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: September 30,
2009
 
  ̈ 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    ̈ 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   ̈ 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 November 13, 2009 there were
1,000,000 shares of common stock outstanding.
  
  PART
I — FINANCIAL INFORMATION
 
 Item
1. Financial Statements.
 
 PageBalance
      Sheet – September 30, 2009 (unaudited) and December 31, 2008
      (audited)
                                                          
                                                          F-1Statement
      of Operations for the three and six months ended September 30, 2009 and
      2008(unaudited)
      and cumulative since inception (May 25, 2007)
                                                          
                                                          F-2Statement
      of Stockholders Deficit
                                                          
                                                          F-4Statement
      of Cash Flows  for the three months ended September 30, 2009 and
      2008 (unaudited)and
      cumulative since inception (May 25, 2007)
                                                          
                                                          F-5Notes
      to Financial Statements (Unaudited)
                                                          
                                                          F-6
  1
 Pretoria
Resources Two, Inc.
 (A
Development Stage Company)
 Balance
Sheet
 
 As ofSeptember 30, 2009
                                      
                                      
                                      December 31, 2008(unaudited)
                                      
                                      
                                      (audited)ASSETSCURRENT ASSETS:Cash
                                      
                                      $
                                      600
                                      
                                      
                                      $
                                      46TOTAL
      CURRENT ASSETS
                                      
                                      
                                      600
                                      
                                      
                                      
                                      46TOTAL
      ASSETS
                                      
                                      $
                                      600
                                      
                                      
                                      $
                                      46LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT LIABILITIES:Related
      Party Note Payable
                                      
                                      
                                      10,437
                                      
                                      
                                      
                                      -Note
      Payable
                                      
                                      
                                      15,000
                                      
                                      
                                      
                                      15,000Accrued
      Expenses
                                      
                                      
                                      3,320
                                      
                                      
                                      
                                      6,315TOTAL
      CURRENT LIABILITIES
                                      
                                      
                                      28,757
                                      
                                      
                                      
                                      21,315TOTAL
      LIABILITIES
                                      
                                      
                                      28,757
                                      
                                      
                                      
                                      21,315STOCKHOLDERS' DEFICITPreferred
      stock ($0.0001 par value; 10,000,000 shares authorized; no shares issued
      and outstanding at September 30, 2009 and December 31,
    2008)
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Common
      stock ($0.0001 par value; 100,000,000 shares authorized: 1,000,000 issued
      and outstanding at September 30, 2009 and December 31,
    2008)
                                      
                                      
                                      100
                                      
                                      
                                      
                                      100Retained
      Deficit
                                      
                                      
                                      (28,257
                                      )
                                      
                                      
                                      (21,369
                                      )TOTAL
      STOCKHOLDERS' DEFICIT
                                      
                                      
                                      (28,157
                                      )
                                      
                                      
                                      (21,269
                                      )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                                      
                                      $
                                      600
                                      
                                      
                                      $
                                      46
  F-1
  Pretoria
Resources Two, Inc.
 (A
Development Stage Company)
 Statement
of Operations—Unaudited
 
 For the three monthsended September 30,2009
                                  
                                  
                                  2008REVENUES:Income
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  -Total
      Revenue
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -EXPENSES:Selling,
      General and Administrative
                                  
                                  
                                  339
                                  
                                  
                                  
                                  24Professional
      Fees
                                  
                                  
                                  1,000
                                  
                                  
                                  
                                  2,710Total
      Expenses
                                  
                                  
                                  1,339
                                  
                                  
                                  
                                  2,734Loss
      from operations
                                  
                                  $
                                  (1,339
                                  )
                                  
                                  $
                                  (2,734
                                  )OTHER INCOME/(EXPENSE):Interest
      Expense
                                  
                                  
                                  (543
                                  )
                                  
                                  
                                  (322
                                  )NET
      LOSS
                                  
                                  $
                                  (1,882
                                  )
                                  
                                  $
                                  (3,056
                                  )Basic
      and fully diluted net loss per common share:
                                  
                                  $
                                  (0.00
                                  )
                                  
                                  $
                                  (0.00
                                  )Weighted
      average common shares outstanding
                                  
                                  
                                  1,000,000
                                  
                                  
                                  
                                  1,000,000
  F-2
  Pretoria
Resources Two, Inc.
 (A
Development Stage Company)
 Statement
of Operations—Unaudited
 
 For the nine months
                                    
                                    
                                    Cumulative Totalended September 30,
                                    
                                    
                                    Since Inception2009
                                    
                                    
                                    2008
                                    
                                    
                                    May 25, 2007REVENUES:Income
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -Total
      Revenue
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -EXPENSES:Selling,
      General and Administrative
                                    
