U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
quarterly period ended: June 30, 2009





o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
transition period from ________ to _________





Commission
file number: 000-52901





PRETORIA RESOURCES TWO,
INC. (Name of
Small Business Issuer in its charter)


Nevada
              26-0383696(State
      or other jurisdiction of Identification No.)
              (I.R.S.
      Employer incorporation or
organization)


4392 Enchantment Cove Lane,
Charlotte North Carolina 28216


Address
of registrant's principal executive offices





704-408-7575


Issuer’s
telephone number







(Former
name, former address and former


fiscal
year, if changed since last report)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. x Yes   
o No





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). o Yes   
o No





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





Large
      accelerated filer   o
            Accelerated
      filer     oNon-accelerated
      filer    o  (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). x
Yes    o No





APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS





Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. o Yes  o No





APPLICABLE
ONLY TO CORPORATE ISSUERS





State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date:  At August 12, 2009 there were
1,000,000 shares of common stock outstanding.








PART
I — FINANCIAL INFORMATION





Item
1. Financial Statements.





PageBalance
      Sheet – June 30, 2009 (unaudited) and December 31, 2008
      (audited)
            
            F-1Statement
      of Operations for the three and six months ended June 30, 2009 and
      2008
              (unaudited)
      and cumulative since inception (May 25, 2007)
            
            F-2Statement
      of Stockholders Deficit
            
            F-3Statement
      of Cash Flows for the three months ended June 30, 2009 and 2008
      (unaudited)
              and
      cumulative since inception (May 25, 2007)
            
            F-4Notes
      to Financial Statements (Unaudited)
            
            F-5




2




Pretoria Resources Two, Inc.(A
      Development Stage Company)Balance
      Sheet
  As ofJune
      30, 2009
              
              
              December
      31, 2008(unaudited)
              
              
              (audited)ASSETSCURRENT ASSETS:Cash
              
              $
              939
              
              
              $
              46TOTAL
      CURRENT ASSETS
              
              
              939
              
              
              
              46TOTAL
      ASSETS
              
              $
              939
              
              
              $
              46LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT LIABILITIES:Related
      Party Note Payable
              
              
              9,437
              
              
              
              -Note
      Payable
              
              
              15,000
              
              
              
              15,000Accrued
      Expenses
              
              
              2,776
              
              
              
              6,315TOTAL
      CURRENT LIABILITIES
              
              
              27,213
              
              
              
              21,315TOTAL
      LIABILITIES
              
              
              27,213
              
              
              
              21,315STOCKHOLDERS' DEFICITPreferred
      stock ($0.0001 par value; 10,000,000 shares authorized; no
      sharesissued
      and outstanding at June 30, 2009 and December 31, 2008)
              
              
              -
              
              
              
              -Common
      stock ($0.0001 par value; 100,000,000 shares authorized:1,000,000
      issued and outstanding at June 30, 2009 and December 31,
    2008)
              
              
              100
              
              
              
              100Retained
      Deficit
              
              
              (26,374
              )
              
              
              (21,369
              )TOTAL
      STOCKHOLDERS' DEFICIT
              
              
              (26,274
              )
              
              
              (21,269
              )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
              
              $
              939
              
              
              $
              46
  F-1
 
 Pretoria
      Resources Two, Inc.(A
      Development Stage Company)Statement
      of Operations--Unaudited
  CumulativeFor
      the three months ended
              
              
              For
      the six months ended
              
              
              Total
      Since InceptionJune
      30, 2009
              
              
              June
      30, 2008
              
              
              June
      30, 2009
              
              
              June
      30, 2008
              
              
              May 25, 2007REVENUES:Income
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Total
      Revenue
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -EXPENSES:Selling,
      General and Administrative
              
              
              1,064
              
              
              
              12
              
              
              
              1,506
              
              
              
              12
              
              
              
              3,149Professional
      Fees
              
              
              1,200
              
              
              
              500
              
              
              
              2,700
              
              
              
              500
              
              
              
              20,448Total
      Expenses
              
              
              2,264
              
              
              
              512
              
              
              
              4,206
              
              
              
              512
              
              
              
              23,597Loss
      from operations
              
              $
              (2,264
              )
              
              $
              (512
              )
              
              $
              (4,206
              )
              
              $
              (512
              )
              
