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EX-31.1 - CERTIFICATION - AYERS EXPLORATION INC.ayers_ex311.htm
EX-32.1 - CERTIFICATION - AYERS EXPLORATION INC.ayers_ex321.htm
EX-31.2 - CERTIFICATION - AYERS EXPLORATION INC.ayers_ex312.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q /A
 
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2011
 
o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ___________ to ___________
 
Commission file number   333-152991
 
AYERS EXPLORATION INC.
(Name of small business issuer in its charter)
 

Nevada
 
98-0608229
(State or other jurisdiction
of incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 

 
#6 Harston Avenue, Mosman, Sydney Australia
 
2088
(Address of principal executive offices)
 
(Zip Code)
 
Issuer's telephone number (411) 199-319
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Name of each exchange on which registered
None   N/A
 
Securities registered pursuant to Section 12(g) of the Act:
 
Common Shares, par value $0.001
(Title of class)
 
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x     No o

Indicate by checkmark 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 (Do not check if a smaller reporting company)
Smaller reporting company  x
 
 
 

 
 
There is no public trading market for our common shares in the United States or elsewhere. Based on the last sale price of our shares of $0.20, our aggregate market value is $1,203,000.
 
APPLICABLE ONLY TO CORPORATE ISSUERS
 
State the number of shares outstanding of each of the issuer's classes of equity stock, as of the latest practicable date.
 
6,435,000 common shares issued and outstanding as of May 20, 2011.
 
Transitional Small Business Disclosure Format (Check one):   Yes o;   No x.
 
Check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). .  Yes x No o
 
EXPLANATORY NOTE
 
Ayers Exploration Inc. is filing this Amendment to its Quarterly Report on Form 10–Q for the period ended March 31, 2011, to: (i) include the correct commission file number; (ii) provide the assessment and conclusion of our Chief Executive Officer/Chief Financial Officer on the adequacy of our company’s disclosure controls and procedures for the period; and (ii) to amend our officer certifications (included as exhibits to this report) to comply with Item 601(b)(31) of Regulation S-K.
 
This Amendment does not reflect events that have occurred after the original filing of the Quarterly Report on Form 10-Q.     
 
Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as a result of this Amendment, the certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002, filed and furnished respectively, as exhibits to the original filing, have been amended and re-filed as of the date of this Amendment and are included as Exhibits 31.1, 31.2, and 32.1 hereto.
 
This Amendment should be read in conjunction with the original filing of our Quarterly Report for the period ended March 31, 2011 and our other filings made with the Securities and Exchange Commission subsequent to the filing of the original Quarterly Report filed on Form 10-Q.  
 
 
 

 
 
AYERS EXPLORATION INC.
(An Exploration Stage Company)
BALANCE SHEETS

   
March 31,
2011
$
   
December 31,
2010
$
 
   
(Unaudited)
       
             
ASSETS
           
             
CURRENT ASSETS
           
             
Cash
   
39,430
     
39,430
 
                 
Total Current Assets
   
39,430
     
39,430
 
                 
Mineral property interest
   
4,500
     
4,500
 
                 
Total Assets
   
43,930
     
43,930
 
                 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
                 
LIABILITIES
               
                 
CURRENT LIABILITIES
               
                 
Accounts payable and accrued liabilities
   
7,200
     
1,850
 
Due to related party
   
5,100
     
5,100
 
                 
Total Current Liabilities
   
12,300
     
6,950
 
                 
Total Liabilities
   
12,300
     
6,950
 
                 
                 
STOCKHOLDERS’ EQUITY
               
                 
Common stock, $.001 par value, 30,000,000 shares authorized, 6,185,000 shares issued and outstanding
   
6,185
     
6,185
 
Additional paid in capital
   
194,315
     
194,315
 
   Deficit accumulated during the exploration stage
   
(168,870
)
   
(163,520
)
                 
Total Stockholders’ Equity
   
31,630
     
36,980
 
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
   
43,930
     
43,930
 
 
The accompanying notes are an integral part of these financial statements
 
 
3

 
 
AYERS EXPLORATION INC.
 (An Exploration Stage Company)
STATEMENTS OF OPERATIONS
Three Months Ended March 31, 2011 and 2010
and Period from February 10, 2006 (Inception) through March 31, 2011
(Unaudited)
 
   
Three Months Ended
March 31, 2011
$
   
Three Months Ended
March 31, 2010
$
   
February 10, 2006
(Inception) to
March 31, 2011
$
 
                   
EXPENSES
                 
                   
General and administrative
   
5,350
     
10,119
     
93,364
 
Mineral exploration
   
-
     
-
     
77,000
 
                         
Total Expenses
   
(5,350
   
(10,119
   
(170,364
                         
OTHER INCOME
                       
                         
  Interest income
   
-
     
-
     
1,494
 
                         
Total Other Income
   
-
     
-
     
1,494
 
                         
NET LOSS
   
(5,350
)
   
