UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

 

S	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2012

OR

£	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______ to _______

 

Commission File Number: 333-140148

 

LORETO RESOURCES CORPORATION

(Exact Name of Small Business Issuer as Specified in its Charter)

 

Nevada	20-5308449
(State of Incorporation)	(IRS Employer Identification No.)

 

c/o Gottbetter & Partners, LLP

488 Madison Avenue, 12th Floor

New York, NY 10022

(212) 400-6900

(Address of principal executive offices and telephone number)

 

Indicate whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes S 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 S 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. (Check One):

 

Large accelerated filer £		Accelerated filer £		Non-accelerated filer ¨		Smaller reporting company þ
				(Do not check if a smaller Reporting company)

 

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes S No £

 

There were 70,298,322 shares of common stock issued and outstanding as of May 15, 2012.

 

 

LORETO CORPORATION

 

INDEX

 

			Page
Part I Financial Information
	Item 1	Financial Statements	2
		Consolidated Balance Sheets (unaudited)	3
		Consolidated Statements of Operations (unaudited)	4
		Consolidated Statements of Cash Flows (unaudited)	5
		Notes to the Consolidated Financial Statements (unaudited)	6
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
	Item 4	Controls and Procedures	12
Part II Other Information			13
	Item 6	Exhibits	13
Signatures			15
Exhibits – Certifications of the Principal Executive Officer and the Principal Financial Officer
Exhibits – Certifications of the Chief Executive Officer and the Chief Financial Officer

 

 

PART I

FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

The financial statements of Loreto Resources Corporation (the “Company”) required to be filed with this Quarterly Report on Form 10-Q were prepared by management and commence on the following page, together with the related Notes. In the opinion of management, these financial statements fairly present the financial condition of the Company, but should be read in conjunction with the financial statements of the Company for the period ended December 31, 2011, previously filed on Form 10-K with the Securities and Exchange Commission .

 

 

LORETO RESOURCES CORPORATION

(A Development Stage Company)

Consolidated Balance Sheets

Unaudited

 

		As of				As of
		March 31,				December 31,
		2012				2011
ASSETS
Current Assets
Cash		$	13,187			$	4,136
Prepaid expenses			27,947				41,920
Due from related party			10,712				10,712
Total Current Assets			51,846				56,768
Non-Current Assets
Deposits			9,228				9,228
TOTAL ASSETS		$	61,074			$	65,996
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued liabilities		$	109,844			$	103,990
Insurance financing			28,215				42,019
Due to related party			6,385				-
Convertible notes and interest payable			327,468				270,519
Total Current Liabilities			471,912				416,528
Total Liabilities			471,912				416,528
Stockholders' Deficit:
Common stock, $.001 par value, 300,000,000 shares authorized; 70,298,322 shares issued and outstanding as of March 31, 2012 and December 31, 2011			70,298				70,298
Additional paid-in capital			3,587,842				3,587,842
Deficit accumulated during development stage			(4,068,978	)			(4,008,672	)
Total Stockholders' Deficit			(410,838	)			(350,532	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	61,074			$	65,996

 

See accompanying notes to Unaudited Consolidated Financial Statements

 

 

LORETO RESOURCES CORPORATION

(A Development Stage Company)

Consolidated Statements of Operations

Unaudited

 

										June 28, 2006
		Three Months				Three Months				(Inception)
		Ended				Ended				through
		March 31,				March 31,				March 31,
		2012				2011				2012
Operating expenses
General and administrative expenses		$	52,815			$	40,187			$	4,127,373
Loss from operations			(52,815	)			(40,187	)			(4,127,373	)
Other income (expense):
Interest income			-				3				10,053
Interest expense			(7,491	)			(4,903	)			(37,184	)
Gain on forgiveness of debt			-				-				85,526
Total other income (expense)			(7,491	)			(4,900	)			58,395
Net loss		$	(60,306	)		$	(45,087	)		$	(4,068,978	)
Loss per share - basic and diluted		$	(0.00	)		$	(0.00	)
Weighted average number of common shares outstanding - basic and diluted			70,298,322				70,127,167

 

See accompanying notes to Unaudited Consolidated Financial Statements

 

 

LORETO RESOURCES CORPORATION

(A Development Stage Company)

Consolidated Statements of Cash Flows

Unaudited

 

