private Offerings



As discussed above,
during the past two years we have had a number of small private offerings of our convertible promissory notes.



In the 2010 Offering,
we raised $149,960, in the March 2011 Offering we raised $90,000, in the October 2011 Offering we raised $52,500 and in the February
2012 Offering we raised an additional $50,000.



We have utilized the
proceeds of these offerings for working capital and general corporate purposes. We expect to use the remaining proceeds of the
February 2012 Offering to meet our current needs including the costs of filing this Annual Report on Form 10-K.



Working Capital Needs



We presently do not
have any available credit, bank financing or other external sources of liquidity, other than the remaining net proceeds from the
February 2012 offering. Due to our brief history and historical operating losses, our operations have not been a source of liquidity.
At our current level of operation, we do not have sufficient cash to meet our expenses for the next twelve months. We expect that
we will need to obtain additional capital in order to meet our current working capital needs, execute our business plan, build
our operations and become profitable. In order to obtain capital, we may need to sell additional shares of our Common Stock or
debt securities, or borrow funds from private lenders or banking institutions. We have not made any decisions with respect to any
such financing. There can be no assurance that we will be successful in obtaining additional funding in amounts or on terms acceptable
to us, if at all. If we are unable to raise additional funding as necessary, we may have to suspend our operations temporarily
or cease operations entirely.



10







Our auditors have included
an explanatory paragraph in their report on our consolidated financial statements relating to the uncertainty of our business as
a going concern, due to our limited operating history, our lack of historical profitability, and our limited funds. We believe
that we will be able to raise the required funds for operations and to achieve our business plan.



ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTAL
DATA



Our audited financial
statements are included beginning immediately following the signature page to this report. See Item 15 for a list of the financial
statements included herein.



ITEM 9A.	CONTROLS AND PROCEDURES



Disclosure Controls and Procedures



Disclosure controls
and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed
by an issuer in the reports that it files or submits under the Exchange Act of 1934 (the “Exchange Act”) is accumulated
and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required disclosure. It should be noted that the design of
any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.



11







Management’s Annual Report on Internal Control over
Financial Reporting



Our management is responsible
for establishing and maintaining an adequate system of internal control over financial reporting (as defined in Rule 13a-15(f)
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Under the supervision and with the participation
of our senior management, consisting of Adam Zive, our Interim Chief Executive Officer, and Luis Saenz, our Interim Chief Financial
Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures,
as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report (the “Evaluation
Date”). Based on this evaluation, our Chief Executive and Interim Chief Financial Officer concluded, as of the Evaluation
Date, that our disclosure controls and procedures were not effective because of the identification of what might be deemed a material
weakness in our internal control over financial reporting which is identified below.



Our internal control
over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore,
even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. In evaluating
the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework.
Based on this evaluation,our sole officer concluded that, during the period covered by this
annual report, our internal controls over financial reporting were not operating effectively. Management did not identify any material
weaknesses in our internal control over financial reporting as of December 31, 2011; however, it has identified the following deficiencies
that, when aggregated, may possibly be viewed as a material weakness in our internal control over financial reporting as of that
date:



| | 1. | We do not have an audit committee. While we are not currently obligated to have an audit committee,
including a member who is an “audit committee financial expert,” as defined in Item 407 of Regulation S-K, under applicable
regulations or listing standards; however, it is management’s view that such a committee is an important internal control
over financial reporting, the lack of which may result in ineffective oversight in the establishment and monitoring of internal
controls and procedures.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | We did not maintain proper segregation of duties for the preparation of our financial statements. We currently only have
                                                                two interim officers overseeing all transactions. This has resulted in several deficiencies including the lack of control over
                                                                preparation of financial statements, and proper application of accounting policies:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



This Annual Report
does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of
the SEC that permit us to provide only management’s report in this annual report.



12







Changes in Internal Control over Financial
Reporting



There were no changes in our internal control
over financial reporting during the year ended December 31, 2011 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.



Officers’ Certifications



Appearing as exhibits
to this Annual Report are “Certifications” of our Chief Executive and Interim Chief Financial Officer. The Certifications
are required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This section
of the Annual Report contains information concerning the Controls Evaluation referred to in the Section 302 Certification. This
information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.



ITEM 9B.	OTHER INFORMATION



Not applicable.



PART III



ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS,
AND CORPORATE GOVERNANCE



Executive Officers and Directors



Below are the names
and certain information regarding the Company’s current executive officers and directors:



|Name          |  | Age |  | Title                                                   |  | Date First Appointed
|------------- |  | --- |  | ------------------------------------------------------- |  | --------------------
|              |  |     |  |                                                         |  |                     
|Luis F. Saenz |  | 40  |  | President, Interim Chief Financial Officer and Director |  | July 21, 2008       
|              |  |     |  |                                                         |  |                     
|Adam Zive     |  | 33  |  | Interim Chief Executive Officer and Director            |  | August 25, 2011     



13







Directors are elected
to serve until the next annual meeting of stockholders and until their successors are elected and qualified.



Currently, directors
are not compensated for their services, although their expenses in attending meetings may be reimbursed. Officers are elected by
the Board of Directors and serve until their successors are appointed by the Board of Directors. Biographical resumes of each officer
and director are set forth below.



Certain biographical
information of our directors and officers:



Luis F. Saenz



Mr. Saenz was most
recently employed at Standard Bank ("Standard") with Standard's investment banking unit, Standard Americas, Inc. Mr.
Saenz joined Standard in New York in 1997 and relocated to Peru in 1998 to establish Standard's Peru representative office. While
in Peru, he led Standard's mining and metals origination effort in the Latin America region. He recently returned to New York to
head Standard's mining and metals team in the Americas. He previously worked for Pechiney World Trade in the base metals trading
area before joining Merrill Lynch as Vice-President for Commodities in Latin America. Mr. Saenz graduated from Franklin and Marshall
College in 1991 with a Bachelor of Arts degree in economics and international affairs.



Mr. Saenz is also currently
the Chief Executive Officer of Li3 Energy, Inc. (OTCBB:LIEG), an early stage, U.S. public company currently pursuing a business
strategy in the lithium brine mining and energy sector in the Americas. Accordingly, Mr. Saenz is only able to devote a portion
of his time to our activities. This may make it more difficult for our management to respond quickly and completely to challenges
and opportunities that we may encounter, may limit our ability to timely consummate strategic transactions and may have an adverse
effect on our results of operations.



Adam Zive



Mr. Zive, who is 33,
has since 2009 been the President and Chief Executive Officer of Dorian Financial Limited (Barbados), a private company owned by
Mr. Zive.  From 2008 until 2009 he was the head of Africa oil and gas research for Renaissance Capital, and from 2006
to 2008 the head of oil and gas research for Desjardins Securities.



Employment Agreements with Our Executives



Luis F. Saenz - Employment
Agreement and Termination of Same



We entered into an
employment agreement effective as of July 21, 2008 with Luis F. Saenz pursuant to which Mr. Saenz was appointed as our President
and Chief Executive Officer. Under this agreement, we were to pay Mr. Saenz a base annual compensation of $250,000. Under
this agreement, we also granted Mr. Saenz an option to purchase an aggregate of 6,200,000 shares (forward split adjusted) of our
Common Stock under our 2008 Plan. The initial term of the employment agreement with Mr. Saenz expired on July 21, 2009 and was
automatically renewed for an additional one (1) year term.



14







Effective May 5, 2010,
we entered into a written termination agreement with Luis Saenz pursuant to which our employment agreement with Mr. Saenz was terminated.
Pursuant to the terms of this termination agreement, Mr. Saenz released us from any and all obligations to him relating to his
employment agreement, including, but not limited to, any and all rights and claims to compensation, bonuses and expense reimbursements.
Mr. Saenz also agreed to terminate his option agreement with us dated July 21, 2008 and relinquished all rights originally granted
under that agreement.



Mr. Saenz remains as
our President, Interim Chief Financial officer and a director.



Board Committees



The Company currently
has not established any committees of the Board of Directors. Our Board of Directors may designate from among its members an executive
committee and one or more other committees in the future. We do not have a nominating committee or a nominating committee charter.
Further, we do not have a policy with regard to the consideration of any director candidates recommended by security holders. To
date, no security holders have made any such recommendations. Our two directors perform all functions that would otherwise be performed
by committees. Given the present size of our board it is not practical for us to have committees. If we are able to grow our business
and increase our operations, we intend to expand the size of our board and allocate responsibilities accordingly.