(10,119
)
   
(168,870
)
                         
                         
NET LOSS PER SHARE: BASIC AND DILUTED
   
(0.00
)
   
(0.00
)
       
                         
WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC AND DILUTED
   
 6,185,000
     
5,810,833
         

The accompanying notes are an integral part of these financial statements
 
 
4

 
 
AYERS EXPLORATION INC.
 (An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2011 and 2010
and Period from February 10, 2006 (Inception) through March 31, 2011
(Unaudited)
 
   
Three Months Ended
March 31, 2011
$
   
Three Months Ended
March 31, 2010
$
   
February 10, 2006 (Inception) to
March 31, 2011
$
 
                   
CASH FLOWS USED IN OPERATING ACTIVITIES
                 
                   
Net loss
   
(5,350
)
   
(10,119
)
   
(168,870
)
                         
    Common shares issued for mineral exploration
   
     
     
75,000
 
    Impairment of mineral property interest
   
     
     
2,000
 
                         
Changes in operating assets and liabilities:
                       
                         
Accounts payable and accrued liabilities
   
5,350
     
3,330
     
7,200
 
                         
Net Cash Used in Operating Activities
   
     
(6,789
)
   
(84,670
)
                         
CASH FLOWS FROM FINANCING ACTIVITIES
    Cash received from amounts due to related parties
   
     
     
5,100
 
                         
Cash received from sale of common stock
   
     
65,000
     
119,000
 
                         
Net Cash From Financing Activities
   
     
65,000
     
124,100
 
                         
NET CHANGE IN CASH
   
     
58,211
     
39,430
 
                         
CASH – BEGINNING
   
39,430
     
13,229
     
 
                         
CASH – ENDING
   
39,430
     
71,440
     
39,430
 
                         
Supplemental Cash Flow Information:
                       
                         
Cash paid for:
                       
Interest
   
     
     
 
Income taxes
   
     
     
 
                         
Non-cash transactions:
                       
Stock issued for mineral property interest
   
     
4,500
     
6,500
 

The accompanying notes are an integral part of these financial statements
 
 
 
5

 
 
AYERS EXPLORATION INC.
 (An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
 
 
NOTE 1 - BASIS OF PRESENTATION
 
The accompanying unaudited interim financial statements of Ayers Exploration Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's annual report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year 2010 as reported in Form 10-K, have been omitted.
 
NOTE 2 – MINING PROPERTY INTEREST
 
Wilpena Property
 
On October 27, 2009 Company entered into a Property Option Agreement with Wilpena Resources Ltd. Pty., which grants the Company exclusive option to acquire an undivided 100% interest in the mining claim known as the Wilpena Property situated in central Queensland, Australia. Consideration for exercising the options is as follows:
 
(1)  
Issues 45,000 common shares of the Company to Wilpena Resources Ltd. Pty. (issued);
 
(2)  
Incur expenditures or make cash payments to Wilpena Resources for any shortfall in the amounts of $25,000 by April 27, 2010 and an additional $50,000 before October 27, 2010. Wilpena Resources Ltd. Pty. has agreed to accept the April 27, 2010 payment and the October 27, 2010 payment in common stock of the Company at a price per share of $0.20. The shares were issued on May 20, 2011.
 
 
 
6

 
 
Item 2. Management's Discussion and Analysis and Plan of Operation.

FORWARD-LOOKING STATEMENTS
 
This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  These statements relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our company's or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
 
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
 
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
 
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares in our capital stock.
 
As used in this quarterly report, the terms "we", "us", "our", and "Ayers" mean Ayers Exploration Inc., unless otherwise indicated.

Corporate History
 
We were incorporated in the State of Nevada on February 10, 2006. Our administrative office is located at 6 Harston Avenue, Mosmon, Sydney Australia 2088 and our registered statutory office is located at Suite 304 – 2470 Saint Rose Pkwy, Henderson, Nevada 89074. Our telephone number is 61 411-199-319.  Our fiscal year end is December 31.

Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.
 
Our Current Business

We intend to be in the business of mineral clay exploration.  We have an option to acquire a 100% interest in the Mt. Cotton mining claim, (hereinafter referred to as the "Mt. Cotton Property"). The option was granted for an initial issuance of 200,000 common shares of our Company to Redpath Clay Corp.  Title to the Mt. Cotton Property is held by Redpath.

On October 27, 2009, we entered into a Property Option Agreement with Wilpena Resources Ltd. Pty. We have recently commenced exploration on the property.  Under the terms of the agreement, we have received an exclusive option to acquire an undivided 100% interest in the mining claim known as the Wilpena Property situated in central Queensland, Australia. In consideration of the option, we have issued 45,000 common shares to Wilpena Resources Ltd. Pty. In addition we will incur expenditures or make cash payments to Wilpena Resources for any shortfall in the amounts of $25,000 by April 27, 2010 and an additional $50,000 before October 27, 2010. Wilpena Resources Ltd. Pty. has agreed to accept the April 27, 2010 and the October 27, 2010 payment in common stock of the Company at a price per share of $0.20. The shares were issued on May 20, 2011.
 