              $
              (23,597
              )OTHER INCOME/(EXPENSE):Interest
      Expense
              
              
              (477
              )
              
              
              (1,100
              )
              
              
              (799
              )
              
              
              (1,100
              )
              
              
              (2,777
              )NET
      LOSS
              
              $
              (2,741
              )
              
              $
              (1,612
              )
              
              $
              (5,005
              )
              
              $
              (1,612
              )
              
              $
              (26,374
              )Basic
      and fully diluted net loss per common share:
              
              $
              (0.00
              )
              
              $
              (0.00
              )
              
              $
              (0.01
              )
              
              $
              (0.00
              )
              
              $
              (0.03
              )Weighted
      average common shares outstanding
              
              
              1,000,000
              
              
              
              1,000,000
              
              
              
              1,000,000
              
              
              
              1,000,000
              
              
              
              1,000,000
  F-2
 
  Pretoria Resources Two, Inc.(A
      Development Stage Company)Statement
      of Stockholders' Deficit--Unaudited
  AdditionalCommon
      Stock
              
              
              Preferred
      stock
              
              
              Paid-in
              
              
              DeficitShares
              
              
              Amount
              
              
              Shares
              
              
              Amount
              
              
              Capital
              
              
              AccumulatedBalances,
      December 31, 2007
              
              
              1,000,000.00
              
              
              $
              100
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              (9,895
              )Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (11,474
              )Capital
      Contributions
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Issuance
      of common shares
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Balances,
      December 31, 2008
              
              
              1,000,000
              
              
              $
              100
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              (21,369
              )Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (5,005
              )Balances,
      June 30, 2009
              
              
              1,000,000
              
              
              $
              100
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              (26,374
              )
  F-3
 
  Pretoria Resources Two, Inc.(A
      Development Stage Company)Statement
      of Cash Flows--Unaudited
  CumulativeFor
      the three months ended
              
              
              TotalsJune
      30,
              
              
              Since
      Inception2009
              
              
              2008
              
              
              May 25, 2007CASH FLOWS FROM OPERATING
      ACTIVITIES:Net
      loss
              
              $
              (5,005
              )
              
              $
              (1,612
              )
              
              $
              (26,374
              )Adjustments
      to reconcile net (loss) to net cash used in operations:Changes
      in Assets and Liabilities:Increase/(decrease)
      in Accrued Expenses
              
              
              (3,539
              )
              
              
              1,100
              
              
              
              2,776NET
      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
              
              
              (8,544
              )
              
              
              (512
              )
              
              
              (23,598
              )CASH FLOWS FROM FINANCING
      ACTIVITIES:Note
      Payable to Related Party
              
              
              9,437
              
              
              
              -
              
              
              
              9,437Note
      Payable
              
              
              -
              
              
              
              -
              
              
              
              15,000Capital
      Stock purchase
              
              
              -
              
              
              
              -
              
              
              
              100NET
      CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
              
              
              9,437
              
              
              
              -
              
              
              
              24,537NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
              
              
              893
              
              
              
              (512
              )
              
              
              939CASH
      AND CASH EQUIVALENTS,BEGINNING
      OF THE PERIOD
              
              
              46
              
              
              
              5,204
              
              
              
              -END
      OF THE PERIOD
              
              $
              939
              
              
              $
              4,692
              
              
              $
              939SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATION:CASH
      PAID DURING THE PERIOD FOR:Interest
              
              $
              -
              
              
              $
              -
              
              
              $
              -Taxes
              
              $
              -
              
              
              $
              -
              
              
              $
              -
  F-4
 
 PRETORIA
RESOURCES TWO, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS (UNAUDITED)
 FOR
THE PERIOD ENDED JUNE 30, 2009
 
 NOTE A- SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 Business Activity-
Pretoria Resources Two, Inc. (f/k/a/ Pretoria Resources, Inc.)  (“The
Company”) was organized under the laws of the State of Nevada on May 25, 2007 as
a corporation. The Company’s objective is to acquire or merge with a target
business or company in a business combination.
 
 Basis of
Presentation- The financial statements included herein were prepared
under the accrual basis of accounting.
 
 Cash and Cash
Equivalents- For purposes of the Statement of Cash Flows, the Company
considers liquid investments with an original maturity of three months or less
to be cash equivalents.
 
 Management’s Use of
Estimates- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates. The financial statements above reflect all of the costs of
doing business.
 
