UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934: For the quarterly period ended ~~March~~September 3130, 2013

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934: For the transition period from ____to____

Commission File Number: 333-169014

American Energy Development Corp.

(Exact name of registrant as specified in its charter)

Nevada	27-2304001
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1230 Avenue of the Americas, 7th Floor, New York, NY 10020

(Address of principal executive offices) (Zip Code)

(855) 645-2332
(Registrant’s telephone number, including area code)

Indicate by check mark whether the issuer (1) has 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. x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated file, 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.

Large accelerated filer	o		Accelerated filer	o
Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company	x

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

As of ~~May~~November 20, 2013, there were 102,331,448 shares of the issuer’s $.001 par value common stock issued and outstanding.

TABLE OF CONTENTS PART I FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1916
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2318
Item 4.	Controls and Procedures	2318
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	2319
Item 1A.	Risk Factors	2319
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2319
Item 3.	Defaults Upon Senior Securities	2319
Item 4.	Mine Safety Disclosures	2319
Item 5.	Other Information	2319
Item 6.	Exhibits	2319

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2013			June 30, 2012
	September 30, 2013 (Unaudited)			June 30, 2013
	(Unaudited)
ASSETS
Current assets
Cash	$	198,~~213~~758		$	849,~~452~~683
Accounts receivable		1314,~~400~~521			913,~~472~~009
Prepaid expenses		3,116			-
Total current assets		23,279			22,692
Total current assets		35,729			93,924
Oil and Gas Property
Evaluated, net of accumulated depletion of $24,263 and $9,117 as of March 31, 2013 and June 30, 2012, respectively		1,086,937			1,102,083
Evaluated, net of accumulated depletion of $28,594 and $28,114 as of September 30, 2013 and June 30, 2013, respectively		405,220			405,700
Unevaluated		~~342,947~~-			~~12,909,593~~-
Total assets	$	1428,~~465,613~~499		$	14428,~~105,600~~392
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued expenses	$	~~513~~253,~~130~~613		$	~~211~~249,~~707~~865
Total current liabilities		~~513~~253,~~130~~613			~~211~~249,~~707~~865
Stockholders’ equity (deficit)
Preferred stock, $.001 par value; 5,000,000 shares authorized, no shares issued and outstanding		-			-
Common stock, $.001 par value; 3,000,000,000 shares authorized, and 102,331,448 and 101,752,506 shares issued and outstanding, as of March 31, 2013 and June 30, 2012, respectively		102,331			101,752
Common stock, $.001 par value; 3,000,000,000 shares authorized, and 102,331,448 and 102,331,448 shares issued and outstanding, as of September 30, 2013 and June 30, 2013, respectively		102,331			102,331
Additional paid-in capital		15,~~691~~693,~~688~~488			15,~~553~~692,~~719~~588
Accumulated other comprehensive loss		(6,117	)		(6,117	)
Deficit accumulated during the exploration stage		(1415,~~835~~614,~~419~~816	)		(115,~~755~~610,~~461~~275	)
Total stockholders’ equity (deficit)		~~952~~174,~~483~~886			13178,~~893,893~~527
Total liabilities and stockholders’ equity (deficit)	$	1428,~~465,613~~499		$	14428,~~105,600~~392

See accompanying notes to consolidated financial statements.

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended March 31, 2013			For the Three Months Ended March 31, 2012			For the Nine Months Ended March 31, 2013			For the Nine Months Ended March 31, 2012		From Inception (March 10, 2010) Through March 31, 2013
	For the Three Months Ended September 30, 2013				For the Three Months Ended September 30, 2012				From Inception (March 10, 2010) Through September 30, 2013
Revenues	$	4945,~~170~~983		$	~~21,304~~$	70,574	$	~~164,229~~	$	$339,447	~~23,580~~	$	~~253,240~~
Operating costs		3,~~127~~068			~~1,599~~	6,605		~~25,190~~		41,594	~~1,763~~		~~33,493~~
Gross Margin		46,043			19,705			139,039			21,817		219,747
Gross margin		42,915				63,969				297,853
Operating expenses
General and administrative		7247,~~574~~456			~~124,726~~	197,670		~~414,739~~		1,186,827	~~363,655~~		~~1,099,613~~
Loss on sale of oil and gas property		~~291,723~~-			-	-		~~291,723~~		291,723	-		~~291,723~~
Impairment of oil and gas property		-			-	-		~~12,512,535~~		14,426,505	-		~~13,656,216~~
Total operating expenses		~~364~~47,~~297~~456			~~124,726~~	197,670		~~13,218,997~~		15,905,055	~~363,655~~		~~15,047,552~~
Loss from operations		(~~318~~4,~~254)~~541	)		~~(105,021)~~	(133,701	)	~~(13,079,958)~~		(15,607,202	~~(341,838~~)		~~(14,827,805)~~
Interest expense		-			~~(1,909)~~	-		-		(7,614	~~(3,859~~)		~~(7,614)~~
Loss before income taxes		(~~318~~4,~~254)~~541	)		~~(106,930)~~	(133,701	)	~~(13,079,958)~~		(15,614,816	~~(345,697~~)		~~(14,835,419)~~
Provision for income taxes		-			-	-		-		-	-		-
Net loss	$	(~~318~~4,~~254)~~541	)	$	~~(106,930)~~$	(133,701	$)	~~(13,079,958)~~	$	$(15,614,816	~~(345,697~~)	$	~~(14,835,419)~~
Net loss per common share – basic and diluted	$	(0.00)	)	$	~~(0.00)~~$	(0.00	$)	~~(0.13)~~		$	~~(0.00)~~
Weighted average of common shares – basic and diluted		102,~~206~~331,~~364~~448			~~90,052,184~~	101,772,683		~~102,061,364~~			~~87,939,061~~

See accompanying notes to consolidated financial statements.

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE PERIOD FROM INCEPTION (MARCH 10, 2010)

THROUGH SEPTEMBER 30, 2013

(UNAUDITED)

											~~Deficit~~					Deficit
								~~Accumulated~~			~~Accumulated~~	Accumulated		~~Total~~		Accumulated			Total
	Common Stock					~~Additional~~		~~Other~~Additional			~~During~~	Other		~~Stockholders'~~		During			Stockholders'
	Number of					~~Paid-In~~		~~Comprehensive~~Paid-In			~~Exploration~~	Comprehensive		~~Equity~~		Exploration			Equity
	Shares			~~Amount~~	Amount	~~Capital~~		~~Loss~~Capital			~~Stage~~	Loss		~~(Deficit)~~		Stage			(Deficit)
Balance, March 10, 2010	-	-	$	-	$	$-	-	$	-		$	-$	-	$	-	$	-		$	-
Issuance of common stock for services	~~90,000,000~~	90,000,000		~~90,000~~		90,000	~~(87,000)~~		-(87,000	)		-	-		~~3,000~~		-			3,000
Additional paid-in capital in exchange for facilities provided by related party	-	-		-		-	~~1,200~~		-1,200			-	-		~~1,200~~		-			1,200
Balance, June 30, 2010	90,000,000			90,000			(85,800)		-			(11,083)			(6,883)
Net loss		-				-			-				-				(11,083	)		-
Issuances of common stock for cash	69,167,100			69,167			161,390		-			-			230,557
Balance, June 30, 2010		90,000,000				90,000			(85,800	)			-				(11,083	)		(6,883	)
Issuance of common stock for oil and gas properties	12,000,000			12,000			1,073,000		-			-			1,085,000
Issuances of common stock for cash		69,167,100				69,167			161,390				-				-			230,557
Additional paid-in capital in exchange for facilities provided by related party	-			-			3,600		-			-			3,600
Issuance of common stock for oil and gas properties		12,000,000				12,000			1,073,000				-				-			1,085,000
Net loss	-			-			-		-			(125,444)			(125,444)
Additional paid-in capital in exchange for facilities provided by related party		-				-			3,600				-				-			3,600
Balance, June 30, 2011	171,167,100		$	171,167		$	1,152,190	$	-		$	(136,527)		$	1,186,830
Net loss		-				-			-				-				(125,444	)		(125,444	)
Issuance of common stock for services	90,000			90			810		-			-			900
Balance, June 30, 2011		171,167,100			$	171,167		$	1,152,190			$	-			$	(136,527	)	$	1,186,830
Issuances of common stock for cash	2,669,215			2,669			1,617,331		-			-			1,620,000
Issuance of common stock for services		90,000				90			810				-				-			900
Surrender of common stock by the stockholder	(85,150,000)			(85,150)			85,150		-			-			-
Issuances of common stock for cash		2,669,215				2,669			1,617,331				-				-			1,620,000
Additional paid-in capital in exchange for facilities provided by related party	-			-			3,600		-			-			3,600
Surrender of common stock by the stockholder		(85,150,000	)			(85,150	)		85,150				-				-			-
Forgiveness of debt by former stockholders	-			-			7,614		-			-			7,614
Additional paid-in capital in exchange for facilities provided by related party		-				-			3,600				-				-			3,600
Issuance of common stock for oil and gas properties	12,976,191			12,976			12,687,024		-			-			12,700,000
Forgiveness of debt by former stockholders		-				-			7,614				-				-			7,614
Foreign currency loss	-			-			-		(6,117)			-			(6,117)
Issuance of common stock for oil and gas properties		12,976,191				12,976			12,687,024				-				-			12,700,000
Net Loss	-			-			-		-			(1,618,934)			(1,618,934)
Foreign currency loss		-				-			-				(6,117	)			-			(6,117	)
Balance, June 30, 2012	101,752,506		$	101,752		$	15,553,719	$	(6,117)		$	(1,755,461)		$	13,893,893
Net Loss		-				-			-				-				(1,618,934	)		(1,618,934	)
Issuance of common stock for services	468,750			469			101,156		-			-			101,625
Balance, June 30, 2012		101,752,506			$	101,752		$	15,553,719			$	(6,117	)		$	(1,755,461	)	$	13,893,893
Issuances of common stock for cash	75,000			75			29,925		-			-			30,000
Issuance of common stock for services		468,750				469			101,156				-				-			101,625
Additional paid-in capital in exchange for facilities provided by related party	-			-			2,700		-			-			2,700
Issuances of common stock for cash		75,000				75			29,925				-				-			30,000
Issuance of common stock for oil and gas properties	35,192			35			4,188		-			-			4,223
Additional paid-in capital in exchange for facilities provided by related party		-				-			3,600				-				-			3,600
Net Loss	-			-			-		-			(13,079,958)			(13,079,958)
Issuance of common stock for oil and gas properties		35,192				35			4,188				-				-			4,223
Balance, March 31, 2013	102,331,448		$	102,331		$	15,691,688	$	(6,117)		$	(14,835,419)		$	952,483
Net Loss		-				-			-				-				(13,854,814	)		(13,854,814	)
Balance, June 30, 2013		102,331,448			$	102,331		$	15,692,588			$	(6,117	)		$	(15,610,275	)	$	178,527
Additional paid-in capital in exchange for facilities provided by related party		-				-			900				-				-			900
Net Loss		-				-			-				-				(4,541	)		(4,541	)
Balance, September 30, 2013		102,331,448			$	102,331		$	15,693,488			$	(6,117	)		$	(15,614,816	)	$	174,886

