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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K



[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934


For the fiscal year ended March 31, 2013


[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934


For the transition period from ___________ to ___________


Commission File No. 333-159517



PETROTERRA CORP.

(Exact name of registrant as specified in its charter)


Nevada

7380

26-3106763

(State or jurisdiction of incorporation
or organization)

Primary Standard Industrial
Classification Code Number

IRS Employer
Identification Number



190 Dzerjinskogo St., Ovidiopol

Odesska obl., 67801, Ukraine

Telephone Number: 38 (048) 5131902

(Address and telephone number of registrant's executive office)     



Securities registered pursuant to Section 12(b) of the Act: None


Securities registered pursuant to Section 12(g) of the Act: None



1




Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]


Indicate by check mark if the  registrant  is not  required  to file  reports  pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]


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 shorter period that the registrant as required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K  is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes [ ] No [X]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer [ ]                        Accelerated filer [ ]

Non-accelerated filer [ ]                          Smaller reporting company [X]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes [X] No [ ]


As of July 16, 2013, the registrant had 106,048,000 shares of common stock issued and outstanding. No market value has been computed based upon the fact that no active trading market has been established as of July 16, 2013.



2




TABLE OF CONTENTS



Part 1   

 

 

Item 1

Description of Business

4

   

   

 

Item 1A    

Risk Factors

6

 

  

 

Item 1B

Unresolved Staff Comments                                     

6

 

 

 

Item 2   

Properties

6

      

 

 

Item 3   

Legal Proceedings                                             

6

      

 

 

Item 4

Submission of Matters to a Vote of Security Holders           

6

 Part II

 

 

Item  5   

Market for Common Equity and Related Stockholder Matters      

6

 

 

 

Item  6  

Selected Financial Data                                       

7

 

 

 

Item  7 

Management's Discussion and Analysis or Results of Operations

7

      

 

 

Item 7A      

Quantitative and Qualitative Disclosures about Market Risk   

9

 

 

 

 Item 8

Financial Statements and Supplementary Data                  

9

      

 

 

Item 9    

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

18

      

 

 

Item 9A (T)

Controls and Procedures

18

 

 

 

Item 9B

Other Information                                            

19

PART III

 

 

Item 10

Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act

19

 

 

 

Item 11

Executive Compensation

20

 

 

 

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

21

 

 

 

Item 13

Certain Relationships, Related Transactions and Director Independence

22

 

 

 

Item 14

Principal Accountant Fees and Services                       

22

PART IV

 

 

Item 15

Exhibits and Financial Statement Schedules                   

22




3





PART I


ITEM 1. DESCRIPTION OF BUSINESS


FORWARD-LOOKING STATEMENTS


This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.


As used in this annual report, the terms "we", "us", "our", "the Company", mean PetroTerra Corp., unless otherwise indicated.


All dollar amounts refer to US dollars unless otherwise indicated.


GENERAL


PetroTerra Corp. was incorporated under the laws of the State of Nevada, U.S. on July 25, 2008 under the name “Loran Connection Corp.”.  Our registration statement was originally filed with the Securities and Exchange Commission on May 28, 2009 and was declared effective on October 28, 2009.

 

We are in the business of organizing of individual and group tourism as well as business support in Ukraine.  Our services include:  reception, transportation, translating, organizing tourist trips, and business support. Our revenue will be earned from the fee for our services from our clients.  We may also receive commissions from tourist companies to which we will refer our potential guests.


On January 25, 2012, we changed our corporate name from Loran Connection Corp. to PetroTerra Corp. in contemplation of an asset acquisition that did not subsequently complete. Accordingly, we intend to pursue our original business plan despite our recent name change.




4




We intend to provide the following services in the area of individual and group tourism and business support in Ukraine:  


-

Reception and support services (Any visa support needed;  Arrangement of a qualified  

 

interpreter);

-

Transportation and driver services;

-

Excursions and tourist activities;                                       

-

Apartment for rent in Odessa and other cities;

-

Entertainment and other services;

-

Business support (Search and background check of potential business partners; Assistance

in  search,   interviewing   and  selection  of  qualified employees;  Assistance of office or

warehouse set up).


Our services will be offered in major cities of Ukraine, such as Kiev, Odessa, Kharkov and Lvov.



INSURANCE


We do not maintain any insurance and do not intend to maintain insurance in the future.  Because  we do not  have  any  insurance,  if we are  made a party of a personal injury action,  we may not have  sufficient  funds to  defend  the litigation.  If that occurs a judgment could be rendered against us that could cause us to cease operations.