 
7

 
 
Product Research and Development

Our business plan is focused on the long-term exploration and development of our mineral properties.

We do not anticipate that we will expend any significant funds on research and development over the next twelve months ending March 31, 2012.

Employees

Currently there are no full time or part-time employees of our company (other than our director and officer who, at present, has not signed employment or consulting agreements with us). We do not expect any material changes in the number of employees over the next 12 month period (although we may enter into employment or consulting agreements with our officer or directors). We do and will continue to outsource contract employment as needed. However, if we are successful in our initial and any subsequent drilling programs we may retain additional employees.

Purchase or Sale of Equipment

We do not intend to purchase any significant equipment over the next twelve months ending March 31, 2012.

Exploration Program

Our objective is to conduct mineral exploration activities on the mineral claims in order to assess whether it possesses economic reserves of mineral clay.  We have not yet identified any economic mineralization on the property.  We have a mineral report which indicates that further exploration is warranted.  Our proposed exploration program is designed to search for an economic mineral deposit.

Mt. Cotton Property Option Agreement
 
In July 2006, we entered into an option agreement (the “Option”) with Redpath Clay Corp. to acquire up to a 100% interest in the Mt. Cotton Property, a mineral claim comprising 5.4 acres located 25 miles west of Sheldon, Queensland, Australia.  Under the term of the Option we can earn a 100% interest by issuing Redpath  200,000 shares on signing (completed) and issuing an additional 200,000 shares upon commencement of commercial production on the Mt. Cotton Property.

Title to the Mt. Cotton Property
 
The Mt. Cotton Property consists of one parcel of land totaling 5.4 acres.  A "mineral claim" refers to a specific section of land over which a title holder owns rights to exploration to ground.  In July 2006, we entered into the Option with Redpath Clay Corp. to acquire up to a 100% interest in the Property.  Such rights may be transferred or held in trust.  The claim comprising the Mt. Cotton property is registered 100% in the name of Redpath Clay Corp.  The registration of the claims in the name of a trustee does not impact a third party's ability to commence an action against us respecting the Mt. Cotton property or to seize the claims after obtaining judgment.  Redpath Clay Corp. holds the exploration permit with the government of the State of Queensland.

Location and Access and Property Description
 
(1)
The Mt. Cotton Property consists of 5.4 acres located 25 miles west of Sheldon, Queensland, Australia.)
   
            (2)
The site lies to the east of Mt Cotton Road, and is bounded by industrial properties to the south, north and east.  The site encloses an area of 5.4 acres.  The finished surface of the property consists predominately of bare earth.  The property contains several metres of fill of unknown origin. 
 
Glossary of Terms
 
The following are the definitions of some of the highly technical and geological terms which follow below.
 
Acid sulfate soils: are naturally occurring soils, sediments or organic substrates (e.g. peat) that are formed under waterlogged conditions. These soils contain iron sulfide minerals (predominantly as the mineral pyrite) or their oxidation products.
 
 
8

 
 
Argillite: is a fine-grained sedimentary rock composed predominantly of indurated clay particle.
 
Greywacke: a grey, earthy rock which is a variety of sandstone generally characterized by its hardness, dark color, and poorly-sorted, angular grains of quartz, feldspar, and small rock fragments set in a compact, clay-fine matrix.
 
Quartzite: is a hard, metamorphic rock which was originally sandstone. Sandstone is converted into quartzite through heating and pressure usually related to tectonic compression within orogenic belts.
 
Sandstone: is a sedimentary rock composed mainly of sand-size mineral or rock grains.
 
Previous Work
 
The Mt. Cotton property was discovered in 2001 by Environmental & Licensing Professionals.  In 2001 Environmental & Licensing Professionals retained Earthtech Consultants (QLD) Pty Ltd to undertake geotechnical investigations on the Mt. Cotton Property.  The scope of the investigation was to identify the presence of mineral clay deposits and to provide assessment of the following:
 
*
ground and subsurface conditions;
*
plasticity and extent of any clay encountered;
*
possible extraction difficulties (including groundwater and shallow rock);
*
sampling of shallow soils for screening for the presence of acid sulphate soils; and
*
limited sampling and testing of shallow soils from two locations, to screen for a range of common soil contaminants, and general inspection of the site for signs of recent surface contamination.
 
Geotechnical: Mt. Cotton Property
 
We have a geotechnical report on the Mt. Cotton Property. The report by Earthtech Consultants, professional geotechnical and environmental consultants, provides an assessment of the property and sets out recommendations. The geotechnical report makes a recommendation for further exploration work and concludes the clay resource is suitable for the use in manufacture of clay bricks.  The Mt. Cotton Property is subject to an Exploration Permit for Minerals (EPM), specifically mineral clay deposits.
 