See accompanying notes to consolidated financial statements.  

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended March 31, 2013			For the Nine Months Ended March 31, 2012			From Inception (March 10, 2010) Through March 31, 2013
		For the Three Months Ended September 30, 2013				For the Three Months Ended September 30, 2012				From Inception (March 10, 2010) Through September 30, 2013
Cash flows from operating activities
Net loss	$	(134,~~079,958)~~541	)	$	~~(345,697)~~$	(133,701	$)	~~(14,835,419)~~	$	(15,614,816	)
Adjustments to reconcile net loss to net cash used in operating activities
Additional paid-in capital in exchange for facilities provided by related party		~~2,700~~900			~~2,700~~	900		~~11,100~~		12,900
Common stock issued for services		~~101,625~~-			~~900~~	50,625		~~105,525~~		105,525
Depletion expense		~~15,146~~480			-	3,645		~~24,263~~		28,594
Loss on sale of oil and gas property		~~291,723~~-			-	-		~~291,723~~		291,723
Impairment of oil and gas properties		~~12,512,535~~-			-	-		~~13,656,216~~		14,426,505
Changes in operating assets and liabilities
Decrease (Increase) in accounts receivable		(31,~~928)~~512	)		-	9,472		~~(13,400)~~		(14,521	)
Increase (decrease) in prepaid expenses		(3,116)						(3,116)
Increase (decrease) in accounts payable and accrued expenses		3,748				242,904				322,882
Increase (decrease) in accounts payable and accrued expenses		301,423			(75,356)			328,332
Net cash used in operating activities		(925	)			173,845				(441,208	)
Net cash used in operating activities		138,150			(417,453)			(434,776)
Cash flows from investing activities
Cash flows from investing activities
Purchase and capitalized costs of oil and gas properties		-				(233,389	)			(1,424,474	)
Purchase and capitalized costs of oil and gas properties		(237,612)			(1,077,103)			(1,424,474)
Net cash used by investing activities		-				(233,389	)			(1,424,474	)
Net cash used by investing activities		(237,612)			(1,077,103)			(1,424,474)
Cash flows from financing activities
Cash flows from financing activities
Proceeds from issuance of common stock		-				-				1,880,557
Proceeds from issuance of common stock		34,223			1,620,000			1,884,580
Proceeds from issuance of stockholder loan		-				-				-
Proceeds from issuance of stockholder loan		-			-			-
Net cash provided by financing activities		-				-				1,880,557
Net cash provided by financing activities		34,223			1,620,000			1,884,580
Effect of exchange rates on cash and cash equivalents		-				-				(6,117	)
Effect of exchange rates on cash and cash equivalents		-			-			(6,117)
Net increase (decrease) in cash		(925	)			(59,544	)			8,758
Net increase (decrease) in cash		(65,239)			125,444			19,213
Cash, beginning of period		9,683				84,452				-
Cash, beginning of period		84,452			208,523			-
Cash, end of period	$	8,758			$	24,908			$	8,758
Cash, end of period	$	19,213		$	333,967		$	19,213
Supplemental disclosure of cash flow information
Supplemental disclosure of cash flow information
Income taxes paid	$	-			$	-			$	-
Income taxes paid	$	-		$	-		$	-
Interest paid	$	-			$	-			$	-
Interest paid	$	-		$	-		$	-
Non-cash transactions
Non-cash transactions
Forgiveness of debt from former shareholder	$	-			$	-			$	7,614
Forgiveness of debt from former shareholder	$	-		$	-		$	7,614
Common stock for services	$	-			$	-			$	117,525
Common stock for services	$	-		$	2,700		$	3,600
Common stock for oil and gas properties	$	-			$	-			$	12,704,223
Common stock for oil and gas properties	$	4,223		$	12,825,000		$	12,704,223

See accompanying notes to consolidated financial statements.

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Basis of Presentation

Nature of Operations

American Energy Development Corp. (the "Company") is currently an exploration stage company under the provisions of Accounting Standards Codification (ASC) No. 915, Development Stage Entities, and was incorporated under the laws of the State of Nevada on March 10, 2010. Since inception, the Company has produced almost no revenues and will continue to report as an exploration stage company until significant revenues are produced.

The Company’s principal activity is the exploration and development of oil and gas properties.

On July 12, 2011, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Nevada Secretary of State to change its name from “LJM Energy Corp.” to “American Energy Development Corp.” (the “Name Change”). The effective date of the Name Change with the Nevada Secretary of State is July 14, 2011.

Basis of Presentation

These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim condensed consolidated financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q and Article 8 of SEC Regulation S-X. The principles for interim consolidated financial information do not require the inclusion of all the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements on Form 10-K for the year ended June 30, ~~2012~~2013. The condensed consolidated financial statements included herein are unaudited; however, in the opinion of management, they contain all normal recurring adjustments necessary for a fair statement of the condensed results for the interim periods. Operating results for the three ~~and nine~~ month period ended ~~March~~September 3130, 2013 are not necessarily indicative of the results that may be expected for the year ending June 30, ~~2013~~2014. We made certain reclassifications to prior-period amounts to conform to the current presentation.

Exploration Stage

The Company is engaged in the acquisition, exploration and development of producing oil and gas properties. As of ~~March~~September 3130, 2013, the Company owns acreage in the State of Michigan which includes a 43.75% working interest in three separate oil and gas leases in Ingham County, Michigan (the “Dansville Prospect”) totaling approximately 1,343 acres along with option rights to acquire a 50% working interest in three (3) prospects located in Trenton Township, Washtenaw County, Trenton Township, Jackson County, and Kinneville Township, Ingham County, Michigan (the “Option Prospects”), and seismic data for certain properties located in Ingham and Calhoun Counties, Michigan for further exploration and analysis. The Company also owns a 1.4% working interest in certain oil and gas leases in Pottawatomie County, Oklahoma (the “Magnolia Prospect”).