 Revenue Recognition-
The Company’s policy is to recognize income when it is earned.
 
 Comprehensive Income (Loss)
- The Company adopted Financial Accounting Standards Board Statement of
Financial Accounting Standards (SFAS) No. 130, “Reporting Comprehensive
Income” which establishes standards for the reporting and display of
comprehensive income and its components in the financial statements. There were
no items of comprehensive income (loss) applicable to the Company during the
period covered in the financial statements.
 
 Net Income per Common
Share- Statement of Financial Accounting Standards (SFAS) No. 128
requires dual presentation of basic and diluted earnings per share (EPS) with a
reconciliation of the numerator and denominator of the EPS computations. Basic
earnings per share amounts are based on the weighted average shares of common
stock outstanding. If applicable, diluted earnings per share would assume the
conversion, exercise or issuance of all potential common stock instruments such
as option, warrants and convertible securities, unless the effect is to reduce a
loss or increase earnings per share. Accordingly, this presentation has been
adopted for the period presented. There were no adjustments required to net
income for the period presented in the computation of diluted earnings per
share.
 
 Deferred Taxes-
Income taxes are provided in accordance with Statement of Financial Accounting
Standards (SFAS) No. 109, “Accounting for Income
Taxes”. A deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting and net operating loss-carry
forwards.
  F-5
 
 PRETORIA
RESOURCES TWO, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE
PERIOD ENDED JUNE 30, 2009
 
 NOTE A- SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or the entire deferred
tax asset will not be realized. Deferred tax assets and liabilities are adjusted
for the effect of changes in tax laws and rates on the date of
enactment.
 
 Fair Value of Financial
Instruments- The carrying amounts reported in the balance sheet for cash,
accounts receivable and payable approximate fair value based on the short-term
maturity of these instruments.
 
 Accounts Receivable-
Accounts deemed uncollectible are written off in the year they become
uncollectible. As of June 30, 2009, the balance in Accounts Receivable was
$0.
 
 Impairment of Long-Lived
Assets- The Company evaluates the recoverability of its fixed assets and
other assets in accordance with Statement of Financial Accounting Standards
(SFAS) No. 144, “Accounting
for the Impairment or Disposal of Long-Lived Assets”. SFAS 144 requires
recognition of impairment of long-lived assets in the event the net book value
of such assets exceeds its expected cash flows. If so, it is considered to be
impaired and is written down to fair value, which is determined based on either
discounted future cash flows or appraised values. The Company adopted the
statement on inception. No impairments of these types of assets were recognized
during the period ended June 30, 2009.
 
 Stock-Based
Compensation- The Company accounts for stock-based compensation using the
fair value method of Statement of Financial Accounting Standards (SFAS) No.
123R. This statement requires a public entity to measure the cost of employee
services received in exchange for an award of equity instruments based on the
grant-date fair value of the award (with limited exceptions). That cost will be
recognized over the period during which an employee is required to provide
service in exchange for the award- the requisite service period (usually the
vesting period). No compensation cost is recognized for equity instruments for
which employees do not render the requisite service.
 
 Fair Value for Financial
Assets and Financial Liabilities- The Company has adopted Statement of
Financial Accounting Standards (SFAS) No. 159, “The Fair Value for Financial Assets
and Financial Liabilities- Including an Amendment of FASB Statement No.
115”. This statement permits entities to choose to measure many financial
instruments and certain other items at value. The objective is to improve
financial reporting by providing entities with the opportunity to mitigate
volatility in reporting earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. This is expected to expand the use of fair value measurement, which
is consistent with the Board’s long-term measurement objectives for accounting
for financial instruments. No such assets or liabilities were recognized during
the period ending June 30, 2009.
  F-6
  PRETORIA
RESOURCES TWO, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE
PERIOD ENDED JUNE 30, 2009
 
 NOTE A- SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Recent Accounting
Pronouncements—In March 2008, the FASB issued Statement of Financial
Accounting Standards No. 161, “Disclosures about Derivative Instruments and
Hedging Activities—an amendment of FASB Statement No. 133”.  This
statement requires enhanced disclosures about an entity’s derivative and hedging
activities and thereby improves the transparency of financial
reporting.  This Statement changes the disclosure requirements for
derivative instruments and hedging activities. Entities are required to provide
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows.  This Statement is
effective for financial statements issued for fiscal years and interim periods
beginning after November 15, 2008, with early application encouraged. This
Statement encourages, but does not require, comparative disclosures for earlier
periods at initial adoption. The adoption of this standard is not expected to
have a material effect on the Company’s results of operations or financial
position.
 