In the report, Earthtech sets out to assess the extent of presence of clay soils on the property in order to qualify the then existing EPM to mine mineralized clay for use in the manufacture of bricks.  The workscope of the report included assessment of the depth, lateral extent and composition of clay soils on the property.  The detection of any Acid Sulphate Soils and or contaminated surface soils was used to highlight and define any constraints that may be placed on the proposed mining activities because of their presence.
 
Fieldwork for the investigation was carried out in September 2001.  Four boreholes were drilled at evenly spaced locations within the area of the site proposed for mining.  The work was undertaken using a mounted drilling rig equipped with 100mm diameter solid flight augers, equipped with a Tungsten Carbide bit.  Undisturbed soil samples were recovered from each borehole for visual classification and laboratory testing, to assess clay content.
 
Soils that were visually assessed as likely to contain Acid Sulphate Soils were sampled and screened.  Soils were also sampled from shallow depths at two locations where contaminants were understood possibly have been stored.  The samples were analyzed for a range of common contaminants including: heavy metals and arsenic.
 
The samples were tested by the Australian Government Analytical Laboratories.  The methods used were those published by United States Protection Agency SW-846 Methods. Analytical results indicated that there were no significant levels of any of the contaminants screened for in any of the samples tested.
 
 
9

 
 
Reports Conclusions
 
The natural clay soils encountered over much of the Mt. Cotton Property to depths ranging from 43 feet to 8 feet, consist of medium plasticity sandy and silty clays.  Conditions encountered in the boreholes indicate that the excavation of materials ranging from 13 feet to deeper than 43 feet will be possible using conventional excavation and earthmoving equipment such as dozers, backhoes and medium sized excavators.  Based on the four boreholes drilled in an area of about 262 feet by 427 feet, the report estimates that about 91,557 cubic yards of extractable clay is present.
 
The report anticipates that the natural material derived from the site would be a mixture of low and medium plasticity sandy and silty clays containing some clayey sands bands of gravel.
 
Results of limited laboratory testing and inspection of samples and local geology indicate that the clay is residual.  The report concludes that clay/silt/sand mixes such as the ones found on the Mt. Cotton Property would be suitable for the manufacture of clay bricks.
 
Earthech makes specific recommendations based on their conclusions to determine the potential of the property to host economic quantities of clay. They recommend that an X-Ray diffraction assessment is completed to confirm the clay mineralogy. 
 
We intend to formulate an exploration program based on the recommendations in Earthtech’s report for an initial phase of exploration. We anticipate the program to be as follows:
 
We will commence an initial program of data acquisition, review and compilation of historic geological information to further assess the property. We also believe geological mapping and further rock geochemical sampling are warranted to further assess the Property.
 
We intend to implement an exploration program and intend to proceed in the following two phases all of which it is intended will be performed or supervised by a geologist with significant exploration experience, and by independent contractors hired by us.
 
Phase 1, will include data acquisition, compilation, review and confirmation sampling, budgeted as follows:
 
Data Acquisition, review and compilation:
 
$
10,000
 
X-Ray diffraction assessment:
   
6,000
 
Geochemical analyses-100 samples:
   
2,500
 
Travel expenses-accommodation, board:
   
1,000
 
Vehicle Rental-14 days:
   
1,400
 
Airfare-Sydney to Sheldon, return:
   
750
 
Field Supplies, communications:
   
1,250
 
Report preparation, result compilation:
   
2,000
 
Miscellaneous:
   
400
 
Total:
 
$
25,300
 
 
Data acquisition will begin with research of the available geologic literature, personal interviews with geologists, mining engineers and others familiar with the prospect sites. We have recently begun this phase of the exploration process on the properties. We anticipate that this activity will take approximately one month.
  
 
10

 
 
As set out above, we may also conduct an X-Ray diffraction assessment to confirm the clay mineralogy. 
 
Phase 1 will take about 3 months and cost approximately $25,000. We currently have adequate capital to complete the various stages of Phase 1.
 
Phase 2 involves the extraction of the mineralized clay.  We will formulate a detailed program for Phase II once we have determined the extent, if any, of mineralized clay on the Mt. Cotton Property.
 
Following completion of Phase 1, our board of directors will make the assessment whether to continue exploration based on an analysis of results of our initial exploration efforts and based on advice from our contracted geologist. Criteria we will consider in making this assessment include the results of the X-Ray diffraction assessment to confirm the clay mineralogy. 
 
We do not have any agreement with Earthtech to provide geological services for planned exploration work on the mineral claims.

We have not taken any actions to further our business plan since July 2006.

Mineral claims Geology and Soil Landscape
 
The Mt. Cotton Property is in an area of the Neranleigh Fernvale Beds, comprising greywacke, argillite, quartzite, chert, shale, sandstone and greenstone. The source of the above description of the rock formation and mineralization of the mineral claims was the 1:100,000 scale Geological Map of Beenleigh. 
 