Additionally, the Company owns all of the issued and outstanding shares of Reservoir Resources Limited, which through its wholly-owned subsidiary, Fairfax Shelfco 307 Limited (“Fairfax 307”), is the owner of a ninety-five percent (95%) share in the Petroleum Exploration and Development Licence for UK Onshore Block SU97, known as licence PEDL236 (the “Licence”), which grants to Fairfax 307 an exclusive license during the term of the Licence to search, bore for and obtain petroleum in UK Onshore Block SU97, a 24,700 acre onshore exploration prospect located in the Weald Basin in Windsor, United Kingdom. Reservoir Resources also owns two-dimensional seismic data and information relating to certain areas of the Licence.

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Exploration Stage (Continued)

~~Additionally~~In December 2012, the Company ~~owns~~determined ~~all~~that of the ~~issued~~costs ~~and~~to ~~outstanding~~obtain ~~shares~~required ofapprovals ~~Reservoir~~necessary ~~Resources~~to ~~Limited,~~develop ~~which~~and ~~through~~drill ~~its~~the ~~wholly-owned~~Windsor ~~subsidiary,~~Prospect ~~Fairfax~~of ~~Shelfco~~Reservoir ~~307~~Resources ~~Limited~~were ~~(“Fairfax~~too ~~307”),~~significant isand the ~~owner~~likelihood of aobtaining ~~ninety-five percent (95%) share in~~ the ~~Petroleum~~approvals ~~Exploration~~too ~~and~~remote ~~Development License for UK Onshore Block SU97, known as license PEDL236 (the “License”), which grants~~ to ~~Fairfax~~pursue ~~307 an exclusive license during~~ the ~~term~~prospect offurther. ~~the~~As ~~License to search, bore for and obtain petroleum in UK Onshore Block SU97,~~ a ~~24,700~~result ~~acre onshore exploration prospect located~~ in the ~~Weald~~prior ~~Basin~~fiscal ~~in Windsor~~year, ~~United~~the ~~Kingdom.~~Company ~~Reservoir~~has ~~Resources~~impaired ~~also~~its ~~owns~~investment ~~two-dimensional seismic data and information relating to certain areas~~ of ~~the~~Reservoir ~~License~~Resources.

In December 2012, the Company determined that the costs to obtain required approvals necessary to develop and drill the Windsor Prospect of Reservoir Resources were too significant and the likelihood of obtaining the approvals too remote to pursue the prospect further. As a result, the Company has impaired its investment of Reservoir Resources.

The Company’s success will depend in large part on its ability to obtain and develop its oil and gas interests. There can be no assurance that oil and gas properties obtained by the Company will contain reserves or that properties with reserves will be profitable to extract. The Company will be subject to local and national laws and regulations which could impact the Company’s ability to execute its business plan.

As discussed in Note 2, the accompanying financial statements have been prepared assuming the Company will continue as a going concern.

Use of Estimates

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

Cash and Cash Equivalents

For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents.

Fair Value of Financial Instruments

The Company is required to estimate the fair value of all financial instruments included on its balance sheet under ASC 825, Financial Instruments. The carrying value of cash, accounts ~~receivable, prepaid expenses, accounts~~ payable and accrued expenses approximate their fair value due to the short period to maturity of these instruments.

Oil and Gas Properties

The Company follows the full cost method of accounting for crude oil and natural gas properties. Under this method, all direct costs and certain indirect costs associated with acquisition of properties and successful as well as unsuccessful exploration and development activities are capitalized. Depreciation, depletion, and amortization of capitalized crude oil and natural gas properties and estimated future development costs, excluding unproved properties, are based on the unit-of-production method based on proved reserves.

The cost of investments in unproved properties and major development projects are excluded from capitalized costs to be amortized until it is determined whether or not proved reserves can be assigned to the properties. Until such a determination is made, the properties are assessed annually to ascertain whether impairment has occurred. The costs of drilling exploratory dry holes are included in the amortization base immediately upon determination that the well is dry.

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Oil and Gas Properties (Continued)

For each cost center, capitalized costs are subject to an annual ceiling test, in which the costs shall not exceed the cost center ceiling. The cost center ceiling is equal to i) the present value of estimated future net revenues computed by applying current prices of oil and gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves computed using a discount factor of ten percent and assuming continuation of existing economic conditions; plus ii) the cost of properties not being amortized; plus iii) the lower of cost or estimated fair value of unproven properties included in the costs being amortized; less iv) income tax effects related to differences between the book and tax basis of the properties. If unamortized costs capitalized within a cost center, less related deferred income taxes, exceed the cost center ceiling, the excess is charged to expense and separately disclosed during the period in which the excess occurs.

Asset Retirement Obligation

The Company accounts for its future asset retirement obligations by recording the fair value of the liability, if any, during the period in which it was incurred. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The increase in carrying value of a property associated with the capitalization of an asset retirement cost is included in proved oil and gas properties within the Company’s balance sheets. The Company depletes the amount added to proved oil and gas property costs using the units-of-production method and the straight-line basis over the life of the assets.

The Company’s asset retirement obligation consists of costs related to the plugging of wells, removal of facilities and equipment and site restoration on its oil and gas properties and gathering assets. The asset retirement liability, if any, will be allocated to operating expense using a systematic and rational method. As of ~~March~~September 3130, 2013, the Company reviewed plug and abandonment costs of its producing Brown 2-12 well and deemed the amount to be immaterial.

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition

Working interest, royalty and net profit interests are to be recognized as revenue when oil and gas are sold. The Company records the sale of its interests in prospects generally as a reduction to the cost pool without gain or loss recognition unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to a cost center. A significant alteration would typically involve a sale of 25% or more of the proved reserves related to a single full cost pool. All terms of the sale are to be finalized and price readily determinable.

Value of Stock Issued for Services

The Company periodically issues shares of its common stock in exchange for, or in settlement of, services. The Company’s management values the shares issued in such transactions at either the then market price of the Company’s common stock after taking into consideration factors such as volume of shares issued or trading restrictions, or the value of the services rendered, whichever is more readily determinable.

Reclassifications

Certain amounts in the ~~2012~~2013 financial statements have been reclassified for comparative purposes to conform to the current year presentation.

~~Concentrations of Credit Risk~~9

The Company collects its receivables on its working interests in oil and gas properties from the well operators. As such, the Company generally has relatively few customers. These receivables are unsecured and the Company performs ongoing credit evaluations of the well operators’ financial condition whenever necessary. At March 31, 2013, the Company had one customer that accounted for 100% of its oil and gas sales. Bad debt expense is recognized on an account-by-account review after all means of collection have been exhausted and recovery is not probable.

There was no bad debt expense for the period ended March 31, 2013.

Recent Accounting Pronouncements

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentrations of Credit Risk

The Company collects its receivables on its working interests in oil and gas properties from the well operators. As such, the Company generally has relatively few customers. These receivables are unsecured and the Company performs ongoing credit evaluations of the well operators’ financial condition whenever necessary. At September 30, 2013, the Company had one customer that accounted for 100% of its oil and gas sales. Bad debt expense is recognized on an account-by-account review after all means of collection have been exhausted and recovery is not probable.

There was no bad debt expense for the three months ended September 30, 2013 and 2012.

Recent Accounting Pronouncements

2. GOING CONCERN

As shown in the accompanying financial statements, the Company has incurred a net operating loss of ($1415,~~835~~614,~~419~~816) from inception (March 10, 2010) through ~~March~~September 3130, 2013. The Company is subject to those risks associated with exploration stage companies. The Company’s present revenues are insufficient to meet operating expenses. Additional debt and equity financing will be required by the Company to fund its development activities and to support operations. However, there is no assurance that the Company will be able to obtain additional financing. Furthermore, the Company's existence is dependent upon management's ability to develop profitable operations. These factors, among others, raise substantial doubt that the Company will be able to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

Management is currently devoting substantially all of its efforts to develop its existing oil and gas properties. The Company also continues to search for additional productive properties. There can be no assurance that the Company's efforts will be successful, or that those efforts will translate in a beneficial manner to the Company. The accompanying statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

3. ~~EMPLOYMENT~~INVESTMENTS ~~AGREEMENTS~~IN OIL AND GAS PROPERTIES

On December 19, 2011, the board of directors of the Company increased the size of the board of directors from two to three directors and appointed Kevin J. Goldrick as a director. On this date, the Company and Mr. Goldrick entered into a director agreement (“Director Agreement”). The Director Agreement provides that Mr. Goldrick will receive an annual cash compensation of $12,000 and equity compensation of 100,000 shares of common stock with the possibility to purchase stock options subject to certain conditions as specified in the Director Agreement. On December 6, 2012, Kevin Goldrick resigned as a director of the Company.