                                    
                                    1,846
                                    
                                    
                                    
                                    36
                                    
                                    
                                    
                                    3,489Professional
      Fees
                                    
                                    
                                    3,700
                                    
                                    
                                    
                                    3,210
                                    
                                    
                                    
                                    21,448Total
      Expenses
                                    
                                    
                                    5,546
                                    
                                    
                                    
                                    3,246
                                    
                                    
                                    
                                    24,937Loss
      from operations
                                    
                                    $
                                    (5,546
                                    )
                                    
                                    $
                                    (3,246
                                    )
                                    
                                    $
                                    (24,937
                                    )OTHER INCOME/(EXPENSE):Interest
      Expense
                                    
                                    
                                    (1,342
                                    )
                                    
                                    
                                    (1,422
                                    )
                                    
                                    
                                    (3,320
                                    )NET
      LOSS
                                    
                                    $
                                    (6,888
                                    )
                                    
                                    $
                                    (4,668
                                    )
                                    
                                    $
                                    (28,257
                                    )Basic
      and fully diluted net loss per common share:
                                    
                                    $
                                    (0.01
                                    )
                                    
                                    $
                                    (0.00
                                    )
                                    
                                    $
                                    (0.03
                                    )Weighted
      average common shares outstanding
                                    
                                    
                                    1,000,000
                                    
                                    
                                    
                                    1,000,000
                                    
                                    
                                    
                                    1,000,000
  F-3
  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
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (6,888
                        )Balances,
      September 30, 2009
                        
                        
                        1,000,000
                        
                        
                        $
                        100
                        
                        
                        
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        (28,257
                        )
  F-4
  Pretoria
Resources Two, Inc.
 (A
Development Stage Company)
 Statement
of Cash Flows—Unaudited
 
 CumulativeFor the nine months ended
                              
                              
                              TotalsSeptember 30,
                              
                              
                              Since Inception2009
                              
                              
                              2008
                              
                              
                              May 25, 2007CASH FLOWS FROM OPERATING
      ACTIVITIES:Net
      loss
                              
                              $
                              (6,888
                              )
                              
                              $
                              (4,668
                              )
                              
                              $
                              (28,257
                              )Adjustments
      to reconcile net (loss) to net cash used in operations:Changes
      in Assets and Liabilities:Increase/(decrease)
      in Accrued Expenses
                              
                              
                              (2,995
                              )
                              
                              
                              1,422
                              
                              
                              
                              3,320NET
      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
                              
                              
                              (9,883
                              )
                              
                              
                              (3,246
                              )
                              
                              
                              (24,937
                              )CASH FLOWS FROM FINANCING
      ACTIVITIES:Note
      Payable to Related Party
                              
                              
                              10,437
                              
                              
                              
                              -
                              
                              
                              
                              10,437Note
      Payable
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              15,000Capital
      Stock purchase
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              100NET
      CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
                              
                              
                              10,437
                              
                              
                              
                              -
                              
                              
                              
                              25,537NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                              
                              
                              554
                              
                              
                              
                              (3,246
                              )
                              
                              
                              600CASH
      AND CASH EQUIVALENTS,BEGINNING
      OF THE PERIOD
                              
                              
                              46
                              
                              
                              
                              5,204
                              
                              
                              
                              -END
      OF THE PERIOD
                              
                              $
                              600
                              
                              
                              $
                              1,958
                              
                              
                              $
                              600SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATION:CASH
      PAID DURING THE PERIOD FOR:Interest
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -Taxes
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
  F-5
  PRETORIA
RESOURCES TWO, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS (UNAUDITED)
 FOR
THE PERIOD ENDED SEPTEMBER 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-6
  
 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 September 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 September 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 September 30, 2009.
 
 Recent Accounting
Pronouncements- In December 2007, the Financial Accounting Standards
Board (the “FASB”) Accounting Codification Statement (“ASC”) 805-10 (formerly
SFAS 141R), “Business Combinations” (“ASC 805-10”) was issued. ASC 805-10
replaces prior guidance on the subject and requires the acquirer of a business
to recognize and measure the identifiable assets acquired, the liabilities
assumed, and any non-controlling interest in the acquiree at fair value.
Additionally, it also requires transaction costs related to the business
combination to be expensed as incurred. ASC 805-10 applies prospectively to
business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. The effective date, as well as our adoption date, for the
pronouncement was January 1, 2009. The adoption did not have a material impact
on our financial statements.
 
