DevMar Equities (DEVM) 10-Q/A 2008 Q2 Quarterly report (amended)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

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

For the quarterly period ended June 30, 2008

OR

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

For the transition period from ______ to ________

Commission File Number 333-138465

LA CORTEZ ENERGY, INC.

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

Nevada	1311	20-5157768
(State of incorporation)	(Primary SIC Number)	(IRS Employer ID Number)

1266 1st Street, Suite 4

Sarasota, FL 34236

(941)365-5081

(Address and telephone number of principal executive offices)

2260 El Cajon Blvd. #882

San Diego, CA 92104

(Former address of principal executive offices)

Indicate whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  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 þ
		(Do not check if a smaller Reporting company)

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

There were 18,935,244  shares of Common Stock outstanding as of May 31, 2009.

EXPLANATORY NOTE

Our condensed consolidated financial statements for the six months ended June 30, 2008 and related disclosures in this Amendment No. 1 to the Quarterly Report on Form 10-Q/A have been restated in accordance with the changes described below:

In April 2009, we concluded that it was necessary to amend this Quarterly Report in order to restate our condensed consolidated financial statements for the six months ended June 30, 2008 to reflect the revaluation of 1,000,000 shares (restated for 5:1 forward stock split) of our common stock we issued to a consultant on February 7, 2008 at an original valuation of $0.01 per share (post-5:1 forward stock split), in exchange for services.  Upon review and consideration of the requirements of EITF 96-18 “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services,” regarding the valuation of this stock, our management has concluded that the shares issued to the consultant should have been valued at $1.00 per share (post-5:1 forward stock split) based on the $1.00 per share stock price we received in our private placement that closed on March 14, 2008.  As a result, we have recognized additional compensation expense of $990,000 and an increase in additional paid-in capital by a corresponding amount.

In the process of preparing this Amendment No. 1 to the June 30, 2008 10-Q, we noted that the weighted average number of common shares outstanding in the Statement of Operations for the three months and six months ended June 30, 2007 had not been properly restated to reflect the 5:1 forward stock split which occurred on February 21, 2008.  We also noted that the condensed balance sheet as of December 31, 2007 had not been reclassified to properly reflect the 5:1 forward stock split which occurred on February 21, 2008.

In the process of preparing this Amendment No. 1 to the June 30, 2008 10-Q, we also noted that the comparative cash flow information for the six month period ended June 30, 2007 in the original June 30, 2008 Form 10-Q filed on August 14, 2008, erroneously reflected the cash flow information for three months ended March 31, 2007 instead of the cash flow information for the six month period ended June 30, 2007.

The condensed consolidated financial statements and other financial information included in this Amendment No. 1 to the June 30, 2008 10-Q have been restated accordingly. Our shareholders should no longer rely on our previously filed financial statements for the six months ended June 30, 2008.  These matters have been discussed by our authorized executive officers and with our independent registered public accounting firm.

As a result of the above changes, management has changed its evaluation of the effectiveness of our disclosure controls and procedures.

This Amendment No. 1 reproduces only those sections of the original Form 10-Q that have been changed as a result of the restatement. This Amendment No. 1 is stated as of the file date of the Original Filing and does not reflect events occurring after the filing date of the Original Filing, or modify or update the disclosures therein in any way other than as required to reflect the amendment described above.

Statement Regarding Forward-Looking Information

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, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements, including, but not limited to, our ability to identify and exploit available business opportunities in the energy sector in Colombia and Peru and, more generally, in Latin America and to establish the technical and managerial infrastructure to take advantage of, and successfully participate in such opportunities, our ability to raise sufficient capital to successfully participate in projects in our field of operations, future economic conditions, political stability and energy prices.

Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

ii

LA CORTEZ ENERGY, INC.

TABLE OF CONTENTS

				Page
Part I Financial Information
	Item 1	Financial Statements		1
		Condensed Consolidated Balance Sheet (unaudited) (restated)		1
		Condensed consolidated Statements of Operations (unaudited) (restated)		2
		Consolidated Statements of Changes in Shareholders’ Equity (unaudited) (restated)	3
		Condensed Consolidated Statements of Cash Flows (unaudited) (restated)		4
		Notes to the Unaudited Condensed Financial Statements		5
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
	Item 4T	Controls and Procedures		15
Part II Other Information				16
	Item 6	Exhibits		16
Signatures				17
Exhibit – Certification of Principal Executive Officer and Principal Financial Officer
Exhibit – Certification of Chief Executive Officer and Chief Financial Officer

iii

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS 

LA CORTEZ ENERGY, INC.

And Subsidiary

LA CORTEZ ENERGY COLOMBIA, E.U.

(a Development Stage Company)

Condensed Consolidated Balance Sheets

(Unaudited)

	June 30,			December 31,
	2008			2007
	(Restated)			(Restated)
Assets
Cash and cash equivalents	$	2,063,132		$	1,025
Prepaid expenses		48,756			—
Total current assets		2,111,888			1,025
Property and equipment, net		45,000			—
Deposit		—			500
	$	2,156,888		$	1,525
Liabilities and Shareholders’ Equity
Liabilities:
Accounts payable	$	22,785		$	—
Accrued liabilities		28,814			1,000
Indebtedness to related party (Note 3)		—			14,600
Total liabilities		51,599			15,600
Shareholders’ equity (Notes 3 and 5):
Common stock, $.001 par value; 300,000,000 and 300,000,000 shares authorized, respectively, and  16,400,444 and 20,750,000 shares issued and outstanding, respectively		16,400			20,750
Additional paid-in capital		3,488,022			7,250
Deficit accumulated during development stage		(1,399,133	)		(42,075	)
Total shareholders’ equity		2,105,289			(14,075	)
	$	2,156,888		$	1,525

See accompanying notes to condensed consolidated financial statements

1

LA CORTEZ ENERGY, INC.