Shareholder Communications



Currently, we do not
have a policy with regard to the consideration of any director candidates recommended by security holders. To date, no security
holders have made any such recommendations.



Code of Ethics



We have adopted a written
code of ethics (the “Code of Ethics”) that applies to our principal executive officer, principal financial officer,
principal accounting officer or controller, and persons performing similar functions. We believe that the Code of Ethics is reasonably
designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure
in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability
for adherence to the code. To request a copy of the Code of Ethics, please make written request to our President at c/o Gottbetter
& Partners, LLP, 488 Madison Avenue, 12th Floor, New York, NY 10022.



Compliance with Section 16(a) of the
Exchange Act



Our common stock is
not registered pursuant to Section 12 of the Exchange Act. Accordingly, our officers, directors and principal shareholders are
not subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act.



15







ITEM 11.	EXECUTIVE COMPENSATION



The following table
sets forth information concerning the total compensation paid or accrued by us during the last two fiscal years ended December
31, 2011 to (i) all individuals that served as our principal executive officer or acted in a similar capacity for us at any time
during the fiscal year ended December 31, 2011; (ii) all individuals that served as our principal financial officer or acted in
a similar capacity for us at any time during the fiscal year ended December 31, 2010; and (iii) all individuals that served as
executive officers of ours at any time during the fiscal year ended December 31, 2011 that received annual compensation during
the fiscal year ended December 31, 2011 in excess of $100,000.



Summary Compensation Table



|Name and Principal Position                                      |  | Year |  |  | Salary ($) |        |  | Bonus  ($) |  |   | Stock
 Awards 
    ($) |  |  | Option Awards
     ($) |  |  | Non-Equity Incentive
    Plan Compen- sation ($) |   |  | Change in  Pension
    Value  and Non-qualified  Deferred Compensation  Earnings ($) |  |   | All Other Compensation
     ($) |  |  | Total($) | 
|---------------------------------------------------------------- |  | ---- |  |  | ---------- | ------ |  | ---------- |  | - | ---------------------- |  |  | ---------------------- |  |  | ------------------------------------------------ | - |  | ------------------------------------------------------------------------------------ |  | - | ------------------------------- |  |  | -------- | 
|(a)                                                              |  | (b)  |  |  | (c)        |        |  | (d)        |  |   | (e)                    |  |  | (f)                    |  |  | (g)                                              |   |  | (h)                                                                                  |  |   | (i)                             |  |  | (j)      | 
|Adam Zive, Interim Chief Executive
    Officer (1)               |  | 2011 |  |  |            | 0      |  |            |  | 0 |                        |  |  | 0                      |  |  |                                                  | 0 |  |                                                                                      |  | 0 |                                 |  |  | 0        | 
|Luis F. Saenz, President and Interim Chief Financial Officer (2) |  | 2011 |  |  |            | 0      |  |            |  | 0 |                        |  |  | 0                      |  |  |                                                  | 0 |  |                                                                                      |  | 0 |                                 |  |  | 0        | 
|                                                                 |  | 2010 |  |  |            | 70,512 |  |            |  | 0 |                        |  |  | 0                      |  |  |                                                  | 0 |  |                                                                                      |  | 0 |                                 |  |  | 0        | 
|                                                                 |  |      |  |  |            |        |  |            |  |   |                        |  |  |                        |  |  |                                                  |   |  |                                                                                      |  |   |                                 |  |  |          | 



| | (1) | Adam Zive was appointed Interim Chief Executive Officer of the Company on August 25, 2011.
| | --- | ------------------------------------------------------------------------------------------



| | (2) | Luiz Saenz resigned as Chief Executive Officer on August 25, 2011.
| | --- | ------------------------------------------------------------------



We have not issued
any stock options or maintained any stock option or other incentive plans other than our 2008 Plan. (See “Item 5. Market
for Common Equity and Related Stockholder Matters – Securities Authorized for Issuance Under Equity Compensation Plans”
above.) We have no other plans in place and have never maintained any plans that provide for the payment of retirement benefits
or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans,
supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans.



16







Outstanding Equity Awards at Fiscal Year-End



The following table
sets forth information regarding stock options held by the Company's Named Executive Officers at December 31, 2011.



|                                   |  | Option awards                                                            |  |                                                                           
|---------------------------------- |  | ------------------------------------------------------------------------ |  | --------------------------------------------------------------------------
|Name and Principal Position        |  | Number of
 securities
 underlying 
unexercised
 options 
exercisable
(#) |  | Number of 
securities
 underlying 
unexercised
 options 
unexercisable
(#)
|(a)                                |  | (b)                                                                      |  | (c)                                                                       
|Adam Zive, Chief Executive Officer |  | 0                                                                        |  | 0                                                                         



There were no stock awards to executive
officers during the year ended December 31, 2011, and there are no stock awards outstanding as of December 31, 2011.



Equity Compensation Plan Information



The following table sets forth information
about the Company’s equity compensation plans as of December 31, 2011:



|Plan Category                                              |  |  | Number of securities  to be issued upon exercise of outstanding options,  warrants and rights |  |  |  | Weighted- average exercise  price of  outstanding options, warrants and rights |  |  |  | Number of  securities remaining  available for future issuance under  equity compensation  plans | 
|---------------------------------------------------------- |  |  | --------------------------------------------------------------------------------------------- |  |  |  | ------------------------------------------------------------------------------ |  |  |  | ------------------------------------------------------------------------------------------------ | 
|Equity compensation plans approved by security holders     |  |  | -                                                                                             |  |  |  | -                                                                              |  |  |  | 16 Million                                                                                       | 
|Equity compensation plans not approved by security holders |  |  | -                                                                                             |  |  |  | -                                                                              |  |  |  | -                                                                                                | 
|Total                                                      |  |  | -                                                                                             |  |  |  | -                                                                              |  |  |  | 16 Million                                                                                       | 



Compensation of Directors



None of our directors
receives any compensation for serving as such, for serving on committees (if any) of the Board of Directors or for special assignments.
During the fiscal year ended December 31, 2011 there were no arrangements between us and our directors that resulted in our making
payments to any of our directors for any services provided to us by them as directors.



17







ITEM
12.	    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS



The following table
sets forth information with respect to the beneficial ownership of our common stock known by us as of April 16, 2012 by:



| | · | each person or entity known by us to be the beneficial owner of more than 5% of our common stock;
| | - | -------------------------------------------------------------------------------------------------



| | · | each of our directors;
| | - | ----------------------



| | · | each of our executive officers; and
| | - | -----------------------------------



| | · | all of our directors and executive officers as a group.
| | - | -------------------------------------------------------



Except as otherwise
indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned
by them, except to the extent such power may be shared with a spouse.



|NAME OF OWNER                                                              | TITLE OF CLASS |  | NUMBER OF SHARES OWNED (1) |  | PERCENTAGE OF COMMON STOCK 
(2) |        |   | 
|-------------------------------------------------------------------------- | -------------- |  | -------------------------- |  | ------------------------------- | ------ | - | 
|                                                                           |                |  |                            |  |                                 |        |  
|Adam Zive                                                                  | Common Stock   |  | 2,500,000                  |  |                                 | 3.5563 | % | 
|                                                                           |                |  |                            |  |                                 |        |  
|Luis F. Saenz                                                              | Common Stock   |  | 400,000                    |  |                                 |        | * | 
|                                                                           |                |  |                            |  |                                 |        |  
|All Officers and Directors                                                 | Common Stock   |  | 2,900,000                  |  |                                 | 4.19   | % | 
|As a Group (2 persons)                                                     |                |  |                            |  |                                 |        |  
|                                                                           |                |  |                            |  |                                 |        |  
|Magdalena Cruz                                                             | Common Stock   |  | 24,000,000                 |  |                                 | 34.1   | % | 
|47395 Monroe Street, #274                                                  |                |  |                            |  |                                 |        |  
|Indio, CA 92201                                                            |                |  |                            |  |                                 |        |  
|                                                                           |                |  |                            |  |                                 |        |  
|Aton Select Fund                                                           | Common Stock   |  | 6,000,000                  |  |                                 | 8.5    | % | 
|3076 Sir Francis Drake's Highway Raod Town, Tortola British Virgin Islands |                |  |                            |  |                                 |        |  



