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EX-32.1 - 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 March 31, 2013
 
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)      
 
As of the date of this Quarterly Report, the Registrant had minimum trading in its common stocks, therefore no market value can be determined based on the trading prices of the Registrant’s common stock for its most recently completed second quarter.
 
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 15, 2013.
 
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
(Unaudited)

   
March 31,
2013
$
   
December 31,
2012
$
 
             
ASSETS
           
             
CURRENT ASSETS
           
             
Cash
    272       290  
                 
Total Current Assets
    272       290  
                 
Total Assets
    272       290  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
               
                 
LIABILITIES
               
                 
CURRENT LIABILITIES
               
                 
Accounts payable and accrued liabilities
    14,941       9,251  
Accrued interest – related party
    595       446  
Note payable – related party, current portion
    8,500       -  
                 
Total Current Liabilities
    24,036       9,697  
                 
Note payable – related party, net of current portion
    -       8,500  
Total Liabilities
    24,036       18,197  
                 
STOCKHOLDERS’ 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
    (274,264 )     (268,407 )
                 
Total Stockholders’ Deficit
    (23,764 )     (17,907 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
    272       290  
 
The accompanying notes are an integral part of these financial statements
 
 
2

 
 
AYERS EXPLORATION INC.
 (An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)

   
Three Months Ended
March 31, 2013
$
   
Three Months Ended
March 31, 2012
$
   
February 10, 2006
(Inception) to
March 31, 2013
$
 
                   
EXPENSES
                 
                   
General and administrative
    5,708       5,830       143,128  
Mineral exploration
    -       -       125,000  
Impairment of mineral property interest
    -       -       6,500  
                         
Operating Loss
    (5,708 )     (5,830 )     (274,628 )
                         
OTHER INCOME (EXPENSE)
                       
 Interest income (expense)
    (149 )     (535 )     364  
                         
Total Other Income (Expense)
    (149 )     (535 )     364  
                         
NET LOSS
    (5,857 )     (6,365 )     (274,264 )
                         
NET LOSS PER SHARE:
                       
BASIC AND DILUTED
    (0.00 )     (0.00 )        
                         
WEIGHTED AVERAGE SHARES OUTSTANDING:                        
BASIC AND DILUTED
    6,435,000       6,435,000          
 
The accompanying notes are an integral part of these financial statements
 
 
3

 
 
AYERS EXPLORATION INC.
 (An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
 (Unaudited)
 
   
Three Months Ended
March 31, 2013
$
   
Three Months Ended
March 31, 2012
$
   
February 10, 2006 (Inception) to
March 31, 2013
$
 
                   
CASH FLOWS USED IN OPERATING ACTIVITIES
                 
                   
Net loss
    (5,857 )     (6,365 )     (274,264 )
                         
Common shares issued for mineral exploration
                125,000  
                         
Impairment of mineral property interest
                6,500  
Changes in operating assets and liabilities:
                       
                         
Accrued interest – related party
    149             595  
Accounts payable and accrued liabilities
    5,690       (2,135 )     14,941  
                         
Net Cash Used in Operating Activities
    (18 )     (8,500 )     (127,228 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
                         
Proceeds from note payable – related party
          8,500       8,500  
Cash received from sale of common stock
                119,000  
                         
Net Cash Provided by Financing Activities
          8,500       127,500  
                         
NET CHANGE IN CASH
    (18 )           272  
                         
CASH – BEGINNING
    290       20,456        
                         
CASH – ENDING
    272       20,456       272  
                         
Supplemental Cash Flow Information:
                       
                         
Cash paid for:
                       
Interest
                 
Income taxes
                 
                         
Non-cash transactions:
                       
Stock issued for mineral property interest
                6,500  
 
The accompanying notes are an integral part of these financial statements
 
 
4

 

AYERS EXPLORATION INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
Three months Ended March 31, 2013
(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 2012 as reported in Form 10-K, have been omitted.

Going Concern

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred a loss since inception resulting in an accumulated deficit of $274,264 as of March 31, 2013 and further losses are anticipated in the development of its business. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and notes payable or advances from officers and/or issuance of common stock for cash.

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. For the three months ending March 31, 2013, interest expense of $149 was accrued on the promissory note, resulting in an accrued interest balance of $595 as of period end.
 
 
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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

Our Current Business
 
Our business objective is to acquire mineral properties and conduct exploration activities on the mineral claims. As of the date of this report, we have identified and incurred acquisition expenditures on two properties in Australia.
 
Mt. Cotton Property Option Agreement
 
In July 2006, we entered into an option agreement (the “Option”) with Redpath Clay Corp. (“Redpath”) 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 is held by Redpath. We have not taken any actions to further our business plan since July 2006 and have impaired the property due to uncertainty of our ability to pursue the claim.
 
Wilpena Property

On October 27, 2009 we entered into a Property Option Agreement with Wilpena Resources Ltd. Pty., which grants the Company exclusive option (the “Wilpena Option”) to acquire an undivided 100% interest in the mining claim known as the Wilpena Property situated in central Queensland, Australia. During the year ended December 31, 2011 we completed the acquisition of the property through issuing 250,000 shares of our common stock. During the year ended December 31, 2012, after assessment of the property, we impaired the $4,500 carrying value due to our assessment that it is not economically viable to pursue the claim or carry out exploration on the property.

We have not conducted exploration activities on the above properties and continue to search for economically viable mineral properties.

 
6

 

Results of Operations

Three Months Ended March 31, 2013 and 2012

During the three months ended March 31, 2013, we incurred general and administrative expenses of $5,708 and interest expense of $149, resulting in a net loss of $5,857 against no revenues. During the three months ended March 31, 2012, we incurred general and administrative expenses of $5,830 and interest expense of $535, resulting in a net loss of $6,365 against 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 March 31, 2013 we had working capital deficit of $23,764.

At March 31, 2013 our total assets of $272 consisted of cash of $272. This compares to our assets at December 31, 2012 of $290, which consisted of cash of $290.

At March 31, 2013 our total liabilities were $24,036, compared to our liabilities of $18,197 as at December 31, 2012.
 
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 $100,000 including $75,000 for mineral property acquisitions and/or explorations and $25,000 for administrative expenses.  

Based on our current plan of operations, we do not have sufficient funds for the next 12 months and need to raise additional funds to continue our operations. In the event that we are unable to raise additional financing, 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.

Recently Issued Accounting Standards

Management does not anticipate that the recently issued but not yet effective accounting pronouncements will materially impact the Company’s financial statements.

Off Balance Sheet Arrangements

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

 
7

 
 
Going Concern

Due to our being an exploration stage company and not having generated revenues, in the financial statements for the year ended December 31, 2012, our independent registered public accountant included an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. Our audited financial statements for the year ended December 31, 2012 contained additional note disclosures describing the circumstances that lead to this disclosure.
 
As at March 31, 2013, we had accumulated losses from inception of $274,264 and working capital deficit of $23,764. 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.

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.
 
 
8

 
 
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.
 
 
9

 

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.
 
 
10

 
 
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: May 15, 2013
By: 
/s/ “Bruce Drury”
 
 
 
Bruce Drury
 
 
 
Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director (Principal Executive and Principal Financial and Accounting Officer)
 
 
 
 
 
 
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