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: March
31, 2010





 ̈ 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 28216Address
      of registrant's principal executive
offices





704-408-7575


Issuer’s
telephone number





(Former
      name, former address and formerfiscal
      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    ̈ 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).


 ̈ Yes  x 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    ̈
                  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). x Yes  ̈ 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.


 ̈  Yes    ̈  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 May 12, 2010 there were
1,000,000 shares of common stock outstanding.







PART
I — FINANCIAL INFORMATION




Item
1. Financial Statements.




PageBalance
      Sheet – March 31, 2010 (unaudited) and December 31, 2009
      (audited)
                F-1Statement
      of Operations for the three months ended March 31, 2010 and
      2009
                  (unaudited)
      and cumulative since inception (May 25, 2007)
                F-2Statement
      of Stockholders Deficit as of March 31, 2010
                F-3Statement
      of Cash Flows  for the three months ended March 31, 2010 and
      2009 (unaudited)
                  and
      cumulative since inception (May 25, 2007)
                F-4Notes
      to Financial Statements (Unaudited)
                F-5




1




Pretoria Resources Two, Inc.(A
      Development Stage Company)Balance
      Sheet
 
 As ofMarch 31, 2010
                                        
                                        
                                        December 31, 2009(Unaudited)
                                        
                                        
                                        (Audited)ASSETSCURRENT ASSETS:Cash
                                        
                                        $
                                        15
                                        
                                        
                                        $
                                        51TOTAL
      CURRENT ASSETS
                                        
                                        
                                        15
                                        
                                        
                                        
                                        51TOTAL
      ASSETS
                                        
                                        $
                                        15
                                        
                                        
                                        $
                                        51LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT LIABILITIES:Related
      Party Note Payable
                                        
                                        
                                        12,177
                                        
                                        
                                        
                                        12,177Note
      Payable
                                        
                                        
                                        15,000
                                        
                                        
                                        
                                        15,000Accounts
      Payable
                                        
                                        
                                        3,750
                                        
                                        
                                        
                                        -Accrued
      Expenses
                                        
                                        
                                        4,952
                                        
                                        
                                        
                                        3,915TOTAL
      CURRENT LIABILITIES
                                        
                                        
                                        35,879
                                        
                                        
                                        
                                        31,092TOTAL
      LIABILITIES
                                        
                                        
                                        35,879
                                        
                                        
                                        
                                        31,092STOCKHOLDERS' DEFICITPreferred
      stock ($0.0001 par value; 10,000,000 shares authorized; no
      sharesissued
      and outstanding at March 31, 2010 and December 31, 2009)
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Common
      stock ($0.0001 par value; 100,000,000 shares authorized:1,000,000
      issued and outstanding at March 31, 2010 and December 31,
                                          2009)
                                        
                                        
                                        100
                                        
                                        
                                        
                                        100Retained
      Deficit
                                        
                                        
                                        (35,964
                                        )
                                        
                                        
                                        (31,141
                                        )TOTAL
      STOCKHOLDERS' DEFICIT
                                        
                                        
                                        (35,864
                                        )
                                        
                                        
                                        (31,041
                                        )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                                        
                                        $
                                        15
                                        
                                        
                                        $
                                        51
 
 F-1
  Pretoria
      Resources Two, Inc.(A
      Development Stage Company)Statement
      of Operations (Unaudited)
 
 For the three months
                              
                              
                              Cumulative Totalended March 31,
                              
                              
                              Since Inception2010
                              
                              
                              2009
                              
                              
                              May 25, 2007REVENUES:Income
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -Total
      Revenue
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -EXPENSES:Selling,
      General and Administrative
                              
                              
                              36
                              
                              
                              
                              442
                              
                              
                              
                              4,614Professional
      Fees
                              
                              
                              3,750
                              
                              
                              
                              1,500
                              
                              
                              
                              26,398Total
      Expenses
                              
                              
                              3,786
                              
                              
                              
                              1,942
                              
                              
                              
                              31,012Loss
      from operations
                              
                              $
                              (3,786
                              )
                              
                              $
                              (1,942
                              )
                              
                              $
                              (31,012
                              )OTHER INCOME/(EXPENSE):Interest
      Expense
                              
                              
                              (1,037
                              )
                              
                              
                              (322
                              )
                              