4. INVESTMENTS IN OIL AND GAS PROPERTIES

Dansville Prospect – Proved (Evaluated) Property

On June 14, 2011, the Company entered into and closed an omnibus agreement (“Omnibus Agreement”) with Range Michigan LLC, a Wyoming limited liability company (“Range”), pursuant to which the Company acquired interests in certain oil and gas drilling areas and land leases located in Ingham County, Michigan and seismic data relating to such areas and leases for the total purchase price of 12,000,000 shares of the Company’s common stock for the cost to date of the development and seismic data which was $ 1,085,000. During ~~the year~~2011, the company incurred additional costs of approximately $1,152,000. The Omnibus Agreement required the Company to effect a 30-to-1 forward stock split of all shares of Common Stock within 30 days of the effective date of the Omnibus Agreement (“Forward Split”). The forward stock split occurred on July 14, 2011.

1110

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. INVESTMENTS IN OIL AND GAS PROPERTIES (Continued)

4. INVESTMENTS IN OIL AND GAS PROPERTIES (Continued)

Amendment to Omnibus Agreement, Participation Agreement and Option Agreement with Range Michigan LLC

On September 19, 2011, the Company entered into a First Amendment to Omnibus Agreement (“Omnibus Amendment”) with Range Michigan LLC, a Wyoming limited liability company (“Range”), pursuant to which the Omnibus Agreement dated June 14, 2011 between the parties was amended to reflect the Company’s name change to American Energy Development Corp. and extend the participation date for the wells from December 31, 2011 to July 1, 2012.

In connection with the Omnibus Amendment, the Company entered into a First Amendment to Participation Agreement (“Participation Amendment”) with Range, pursuant to which the Participation Agreement dated June 14, 2011 between the parties was amended to, among other things, (i) reflect the Company’s name change to American Energy Development Corp., (ii) extend the date in which the Company is required to participate in the Required Wells from December 31, 2011 to July 1, 2012, (iii) provide that it is anticipated that each of the two remaining two of the Required Wells will be spudded by July 1, 2012, and (iv) authorize Range to withhold the first $100,000 from the Company’s share of the proceeds from the production of the first Required Well( the Brown #2 -12 well) for the payment of the option fee specified Option Agreement and Option Amendment as described below.

In connection with the Omnibus Amendment, the Company entered into a First Amendment to Option Agreement (“Option Amendment”) with Range, which provides that in the event the Brown #2-12 Well is a producing well, Range will withhold the first $100,000 of the Company’s share of production proceeds for payment of the option fee and if the Company’s share of the proceeds from the Brown #2-12 Well are insufficient to pay the entire amount of the option fee on or before February 1, 2012 then the Company shall pay Range the remaining balance of the option fee on or before February 5, 2012. As of September 30, 2012, the Brown #2-12 well production has been insufficient to pay the Option Fee. The Company has renegotiated with Range to waive the option fee.

The Company will remit to the seller an overriding royalty interest of 2.5% of the overall gross market value at the time of production of all oil and gas produced from the licensed areas from proceeds of the sale of oil and gas produced. The property currently has one well that is producing in which they hold a net realizable interest of 26%.

During the prior fiscal ~~year~~years, the Company recorded an impairment charge on the Dansville Prospect of approximately $1720,~~145,~~000 based on the independent assessment of the future value of its proved reserves ~~on the Dansville prospect~~.

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4. INVESTMENTS IN OIL AND GAS PROPERTIES (Continued)

Reservoir Resources

On September 13, 2011, the Company entered into a Purchase Agreement with Pepper Canister Nominees Limited pursuant to which the Company will acquire all of the issued and outstanding shares of the Seller’s wholly-owned subsidiary, Reservoir Resources Limited, which, through its wholly-owned subsidiary, owns an oil and gas exploration and development license in the United Kingdom in exchange for 12,500,000 shares of the Company’s common stock valued at $12,500,000 ($1.00 per share) . The Company is subject to development requirements whereby the Company must drill at least one well in the licensed area to a depth of 400 meters to be spudded by December 31, 2012 (“Target Date”), failure of which will result in the Seller being granted the option to cancel the Purchase Agreement within 60 days of the Target Date, re-acquire all shares of Reservoir Resources and retain 50% of the Company’s shares received as the Purchase Price. The purchase of Reservoir Resources was completed on March 12, 2012. ~~The Company is currently undergoing various reserve studies to assess potential production and to continue the development of the wells purchased.~~

~~The~~In ~~allocation~~December of2012, the ~~purchase~~Company ~~price~~determined ofthat the ~~assets~~costs ~~acquired~~to obtain required approvals necessary to develop and ~~liabilities~~drill ~~assumed~~the ~~based~~Windsor onProspect ~~their~~of ~~fair~~Reservoir ~~values~~Resources ~~was~~were astoo ~~follows:~~significant and the likelihood of obtaining the approvals too remote to pursue the prospect further. As a result, the Company has impaired its investment of Reservoir Resources in the amount of $12,512,535 in the prior fiscal year.

Cash	$	250
Oil and gas property - License		42,400
Oil and gas property - Unproved		12,470,135
Total assets acquired		12,512,785
Liabilities Assumed		(12,785	)
Total	$	12,500,000

In December 2012, the Company determined that the costs to obtain required approvals necessary to develop and drill the Windsor Prospect of Reservoir Resources were too significant tand the likelihood of obtaining the approvals too remote to pursue the prostect further. As a result, the Company has impaired its investment of Reservoir Resources in the amount of $12,512,535.

White Tail Prospect

On March 6, 2012, the Company entered into a letter of intent to acquire a forty three and seventy five hundredths percent (43.75%) working interest and a thirty five percent (35%) net revenue interest in the White-tail Prospect from Range Michigan LLC, a Wyoming limited liability company, which covers approximately 4,000 acres. On February 5, 2013, the Company entered into a Termination Agreement with Range as further discussed below.

In consideration of the purchase of the interests in the White-tail Prospect, the Company agreed to pay Range a total purchase price of $487,500. The Company paid Range $87,500 to reimburse Range for development costs incurred to date and on June 15, 2012, the Company issued 476,191 common shares for $200,000, or $0.42/share. The Company further agreed to pay one hundred percent (100%) of the Authority For Expenditure (“AFE”) for a 3-D high resolution seismic survey of the White-tail Prospect. The Company incurred approximately $226,000 of the AFE to date. On February 5, 2013, the Company entered into an Assignment of Oil and Gas Leases, Termination of Lease Acquisition Agreement and Operating Agreement and Disclaimer (the "Termination Agreement") with Range Michigan LLC ("Range") pursuant to which the Company and Range agreed that (i) the Company assign to Range all of its 43.75% working interest in Range's right to oil and gas leases covering the White-tail Prospect in Northern Michigan (the "Prospect"), effective January 22, 2013, for the nominal consideration of $10 and (ii) both the Company and Range terminate the Lease Acquisition Agreement dated June 15, 2012 by and between the Company and Range (the "Purchase Agreement") and the Joint Operating Agreement dated March 31, 2012 by and between the Company and Range (the "Operating Agreement"), effective January 23, 2013, due to the Company's non-payment of seismic program costs as required pursuant to the Purchase Agreement. There were no material early termination penalties incurred by the Company in connection with the Termination Agreement. As a result, the Company recorded a loss on the termination agreement of $291,723 for the three months ended March 31, 2013.

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

43. INVESTMENTS IN OIL AND GAS PROPERTIES (Continued)

White Tail Prospect

In consideration of the purchase of the interests in the White-tail Prospect, the Company agreed to pay Range a total purchase price of $487,500. The Company paid Range $87,500 to reimburse Range for development costs incurred to date and on June 15, 2012, the Company issued 476,191 common shares for $200,000, or $0.42/share. The Company further agreed to pay one hundred percent (100%) of the Authority For Expenditure (“AFE”) for a 3-D high resolution seismic survey of the White-tail Prospect. The Company incurred approximately $226,000 of the AFE. On February 5, 2013, the Company entered into an Assignment of Oil and Gas Leases, Termination of Lease Acquisition Agreement and Operating Agreement and Disclaimer (the "Termination Agreement") with Range Michigan LLC ("Range") pursuant to which the Company and Range agreed that (i) the Company assign to Range all of its 43.75% working interest in Range's right to oil and gas leases covering the White-tail Prospect in Northern Michigan (the "Prospect"), effective January 22, 2013, for the nominal consideration of $10 and (ii) both the Company and Range terminate the Lease Acquisition Agreement dated June 15, 2012 by and between the Company and Range (the "Purchase Agreement") and the Joint Operating Agreement dated March 31, 2012 by and between the Company and Range (the "Operating Agreement"), effective January 23, 2013, due to the Company's non-payment of seismic program costs as required pursuant to the Purchase Agreement. There were no material early termination penalties incurred by the Company in connection with the Termination Agreement. As a result, in the prior fiscal year the Company recorded a loss on the Termination Agreement of $291,723.