And Subsidiary

LA CORTEZ ENERGY COLOMBIA, E.U.

(a Development Stage Company)

Condensed Consolidated Statements of Operations

(Unaudited)

													June 9, 2006
													(Inception)
	Three Months Ended						Six Months Ended						Through
	June 30,						June 30,						June 30,
	2008			2007			2008			2007			2008
				(Restated)			(Restated)			(Restated)			(Restated)
Operating expenses:
Compensation	$	71,819		$	—		$	1,071,819		$	—		$	1,071,819
Professional fees		52,678			2,410			160,796			15,145			190,479
Management fees		—			1,500			—			3,000			7,500
Travel		62,932			—			69,021			—			69,021
Rent		—			600			600			1,200			4,200
Other		56,992			82			62,963			501			64,255
Total operating expenses		244,421			4,592			1,365,199			19,846			1,407,274
Loss from operations		(244,421	)		(4,592	)		(1,365,199	)		(19,846	)		(1,407,274	)
Non-operating income (expense):
Interest income		7,710			—			8,363			—			8,363
Interest expense		—			—			(222	)		—			(222	)
Loss before income taxes		(236,711	)		(4,592	)		(1,357,058	)		(19,846	)		(1,399,133	)
Income tax provision (Note 6)		—			—			—			—			—
Net loss	$	(236,711	)	$	(4,592	)	$	(1,357,058	)	$	(19,846	)	$	(1,399,133	)
Basic and diluted loss per share	$	(0.02	)	$	(0.00	)	$	(0.08	)	$	(0.00	)
Basic and diluted weighted average common shares outstanding		16,400,444			20,750,000			17,071,746			20,750,000

See accompanying notes to condensed consolidated financial statements

2

LA CORTEZ ENERGY, INC.

And Subsidiary

LA CORTEZ ENERGY COLOMBIA, E.U.

(a Development Stage Company)

Condensed Consolidated Changes in Shareholders’ Equity

(Unaudited)

											Deficit
											Accumulated
								Additional			During
		Common Stock						Paid-in			Development
		Shares			Amount			Capital			Stage			Total
Balance at June 9, 2006 (inception)			—		$	—		$	—		$	—		$	—
July 2006, common stock sold to president/
sole director at $.0008 per share (Note 3)	*		11,250,000			11,250			(2,250	)		—			9,000
December 2006, common stock sold pursuant
to a SB-2 registered offering at $.002/share
(Note 5)	*		9,500,000			9,500			9,500			—			19,000
Net loss, period ended December 31, 2006			—			—			—			(13,239	)		(13,239	)
Balance at December 31, 2006	*		20,750,000			20,750			7,250			(13,239	)		14,761
Net loss, year ended December 31, 2007			—			—			—			(28,836	)		(28,836	)
Balance at December 31, 2007	*		20,750,000			20,750			7,250			(42,075	)		(14,075	)
February 2008, common stock sold to an
officer at $.01 per share (unaudited) (Note 3)	*		1,150,000			1,150			10,350			—			11,500
February 2008, common stock issued to a
consultant in exchange for services at $1.00
per share (unaudited) (Restated) (Notes 5 and 10)	*		1,000,000			1,000			999,000			—			1,000,000
February 2008, cancellation of former officer's
shares (unaudited) (Note 3)			(9,000,000	)		(9,000	)		9,000			—			—
February 2008, common stock issued in exchange
for extinguishment of debt and accrued
interest at $.50 per share (unaudited) (Note 5)			100,444			100			50,122			—			50,222
March 2008, common stock sold in private
placement offering at $1.00 per share
(unaudited) (Note 5)			2,400,000			2,400			2,397,600			—			2,400,000
June 2008, indebtedness forgiven by related
party (unaudited) (Note 3)			—			—			14,700			—			14,700
Net loss, six months ended
June 30, 2008 (unaudited) (Restated)(Note 10)			—			—			—			(1,357,058	)		(1,357,058	)
Balance at June 30, 2008 (unaudited) (Restated)(Note 10)			16,400,444		$	16,400		$	3,488,022		$	(1,399,133	)	$	2,105,289

* Restated for 5:1 forward stock split (see Note 5)

See accompanying notes to condensed consolidated financial statements

3

LA CORTEZ ENERGY, INC.

And Subsidiary

LA CORTEZ ENERGY COLOMBIA, E.U.