                              
                              (4,952
                              )NET
      LOSS
                              
                              $
                              (4,823
                              )
                              
                              $
                              (2,264
                              )
                              
                              $
                              (35,964
                              )Basic
      and fully diluted net loss per common share:
                              
                              $
                              (0.00
                              )
                              
                              $
                              (0.00
                              )
                              
                              $
                              (0.04
                              )Weighted
      average common shares outstanding
                              
                              
                              1,000,000
                              
                              
                              
                              1,000,000
                              
                              
                              
                              1,000,000
 
 F-2
  Pretoria Resources Two, Inc.(A
      Development Stage Company)Statement
      of Stockholders' Deficit
(Unaudited)
 
 DeficitAdditional
                        
                        
                        AccumulatedCommon Stock
                        
                        
                        Preferred stock
                        
                        
                        Paid-in
                        
                        
                        SinceInceptionShares
                        
                        
                        Amount
                        
                        
                        Shares
                        
                        
                        Amount
                        
                        
                        Capital
                        
                        
                        May
      25, 2007Balances,
      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
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (9,772
                        )Balances,
      December 31, 2009
                        
                        
                        1,000,000
                        
                        
                        $
                        100
                        
                        
                        
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        (31,141
                        )Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (4,823
                        )Balances,
      March 31, 2010
                        
                        
                        1,000,000
                        
                        
                        $
                        100
                        
                        
                        
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        (35,964
                        )
 
 F-3
  Pretoria Resources Two, Inc.(A
      Development Stage Company)Statement
      of Cash Flows (Unaudited)
 
 CumulativeFor the three months ended
                              
                              
                              TotalsMarch 31,
                              
                              
                              Since Inception2010
                              
                              
                              2009
                              
                              
                              May 25, 2007CASH FLOWS FROM OPERATING
      ACTIVITIES:Net
      loss
                              
                              $
                              (4,823
                              )
                              
                              $
                              (2,264
                              )
                              
                              $
                              (35,964
                              )Adjustments
      to reconcile net (loss) to net cash used in operations:Changes
      in Assets and Liabilities:Increase/(decrease)
      in Accounts Payable
                              
                              
                              3,750
                              
                              
                              
                              -
                              
                              
                              
                              3,750Increase/(decrease)
      in Accrued Expenses
                              
                              
                              1,037
                              
                              
                              
                              (2,515
                              )
                              
                              
                              4,952NET
      CASH PROVIDED BY (USED IN) OPERATINGACTIVITIES
                              
                              
                              (36
                              )
                              
                              
                              (4,779
                              )
                              
                              
                              (27,262
                              )CASH FLOWS FROM FINANCING
      ACTIVITIES:Note
      Payable to Related Party
                              
                              
                              -
                              
                              
                              
                              4,734
                              
                              
                              
                              12,177Note
      Payable
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              15,000Capital
      Stock purchase
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              100NET
      CASH PROVIDED BY (USED IN) FINANCINGACTIVITIES
                              
                              
                              -
                              
                              
                              
                              4,734
                              
                              
                              
                              27,277NET
      INCREASE (DECREASE) IN CASH AND CASHEQUIVALENTS
                              
                              
                              (36
                              )
                              
                              
                              (45
                              )
                              
                              
                              15CASH
      AND CASH EQUIVALENTS,BEGINNING
      OF THE PERIOD
                              
                              
                              51
                              
                              
                              
                              45
                              
                              
                              
                              -END
      OF THE PERIOD
                              
                              $
                              15
                              
                              
                              $
                              -
                              
                              
                              $
                              15SUPPLEMENTAL
      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)
 AS
OF MARCH 31, 2010
 
 
 NOTE A—BUSINESS
ACTIVITY
 
 Pretoria
Resources Two, Inc. (the "Company”) was organized under the laws of the State of
Nevada on September 27, 2007 and is the successor in interest to Pretoria
Resources, Inc., which was a corporation organized under the laws of the State
of Delaware 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.
 
 NOTE B—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 $35,964, used cash from operations of $27,262 since its
inception, and has a negative working capital of $35,864 at March 31,
2010.
 