Osprey Prospect

On April 17, 2012, the Company entered into a letter of intent to acquire 43.75% working interest and a 35% net revenue interest in the Osprey Prospect from Range Michigan LLC, a Wyoming limited liability company.

In consideration of the purchase of the interests in the Osprey Prospect, the Company will pay Range a total purchase price of $80,000. The Company paid Range $50,000 to reimburse Range for development costs incurred to date and any prior land lease payments. In October 2012, Range agreed to accept our reimbursement costs of $40,000 as partial payment on the prospect. As of June 2013, the Company has not closed the acquisition of the Osprey Prospect and does not intend to pursue this transaction. Accordingly, the Company has impaired its investment in the Osprey Prospect during the prior fiscal year of approximately $50,000.

54. ADVISOR AGREEMENT

On September 20, 2011, the Company entered into an Advisory Board Member Agreement (“Advisor Agreement”) with Desmond Oswald, pursuant to which the Company appointed Mr. Oswald to serve as an advisor to the Company continuing indefinitely, until terminated at any time by Mr. Oswald or the Company. The Advisor Agreement provides that Mr. Oswald will be available at a minimum of one time per quarter a year for advisory board meetings to (i) facilitate introductions to potential partners, suppliers, customers and investors, (ii) provide opinions to assist the Company in identify and recruiting potential technical, strategic and other partners or individuals, and (iii) apprise the Company of technological, competitive and other changes and developments that he may from time to time become aware of. The Advisor Agreement also provides that Mr. Oswald is paid $900 for the preparation and attendance of each advisory board meeting and Mr. Oswald was issued 90,000 shares of the Company’s common stock as compensation subject to certain vesting requirements as specified in the Advisor Agreement.

~~6. LOANS FROM STOCKHOLDER~~12

On March 31, 2010, the Company issued a promissory note to a stockholder and officer of the Company in exchange for a loan of $30,000 with interest that accrued at the rate of 10% per annum. On March 22, 2012, the Company repaid the loan and the stockholder and officer of the Company forgave the accrued interest due to him on this promissory note and contributed the same amount to capital.

On December 2, 2011, the Company issued a promissory note to a stockholder and officer of the Company in the amount of $109,962. The promissory note, which was due on June 2, 2012, including interest at the annual rate of 5% was repaid on March 22, 2012. On this date, the stockholder and officer of the Company forgave the accrued interest due to him on this promissory note and contributed the same amount to capital.

On December 23, 2011, a stockholder and officer of the Company provided an advance to fund operations. The advance was unsecured, non-interest bearing and due on demand. On March 22, 2012 the Company repaid the amount due of $13,488.

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

75. COMMON STOCK

On June 14, 2011, the Company issued 12,000,000 shares of its common stock in connection with the Omnibus Agreement as discussed in Note 4.

During the year ended June 30, 2011, the Company issued 69,167,100 shares of common stock to unrelated investors at $0.003 per share for a total of $230,557.

On July 12, 2011, the Company filed a Certificate of Change pursuant to Section 78.209 of the Nevada Revised Statutes (the “Certificate of Change”) with the Nevada Secretary of State to effect a thirty for one forward stock split of the Company’s common stock (the “Forward Stock Split”). The Certificate of Change increased the number of authorized shares of the Company’s common stock from 100,000,000 to 3,000,000,000 and the number of issued and outstanding shares of common stock for shareholders of record as of July 13, 2011, from 5,705,570 shares to 171,167,100 shares. The Company’s common stock continues to be $.001 par value. Fractional shares were rounded upward. The effective date of the Forward Stock Split with the Nevada Secretary of State was July 14, 2011. These financial statements reflect the Forward Stock Split in historical and current numbers and disclosures.

On September 20, 2011, the Company issued 90,000 shares of its common stock pursuant to the Advisory Agreement discussed in Note 54.

On October 3, 2011, the Company entered into a Securities Purchase Agreement (the “Financing Agreement”) with an investor (the “Investor”) pursuant to which the Company, at its sole and exclusive option, may issue and sell to the Investor, and the Investor shall purchase up to $7,800,000 of the Company’s $0.001 par value common stock and five-year warrants to purchase common stock (the “Warrants”) from time to time over a two year period at a purchase price (the “Purchase Price”) of the higher of (i) $0.40 per share, and (ii) eighty percent (80%) of the 10-day volume weighted average price (VWAP) of the Company’s common stock. The Company shall have sole discretion to issue and sell the common stock and Warrants pursuant to the Financing Agreement and the Investor shall have no right to acquire the common stock and Warrants from the Company until a drawdown notice is received from the Company. The Investor shall have sole discretion in determining whether the proposed use of proceeds as provided by the Company in the drawdown notice is acceptable to the Investor.

The Company received an initial drawdown of $200,000 (“First Drawdown”) on October 3, 2011. In exchange for the First Drawdown, the Company issued 500,000 shares of common stock at a purchase price of $0.40 per share and Warrants to purchase 500,000 shares of common stock at an exercise price of 120% of the purchase price, or $0.48 per share. The Warrants expire five years from the date of the investment.

On October 12, 2011, the Company received an additional $200,000 drawdown (“Second Drawdown”). In exchange for the Second Drawdown, the Company issued 500,000 shares of common stock at a purchase price of $0.40 per share and Warrants to purchase 500,000 shares of common stock at an exercise price of 120% of the purchase price, or $0.48 per share, pursuant to the Financing Agreement. The Warrants expire five years from the date of the investment.

In connection with the Financing Agreement, on October 3, 2011, the Company also entered into a Stock Cancellation Agreement (the “Cancellation Agreement”) with Joel Felix, pursuant to which the Company and Mr. Felix agreed to cancel 85,000,000 shares of common stock held by Mr. Felix as consideration for the Investor’s willingness to enter into and as a condition of the Financing Agreement.

On October 17, 2011, the Company canceled and retired 150,000 shares of Common Stock from an unrelated third party.

15On November 23, 2011, the Company issued 100,000 shares of its common stock to unrelated investors at $0.50 per share for a total of $50,000.

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

75. COMMON STOCK (Continued)

On November 23, 2011, the Company issued 100,000 shares of its common stock to unrelated investors at $0.50 per share for a total of $50,000.

On February 3, 2012, the Company received an additional $50,000 drawdown (“Third Drawdown”). In exchange for the Third Drawdown, the Company issued 125,000 shares of common stock at a purchase price of $0.40 per share and Warrants to purchase 125,000 shares of common stock at an exercise price of 120% of the purchase price, or $0.48 per share, pursuant to the Financing Agreement. The Warrants expire five years from the date of the investment.

On March 12, 2012, the Company issued 12,500,000 shares of its common stock pursuant to a Purchase Agreement with Pepper Canister Nominees Limited to acquire all of the issued and outstanding shares of Reservoir Resources Limited, which through its wholly-owned subsidiary, owns an oil and gas exploration and development license in the United Kingdom. See Note 43.

On March 20, 2012, the Company received an additional $1,000,000 drawdown (“Fourth Drawdown”). In exchange for the Fourth Drawdown, the Company issued 1,282,052 shares of common stock at a purchase price of $0.78 per share and Warrants to purchase 1,282,052 shares of common stock at an exercise price of 120% of the purchase price, or $0.94 per share, pursuant to the Financing Agreement. The Warrants expire five years from the date of the investment.

On March 22, 2012, a stockholder and officer of the Company forgave $7,614 of accrued interest due to him in relation to his advances to the Company and contributed the same amount to capital.

On March 30, 2012, the Company received an additional $120,000 drawdown (“Fifth Drawdown”). In exchange for the Fifth Drawdown, the Company issued 162,163 shares of common stock at a purchase price of $0.74 per share and Warrants to purchase 162,163 shares of common stock at an exercise price of 120% of the purchase price, or $0.89 per share, pursuant to the Financing Agreement. The Warrants expire five years from the date of the investment.

On June 15, 2012, the Company issued 476,191 common shares valued at $200,000 as partial consideration for the White-tail Prospect. See Note 43.

On September 19, 2012, the Company issued 75,000 common shares valued at $25,000 to a consultant for services performed.

On September 19, 2012, the Company issued 93,750 common shares valued at $28,125 to a board member as consideration for his services.

On October 31, 2012, the Company received an additional $30,000 drawdown (“Sixth Drawdown”). In exchange for the Sixth Drawdown, the Company issued 75,000 shares of common stock at a purchase price of $0.40 per share and Warrants to purchase 75,000 shares of common stock at an exercise price of 120% of the purchase price, or $0.48 per share, pursuant to the Financing Agreement. The Warrants expire five years from the date of the investment.

On November 29, 2012, the Company issued 300,000 common shares valued at $51,000 to a consultant for services performed.