(a Development Stage Company)

Condensed Consolidated Statements of Cash Flows

(Unaudited)

							June 9, 2006
							(Inception)
	Six Months Ended						Through
	June 30,						June 30,
	2008			2007			2008
	(Restated)			(Restated)			(Restated)
Cash flows from operating activities:
Net loss	$	(1,357,058	)	$	(19,846	)	$	(1,399,133	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation		847			—			847
Stock-based compensation		1,000,000			—			1,000,000
Common stock issued in exchange for
interest expense		222			—			222
Changes in operating assets and liabilities:
Prepaid expenses		(48,756	)		—			(48,756	)
Deposit		500			—			—
Accounts payable		22,785			—			22,785
Accrued liabilities		27,814			(2,300	)		28,814
Indebtedness to related party		100			—			100
Net cash used in operating activities		(353,546	)		(22,146	)		(395,121	)
Cash flows from investing activities:
Purchases of property and equipment		(45,847	)		—			(45,847	)
Net cash used in investing activities		(45,847	)		—			(45,847	)
Cash flows from financing activities:
Proceeds from the sale of common stock		2,411,500			—			2,439,500
Proceeds from issuance of note payable		50,000			—			50,000
Proceeds from officer advances		—			12,600			14,600
Net cash provided by financing activities		2,461,500			12,600			2,504,100
Net change in cash		2,062,107			(9,546	)		2,063,132
Cash, beginning of period		1,025			19,861			—
Cash, end of period	$	2,063,132		$	10,315		$	2,063,132
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes	$	—		$	—		$	—
Interest	$	—		$	—		$	—
Non-cash financing transactions:
Common stock issued in exchange for
extinguishment of note payable	$	(50,000	)	$	—		$	(50,000	)

See accompanying notes to condensed consolidated financial statements

4

LA CORTEZ ENERGY, INC.

And Subsidiary

LA CORTEZ ENERGY COLOMBIA, E.U.

(a Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

 (1) Basis of Presentation

The condensed consolidated financial statements presented herein have been prepared by the Company in accordance with the accounting policies set forth in its audited financial statements for the period ended December 31, 2007 as filed with the Securities and Exchange Commission (the “SEC”) in the Company’s Annual Report on Form 10-KSB and should be read in conjunction with the notes thereto. The Company is in the development stage in accordance with Statement of Financial Accounting Standards (“SFAS”) No.7 “Accounting and Reporting by Development Stage Enterprises”.

In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) which are necessary to provide a fair presentation of operating results for the interim periods presented. Certain information and footnote disclosures, normally included in the financial statements prepared in accordance with generally accepted accounting principles, have been condensed. The results of operations presented for the three and six months ended June 30, 2008 are not necessarily indicative of the results to be expected for the year.  These condensed consolidated financial statements should be read in connection with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2007.

Interim financial data presented herein are unaudited.

As described in Notes 5 and 10, these condensed financial statements as of June 30, 2008 and for the six months then ended have been restated to reflect the revaluation of 1,000,000 shares (restated for 5:1 forward stock split) of the Company’s common stock it issued to a consultant on February 7, 2008 at an original valuation of $0.01 per share (post-5:1 forward stock split), in exchange for services.

(2) Organization

La Cortez Energy, Inc. (“LCE,” and together with its subsidiary, La Cortez Energy Colombia, E.U. the “Company”),  is an international, early stage oil and gas exploration and production (“E&P”) company concentrating on opportunities in South America. The Company is currently evaluating ways to optimize its business structure in each jurisdiction where it intends to conduct its business and is currently establishing a branch in Colombia.

LCE was incorporated on June 9, 2006 in the State of Nevada. LCE was originally formed to create market and sell gourmet chocolates wholesale and retail throughout Mexico, as more fully described in its registration statement on Form SB-2 as filed with the SEC on November 7, 2006 (the “Legacy Business”). This business has been discontinued. On February 7, 2008, LCE changed its name from La Cortez Enterprises, Inc. to La Cortez Energy, Inc. See Note 9, Subsequent Events.

On March 14, 2008, the Company closed a private placement of its common stock, pursuant to which it raised $2,400,000 ($2,314,895 net after offering expenses). The Company has been using the net proceeds to begin its operations in South America. See Note 5 below.

(3) Related Party Transactions

Forgiveness of indebtedness to related party

On July 28, 2006, the then sole officer and director of the Company advanced $2,000 to the Company for working capital. The advance is included in the accompanying condensed statements of financial condition at December 31, 2007, as “Indebtedness to related party.” On June 16, 2007, the then sole officer and director advanced $10,000 to the Company for working capital. On May 17, 2007, the then sole officer and director advanced $2,600 to the Company for working capital. All of these advances bore no interest and were payable on demand. On June 30, 2008, the former sole officer and director forgave the total outstanding advances of $14,600 with no interest and no penalty, and this amount was written off of the Company’s condensed consolidated statements of financial condition as of that date and was recognized as additional paid in capital during the three months ended June 30, 2008.

5

LA CORTEZ ENERGY, INC.

And Subsidiary

LA CORTEZ ENERGY COLOMBIA, E.U.

(a Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

Common stock sales

On February 7, 2008, the Company sold 1,150,000 (after giving effect to the common stock split referred to in Note 5 below) shares of its $.001 par value common stock to its newly appointed sole officer and director for $11,500, or $.01 (post-split) per share, the fair market value of the Company’s common stock on the date of sale, as determined by the Company’s Board of Directors.

On July 28, 2006, the Company sold 11,250,000 (post-split) shares of its $.001 par value common stock to its then sole officer and director for $9,000, or $.0008 (post-split) per share. Because the price paid for these shares was below par value on a post-split basis, the Company recorded a reduction to additional paid-in capital.

