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,
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.








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








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  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 November 19, 2010 there were
1,000,000 shares of common stock outstanding.





PART
I — FINANCIAL INFORMATION





Item
1. Financial Statements.





PageBalance
      Sheet – September 30, 2010 (unaudited) and December 31, 2009
      (audited)
                                      
                                      F-1Statement
      of Operations for the three months ended September 30, 2010 and 2009
      (unaudited) and cumulative since inception (May 25, 2007)
                                      
                                      F-2Statement
      of Operations for the nine months ended September 30, 2010 and 2009
      (unaudited) and cumulative since inception (May 25, 2007)
                                      
                                      F-3Statement
      of Stockholders Deficit as of September 30, 2010
                                      
                                      F-4Statement
      of Cash Flows  for the nine months ended September 30, 2010 and
      2009 (unaudited) and cumulative since inception (May 25,
    2007)
                                      
                                      F-5Notes
      to Financial Statements (Unaudited)
                                      
                                      F-6


2




Pretoria
Resources Two, Inc.
 (A
Development Stage Company)
 Balance
Sheet
 
 As ofSeptember 30, 2010
                      
                      
                      December 31, 2009(Unaudited)
                      
                      
                      (Audited)ASSETSCURRENT
      ASSETSCash
                      
                      $
                      139
                      
                      
                      $
                      51TOTAL
      CURRENT ASSETS
                      
                      
                      139
                      
                      
                      
                      51TOTAL
      ASSETS
                      
                      
                      139
                      
                      
                      
                      51LIABILITIES
      AND STOCKHOLDER'S EQUITYCURRENT
      LIABILITIESAccounts
      Payable
                      
                      
                      2,303
                      
                      
                      
                      -Related
      Party Note Payable
                      
                      
                      18,927
                      
                      
                      
                      12,177Note
      Payable
                      
                      
                      15,000
                      
                      
                      
                      15,000Accrued
      Interest
                      
                      
                      5,663
                      
                      
                      
                      3,915TOTAL
      CURRENT LIABILITIES
                      
                      
                      41,893
                      
                      
                      
                      31,092TOTAL
      LIABILITIES
                      
                      
                      41,893
                      
                      
                      
                      31,092STOCKHOLDER'S
      DEFICITPreferred
      stock ($0.0001 par value; 10,000,000 shares authorized; no shares issued
      and outstanding at September 30, 2010 and December 31,
    2009)
                      
                      
                      -
                      
                      
                      
                      -Common
      stock ($0.0001 par value; 100,000,000 shares authorized: 1,000,000 issued
      and outstanding at September 30, 2010 and December 31,
    2009)
                      
                      
                      100
                      
                      
                      
                      100Retained
      Deficit
                      
                      
                      (41,854
                      )
                      
                      
                      (31,141
                      )TOTAL
      STOCKHOLDER'S DEFICIT
                      
                      
                      (41,754
                      )
                      
                      
                      (31,041
                      )TOTAL
      LIABILITIES AND STOCKHOLDER'S DEFICIT
                      
                      $
                      139
                      
                      
                      $
                      51
 
 The
accompanying notes are an integral part of these financial
statements.
  F-1
  Pretoria
Resources Two, Inc.
 (A
Development Stage Company)
 Statement
of Operations(Unaudited)
 
 For the three months
                      
                      
                      Cumulative Totalended September 30,
                      
                      
                      Since Inception2010
                      
                      
                      2009
                      
                      
                      May 25, 2007REVENUES:Income
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -Total
      Revenue
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -EXPENSES:Selling,
      General and Administrative
                      
                      
                      36
                      
                      
                      
                      339
                      
                      
                      
                      5,490Professional
      Fees
                      
                      
                      4,303
                      
                      
                      
                      1,000
                      
                      
                      
                      30,701Total
      Expenses
                      
                      
                      4,339
                      
                      
                      
                      1,339
                      
                      
                      
                      36,191Loss
      from operations
                      
                      
                      (4,339
                      )
                      
                      
                      (1,339
                      )
                      
                      
                      (36,191
                      )OTHER
      INCOME/(EXPENSE):Interest
      Expense
                      
                      
                      (661
                      )
                      
                      
                      (543
                      )
                      
                      
                      (5,663
                      )NET
      LOSS
                      
                      $
                      (5,000
                      )
                      
                      $
                      (1,882
                      )
                      
                      $
                      (41,854
                      )Basic
      and fully diluted net loss per common share:
                      