Reference to “The Soil Landscapes of Brisbane and South-eastern Environs-CSIRO 1987”, indicates that the Property is located in the area of ‘Soils with Markedly Differentiated Profiles’.  The dominant soil group consists of red-yellow podzolic soils with lithosols and some gleyed podzols, within a landscape of ‘Low hills of greywacke, phyllite and shale’.

We do not anticipate that we will expend any significant funds on research and development over the next twelve months ending March 31, 2012.
 
On October 27, 2009, we entered into a Property Option Agreement with Wilpena Resources Ltd. Pty. We recently commenced exploration on the Wilpena Property. Under the terms of the agreement, we have received an exclusive option to acquire an undivided 100% interest in the mining claim known as the Wilpena Property situated in central Queensland, Australia. In consideration of the option, we have issued 45,000 common shares to Wilpena Resources Ltd. Pty. valued at $4,500. In addition we will incur expenditures or make cash payments to Wilpena Resources for any shortfall in the amounts of $25,000 by April 27, 2010 and an additional $50,000 before October 27, 2010. Wilpena Resources Ltd. Pty. has agreed to accept the April 27, 2010 and the October 27, 2010 payments in common stock of the Company at a price per share of $0.20. The shares were issued on May 20, 2011.
 
Competition
 
The clay industry is fragmented. We compete with other exploration companies looking for clay. We are one of the smallest exploration companies in existence. We are an infinitely small participant in the clay extraction market. While we compete with other exploration companies, there is no competition for the exploration or removal of minerals from our mineral claims. Readily available clay markets exist in Australia United States and around the world for the sale of gold.
 
 We may not have access to all of the supplies and materials we need to begin exploration that could cause us to delay or suspend operations. Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies and certain equipment such as bulldozers and excavators that we might need to conduct exploration. We have not attempted to locate or negotiate with any suppliers of products, equipment or materials. We will attempt to locate products, equipment and materials after this offering is complete. If we cannot find the products and equipment we need, we will have to suspend our exploration plans until we do find the products and equipment we need.
 
 
11

 
 
Government Regulations and Supervision
 
Our mineral exploration program is subject to Australian mining law and regulation.   Specifically, the laws and regulations of the State of Queensland.
 
All landholdings (tenements) in Australia are subject to regulation.  In Queensland, tenements are granted as either exploration permits, mineral development licenses or mining leases.

Exploration permits can only be applied for over available ground.  Applications consist of a prescribed application form, proposed exploration program with estimated expenditure and the prescribed application fee.  An exploration permit number is assigned when the application is received.  The Queensland Ming Department then assesses the application to determine whether a company is a suitable candidate and proposes to spend sufficient funds on exploration on the license.  If the Department considers a company to be a suitable candidate, the Department then assesses the environmental impact of the proposed exploration program and also commences the native title process.  The native title process involves advertising the application for the purpose of determining whether there are any objections to the licence being granted. If there are no objections, the permit is granted.

The exploration permit is granted for five years provided the company continues to comply with the licenses conditions.  There is a statutory requirement to reduce the area of the exploration licence by fifty percent before the end of years three, four and five.

Rent is required to be paid each year in advance.  Rent will be paid by Redpath Clay Corp.

An annual expenditure report is due each year, as a statement of the amount that has been spent on the ground.  A annual technical report is also due each year, as a statement of the exploration work that has been undertaken on the ground and what work is proposed to be undertaken for the coming year.

The exploration permit expires at the end of year five but a renewal application can be lodged prior to the expiry to, if granted, extend the permit for up to another five years.  A summary of work completed on the ground together with a detailed explanation of the work proposed for the ground is required to accompany the renewal application.

If we propose to mine a measured resource we will need to notify Redpath Clay Corp. who will then apply for a Mining Lease.  As the Exploration Permit holder Redpath Clay Corp.  has automatic priority to the ground to be the subject of the mining Lease.  Applications consist of a prescribed application form, details of the proposed development, the financial resources to fund the proposal and the prescribed application fee.  A mining lease number is assigned when the application is received.  The Department then assesses the application to determine the suitability of the proposal.  The application will then pass through the environmental and native title process.  An agreement will need to be negotiated with the native title holders/claimants as part of the native title process.

A mineral lease may be granted for such term as the Department thinks fit.  Redpath Clay Corp. is required to state the term of the lease required at the time of application.  The term required is stated on the application form.

An annual expenditure report is due each year, as a statement of what has been spent on the ground.  An annual technical report is also due each year, as a statement of what work has been done on the ground and what work is proposed for the coming year. 

Three Months Ended March 31, 2011 and 2010

 During the three months ended March 31, 2011, operating expenses totaled $5,350 and we experienced a net loss of $5,350 against no revenues. During the three months ended March 31, 2010, operating expenses totaled $10,119 and we experienced a net loss of $10,119 against no revenues.
 