 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 C—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 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.
  F-5
  PRETORIA
RESOURCES TWO, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS (UNAUDITED)
 AS
OF MARCH 31, 2010
  NOTE C—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES—CONT’D
 
 Revenue Recognition-
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition.  The Company recognizes revenue
when it is realized or realizable and earned less estimated future doubtful
accounts.  The Company considers revenue realized or realizable and
earned when all of the following criteria are met:
 
 (i)
              persuasive
      evidence of an arrangement exists,
 
 (ii)
              the
      services have been rendered and all required milestones
      achieved,
 
 (iii)
              the
      sales price is fixed or determinable,
and
 
 (iv)
              collectability
      is reasonably assured.
 
 Comprehensive Income (Loss)
- The Company reports Comprehensive income and its components following
guidance set forth by section 220-10 of the FASB Accounting Standards
Codification 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- Net loss per common share is computed pursuant to section
260-10-45 of the FASB Accounting Standards Codification.  Basic net
loss per share is computed by dividing net loss by the weighted average number
of shares of common stock outstanding during the period.  Diluted net
loss per share is computed by dividing net loss by the weighted average number
of shares of common stock and potentially outstanding shares of common stock
during each period.  There were no potentially dilutive shares
outstanding as of March 31, 2010.
 
 Deferred Taxes- The
Company accounts for income taxes under Section 740-10-30 of the FASB Accounting
Standards Codification.  Deferred income tax assets and liabilities
are determined based upon differences between the financial reporting and tax
bases of assets and liabilities and are measured using the enacted tax rates and
laws that will be in effect when the differences are expected to
reverse.  Deferred tax assets are reduced by a valuation allowance to
the extent management concludes it is more likely than not that the assets will
not be realized.  Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in the statements of operations in the period that includes the
enactment date.
 
 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 March 31, 2010, 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 section 360-10-15 of the FASB Accounting
Standards Codification for disclosures about Impairment or Disposal of
Long-Lived Assets.  Disclosure 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
March 31, 2010.
  F-6
  PRETORIA
RESOURCES TWO, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS (UNAUDITED)
 AS
OF MARCH 31, 2010
  NOTE C—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES—CONT’D
 
 Stock-Based
Compensation- The Company accounts for stock-based compensation using the
fair value method following the guidance set forth in section 718-10 of the FASB
Accounting Standards Codification for disclosure about Stock-Based Compensation.
This section 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 follows paragraph
825-10-50-10 of the FASB Accounting Standards Codification for disclosures about
fair value of its financial instruments and paragraph 820-10-35-37 of the FASB
Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair
value of its financial instruments.  Paragraph 820-10-35-37
establishes a framework for measuring fair value in accounting principles
generally accepted in the United States of America (U.S. GAAP), and expands
disclosures about fair value measurements. To increase consistency and
comparability in fair value measurements and related disclosures, Paragraph
820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to
valuation techniques used to measure fair value into three broad
levels.  The fair value hierarchy gives the highest priority to quoted
prices (unadjusted) in active markets for identical assets or liabilities and
the lowest priority to unobservable inputs.  The three levels of fair
value hierarchy defined by Paragraph 820-10-35-37 are described
below:
 
 Level
      1
                Quoted
      market prices available in active markets for identical assets or
      liabilities as of the reporting date.Level
      2
                Pricing
      inputs other than quoted prices in active markets included in Level 1,
      which are either directly or indirectly observable as of the reporting
      date.Level
      3
                Pricing
      inputs that are generally observable inputs and not corroborated by market
      data.
 
 The carrying amounts of the Company’s
financial assets and liabilities, such as cash and accrued expenses, approximate
their fair values because of the short maturity of these instruments. The
Company’s note payable approximates the fair value of such instrument based upon
management’s best estimate of interest rates that would be available to the
Company for similar financial arrangement at March 31, 2010.
 