18







|Adrien Ellul B                                                                   | Common Stock |  | 5,000,000 |  |  | 7.1 | % | 
|-------------------------------------------------------------------------------- | ------------ |  | --------- |  |  | --- | - | 
|SOHO Square 21 Lyndhurst Terrace Central, Hong Kong Hong Kong SAR                |              |  |           |  |  |     |  
|                                                                                 |              |  |           |  |  |     |  
|Mark Tompkins                                                                    | Common Stock |  | 5,000,000 |  |  | 7.1 | % | 
|c/o Gottbetter & Partners, LLP 488 Madison Avenue, 12th Floor New York, NY 10022 |              |  |           |  |  |     |  
|                                                                                 |              |  |           |  |  |     |  
|Paramount Strategy Corp.                                                         | Common Stock |  | 5,000,000 |  |  | 7.1 | % | 
|PO BOX 802 West Bay Cayman Islands KYI-1303                                      |              |  |           |  |  |     |  
|                                                                                 |              |  |           |  |  |     |  
|Affaires Financieres                                                             | Common Stock |  | 4,000,000 |  |  | 5.7 | % | 
|Nuschelerstrasse 44 8001 Zurich Switzerland                                      |              |  |           |  |  |     |  
|                                                                                 |              |  |           |  |  |     |  
|TangoCorp, Inc.                                                                  | Common Stock |  | 4,000,000 |  |  | 5.7 | % | 
|802 Grand Pavilion PO Box 10335 APO West Bay Rd Grand Cayman, Cayman Islands     |              |  |           |  |  |     |  










*Less
than 1%.



(1)    Beneficial
Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect
to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable or convertible
within 60 days of April 16, 2012 are deemed outstanding for computing the percentage of the person holding such option or warrant
but are not deemed outstanding for computing the percentage of any other person.



(2)     Percentage
based upon 70,298,322 shares of common stock outstanding as of April 16, 2012.



19







Securities Authorized for Issuance Under Equity Compensation
Plans



On
July 3, 2008, our Board of Directors and stockholders adopted the 2008 Plan which reserves a total of 16,000,000 2 shares
of Common Stock for issuance under the 2008 Plan. If an incentive award granted under
the 2008 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with an
incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the
2008 Plan. As of the date hereof, we have not issued any shares under the 2008 Plan and we do not have any outstanding options
or other awards under the 2008 Plan.



ITEM 13.	CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE



Not applicable.



Director Independence



We are not currently
subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that
a majority of the board of directors be “independent” and, as a result, we are not at this time required to (and we
do not) have our Board of Directors comprised of a majority of “Independent Directors.”



Our
Board of Directors has considered the independence of its directors in reference to the definition of “independent director”
established by the Nasdaq Marketplace Rule 5605(a)(2). In doing so, the Board of Directors has reviewed all commercial and other
relationships of each director in making its determination as to the independence of its directors. After such review, the Board
of Directors has determined that neither of our current directors qualifies as independent under the requirements of the Nasdaq
listing standards.



ITEM 14.	PRINCIPAL ACCOUNTANT FEES
AND SERVICES



Audit Fees.



The aggregate fees
billed to us by our principal accountant for services rendered during the fiscal years ended December 31, 2011 and 2010 are set
forth in the table below:



|Fee Category           |  | Fiscal year ended December 31, 2011 |        |  | Fiscal year ended December 31, 2010 |  
|---------------------- |  | ----------------------------------- | ------ |  | ----------------------------------- | -
|Audit fees (1)         |  | $                                   | 18,345 |  |                                     | $
|Audit-related fees (2) |  | $                                   | 17,200 |  |                                     | $
|Tax fees (3)           |  |                                     | -      |  |                                     |  
|All other fees (4)     |  |                                     | -      |  |                                     |  
|Total fees             |  | $                                   | 35,545 |  |                                     | $








2. Adjusted for the July 24, 2008,
February 2, 2009 and January 28, 2010 two for one stock splits.



20







| | (1) | Audit fees consists of fees incurred for professional services rendered for the audit of consolidated
financial statements, for reviews of our interim consolidated financial statements included in our quarterly reports on Form 10-Q
and for services that are normally provided in connection with statutory or regulatory filings or engagements.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Audit-related fees consists of fees billed for professional services that are reasonably related
to the performance of the audit or review of our consolidated financial statements, but are not reported under “Audit fees.”
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Tax fees consists of fees billed for professional services relating to tax compliance, tax planning,
and tax advice.
| | --- | --------------------------------------------------------------------------------------------------------------------



| | (4) | All other fees consists of fees billed for all other services.
| | --- | --------------------------------------------------------------



Audit Committee’s Pre-Approval Practice.



We
do not have an audit committee. Our board of directors performs the function of an audit committee. Section 10A(i) of the Securities
Exchange Act of 1934, as amended, prohibits our auditors from performing audit services for us as well as any services not considered
to be audit services unless such services are pre-approved by our audit committee or, in cases where no such committee exists,
by our board of directors (in lieu of an audit committee) or unless the services meet certain de minimis standards.



21







PART IV



ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES



Financial Statement Schedules



The consolidated financial
statements of Loreto Resources Corporation are listed on the Index to Financial Statements on this annual report on Form 10-K beginning
on page F-1.



Exhibits



The following Exhibits are being filed with
this Annual Report on Form 10-K:







|Exhibit

        No. |  | SEC Report

        Reference Number |  | Description                                                                                                                               
|-------------------- |  | ------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------
|                     |  |                                      |  |                                                                                                                                           
|3.1                  |  | 3.1                                  |  | Amended and Restated Articles of Incorporation of Registrant as filed with the Nevada Secretary of State on July 3, 2008 (1)              
|                     |  |                                      |  |                                                                                                                                           
|3.2                  |  | 3.2                                  |  | By-Laws of Registrant (2)                                                                                                                 
|                     |  |                                      |  |                                                                                                                                           
|3.3                  |  | 3.3                                  |  | Form of 2010 10% Convertible Promissory Note (3)                                                                                          
|                     |  |                                      |  |                                                                                                                                           
|3.4                  |  | 3.4                                  |  | Form of 2011 10% Convertible Promissory Note (3)                                                                                          
|                     |  |                                      |  |                                                                                                                                           
|3.5                  |  | *                                    |  | Form of 2012 10% Convertible Promissory Note                                                                                              
|                     |  |                                      |  |                                                                                                                                           
|10.1                 |  | 10.1                                 |  | Employment Agreement dated July 21, 2008 by and between Loreto Resources Corporation and Luis F. Saenz (4)                                
|                     |  |                                      |  |                                                                                                                                           
|10.2                 |  | 10.1                                 |  | Contract Termination Agreement between the Registrant and Luis F. Saenz dated May 5, 2010 (4)                                             
|                     |  |                                      |  |                                                                                                                                           
|10.3                 |  | 10.2                                 |  | Stock Option Agreement dated July 21, 2008 between Loreto Resources Corporation and Luis F. Saenz (5)                                     
|                     |  |                                      |  |                                                                                                                                           
|10.4                 |  | 10.1                                 |  | Form of 2008 Common Stock Subscription Agreement (6)                                                                                      
|                     |  |                                      |  |                                                                                                                                           
|10.5                 |  | 10.4                                 |  | 2008 Equity Incentive Plan (7)                                                                                                            
|                     |  |                                      |  |                                                                                                                                           
|10.6                 |  | 10.6                                 |  | Form of Subscription Agreement between the Registrant and each subscriber in the 2010 10% convertible notes private placement offering (3)





