10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2017

or

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 000-54159

ARIEL CLEAN ENERGY, INC.

(Exact name of registrant as specified in its charter)

Delaware	84-1209978
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

86 Broad St., 18th Floor, New York, NY	10004
(Address of principal executive offices)	(Zip Code)

(347) 690-5187

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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 filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth 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
			Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. o YES   o NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

113,296,421 common shares issued and outstanding as of November 10, 2017

FORM 10-Q

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14
Item 4.	Controls and Procedures	14
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Mine Safety Disclosures	15
Item 5.	Other Information	15
Item 6.	Exhibits	16
SIGNATURES		17

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ARIEL CLEAN ENERGY, INC.

INDEX TO INTERIM FINANCIAL STATEMENTS

UNAUDITED

	Page
Balance Sheets at September 30, 2017 and December 31, 2016	4
Statements of Operations for the three and nine months ended September 30, 2017 and 2016	5
Statements of Cash Flows for the nine months ended September 30, 2017 and 2016	6
Notes to the Financial Statements	7

 

3

ARIEL CLEAN ENERGY, INC.

Balance Sheets

(Unaudited)

	September 30,			December 31,
	2017			2016
ASSETS
Current Assets
Prepaid expenses	$	5,833		$	4,346
Total Current Assets		5,833			4,346
TOTAL ASSETS	$	5,833		$	4,346
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable	$	233		$	6,113
Accrued interest - related party		24,920			14,296
Note payable - related party		133,530			96,871
Total Current Liabilities		158,683			117,280
TOTAL LIABILITIES		158,683			117,280
Stockholders' Deficit
Preferred stock: 50,000,000 authorized; $0.000006 par value; no shares issued and outstanding		-			-
Common stock Class A: 1,000,000,000 authorized; $0.000006 par value; 99,765,421 shares issued and outstanding		599			599
Common stock Class B: 200,000,000 authorized; $0.000006 par value; no shares issued and outstanding		-			-
Additional paid-in capital		41,209			41,209
Accumulated deficit		(194,658	)		(154,742	)
Total Stockholders' Deficit		(152,850	)		(112,934	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	5,833		$	4,346

The accompanying notes are an integral part of these unaudited financial statements.

 

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ARIEL CLEAN ENERGY, INC.

Statements of Operations

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Revenues	$	-		$	-		$	-		$	-
Operating Expenses
General and administrative		2,500			4,361			13,959			11,778
Professional fees		(526	)		4,000			15,333			18,236
Total operating expenses		1,974			8,361			29,292			30,014
Loss from operations		(1,974	)		(8,361	)		(29,292	)		(30,014	)
Other expense
Interest expense		(3,835	)		(2,686	)		(10,624	)		(7,249	)
Total other expense		(3,835	)		(2,686	)		(10,624	)		(7,249	)
Net loss before taxes		(5,809	)		(11,047	)		(39,916	)		(37,263	)
Net loss	$	(5,809	)	$	(11,047	)	$	(39,916	)	$	(37,263	)
Basic and dilutive net loss per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average number of common shares outstanding - basic and diluted		99,765,421			99,765,421			99,765,421			99,765,421

The accompanying notes are an integral part of these unaudited financial statements.

 

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ARIEL CLEAN ENERGY, INC.

Statements of Cash Flows

(Unaudited)

	Nine Months Ended
	September 30,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(39,916	)	$	(37,263	)
Changes in operating assets and liabilities:
Prepaid expenses		(1,487	)		(4,346	)
Accounts payable and accrued expenses		30,779			34,360
Accrued interest - related party		10,624			7,249
Net Cash Used in Operating Activities		-			-
Net increase (decrease) in cash and cash equivalents		-			-
Cash and cash equivalents, beginning of period		-			-
Cash and cash equivalents, end of period	$	-		$	-
Supplemental cash flow information
Cash paid for interest		-			-
Cash paid for taxes	$	-		$	31
Non-cash financing transactions:
Note payable - related party	$	36,659		$	29,923

The accompanying notes are an integral part of these unaudited financial statements.