(4) Explanation of Assets and Liabilities on Financial Statements

Assets

As of June 30, 2008 there was a balance of $48,756 of prepaid expenses; $41,666 was for the balance of prepaid insurance, which is paid through May 2009 and will be reduced by $4,166 per month; the remaining $7,090 was for services provided for the Bogota, Colombia office set-up; those services are expected to be completed during the third quarter of 2008.

The Company will use the straight-line method to depreciate the $45,000 of property and equipment over five years. Depreciation expense for the six months ended June 30, 2008 totaled $847.

Liabilities

As of June 30, 2008 the Company posted accounts payable and accrued expenses in the amount of $51,599, which represents general and administrative costs and withholding taxes.

(5) Shareholders’ Equity

Common stock split

On February 8, 2008, the articles of incorporation of LCE were amended to increase the authorized capital stock of LCE to 310,000,000 shares, of which 300,000,000 are common stock with a par value of $0.001 per share and 10,000,000 shares are preferred stock with a par value $0.001 per share. On February 7, 2008, the Company’s Board of Directors approved a 5-for-1 forward stock split on each share of its common stock issued and outstanding at the close of business on February 21, 2008. Following the stock split (and prior to the 9,000,000 share cancellation and 100,444 share issuance – see below) the Company had 22,900,000 common shares issued and outstanding. Shares issued prior to February 21, 2008 have been retroactively restated to reflect the impact of the stock split.

Share cancellation

On February 26, 2008, 9,000,000 shares of LCE common stock held by Maria de la Luz, our founding stockholder, were surrendered to LCE and cancelled [in partial consideration of the expected Split-Off of the Legacy Business to Ms. de la Luz (See Note 8 – Split-Off of Legacy Business], following which there were 14,000,444 common shares issued and outstanding.

Common stock issued for services

As further described in Note 10, on February 7, 2008, the Company issued 1,000,000 (post-split) shares of its common stock in exchange for consulting services, which included assisting the CEO in building the Board of Directors and senior management team for the Company. The Company revalued the stock issuance in accordance with EITF 96-18 “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services,” resulting in a restatement of its condensed consolidated financial statements as of and for the six months ended June 30, 2008.  Management estimated the revised fair value of the stock issued to the consultant at $1.00 (post-split) per share based on the stock price received in the private placement on March 14, 2008. This resulted in an increase of the stock-based compensation expense by 990,000, which was recognized in the accompanying condensed consolidated statement of operations for the six months ended June 30, 2008.

6

LA CORTEZ ENERGY, INC.

And Subsidiary

LA CORTEZ ENERGY COLOMBIA, E.U.

(a Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

Common stock issued to extinguish debt

On February 8, 2008, the Company issued a promissory note to Milestone Enhanced Fund Ltd. (“Milestone”) in exchange for a loan of $50,000 to be used for working capital purposes. The note was due and payable no later than one year from its date of issuance and carried a 9% annual interest rate. On February 25, 2008, the Company issued 100,444 shares of its common stock in exchange for full payment of the note and accrued interest. The transaction was valued at the fair value of the common stock issued, or $.50 per share, by the Company’s Board of Directors, representing the $50,000 principal amount of the note and $222 of accrued interest.

Common stock sales

On February 19, 2008 the Company’s Board of Directors, via a consent of its sole director, authorized the Company to offer up to 2,000,000 shares of its common stock to a limited number of accredited investors at a price of $1.00 per share, in a private placement offering pursuant to the exemption from registration provided by Rule 506 of Regulation D, Regulation S, and Section 4(2) under the Securities Act of 1933, as amended. On March 13, 2008, the Board further authorized an increase in the size of the offering to up to 3,000,000 shares of its common stock. As of March 31, 2008, a total of 2,400,000 shares of common stock were sold for total proceeds of $2,400,000 ($2,314,895 net after offering expenses).

On December 12, 2006, the Company sold 9,500,000 (post-split) shares of its common stock at a price of $.002 (post-split) per share for total proceeds of $19,000 ($13,845 net after offering expenses). The offering was made pursuant to the company’s registration statement on Form SB-2 that became effective on December 4, 2006. All sales were conducted directly by the Company.

At the end of the period (June 30, 2008), there were 16,400,444 shares of common stock and no shares of preferred stock issued and outstanding

(6) Income Taxes

The Company records its income taxes in accordance with SFAS No.109, “Accounting for Income Taxes.” The Company incurred net operating losses during all periods presented in a deferred tax asset, which was fully allowed for; therefore, the net benefit and expense resulted in $-0- income taxes

(7) Commitments

Leases

On September 15, 2006, the Company entered into a Commercial Property Lease. The Lease commenced on November 1, 2006 and continued on a month-to-month basis until cancelled by either party. The Lease required rental payments of $200 per month and a $500 deposit. As of March 31, 2008, the Company owed $600 for unpaid lease payments. On June 30, 2008, the Lessor of this property, by written letter, agreed to terminate the existing lease with no balance of account owed and all obligations from the Lessee (the Company) considered satisfied. An amount of $600 in accrued rents and $500 lease deposit were written off of the Company’s balance sheet as of that date.

The Company has signed a lease for approximately 1,000 square feet of office space in Bogota, Colombia, The rent is $9,810 per month. This lease will expire on July 2, 2011.