22









|Exhibit
        
        No. |  | SEC Report

        Reference Number |  | Description                                                                                                                                                            | 
|---------------------------- |  | ------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|                             |  |                                      |  |                                                                                                                                                                       
|10.7                         |  | 10.7                                 |  | Form of Subscription Agreement between the Registrant and each subscriber in the 2011 10% convertible notes private placement offering (3)                            
|                             |  |                                      |  |                                                                                                                                                                       
|10.8                         |  | *                                    |  | Form of Subscription Agreement between the Registrant and each subscriber in the 2012 10% convertible notes private placement offering                                
|                             |  |                                      |  |                                                                                                                                                                       
|14.1                         |  | 14                                   |  | Code of Ethics (8)                                                                                                                                                    
|                             |  |                                      |  |                                                                                                                                                                       
|21                           |  | *                                    |  | List of Subsidiaries                                                                                                                                                  
|                             |  |                                      |  |                                                                                                                                                                       
|31.1                         |  | *                                    |  | Certification of Interim Principal Executive Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|                             |  |                                      |  |                                                                                                                                                                       
|31.2                         |  | *                                    |  | Certification of Interim Principal Financial Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|                             |  |                                      |  |                                                                                                                                                                       
|32.1                         |  | *                                    |  | Certification of Interim Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**             
|                             |  |                                      |  |                                                                                                                                                                       
|32.2                         |  | *                                    |  | Certification of Interim Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**             





| | (1) | Filed with the SEC on July 10, 2008 as an exhibit, numbered as indicated above, to the Registrant’s
current report (SEC File No. 333-140148) on Form 8-K, which exhibit is incorporated herein by reference.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                             

| | (2) | Filed with the SEC on January 23, 2007 as an exhibit, numbered as indicated above, to the Registrant’s
registration statement (SEC File No. 333-140148) on Form SB-2, which exhibit is incorporated herein by reference.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Filed with the SEC on April 12, 2011 as an exhibit, numbered
as indicated above, to the Registrant’s annual report (SEC File No. 333-140148) on Form 10-K, which exhibit is incorporated
herein by reference.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Filed with the SEC on August 20, 2010 as an exhibit, numbered as indicated above, to the Registrant’s
quarterly report (SEC File No. 333-140148) on Form 10-Q, which exhibit is incorporated herein by reference.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



23









| | (5) | Filed with the SEC on July 24, 2008 as an exhibit, numbered as indicated above, to the Registrant’s
current report (SEC File No. 333-140148) on Form 8-K, which exhibit is incorporated herein by reference.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Filed with the SEC on September 15, 2008 as an exhibit, numbered as indicated above, to the Registrant’s
current report (SEC File No. 333-140148) on Form 8-K, which exhibit is incorporated herein by reference.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (7) | Filed with the SEC on April 14, 2009 as an exhibit, numbered as indicated above, to the Registrant’s
annual report (SEC File No. 333-140148) on Form 10-K, which exhibit is incorporated herein by reference.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (8) | Filed with the SEC on March 31, 2008 as an exhibit, numbered as indicated above, to the Registrant’s
annual report (SEC File No. 333-140148) on Form 10-KSB, which exhibit is incorporated herein by reference.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

____________________

* Filed herewith.



** This certification is being furnished
and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to
the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act
or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.



In reviewing the agreements included as
exhibits and incorporated by reference to this Annual Report on Form 10-K, please remember that they are included to provide you
with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company
or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the
applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable
agreement and:





| | • | should not in all instances be treated as categorical statements of fact, but rather as a way of
allocating the risk to one of the parties if those statements prove to be inaccurate;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | have been qualified by disclosures that were made to the other party in connection with the negotiation
of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | may apply standards of materiality in a way that is different from what may be viewed as material
to you or other investors; and
| | - | --------------------------------------------------------------------------------------------------------------------------------



| | • | were made only as of the date of the applicable agreement or such other date or dates as may be
specified in the agreement and are subject to more recent developments.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------







24







Accordingly, these representations and
warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information
about the Company may be found elsewhere in this Annual Report on Form 10-K and the Company’s other public filings, which
are available without charge through the SEC’s website at http://www.sec.gov.



25







SIGNATURES



Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.



| | LORETO RESOURCES CORPORATION
| | ----------------------------



|Dated:  April 16, 2012 | By: | /s/ Adam Zive                                  | 
|---------------------- | --- | ---------------------------------------------- | 
|                       |     | Adam Zive, Interim Chief Executive Officer    
|                       |     |                                               
|Dated:  April 16, 2012 | By: | /s/ Luis F. Saenz                              | 
|                       |     | Luis F. Saenz, Interim Chief Financial Officer



In accordance with
the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.



|SIGNATURE         |  | TITLE    |  | DATE          
|----------------- |  | -------- |  | --------------
|/s/ Adam Zive     |  | Director |  | April 16, 2012
|Adam Zive         |  |          |  |               
|/s/ Luis F. Saenz |  | Director |  | April 16, 2012
|Luis F. Saenz     |  |          |  |               



26







PART IV – FINANCIAL
INFORMATION



|ITEM 15. FINANCIAL STATEMENTS                                                                                                                                    |           
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------
|                                                                                                                                                                 | Page      
|                                                                                                                                                                 |           
|Report of Independent Registered Public Accounting Firm                                                                                                          | F-2       
|                                                                                                                                                                 |           
|Consolidated Balance Sheets as of December 31, 2011 and 2010                                                                                                     | F-3       
|                                                                                                                                                                 |           
|Consolidated Statements of Operations for the years ended December 31, 2011 and 2010 and for the period from June 28, 2006 (inception) through December 31, 2011 | F-4       
|                                                                                                                                                                 |           
|Consolidated Statements of Changes in Stockholders’ Deficit for the period from June 28, 2006 (inception) through December 31, 2011                              | F-5       
|                                                                                                                                                                 |           
|Consolidated Statements of Cash Flows for the years ended December 31, 2011 and 2010 and for the period from June 28, 2006 (inception) through December 31, 2011 | F-6       
|                                                                                                                                                                 |           
|Notes to Consolidated Financial Statements                                                                                                                       | F-7 – F-16



F-1







REPORT OF INDEPENDENT REGISTERED ACCOUNTING
FIRM



To the Board of Directors of

Loreto Resources Corporation

(A Development Stage Company)

New York, New York



We have audited the accompanying consolidated balance
sheets of Loreto Resources Corporation, (“Loreto”) as of December 31, 2011 and 2010 and the related consolidated
statements of operations, stockholders’ equity (deficit) and cash flows for the two years then ended and the period
from June 28, 2006 (inception) through December 31, 2011. The financial statements for the period from June 28, 2006
(inception) through December 31, 2007 were audited by other auditors whose report expressed an unqualified opinion on those
financial statements. The financial statements for the period from June 28, 2006 (inception) through December 31, 2011
include no revenue and a net loss of $3,796,921. Our opinion on the statements of operations, stockholder’ equity, and
cash flows for the period from June 28, 2006 (inception) through December 31, 2010, in so far as it relates to amounts for
prior periods through December 31,2007 is based solely on the report of the other auditor. These consolidated financial
statements are the responsibility of Loreto’s management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.



We conducted our audits in accordance with standards of
the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements are free of material misstatements. Loreto is
not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Loreto’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the consolidated financial position of Loreto as of December 31,
2011 and 2010 and the consolidated results of its operations and its cash flows for the two years then ended and the period
from June 28, 2006 (inception) through December 31, 2011 in conformity with accounting principles generally accepted in the
United States of America.



The accompanying consolidated financial statements have been
prepared assuming that Loreto will continue as a going concern. As discussed in Note 3 to the consolidated financial statements,
Loreto has suffered recurring losses from operations, which raises substantial doubt about its ability to continue as a going concern.
Management’s plans regarding those matters are described in Note 3. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.



MALONEBAILEY, LLP

www.malone-bailey.com

Houston, Texas



April 16, 2012



F-2







LORETO RESOURCES CORPORATION

(A Development Stage Company)

Consolidated Balance Sheets



|                                                                                                                                                     |  | As of December 31, |            |   | As of December 31, |  
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ---------- | - | ------------------ | -
|                                                                                                                                                     |  | 2011               |            |   | 2010               |  
|ASSETS                                                                                                                                               |  |                    |            |   |                    |  
|                                                                                                                                                     |  |                    |            |   |                    |  
|Current Assets                                                                                                                                       |  |                    |            |   |                    |  
|Cash                                                                                                                                                 |  | $                  | 4,136      |   |                    | $
|Prepaid expenses                                                                                                                                     |  |                    | 41,920     |   |                    |  
|Due from related party                                                                                                                               |  |                    | 10,712     |   |                    |  
|Total Current Assets                                                                                                                                 |  |                    | 56,768     |   |                    |  
|                                                                                                                                                     |  |                    |            |   |                    |  
|Non-Current Assets                                                                                                                                   |  |                    |            |   |                    |  
|Deposits                                                                                                                                             |  |                    | 9,228      |   |                    |  
|                                                                                                                                                     |  |                    |            |   |                    |  
|TOTAL ASSETS                                                                                                                                         |  | $                  | 65,996     |   |                    | $
|                                                                                                                                                     |  |                    |            |   |                    |  
|LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                |  |                    |            |   |                    |  
|                                                                                                                                                     |  |                    |            |   |                    |  
|Current Liabilities                                                                                                                                  |  |                    |            |   |                    |  
|Accounts payable and accrued liabilities                                                                                                             |  | $                  | 103,990    |   |                    | $
|Insurance financing                                                                                                                                  |  |                    | 42,019     |   |                    |  
|Convertible notes and interest payable                                                                                                               |  |                    | 270,519    |   |                    |  
|Notes and interest payable-related party                                                                                                             |  |                    | -          |   |                    |  
|Total Current Liabilities                                                                                                                            |  |                    | 416,528    |   |                    |  
|                                                                                                                                                     |  |                    |            |   |                    |  
|Total Liabilities                                                                                                                                    |  |                    | 416,528    |   |                    |  
|                                                                                                                                                     |  |                    |            |   |                    |  
|Stockholders' Deficit:                                                                                                                               |  |                    |            |   |                    |  
|Common stock, $.001 par value, 300,000,000 shares authorized; 70,298,322 shares issued and outstanding as of December 31, 2011 and December 31, 2010 |  |                    | 70,298     |   |                    |  
|Additional paid-in capital                                                                                                                           |  |                    | 3,587,842  |   |                    |  
|Deficit accumulated during development stage                                                                                                         |  |                    | (4,008,672 | ) |                    |  
|Total Stockholders' Deficit                                                                                                                          |  |                    | (350,532   | ) |                    |  
|                                                                                                                                                     |  |                    |            |   |                    |  
|TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                          |  | $                  | 65,996     |   |                    | $