										June 28, 2006
		Three Months				Three Months				(Inception)
		Ended				Ended				through
		March 31,				March 31,				March 31,
		2012				2011				2012
Cash Flows from Operating Activities
Net loss		$	(60,306	)		$	(45,087	)		$	(4,068,978	)
Adjustments to reconcile net loss to net cash  used in operating activities:
Stock option expense			-				-				1,372,158
Common stock issued for services			-				-				4,500
Gain on forgiveness of debt			-				-				(85,526	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets			13,973				6,899				103,670
Accounts payable and accrued liabilities			5,854				(13,499	)			197,221
Accounts payable-related party			-				-				160,389
Interest accrued on notes payable			6,949				3,912				32,459
Interest accrued on notes payable-related party			-				486				268
Due from related party			-				(141	)			(10,712	)
Due to related party			6,385				-				6,385
Net cash used in operating activities			(27,145	)			(47,430	)			(2,288,166	)
Cash Flows from Financing Activities
Loan from stockholder			-				-				13,200
Issuance of common stock, net of offering costs			-				-				2,058,313
Repayment of insurance financing			(13,804	)			(14,314	)			(112,630	)
Proceeds from convertible notes payable			50,000				80,015				325,927
Proceeds from notes payable-related party			-				9,995				16,543
Net cash provided by financing activities			36,196				75,696				2,301,353
Net Increase (Decrease) in Cash			9,051				28,266				13,187
Cash at Beginning of Period			4,136				8,235				-
Cash at End of Period		$	13,187			$	36,501			$	13,187
Supplemental Cash Flow Information
Cash paid for interest		$	543			$	505			$	2,605
Cash paid for income taxes		$	-			$	-			$	-
Non-Cash Investing and Financing Activities
Debt forgiveness		$	-			$	-			$	173,589
Insurance financing		$				$				$	109,056
Stock issued for settlement of accounts payable		$	-			$	-			$	49,580

 

See accompanying notes to Unaudited Consolidated Financial Statements

 

 

LORETO RESOURCES CORPORATION

(A Development Stage Company)

Notes to Consolidated Financial Statements

March 31, 2012

(Unaudited)

 

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

 

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

 

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

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying unaudited interim consolidated financial statements of Loreto Resources Corporation have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for the most recent fiscal year, 2011, as reported in Form 10-K, have been omitted.

 

NOTE 3. GOING CONCERN

 

During the three months ended March 31, 2012, Loreto has not generated any revenue and therefore has been unable to generate cash flows sufficient to support its operations and has been dependent on debt and equity financing. In addition to negative cash flow from operations, Loreto has experienced recurring net losses, and has an accumulated deficit of approximately $4.1 million as of March 31, 2012.

 

 

LORETO RESOURCES CORPORATION

(A Development Stage Company)

Notes to Consolidated Financial Statements

March 31, 2012

(Unaudited)

 

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

 

NOTE 4. RELATED PARTY TRANSACTIONS

 

As of March 31, 2012, the Company is indebted to its president for the amount of $6,385. This amount is unsecured, due on demand, and non-interest bearing.

 

NOTE 5. CONVERTIBLE PROMISSORY NOTES

 

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

 

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

 

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

 

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

 

 

LORETO RESOURCES CORPORATION

(A Development Stage Company)

Notes to Consolidated Financial Statements

March 31, 2012

(Unaudited)

 

On March 31, 2012, the 2010 Notes and the March 2011 Notes were amended, and the maturity dates were extended to September 30, 2013. In addition, the mandatory conversion terms for the aforementioned notes were amended to require conversion only if the minimum $1,000,000 financing closes concurrent with the closing of a related merger or other acquisition transaction.

 

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

 

The Company evaluated the conversion options under FASB ASC 815-40 for derivative treatment and determined that the conversion options are required to be accounted for as a derivative upon the aforementioned closing of the next private placement offering. As the closing had not occurred as of the period ended March 31, 2012, and as per FASB ASC Topic 470-20, the derivative instrument nor the beneficial conversion feature need not be accounted for as of March 31, 2012.

 

As of March 31, 2012 and as of December 31, 2011, the Company owed principal and accrued interest of $327,468 and $270,519, respectively.

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This report contains forward-looking statements. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including without limitation, statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding our financial position, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believe,” “expects,” “anticipates,” “intends,” “estimates,” “projects,” “target,” “goal,” “plans,” “objective,” “should,” or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties including those related to changes in economic conditions, new business opportunities and general financial and business conditions, actual results may differ materially from those expressed or implied by the forward-looking statements.

 

Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this Form 10-Q to be accurate as of the date hereof. Changes may occur after that date. We will not update that information except as required by law in the normal course of its public disclosure practices.

 

Additionally, the following discussion regarding our financial condition and results of operations should be read in conjunction with the financial statements and accompanying notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and with the Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and accompanying notes included our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, filed with the Securities and Exchange Commission.

 

OVERVIEW AND RECENT DEVELOPMENTS

 

Loreto Resources Corporation is an exploration stage, growth-oriented resource company, recently focused on the acquisition, development and production of significant base and precious metals deposits.