 The Company does not have any assets or
liabilities measured at fair value on a recurring or a non-recurring basis,
consequently, the Company did not have any fair value adjustments for assets and
liabilities measured at fair value at March 31, 2010, nor gains or losses are
reported in the statement of operations that are attributable to the change in
unrealized gains or losses relating to those assets and liabilities still held
at the reporting date for the interim period ended March 31, 2010.
  F-7
  PRETORIA
RESOURCES TWO, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS (UNAUDITED)
 AS
OF MARCH 31, 2010
 NOTE C—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES—CONT’D
 
 Recent Accounting
Pronouncements- In June 2009, the FASB approved the “FASB Accounting
Standards Codification” (the “Codification”) as the single source of
authoritative nongovernmental U.S. GAAP which commenced on July 1,
2009.  The Codification does not change current U.S. GAAP, but is
intended to simplify user access to all authoritative U.S. GAAP by providing all
the authoritative literature related to a particular topic in one
place.  All existing accounting standard documents will be superseded
and all other accounting literature not included in the Codification will be
considered non-authoritative. The Codification is effective for interim and
annual periods ending after September 15, 2009.  The adoption did
not have a material impact on the Company’s financial position, results of
operations or cash flows.
 
 In
August 2009, the FASB issued the FASB Accounting Standards Update No.
2009-04, Accounting for
Redeemable Equity Instruments - Amendment to Section 480-10-S99, which
represents an update to section 480-10-S99, distinguishing liabilities from
equity, per EITF Topic D-98, Classification and Measurement of
Redeemable Securities.  The Company does not expect the
adoption of this update to have a material impact on its consolidated financial
position, results of operations or cash flows.
 
 In
August 2009, the FASB issued the FASB Accounting Standards Update No.
2009-05, Fair Value
Measurement and Disclosures Topic 820 – Measuring Liabilities at Fair
Value, which provides amendments to subtopic 820-10, Fair Value
Measurements and Disclosures – Overall, for the fair value measurement of
liabilities.  This Update provides clarification that in circumstances
in which a quoted price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value using one or
more of the following techniques: 1. A valuation technique that uses: a. The
quoted price of the identical liability when traded as an asset b. Quoted prices
for similar liabilities or similar liabilities when traded as assets. 2. Another
valuation technique that is consistent with the principles of topic 820; two
examples would be an income approach, such as a present value technique, or a
market approach, such as a technique that is based on the amount at the
measurement date that the reporting entity would pay to transfer the identical
liability or would receive to enter into the identical liability. The amendments
in this Update also clarify that when estimating the fair value of a liability,
a reporting entity is not required to include a separate input or adjustment to
other inputs relating to the existence of a restriction that prevents the
transfer of the liability. The amendments in this Update also clarify that both
a quoted price in an active market for the identical liability when traded as an
asset in an active market when no adjustments to the quoted price of the asset
are required are Level 1 fair value measurements.  The Company does
not expect the adoption of this update to have a material impact on its
consolidated financial position, results of operations or cash
flows.
 
 In
September 2009, the FASB issued the FASB Accounting Standards Update No.
2009-08, Earnings Per Share –
Amendments to Section 260-10-S99,which represents technical corrections
to topic 260-10-S99, Earnings per share, based on EITF Topic D-53, Computation of Earnings Per Share
for a Period that includes a Redemption or an Induced Conversion of a Portion of
a Class of Preferred Stock and EITF Topic D-42, The Effect of the Calculation of
Earnings per Share for the Redemption or Induced Conversion of Preferred
Stock. The Company does not expect the adoption of this update to have a
material impact on its consolidated financial position, results of operations or
cash flows.
 
 In
September 2009, the FASB issued the FASB Accounting Standards Update No.
2009-09, Accounting for
Investments-Equity Method and Joint Ventures and Accounting for Equity-Based
Payments to Non-Employees.  This Update represents a correction
to Section 323-10-S99-4, Accounting by an Investor for
Stock-Based Compensation Granted to Employees of an Equity Method
Investee. Additionally, it adds observer commentAccounting Recognition for Certain
Transactions Involving Equity Instruments Granted to Other Than Employees
to the Codification. The Company does not expect the adoption to have a material
impact on its consolidated financial position, results of operations or cash
flows.
  F-8
  PRETORIA
RESOURCES TWO, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS (UNAUDITED)
 AS
OF MARCH 31, 2010
 
 NOTE C—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES—CONT’D
 
 Recent Accounting
Pronouncements (Cont’d)
 