The accompanying notes are an integral part
of these consolidated financial statements.





F-3







LORETO RESOURCES CORPORATION

(A Development Stage Company)

Consolidated Statements of Operations



|                                                                         |  |              |            |   |              |   |            | June 28, 2006 | 
|------------------------------------------------------------------------ |  | ------------ | ---------- | - | ------------ | - | ---------- | ------------- | 
|                                                                         |  | Year End     |            |   | Year End     |   |            | (Inception)   | 
|                                                                         |  | Ended        |            |   | Ended        |   |            | through       | 
|                                                                         |  | December 31, |            |   | December 31, |   |            | December 31,  | 
|                                                                         |  | 2011         |            |   | 2010         |   |            | 2011          | 
|Operating expenses                                                       |  |              |            |   |              |   |            |               | 
|General and administrative expenses                                      |  | $            | 234,267    |   |              | $ | 1,042,149  |               | 
|                                                                         |  |              |            |   |              |   |            |               | 
|Loss from operations                                                     |  |              | (234,267   | ) |              |   | (1,042,149 | )             | 
|                                                                         |  |              |            |   |              |   |            |               | 
|Other income (expense):                                                  |  |              |            |   |              |   |            |               | 
|                                                                         |  |              |            |   |              |   |            |               | 
|Interest income                                                          |  |              | 9          |   |              |   | 63         |               | 
|Interest expense                                                         |  |              | (25,222    | ) |              |   | (3,584     | )             | 
|Gain on forgiveness of debt                                              |  |              | 47,729     |   |              |   | 37,797     |               | 
|                                                                         |  |              |            |   |              |   |            |               | 
|Total other income (expense)                                             |  |              | 22,516     |   |              |   | 34,276     |               | 
|                                                                         |  |              |            |   |              |   |            |               | 
|Net loss                                                                 |  | $            | (211,751   | ) |              | $ | (1,007,873 | )             | 
|                                                                         |  |              |            |   |              |   |            |               | 
|Loss per share - basic and diluted                                       |  | $            | (0.00      | ) |              | $ | (0.01      | )             | 
|                                                                         |  |              |            |   |              |   |            |               | 
|Weighted average number of common shares outstanding - basic and diluted |  | $            | 70,298,322 |   |              | $ | 70,127,167 |               | 



The accompanying notes are an integral part
of these consolidated financial statements.



F-4







LORETO RESOURCES CORPORATION

(A Development Stage Company)

Consolidated Statements of Stockholders’
Deficit



|                                                                                            |  |        |             |   |        |   |         |            |  |   | Deficit     |   |  |       |           
|------------------------------------------------------------------------------------------- |  | ------ | ----------- | - | ------ | - | ------- | ---------- |  | - | ----------- | - |  | ----- | ----------
|                                                                                            |  |        |             |   |        |   |         |            |  |   | Accumulated |   |  |       |           
|                                                                                            |  |        |             |   | Common |   |         | Additional |  |   | During      |   |  |       |           
|                                                                                            |  | Common |             |   | Stock  |   |         | Paid-in    |  |   | Development |   |  |       |           
|                                                                                            |  | Stock  |             |   | Amount |   |         | Capital    |  |   | Stage       |   |  | Total |           
|Balance, June 28, 2006                                                                      |  |        | -           |   |        | $ | -       |            |  | $ | -           |   |  | $     | -         
|Stock issued for cash on October 3, 2006 at $0.00025
    per share                          |  |        | 40,000,000  |   |        |   | 40,000  |            |  |   | (30,000     | ) |  |       | -         
|Net loss, December 31, 2006                                                                 |  |        | -           |   |        |   | -       |            |  |   | -           |   |  |       | (877      
|Balance, December 31, 2006                                                                  |  |        | 40,000,000  |   |        |   | 40,000  |            |  |   | (30,000     | ) |  |       | (877      
|                                                                                            |  |        |             |   |        |   |         |            |  |   |             |   |  |       |           
|Stock issued for cash on February 23, 2007 at $0.0005 per share                             |  |        | 36,000,000  |   |        |   | 36,000  |            |  |   | (18,000     | ) |  |       | -         
|Stock issued for services on July 2, 2007 at $0.0001875 per share                           |  |        | 24,000,000  |   |        |   | 24,000  |            |  |   | (19,500     | ) |  |       | -         
|Net loss, December 31, 2007                                                                 |  |        | -           |   |        |   | -       |            |  |   | -           |   |  |       | (43,518   
|Balance, December 31, 2007                                                                  |  |        | 100,000,000 |   |        |   | 100,000 |            |  |   | (67,500     | ) |  |       | (44,395   
|                                                                                            |  |        |             |   |        |   |         |            |  |   |             |   |  |       |           
|Stock issued for cash on February 7, 2008 at $0.025 per share                               |  |        | 2,000,000   |   |        |   | 2,000   |            |  |   | 48,000      |   |  |       | -         
|Debt forgiveness from related party on June 30, 2008                                        |  |        | -           |   |        |   | -       |            |  |   | 13,200      |   |  |       | -         
|Restricted stock cancelled on July 18, 2008                                                 |  |        | (40,000,000 | ) |        |   | (40,000 | )          |  |   | 40,000      |   |  |       | -         
|Stock based-compensation on July 21, 2008                                                   |  |        | -           |   |        |   | -       |            |  |   | 181,612     |   |  |       | -         
|Stock issued for cash on September 17, 2008 at $0.25 per share,
    net of offering costs   |  |        | 8,100,000   |   |        |   | 8,100   |            |  |   | 1,972,213   |   |  |       | -         
|Net loss, December 31, 2008                                                                 |  |        | -           |   |        |   | -       |            |  |   | -           |   |  |       | (699,020  
|Balance, December 31, 2008                                                                  |  |        | 70,100,000  |   |        |   | 70,100  |            |  |   | 2,187,525   |   |  |       | (743,415  
|                                                                                            |  |        |             |   |        |   |         |            |  |   |             |   |  |       |           
|Stock-based compensation                                                                    |  |        | -           |   |        |   | -       |            |  |   | 549,720     |   |  |       | -         
|Net loss, December 31, 2009                                                                 |  |        | -           |   |        |   | -       |            |  |   | -           |   |  |       | (2,045,633
|Balance, December 31, 2009                                                                  |  |        | 70,100,000  |   |        |   | 70,100  |            |  |   | 2,737,245   |   |  |       | (2,789,048
|Stock-based compensation                                                                    |  |        | -           |   |        |   | -       |            |  |   | 640,826     |   |  |       | -         
|Related party forgiveness of accounts payable and accrued payroll                           |  |        | -           |   |        |   | -       |            |  |   | 160,389     |   |  |       | -         
|Stock issued for settlement of accounts payable on November 11,
    2010 at $0.25 per share |  |        | 198,322     |   |        |   | 198     |            |  |   | 49,382      |   |  |       | -         
|Net loss, December 31, 2010                                                                 |  |        | -           |   |        |   | -       |            |  |   | -           |   |  |       | (1,007,873
|Balance, December 31, 2010                                                                  |  |        | 70,298,322  |   |        |   | 70,298  |            |  |   | 3,587,842   |   |  |       | (3,796,921
|Net loss, December 31, 2011                                                                 |  |        | -           |   |        |   | -       |            |  |   | -           |   |  |       | (211,751  
|Balance, December 31, 2011                                                                  |  |        | 70,298,322  |   |        | $ | 70,298  |            |  | $ | 3,587,842   |   |  | $     | (4,008,672



The accompanying notes are an integral part
of these consolidated financial statements.