 

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ARIEL CLEAN ENERGY, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

NOTE 1 – ORGANIZATION, DESCRIPTION OF BUSINESS, AND GOING CONCERN

Ariel Clean Energy Inc. (“Ariel” or “the Company”) began its existence as the Pacific Development Corporation which was incorporated under the laws of the State of Colorado on September 21, 1992. On March 23, 2000, Pacific and Cheshire Holdings, Inc. were merged into a single corporation existing under the laws of the State of Delaware, with Cheshire Holdings, Inc. being the surviving corporation. The name of the surviving corporation was changed to Cheshire Distributors, Inc. On July 17, 2003, Cheshire Distributors, Inc. changed its name to LMIC, Inc. and on October 31, 2012 changed its name to Z Holdings, Inc. Ariel Clean Energy, Inc. adopted fresh start accounting on May 6, 2005 with an objective to acquire or merge with an operating business.

Big Time Acquisition (BTA) was originally organized to acquire a target company or business seeking the perceived advantages of being a publicly held corporation. On October 29, 2012, by written consent in lieu of a meeting, the respective Boards of Directors and requisite majority shareholders of Ariel and Big Time Acquisition, Inc. approved the merger of Big Time Acquisition, Inc. into Ariel with Ariel as the surviving corporation.

Immediately before the effective time of merger, any and all outstanding shares of Big Time Acquisition, Inc. held by Ariel Clean Energy, Inc. were canceled, and at the closing of the Merger Agreement, Ariel issued a total of 90,000 restricted Class A common shares to the former shareholders of Big Time Acquisition, Inc. for their then outstanding shares of Big Time common stock. In the share exchange, Ariel received 90,000 shares of Big Time common stock representing 100% of the issued and outstanding shares of Big Time, which were deemed to be canceled. As a result of the Merger Agreement, Ariel is now the surviving company of the merger pursuant to Delaware General Corporate Law (DGCL), and deemed to be Successor Registrant. The issuance of such shares was exempt from registration pursuant to Section 4(2) of the Securities Act, and Regulation D promulgated thereunder.

On July 15, 2015, the Company's Board of Directors approved to amend the Articles of Incorporation to change the Company's name from Z Holdings, Inc. to Ariel Clean Energy, Inc.

Going concern and Liquidity Considerations

The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have material assets, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The Company has an accumulated deficit of $194,658. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts of and classification of liabilities that might be necessary in the event the company cannot continue in existence. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.

The officers and directors have committed to advancing certain operating costs of the Company, including compliance costs for being a public company.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES 

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

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In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited interim financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2016, as filed with the SEC on March 14, 2017.

Use of Estimates and Assumptions

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 reporting period. Actual results could differ from those estimates.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

NOTE 3 - PREPAID EXPENSE

Prepaid expenses at September 30, 2017 and December 31, 2016 consist of the following:

	September 30,		December 31,
	2017		2016
OTC Markets fees	$	5,833	$	3,333
Professional fees		-		1,013
	$	5,833	$	4,346

 

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NOTE 4 - RELATED-PARTY TRANSACTIONS

Note Payable

During the nine months ended September 30, 2017 and 2016, a corporation controlled by the company's officers paid operating expenses totaling $36,659 and $29,923 on behalf of the Company, respectively. Unpaid balances are due on demand and accrue an annual interest rate of 12%.

Note payable and accrued interest at September 30, 2017 and December 31, 2016 consist of the following:

	September 30, 2017		December 31, 2016
Note payable	$	133,530	$	96,871
Accrued interest	$	24,920	$	14,296

For the nine months ended September 30, 2017 and 2016, interest expense was $10,624 and $7,249, respectively. The Company plans to pay the note payable and accrued interest as cash flows become available.

Other

The Company utilizes home office space at the residence of our President to conduct activities at no charge.