Annual lease payment commitments are as follows:

Year	Total Lease Payment Amount
2008	$	49,050
2009	$	127,140
2010	$	36,044
2011	$	84,917

7

LA CORTEZ ENERGY, INC.

And Subsidiary

LA CORTEZ ENERGY COLOMBIA, E.U.

(a Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

Employment Agreement

As discussed in the Company’s Form 8-K filed with the SEC on May, 20, 2008, the Company has entered into an employment agreement effective as of June 1, 2008 (the “Employment Agreement”) with Andres Gutierrez pursuant to which Mr. Gutierrez was appointed as its President and Chief Executive Officer, Pursuant to the Employment Agreement, Mr. Gutierrez’s base annual compensation has been set at $250,000, which amount may be increased annually at the discretion of the Board. This annual compensation shall be paid in equal monthly installments in Colombian Pesos (“$Col”). The exchange rate used to calculate Mr. Gutierrez’s monthly salary payment will be calculated each month and shall neither exceed a maximum of $Col 2,400 nor be less than a minimum of $Col 1,600. This minimum/maximum range will be adjusted at the end of each calendar year based upon changes in the consumer price index in Colombia.

In addition, Mr. Gutierrez is eligible to receive an annual cash bonus of up to fifty percent (50%) of his applicable base salary. Mr. Gutierrez’s annual bonus (if any) shall be in such amount (up to the limit stated above) as the Board may determine in its sole discretion, based upon Mr. Gutierrez’s achievement of certain performance milestones to be established annually by the Board in discussion with Mr. Gutierrez (the “Milestones”).

Under the Employment Agreement, we agreed to grant Mr. Gutierrez an option to purchase an aggregate of 1,000,000 shares of our common stock under our 2008 Equity Incentive Plan (the “2008 Plan”) as of June 1, 2008. We granted this option on July 1, 2008. This option vests in three equal annual installments beginning on July 1, 2009 and is exercisable at $2.20 per share.

The initial term of the Employment Agreement expires on June 1, 2009. In the event of a termination of employment “without cause” by the Company during the first 12 months following June 1, 2008, Mr. Gutierrez shall receive: (i) twelve (12) months of his base salary; plus (ii) to the extent the Milestones are achieved or, in the absence of Milestones, the Board has, in its sole discretion, otherwise determined an amount for Mr. Gutierrez’s bonus for the initial 12 months of his employment, a pro rata portion of his annual bonus for the initial 12 months of his employment, to be paid to him on the date such annual bonus would have been payable to him had he remained employed by the Company; plus (iii) any other accrued compensation and Benefits, as defined in the Employment Agreement. In the event of a termination of employment by Mr. Gutierrez for “good reason”, as defined in the Employment Agreement, Mr. Gutierrez shall receive: (i) twelve (12) months of his then in effect base salary, subject to his compliance with the non-competition, non-solicitation and confidentiality provisions of the Employment Agreement.

(8) The 2008 Equity Incentive Plan

The 200 Plan provides for the grant of incentive stock options to employees of the Company and non-statutory stock options, restricted stock and stock appreciation rights to employees, directors and consultants of the Company and of an affiliate or subsidiary of the Company. A maximum of 2,000,000 shares of common stock are available for issuance under the 2008 plan. As of June 30, 2008, no awards had been granted under the 2008 Plan.

The Company will determine the fair value of stock option awards on the date of grant in accordance with Statement of Financial Accounting Standard (SFAS) No. 123(R), Share-Based Payment.

(9) Subsequent events

Split-off of Legacy Business

In connection with the discontinuation of the Company’s Legacy Business and the redirecting of its business strategy to focus on oil and gas exploration and production opportunities in South America, the Company has agreed to split off and sell all of the assets and liabilities of the Legacy Business (the “Split-Off”) to Maria de la Luz, the Company’s founding stockholder. The Split Off is expected to close on or about August 15, 2008. The Company will contribute all of its assets and liabilities relating to the Legacy Business, whether accrued, contingent or otherwise, and whether known or unknown, to a newly organized, wholly owned subsidiary, De La Luz Gourmet Chocolates, Inc., a Nevada corporation (“Split-Off Sub”), and immediately thereafter will sell all of the outstanding capital stock of Split-Off Sub to Ms. de la Luz in exchange for the 9,000,000 shares of the Company’s common stock previously surrendered by Ms. de la Luz and all of the Company’s common stock that Ms. De la Luz currently owns, 2,250,000 shares. Ms. de la Luz has agreed to indemnify the Company and its officers and directors against any third party claims relating to the Legacy Business. Split-Off Sub and Ms. de la Luz have also agreed to release the Company and its officers, directors, stockholders, employees and agents from all liabilities incurred by Split-Off Sub or Ms. de la Luz arising from, relating to, or in any way connected with, any fact, event, transaction, action or omission that occurred or failed to occur on or prior to the Closing Date. After giving effect to the Split-Off, we will have 14,150,444 shares of common stock issued and outstanding.

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LA CORTEZ ENERGY, INC.

And Subsidiary

LA CORTEZ ENERGY COLOMBIA, E.U.

