AYERS EXPLORATION INC. - FORM 10-Q

Attached files

file	filename
EXCEL - IDEA: XBRL DOCUMENT - AYERS EXPLORATION INC.	Financial_Report.xls
EX-31.1 - CERTIFICATION - AYERS EXPLORATION INC.	ayxe_ex311.htm
EX-31.2 - CERTIFICATION - AYERS EXPLORATION INC.	ayxe_ex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2012

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

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 $1,287,000.

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 November 14, 2012.

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

AYERS EXPLORATION INC.

(An Exploration Stage Company)

BALANCE SHEETS

	September 30, 2012 $ (Unaudited)			December 31, 2011 $
ASSETS

CURRENT ASSETS

Cash		1,308			20,456

Total Current Assets		1,308			20,456

Mineral property interest		4,500			4,500

Total Assets		5,808			24,956

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES

CURRENT LIABILITIES

Accounts payable and accrued liabilities		5,880			11,083
Accrued interest – related party		298			-

Total Current Liabilities		6,178			11,083

Note payable – related party		8,500			-
Total Liabilities		14,678			11,083


STOCKHOLDERS’ EQUITY (DEFICIT)

Common stock, $.001 par value, 30,000,000 shares authorized, 6,435,000 shares issued and outstanding		6,435			6,435
Additional paid in capital		244,065			244,065
Deficit accumulated during the exploration stage		(259,370	)		(236,627	)

Total Stockholders’ Equity (Deficit)		(8,870	)		13,873

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)		5,808			24,956

The accompanying notes are an integral part of these financial statements

AYERS EXPLORATION INC.

(An Exploration Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30, 2012 $			Three Months Ended September 30, 2011 $			Nine Months Ended September 30, 2012 $			Nine Months Ended September 30, 2011 $			February 10, 2006 (Inception) to September 30, 2012 $

EXPENSES

General and administrative		6,055			5,711			21,910			19,616			133,031
Mineral exploration		-			-			-			50,000			127,000

Total Expenses		(6,055	)		(5,711	)		(21,910	)		(69,616	)		(260,031	)

OTHER INCOME (EXPENSE)
Interest income (expense)		(149	)		-			(833	)		-			661

Total Other Income (Expense)		(149	)		-			(833	)		-			661

NET LOSS		(6,204	)		(5,711	)		(22,743	)		(69,616	)		(259,370	)


NET LOSS PER SHARE: BASIC AND DILUTED		(0.00	)		(0.00	)		(0.00	)		(0.01	)

WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC AND DILUTED		6,435,000			6,435,000			6,435,000			6,306,800

The accompanying notes are an integral part of these financial statements

AYERS EXPLORATION INC.

(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30, 2012 $			Nine Months Ended September 30, 2011 $			February 10, 2006 (Inception) to September 30, 2012 $
CASH FLOWS USED IN OPERATING ACTIVITIES

Net loss		(22,743	)		(69,616	)		(259,370	)

Common shares issued for mineral exploration		–			50,000			125,000

Impairment of mineral property interest		–			–			2,000
Changes in operating assets and liabilities:

Accrued interest – related party		298						298
Accounts payable and accrued liabilities		(5,203	)		7,007			5,880

Net Cash Used in Operating Activities		(27,648	)		(12,609	)		(126,192	)

CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from (repayment to) related party		8,500			(5,100	)		8,500

Cash received from sale of common stock		–			–			119,000

Net Cash From Financing Activities		8,500			(5,100	)		127,500

NET CHANGE IN CASH		(19,148	)		(17,709	)		1,308

CASH – BEGINNING		20,456			39,430			–

CASH – ENDING		1,308			21,721			1,308

Supplemental Cash Flow Information:

Cash paid for:
Interest		535			–			535
Income taxes		–			–			–

Non-cash transactions:
Stock issued for mineral property interest		–			–			6,500

The accompanying notes are an integral part of these financial statements

AYERS EXPLORATION INC.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

Nine Months Ended September 30, 2012

(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 2011 as reported in Form 10-K, have been omitted.