 In April
2008 the FASB issued ASC 350-30 (formerly FSP No. 142-3), Determination of the
Useful Life of Intangible Assets, which amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under ASC 350-10 (formerly SFAS
142). This pronouncement requires enhanced disclosures concerning a company’s
treatment of costs incurred to renew or extend the term of a recognized
intangible asset. It is effective for financial statements issued for fiscal
years beginning after December 15, 2008. We determined that the standard will
not have a material impact on our financial statements.
  F-7
 
 NOTE A- SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Recent Accounting
Pronouncements (continued)
 
 In May
2009, the FASB issued ASC 855-10 (formerly SFAS No. 165), “Subsequent Events,”
which establishes general standards for accounting for accounting for and
disclosure of events that occur after the balance sheet date but before the
financial statements are issued or are available to be issued. The pronouncement
requires the disclosure of the date through which an entity has evaluated
subsequent events and the basis for that date, whether that date represents the
date the financial statements were issued or were available to be issued. It is
effective with interim and annual financial periods ending after June 15, 2009.
We adopted ASC 855-10 at the beginning of our 2009 third quarter. The adoption
did not have a significant impact on the subsequent events that we report,
either through recognition or disclosure, in our financial
statement
 
 In June
2009, the FASB issued ASC 105-10 (formerly SFAS 168), “The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles”. ASC 105-10 will become the source of authoritative U.S. GAAP
recognized by the FASB to be applied by nongovernment entities. It also modifies
the GAAP hierarchy to include only two levels of GAAP; authoritative and
nonauthoritative. ASC 105-10 is effective for financial statements issued for
interim and annual periods ending after September 15,
2009.  Therefore, the Company adopted ASC 105-10 for the reporting in
our 2009 third quarter. The adoption did not have a significant impact on the
reporting of our financial position, results of operations or cash
flows.
 
 In April
2009, the FASB issued FSP FAS No. 115-2 and FAS No. 124-2, “Recognition and
Presentation of Other-Than-Temporary Impairments ". The objective of an
other-than-temporary impairment analysis under existing U.S. generally accepted
accounting principles (GAAP) is to determine whether the holder of an investment
in a debt or equity security for which changes in fair value are not regularly
recognized in earnings (such as securities classified as held-to-maturity or
available-for-sale) should recognize a loss in earnings when the investment is
impaired. An investment is impaired if the fair value of the investment is less
than its amortized cost basis. FSP FAS No. 115-2 and FAS No. 124-2 is effective
for interim and annual reporting periods ending after June 15, 2009, with early
adoption permitted for periods ending after March 15, 2009. Earlier adoption for
periods ending before March 15, 2009, is not permitted.  The
implementation of FSP FAS No. 115-2 and FAS No. 124-2 did not have a material
impact on the Company’s financial position and results of
operations.
 
 In April
2009, the FASB issued FSP FAS No. 107-1 and APB No. 28-1, “Interim Disclosures
about Fair Value of Financial Instruments". This FSP amends SFAS No. 107, Disclosures about Fair Value of
Financial Instruments,to require disclosures about fair value of
financialinstruments for interim
reporting periods of publicly traded companies as well as in annualfinancial statements.
This FSP also amends APB Opinion No. 28, Interim Financial Reporting,to require those disclosures in summarized financial information at
interim reporting periods. FSP FAS No. 107-1 is effective for interim reporting
periods ending after June 15, 2009, with early adoption permitted for periods
ending after March 15, 2009.  The implementation of FSP FAS No. 107-1
did not have a material impact on the Company’s financial position and results
of operations
  F-8
 
 NOTE A- SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Recent Accounting
Pronouncements (continued)
 
 In April
2009, the FASB issued FASB Staff Position “FSP” No. SFAS 107-1 and APB 28-1,
“Interim Disclosures about Fair Value of Financial Instruments”.  This
FSP amends SFAS No. 107 to require disclosures about fair values of financial
instruments for interim reporting periods as well as in annual financial
statements.  The FSP also amends Accounting Principles Board Opinions
“APB Opinion” No. 28 to require those disclosures in summarized financial
information at interim reporting periods.  This FSP becomes effective
for interim reporting periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009.  The adoption of
this FSP is not expected to have a material impact on our financial
statements.
 
 In April
2009, the FASB issued FSP FAS No. 157-4, “Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly". This FSP provides additional
guidance for estimating fair value in accordance with FASB Statement No. 157,
Fair Value Measurements, when the volume and level of activity for the asset or
liability have significantly decreased. This FSP also includes guidance on
identifying circumstances that indicate a transaction is not orderly. FSP FAS
No. 157-4 is effective for interim and annual reporting periods ending after
June 15, 2009, and shall be applied prospectively.  The implementation
of FSP FAS No. 157-4 did not have a material on the Company’s financial position
and results of operations.
 