(a Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

Stock Option Awards

On July 1, 2008, the Company granted options to purchase (i) 1,000,000 shares of its common stock to Andres Gutierrez, the Company’s President and Chief Executive Officer, (ii) 175,000 shares of its common stock to Nadine C. Smith, the Company’s Chairman and Vice President, (iii) 100,000 shares of its common stock to Jaime Ruiz, a newly appointed director, and (iv) an additional 175,000 shares of its common stock to three employees. The options vest pro-rata over a 36 month period and have a 5 year term. They were granted with an exercise price equal to $2.20.

On July 23, 2008, the Company granted options to purchase (i) 100,000 shares of its common stock to each of Jaime Navas Gaona and Richard G. Stevens, newly appointed directors, and (ii) 150,000 shares, to Highlands Capital, Inc., a consultant to the Company. The options vest pro-rata over a 36 month period and have a 5 year term. They were granted with an exercise price equal to $2.47.

To date, we have granted options exercisable for 1,800,000 shares of our Common Stock.

Colombia Office

The Company expects to incur $122,957 in expenses for the set-up of its Bogota office, which is expected to be completed during the third quarter of 2008.

 (10) Restatement of previously issued financial statements

Summary of Restatement Items

The condensed consolidated financial statements for the six months ended June 30, 2008 and related disclosures in this Amendment No. 1 to the Quarterly Report on Form 10-Q/A have been restated in accordance with the changes described below:

In April 2009, the Company concluded that it was necessary to amend this Quarterly Report in order to restate its financial statements for the six months ended June 30, 2008 to reflect the revaluation of 1,000,000 shares (restated for 5:1 forward stock split) of its common stock issued to a consultant on February 7, 2008 at an original valuation of $0.01 per share (post-5:1 forward stock split), in exchange for services.  Upon review and consideration of the requirements of EITF 96-18 regarding the valuation of this stock, management has concluded that the shares issued to the consultant should have been valued at $1.00 per share (post-5:1 forward stock split) based on the $1.00 per share stock price the Company received in its private placement that closed on March 14, 2008.  As a result, the Company has recognized additional compensation expense of $990,000 and increased additional paid-in capital by a corresponding amount during the six months ended June 30, 2008.

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LA CORTEZ ENERGY, INC.

And Subsidiary

LA CORTEZ ENERGY COLOMBIA, E.U.

(a Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

Impact on Statements of Operations

The impact of the above restatement on the Company’s condensed consolidated statements of operations for the six months ended June 30, 2008 and for the period from June 9, 2006 (Inception) through June 30, 2008 is summarized below.

	Six months ended June 30, 2008
	As initially reported			Adjustment				As restated
Operating expenses:
Payroll	$	71,819		$	-			$	71,819
Professional fees		160,796			-				160,796
Stock-based compensation		10,000			990,000		(a)		1,000,000
Travel		69,021			-				69,021
Rent		600			-				600
Other		62,963			-				62,963
Total operating expense		375,199			990,000				1,365,199
Loss from operations		(375,199	)		(990,000	)			(1,365,199	)
Net other income (expense)		8,141			-				8,141
Net loss	$	(367,058	)	$	(990,000	)		$	(1,357,058	)
Loss per share – basic and fully diluted	$	(0.02	)	$	(0.06	)	(b)	$	(0.08	)

(a) To record additional stock-based compensation for the valuation of common stock issued to a consultant.

(b) To reflect basic and diluted loss per shares based upon corrected net loss.

	Inception through June 30, 2008
	As initially reported			Adjustment				As restated
Operating expenses:
Payroll	$	71,819		$	-			$	71,819
Professional fees		190,479			-				190,479
Management fees		7,500			-				7,500
Stock-based compensation		10,000			990,000		(a)		1,000,000
Travel		69,021			-				69,021
Rent		4,200			-				4,200
Other		64,255			-				64,255
Total operating expense		417,274			990,000				1,407,274
Loss from operations		(417,274	)		(990,000	)			(1,407,274	)
Net other income		8,141			-				8,141
Net loss	$	(409,133	)	$	(990,000	)		$	(1,399,133	)

(a) To record additional stock-based compensation for the valuation of common stock issued to a consultant.

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LA CORTEZ ENERGY, INC.

And Subsidiary

LA CORTEZ ENERGY COLOMBIA, E.U.

(a Development Stage Company)

Notes to Condensed Financial Statements

(Unaudited)

Balance sheet impact

The following table sets forth the effects of the restatement adjustments on the Company’s condensed consolidated balance sheet as of June 30, 2008 as compared to the balance sheet initially filed in the June 30, 2008 Form 10-Q.

	June 30, 2008
	As initially reported			Adjustment				As restated
Current assets	$	2,111,888		$	-			$	2,111,888
Total assets		2,156,888			-				2,156,888
Current liabilities		51,599			-				51,599
Shareholders’ equity:
Common stock		16,400			-				16,400
Additional paid-in capital		2,498,022			990,000		(a)		3,488,022
Deficit accumulated during development stage		(409,133	)		(990,000	)	(b)		(1,399,133	)
Total shareholders’ equity		2,105,289			-				2,105,289
Total liabilities and shareholders’ equity	$	2,156,888		$	-			$	2,156,888

(a) To correct additional paid-in capital for restated valuation of common stock issued to consultant.

(b) To reflect aggregate effect of statement of operations adjustment.

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

The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” and “Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.