                      
                      (0.01
                      )
                      
                      
                      (0.00
                      )
                      
                      
                      (0.04
                      )Weighted
      average common shares outstanding
                      
                      
                      1,000,000
                      
                      
                      
                      1,000,000
                      
                      
                      
                      1,000,000
 
 The
accompanying notes are an integral part of these financial
statements.
  F-2
  Pretoria
Resources Two, Inc.
 (A
Development Stage Company)
 Statement
of Operations(Unaudited)
 
 For the nine months
                    
                    
                    CumulativeTotalended September 30,
                    
                    
                    Since Inception2010
                    
                    
                    2009
                    
                    
                    May 25, 2007REVENUES:Income
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -Total
      Revenue
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -EXPENSES:Selling,
      General and Administrative
                    
                    
                    912
                    
                    
                    
                    1,846
                    
                    
                    
                    5,490Professional
      Fees
                    
                    
                    8,053
                    
                    
                    
                    3,700
                    
                    
                    
                    30,701Total
      Expense
                    
                    
                    8,965
                    
                    
                    
                    5,546
                    
                    
                    
                    36,191Loss
      from operations
                    
                    
                    (8,965
                    )
                    
                    
                    (5,546
                    )
                    
                    
                    (36,191
                    )OTHER
      INCOME/(EXPENSE):Interest
      Expense
                    
                    
                    (1,748
                    )
                    
                    
                    (1,342
                    )
                    
                    
                    (5,663
                    )NET
      LOSS
                    
                    
                    (10,713
                    )
                    
                    
                    (6,888
                    )
                    
                    
                    (41,854
                    )Basic
      and fully diluted net loss per common share:
                    
                    
                    (0.01
                    )
                    
                    
                    (0.01
                    )
                    
                    
                    (0.04
                    )Weighted
      average common shares outstanding
                    
                    
                    1,000,000
                    
                    
                    
                    1,000,000
                    
                    
                    
                    1,000,000
 
 The
accompanying notes are an integral part of these financial
statements.
  F-3
  Pretoria
Resources Two, Inc.
 (A
Development Stage Company)
 Statement
of Stockholder's Deficit(Unaudited)
 
 AdditionalCommon Stock
                                                          
                                                          
                                                          Preferred Stock
                                                          
                                                          
                                                          Paid-in
                                                          
                                                          
                                                          Deficit
                                                          
                                                          
                                                          TotalShares
                                                          
                                                          
                                                          Amount
                                                          
                                                          
                                                          Shares
                                                          
                                                          
                                                          Amount
                                                          
                                                          
                                                          Capital
                                                          
                                                          
                                                          Accumulated
                                                          
                                                          
                                                          EquityBalances,
      December 31, 2007
                                                          
                                                          
                                                          1,000,000
                                                          
                                                          
                                                          $
                                                          100
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          (9,895
                                                          )
                                                          
                                                          $
                                                          (9,795
                                                          )Net
      loss
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (11,474
                                                          )
                                                          
                                                          
                                                          (11,474
                                                          )Capital
      Contributions
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -Issuance
      of common shares
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -Balances,
      December 31, 2008
                                                          
                                                          
                                                          1,000,000
                                                          
                                                          
                                                          $
                                                          100
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          (21,369
                                                          )
                                                          
                                                          $
                                                          (21,269
                                                          )Net
      loss
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          (9,772
                                                          )
                                                          
                                                          $
                                                          (9,772
                                                          )Balances,
      December 31, 2009
                                                          
                                                          
                                                          1,000,000
                                                          
                                                          
                                                          $
                                                          100
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          (31,141
                                                          )
                                                          
                                                          $
                                                          (31,041
                                                          )Net
      loss
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          (10,713
                                                          )
                                                          
                                                          $
                                                          (10,713
                                                          )Balances,
      September 30, 2010
                                                          
                                                          
                                                          1,000,000
                                                          
                                                          
                                                          $
                                                          100
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          (41,854
                                                          )
                                                          
                                                          $
                                                          (41,754
                                                          )
 
 The
accompanying notes are an integral part of these financial
statements.
  F-4
  Pretoria
Resources Two, Inc.
 (A
Development Stage Company)
 Statement
of Cash Flows(Unaudited)
 
 For the nine months ended
                              
                              
                              CumulativeTotalsSeptember 30,
                              
                              
                              Since Inception2010
                              
                              
                              2009
                              
                              
                              May 25, 2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                              
                              $
                              (10,713
                              )
                              