NOTE 5 – SUBSEQUENT EVENTS

On July 12, 2017, the Company entered into a Debt Conversion Agreement with Nexus BioFuel Inc., a corporation controlled by the company’s officers, to convert $135,316 of debt and accrued interest into 13,531,000 shares of Common Stock. On November 9, 2017, the Company issued the 13,531,000 shares of common stock to settle the debt.

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

FORWARD LOOKING STATEMENTS

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words "expects," "anticipates," "intends," "believes" and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the "Description of Business - Risk Factors" section in our Annual Report on Form 10-K, as filed on March 14, 2017. You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

All references in this Form 10-Q to the "Company," "Ariel Clean Energy," “Ariel,” "we," "us," or "our" are to Ariel Clean Energy, Inc.

General Overview

We are currently seeking new business opportunities with established business entities for merger with or acquisition of a target business. In certain instances, a target business may wish to become our subsidiary or may wish to contribute assets to us rather than merge. We have not yet begun negotiations or entered into any definitive agreements for potential new business opportunities, and there can be no assurance that we will be able to enter into any definitive agreements.

We may seek a business opportunity with entities which have recently commenced operations, or entities who wish to utilize the public marketplace in order to raise additional capital in order to expand business development activities, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.

In implementing a structure for a particular business acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. Upon the consummation of a transaction, it is likely that our present management will no longer retain a majority control of our company. In addition, it is likely that as part of the terms of the acquisition transaction, one or more new officers and directors, would join our Company.

We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. We believe that there are numerous firms in various industries seeking the perceived benefits of being a publicly registered corporation. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Business opportunities that we believe are in the best interests of our company may be scarce or we may be unable to obtain the ones that we want. We can provide no assurance that we will be able to locate compatible business opportunities.

We have not yet entered into any definitive agreements for potential new business opportunities. There can be no assurance that we will be able to identify an appropriate business opportunity or acquire the financing necessary to enable us to pursue a transaction if an appropriate opportunity is identified.

 

10

Currently, we do not have a source of revenue. We are not able to fund our cash requirements through our current operations. Historically, we have been able to raise a limited amount of capital through loans from a company controlled by our management, but we are uncertain about our continued ability to raise additional funds privately. We believe that our company may have difficulties raising capital until we locate a prospective business opportunity through which we can pursue our plan of operation. Further, we expect that any new acquisition or business opportunities that may become available to our company will require additional financing. There can be no assurance that we will be able to acquire the financing necessary to enable us to pursue our plan of operation. If our company requires additional financing and we are unable to acquire such funds, our business may fail. If we are unable to secure adequate capital to continue our acquisition efforts, our shareholders may lose some or all of their investment and our business may fail.

Results of Operations

Since inception, we have not earned any revenue. During the Nine months ended September 30, 2017, we incurred operating expenses of $29,292, compared to operating expenses of $30,014 incurred during the Nine months ended September 30, 2016. Operating expenses consist of professional fees and general and administrative expenses primarily for maintaining reporting status with the Securities and Exchange Commission.

For the Three months ended September 30, 2017 compared to three months ended September 30, 2016.

	Three Months Ended September 30,
	2017		2016		Changes
Revenue	$	-	$	-	$	-
Total operating expenses		1,974		8,361		(6,387	)
Other expenses		3,835		2,686		1,149
Net loss	$	5,809	$	11,047	$	(5,238	)

Our operating expenses, for the three months ended September 30, 2017 were $1,974 compared to $8,361 for the same period in 2016. The decrease in operating expenses was primarily as a result of reduced professional fees.

We incurred a net loss of $5,809 and $11,047 for the three months ended September 30, 2017 and September 30, 2016, respectively.

For the Nine months ended September 30, 2017 compared to Nine months ended September 30, 2016.

	Nine Months Ended September 30,
	2017		2016		Changes
Revenue	$	-	$	-	$	-
Total operating expenses		29,292		30,014		(722	)
Other expenses		10,624		7,249		3,375
Net loss	$	39,916	$	37,263	$	2,653

Our operating expenses, for the Nine months ended September 30, 2017 were $29,292 compared to $30,014 for the same period in 2016.