Overview

La Cortez Energy Inc. (referred to herein as “La Cortez Energy”, the “Company”, “we”, “us”, “our” and similar terms”) is an international, early-stage oil and gas exploration and production (“E&P”) company concentrating on opportunities in South America. We are currently evaluating ways to optimize our business structure in each jurisdiction where we intend to conduct our business, in order to comply with local regulations while optimizing our tax, legal and operational flexibility, and we are in the process of establishing a branch in Bogota, Colombia. We are currently evaluating potential investments, prospects, companies and existing production opportunities in South America, with an initial focus on Colombia and Peru and a longer term focus on Paraguay, Argentina and other South American countries.

We were incorporated in the State of Nevada on June 9, 2006 under the name La Cortez Enterprises, Inc. to pursue certain business opportunities in Mexico. In early 2008, we decided to redirect our efforts towards identifying and pursuing business in the oil and gas sector in South America. As a reflection of this change in our strategic direction, we changed our name to La Cortez Energy, Inc.

More specifically, we expect to explore investment opportunities in one or more of the following areas: oil and gas exploration and development, hydrocarbon production and investments in infrastructure associated therewith (e.g., storage tanks, processing facilities and/or pipelines). The scope of our activities in this regard may include, but not be limited to, the acquisition of or assignment of rights to develop exploratory acreage under concessions with government authorities and private landowners, the purchase of oil and gas producing properties, farm-in and farm-out opportunities (i.e., the assumption of or assignment of obligations to fund the cost of drilling and development), and/or the purchase of debt or equity in, and/or assets of, existing oil and gas exploration and development companies currently conducting activities in Colombia.

Recent Developments

In February 2008, Nadine C. Smith became the Chairman of our Board of Directors (sometimes referred to hereinafter as the “Board”). Ms. Smith most recently served as a director of another publicly traded oil and gas exploration and production company, Gran Tierra Energy, Inc., which also operates in South America.

On March 14, 2008, we closed a private placement of our Common Stock (the “Private Placement”) pursuant to which we raised $2,400,000. We have been using these funds (net after offering expenses) to begin our operations in South America and have taken the following steps in this ramping-up process:

· Hired a new President and Chief Executive Officer, Andres Gutierrez, and appointed Mr. Gutierrez to our Board of Directors;

· Added Jaime Ruiz, a former Colombian senator and a member of the Board of Directors of the World Bank, Jaime Navas Gaona, an experienced oil industry executive, and Richard G. Stevens, an “audit committee financial expert”, as members of our Board of Directors, each as an independent director;

· Initiated activities to establish and organize our Colombia branch operations and, to this end, opened and began staffing our offices in Bogota, Colombia;

· Hired a Chief Geologist, Carlos Lombo, as well as business development and administrative personnel; and

· Have begun identifying and investigating oil and gas investment opportunities in Colombia and Peru.

Additionally, in the coming months, we expect to:

· Appoint two additional independent directors to our Board of Directors;

· Hire a Chief Financial Officer, additional geologists and a petroleum engineer, to form a strong technical team, as well as additional finance and administrative personnel; and

· Enter into a material agreement to acquire oil and gas exploration and/or production rights in Colombia and/or Peru. (Although we have not yet finalized decisions to pursue any particular opportunities, we have begun to identify and evaluate potential prospects.)

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Our principal executive offices are located at 1266 1st Street, Suite 4, Sarasota, FL 34236, and our telephone number at our principal executive offices is (941) 870-5433. Our website address is www.lacortezenergy.com. Our fiscal year end is December 31.

Plan of Operations

We plan to build a successful oil and gas exploration and production company focused in select countries in South America. We will concentrate our efforts initially in Colombia and Peru, where, we believe, good E&P opportunities exist with straight forward oil and gas contracting terms and conditions. At a later stage, we will turn to opportunities in Paraguay and Argentina, with a peripheral view to other regional countries if we deem the relevant considerations (see list of factors below) to merit our investment. Within the spectrum of the oil and gas business, we plan to focus on a blend between exploration and production of hydrocarbons through a variety of transactions. Our initial plan is to acquire oil and gas production and to start to build a reserves base.

Acquisition Strategy

We intend to acquire producing oil and gas properties (and/or fields) where we believe significant value exists or where additional value can be created. Our senior management is primarily interested in developmental properties where some combination of the following factors exist:

(1)  Opportunities for medium to long term production life with clear understandings of production mechanisms and output levels;

(2)  Geological formations with multiple producing horizons;

(3)  Substantial upside potential; and

(4)  Relatively low capital investment and production costs.

We will also pursue joint ventures or farms-ins in exploration ventures with limited risk, in areas where nearby oil discoveries have been found.

Phased Approach

• Phase 1– We will concentrate our initial efforts in Colombia and Peru where opportunities as well as operating terms and conditions are perceived in the industry to be appropriate for small, early stage oil and gas E&P companies. In these markets we will pursue:

– Acquisitions of established oil and gas exploration and production fields and/or companies, which will enable us to establish base production with upside potential;

– Joint ventures and farm-ins on exploration projects with up to a 25% to 50% maximum participation interest; and

– Participation in bidding processes for property operator opportunities, in conjunction with established E&P companies or independently, if allowed under local regulations.