Financial Condition, Liquidity and Capital Resources
 
Since inception on February 10, 2006, we have been engaged in exploration and acquisition of mineral properties. Our principal capital resources have been acquired through the issuance of common stock.
 
At March 31, 2011 we had a working capital of $27,130.
 
 
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At March 31, 2011 our total assets of $43,930 consists of cash of $39,430 and mineral property interest of $4,500. This compares with our assets at December 31, 2010 of $43,930 which consisted of cash of $39,430 and mineral property interest of $4,500.

At March 31, 2011 our total liabilities were $12,300, compared to our liabilities of $6,950 as at December 31, 2010.
 
We have had no revenues from inception. We currently have sufficient funding to complete Phase 1 of our exploration program.

We have no external sources of liquidity in the form of credit lines from banks. Based on the plan of operation described below, management believes that our available cash will not be sufficient to fund our immediate working capital requirements for the next 12 months.
 
Plan of Operations
 
Cash Requirements
 
For the next 12 months we plan to expend a total of approximately $220,000 in respect of our mineral properties and administrative expenses.  We currently do not have enough to complete our 12 month plan.
 
We estimate that we will expend approximately $10,000 on general and administrative expenses over the next 12 months generated from our allotted working capital of approximately $10,000.
 
Based on our current plan of operations, we have sufficient funds for the next 6 months, after which time we will require additional funds to continue our exploration operations. In the event that we are unable to raise additional financing in the next 6 months, and fail to generate any cash flow, we may modify our operations plan accordingly. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable.
 
Over the next twelve months we intend to use all available funds to expand on the exploration and development of our mineral properties, as follows:
 
Estimated Funding Required During the Next Twelve Months
         
Operations
       
Wilpena Property costs
  $ 75,000  
Working Capital
    10.000  
Wilpena Exploration costs
    100,000  
Mt. Cotton Phase 1 exploration
    25,300  
General and Administrative
    10,000  
Total
  $ 220,300  
 
Going Concern
 
Due to our being an exploration stage company and having generated no revenues since inception, in the financial statements for the year ended December 31, 2010, our auditors  included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.  Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure.
 
The continuation of our business is dependent upon us raising additional financial support.  The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders.  Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
 
Recently Issued Accounting Standards

Ayers does not expect the adoption of recently issued accounting pronouncements to have a significant impact on Ayers’ results of operations, financial position or cash flow.
 
 
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APPLICATION OF CRITICAL ACCOUNTING POLICIES
 
Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States.  Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies.  We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our financials.
 
We have historically incurred losses, and through March 31, 2011 have incurred losses of $168,870 from our inception.   We intend to raise additional working capital through a private placement.
 
There are no assurances that we will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing  and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from operations, our S-1 public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us. If adequate working capital is not available we may not increase or sustain our operations.
 
These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern.

RISK FACTORS
 
Much of the information included in this current report includes or is based upon estimates, projections or other "forward looking statements".  Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations.  While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.
 
Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below.  We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".
 
Our common shares are considered speculative during the development of our new business operations.  Prospective investors should consider carefully the risk factors set out below.
 
We need to continue as a going concern if our business is to succeed, if we do not we will go out of business.
 
 Our independent accountant's report to our audited financial statements for the period ended December 31, 2010 indicates that there are a number of factors that raise substantial doubt about our ability to continue as a going concern.  Such factors identified in the report are our accumulated deficit since inception, our failure to attain profitable operations and our dependence upon adequate financing to pay our liabilities.  If we are not able to continue as a going concern, it is likely investors will lose their investments.
 
Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure.
 
Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The expenditures to be made by us in the exploration of the mineral claim may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of our exploration do not reveal viable commercial mineralization, we may decide to abandon our claim and acquire new claims for new exploration. The acquisition of additional claims will be dependent upon us possessing capital resources at the time in order to purchase such claims. If no funding is available, we may be forced to abandon our operations.
 
 
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If we do not obtain additional financing, our business will fail.
 
Our current operating funds are less than necessary to complete all intended exploration of the property, and therefore we will need to obtain additional financing in order to complete our business plan.  As of March 31, 2011 we had cash in the amount of $39,430. We currently have minimal operations and we have no income.  
 
Our business plan calls for significant expenses in connection with the exploration of the property.  We do not currently have sufficient funds to conduct initial exploration on the property and require additional financing in order to determine whether the property contains economic mineralization.  We will also require additional financing if the costs of the exploration of the property are greater than anticipated.
 
We will require additional financing to sustain our business operations if we are not successful in earning revenues once exploration is complete.  We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including the market prices for copper, silver and gold, investor acceptance of our property and general market conditions.  These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.
 
The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders.  The only other anticipated alternative for the financing of further exploration would be our sale of a partial interest in the property to a third party in exchange for cash or exploration expenditures, which is not presently contemplated.
 