 In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” SFAS No. 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. It is effective 60 days following the SEC’s approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles.” The adoption of this statement is not expected to have a material
effect on the Company’s financial statements.
 
 In
May 2008, the FASB issued SFAS No. 163, “Accounting for Financial
Guarantee Insurance Contracts — An interpretation of FASB Statement
No. 60.” SFAS No. 163 requires that an insurance enterprise recognize
a claim liability prior to an event of default when there is evidence that
credit deterioration has occurred in an insured financial obligation. It also
clarifies how Statement No. 60 applies to financial guarantee insurance
contracts, including the recognition and measurement to be used to account for
premium revenue and claim liabilities, and requires expanded disclosures about
financial guarantee insurance contracts. It is effective for financial
statements issued for fiscal years beginning after December 15, 2008,
except for some disclosures about the insurance enterprise’s risk-management
activities. SFAS No. 163 requires that disclosures about the
risk-management activities of the insurance enterprise be effective for the
first period beginning after issuance. Except for those disclosures, earlier
application is not permitted. The adoption of this statement is not expected to
have a material effect on the Company’s financial statements.
  F-7
  PRETORIA
RESOURCES TWO, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE
PERIOD ENDED JUNE 30, 2009
 
 NOTE B-SUPPLEMENTAL CASH
FLOW INFORMATION
 
 Supplemental
disclosures of cash flow information for the year ended June 30, 2009 is
summarized as follows:
 Cash paid
during the year ended June 30, 2009 for interest and income taxes:
 
 Income
      taxes
              $
      NONEInterest
              $
      NONE
 
 NOTE C-SEGMENT
REPORTING
 
 In June,
1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 131,”Disclosures About Segments of an
Enterprises and Related Information”. This Statement requires companies
to report information about operating segments in interim and annual financial
statements. It also requires segment disclosures about products and services,
geographic areas, and major customers. The Company determined that it did not
have any separately reportable operating segments as of June 30,
2009.
 
 NOTE D-INCOME
TAXES
 
 Due to
the operating loss and the inability to recognize an income tax benefit there is
no provision for current or deferred federal or state income taxes for the
period from May 25, 2007 through June 30, 2009.
 
 Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amount used for federal and state income tax purposes.
 
 The
Company’s total deferred tax asset, calculated using federal and state effective
tax rates, as of June 30, 2009 is as follows:
 
 Total
      Deferred Tax Assets
              
              $
              (4,951
              )Valuation
      Allowance
              
              
              4,951Net
      Deferred Tax Asset
              
              $
              NONE
  The
reconciliation of income taxes computed at the federal statutory income tax rate
to total income taxes for the period from inception through June 30, 2009 is as
follows:
 
 Income tax computed at the federal statutory
      rate
              
              
              34.0
              %State
      income tax, net of federal benefit
              
              
              0.0
              %Total
              
              
              34.0
              %Valuation
      allowance
              
              
              -34.0
              %Total deferred tax asset
              
              
              0.0
              %
  F-8
  PRETORIA
RESOURCES TWO, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE
PERIOD ENDED JUNE 30, 2009
  NOTE D-INCOME TAXES
(CONT.)
 
 Because
of the Company’s lack of earnings history, the deferred tax asset has been fully
offset by a valuation allowance. The valuation allowance increased (decreased)
by approximately $ 1,043.
 
 As of
June 30, 2009, the Company had a federal and state net operating loss carry
forward in the amount of approximately $ 14,563, which expires in the year
ending 2028.
 
 NOTE E-GOING
CONCERN
 
 The
accompanying financial statements have been prepared on a going concern basis,
which assumes the Company will realize its assets and discharge its liabilities
in the normal course of business.  As reflected in the accompanying
financial statements, the Company has a deficit accumulated during the
development stage of $26,374, used cash from operations of $25,598 since its
inception, and has a negative working capital of $26,274 at June 30,
2009.
 
