U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



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



For the quarterly period ended June 30,
2012



OR



| ̈ | TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934
|- | -----------------------------------------------------------------------



From the transition period from ____________
to ___________.



Commission File Number 000-50541



|Bering Exploration, Inc.                                         
|-----------------------------------------------------------------
|(Exact name of small business issuer as specified in its charter)



|N/A                        
|---------------------------
|(Former Name if Applicable)





|Nevada                                                                 |  | 88-0507007                          
|---------------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of
        incorporation or organization) |  | (IRS Employer Identification Number)



710 North Post Oak, Suite 410, Houston,
Texas 77024



(Address of principal executive offices)

(713) 780-0806

(Issuer's telephone number)



Check whether the issuer has (1) filed
all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.



Yesx         No ̈



Indicate by check mark whether the registrant is a large accelerated
filer, and 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   ̈ | Accelerated filer    ̈       
|-------------------------- | ----------------------------
|Non-accelerated filer   ̈   | 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.  Yes   ̈   No x



As of August 20, 2012 there were outstanding
11,156,506 shares of common stock, $0.001 par value per share.















BERING EXPLORATION, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

June 30, 2012



|Part I  | Financial Information
|------- | ---------------------
|        |                      
|        | Item 1.              
|        |                      
|        |                      
|        |                      
|        |                      
|        |                      
|        |                      
|        |                      
|        |                      
|        |                      
|        |                      
|        |                      
|        |                      
|        | Item 2.              
|        |                      
|        | Item 3.              
|        |                      
|        | Item 4.              
|        |                      
|Part II | Other Information    
|        |                      
|        | Item 5.              





2









PART I.                FINANCIAL
INFORMATION



ITEM 1.                                               FINANCIAL
STATEMENTS



BERING EXPLORATION, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS





|                                                                 |  | June 30,    |            |   | March 31, |  
|---------------------------------------------------------------- |  | ----------- | ---------- | - | --------- | -
|                                                                 |  | 2012        |            |   | 2012      |  
|                                                                 |  | (Unaudited) |            |   |           |  
|                                                                 |  |             |            |   |           |  
|ASSETS                                                           |  |             |            |   |           |  
|                                                                 |  |             |            |   |           |  
|Current assets:                                                  |  |             |            |   |           |  
|Cash and cash equivalents                                        |  | $           | 62,957     |   |           | $
|Accounts receivable, net                                         |  |             | 32,863     |   |           |  
|Prepaid insurance                                                |  |             | 15,399     |   |           |  
|Total current assets                                             |  |             | 111,219    |   |           |  
|                                                                 |  |             |            |   |           |  
|Property and equipment, net                                      |  |             | 351        |   |           |  
|Oil and gas properties, net of accumulated depletion             |  |             |            |   |           |  
|of $55,268 and $38,988, at June 30, 2012 and March 31, 2012,     |  |             |            |   |           |  
|respectively, full cost method                                   |  |             |            |   |           |  
|Proved                                                           |  |             | 641,519    |   |           |  
|Unproved                                                         |  |             | 583,441    |   |           |  
|Total assets                                                     |  | $           | 1,336,530  |   |           | $
|                                                                 |  |             |            |   |           |  
|LIABILITIES AND SHAREHOLDERS' EQUITY                             |  |             |            |   |           |  
|                                                                 |  |             |            |   |           |  
|Current liabilities:                                             |  |             |            |   |           |  
|Accounts payable                                                 |  | $           | 116,839    |   |           | $
|Accounts payable - related parties                               |  |             | 52,808     |   |           |  
|Accrued liabilities                                              |  |             | 24,325     |   |           |  
|Notes payable third parties                                      |  |             | 11,404     |   |           |  
|Convertible note payable - related parties                       |  |             | 28,200     |   |           |  
|Convertible notes, net of discount of $33,116 and $0             |  |             |            |   |           |  
|at June 30 and March 31, 2012, respectively                      |  |             | 32,525     |   |           |  
|Total current liabilities                                        |  |             | 266,101    |   |           |  
|Asset retirement obligation                                      |  |             | 9,665      |   |           |  
|Total liabilities                                                |  |             | 275,766    |   |           |  
|                                                                 |  |             |            |   |           |  
|Commitments and contingencies                                    |  |             |            |   |           |  
|                                                                 |  |             |            |   |           |  
|Shareholders' equity:                                            |  |             |            |   |           |  
|Preferred stock, $0.001 par value, 25,000,000 shares authorized; |  |             |            |   |           |  
|0 shares issued and outstanding at June 30 and March 31, 2012    |  |             | -          |   |           |  
|Common stock, $0.001 par value, 500,000,000 shares               |  |             |            |   |           |  
|authorized; 10,656,506 and 4,465,531 shares issued and           |  |             |            |   |           |  
|outstanding at June 30 and March 31, 2012, respectively          |  |             | 10,656     |   |           |  
|Additional paid-in capital                                       |  |             | 8,703,761  |   |           |  
|Accumulated deficit                                              |  |             | (7,653,653 | ) |           |  
|Total shareholders' equity                                       |  |             | 1,060,764  |   |           |  
|Total liabilities and shareholders' equity                       |  | $           | 1,336,530  |   |           | $





