HK GRAPHENE TECHNOLOGY CORP - FORM 10-Q

Attached files

file	filename
EX-32 - HK GRAPHENE TECHNOLOGY CORP	v202640_ex32.htm
EX-31 - HK GRAPHENE TECHNOLOGY CORP	v202640_ex31.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2010

o	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.)

1266 1st Street, Suite 4

Sarasota, FL 34236

(941) 365-5081

(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 x No o

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 o No o

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 o		Accelerated filer o		Non-accelerated filer o		Smaller reporting company x
				(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 x No o

There were 70,298,322 shares of common stock issued and outstanding as of November 15, 2010.

LORETO CORPORATION

INDEX

			Page
Part I Financial Information			3

	Item 1	Financial Statements	3

		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	10

	Item 4	Controls and Procedures	12

Part II Other Information			14

	Item 6	Exhibits	14

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, 2009, previously filed on Form 10-K with the Securities and Exchange Commission (“SEC”).

LORETO RESOURCES CORPORATION

(An Exploration Stage Company)

Consolidated Balance Sheets

Unaudited

	As of			As of
	September 30, 2010			December 31, 2009
ASSETS

Current Assets
Cash	$	1,126		$	148,013
Due from related party		10,818			-
Prepaid expenses		24,714			61,644
Total Current Assets		36,658			209,657

Non-Current Assets
Deposits		6,011			5,628

TOTAL ASSETS	$	42,669		$	215,285

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current Liabilities
Accounts payable	$	143,605		$	82,374
Accounts payable - related party		-			83,332

Advances		7,819			-
Insurance financing		-			31,282

Total Current Liabilities		151,424			196,988

Total Liabilities		151,424			196,988

Stockholders’ Equity (Deficit):
Preferred stock, $.001 par value, 10,000,000 shares
authorized; 0 shares issued and outstanding as of
September 30, 2010 and December 31, 2009		-			-
Common stock, $.001 par value, 300,000,000 shares
authorized; 70,100,000 shares issued and outstanding
as of September 30, 2010 and December 31, 2009		70,100			70,100
Additional paid-in capital		3,538,460			2,737,245
Deficit accumulated during exploration stage		(3,717,315	)		(2,789,048	)
Total Stockholders’ Equity (Deficit)		(108,755	)		18,297

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	42,669		$	215,285

See accompanying notes to Unaudited Consolidated Financial Statements

LORETO RESOURCES CORPORATION

(An Exploration Stage Company)

Consolidated Statements of Operations

Unaudited

													June 28, 2006
	Three Months			Three Months			Nine Months			Nine Months			(Inception)
	Ended			Ended			Ended			Ended			through
	September 30,			September 30,			September 30,			September 30,			September 30,
	2010			2009			2010			2009			2010
Revenues
Revenues	$	-		$	-		$	-		$	-		$	-
Total revenues		-			-			-			-			-

Operating costs
General and administrative expenses		75,525			575,606			965,339			1,650,854			3,763,481

Loss from operations		(75,525	)		(575,606	)		(965,339	)		(1,650,854	)		(3,763,481	)

Other income (expense):
Interest income		-			537			61			3,618			10,042
Interest expense		(1	)		-			(787	)		-			(1,674	)
Gain on forgiveness of debt		21,577			-			37,798			-			37,798

Total other income		21,576			537			37,072			3,618			46,166

Net loss	$	(53,949	)	$	(575,069	)	$	(928,267	)	$	(1,647,236	)	$	(3,717,315	)

Loss per share - basic and diluted	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)

Weighted average number of
common shares outstanding -
basic and diluted		70,100,000			70,100,000			70,100,000			70,100,000

See accompanying notes to Unaudited Consolidated Financial Statements

LORETO RESOURCES CORPORATION

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

Unaudited

							June 28, 2006
	Nine Months			Nine Months			(Inception)
	Ended			Ended			through
	September 30,			September 30,			September 30,
	2010			2009			2010
Cash Flows from Operating Activities
Net loss	$	(928,267	)	$	(1,647,236	)	$	(3,717,315	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Stock option expense		640,826			429,296			1,372,158
Common stock issued for services		-			-			4,500
Gain on forgiveness of debt		(37,798	)		-			(37,798	)
Changes in operating assets and liabilities:
Prepaid expenses and deposits		36,547			41,168			14,868
Accounts payable		99,029			48,603			181,403
Accounts payable - related party		70,512			-			153,844

Due from related party		(10,818	)		-			(10,818	)
Net cash used in operating activities		(129,969	)		(1,128,169	)		(2,039,158	)

Cash Flows from Financing Activities
Loan from stockholder		-			-			13,200
Cash advances		7,819			-			7,819
Capital contributions		6,545			-			6,545
Issuance of common stock, net of offering costs		-			-			2,058,313
Repayment of insurance financing		(31,282	)		-			(45,593	)
Net cash provided by (used in) financing activities		(16,918	)		-			2,040,284

Net Increase (Decrease) in Cash		(146,887	)		(1,128,169	)		1,126

Cash at Beginning of Period		148,013			1,517,269			-
Cash at End of Period	$	1,126		$	389,100		$	1,126