RESEARCH AND DEVELOPMENT EXPENDITURES


We have not incurred any other research or development expenditures since our incorporation.


SUBSIDIARIES


We do not have any subsidiaries.


PATENTS AND TRADEMARKS


We do not own, either legally or beneficially, any patents or trademarks.




5




ITEM 1A. RISK FACTORS


Not applicable.



ITEM 1B. UNRESOLVED STAFF COMMENTS


None.


ITEM 2. PROPERTIES


We do not own any property.


ITEM 3. LEGAL PROCEEDINGS


We are not currently involved in any legal proceedings and we are not aware of any pending or potential legal actions.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


No report required.



PART II


ITEM 5. MARKET FOR EQUITY SECURITIES AND OTHER SHAREHOLDER MATTERS


MARKET INFORMATION


Our shares of common stock are quoted for trading on the OTC Bulletin Board. As of the date of this Annual report we had 37 shareholders of record.


DIVIDENDS

 

We have never paid or declared any dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future.


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS


We currently do not have any equity compensation plans.




6




ITEM 6. SELECTED FINANCIAL DATA


Not Applicable.


ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS


The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.  Our actual results could differ materially from those discussed in the forward looking statements.  Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Annual Report.  Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.


RESULTS OF OPERATIONS


We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.


We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.


Our net loss for the fiscal year ended March 31, 2013 was $15,547 compared to a net loss of $17,315 during the fiscal year ended March 31, 2012. During fiscal year ended March 31, 2013, we did not generated any revenue.


During the fiscal year ended March 31, 2013, we incurred expenses of $15,547 compared to $17,315 incurred during fiscal year ended March 31, 2012.  

 

LIQUIDITY AND CAPITAL RESOURCES


As of March 31, 2013, we didn’t have any assets and our total liabilities were $50,275. As of March 31, 2013, total liabilities were comprised of $5,585 in accounts payable and accrued liabilities and of $44,690 in advances from a director. Stockholders’ deficit decreased from ($34,728) as of March 31, 2012 to ($50,275) as of March 31, 2013.  




7




Cash Flows from Operating Activities


We have not generated positive cash flows from operating activities. For the fiscal year ended March 31, 2013, net cash flows used in operating activities was $32 consisting of a net loss of $15,547, accounts payables and accrued liabilities of $3,490 and related party loans paid directly to vendors on the Company’s behalf of $12,025. For the fiscal year ended March 31, 2012, net cash flows used in operating activities was $2,950 consisting of a net loss of $17,315, which was adjusted for the following non-cash items: common stock issued for services of $160, accounts payables and accrued liabilities of $2,040 and related party loans paid directly to vendors on the Company’s behalf of $12,165.Net cash flows used in operating activities was $42,300 for the period from our inception on July 25, 2008 to March 31, 2013.   


Cash Flows from Financing Activities


We have financed our operations primarily from either advancements or the issuance of equity and debt instruments.   For the fiscal year ended March 31, 2013 and 2012, net cash from financing activities was $0. For the period from our inception on July 25, 2008 to March 31, 2013, net cash provided by financing activities was $42,300, consisting of $21,800 in proceeds that we received from issuances of common stock and $20,500 in advances from a director.


PLAN OF OPERATION AND FUNDING


We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.


Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.


MATERIAL COMMITMENTS


As of the date of this Annual Report, we do not have any material commitments.


PURCHASE OF SIGNIFICANT EQUIPMENT


We do not intend to purchase any significant equipment during the next twelve months.



8






OFF-BALANCE SHEET ARRANGEMENTS


As of the date of this Annual Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.


GOING CONCERN


The independent auditors' report accompanying our March 31, 2013 and March 31, 2012 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Not applicable.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




INDEX TO FINANCIAL STATEMENTS


Report of Independent Registered Public Accounting Firm

Balance Sheets

Statements of Operations

Statement of Stockholder's Equity

Statements of Cash Flows

Notes to Financial Statements





9




 SEALE AND BEERS, CPAs

PCAOB & CPAB REGISTERED AUDITORS

www.sealebeers.com



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders of

PetroTerra Corp.