 

We intended to pursue the acquisition of one or ore mining properties in Peru and other South American countries and, to that end, we had opened an office in Lima, Peru. Because we decided not to pursue any of those opportunities, during the quarter ended September 30, 2010, we closed our office in Peru.

 

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

 

 

Going Concern

 

During the three month period ended March 31, 2012, we did not generate any revenue. Because we have been unable to generate cash flows sufficient to support our operations, we have been dependent on debt financing from certain of our existing stockholders. In addition to negative cash flow from operations, we have experienced recurring net losses, and have an accumulated deficit of approximately $4.1 million. These factors raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

 

RESULTS OF OPERATIONS

 

Three Months Ended March 31, 2012 and Three Months Ended March 31, 2011

 

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

We incurred general and administrative expenses of $52,815 and $40,187 for the three months ended March 31, 2012 and 2011, respectively. These expenses consisted of legal and other professional fees and operating costs incurred in connection with the day to day operation of our business and the preparation and filing of our periodic reports.

 

Our net loss for the three months ended March 31, 2012 and 2011 was $(60,306) and $(45,087), respectively.

 

We have generated no revenues and our net operating loss from inception through March 31, 2012 was $(4,068,978).

 

The increase from the 2011 to the 2012 three-month periods reflects our efforts to seek out quality investment opportunities and raise the additional capital necessary to fund these potential investments.

 

LIQUIDITY AND CAPITAL RESOURCES

 

Our cash and cash equivalents balance at March 31, 2012 was $13,187 as compared to $4,136 at December 31, 2011.

 

On November 17, 2010, we completed a private placement offering (the “2010 Offering”) of our 10% Convertible Promissory Notes (the “2010 Notes”). We sold an aggregate principal amount of $149,960 of the 2010 Notes in the 2010 Offering. The 2010 Notes were to be automatically converted at the initial closing of our next private placement, together with accrued interest, into those securities offered in that next private placement.

 

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

 

 

The March 2011 Notes, and the deemed converted 2010 Notes, bear interest of 10%, mature on March 31, 2012, and both the principal and accrued interest will be mandatorily converted at a price equal to either (a) the price per share of stock (or unit of stock and other securities) paid by investors in our next securities offering or other financing, if the financing is an issuance of stock (or unit of stock and other securities), or (b) the price paid by investors in our next securities offering or other financing, expressed as a percentage of the face amount of debt securities, if the financing is an issuance of debt securities (or units of debt securities and other securities) (including debt securities convertible into stock), upon the closing of, and into the securities issued in, the next financing in which we sell at least $1,000,000 of our securities.

 

On October 10, 2011, we closed a private placement offering (the “October 2011 Offering”) of our 10% convertible promissory notes (the “October 2011 Notes”). In the October 2011 Offering, we sold $52,500 in principal amount of the October 2011 Notes to an existing investor. The October 2011 Notes bear interest of 10%, mature on April 9, 2013, and both the principal and accrued interest will be mandatorily converted on the same terms as the March 2011 Notes.

 

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

 

The 2010 Notes and the March 2011 Notes have been amended so that they now mature on September 30, 2013. Also, the mandatory conversion terms for these notes have been amended to require conversion only if the minimum $1,000,000 financing closes concurrent with the closing of a related merger or other acquisition transaction.

 

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

 

OFF-BALANCE SHEET ARRANGEMENTS

 

We have no off-balance sheet arrangements.

 

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

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

 

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

 

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on this evaluation, our Interim Chief Executive Officer and Interim Chief Financial Officer concluded that, during the period covered by this quarterly report, our internal controls over financial reporting were not operating effectively. Management did not identify any material weaknesses in our internal control over financial reporting as of March 31, 2012; however, it has identified the following deficiencies that, when aggregated, may possibly be viewed as a material weakness in our internal control over financial reporting as of that date:

 

1.

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

 

 

2.

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

 

Management believes that the material weaknesses set forth the two items above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside Directors on our Board of Directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

 

Management's Remediation Initiatives

 

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we plan to initiate the following series of measures once we have the financial resources to do so:

 

We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

 

Management believes that the appointment of one or more outside Directors, who shall be appointed to a fully functioning audit committee, would remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

 

Changes in Internal Controls over Financial Reporting

 

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

 

PART II

OTHER INFORMATION

 

ITEM 6. EXHIBITS

 

The following exhibits are included with this quarterly report.

 

 

Exhibit
Number		Description
31.1		Certification of Interim Principal Executive Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Interim Principal Financial Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Interim Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2		Certification of Interim Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
_____________________
* This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	Loreto Resources Corporation
Date:   May 15, 2012	By	/s/Luis F. Saenz
	Luis F. Saenz, President and Interim
	Principal Financial Officer
	By	/s/Adam Zive
	Adam Zive, Interim Principal
Date:   May 15, 2012	Executive Officer