We incurred a net loss of $39,916 and $37,263 for the Nine months ended September 30, 2017 and September 30, 2016, respectively.

 

11

Liquidity and Capital Resources

The following table provides selected financial data about our company as of September 30, 2017 and December 31, 2016, respectively.

Working Capital

	September 30, 2017		December 31, 2016		Changes
Total Current Assets	$	5,833	$	4,346	$	1,487
Total Current Liabilities		158,683		117,280		41,403
Working Capital Deficiency	$	152,850	$	112,934	$	39,916

Cash Flows

	Nine Months ended September 30, 2017		Nine Months ended September 30, 2016
Net cash used in operating activities	$	-	$	-
Net cash used in investing activities	$	-	$	-
Net cash provided by financing activities	$	-	$	-
Increase (Decrease) in cash	$	-	$	-

As at September 30, 2017 our company’s cash balance was $0 and total assets were $5,833. As at December 31, 2016, our company’s cash balance was $0 and total assets were $4,346.

As at September 30, 2017, our company had total liabilities of $158,683, compared with total liabilities of $117,280 as at December 31, 2016.

As at September 30, 2017, our company had working capital deficiency of $152,850 compared with working capital deficiency of $112,934 as at December 31, 2016, an increase of $39,916. This was driven by the increase in amounts due to a related party for paying the company’s operating expenses.

Cash Flow from Operating Activities

Net cash used in operating activities was $0 for the nine months ended September 30, 2017 and 2016. For the Nine months ended September 30, 2017, we had a net loss of $39,916, which was increased by a change in prepaid expenses of $1,487 and reduced by $30,779 for increase in accounts payable and $10,624 for increase in amounts due to a related party. During the Nine months ended September 30, 2016, we had a net loss of $37,263, which was increased by an increase in prepaid expenses of $4,346, and reduced by $34,360 for increase in accounts payable and accrued expenses and $7,249 for increase in amounts due to a related party.

Cash Flow from Investing Activities

We did not use any cash in investing activities for the nine months ended September 30, 2017 and 2016.

Cash Flow from Financing Activities

We did not have any cash provided from financing activities for the nine months ended September 30, 2017 and 2016.

Limited Operating History; Need for Additional Capital

There is no historical financial information about us upon which to base an evaluation of our performance. We are a development stage corporation and have not generated sufficient revenues from operations to fully implement our business plan. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, and competition from larger organizations. We will require equity and/or debt financing to provide for the capital required to implement our plans. We will require additional funds to operate for the next year.

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations.

 

12

Capital Resources

We had no material commitments for capital expenditures as of September 30, 2017 and 2016.

Off Balance Sheet Arrangements

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

As of September 30, 2017, we have no off-balance sheet arrangements such as guarantees, retained or contingent interest in assets transferred, obligation under a derivative instrument and obligation arising out of or a variable interest in an unconsolidated entity.

Going Concern

Our auditors have issued a going concern opinion on our audited financial statements for the year ended December 31, 2016. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain sufficient debt or equity financing to fund our operating expenses. This is because we have not commenced planned principal operations. We have no actual or potential revenue source. There is no assurance we will ever reach this point. Our financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern.

The continuation of our business is dependent upon obtaining further financing or acquiring a new business and achieving a break even or profitable level of operations in that new business. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. It is not probable we would be able to obtaining traditional loans from financial institutions because we have no business operations, no assets and no revenues.

There are no assurances that we will be able to obtain additional financing through private placements, bank financing or other loans necessary to support our working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us. We have been reliant on our majority shareholder to provide financial contributions and services to keep the company operating. We currently have no written or oral agreement from our majority shareholder to continue to provide financial contributions.