(A Development Stage Company)


We have audited the accompanying balance sheets of PetroTerra Corp. (A Development Stage Company) as of March 31, 2013 and 2012, and the related statements of operations, stockholders’ deficit, and cash flows for the years then ended and since inception on July 25, 2008 through March 31, 2013. PetroTerra Corp.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of PetroTerra Corp. (A Development Stage Company) as of March 31, 2013 and 2012, and the related statements of operations, stockholders’ deficit, and cash flows for the years then ended and since inception on July 25, 2008 through March 31, 2013 in conformity with accounting principles generally accepted in the United States of America.


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company has no revenues, has negative working capital at March 31, 2013, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern.  Management’s plans concerning these matters are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ Seale and Beers, CPAs


Seale and Beers, CPAs

Las Vegas, Nevada

July 9, 2013


50 S. Jones Blvd. Suite 202 Las Vegas, NV 89107 Phone: (888)727-8251 Fax: (888)782-2351



10




 

PETROTERRA CORP.

(A Development Stage Company)

Balance Sheets

 

Assets

 

 

 

 

 

March 31,

 

March 31,

 

 

 

 

 

2013

 

2012

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

 

$

0

$

32

    

     

Total  Current Assets

 

 

 


0



32

 

 

 

 

 

 

 

 

Total Assets

 

 

 

$

0

$

32


Liabilities and Stockholders’ Equity (deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

Accounts payables and accrued liabilities

 

 

$

5,585

$

2,095

 

Loan from Director

 

 

 

44,690

 

32,665

 


Total Current Liabilities

 

 

 


50,275



34,760


Total Liabilities

 

 


$


50,275


$


34,760

 

 

 

 

 

 

 

Stockholders’ Equity (deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Preferred Stock, $0.001 par value, 20,000,000 shares authorized; 0 shares issues and outstanding.

 

0

 

0

 

Common stock, $0.001par value, 200,000,000 shares authorized ; 106,048,000 shares issued and outstanding

 

 

 

106,048

 

106,048

 

Additional paid-in-capital

 

 

 

(84,088)

 

(84,088)

 

Deficit accumulated during the development stage

 

 

 

(72,235)

 

(56,688)


Total stockholders’ equity (deficit)

 

 

 


(50,275)

 


(34,728)


Total liabilities and stockholders’ equity (deficit)

 

 


$


0


$


32

 

 

The accompanying notes are an integral part of these financial statements.



11





PETROTERRA CORP.

 (A Development Stage Company)

Statements of Operations

 

 

 

 

 

 

Year Ended

March 31, 2013

 

Year Ended

March 31, 2012

 

From Inception on July 25,

2008 to

March 31, 2013

Expenses

 

 

 

 

 

 

General and Administrative Expenses

$

15,547

 

$           17,155

 

    $     72,075

Compensation Consulting Fee Expense - Related

 

-

 

160

 

160

  Net (loss) from Operation before Taxes

 

(15,547)

 

(17,315)

 

(72,235)

Provision for Income Taxes

 

0

 

0

 

0


Net (loss)

$

(15,547)

 


 $       (17,315)

 

     $  (72,235)

(Loss) per common share – Basic and diluted

$

       (0.00)

 

$           (0.00)

 

 

Weighted Average Number of Common Shares Outstanding

 


106,048,000

 

139,061,158

 

 


The accompanying notes are an integral part of these financial statements.




12





PETROTERRA CORP.

 (A Development Stage Company)

Statement of Stockholders’ Deficit

From Inception on July 25, 2008 to March 31, 2013

 

 

Number of

Common

Shares


Amount

Additional

Paid-in-

Capital

Deficit

accumulated

During  development stage



Total

 

 

 

 

 

 

Balance at inception on July 25, 2008

 

 

 

 

 

 

  November 28, 2008

 

 

 

 

 

 

Common shares issued for cash   at $0.00003125

 


28,800,000

$    28,800

$    (27,900)

$               -


$    900

  December 4, 2008

 

 

 

 

 

 

Common shares issued for cash   at $0.00003125

 


64,000,000

64,000

(62,000)

                 -


2,000

  March 19, 2009

 

 

 

 

 

 

Common shares issued for cash at $0.00003125

 


60,480,000

60,480

(41,580)

 


18,900


Net (loss)

 

 

 

 

(1,238)


(1,238)


Balance as of March 31, 2009


153,280,000


    153,280


(131,480)


(1,238)


  20,562


Net (loss)

 

 

 

(27,699)


(27,699)


Balance as of March 31, 2010

153,280,000

 153,280

  (131,480)