• Phase 2– Once we have established our business in Colombia and Peru, we will turn our attention to new opportunities in Paraguay and Argentina. We intend to take advantage of promising opportunities in these additional markets while we consolidate our E&P activities in our Phase 1 countries. In these markets, we intend to search for the following types of projects:

– Frontier exploration areas (Joint ventures with up to a 25% ownership participation) where limited competition exists; and

– Acquisitions with significant upside potential.

• Phase 3– We will stay alert for opportunities in other South American countries with developed oil and gas industries, however, we believe that at the present time, terms and conditions for projects in such countries are not favorable for small, early stage companies like ours. In these countries, projects might depend on the following factors:

– Political stability; and

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– Supportive local oil and gas industry regulatory environments.

Experienced and Dedicated Personnel

We intend to build an experienced leadership team of energy industry veterans with direct exploration and production experience in the region combined with an efficient managerial and administrative staff, to enable us to achieve our strategic and operational goals.

We will maintain a highly competitive assembly of experienced and technically proficient employees and motivate them through a positive, team oriented work environment and incentive stock ownership plan. We believe that employee ownership, which is encouraged through our 2008 Equity Incentive Plan, is essential for attracting, retaining and motivating qualified personnel.

Results of Operations

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

Second Quarter 2008 Compared with Second Quarter 2007

We incurred total expenses of $244,421 for the three month period ended June 30, 2008 compared to $4,592 for the three month period ended June 30, 2007. These expenses consisted of general operating expenses incurred in connection with the day to day operation of our business and the preparation and filing of our periodic reports. The increase in expenses for the three month period ended June 30, 2008 is attributable primarily to increased legal expenses incurred in connection with the our new business activities.

Our net loss for the three months ended June 30, 2008 was $(236,711) compared to $(4,592) for the three month period ended June 30, 2007.

First Six Months of 2008 Compared with First Six Months of 2007

We incurred total expenses of $1,365,199 for the six month period ended June 30, 2008 compared to $19,846 for the six month period ended June 30, 2007. These expenses consisted of general operating expenses incurred in connection with the day to day operation of our business and the preparation and filing of our periodic reports. The increase in expenses for the six month period ended June 30, 2008 is attributable primarily to increased legal expenses incurred in connection with the our new business activities, costs related to the Private Placement and increased stock based compensation related to the issuance of common stock to a consultant.

Our net loss for the six months ended June 30, 2008 was $(1,357,058) compared to $(19,846) for the six month period ended June 30, 2007.

Liquidity and Capital Resources

As of June 30, 2008, we had a cash balance of $2,063,132 as a result of the Private Placement.

On December 4, 2006, our public offering registration statement on Form SB-2 was declared effective by the SEC (SEC file no. 333-138465). On December 22, 2006, the sale under this Form SB-2 of 1,900,000 shares of our Common Stock at a price of $0.01 per share for an aggregate of $19,000 was completed and the offering was closed. There was no underwriter involved in this public offering. We have used these funds as working capital for administrative expenses and professional fee payments to third parties.

On June 16, 2007, May 17, 2007 and July 28, 2006, our former President and sole director, Maria de la Luz, advanced $10,000, $2,600 and $2,000, respectively, to us for working capital purposes. These advances carried no interest rate and have been written off as of the June 30, 2008.

Effective March 14, 2008, we closed the Private Placement. We offered our shares of Common Stock at a price of $1.00 per share and we derived total proceeds of $2,400,000 from the sale of 2,400,000 shares of our Common Stock.  

We presently do not have any available credit, bank financing or other external sources of liquidity, other than the remaining net proceeds from the Private Placement. Due to our brief history and historical operating losses, our operations have not been a source of liquidity. We will need to obtain additional capital in order to 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 borrow funds from private lenders. 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.

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Off-Balance Sheet Arrangements

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 is material to investors.

ITEM 4T. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer (who joined the Company as principal executive officer in June 2008) and principal financial officer (who joined the Company in February 2008 and became principal financial officer in June 2008), of the effectiveness of our disclosure controls and procedures  (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2008. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2008, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.  In particular, we concluded that internal control weaknesses in our accounting policies and procedures relating to our equity transactions, financial statement disclosures and segregation of duties were material weaknesses.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our condensed consolidated financial statements included in this Form 10-Q/A accurately reflects our financial condition, results of operations and cash flows for the periods presented.  In addition, we engaged independent accounting consultants to assist us with our accounting functions and in performing the additional analyses referred to above.  Accordingly, management believes that the condensed consolidated financial statements included in this Form 10-Q/A fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Changes in Internal Control Over Financial Reporting

Subsequent to December 31, 2008, management has engaged consultants to assist the Company in ensuring that accounting policies and procedures are consistent across all the organization and that we have adequate control over financial statement disclosures.  In addition, the Company continues to increase its workforce in preparation for leaving the development stage and beginning operations.   We also intend to hire an experienced Chief Financial Officer with an oil and gas industry background.  We believe that these combined actions will remedy the material weaknesses in our current system of internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 6. EXHIBITS

Exhibits

The following exhibits are filed as part of (or are furnished with, as indicated below) this Quarterly Report Amendment No. 1: 

Exhibit No. Description

31.1	Certification of 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 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.

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SIGNATURES

In accordance with the requirements of Section 13(a) or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: June 1, 2009	LA CORTEZ ENERGY, INC.
	By:	/s/ Andres Gutierrez
		Name:	Andres Gutierrez
		Title:	Principal Executive Officer

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