F-5







LORETO RESOURCES CORPORATION

(A Development Stage Company)

Consolidated Statements of Cash Flows



|                                                                            |  |              |          |   |              |   |            | June 28, 2006 | 
|--------------------------------------------------------------------------- |  | ------------ | -------- | - | ------------ | - | ---------- | ------------- | 
|                                                                            |  | Year         |          |   | Year         |   |            | (Inception)   | 
|                                                                            |  | Ended        |          |   | Ended        |   |            | through       | 
|                                                                            |  | December 31, |          |   | December 31, |   |            | December 31,  | 
|                                                                            |  | 2011         |          |   | 2010         |   |            | 2011          | 
|Cash Flows from Operating Activities                                        |  |              |          |   |              |   |            |               | 
|Net loss                                                                    |  | $            | (211,751 | ) |              | $ | (1,007,873 | )             | 
|Adjustments to reconcile net loss to net cash used in operating activities: |  |              |          |   |              |   |            |               | 
|Stock option expense                                                        |  |              | -        |   |              |   | 640,826    |               | 
|Common stock issued for services                                            |  |              | -        |   |              |   | -          |               | 
|Gain on forgiveness of debt                                                 |  |              | (47,729  | ) |              |   | (37,797    | )             | 
|Changes in operating assets and liabilities:                                |  |              |          |   |              |   |            |               | 
|Prepaid expenses and other current assets                                   |  |              | 46,205   |   |              |   | 65,171     |               | 
|Accounts payable                                                            |  |              | 86,078   |   |              |   | 22,915     |               | 
|Accounts payable-related party                                              |  |              | -        |   |              |   | 77,057     |               | 
|Interest accrued on notes payable                                           |  |              | 23,469   |   |              |   | 2,041      |               | 
|Interest accrued on notes payable-related party                             |  |              | -        |   |              |   | 268        |               | 
|Due from related party                                                      |  |              | -        |   |              |   | (10,712    | )             | 
|Net cash used in operating activities                                       |  |              | (103,728 | ) |              |   | (248,104   | )             | 
|                                                                            |  |              |          |   |              |   |            |               | 
|Cash Flows from Financing Activities                                        |  |              |          |   |              |   |            |               | 
|Loan from stockholder                                                       |  |              | -        |   |              |   | -          |               | 
|Issuance of common stock, net of offering costs                             |  |              | -        |   |              |   | -          |               | 
|Repayment of insurance financing                                            |  |              | (42,881  | ) |              |   | (41,634    | )             | 
|Proceeds from convertible notes payable                                     |  |              | 142,510  |   |              |   | 133,417    |               | 
|Proceeds from notes payable-related party                                   |  |              | -        |   |              |   | 16,543     |               | 
|Net cash provided by financing activities                                   |  |              | 99,629   |   |              |   | 108,326    |               | 
|                                                                            |  |              |          |   |              |   |            |               | 
|Net Increase (Decrease) in Cash                                             |  |              | (4,099   | ) |              |   | (139,778   | )             | 
|                                                                            |  |              |          |   |              |   |            |               | 
|Cash at Beginning of Period                                                 |  |              | 8,235    |   |              |   | 148,013    |               | 
|Cash at End of Period                                                       |  | $            | 4,136    |   |              | $ | 8,235      |               | 
|                                                                            |  |              |          |   |              |   |            |               | 
|Supplemental Cash Flow Information                                          |  |              |          |   |              |   |            |               | 
|Cash paid for interest                                                      |  | $            | 787      |   |              | $ | 1,275      |               | 
|Cash paid for income taxes                                                  |  | $            | -        |   |              | $ | -          |               | 
|Non-Cash Investing and Financing Activities                                 |  |              |          |   |              |   |            |               | 
|Debt forgiveness                                                            |  | $            | -        |   |              | $ | 160,389    |               | 
|Insurance financing                                                         |  | $            | 51,111   |   |              | $ | 44,141     |               | 
|Stock issued for settlement of accounts payable                             |  | $            | -        |   |              | $ | 49,580     |               | 



The accompanying notes are an integral part
of these consolidated financial statements.



F-6







LORETO RESOURCES CORPORATION

(A Development Stage Company)

Notes to Consolidated Financial Statements



NOTE 1. ORGANIZATION AND DESCRIPTION
OF BUSINESS



Loreto Resources Corporation (the “Company”)
was incorporated on June 28, 2006 in the state of Nevada under the name Loreto Corporation. The Company pursued its original business
plan to create, market, and sell greeting cards to wholesalers and retail customers in shopping malls in its own planned retail
shops. However, in 2008, the Company decided to redirect its business focus and strategy toward identifying and pursuing business
opportunities in the mining sector in South America, more specifically in Peru.



Recently, the Company changed its focus
again and is now looking for quality investment opportunities not necessarily in the mining sector or in South America. The Company
is in the development stage in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”)
Topic No. 915, “Accounting and Reporting by Development Stage Enterprises.”



On July 3, 2008, the Company amended its
articles of incorporation to (1) change its name toLoreto Resources Corporation and (2) increase its authorized capital
stock to 310,000,000 shares of which 300,000,000 shares are common stock, par value $0.001 per share (the “Common Stock”),
and 10,000,000 shares are preferred stock, par value $0.001 per share.



On August 27, 2008, the Company formed
its wholly-owned Cayman Island subsidiary, Loreto Resources Corporation-Peru. This subsidiary was dissolved on March 31, 2011.



NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES



Basis of Presentation



The accompanying consolidated financial
statements as of December 31, 2011 and 2010 and for the years then ended have been prepared in accordance with accounting principles
generally accepted in the United States of America (“U.S. GAAP”).



Use of Estimates and Assumptions



The preparation of financial statements
in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could differ from those estimates.



F-7







Principles of Consolidation



The consolidated financial statements include
the accounts of the Company and its 100% owned subsidiary, Loreto Resources Corporation-Peru, until it was dissolved on March 31,
2011, after elimination of all significant inter-company accounts and transactions.



Cash Equivalents



The Company considers all highly liquid
debt instruments with original maturities of three months or less when acquired to be cash equivalents.



Mineral Exploration and Development
Costs



All exploration expenditures are expensed
as incurred. Significant property acquisition payments for active exploration properties are capitalized. If no minable
ore body is discovered, previously capitalized costs are expensed in the period the property is abandoned. Expenditures to
develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines,
are capitalized and amortized on a unit of production basis over proven and probable reserves.



Income Taxes



In accordance with ASC Topic 740 “Accounting
for Income Taxes,” the provision for income taxes is computed using the asset and liability method. Under the asset and
liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting
and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance
is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.



Basic Earnings per Share



Basic and diluted earnings or loss per
share (“EPS”) amounts in the financial statements are computed in accordance with ASC Topic 260 – 10 “Earnings
per Share,” which establishes the requirements for presenting EPS. Basic EPS is based on the weighted average number
of common shares outstanding. Diluted EPS is based on the weighted average number of common shares outstanding and dilutive common
stock equivalents. Basic EPS is computed by dividing net income/loss available to common stockholders (numerator) by the weighted
average number of common shares outstanding (denominator) during the period. Weighted average number of shares used to calculate
basic and diluted loss per share is considered the same as the effect of dilutive shares is anti-dilutive.



Fair Value of Financial Instruments



The Company estimates the fair value of
financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating
fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current
market exchange. As of December 31, 2011 and 2010, the carrying value of the assets and liabilities approximated fair value due
to the short-term nature and maturity of these instruments.





F-8







Stock Split



On February 2, 2009 and January 15, 2010,
the Company implemented 2-for-1 stock splits. The par value of the common stock was not affected by the stock splits. Upon effectiveness
of the stock splits, each stockholder received two shares of common stock for every share of common stock owned as of February
2, 2009 and again on January 25, 2010, the stock splits’ record dates. The stock split does not affect the amount of common
stock authorized for issuance. All share and per share information has been retroactively adjusted to reflect the reverse stock
split in the consolidated financial statements and in the notes to consolidated financial statements for all periods presented,
to reflect the stock split as if it occurred on the first day of the first period presented.