 In May
2009, the FASB issued SFAS No. 165, “Subsequent Events”.(“SFAS No. 165”)
This Statement establishes general standards of accounting for and disclosures
of events that occur after the balance sheet date but before financial
statements are issued or are available to be issued.  It requires the
disclosure of the date through which an entity has evaluated subsequent events
and the basis for that date and is effective for interim and annual periods
ending after June 15, 2009.  The adoption of SFAS No. 165 is not
expected to have a material impact on the Company’s financial
statements.
 
 In June
2009, the Financial Accounting Standards Board issued Statement “FASB” issued
Statement No. 168, “The FASB Accounting Standards Codification and the Hierarchy
of Generally Accepted Accounting Principles” (“SFAS No. 168”).  SFAS
No. 168 will become the single source of authoritative nongovernmental U.S.
generally accepted accounting principles (“GAAP”), superseding existing FASB,
American Institute of Certified Public Accountants (“AICPA”), Emerging Issues
Task Force (“EITF”), and related accounting literature.  SFAS No. 168
reorganizes the thousands of GAAP pronouncements into roughly 90 accounting
topics and displays them using a consistent structure.  Also included
is relevant Securities and Exchange Commission guidance organized using the same
topical structure in separate sections.  SFAS No. 168 will be
effective for financial statements issued for reporting periods that end after
September 15, 2009.  This statement will have an impact on the
Company’s financial statements since all future references to authoritative
accounting literature will be references in accordance with SFAS No.
168.
 
 In June
2009, the FASB issued FSP Emerging Issues Task Force ("EITF") Issue No. 09-1,
“Accounting for Own-Share Lending Arrangements in Contemplation of Convertible
Debt Issuance or Other Financing”. This Issue is effective for fiscal years
beginning on or after December 15, 2009, and interim periods within those fiscal
years for arrangements outstanding as of the beginning of those fiscal years.
Share lending arrangements that have been terminated as a result of counterparty
default prior to the effective date of this Issue but for which the entity has
not reached a final settlement as of the effective date are within the scope of
this Issue. This Issue requires retrospective application for all arrangements
outstanding as of the beginning of fiscal years beginning on or after December
15, 2009. This Issue is effective for arrangements entered into on or after the
beginning of the first reporting period that begins on or after June 15, 2009.
Early adoption is not permitted. The Company is currently assessing the impact
of FSP EITF 09-1 on its financial position and results of
operations.
  F-9
 
 NOTE B-SUPPLEMENTAL CASH
FLOW INFORMATION
 
 Supplemental
disclosures of cash flow information for the quarter ended September 30, 2009 is
summarized as follows:
 Cash paid
during the quarter ended September 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 September 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 Decemeber 31, 2008
 
 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, 2008 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 December 31, 2008 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-10
 
 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
December 31, 2008, 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 $28,257, used cash from operations of $24,937 since its
inception, and has a negative working capital of $28,157 at September 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 $10,437 and it is payable on demand, the annual
interest rate on the note is 8%.  Accrued interest not paid as of
September 30, 2009 is $420.
 
 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 September 30, 2009 is $2,900.
 
 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 September 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 Deadwiley 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
September 30, 2009, Allison Carroll is the only shareholder.  She owns
1,000,000 shares of the common stock.
  F-11
 
 NOTE G-CAPITAL STOCK
(CONT’D)
 
 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
September 30, 2009, the Company issued no preferred shares.
 
 NOTE H-DEVELOPMENT STAGE
COMPANY
 
 The
Company is in the development stage as of September 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-12
  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 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 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.   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
 
 ·
              cause
      a change in 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
September 30, 2009, we had $600 of cash on hand.  We do not expect
that the funds available will be sufficient to cover our operating costs and
expenses.  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 through loans or further investment in the
Company, as and when necessary.
  2
  Since our
inception, we have neither engaged in any operations nor generated any
revenue.  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.  The
Company has a deficit accumulated during the development stage of $28,257, used
cash from operations of $24,937 since its inception, and has a negative working
capital of $28,157 at September 30, 2009.  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."   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.
 
 Results of
Operations.
 
 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.
 
 Evaluation
of Disclosure Controls and Procedures
 
 As of
September 30, 2009, 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 September 30, 2009 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.
  3
  Item
1A. Risk Factors.
 
 Smaller
reporting companies are not required to provide the information required by this
item.
 
 Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
 
 (a) During
the three months ended September 30, 2009, the Company did not issue any
securities.
 
 (b) Not
applicable.
 
 (c)
During the three months ended September 30, 2009, 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. 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 September 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.
 
 * 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:
      November 13, 2008
                    By:
                    /s/  Allison
    CarrollName
                    Allison CarrollTitle:
                    President, Principal Executive Officer
                      and
      Principal Financial
Officer
  5