Because we have commenced limited business operations, we face a high risk of business failure.
 
We just recently commenced exploration on the property in the spring of 2010.  Accordingly, we have no way to evaluate the likelihood that our business will be successful.  We were incorporated on February 10, 2006 and have been involved primarily in organizational activities and the acquisition of our mineral property.  We have not earned any revenues as of the date of this prospectus.
 
Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues.  We therefore expect to incur significant losses into the foreseeable future.  We recognize that if we are unable to generate significant revenues from development of the mineral claims and the production of minerals from the claims, we will not be able to earn profits or continue operations.
 
There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.

We lack an operating history and we expect to have losses in the future.
 
We have not started our proposed business operations or realized any revenues. We have no operating history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent upon the following:
 
·
Our ability to locate a profitable mineral property;
·
Our ability to generate revenues; and
·
Our ability to reduce exploration costs.
 
 
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Based upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated with the research and exploration of our mineral properties. We cannot guarantee that we will be successful in generating revenues in the future. Failure to generate revenues will cause us to go out of business.
 
We have no known ore reserves and we cannot guarantee we will find any significant clay soils or if we find clay soil, that production will be profitable. Even if we are successful in discovering clay soil or other mineralized material we may not be able to realize a profit from its sale. If we cannot make a profit, we may have to cease operations.
 
 We have no known clay soil reserves. We have not identified any significant clay soil on the mineral claims and we cannot guarantee that we will ever find any clay soil. The report we reviewed in selecting the mineral claims for exploration are old and may be out of date. Even if we find that there is clay soil on our mineral claims, we cannot guarantee that we will be able to recover the clay soil. If we cannot find clay soil or it is not economical to recover the clay soil, we will have to cease operations.
 
Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.
 
 The search for valuable minerals involves numerous hazards.  As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure.  The payment of such liabilities may have a material adverse effect on our financial position.
 
Because we are small and do not have much capital, we must limit our exploration and consequently may not find mineralized material. If we do not find mineralized material, we will cease operations.
 
Because we are small and do not have much capital, we must limit our exploration. Because we may have to limit our exploration, we may not find mineralized material, although our mineral claims may contain mineralized material. If we do not find mineralized material, we will cease operations.
 
If we become subject to onerous government regulation or other legal uncertainties, our business will be negatively affected.
 
There are several governmental regulations that materially restrict mineral property exploration and development. Under Australian mining law, to engage in certain types of exploration will require work permits, the posting of bonds, and the performance of remediation work for any physical disturbance to the land. While these current laws do not affect our current exploration plans, if we proceed to commence drilling operations on the mineral claims, we will incur modest regulatory compliance costs.
 
In addition, the legal and regulatory environment that pertains to the exploration of ore is uncertain and may change. Uncertainty and new regulations could increase our costs of doing business and prevent us from exploring for ore deposits. The growth of demand for ore may also be significantly slowed. This could delay growth in potential demand for and limit our ability to generate revenues.  In addition to new laws and regulations being adopted, existing laws may be applied to mining that have not as yet been applied.  These new laws may increase our cost of doing business with the result that our financial condition and operating results may be harmed.
 
We may not have access to all of the supplies and materials we need to begin exploration that could cause us to delay or suspend operations.
 
Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies, such as explosives, and certain equipment such as bulldozers and excavators that we might need to conduct exploration. We have not attempted to locate or negotiate with any suppliers of products, equipment or materials. We will attempt to locate products, equipment and materials after this offering is complete. If we cannot find the products and equipment we need, we will have to suspend our exploration plans until we do find the products and equipment we need.
 
 
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Because of the speculative nature of exploration of mineral properties, there is no assurance that our exploration activities will result in the discovery of new commercially exploitable quantities of minerals.
 
We plan to continue to source exploration mineral claims. The search for valuable minerals as a business is extremely risky. We can provide investors with no assurance that additional exploration on our properties will establish that additional commercially exploitable reserves of clay soil exist on our properties. Problems such as unusual or unexpected geological formations or other variable conditions are involved in exploration and often result in exploration efforts being unsuccessful. The additional potential problems include, but are not limited to, unanticipated problems relating to exploration and attendant additional costs and expenses that may exceed current estimates. These risks may result in us being unable to establish the presence of additional commercial quantities of ore on our mineral claims with the result that our ability to fund future exploration activities may be impeded.
 
Because the SEC imposes additional sales practice requirements on brokers who deal in our shares that are penny stocks, some brokers may be unwilling to trade them. This means that you may have difficulty in reselling your shares and may cause the price of the shares to decline.
 