Critical Accounting Policies

We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared and actual results could differ from our estimates and such differences could be material. We have identified below the critical accounting policies which are assumptions made by management about matters that are highly uncertain and that are of critical importance in the presentation of our financial position, results of operations and cash flows. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation our financial statements.

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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures.

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, management, with the participation of the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this Quarterly Report on Form 10-Q, are not functioning effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. A controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management is dominated by two individuals without adequate compensating controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with the review of our financial statements as of September 30, 2017.

Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Presently, there are not any material pending legal proceedings to which our Company is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.

Item 1A. Risk Factors

As a “smaller reporting company”, we are not required to provide the information required by this Item.

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.

 

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Item 6. Exhibits

Exhibit Number	Description
(31)	Rule 13a-14 (d)/15d-14d) Certifications
31.1*	Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer
(32)	Section 1350 Certifications
32.1*	Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
101*	Interactive Data File
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 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.

 

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SIGNATURES

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

	ARIEL CLEAN ENERGY, INC.
	(Registrant)
Dated: November 13, 2017	/s/ Robert Morrison
	Robert Morrison
	President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director
	(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

17

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

18 U.S.C. ss 1350, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert Morrison, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Ariel Clean Energy, Inc.;
2	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 13, 2017

/s/ Robert Morrison

/s/ Robert Morrison

President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director

(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert Morrison, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	the Quarterly Report on Form 10-Q of Ariel Clean Energy, Inc. for the period ended September 30, 2017 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Ariel Clean Energy, Inc.

Dated: November 13, 2017	/s/ Robert Morrison
	Robert Morrison
	President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director
	(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Ariel Clean Energy, Inc. and will be retained by Ariel Clean Energy, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 10, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	Ariel Clean Energy, Inc.
Entity Central Index Key	0001499684
Trading Symbol	acez
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		113,296,421
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3

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Balance Sheets - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Current Assets
Prepaid expenses	$ 5,833	$ 4,346
Total Current Assets	5,833	4,346
TOTAL ASSETS	5,833	4,346
Current Liabilities
Accounts payable	233	6,113
Accrued interest - related party	24,920	14,296
Note payable - related party	133,530	96,871
Total Current Liabilities	158,683	117,280
TOTAL LIABILITIES	158,683	117,280
Stockholders' Deficit
Preferred stock: 50,000,000 authorized; $0.000006 par value; no shares issued and outstanding
Additional paid-in capital	41,209	41,209
Accumulated deficit	(194,658)	(154,742)
Total Stockholders' Deficit	(152,850)	(112,934)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	5,833	4,346
Common stock Class A
Stockholders' Deficit
Common stock, value	599	599
Common stock Class B
Stockholders' Deficit
Common stock, value

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Balance Sheets (Parentheticals) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, par value (in dollars per share)	$ 0.000006	$ 0.000006
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock Class A
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, par value (in dollars per share)	$ 0.000006	$ 0.000006
Common stock, shares issued	99,765,421	99,765,421
Common stock, shares outstanding	99,765,421	99,765,421
Common stock Class B
Common stock, shares authorized	200,000,000	200,000,000
Common stock, par value (in dollars per share)	$ 0.000006	$ 0.000006
Common stock, shares issued	0	0
Common stock, shares outstanding	0	0

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Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
Revenues	$ 0	$ 0	$ 0	$ 0
Operating Expenses
General and administrative	2,500	4,361	13,959	11,778
Professional fees	(526)	4,000	15,333	18,236
Total operating expenses	1,974	8,361	29,292	30,014
Loss from operations	(1,974)	(8,361)	(29,292)	(30,014)
Other expense
Interest expense	(3,835)	(2,686)	(10,624)	(7,249)
Total other expense	(3,835)	(2,686)	(10,624)	(7,249)
Net loss before taxes	(5,809)	(11,047)	(39,916)	(37,263)
Net loss	$ (5,809)	$ (11,047)	$ (39,916)	$ (37,263)
Basic and dilutive net loss per common share (in dollars per share)	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)
Weighted average number of common shares outstanding - basic and diluted (in shares)	99,765,421	99,765,421	99,765,421	99,765,421