Stock-based Compensation



The Company determines the fair value of
stock option awards granted to employees in accordance with FASB ASC Topic 718 – 10 and to non-employees in accordance with
FASB ASC Topic 505 – 50.



Recent Accounting Pronouncements



The Company does not expect that the adoption
of recently issued accounting pronouncements will have a material impact on its consolidated financial position, results of operations,
or cash flows.



NOTE 3. GOING CONCERN



During 2011, Loreto has not generated any
revenue and therefore has been unable to generate cash flows sufficient to support its operations and has been dependent on debt
and equity financing. In addition to negative cash flow from operations, Loreto has experienced recurring net losses, and has an
accumulated deficit of approximately $4.0 million as of December 31, 2011.



These factors raise substantial doubt about
the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments
that might be necessary if Loreto is unable to continue as a going concern.



NOTE 4. FORGIVENESS OF DEBT



On December 15, 2011, the Company entered
into a note cancellation agreement with a former director. As per the agreement, the former director agreed to cancel the convertible
promissory notes originally dated November 2, 2010 andMarch 1, 2011,in the amounts of $16,586
and $9,952, respectively, along with the related accrued but unpaid interest. These notes were released without further obligation
of the Company, and a gain of $29,175 was recorded.



F-9







On December 15, 2011, the Company entered
into a note cancellation agreement with a stockholder. As per the agreement, the stockholder
agreed to cancel the convertible promissory notes originally dated November 17, 2010 andMarch
1, 2011,in the amounts of $10,573 and $6,344, respectively, along with the related accrued but unpaid
interest. These notes were released without further obligation of the Company, and a gain of $18,554 was recorded.



During June and August 2010, the Company
entered into release and settlement agreements with certain third party vendors. As per those agreements, the liabilities were
either paid or written off. Two third party vendors were paid a total of $20,000. The amount of $2,800 was paid to the Company’s
former Interim Chief Financial Officer for past services performed. Payable amounts totaling $37,797 related to accounting and
financial services were written off, and a gain was recorded. The amount totaling $160,389 was settled for accounts payable and
accrued salaries due to the Company’s Chief Executive Officer, and considered a contribution to capital.



On November 11, 2010, the Company reached
a settlement agreement with its legal counsel, whereby the legal counsel agreed to forego payment of $49,580 in legal fees due
for the 2009 fiscal year upon delivery of 198,322 restricted shares of the Company’s common stock. The restricted shares
were valued at $0.25 per share.



NOTE 5. CONVERTIBLE PROMISSORY NOTES



On November 2, 2010 and on November 17,
2010, the Company completed closings of a private placement offering of its convertible notes (the “2010 Notes”), totaling
approximately $150,000 in principal, to eight stockholders and one unaffiliated third party. The 2010 Notes bore interest of 10%,
and would have matured on December 31, 2011. Both the principal and accrued interest are deemed mandatorily converted (see below)
on March 15, 2011 at the price paid by investors in that offering, expressed as a percentage of the face amount of debt securities.



On March 15,
2011, the Company completed closings of a private placement offering of its convertible promissory notes, totaling approximately
$90,000 in principal, toeight stockholders and one unaffiliated third party.As of March
1, 2011, the Company deemed the notes from the 2010 offering, along with accrued but unpaid interest, to have been converted, on
a mandatory basis, into new notes on the same terms as the subsequent notes. The subsequent notes bear interest of 10%, mature
on March 31, 2012, and both the principal and accrued interest will be mandatorily converted at a price equal to either (a) the
price per share of stock (or unit of stock and other securities) paid by investors in the next securities offering or other financing
by the Company, if the financing is an issuance of stock (or unit of stock and other securities), or (b) the price paid by investors
in the next securities offering or other financing by the Company, expressed as a percentage of the face amount of debt securities,
if the financing is an issuance of debt securities (or units of debt securities and other securities) (including debt securities
convertible into stock), upon the closing of, and into the securities issued in, the next financing in which the Company sells
at least $1,000,000 of its securities.



F-10







On October 10, 2011, the Company closed
a private placement offering (the “October 2011 Offering”) of its 10% convertible promissory notes (the “October
2011 Notes”). In the October 2011 Offering, the Company sold $52,500 in principal amount of the October 2011 Notes to an
existing investor.



The October 2011 Notes bear interest of
10%, mature on April 9, 2013, and both the principal and accrued interest will be mandatorily converted at a price equal to either
(a) the price per share of stock (or unit of stock and other securities) paid by investors in the next securities offering or other
financing, if the financing is an issuance of stock (or unit of stock and other securities), or (b) the price paid by investors
in the next securities offering or other financing by the Company, expressed as a percentage of the face amount of debt securities,
if the financing is an issuance of debt securities (or units of debt securities and other securities) (including debt securities
convertible into stock), upon the closing of, and into the securities issued in, the next financing in which the Company sells
at least $1,000,000 of its securities.



The Company evaluated the conversion options
under FASB ASC 815-40 for derivative treatment and determined that the conversion options are required to be accounted for as a
derivative upon the aforementioned closing of the next private placement offering. As the closing had not occurred as of the period
ended December 31, 2011, and as per FASB ASC Topic 470-20, the derivative instrument nor the beneficial conversion feature need
not be accounted for as of December 31, 2011.



As of December 31, 2011 and 2010, the Company
owed principal and accrued interest of $270,519 and $152,269, respectively.



NOTE 6. STOCK TRANSACTIONS



On October 3, 2006, the Company issued
40,000,000 common shares to a director for $10,000.



On February 23, 2007, the Company issued
36,000,000 common shares to 36 non-affiliated stockholders for a total of $18,000.



On July 2, 2007, the Company issued 24,000,000
common shares to Magdalena Cruz, then President and CEO, in exchange for her services valued at $4,500.



On February 7, 2008, the Company issued
2,000,000 common shares to Milestone Enhanced Fund Ltd. for $50,000.



On July 18, 2008, 40,000,000 common shares
held by Magdalena Cruz, the director in 2008, were cancelled.



On July 18, 2008, January 15, 2009, and
January 15, 2010, the Company declared two for one (2-for-1) forward stock splits on each common share. All share and per
share amounts have been adjusted retroactively from inception to reflect these splits.



F-11







In September 2008, the Company issued 8,100,000
shares through a private placement to various individuals and entities at the price of $0.25 per share. Total proceeds were
$1,980,313, net of offering costs of $44,687.



Each forward split entitled each Loreto
shareholder of record on the specified dates to receive one additional common share for each one share owned. The stock split did
not affect the amount of common stock authorized for issuance.



On November 11, 2010, the Company reached
a settlement agreement with its legal counsel, whereby the legal counsel agreed to forego payment of $49,580 in legal fees due
for the 2009 fiscal year upon delivery of 198,322 restricted shares of the Company’s common stock. The restricted shares
were valued at $0.25 per share. See Note 4.



NOTE 7. OPTIONS AND WARRANTS



The 2008 Equity Incentive Plan



The Company’s 2008 Equity Incentive
Plan provided for the grant of incentive stock options to employees of the Company and of an affiliate or subsidiary of the Company
and non-statutory stock options, restricted stock, and stock appreciation rights to employees, directors, and consultants of the
Company, and of an affiliate or subsidiary of the Company. A maximum of 16,000,000 common shares are available for issuance.
As of December 31, 2009, options had been granted under the 2008 Plan exercisable for an aggregate of 6,960,000. No options had
been granted during 2011 and 2010. Options granted under the 2008 Plan were generally granted with a strike price equal to market
value and a ten-year term. The outstanding options vested over periods ranging from three months to three years.



Effective July 21, 2008, the President
and CEO of the Company was granted an option to purchase 6,200,000 shares of common stock with a fair value of $1,237,539. The
options were exercisable at $0.25 per share, expired in ten years, and 1/3 per year for 3 years.



On December 8, 2008, a consultant was granted
120,000 options with a fair value of $20,416. The options were exercisable at $0.25 per share, expired in 10 years, and vested
over 3 months.



On January 1, 2009, the Company granted
180,000 options to a consultant with a fair value of $30,546. The options were exercisable at $0.25 per share, vested
equally over 3 months, and expired in 10 years.



On March 8, 2009, the Company granted 120,000
options to a consultant with a fair value of $21,224. The options were exercisable at $0.25 per share, vested equally over
3 months, and expired in 10 years.



On April 1, 2009, the Company granted 120,000
options to a consultant with a fair value of $21,108. The options were exercisable at $0.25 per share, vested equally over
2 months, and expired in 10 years.