   (28,937)

  (7,137)


Net (loss)

 

 

 

(10,436)


(10,436)


Balance as of March 31, 2011


153,280,000

153,280

(131,480)

(39,373)


(17,573)


December 14, 2011

 

 

 

 

 

Common shares cancelled

(47,744,000)

(47,744)

47,744

-

-


December 14, 2011 Common shares      issued at $0.0003125



512,000

512

(352)

-



160


Net (loss)

 

 

 

(17,315)


(17,315)


Balance as of March 31, 2012


106,048,000


  106,048


$   (84,088)


     (56,688)


  (34,728)


Net (loss)

 

 

 

(15,547)

(15,547)


Balance as of March 31, 2013

106,048,000

$   106,048

$    (84,088)

$  (72,235)

$  (50,275)


The accompanying notes are an integral part of these financial statements.





13





PETROTERRA CORP.

(formerly Loran Connection Corp.)

(A Development Stage Company)

Statements of Cash Flows

 

 

 

Year Ended

March 31, 2013

 

Year Ended

March 31, 2012

 

From Inception on July 25,

2008 to

March 31, 2013

Operating Activities

 

 

 

 

 

 

 

  Net (loss)

$

(15,547)

$

(17,315)

$

(72,235)

 

Common stock Issued for Services

 

-

 

160

 

160

 

Accounts payables and accrued liabilities

 

3,490

 

2,040

 

5,585

 

Related Party Loans – paid directly to vendors on behalf of the Company

 

12,025

 


12,165

 


24,190

 


Net cash (used) for operating activities

 


(32)

 


(2,950)

 


(42,300)

 

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

 

 

Loans from Director

 

-

 

-

 

20,500

 

Sale of common stock

 

-

 

-

 

21,800

 


Net cash provided by financing activities

 


-

 


 -

 


42,300

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and equivalents

 

(32)

 

(2,950)

 

0

 

 

 

 

 

 

 

Cash and equivalents at beginning of the period

 

32

 

2,982

 

-


Cash and equivalents at end of the period


$


0


$


32


$


0

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

Cash paid for:

 

 

 

 

 

 

 

Interest                                                                                               

$

-

$

-

$

-

 


Taxes  


$


-


$


-


$


-

 

Non-Cash Activity

 

 

 

 

 

 

 


Common Stock Issued for Services


$


-


$


-


$


160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements



14





PETROTERRA CORP.

 (A Development Stage Company)

Notes To The Financial Statements

March 31, 2013



1. ORGANIZATION AND BUSINESS OPERATIONS


PetroTerra CORP (“the Company”) was incorporated under the laws of the State of Nevada, U.S. on July 25, 2008.  The Company is in the development stage as defined under Accounting Codification Standard, Development Stage Entities (“ASC-915”) and intends to organize individual and group tourism as well as business support in Ukraine. The Company has not generated any revenue to date and consequently its operations are subject to all risks inherent in the establishment of a new business enterprise.  For the period from inception on July 25, 2008 through March 31, 2013 the Company has accumulated losses of $72,235.


2. GOING CONCERN


The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.  The Company has incurred losses since inception resulting in an accumulated deficit of $72,235 as of March 31, 2013 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern.  The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or private placement of common stock.  



3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


a)Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.  


b) Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. The company’s cash is petty cash in the possession of the sole director of the Company.


c) Use of Estimates and Assumptions

The  preparation  of  financial  statements  in conformity with accounting principles generally  accepted  in  the  United States requires  management  to  make   estimates and assumptions that  affect  the reported amounts of  assets and liabilities and disclosure of contingent assets and liabilities at  the  date  of  the  financial  statements  and the reported amounts of  revenues  and    expenses  during  the  reporting  period. Actual  results  could differ from those estimates.

In management’s opinion, all adjustments necessary for a fair statement of the results for the interim periods have been made, and all adjustments are of a normal recurring nature.


d) Foreign Currency Translation

The Company's functional currency and its reporting currency is the United  States dollar.




15




PETROTERRA CORP.