Supplemental Disclosures of Cash Flow Information
Cash paid during year for:
Interest	$	-		$	-		$	-
Income taxes	$	-		$	-		$	-

Non-Cash Investing and Financing Activities
Debt forgiveness by related party	$	153,844		$	-		$	153,844
Forgiveness of debt by stockholder	$	-		$	-		$	13,200

See accompanying notes to Unaudited Consolidated Financial Statements

LORETO RESOURCES CORPORATION

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

September 30, 2010

(Unaudited)

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Loreto Resources Corporation (“Loreto” or 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, 2009, as reported in Form 10-K, have been omitted.

a. Stock Splits

On February 2, 2009 and January 15, 2010, the Company implemented 2 for 1 stock splits. The par value of the common stock was not affected by the stock splits. Upon effectiveness of the stock splits, each stockholder received two shares of common stock for every share of common stock owned as of February 2, 2009 and again on January 25, 2010, the stock splits’ record dates. The stock split does not affect the amount of common stock authorized for issuance. All share and per share information has been retroactively adjusted to reflect the reverse stock split in the financial statements and in the notes to financial statements for all periods presented, to reflect the stock split as if it occurred on the first day of the first period presented.

b. Recent Accounting Pronouncements

The Company does not expect that the adoption of recently issued accounting pronouncements will have a material impact on its financial position, results of operations, or cash flows.

LORETO RESOURCES CORPORATION

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

September 30, 2010

(Unaudited)

NOTE 3. GOING CONCERN

During the nine months ended September 30, 2010, 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 equity financing. In addition to negative cash flows from operations, Loreto has experienced recurring net losses, and has an accumulated deficit of approximately $3.7 million.

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. ADVANCES

In July and August 2010, a third party advanced the Company a total of $7,819 for working capital purposes. These cash advances are non-interest bearing, and were later paid back to the third party on November 3, 2010 from the proceeds of the private placement offering (the “Offering”). [See Note 8]

NOTE 5. RELATED PARTY TRANSACTIONS

The Company’s chief executive officer agreed to defer receipt of his salary from September 2009 until his employment agreement was terminated on May 5, 2010, at which time the related accrued salaries amounting to $153,844 was written off and a contribution to capital was recorded. FASB ASC 470-50-40-2 states “extinguishment transactions between related entities may be in essence capital transactions.”

Starting in November 2009, Li3 Energy, Inc., a company in which Loreto’s chief executive officer and interim financial officer function in the same capacity (“related party company”), started utilizing the administrative personnel and office space of Loreto, which has an office located in Lima, Peru. As such, certain net common costs initially paid by Loreto for the nine months ended September 30, 2010 and 2009, were allocable to the related party company, as follows:

	Nine Months Ended September 30,
	2010		2009

Administrative salaries	$	2,380	$	-
Utilities and maintenance expenses		8,438		-
	$	10,818	$	-

LORETO RESOURCES CORPORATION

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

September 30, 2010

(Unaudited)

The related receivable due from the related party company arising from these common costs, amounting to $10,818, is shown as a due from related party in the consolidated balance sheet as of September 30, 2010.

NOTE 6. VENDOR RELEASE AND SETTLEMENTS

During June and August 2010, the Company entered into release and settlement agreements with certain third party vendors. As per those agreements, the liabilities were either paid or written off. Two third party vendors were paid a total of $20,000. The amount of $2,800 was paid to the Company’s former interim chief financial officer for past services performed. Payable amounts totaling $37,798 related to accounting and financial services were written off, and a gain was recorded. The amount totaling $6,545 was paid directly by the Company’s chief executive officer, and considered a contribution to capital.

On September 30, 2010, the Company reached a settlement agreement with its legal counsel, whereby the legal counsel agreed to forego payment of $49,580 in legal fees due for the 2009 fiscal year upon delivery of 198,322 restricted shares of the Company’s common stock. The restricted shares are valued at $0.25 per share. As of September 30, 2010, the legal counsel had not been issued the shares, and per the agreement the related payable for legal fees had not been relieved.

NOTE 7. OPTIONS AND WARRANTS

Stock option activity summary is presented in the table below:

	Number of Shares		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at December 31, 2009		6,960,000	$	0.25		8.63	$	—
Granted		—		—		—		—
Exercised		—		—		—		—
Expired / Forfeited		6,960,000		0.25		—		—
Outstanding at September 30, 2010		—		—		—		—
Exercisable at September 30, 2010		—		—		—		—

No options were granted during the nine months ended September 30, 2010. On May 5, 2010, the Company’s chief executive officer’s stock option agreement was terminated. As such, 6,200,000 options were cancelled. During May and June 2010, the remaining stock option agreements were terminated, resulting in the cancellation of 760,000 options. During the nine months ended September 30, 2010, the Company recognized stock-based compensation expense of $640,826 related to stock options.

LORETO RESOURCES CORPORATION

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

September 30, 2010

(Unaudited)

There are no warrants outstanding at September 30, 2010.