                              $
                              (6,888
                              )
                              
                              $
                              (41,854
                              )Adjustments
      to reconcile net (loss) to net cash provided by
      operations:Changes
      in Assets and Liabilities:Increase
      (decrease) in Accrued Expenses
                              
                              
                              4,051
                              
                              
                              
                              (2,995
                              )
                              
                              
                              7,966NET
      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
                              
                              
                              (6,662
                              )
                              
                              
                              (9,883
                              )
                              
                              
                              (33,888
                              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Note
      Payable to Related Party
                              
                              
                              6,750
                              
                              
                              
                              10,437
                              
                              
                              
                              18,927Note
      Payable
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              15,000Capital
      Stock Purchase
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              100NET
      CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
                              
                              
                              6,750
                              
                              
                              
                              10,437
                              
                              
                              
                              34,027NET
      INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS
                              
                              
                              88
                              
                              
                              
                              554
                              
                              
                              
                              139CASH
      AND CASH EQUIVALENTS,BEGINNING OF THE
      PERIOD
                              
                              
                              51
                              
                              
                              
                              46
                              
                              
                              
                              -END
      OF THE PERIOD
                              
                              $
                              139
                              
                              
                              $
                              600
                              
                              
                              $
                              139SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATION:CASH
      PAID DURING THE PERIOD FOR:Interest
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -Taxes
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
 
 The
accompanying notes are an integral part of these financial
statements.
  F-5




PRETORIA
      RESOURCES TWO, INC.(A
      Development Stage Company)NOTES
      TO FINANCIAL STATEMENTS (UNAUDITED)AS
      OF SEPTEMBER 30, 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 $41,854 used cash from operations of $33,888 since its
inception, and has a negative working capital of $41,754 at September 30,
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.
 
 Presentation
of Interim Information
 
 The
financial information at September 30, 2010 is unaudited, but includes all
adjustments (consisting only of normal recurring adjustments) that the Company
considers necessary for a fair presentation of the financial information set
forth herein, in accordance with accounting principles generally accepted in the
United States (“U.S. GAAP”) for interim financial information, and with the
instructions to Form 10-Q. Accordingly, such information does not include
all of the information and footnotes required by U.S. GAAP for annual financial
statements. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company’s annual Report on
Form 10-K for the year ended December 31, 2009.
 
 The
results for the nine and three months ended September 30, 2010 may not be
indicative of results for the year ending December 31, 2010 or any future
periods.
 
 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-6
 
 PRETORIA
      RESOURCES TWO, INC.(A
      Development Stage Company)NOTES
      TO FINANCIAL STATEMENTS (UNAUDITED)AS
      OF SEPTEMBER 30, 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 September 30, 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 September 30, 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
September 30, 2010.
  F-7
  PRETORIA
      RESOURCES TWO, INC.(A
      Development Stage Company)NOTES
      TO FINANCIAL STATEMENTS (UNAUDITED)AS
      OF SEPTEMBER 30, 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
September 30, 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
September 30, 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 September 30, 2010.
  F-8
 
 PRETORIA
      RESOURCES TWO, INC.(A
      Development Stage Company)NOTES
      TO FINANCIAL STATEMENTS (UNAUDITED)AS
      OF SEPTEMBER 30, 2010
 
 NOTE
C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D
 
 Recent
Accounting Pronouncements
 In March
2010, the FASB issued Accounting Standard Update No. 2010-11 “Derivatives and
Hedging” (Topic 815). ASU No. 2010-11 update provides amendments to subtopic
815-15, Derivatives and hedging. The amendments clarify about the scope
exception in paragraph 815-10-15-11 and section 815-15-25 as applicable to the
embedded credit derivatives. The ASU is effective on the first day of the first
fiscal quarter beginning after June 15, 2010. Therefore, for a calendar-year-end
entity, the ASU becomes effective on July 1, 2010. Early application is
permitted at the beginning of the first fiscal quarter beginning after March 5,
2010
 
 In April
2010, the FASB issued Accounting Standard Update No. 2010-12. “Income Taxes”
(Topic 740). ASU No.2010-12 amends FASB Accounting Standard Codification
subtopic 740-10 Income Taxes to include paragraph 740-10-S99-4. On March 30,
2010 The President signed the Health Care & Education Affordable Care Act
reconciliation bill that amends its previous Act signed on March 23, 2010. FASB
Codification topic 740, Income Taxes, requires the measurement of current and
deferred tax liabilities and assets to be based on provisions of enacted tax
law. The effects of future changes in tax laws are not anticipated.” Therefore,
the different enactment dates of the Act and reconciliation measure may affect
registrants with a period-end that falls between March 23, 2010 (enactment date
of the Act), and March 30, 2010 (enactment date of the reconciliation measure).
However, the announcement states that the SEC would not object if such
registrants were to account for the enactment of both the Act and the
reconciliation measure in a period ending on or after March 23, 2010, but notes
that the SEC staff “does not believe that it would be appropriate for
registrants to analogize to this view in any other fact patterns.”
 