 (A Development Stage Company)

Notes To The Financial Statements

March 31, 2013


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


e) Stock-based Compensation

In September, 2009 the FASB issued ASC-718, “Stock Compensation”. ASC-718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. Under ASC-718, the Company must determine the appropriate fair value model to be used for valuing share-based payments, the amortization method for compensation cost and the transition method to be used at date of adoption.


f) Income Taxes

Income taxes are accounted for  under  the  assets  and liability method.  Deferred  tax  assets  and  liabilities are recognized for  the  estimated future tax consequences attributable  to differences between the financial  statement carrying amounts of existing  assets  and  liabilities and their respective  tax  bases and operating loss and tax credit  carry  forwards. Deferred tax assets  and  liabilities are measured using enacted tax rates  in effect for the year in which  those  temporary differences are expected to be recovered or settled.


g) Basic and Diluted Loss Per Share

The Company computes loss per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period.  Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are equal.


h) Fiscal Periods

The Company's fiscal year end is March 31.


i) Recent accounting pronouncements

We have reviewed all the recent accounting pronouncements issued to date, and we do not believe any of these pronouncements will have a material impact on the company.


j) Revenue Recognition

The Company will recognize revenue in accordance with Accounting Standards Codification No. 605, Revenue recognition ("ASC-605"), ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectibility of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.



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PETROTERRA CORP.

 (A Development Stage Company)

Notes To The Financial Statements

March 31, 2013


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


k) Advertising

The Company follows the policy of charging the costs of advertising to expenses incurred. The Company incurred $0 in advertising costs during the period July 25, 2008  (inception)  to March 31, 2013.


4. COMMON STOCK


Company’s authorized capital is 220,000,000 shares consisting of 200,000,000 shares of common stock and 20,000,000 shares of preferred stock, both with a par value of $0.001 per share.


On January 3, 2012 the Company completed a forward stock split whereby every pre-split share of common stock is exchangeable for 32 shares of post-split common stock. Accordingly, all share and per share information has been restated to retroactively show the effect of the stock split.


On November 28, 2008, the Company issued 28,800,000 post-split shares of common stock at a price of $0.00003125 per share for total cash proceeds of $900.


On December 4,  2008, the Company issued 64,000,000 post-split shares of common stock at a price of $0.00003125 per share for total cash proceeds of $2,000.


During the period December 10, 2008 to March 19, 2009, the Company issued 60,480,000 post-split shares of common stock at a price of $0.0003125 per share for total cash proceeds of $18,900.


During the period July 25, 2008  (inception)  to March 31, 2009, the Company  sold  a  total of 153,280,000 shares of common stock  for  total  cash proceeds  of  $21,800.

 

On December 14, 2011, in connection with the change in directors, two controlling shareholders cancelled an aggregate of 47,744,000 shares of Common Stock  which were returned to the status of authorized but unissued shares.

On the same day, 512,000 new common shares were issued to a director for services valued at $0.0003125 per share.


As of and March 31, 2013, the Company had 106,048,000 shares of common stock issued and outstanding.





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PETROTERRA CORP.

 (A Development Stage Company)

Notes To The Financial Statements

March 31, 2013


5. INCOME TAXES


As of March 31, 2013, the Company had net operating loss carry forwards of approximately $72,235 that may be available to reduce future years’ taxable income through 2033. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.


Components of net deferred tax assets, including a valuation allowance, are as follows at March 31, 2013


 

2013

Deferred tax assets:

 

Net operating loss carry forward

$         72,235

         

Total deferred tax assets

25,282

Less: valuation allowance

 (25,282)

Net deferred tax assets

$                -


Components of net deferred tax assets, including a valuation allowance, are as follows at March 31, 2012


 

2012

Deferred tax assets:

 

Net operating loss carry forward

$         56,688

         

Total deferred tax assets

19,841

Less: valuation allowance

 (19,841)

Net deferred tax assets

$                -




The valuation allowance for deferred tax assets as of March 31, 2013 was $25,282 compared to 19,841 as at March 31, 2012. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of March 31, 2013.

Reconciliation between the statutory rate and the effective tax rate is as follows at March 31, 2013 and March 31, 2012:

 

2013

 

2012

 

Federal statutory tax rate

(35.0)

%

(35.0)

%

Permanent difference and other

35.0

%

35.0

%

Effective tax rate

-

%

           -

%



6. RELATED PARTY TRANSACTIONS


As of March 31, 2013 the total amount loaned to the company by a director was $44,690. The loan is non-interest bearing, due upon demand and unsecured.



7. SUBSEQUENT EVENT


The Company has evaluated subsequent events from March 31, 2013  through the filing date of these financial statements and has determined that there are no items to disclose.







ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE


None.