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Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (5,809)	$ (11,047)	$ (39,916)	$ (37,263)
Changes in operating assets and liabilities:
Prepaid expenses			(1,487)	(4,346)
Accounts payable and accrued expenses			30,779	34,360
Accrued interest - related party			10,624	7,249
Net Cash Used in Operating Activities			0	0
Net increase (decrease) in cash and cash equivalents			0	0
Cash and cash equivalents, beginning of period			0	0
Cash and cash equivalents, end of period	$ 0	$ 0	0	0
Supplemental cash flow information
Cash paid for interest			0	0
Cash paid for taxes				31
Non-cash financing transactions:
Note payable - related party			$ 36,659	$ 29,923

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ORGANIZATION, DESCRIPTION OF BUSINESS, AND GOING CONCERN

9 Months Ended

Sep. 30, 2017

Organization And Description Of Business [Abstract]

ORGANIZATION, DESCRIPTION OF BUSINESS, AND GOING CONCERN

NOTE 1 – ORGANIZATION, DESCRIPTION OF BUSINESS, AND GOING CONCERN

Ariel Clean Energy Inc. (“Ariel” or “the Company”) began its existence as the Pacific Development Corporation which was incorporated under the laws of the State of Colorado on September 21, 1992. On March 23, 2000, Pacific and Cheshire Holdings, Inc. were merged into a single corporation existing under the laws of the State of Delaware, with Cheshire Holdings, Inc. being the surviving corporation. The name of the surviving corporation was changed to Cheshire Distributors, Inc. On July 17, 2003, Cheshire Distributors, Inc. changed its name to LMIC, Inc. and on October 31, 2012 changed its name to Z Holdings, Inc. Ariel Clean Energy, Inc. adopted fresh start accounting on May 6, 2005 with an objective to acquire or merge with an operating business.

Big Time Acquisition (BTA) was originally organized to acquire a target company or business seeking the perceived advantages of being a publicly held corporation. On October 29, 2012, by written consent in lieu of a meeting, the respective Boards of Directors and requisite majority shareholders of Ariel and Big Time Acquisition, Inc. approved the merger of Big Time Acquisition, Inc. into Ariel with Ariel as the surviving corporation.

Immediately before the effective time of merger, any and all outstanding shares of Big Time Acquisition, Inc. held by Ariel Clean Energy, Inc. were canceled, and at the closing of the Merger Agreement, Ariel issued a total of 90,000 restricted Class A common shares to the former shareholders of Big Time Acquisition, Inc. for their then outstanding shares of Big Time common stock. In the share exchange, Ariel received 90,000 shares of Big Time common stock representing 100% of the issued and outstanding shares of Big Time, which were deemed to be canceled. As a result of the Merger Agreement, Ariel is now the surviving company of the merger pursuant to Delaware General Corporate Law (DGCL), and deemed to be Successor Registrant. The issuance of such shares was exempt from registration pursuant to Section 4(2) of the Securities Act, and Regulation D promulgated thereunder.

On July 15, 2015, the Company's Board of Directors approved to amend the Articles of Incorporation to change the Company's name from Z Holdings, Inc. to Ariel Clean Energy, Inc.

Going concern and Liquidity Considerations

The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have material assets, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The Company has an accumulated deficit of $194,658. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts of and classification of liabilities that might be necessary in the event the company cannot continue in existence. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.

The officers and directors have committed to advancing certain operating costs of the Company, including compliance costs for being a public company.

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SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES 

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited interim financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2016, as filed with the SEC on March 14, 2017.