Our shares qualify as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934, which imposes additional sales practice requirements on broker/dealers who sell our securities in this offering or in the aftermarket. In particular, prior to selling a penny stock, broker/dealers must give the prospective customer a risk disclosure document that: contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; contains a description of the broker/dealers' duties to the customer and of the rights and remedies available to the customer with respect to violations of such duties or other requirements of Federal securities laws; contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask prices; contains the toll free telephone number for inquiries on disciplinary actions established pursuant to section 15(A)(i); defines significant terms used in the disclosure document or in the conduct of trading in penny stocks; and contains such other information, and is in such form (including language, type size, and format), as the SEC requires by rule or regulation. Further, for sales of our securities, the broker/dealer must make a special suitability determination and receive from you a written agreement before making a sale to you. Because of the imposition of the foregoing additional sales practices, it is possible that brokers will not want to make a market in our shares. This could prevent you from reselling your shares and may cause the price of the shares to decline.
 
We have no known ore reserves and we cannot guarantee we will find any clay soil or if we find clay soil, that production will be profitable.
 
We have no known ore reserves.  We have not identified any clay soil on the property and we cannot guarantee that we will ever find any clay soil.  We did not rely upon any expert advice in selecting the property for the exploration.  Even if we find that there is clay soil on our property, we cannot guarantee that we will be able to recover the clay soil.  Even if we recover the clay soil, we cannot guarantee that we will make a profit.  If we cannot find clay soil or it is not economical to recover the clay soil, we will have to cease operations.
 
Because we are small and do not have much capital, we must limit our exploration and consequently may not find mineralized material.  If we do not find mineralized material, we will cease operations.
 
Because we are small and do not have much capital, we must limit our exploration.  Because we may have to limit our exploration, we may not find mineralized material, although our property may contain mineralized material.  If we do not find mineralized material, we will cease operations.
 
As we face intense competition in the mining industry, we will have to compete with our competitors for financing and for qualified managerial and technical employees.
 
The mining industry is intensely competitive in all of its phases. Competition includes large established mining companies with substantial capabilities and with greater financial and technical resources than we have. As a result of this competition, we may be unable to acquire additional attractive mining claims or financing on terms we consider acceptable. We also compete with other mining companies in the recruitment and retention of qualified managerial and technical employees. If we are unable to successfully compete for financing or for qualified employees, our exploration and development programs may be slowed down or suspended.
 
 
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Trading of our stock may be restricted by the SEC's Penny Stock Regulations which may limit a stockholder's ability to buy and sell our stock.
 
The U.S. Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions.  Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors".  The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse.  The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market.  The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account.  The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation.  In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction.  These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules.  Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities.  We believe that the penny stock rules discourage investor interest in and limit the marketability of, our common stock.
 
We do not expect to declare or pay any dividends.
 
We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future.
 
Anti-Takeover Provisions
 
We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws.  Without any anti-takeover provisions, there is no deterrent for a take-over of our company, which may result in a change in our management and directors.
 
Our By-laws contain provisions indemnifying our officer and directors against all costs, charges and expenses incurred by them.
 
Our By-laws contain provisions with respect to the indemnification of our officer and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgement, actually and reasonably incurred by him, including an amount paid to settle an action or satisfy a judgement in a civil, criminal or administrative action or proceeding to which he is made a party by reason of his being or having been one of our directors or officer.
 
Volatility of Stock Price.
 
Our common shares are not currently publicly traded.  In the future, the trading price of our common shares may be subject to wide fluctuations.  Trading prices of the common shares may fluctuate in response to a number of factors, many of which will be beyond our control.  In addition, the stock market in general, and the market for software technology companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies.  Market and industry factors may adversely affect the market price of the common shares, regardless of our operating performance.
 
In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted.  Such litigation, if instituted, could result in substantial costs and a diversion of management's attention and resources.
 
 
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Item 4. Controls and Procedures
 
As required by Rule 13a-15 under the Exchange Act, as of the end of the period covered by this quarterly report, being March 31, 2011, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our company's management, including our company's Chief Executive Officer/Chief Financial Officer . Based upon that evaluation, our company's Chief Executive Officer/Chief Financial Officer concluded that our company's disclosure controls and procedures are effective as at the end of the period covered by this report.

There have been no changes in our company's internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

Disclosure controls and procedures and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer/Chief Financial Officer , as appropriate to allow timely decisions regarding required disclosure.

Part II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

Item 6. Exhibits.

Exhibits Required by Item 601 of Regulation S-B.

Exhibit Number/Description

(3) Charter and By-laws

3.1 Articles of Incorporation (incorporated by reference to the Company's S-1 Registration Statement filed August13, 2008).

3.2 Bylaws (incorporated by reference to the Company's S-1 Registration Statement filed August 13, 2008).

(14) Code of Ethics

14.1 Code of Business Conduct and Ethics

(31) Section 302 Certification

31.1 Certification of Greg Curson
 
31.2 Certification of Greg Curson

(32) Section 906 Certification

32.1 Certification of Greg Curson
 
 
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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AYERS EXPLORATION INC.

By: /s/ Greg Curson
Greg Curson President, Secretary, Treasurer and Director
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

Date: August 18 , 2011
 
 
 
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