 The
Company’s ability to continue as a going concern is dependent upon its ability
to generate future profitable operations and/or to obtain the necessary
financing to meet its obligations and repay its liabilities arising from normal
business operations when they come due.  The Company’s ability to
continue as a going concern is also dependent on its ability to find a suitable
target company and enter into a possible reverse merger with such
company.  Management’s plan includes obtaining additional funds by
equity financing through a reverse merger transaction and/or related party
advances; however there is no assurance of additional funding being
available.  These circumstances raise substantial doubt about the
Company’s ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might arise as a result of this
uncertainty.
 
 NOTE F—SHAREHOLDER
LOAN/RELATED PARTY
 
 The
Company has an outstanding promissory note with a related party.  The
total amount of the loan is $9,437 and it is payable on demand, the annual
interest rate on the note is 8%.  Accrued interest not paid as of June
30, 2009 is $177.
 
 NOTE G—NOTE
PAYABLE
 
 The
Company has an outstanding Note Payable with a principal amount of $15,000 that
is payable on demand with an annual interest rate of 8%.  Accrued
interest not paid as of June 30, 2009 is $2,600.
  F-9
  PRETORIA
RESOURCES TWO, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS (UNAUDITED)
 FOR THE
PERIOD ENDED JUNE 30, 2009
 
 NOTE G-CAPITAL
STOCK
 
 The
Company is authorized to issue 100,000,000 common shares at $.0001 par value per
share.
 
 During
the period from inception (May 25, 2007) through June 30, 2009, the Company
issued an aggregate of 2,000,000 shares of common stock, including:
  Allison
      Carroll
              
              
              1,000,000Gail
      Davis
              
              
              900,000Barbara
      Deadwiley
              
              
              100,000
  On
December 23, 2008, Gail Davis and Barbara Dead Wiley resigned as officers and as
members of the Company’s board and returned all of their shares of common stock
to the Company for cancellation.
 
 As of
June 30, 2009, Allison Carroll is the only shareholder.  She owns
1,000,000 shares of common stock.
 
 The
Company is authorized to issue 10,000,000 preferred shares at $.0001 par value
per share.  During the period from inception (May 25, 2007) through
June 30, 2009, the Company issued no preferred shares.
 
 NOTE H-DEVELOPMENT STAGE
COMPANY
 
 The
Company is in the development stage as of June 30, 2009 and to date has had no
significant operations. Recovery of the Company assets is dependent on future
events, the outcome of which is indeterminable. In addition, successful
completion of the Company’s development program and its transition, ultimately,
to attaining profitable operations is dependent upon obtaining adequate
financing to fulfill its development activities and achieving a level of sales
adequate to support the Company’s cost structure.
  F-10




Item
2. Management’s Discussion and Analysis or Plan of Operation.





Overview.





Pretoria
Resources Two, Inc. (“we”, “us”, the “Company” or like terms) was incorporated
in the State of Nevada on September 26, 2007 and is the successor in interest to
Pretoria Resources, Inc., a Delaware corporation, upon the merger of the
companies effective October 1, 2007.  We were formed to serve as a
vehicle to acquire, through a reverse acquisition, merger, capital stock
exchange, asset acquisition or other similar business combination (“Business
Combination”), an operating or development stage business ("Target Business")
which desires to utilize our status as a reporting corporation under the
Securities Exchange Act of 1934.  We are currently in the process of
identifying and evaluating targets for a Business Combination.  We are
not presently engaged in, and will not engage in, any substantive commercial
business operations unless and until we consummate a Business
Combination.





Our
management has broad discretion with respect to identifying and selecting a
prospective Target Business.  We have not established any specific
attributes or criteria (financial or otherwise) for prospective Target
Businesses.  Our sole officer and director has never served as an
officer or director of a development stage public company with the business
purpose of acquiring a Target Business.  Accordingly, he may not
successfully identify a Target Business or conclude a Business
Combination.   To the extent we affect a Business Combination
with a financially unstable company or an entity in its early stage of
development or growth, including entities without established records of sales
or earnings, we may be affected by numerous risks inherent in the business and
operations of financially unstable and early stage or potential emerging growth
companies.  If we consummate a Business Combination with a foreign
entity, we will be subject to all of the risks attendant to foreign
operations.  Although our management will endeavor to evaluate the
risks inherent in a particular Target Business, we cannot assure you that we
will properly ascertain or assess all significant risk factors.