F-12







On June 1, 2009, the Company granted options
to purchase (i) 60,000 shares to a consultant with a fair value of $10,754, and (ii) 40,000 shares to a consultant with a fair
value of $7,053. The 60,000 options were exercisable at $0.25 per share, vested equally over 3 months and expired in
10 years. The 40,000 options were exercisable at $0.25 per share, vested over 1 month, and expired in 10 years.



On September 8, 2009, the Company granted
120,000 options to a consultant with a fair value of $21,683. The options were exercisable at $0.25 per share, vested equally
over 3 months, and expired in 10 years.



Stock option activity summary is presented
in the table below:



|                                          |  | Number of Shares |           |  | Weighted- average Exercise Price |   |      | Weighted- average Remaining Contractual Term (years) |  |  | Aggregate Intrinsic Value | 
|----------------------------------------- |  | ---------------- | --------- |  | -------------------------------- | - | ---- | ---------------------------------------------------- |  |  | ------------------------- | 
|Outstanding at December 31, 2008          |  |                  | 6,320,000 |  |                                  | $ | 0.25 |                                                      |  |  | 8.56                      | 
|Granted                                   |  |                  | 640,000   |  |                                  |   | 0.25 |                                                      |  |  | 9.28                      | 
|Exercised                                 |  |                  | —         |  |                                  |   | —    |                                                      |  |  | —                         | 
|Expired / Forfeited                       |  |                  | —         |  |                                  |   | —    |                                                      |  |  | —                         | 
|Outstanding at December 31, 2009          |  |                  | 6,960,000 |  |                                  | $ | 0.25 |                                                      |  |  | 8.63                      | 
|Granted                                   |  |                  | —         |  |                                  |   | —    |                                                      |  |  | —                         | 
|Exercised                                 |  |                  | —         |  |                                  |   | —    |                                                      |  |  | —                         | 
|Expired / Forfeited                       |  |                  | 6,960,000 |  |                                  |   | 0.25 |                                                      |  |  | —                         | 
|Outstanding at December 31, 2011 and 2010 |  |                  | —         |  |                                  |   | —    |                                                      |  |  | —                         | 
|Exercisable at December 31, 2011 and 2010 |  |                  | —         |  |                                  |   | —    |                                                      |  |  | —                         | 



As of December 31, 2009, 2,706,667 options
were vested or exercisable. During 2009, 640,000 options were granted with a weighted average grant date fair value of $0.25. During
2009, the Company recognized related stock-based compensation expense of $549,720. As of December 31, 2009, there was $640,808
of total unrecognized compensation cost related to non-vested stock options which had been originally expected to be recognized
over a weighted-average period of 1.55 years.



The fair value of the options granted during
the twelve months ended December 31, 2009 was estimated at the date of grant using the Black-Scholes option-pricing model with
the following assumptions:





|Market value of stock on grant date |  | $ | 0.25           | (1)
|----------------------------------- |  | - | -------------- | ---
|Risk-free interest rate             |  |   | 1.87%-3.28     | %  
|Dividend yield                      |  |   | 0.00           | %  
|Volatility factor                   |  |   | 118.98%-129.45 | %  
|Weighted average expected life      |  |   | 5.5 years      | (2)
|                                    |  |   |                |    
|Expected forfeiture rate            |  |   | 5              | %  





F-13







|(1) | The market value of the stock was calculated based on the July 25, 2008 private placement that sold 8,100,000 shares at $0.25 per share.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------



|(2) | Due to a lack of stock option exercise history, the Company used the simplified method under SAB 107 to estimate expected term.
|--- | -------------------------------------------------------------------------------------------------------------------------------



No options were granted during 2011 and
2010. On May 5, 2010, the Company’s Chief Executive Officer’s stock option agreement was terminated. As such, 6,200,000
options were cancelled. During May and June 2010, the remaining stock option agreements were terminated, resulting in the cancellation
of 760,000 options. During 2010, the Company recognized stock-based compensation expense of $640,826 related to stock options.
The Company did not have stock-based compensation expense in 2011.



There are no options or warrants outstanding
at December 31, 2011 and 2010.



NOTE 8. RELATED PARTY TRANSACTIONS



Starting in November 2009, Li3 Energy,
Inc., a company in which Loreto’s director and former Chief Executive Officer functioned in the same capacity, started utilizing
the administrative personnel and office space of Loreto, which had an office located in Lima, Peru. As such, certain net common
costs initially paid by Loreto during 2011 and 2010, were allocable to the related party company, as follows:



|                                   |  | December 31, |       
|---------------------------------- |  | ------------ | ------
|                                   |  | 2011         |       
|                                   |  |              |       
|Administrative salaries            |  | $            | 2,380 
|Utilities and maintenance expenses |  |              | 8,332 
|                                   |  | $            | 10,712



The related receivable due from the related
party company arising from these common costs, amounting to $10,712, is shown as a due from related party in the consolidated balance
sheet as of December 31, 2011 and 2010.



This arrangement ceased on July 31, 2010,
and all common cost obligations on a go-forward basis are the responsibility of the related party company.



On November 2, 2010 and on March 15, 2011,
the Company completed closings of a private placement offering of its convertible promissory notes, totaling $16,586 and $9,952
in principal, respectively, to a former director. These notes were later cancelled. See Note 5.



NOTE 9. INCOME TAXES



Loreto Resources Corporation files a U.S.
Federal income tax return. The Company’s foreign subsidiary files income tax returns in its jurisdictions. The components
of the consolidated net operating loss before income tax benefit are as follows:



F-14







|         |  | 2011 |         |  | 2010 |  
|-------- |  | ---- | ------- |  | ---- | -
|         |  |      |         |  |      |  
|U.S.     |  | $    | 209,817 |  |      | $
|Non-U.S. |  |      | 1,934   |  |      |  
|Total    |  |      | 211,751 |  |      |  



The components of the Company’s deferred
tax assets at December 31, 2011 and 2010 are as follows:



|                                     |  | 2011 |         |   | 2010 |  
|------------------------------------ |  | ---- | ------- | - | ---- | -
|                                     |  |      |         |   |      |  
|Deferred tax assets and liabilities: |  |      |         |   |      |  
|Loss carry-forwards                  |  | $    | 71,338  |   |      | $
|Stock-based compensation             |  |      | -       |   |      |  
|Total deferred tax assets            |  |      | 71,338  |   |      |  
|Valuation allowance                  |  |      | (71,338 | ) |      |  



As of December 31, 2011, net operating
loss carry-forwards expire from 2029 to 2031. These net operating loss carry-forwards are available to reduce future taxable income.
However, a change in ownership, as defined by federal income tax regulations, could significantly limit the Company’s ability
to utilize its U.S. net operating loss carry-forwards. Additionally, because federal tax laws limit the time during which the net
operating loss carry-forwards may be applied against future taxes, if the Company fails to generate taxable income prior to the
expiration dates it may not be able to fully utilize the net operating loss carry-forwards to reduce future income taxes. As the
Company has had cumulative losses and there is no assurance of future taxable income, valuation allowances have been recorded to
fully offset the deferred tax asset at December 31, 2011 and 2010.



NOTE 10. GENERAL AND ADMINISTRATIVE
EXPENSES



The following table shows the major components
of general and administrative expenses during 2011 and 2010:



|                                                     |  | 2011 |         |  | 2010 |  
|---------------------------------------------------- |  | ---- | ------- |  | ---- | -
|Compensation                                         |  | $    | -       |  |      | $
|Professional Fees (accounting, legal and consulting) |  |      | 179,548 |  |      |  
|Other general and administrative expenses            |  |      | 54,719  |  |      |  
|                                                     |  | $    | 234,267 |  |      | $



Compensation for the years ended December
31, 2011 and 2010 was composed primarily of stock-based compensation of $0 and $640,826, respectively.



F-15







NOTE 11. SUBSEQUENT EVENTS



On February 1, 2012, the Company closed
a private placement offering (the “February 2012 Offering”) of its 10% convertible promissory notes (the “February
2012 Notes”). In the February 2012 Offering, the Company sold $50,000 in principal amount of the February 2012 Notes to one
existing investor. The February 2012 Notes mature on July 31, 2013 and will be automatically converted at the initial closing of
the Company’s next private placement in which it sells at least $1,000,000 of its securities, so long as such offering closes
concurrent with the closing of a related merger or other acquisition transaction.



F-16