 In April
2010, the FASB issued Accounting Standard Update No. 2010-13 “Stock
Compensation” (Topic 718). ASU No.2010-13 provides amendments to Topic 718 to
clarify that an employee share-based payment award with an exercise price
denominated in the currency of a market in which a substantial portion of the
entity's equity securities trades should not be considered to contain a
condition that is not a market, performance, or service condition. Therefore, an
entity would not classify such an award as a liability if it otherwise qualifies
as equity. The amendments in this Update are effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December 15,
2010. The amendments in this Update should be applied by recording a
cumulative-effect adjustment to the opening balance of retained earnings. The
cumulative-effect adjustment should be calculated for all awards outstanding as
of the beginning of the fiscal year in which the amendments are initially
applied, as if the amendments had been applied consistently since the inception
of the award. The cumulative-effect adjustment should be presented separately.
Earlier application is permitted.
 
 In April
2010, the FASB issued Accounting Standards Update No.2010-14, “Accounting for
Extractive Activities – Oil & Gas” (Topic 932). ASU No. 2010-14 amends FASB
accounting Standard paragraph 932-10-S99-1 due to SEC release no. 33-8995 [FR
78], Modernization of Oil and Gas Reporting and provides update as to amendments
to SEC Regulation S-X, Rule 4-10.
 
 In April
2010, the FASB issued Accounting Standard Update No. 2010-15. “Financial
Services-Insurance” (Topic 944) ASU No.2010-15 gives direction on how
investments through separate accounts affect an insurer’s consolidation analysis
of those investments. Under the ASU: an insurance entity should not consider any
separate account interests held for the benefit of policy holders in an
investment to be the insurer's interests and should not combine those interests
with its general account interest in the same investment when assessing the
investment for consolidation, unless the separate account interests are held for
the benefit of a related party policy holder as defined in the Variable Interest
Entities Subsections of Subtopic 810-10 and those Subsections require the
consideration of related parties. The amendments in this Update are effective
for fiscal years, and interim periods within those fiscal years, beginning
after December 15, 2010. Early adoption is permitted. The amendments in
this Update should be applied retrospectively to all prior periods upon the date
of adoption.
  F-9
 
 PRETORIA
      RESOURCES TWO, INC.(A
      Development Stage Company)NOTES
      TO FINANCIAL STATEMENTS (UNAUDITED)AS
      OF SEPTEMBER 30, 2010
 
 NOTE
C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D
 
 Recent
Accounting Pronouncements (cont’d)
 
 In April
2010, the FASB issued Accounting Standard Update No. 2010-16.
“Entertainment-Casinos” (Topic 924). ASU No.2010-16 addresses diversity in
practice regarding whether an entity accrues liabilities for a base jackpot
before it is won because they could avoid the payment. The amendments in this
update clarify that an entity should not accrue jackpot liabilities (or portions
thereof) before a jackpot is won if the entity can avoid paying that jackpot.
Jackpots should be accrued and charged to revenue when an entity has the
obligation to pay the jackpot. This guidance applies to both base and
progressive jackpots. The ASU amendments are effective for fiscal years, and the
interim periods within those fiscal years, beginning on or after December 15,
2010.
 
 In April
2010, the FASB issued Accounting Standard Update No. 2010-17. “Revenue
Recognition-Milestone Method” (Topic 605) ASU No.2010-17 provides guidance on
defining a milestone and determining when it may be appropriate to apply the
milestone method of revenue recognition for research or development
transactions. An entity often recognizes these milestone payments as revenue in
their entirety upon achieving a specific result from the research or development
efforts. A vendor can recognize consideration that is contingent upon
achievement of a milestone in its entirety as revenue in the period in which the
milestone is achieved only if the milestone meets all criteria to be considered
substantive. Determining whether a milestone is substantive is a matter of
judgment made at the inception of the arrangement. The ASU is effective for
fiscal years and interim periods within those fiscal years beginning on or after
June 15, 2010. Early application is permitted. Entities can apply this guidance
prospectively to milestones achieved after adoption. However, retrospective
application to all prior periods is also permitted.
 