ITEM 9A(T). CONTROLS AND PROCEDURES


EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES


An evaluation was conducted under the supervision and with the  participation of our management, including Ms. Larysa Dekhtyaruk,  our Chief  Executive  Officer and our Chief Financial  Officer of the effectiveness of the design and operation of our disclosure  controls  and  procedures  as of  March  31, 2013.  Based  on  that evaluation,  Ms. Dekhtyaruk concluded that our disclosure  controls and procedures were  effective  as of such date to ensure that  information  required to be disclosed  in the  reports that we file or submit  under the  Exchange  Act, is recorded,  processed,  summarized and reported within the time periods specified in SEC rules and forms.  Such officer also confirmed that there was no change in our internal  control over financial  reporting  during the year ended March 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.




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We maintain  "disclosure  controls and  procedures,"  as such term is defined in Rule 13a-15(e) under the Securities  Exchange Act of 1934 (the "Exchange  Act"), that are  designed to ensure that  information required to be  disclosed in our Exchange Act reports is recorded, processed,  summarized and reported within the time periods  specified in the  Securities  and  Exchange  Commission  rules and forms,  and that  such  information  is  accumulated  and  communicated  to our management,  including our Chief Executive  Officer/Chief  Financial Officer, as appropriate,  to  allow  timely  decisions  regarding required  disclosure.  We conducted an evaluation (the  "Evaluation"),  under the supervision and with the participation  of our Chief  Executive  Officer/Chief  Financial  Officer of the effectiveness  of the  design and  operation  of our  disclosure  controls  and procedures  ("Disclosure  Controls") as of the end of the period covered by this report  pursuant to Rule  13a-15 of the  Exchange  Act.  The  evaluation  of our disclosure controls and procedures included a review of the disclosure controls' and  procedures' objectives,  design,  implementation  and  the  effect  of the controls and procedures on the information generated for use in this report. In the course of our evaluation, we sought to identify data errors, control problems or acts of fraud and to confirm the appropriate corrective actions, if any, including process improvements, were being undertaken. Our Chief Executive Officer/Chief Financial Officer concluded that, as of the end of the period covered by this Annual report, our disclosure controls and procedures were effective and were operating at the reasonable assurance level.


ITEM 9B. OTHER INFORMATION


None.


PART III


ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE COMPANY


DIRECTORS AND EXECUTIVE OFFICERS


 The name, address and position of our present officers and directors are set forth below:

 

 

Name and Address 

Position(s) 

Larysa Dekhtyaruk

President, Principal Executive Officer, Secretary,

Treasurer, Principal Financial Officer, Principal 

Accounting Officer and member of the Board of

Directors. 

190 Dzerjinskogo St., Ovidiopol

Odesska obl., 67801, Ukraine


Biographical Information and Background of officers and directors


Since our inception on July 25, 2008, Larysa Dekhtyaruk has been our President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer, Chief Accounting Officer and member of our board of directors.  In 2004, Ms. Larysa Dekhtyaruk completed a government certified course as a Foster Home Operator. Since 2004, she managed a foster home and provided care for orphan children. Ms.Dekhtyaruk holds a Bachelor degree in chemistry from University of Odessa and is fluent in English, Russian and Ukrainian languages.



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AUDIT COMMITTEE


We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we have no operations, at the present time, we believe the services of a financial expert are not warranted.


SIGNIFICANT EMPLOYEES


Other than our directors, we do not expect any other individuals to make a significant contribution to our business.


ITEM 11. EXECUTIVE COMPENSATION


The following table sets forth the compensation paid by us for the last three fiscal years ending March 31, 2013 for each of our officers. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid to named executive officers. 




EXECUTIVE OFFICER COMPENSATION TABLE


 

 

 

 

 

 

 

 

 

 

Name and Principal Position

Year

Salary (US$)

Bonus (US$)

Stock Awards (US$)

Option Awards (US$)

Non-Equity Incentive Plan Compensation (US$)

Nonqualified Deferred Compensation Earnings (US$)

All Other Compensation (US$)

Total (US$)

Larysa Dekhtyaruk

2013

0

0

0

0

0

0

0

0

2012

0

0

0

0

0

0

0

0

 

2011

0

0

0

0

0

0

0

0

 

2010

0

0

0

0

0

0

0

0

 

2009

0

0

0

0

0

0

0

0


We have no employment agreements with any of our officers. We do not contemplate entering into any employment agreements until such time as we begin profitable operations.