We expect
that in connection with any Business Combination, we will issue a significant
number of shares of our common stock (equal to at least 80% of the total number
of shares outstanding after giving effect to the transaction and likely, a
significantly higher percentage) in order to ensure that the Business
Combination qualifies as a “tax free” transaction under federal tax
laws.  The issuance of additional shares of our capital
stock:




·
            will
      significantly reduce the equity interest of our stockholders;
      and





·
            will
      cause a change in and likely result in the resignation or removal of one
      or more of our present officers and
directors.





Our
management anticipates that the Company likely will affect only one Business
Combination, due primarily to our financial resources and the dilution of
interest for present and prospective stockholders, which is likely to occur as a
result of our management's plan to offer a controlling interest to a Target
Business in order to achieve a tax-free reorganization.  This lack of
diversification should be considered a substantial risk in investing in us
because it will not permit us to offset potential losses from one venture
against potential gains from another.





Liquidity and Capital
Resources.





At June
30, 2009, we had less than $1,000 of cash on hand.  During the next
twelve months we anticipate that we will incur costs and expenses in connection
with the preparation and filing of reports under the Securities Exchange Act and
the identification and evaluation of targets for a Business
Combination.  Management expects to fund additional costs and expenses
which may be incurred in connection with due diligence activities and a Business
Combination through loans or further investment in the Company, as and when
necessary.  We cannot provide investors with any assurance that we
will have sufficient capital resources to identify a suitable Target Business,
to conduct effective due diligence as to any Target Business or to consummate a
Business Combination.  As a result of our negative working capital,
our losses since inception and our failure to generate revenues from operations,
our financial statements include a note in which our auditor has expressed doubt
about our ability to continue as a "going concern."




3





Results of
Operations.





Since our inception, we have not
generated any revenues.  We do not expect to engage in any activities,
other than seeking to identify a Target Business, unless and until such time as
we enter into a Business Combination with a Target Business, if
ever.  We cannot provide investors with any assessment as to the
nature of a Target Business’s operations or speculate as to the status of its
products or operations, whether at the time of the Business Combination it will
be generating revenues or its future prospects.





Item
3. Quantitative and Qualitative Disclosures About Market Risk.





Not applicable.





Item
4(T). Controls and Procedures.





We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in the reports we file under the Securities
Exchange Act of 1934 (Exchange Act) is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and forms, and
that such information is accumulated and communicated to management, consisting
of our principal executive officer, who also is our principal financial officer,
as appropriate, to allow timely decisions regarding required
disclosure.  Management necessarily applied its judgment in assessing
the costs and benefits of such controls and procedures, which, by their nature,
can provide only reasonable assurance regarding management’s control
objectives.





As of the
end of the period covered by this quarterly report, we carried out an
evaluation, under the supervision and with the participation of management, of
the effectiveness, design and operation of our disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)).  The Company’s disclosure controls and procedures are
designed to provide a reasonable level of assurance of achieving the Company’s
disclosure control objectives.  Based upon the foregoing, management
concluded that our disclosure controls and procedures are effective at providing
reasonable assurance that all material information required to be included in
our Exchange Act reports is reported in a timely manner.  In addition,
based on such evaluation, we have identified no changes in our internal control
over financial reporting that occurred during the most recent fiscal quarter
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.




4




PART
II — OTHER INFORMATION





Item
1. Legal Proceedings.





The
Company is not a party to any legal proceeding or litigation.





Item
1A. Risk Factors.





Smaller
reporting companies are not required to provide the information required by this
item.





Item
2. Changes in Securities and Small Business Issuer Purchase of Equity
Securities.





(a) During
the three months ended June 30 2009, the Company did not issue any
securities.





(b) None.





(c)
None.





Item
3. Defaults Upon Senior Securities.





None.





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





None.





Item
5. Other Information.





None.





Item
6. Exhibits.





Index to
Exhibits




Exhibit
            
            Description31.1
            
            Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with
      respect to the registrant’s Quarterly Report on Form 10-Q for the quarter
      ended June 30, 2009.32.1
            
            Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes Oxley Act of
2002.




5





SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused the Report to be signed on its behalf by the
undersigned thereunto duly authorized.




PRETORIA RESOURCES TWO,
      INC.Date: August 13,
      2008
              By:
              /s/ Allison
      CarrollAllison
      Carroll




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