 In April
2010, the FASB issued Accounting Standard Update No. 2010-18. “Receivables”
(Topic 310). ASU No.2010-18 provides guidance on accounting for acquired loans
that have evidence of credit deterioration upon acquisition. Paragraph
310-30-15-6 allows acquired assets with common risk characteristics to be
accounted for in the aggregated as a pool. Upon establishment of the pool, the
pool becomes the unit of accounting. When loans are accounted for as a pool, the
purchase discount is not allocated to individual loans; thus all of the loans in
the pool accrete at a single pool rate (based on cash flow projections for the
pool). Under subtopic 310-30, the impairment analysis also is performed on the
pool as a whole as opposed to each individual loan. Paragraphs 310-40-15-4
through 15-12 establish the criteria for evaluating whether a loan modification
should be classified as a troubled debt restructuring. Specifically paragraph
310-40-15-5 states that “a restructuring of a debt constitutes a troubled debt
restructuring for purposes of this subtopic if the creditor for economic or
legal reasons related to the debtor’s financial difficulties grants a concession
to the debtor that it would not otherwise consider.” The ASU is effective for
modification of loans accounted for within pools under subtopic 310-30 occurring
in the first interim or annual period ending on or after July 15, 2010. The
amendments are to be applied prospectively. Early application is
permitted.
  In May
2010, the FASB issued Accounting Standard Update No. 2010-19 “Foreign Currency”.
(“ASU No. 2010-19”). ASU 2010-19, codifies the SEC staff announcement made at
the March 18, 2010, EITF meeting. The ASU “provides the SEC staff’s views on
certain foreign currency issues related to investments in Venezuela.” These
issues relate to Venezuela’s highly inflationary status. The ASU became
effective on March 18, 2010.
  Other
ASUs not effective until after September 30, 2010, are not expected to have a
significant effect on the Company’s consolidated financial position or results
of operations.
  F-10
 
 PRETORIA
      RESOURCES TWO, INC.(A
      Development Stage Company)NOTES
      TO FINANCIAL STATEMENTS (UNAUDITED)AS
      OF SEPTEMBER 30, 2010
 
 NOTE
D-SUPPLEMENTAL CASH FLOW INFORMATION
 
 Supplemental
disclosures of cash flow information for the period ended September 30, 2010 and
2009 is summarized as follows:
 
 Cash paid
during the period ended September 30, 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 September 30,
2010.
 
 NOTE
F-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, 2010, the Company
issued 1,000,000 shares to Allison Carroll.
 
 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 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
September 30, 2010, the Company issued no preferred shares.
 
 NOTE
G-DEVELOPMENT STAGE COMPANY
 
 The
Company is in the development stage as of September 30, 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
H—RELATED PARTY NOTE PAYABLE AND NOTE PAYABLE
 
 The
Company has Notes Payable outstanding to related parties:
 
 Note
      Payable, due upon demand, 8% per year
                  
                  $
                  18,927
                  
                  (Related
      Party)
 
 The Notes
Payable is listed as follows:
 
 Note
      Payable, due upon demand, 8% per year
                  
                  $
                  15,000
 
 Accrued
interest not paid for the period from inception (May 25, 2007) through September
30, 2010 was $5,663.
  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
currently are 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
September 30, 2010, we had a de minimus amount 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 September 30, 2010, we had borrowed an aggregate of
$33,927 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.


3


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
September 30, 2010 and 2009 of $5,000 and $1,882 respectively, and a net loss
since inception of $41,854.  The Company has a deficit accumulated
during the development stage of $41,854 used cash from operations of $33,888
since its inception, and has a negative working capital of $41,754 at September
30, 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 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.





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, 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 September 30, 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.


4


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





(a) During
the three months ended September 30, 2010, the Company did not issue any
securities.





(b) Not
applicable.





(c)
During the three months ended September 30, 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 September 30, 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.


5


SIGNATURES





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





PRETORIA
      RESOURCES TWO, INC.Date:
      November 22, 2010
                    By:
                    
                    /s/  Allison
    CarrollName
                    
                    Allison CarrollTitle:
                    
                    President, Principal Executive Officerand Principal Financial
Officer




6