On December 20, 2012, the Company issued 35,192 common shares valued at $4,223 pursuant to an agreement whereby the third party would be issued additional shares if the company issued additional shares for less than $0.30 per share.

1614

AMERICAN ENERGY DEVELOPMENT CORP.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

86. WARRANTS

~~Warrant~~As ~~Activity~~described in Note 5, the Company issued a convertible note with detachable warrants. As of September 30, 2013, there were 2,644,215 warrants issuable into 2,644,215 shares of common stock with a weighted average exercise price of $0.73 and a weighted average remaining contract term of 3.3 years. There was no warrant activity for the three months ended September 30, 2013.

~~As described in Note~~ 7~~, the Company issued a convertible note with detachable warrants~~. PROVISION AFOR ~~summary~~INCOME ~~of warrant activity for the period from June 30, 2011 through March 31, 2013 is presented below:~~TAXES

		Weighted		Weighted
		Average		Average
	Number of	Exercise		Remaining
	Warrants	Price		Contract Term
Outstanding June 30, 2011	-	$	-	-
Issued	2,569,215	$	0.75	3.79 years
Exercised	-		-	-
Outstanding June 30, 2012	2,569,215	$	0.75	3.79 years
Issued	75,000	$	0.48	4.59 years
Exercisable, March 31,2013	2,644,215	$	0.73	3.81 years

Shares Reserved for Future Issuance

The Company has reserved shares for future issuance upon conversion of warrants as follows:

	Warrants	2,644,215
	Reserved shares at March 31, 2013	2,644,215

9. PROVISION FOR INCOME TAXES

Deferred income taxes are reported using the liability method. Deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

As of ~~March~~September 3130, ~~2013,~~ the Company had federal net operating loss carryforwards of (12,~~179~~054,~~203~~000), which can be used to offset future federal income tax. The federal and state net operating loss carryforwards expire at various dates through 2033. Deferred tax assets resulting from the net operating losses are reduced by a valuation allowance, when, in the opinion of management, utilization is not reasonably assured.

17A summary of the Company’s deferred tax assets as of September 30, 2013 are as follows:

AMERICAN ENERGY DEVELOPMENT CORP.


Federal net operating loss (@ 34%)	$	698,360
Less: valuation allowance		(698,360	)

Net deferred tax asset	$	-

~~(An~~During ~~Exploration~~the ~~Stage~~three months ended September 30, 2013, the Company)’s valuation allowance increased by approximately $1,800.

~~NOTES~~8. RELATED TOPARTY ~~CONSOLIDATED FINANCIAL STATEMENTS~~TRANSACTIONS

From the Company’s inception (~~UNAUDITED~~March 10, 2010) through September 30, 2013, the Company utilized office space of an officer and stockholder at no charge. The Company treated the usage of the office space as additional paid-in capital and charged the estimated fair value rent of $300 per month to operations. For the quarter ended September 30, 2013 and 2012 rent expense was $900 and $900, respectively.

9. PROVISION FOR INCOME TAXES (Continued)

A summary of the Company’s deferred tax assets as of March 31, 2013 are as follows:

	March 31, 2013
Federal net operating loss (@ 34%)	$	401,000
Less: valuation allowance		(401,000	)
Net deferred tax asset	$	-

During the period ended March 31, 2013, the Company’s valuation allowance increased by approximately $193,000.

10. RELATED PARTY TRANSACTIONS

From the Company’s inception (March 10, 2010) through March 31, 2013, the Company utilized office space of an officer and stockholder at no charge. The Company treated the usage of the office space as additional paid-in capital and charged the estimated fair value rent of $300 per month to operations. For the years ended June 30, 2012 and 2011 rent expense was $3,600 and $3,600, respectively.

In connection with the Financing Agreement, on October 3, 2011, the Company also entered into the Cancellation Agreement with Joel Felix, pursuant to which the Company and Mr. Felix agreed to cancel 85,000,000 shares of common stock held by Mr. Felix as consideration for the Investor’s willingness to enter into and as a condition of the Financing Agreement.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

~~This~~The following ~~information~~discussion ~~specifies~~relates ~~certain~~to ~~forward-looking~~a ~~statements~~discussion of ~~management of~~ the ~~company.~~financial ~~Forward-looking~~condition ~~statements~~and ~~are~~results ~~statements~~of ~~that~~operations ~~estimate the happening~~ of ~~future~~American ~~events~~Energy ~~and~~Development ~~are not based on historical fact~~Corp., ~~Forward-looking~~a ~~statements~~Nevada ~~may~~corporation ~~be identified by~~ (the ~~use~~“Company”) ofherein ~~forward-looking~~used ~~terminology,~~in ~~such~~this ~~as “may~~report,” ~~“shall,”~~unless ~~“could,”~~otherwise ~~“expect~~indicated,” ~~“estimate,”~~under ~~“anticipate,”~~the ~~“predict,”~~terms “~~probable~~Registrant,” “~~possible~~AED,” “~~should~~we,” “~~continue~~us” orand similar terms~~, variations of those terms or the negative of those terms~~. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements.

Forward Looking Statements

This following information specifies certain forward-looking statements of management of the company. Forward-looking statements are statements that estimate the happening of future events are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology, such as “may”, “shall”, “could”, “expect”, “estimate”, “anticipate”, “predict”, “probable”, “possible”, “should”, “continue”, or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements.

The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to:

· risks associated with drilling and production programs resulting from geological, technical, drilling, seismic and other unforeseen problems; · unexpected results of exploration and development drilling and related activities ~~on the Dansville Prospect~~;

·	availability of capital and financing to fund exploration and development drilling activities;
·	increases in operating costs;

· availability of skilled personnel; · unpredictable weather conditions; ~~other factors listed from time to time in the Company's filings with the Securities~~ and ~~Exchange Commission.~~

We· ~~cannot~~other ~~guaranty~~factors ~~that~~listed ~~any~~from oftime ~~the assumptions relating~~ to ~~the~~time ~~forward-looking statements specified~~ in the ~~following~~Company's ~~information~~filings ~~are~~with ~~accurate,~~the Securities and weExchange ~~assume no obligation to update any such forward-looking statements~~Commission.

~~Critical~~No ~~Accounting~~assurance ~~Policy~~can ~~and~~be ~~Estimates.~~given ~~Our~~that ~~Management’s~~any ~~Discussion and Analysis~~ of ~~Financial Condition and Results of Operations section discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in~~ the ~~United~~assumptions ~~States~~relating ~~of America. The preparation of these financial statements requires management~~ to ~~make estimates and assumptions that affect~~ the ~~reported~~forward-looking ~~amounts of assets and liabilities at the date of the financial~~ statements ~~and~~specified the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the ~~preparation~~following ofinformation ~~our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which~~ are ~~not readily apparent from other sources. In addition~~accurate, ~~these accounting policies are described at relevant sections in this discussion~~ and ~~analysis~~we ~~and~~assume inno ~~the~~obligation ~~notes~~ to ~~the~~update ~~financial~~any ~~statements~~such ~~included in this Quarterly Report on Form 10~~forward-Qlooking ~~for the period ended March 31, 2013~~statements.

~~Overview. We~~Critical ~~are~~Accounting anPolicy ~~exploration~~and ~~stage~~Estimates. ~~company~~Our ~~focused~~Management’s onDiscussion ~~exploration,~~and ~~production~~Analysis of Financial Condition and ~~development~~Results of ~~oil~~Operations ~~and~~section ~~natural~~discusses ~~gas~~our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the ~~United~~reported ~~Kingdom. In~~amounts ~~Michigan,~~of weassets ~~own~~and ~~working~~liabilities ~~interests~~at ~~located~~the indate ~~Ingham~~of ~~County,~~the ~~Michigan,~~financial ~~known~~statements asand the ~~Dansville~~reported ~~Prospect.~~amounts Inof revenues and expenses during the ~~United~~reporting ~~Kingdom,~~period. ~~through~~On ~~our~~an ~~subsidiaries~~on-going basis, wemanagement ~~own~~evaluates aits ~~license~~estimates toand ~~search~~judgments, ~~bore~~including ~~and~~those ~~obtain~~related ~~petroleum~~to inrevenue anrecognition, ~~onshore~~accrued ~~exploration~~expenses, ~~prospect~~financing ~~known~~operations, asand ~~the~~contingencies ~~Windsor~~and ~~Prospect~~litigation. ~~located~~Management inbases ~~the~~its ~~Weald~~estimates ~~Basin~~and injudgments ~~Windsor,~~on ~~United~~historical ~~Kingdom. During~~experience ~~December~~and ~~2012,~~on wevarious ~~determined~~other factors that ~~further~~are ~~exploration~~believed ~~and~~to ~~development~~be reasonable under the circumstances, the results of which form the ~~Windsor~~basis ~~Prospect~~for ~~was~~making nojudgments ~~longer~~about ~~economically~~the ~~viable~~carrying value of assets and asliabilities athat ~~result~~are ~~took~~not asreadily ~~impairment charge~~apparent offrom ~~$12,512,535~~other sources. ~~For~~ ~~all~~Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our ~~working~~financial ~~interests,~~statements weinclude ~~depend~~estimates onas ~~operating~~to ~~partners~~the toappropriate ~~propose~~carrying value of certain assets and liabilities which are not readily apparent from other sources. In addition, ~~permit~~these accounting policies are described at relevant sections in this discussion and ~~initiate~~analysis and in the ~~drilling~~notes ofto ~~wells~~the financial statements included in this Quarterly Report on Form 10-Q for the period ended September 30, 2013.