Use of Estimates and Assumptions

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 reporting period. Actual results could differ from those estimates.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

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PREPAID EXPENSE

9 Months Ended

Sep. 30, 2017

Prepaid Expense [Abstract]

PREPAID EXPENSE

NOTE 3 - PREPAID EXPENSE

Prepaid expenses at September 30, 2017 and December 31, 2016 consist of the following:

	September 30,		December 31,
	2017		2016
OTC Markets fees	$	5,833	$	3,333
Professional fees		-		1,013
	$	5,833	$	4,346

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RELATED-PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

RELATED-PARTY TRANSACTIONS

NOTE 4 - RELATED-PARTY TRANSACTIONS

Note Payable

During the nine months ended September 30, 2017 and 2016, a corporation controlled by the company's officers paid operating expenses totaling $36,659 and $29,923 on behalf of the Company, respectively. Unpaid balances are due on demand and accrue an annual interest rate of 12%.

Note payable and accrued interest at September 30, 2017 and December 31, 2016 consist of the following:

	September 30, 2017		December 31, 2016
Note payable	$	133,530	$	96,871
Accrued interest	$	24,920	$	14,296

For the nine months ended September 30, 2017 and 2016, interest expense was $10,624 and $7,249, respectively. The Company plans to pay the note payable and accrued interest as cash flows become available.

Other

The Company utilizes home office space at the residence of our President to conduct activities at no charge.

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 5 – SUBSEQUENT EVENTS

On July 12, 2017, the Company entered into a Debt Conversion Agreement with Nexus BioFuel Inc., a corporation controlled by the company’s officers, to convert $135,316 of debt and accrued interest into 13,531,000 shares of Common Stock. On November 9, 2017, the Company issued the 13,531,000 shares of common stock to settle the debt.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited interim financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2016, as filed with the SEC on March 14, 2017.

Use of Estimates and Assumptions

Use of Estimates and Assumptions

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 reporting period. Actual results could differ from those estimates.

Reclassifications

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

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PREPAID EXPENSE (Tables)

9 Months Ended

Sep. 30, 2017

Prepaid Expense [Abstract]

Schedule of prepaid expense.

	September 30,		December 31,
	2017		2016
OTC Markets fees	$	5,833	$	3,333
Professional fees		-		1,013
	$	5,833	$	4,346

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RELATED-PARTY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Schedule of related party transactions

	September 30, 2017		December 31, 2016
Note payable	$	133,530	$	96,871
Accrued interest	$	24,920	$	14,296

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ORGANIZATION, DESCRIPTION OF BUSINESS, AND GOING CONCERN (Detail Textuals) - USD ($)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Nature Of Organization [Line Items]
Accumulated deficit	$ (194,658)	$ (154,742)
Merger Agreement | Big Time Acquisition, Inc. | Common stock Class A
Nature Of Organization [Line Items]
Percentage of issued and outstanding stock acquired	100.00%
Number of common stock received under share exchange	90,000
Merger Agreement | Big Time Acquisition, Inc. | Restricted Stock | Common stock Class A
Nature Of Organization [Line Items]
Common stock shares issued under acquisition	90,000

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PREPAID EXPENSE (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Prepaid Expense [Abstract]
OTC Markets fees	$ 5,833	$ 3,333
Professional fees		1,013
Prepaid expenses	$ 5,833	$ 4,346

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RELATED-PARTY TRANSACTIONS (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Related Party Transactions [Abstract]
Note payable	$ 133,530	$ 96,871
Accrued interest	$ 24,920	$ 14,296

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RELATED-PARTY TRANSACTIONS (Detail Textuals) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Related Party Transactions [Abstract]
Officers paid operating expenses			$ 36,659	$ 29,923
Annual interest rate accrued on promissory notes	12.00%		12.00%
Interest expense	$ 3,835	$ 2,686	$ 10,624	$ 7,249

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SUBSEQUENT EVENTS (Detail Textuals) - USD ($)	Nov. 09, 2017	Jul. 12, 2017
Subsequent Event [Line Items]
Debt and accrued interest		$ 135,316
Shares issued upon conversion		13,531,000
Subsequent event | Nexus BioFuel Inc
Subsequent Event [Line Items]
Common stock issued for settlement of debt	13,531,000