NOTE 8. SUBSEQUENT EVENTS

On November 2, 2010, the Company completed the initial closing of a private placement offering of its 10% Convertible Promissory Notes. In the initial closing of the offering, the Company sold $121,885 in principal amount of the notes.

On November 11, 2010, the 198,322 shares related to the settlement agreement with the Company's legal counsel [Note 6] were issued.

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

This report includes a number of forward looking statements that reflect our current views with respect to future events and financial performance. Forward looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward looking statements, which apply only as of the date of this quarterly report. These forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

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.

During the year ended December 31, 2009, we entered into a number of letters of intent relating to the acquisition of various mining properties in Peru and other South American countries. We were seeking, at that time, development and production-stage zinc, copper, gold and silver mining assets. For commercial reasons, we decided not to pursue any of the acquisitions proposed in those letters.

We recently changed our focus and are now primarily seeking quality assets and investment opportunities. During the quarter ended September 30, 2010, we closed our office in Lima, Peru.

On January 15, 20101 our Board of Directors declared an additional 2 for 1 forward stock split in the form of a dividend. The record date for the stock dividend was January 25, 2010, the payment date was January 28, 2010 and the “Ex” date was January 29, 2010.

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

Effective May 5, 2010, we entered into a written agreement with Luis Saenz (the “Termination Agreement”) pursuant to which Mr. Saenz’s employment agreement with us dated July 21, 2008 (the “Employment Agreement”) was terminated. Pursuant to the terms of the Termination Agreement, Mr. Saenz released us from any and all obligations to him relating to the Employment Agreement, including, but not limited to, any and all rights and claims to compensation, bonuses and expense reimbursements. Mr. Saenz also agreed to terminate his option agreement with us dated July 21, 2008 and has relinquished all rights originally granted under that agreement. Mr. Saenz will remain as our President and Chief Executive Officer and a director.

Additionally, during the nine months ended September 30, 2010, we reached settlements with all of our creditors in connection with outstanding bills relating to our former proposed mining operations, and we terminated option agreements that we had in place with a number of consultants. We also reached a settlement agreement with Gottbetter & Partners, LLP, our legal counsel (“G&P”), whereby G&P agreed to forego payment of $49,580.49 in legal fees due for the 2009 fiscal year in exchange for and upon receipt of 198,322 restricted shares of our common stock (valued at $0.25 per share). Those shares were issued to G&P on November 11, 2010.

1. As further discussed in our Form 8-K filed with the Securities and Exchange Commission on January 28, 2010.

During the three months ended September 30, 2010, we did not generate any revenue and therefore we have been unable to generate cash flows sufficient to support our operations and we have been dependent on equity financing. In addition to negative cash flow from operations, we have experienced recurring net losses, and have an accumulated deficit of approximately $3.7 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 September 30, 2010 and Three Months Ended September 30, 2009

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

We incurred general and administrative expenses of $75,525 and $575,606 for the three months ended September 30, 2010 and 2009, 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 September 30, 2010 and 2009 was $(53,949) and $(575,069), respectively.

We have generated no revenues and our net operating loss from inception through September 30, 2010 was $(3,717,315).

Nine Months Ended September 30, 2010 and Nine Months Ended September 30, 2009

We incurred general and administrative expenses of $965,339 and $1,650,854 for the nine months ended September 30, 2010 and 2009, 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 nine months ended September 30, 2010 and 2009 was $(928,267) and $(1,647,236), respectively.

The change from the 2009 to the 2010 three and nine month periods reflect our increased costs incurred as a result of ramping up our business and exploration related expenditures incurred in connection with our review and analysis of prospective South American mining operation investment opportunities in fiscal 2009 offset by a decrease in costs as a result of our winding down of our planned South American mining exploration business in fiscal 2010 as well as stock-based compensation.

LIQUIDITY AND CAPITAL RESOURCES

Our cash and cash equivalents balance at September 30, 2010 was $1,126 as compared to $148,013 at December 31, 2009.

On September 17, 2008 we completed the Private Placement of our Common Stock for net proceeds to us of $1,980,313. We have been using the proceeds of the Private Placement for working capital purposes.

We presently do not have any available credit, bank financing or other external sources of liquidity, and the net proceeds from the Private Placement have been depleted. 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.

SUBSEQUENT EVENTS

On November 2, 2010, we completed the initial closing of a private placement offering (the “Offering”) of an aggregate of $150,000 principal amount of our 10% Convertible Promissory Notes (the “Notes”). In the initial closing of the Offering, we sold $121,885.30 of the Notes.

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 Luis F. Saenz, our Chief Executive Officer and 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 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 sole 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 September 30, 2010; 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:

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.

We did not maintain proper segregation of duties for the preparation of our financial statements. We currently only have one officer 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

31.1/31.2		Certification of Principal Executive Officer and 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

32.1/32.2		Certification of Chief Executive Officer and 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: November 15, 2010	By	/s/ Luis F. Saenz
		Luis F. Saenz, President, Principal Executive Officer and Interim Principal Financial Officer

HK GRAPHENE TECHNOLOGY CORP - FORM 10-Q - November 15, 2010

Attached files

HK GRAPHENE TECHNOLOGY CORP Reports