19Our Business. We are an exploration stage company focused on exploration, production and development of oil and natural gas in the United States. We currently own interests in certain oil and gas drilling areas and land leases located in Ingham County, Michigan, known as the Dansville Prospect, and seismic data relating to such areas and leases. We also own a working interest in a three well developmental drilling project in Pottawatomie County, Oklahoma, known as the Magnolia Prospect. For all of our working interests, we depend on operating partners to propose, permit and initiate the drilling of wells.

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements for the year ended June 30, ~~2012~~2013, together with notes thereto, as previously filed with our Annual Report on Form 10-K, and our financial statements for the period ended ~~March~~September 3130, 2013, together with notes thereto, which are included in this Quarterly Report.

~~For the three months ended March 31, 2013, as compared to the three months ended March 31, 2012.~~16

For the three months ended September 30, 2013, as compared to the three months ended September 30, 2012.

Results of Operations.

Revenues. We had revenues of $4945,~~170~~983 for the three months ended ~~March~~September 3130, 2013, as compared to revenues of $2170,~~304~~574 for the three months ended ~~March~~September 3130, 2012. ~~The~~We ~~increase~~do innot ~~revenues~~anticipate iswe ~~due~~will togenerate anmore ~~increase~~significant inrevenues from oil and gas sales from our interest in the ~~Brown 2-12 well in the~~ Dansville Prospect. We hope the Brown 2-12 well will continue to generate those revenues for the foreseeable future, although we cannot guaranty it will do so. The Cremer 1-1 well in the Dansville Prospect was abandoned in May 2012 due to high salt content. Spudding of the Bowen well in the Dansville Prospect has been postponed for further technical evaluations due to its proximity to the Cremer 1-1 well. During December 2012, we determined that further exploration and development of the Windsor Prospect was no longer economically viable.

Operating Expenses. For the three months ended ~~March~~September 3130, 2013, our total operating expenses were $~~364~~47,~~297~~456, as compared to total operating expenses of $~~124~~197,~~726~~670 for the three months ended ~~March~~September 3130, 2012. ~~The~~Our ~~increase~~operating inexpenses ~~general~~for ~~and~~the ~~administrative~~three ~~expenses~~months isended ~~primarily~~September ~~related~~30, to2013, ~~the~~were ~~loss~~comprised ~~related~~solely toof ~~our~~general ~~termination~~and ofadministrative ~~the~~expenses ~~White~~of ~~Tail~~$47,456. The ~~Prospect~~decrease in ~~the~~general ~~amount~~and ofadministrative expenses from $~~291~~197,~~723~~670 ~~and~~for ~~decreased~~the ~~professional~~three ~~fees~~months ~~and~~ended ~~costs~~September ~~associated~~30, ~~with~~2012, usis ~~being~~directly arelated ~~public~~to ~~company~~the decreased size of our operations.

We expect that our future monthly operating expenses for fiscal year 2013 ~~will~~may increase from our current expense levels, plus we expect to incur additional direct costs relating to drilling the Dansville Prospect ~~and~~in ~~any new prospects that we acquire~~Michigan. We will continue to incur significant general and administrative expenses as a result of being a public company.

Net Loss. For the three months ended ~~March~~September 3130, 2013, our net loss was $~~318~~4,~~254~~541, as compared to our net loss of $~~106~~133,~~930~~701 for the three months ended ~~March~~September 3130, 2012. The increase in net loss is due to the loss for the termination of the White Tail Prospect in the amount of $291,723 offset by an increase in revenues and a reduction in general and administrative expenses. We ~~expect that generating more significant revenues from oil and gas sales will offset our operating costs and reduce our net losses in the future. We~~ cannot guarantee that we will be able to generate additional revenues or, if that we do generate additional revenues, that such revenues will be sufficient to cover our operating costs and reduce our net loss in future periods.

~~Results~~Financial Condition, Liquidity and Capital Resources. As of ~~Operations~~September 30, 2013, we have cash of $8,758 and accounts receivable of $14,521 which comprises our current assets of $23,279 as of that date. Our total assets of $428,499 as of September 30, 2013 consist of our current assets of $23,279, and evaluated oil and gas property of $405,220.

~~Revenues.~~As ~~We had revenues~~ of ~~$164,229~~September ~~for the nine months ended March 31~~30, 2013, aswe ~~compared~~had tototal ~~revenues~~current liabilities of $23253,~~580~~613 ~~for~~all ~~the~~of ~~nine~~which ~~months~~were ~~ended~~represented ~~March~~by ~~31,~~accounts ~~2012. The~~payable ~~increase in revenues is due to an increase in oil~~ and ~~gas~~accrued ~~sales from our interest in the Brown 2-12 well in the Dansville Prospect~~expenses. We ~~hope~~had ~~the~~no ~~Brown~~other ~~2-12~~long ~~well~~term ~~will continue to generate those revenues for the foreseeable future~~liabilities, ~~although~~commitments weor ~~cannot guaranty it will do so~~contingencies. The Cremer 1-1 well in the Dansville Prospect was abandoned in May 2012 due to high salt content. Spudding of the Bowen well in the Dansville Prospect has been postponed for further technical evaluations due to its proximity to the Cremer 1-1 well. During December 2012, we determined that further exploration and development of the Windsor Prospect was no longer economically viable.

Operating Expenses. For the nine months ended March 31, 2013, our total operating expenses were $13,218,997, as compared to total operating expenses of $363,655 for the nine months ended March 31, 2012. The increase is directly attributable to our impairment of the Windsor Project in the amount of $12,512,535 and our loss on the termination of the White Tail Prospect in the amount of $291,723 and in general and administrative expenses in the nine months ended March 31, 2013 related to increased professional fees and costs associated with us being a public company.

We expect that our future monthly operating expenses for fiscal year 2013 may increase from our current expense levels, plus we expect to incur additional direct costs relating to drilling the Dansville Prospect and any new prospects that we acquire. We will continue to incur significant general and administrative expenses as a result of being a public company.

Net Loss. For the nine months ended March 31, 2013, our net loss was $13,097,958, as compared to our net loss of $345,697 for the nine months ended March 31, 2012. The increase in net loss is due to our impairment of the Windsor Project in the amount of $12,512,535 and our loss on the termination of the White Tail Prospect in the amount of $291,723 offset by an increase in net revenue. We expect that generating more significant revenues from oil and gas sales will offset our operating costs and reduce our net losses in the future. We cannot guarantee that we will be able to generate additional revenues or, if that we do generate additional revenues, that such revenues will be sufficient to cover our operating costs and reduce our net loss in future periods.

Financial Condition, Liquidity and Capital Resources. As of March 31, 2013, we have cash of $19,213 and accounts receivable of $13,400 which comprises our current assets as of that date. Our total assets of $1,465,613 as of March 31, 2013 consist of our current assets of $32,613, evaluated oil and gas property of $1,086,937 and unevaluated oil and gas property of $342,947.

As of March 31, 2013, we had total current liabilities of $513,130 all of which were represented by accounts payable and accrued expenses. We had no other long term liabilities, commitments or contingencies.