 In
September 2009, the FASB issued the FASB Accounting Standards Update No.
2009-12, Fair Value
Measurements and Disclosures Topic 820 – Investment in Certain Entities That
Calculate Net Assets Value Per Share (or Its Equivalent), which provides
amendments to Subtopic 820-10, Fair Value Measurements and Disclosures-Overall,
for the fair value measurement of investments in certain entities that calculate
net asset value per share (or its equivalent). The amendments in this Update
permit, as a practical expedient, a reporting entity to measure the fair value
of an investment that is within the scope of the amendments in this Update on
the basis of the net asset value per share of the investment (or its equivalent)
if the net asset value of the investment (or its equivalent) is calculated in a
manner consistent with the measurement principles of Topic 946 as of the
reporting entity’s measurement date, including measurement of all or
substantially all of the underlying investments of the investee in accordance
with Topic 820. The amendments in this Update also require disclosures by major
category of investment about the attributes of investments within the scope of
the amendments in this Update, such as the nature of any restrictions on the
investor’s ability to redeem its investments at the measurement date, any
unfunded commitments (for example, a contractual commitment by the investor to
invest a specified amount of additional capital at a future date to fund
investments that will be make by the investee), and the investment strategies of
the investees. The major category of investment is required to be determined on
the basis of the nature and risks of the investment in a manner consistent with
the guidance for major security types in U.S. GAAP on investments in debt and
equity securities in paragraph 320-10-50-1B. The disclosures are required for
all investments within the scope of the amendments in this Update regardless of
whether the fair value of the investment is measured using the practical
expedient. The Company does not expect the adoption to have a material impact on
its consolidated financial position, results of operations or cash
flows.
 
 Management
does not believe that any other recently issued, but not yet effective
accounting pronouncements, if adopted, would have a material effect on the
accompanying financial statements.
 
 NOTE D-SUPPLEMENTAL CASH
FLOW INFORMATION
 
 Supplemental
disclosures of cash flow information for the period ended March 31, 2010 and
2009 is summarized as follows:
 
 Cash paid
during the period ended March 31, 2010 and 2009 for interest and income
taxes:
 
 2010
                    
                    
                    2009Interest
                    
                    $
                    -
                    
                    
                    $
                    -Taxes
                    
                    $
                    -
                    
                    
                    $
                    -
  NOTE E-SEGMENT
REPORTING
 
 The
Company follows the guidance set forth by section 280-10 of the FASB Accounting
Standards Codification for reporting and disclosure on operating segments of the
Company. 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 March 31,
2010.
 
 F-9
  PRETORIA
RESOURCES TWO, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS (UNAUDITED)
 AS
OF MARCH 31, 2010
 
 NOTE F—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 inception through December 31, 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 December 31, 2009 is as follows:
 
 Total
      Deferred Tax Asset
                      
                      $
                      (10,500
                      )Valuation
      Allowance
                      
                      
                      10,500Net
      Deferred Tax Asset
                      
                      $
                      -
 
 The
reconciliation of income taxes computed at the federal statutory income tax rate
to total income taxes for the years ended December 31, 2009 and 2008 is as
follows:
 
 2009
                        
                        
                        2008Income
      tax computed at the federal statutory rate
                        
                        
                        34.0
                        %
                        
                        
                        34.0
                        %State
      income tax, net of federal tax benefit
                        
                        
                        0.0
                        %
                        
                        
                        0.0
                        %Total
                        
                        
                        34.0
                        %
                        
                        
                        34.0
                        %Valuation
      allowance
                        
                        
                        -34.0
                        %
                        
                        
                        -34.0
                        %Total
      deferred tax asset
                        
                        
                        0.0
                        %
                        
                        
                        0.0
                        %
  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 $3,300 and $3,900 in the years ended December 31,
2009 and 2008 respectively.
 
 As of
December 31, 2009, the Company had a federal and state net operating loss carry
forward in the amount of approximately $31,141, which expires in the year
2029.
  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 March 31, 2010, the Company
issued 1,000,000 to the following:
 
 Allison
Carroll       1,000,000
 
 On
December 23, 2008, former major shareholders Gail Davis and Barbara Deadwiley
resigned as officers and as members of the Company’s board; all shares were
cancelled and new shares were issued to Allison Carroll, who now serves as the
Company’s officer and board member.
 
 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
March 31, 2010, the Company issued no preferred shares.
  F-10
  PRETORIA
RESOURCES TWO, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS (UNAUDITED)
 AS
OF MARCH 31, 2010
  NOTE H-DEVELOPMENT STAGE
COMPANY
 
 The
Company is in the development stage as of March 31, 2010 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.
 