NOTE 2 – PROMISSORY NOTE – RELATED PARTY

On March 29, 2012 the Company issued a promissory note to a director of the Company for cash proceeds of $8,500 at simple annual interest rate of 7%. The promissory note is unsecured and matures on March 29, 2014, after which date interest is increased to 12% per annum on the total outstanding balance including the principal amount and interest accrued up to March 29, 2014. As at September 30, 2012, total interest of $298 was accrued on the promissory note.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

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.

Our Business

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. During the year ended December 31, 2011, the Company completed the acquisition of the property. We have recently completed our proposed exploration program on the property but we estimate we will need to raise an additional $100,000 to complete exploration. 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. We are still in the process of transferring title as the Queensland Mining Department (“Department”) requires that the transferee be an Australian company. As a result, we are in the process of forming a subsidiary in Queensland to effect the transfer and until then the status of the property and our ability to obtain the necessary permits remains uncertain.

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.

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, 2011, our auditors included an explanatory paragraph in their report raising 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.

Results of Operations

Nine Months Ended September 30, 2012 and 2011

During the nine months ended September 30, 2012, we incurred $21,910 for general and administrative activities and interest expense of $833, resulting in a net loss of $22,743 against no revenues. During the nine months ended September 30, 2011, operating expenses totaled $69,616 including general and administrative expense of $19,616 and mineral exploration cost of $50,000, resulting in a net loss of $69,616 with no revenues.

Three Months Ended September 30, 2012 and 2011

During the three months ended September 30, 2012, we incurred $6,055 for general and administrative activities and interest expense of $149, resulting in a net loss of $6,204 against no revenues. During the three months ended September 30, 2011, operating expenses totaled $5,711 consisting of general and administrative expense of $5,711 and no mineral exploration cost, resulting in a net loss of $5,711 with no revenues.

Liquidity and Capital Resources

Since inception on February 10, 2006, we have been engaged in acquisition and exploration of mineral properties. Our principal capital resources have been acquired through the issuance of common stock.

At September 30, 2012 we had working capital deficit of $4,870.

At September 30, 2012 our total assets of $5,808 consisted of cash of $1,308 and a mineral property interest of $4,500. This compares to our assets at December 31, 2011 of $24,956, which consisted of cash of $20,456 and a mineral property interest of $4,500.

At September 30, 2012 our total liabilities were $14,678, compared to our liabilities of $11,083 as at December 31, 2011.

We have had no revenues from inception. 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 $145,000 in respect of our mineral properties and administrative expenses. We currently do not have enough cash to complete our 12 month plan.

We estimate that we will expend approximately $20,000 on general and administrative expenses over the next 12 months.

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:

Wilpena Exploration costs	$	100,000
Mt. Cotton Phase 1 exploration		25,300
General and Administrative		20,000
Total	$	145,300

Recently Issued Accounting Standards

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

Off Balance Sheet Arrangements

As of September 30, 2012 and the date of this report, we did not have any off balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer who is also our principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer who is also our principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, particularly during the period when this report was being prepared. However, because we have limited transactions which are all approved, carried out and reviewed by our director and officer, the impact of the limitations are not material.

Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We know of no 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. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS

d) Exhibits

Exhibit No.		Document Description

31.1*		Section 302 Certification of Chief Executive Officer and Chief Financial Officer

32.1*		Section 906 Certification of Chief Executive Officer and Chief Financial Officer

101.INS **		XBRL Instance Document

101.SCH **		XBRL Taxonomy Extension Schema Document

101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB **		XBRL Taxonomy Extension Label Linkbase Document

101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

*Filed herewith

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements 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.

Date: November 14, 2012	By:	/s/ “Bruce Drury”
		Bruce Drury
		Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director (Principal Executive and Principal Financial and Accounting Officer)

AYERS EXPLORATION INC. - FORM 10-Q - November 14, 2012

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AYERS EXPLORATION INC. Reports