On October 3, 2011, we entered into a Securities Purchase Agreement (“Financing Agreement”) with an investor pursuant to which we may, at our sole and exclusive option, issue and sell to the investor (“Investor”), and the Investor shall purchase up to $7,800,000 of our common stock and five-year warrants to purchase common stock (the “Warrants”) from time to time over a two year period at a purchase price of the higher of (i) $0.40 per share, and (ii) eighty percent (80%) of the 10-day volume weighted average price (VWAP) of our common stock. We received an initial drawdown of $200,000 on October 3, 2011, and we issued 500,000 shares of common stock at a purchase price of $0.40 per share and Warrants to purchase 500,000 shares of common stock at an exercise price of 120% of the purchase price, or $0.48 per share. The Warrants expire five years from the date of the investment. The second drawdown of $200,000 was delivered on October 12, 2011 and we issued 500,000 shares of our common stock at a purchase price of $0.40 per share and Warrants to purchase 500,000 shares of our common stock at an exercise price of $0.48 per share to the Investor in connection with the second drawdown. The third drawdown of $50,000 was delivered on February 3, 2012 and we issued 125,000 shares of our common stock at a purchase price of $0.40 per share and Warrants to purchase 125,000 shares of our common stock at an exercise price of $0.48 per share to the Investor in connection with the third drawdown. The fourth drawdown of $1,000,000 was delivered on March 20, 2012 and we issued 1,282,052 shares of our common stock at a purchase price of $0.78 per share and Warrants to purchase 1,282,052 shares of our common stock at an exercise price of $0.94 per share to the Investor in connection with the fourth drawdown. The fifth drawdown of $120,000 was delivered on March 30, 2012 and we issued 162,163 shares of our common stock at a purchase price of $0.74 per share and Warrants to purchase 162,163 shares of our common stock at an exercise price of $0.89 per share to the Investor in connection with the fifth drawdown. The sixth drawdown of $30,000 was delivered on October 31, 2012 and we issued 75,000 shares of our common stock at a purchase price of $0.40 per share and Warrants to purchase 75,000 shares of our common stock at an exercise price of $0.48 per share to the Investor in connection with the sixth drawdown.

OnDuring ~~April~~the 17prior fiscal year, ~~2012~~the Company paid approximately $90,000 wein ~~entered~~legal ~~into~~costs arelated ~~letter~~to responding to requests from the staff of ~~intent~~the ~~with~~Securities ~~Range~~and ~~Michigan~~Exchange ~~LLC~~Commission (~~"Range"~~“SEC”). The staff’s requests have sought, among other things, information related to ~~acquire~~the aCompany’s ~~43.75%~~Financing ~~working~~Agreement ~~interest~~with the Investor and athe ~~35%~~accompanying ~~net~~issuances ~~revenue~~of ~~interest~~shares into Investor, information concerning the ~~Osprey~~Company’s ~~Prospect~~communications inor ~~Southern~~dealings ~~Michigan.~~with consultants who introduced the Company to WeInvestor and ~~did~~to ~~not~~oil ~~enter~~and ~~into~~gas aopportunities, ~~definitive~~information ~~agreement~~concerning ~~with~~oil ~~Range~~and ~~for~~gas-related agreements, and information concerning the ~~acquisition~~Company’s sale of ~~those~~shares ~~interests~~in connection with its S-1 registration statement and inrelated ~~October~~shareholder ~~2012~~communications. The Company is fully cooperating with the staff’s investigation. At this time, ~~Range~~ ~~agreed~~the toCompany ~~accept~~cannot ~~our~~predict ~~deposit~~reasonably the outcome or timing of ~~$50,000~~this matter as it relates to the Company. The Company has determined that for the ~~Osprey~~time ~~Prospect~~being, asit ~~partial~~is ~~payment~~not ofadvisable ~~certain~~to ~~costs~~seek ~~associated~~additional ~~with~~funding ~~our~~from ~~interests~~the Investor and inthat the ~~White-tail~~pending ~~Prospect~~investigation inis ~~Northern~~having ~~Michigan~~a material impact on the Company’s ability to seek new funding. The Company anticipates it will continue to incur significant legal costs related to these matters.

On February 5, 2013, we entered into an Assignment of Oil and Gas Leases, Termination of Lease Acquisition Agreement and Operating Agreement and Disclaimer (the “Termination Agreement”) with Range to assign to Range all of our 43.75% working interest in Range’s right to oil and gas leases covering the White-tail Prospect in Northern Michigan, effective January 22, 2013, and to terminate the Lease Acquisition Agreement dated June 15, 2012 (the “Acquisition Agreement”) and the Operating Agreement, effective January 23, 2013, due to our non-payment of certain costs as required pursuant to the Acquisition Agreement. Our prior payments for the interests in the White-tail Prospect were not refunded puruant to the Termination Agreement. As a result of the Termination Agreement, we recorded a loss from the termination of the prospect in the amount if $291,723. 17

During the nine months ended March 31, 2013, the Company incurred approximately $96,352 in legal costs related to responding to requests from the staff of the Securities and Exchange Commission (“SEC”). The staff’s requests have sought, among other things, information related to the Company’s Financing Agreement with the Investor and the accompanying issuances of shares to Investor, information concerning the Company’s communications or dealings with consultants who introduced the Company to Investor and to oil and gas opportunities, information concerning oil and gas-related agreements, and information concerning the Company’s sale of shares in connection with its S-1 registration statement and related shareholder communications. The Company is fully cooperating with the staff’s investigation. At this time, the Company cannot predict reasonably the outcome or timing of this matter as it relates to the Company. The Company has determined that for the time being, it is not advisable to seek additional funding from the Investor and that the pending investigation is having a material impact on the Company’s ability to seek new funding. The Company anticipates it will continue to incur significant legal costs related to these matters.

During 2013, we expect that the following will continue to impact our liquidity:

·	significant legal and accounting costs associated with being a public company and costs associated with responding to the SEC.
·	increases in overhead and the use of independent contractors for services to be provided to us.
·	future payments to Range of our proportional share of costs associated with the wells located on Dansville Prospect.
·	additional expenses related to the acquisition of additional oil and gas rights.

Other than those items specified above, we are not aware of any other known trends, events or uncertainties, which may affect our future liquidity.

We have cash of $198,~~213~~758 as of ~~March~~September 3130, 2013. In the opinion of management, available funds will not satisfy our working capital requirements to operate at our current level of activity for the next twelve months. We need additional cash to continue our operations and to develop the Dansville Prospect and other properties. We cannot guarantee that we will be successful in obtaining sufficient capital to develop any of our properties. Our forecast for the period for which our financial resources will be adequate to support our operations involves risks and uncertainties and actual results could fail as a result of a number of factors.

We do not believe we will be able to continue to drawdown funds from the Financing Agreement. Accordingly, we have been, and intend to continue, working toward identifying and obtaining new sources of financing. We cannot guarantee that we will be successful in obtaining additional financing or that additional funding will be available on favorable terms. Any future financing that we may obtain may cause significant dilution to existing stockholders. Any debt financing or other financing of securities senior to common stock that we are able to obtain will likely include financial and other covenants that will restrict our flexibility. Any failure to comply with these covenants would have a negative impact on our business, prospects, financial condition, results of operations and cash flows.

If we are unable to raise additional capital, we may be required to delay, scale back or eliminate portions of our operations or to obtain funds through arrangements with strategic partners or others that may require us to relinquish rights to certain of our assets. Accordingly, the inability to obtain such financing could result in a significant loss of ownership and/or control of our assets and could also adversely affect our ability to fund our continued operations and our expansion efforts with respect to our oil and gas interests.

We are not currently conducting any research and development activities. We do not anticipate conducting such activities in the near future. We do not currently own any equipment. Our management believes that we will require the services of independent contractors to operate at our current level of activity. Further, as our level of operations increases beyond the level that our current staff can provide, we may need to hire additional employees or independent contractors as well as purchase or lease equipment.

Off-Balance Sheet Arrangements. We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Evaluation of disclosure controls and procedures. We maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Based upon their evaluation of those controls and procedures performed as of the end of the period covered by this report, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective.

Changes in internal controls. There were no changes in our internal control over financial reporting that occurred during the fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

Not applicable.

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.

31.1	Certification of Principal Executive Officer, pursuant to Rule 13a-14 and 15d-14 of the Securities Exchange Act of 1934
31.2	Certification of Principal Financial Officer, pursuant to Rule 13a-14 and 15d-14 of the Securities Exchange Act of 1934
32.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.ins	XBRL Instance Document
101.sch	XBRL Taxonomy Schema Document
101.cal	XBRL Taxonomy Calculation Linkbase Document
101.def	XBRL Taxonomy Definition Linkbase Document
101.lab	XBRL Taxonomy Label Linkbase Document
101.pre	XBRL Taxonomy Presentation Linkbase Document

2319

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.

	American Energy Development Corp., a Nevada corporation
May 24, 2013	By:	/s/ Herold Ribsskog
November 22, 2013	By:	/s/ Herold Ribsskog
		Herold Ribsskog
	Its:	Chief Executive Officer, President, and a director
		(Principal Executive Officer)
May 24, 2013	By:	/s/ Joel Felix
November 22, 2013	By:	/s/ Joel Felix
		Joel Felix
	Its:	Chief Financial Officer, Secretary, Treasurer, and a director
		(Principal Financial and Accounting Officer)

Filing Compare · American Energy Development Corp.