 NOTE I—RELATED PARTY NOTE
PAYABLE AND NOTE PAYABLE
 
 The
Company has Notes Payable outstanding to related parties:  The Notes
Payable is listed as follows:
 
 Note
      Payable, due upon demand, 8% per year
                    
                    $
                    15,000Note
      Payable, due upon demand, 8% per year
                    
                    $
                    12,177
                    
                    (Related
      Party)
 
 Accrued
interest not paid for the period from inception (May 25, 2007) through December
31, 2009 was $4,952.
  F-11




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





Overview.





Pretoria
Resources Two, Inc. (“we”, “us”, the “Company” or like terms) was incorporated
in the State of Nevada on September 27, 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 organized 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, as amended (the "Exchange Act").  We
are currently investigating 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, she may not
successfully identify a Target Business or conclude a Business
Combination.





Any
entity with which we enter into a Business Combination will be subject to
numerous risk in its operations.  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 prior to the transaction;
      and





·
            cause
      a change in control in our Company 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 the
stockholders of 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 March
31, 2010, we had a de minimus of cash on hand.  Our existing cash
reserves will not be sufficient to cover our operating costs and expenses over
the next twelve months which we anticipate will comprise costs and expenses in
connection with the preparation and filing of reports under the Securities
Exchange Act, the identification and evaluation of Target Businesses and,
possibly, in connection with a Business Combination.





To date,
we have funded our operations through loans from our present and former
stockholders, and, as of March 31, 2010, we had borrowed an aggregate of $27,277
from them.  Our current officer, director and sole stockholder has
advised us that she expects to fund additional costs and expenses through loans
or further investment in the Company, as and when necessary.





2


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."





Results of
Operations.





Since our
inception, we have neither engaged in any substantive operations nor generated
any revenue.  We reported a net loss for the three-month period ended
March 31, 2010 of $4,823 and a net loss since inception of
$35,964.  The Company has used cash from operations of $27,262 since
its inception, consisting primarily of professional fees, and has a negative
working capital of $_35,864 at March 31, 2010.





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.  As a result of our negative working capital, our losses
since inception, and 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.





Item
3. Quantitative and Qualitative Disclosures About Market Risk.





Not applicable.





Item
4(T). Controls and Procedures.





Evaluation
of Disclosure Controls and Procedures





As of
March 31, 2010, the Company’s management carried out an evaluation, under the
supervision and with the participation of the Company’s Chief Executive Officer,
who is the Company’s principal executive officer and principal financial
officer, of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under
the Exchange Act), pursuant to Exchange Act Rule 13a-15. Based on such
evaluation, the Company’s Chief Executive Officer has concluded that the
Company's disclosure controls and procedures were effective.




Changes
in Internal Controls





There
have been no changes in the Company’s internal control over financial reporting
(as defined in Rules 13a-15 and 15d-15 under the Exchange Act) during the three
months ended March 31, 2010 that have materially affected, or are reasonably
likely to materially affect, the Company’s internal control over financial
reporting.




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.





3


Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.





(a) During
the three months ended March 31, 2010, the Company did not issue any
securities.





(b) Not
applicable.





(c)
During the three months ended March 31, 2010, neither the issuer nor any
"affiliated purchaser," as defined in Rule 10b-18(a)(13), purchased any shares
or other units of any class of the issuer's equity securities.





Item
3. Defaults Upon Senior Securities.





None.





Item 4.(Removed and
Reserved)




Item
5. Other Information.





(a) None.





(b) The Company has not adopted any
procedures by which security holders may recommend nominees to the registrant's
board of directors.





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 March 31, 2010.32.1*
            
            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.





*
Pursuant to Commission Release No. 33-8238, this certification will be
treated as “accompanying” this Quarterly Report on Form 10-Q and not “filed” as
part of such report for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended, or otherwise subject to the liability of
Section 18 of the Securities Exchange Act of 1934, as amended, and this
certification will not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, except to the extent that the registrant specifically
incorporates it by reference.





4


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:
      May 12, 2010
                  By:
                  /s/  Allison
      CarrollName
                  Allison
      CarrollTitle:
                  President,
      Principal Executive Officer
                    and
      Principal Financial
Officer




5