The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officers.


There are no stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors.



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Compensation of Directors


The member of our board of directors is not compensated for his services as a director. The board has not implemented a plan to award options to any directors. There are no contractual arrangements with any member of the board of directors. We have no director's service contracts.


CHANGE OF CONTROL


As of March 31, 2013, we had no pension plans or compensatory plans or other arrangements which provide compensation in the event of a termination of employment or a change in our control.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


The following table sets forth information as of March 31, 2013 regarding the ownership of our common stock by each shareholder known by us to be the beneficial owner of more than five percent of our outstanding shares of common stock, each director and all executive officers and directors as a group. Except as otherwise indicated, each of the shareholders has sole voting and investment power with respect to the shares of common stock beneficially owned.


Title of Class


Name of  Beneficial Owner

Amount of Beneficial Ownership

Percent of class

Common Stock

Villay Asset Management LLC

11,264,000

10.62%

Common Stock

Newbridge Equipment

and Controls

11,264,000

10.62%

Common Stock

Alejandro Moreno

10,560,000

9.96%

Common Stock

EPS Holdings Limited

10,560,000

9.96%

Common Stock

Directors and officers as a group consisting of one person

0

0%


The percent of class is based on 106,048,000 shares of common stock issued and outstanding as of the date of this annual report.


The above-noted shareholders acquired their positions pursuant to a share purchase agreement with our president, Larysa Dekhtyaruk and our former director, Artem Kruk. One of the conditions of the share purchase agreement was that the purchasing shareholders facilitate our acquisition of certain assets, which did not transpire. Accordingly, as of the date of this Annual Report, the purchasing shareholders were in the process of transferring the noted shares back to Dekhtyaruk.



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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


On December 14, 2011, a change in control of Loran Connection Corp (the “Company”) occurred. Two controlling shareholders cancelled an aggregate of 1,492,000 shares of Common Stock, which were returned to the status of authorized but unissued shares. Ms. Larysa Dekhtyaruk, a director, principal officer and a principal shareholder ("Dekhtyaruk"), cancelled 463,000 shares and Mr. Artem Kruk, a director and a principal shareholder (“Kruk”) cancelled 1,029,000 shares. Contemporaneous with the cancellation of those shares, Dekhtyaruk sold four hundred thirty seven thousand (437,000) shares, representing 13.25% of the issued and outstanding shares of Common Stock of the Company and Kruk sold nine hundred seventy one thousand (971,000) shares, representing 29.44% of the issued and outstanding Common Stock of the Company in a private transaction.  (Dekhtyaruk and Kruk are collectively referred to as the "Selling Shareholders").


The closing of the purchase and sale of stock transaction occurred on December 14, 2011. On the date of the closing, the Selling Shareholders owned 1,408,000 shares of Common Stock (after giving effect to the cancellation of the 1,492,000 returned shares) from a total of 3,298,000 shares outstanding.   The Selling Shareholders owned 60.54% of all of the voting securities of the Company prior to the transaction.  At the close of the transaction, the Selling Shareholders divested their entire 60.54% of the total voting securities of the Company, resulting in Dekhtyaruk and Kruk as Selling Shareholders having no ownership or percent of the voting securities.


One of the conditions of the share purchase agreement was that the purchasing shareholders facilitate our acquisition of certain assets, which did not transpire. Accordingly, as of the date of this Annual Report, the purchasing shareholders were in the process of transferring the noted shares back to Dekhtyaruk.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES


During  fiscal year ended March 31, 2013, we incurred  approximately $8,000 in fees to our principal independent accountants for professional services rendered in connection  with the audit of our financial statements for the fiscal year ended March 31, 2012 and for the reviews of our financial statements for the quarters ended June 30, 2012, September 30, 2012  and December 31, 2012.



ITEM 15. EXHIBITS


The following exhibits are filed as part of this Annual Report.


Exhibits:


23.1    Consent of Independent Registered Public Accounting Firm



31.1

Certification Statement of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002


32.1   

Certification of Chief Executive Officer and Chief Financial Officer under Section 1350 as Adopted Pursuant Section 906 of the Sarbanes-Oxley Act.



22






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.


                                          

                    

 


PETROTERRA CORP.


Dated: July 16, 2013  


By: /s/ Larysa Dekhtyaruk

 

Larysa Dekhtyaruk, President and

Chief Executive Officer and Chief Financial Officer




23