3











BERING EXPLORATION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)





|                                         |  | For the Three Months Ended June 30, |          
|---------------------------------------- |  | ----------------------------------- | ---------
|                                         |  | 2012                                |          
|                                         |  |                                     |          
|Oil and gas revenue                      |  | $                                   | 24,077   
|                                         |  |                                     |          
|Operating costs and expenses:            |  |                                     |          
|Lease operating expenses                 |  |                                     | 35,534   
|Compensation and related expenses        |  |                                     | 169,218  
|Office administration                    |  |                                     | 32,601   
|Professional fees                        |  |                                     | 127,064  
|Investor relations                       |  |                                     | -        
|Depreciation, depletion and amortization |  |                                     | 16,495   
|Other expenses                           |  |                                     | -        
|Total operating costs and expenses       |  |                                     | 380,912  
|                                         |  |                                     |          
|Net loss from operations                 |  |                                     | (356,835 
|                                         |  |                                     |          
|Other expense                            |  |                                     |          
|Interest expense                         |  |                                     | (432,472 
|                                         |  |                                     |          
|Net loss                                 |  | $                                   | (789,307 
|                                         |  |                                     |          
|Net loss per share:                      |  |                                     |          
|Basic and diluted                        |  | $                                   | (0.11    
|                                         |  |                                     |          
|Weighted average number of common shares |  |                                     |          
|outstanding basic and diluted            |  |                                     | 7,422,372



See accompanying notes to unaudited consolidated
financial statements.





4







BERING EXPLORATION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)





|                                                                                                 |  | For the Three Months Ended June 30, |         
|------------------------------------------------------------------------------------------------ |  | ----------------------------------- | --------
|                                                                                                 |  | 2012                                |         
|Cash flows from operating activities:                                                            |  |                                     |         
|Net loss                                                                                         |  | $                                   | (789,307
|Adjustments to reconcile net loss to cash                                                        |  |                                     |         
|used in operating activities:                                                                    |  |                                     |         
|Depletion, depreciation, and amortization                                                        |  |                                     | 16,495  
|Amortization of debt discount                                                                    |  |                                     | 387,128 
|Share-based compensation                                                                         |  |                                     | 169,218 
|Non-cash interest expense                                                                        |  |                                     | 35,027  
|Changes in assets and liabilities:                                                               |  |                                     |         
|Accounts receivable                                                                              |  |                                     | (18,487 
|Prepaid insurance                                                                                |  |                                     | (15,399 
|Accounts payable                                                                                 |  |                                     | 8,537   
|Accrued liabilities                                                                              |  |                                     | 10,318  
|Net cash used in operating activities                                                            |  |                                     | (196,470
|                                                                                                 |  |                                     |         
|Cash flows from investing activities:                                                            |  |                                     |         
|Capital expenditures                                                                             |  |                                     | (307,168
|Net cash used in investing activities                                                            |  |                                     | (307,168
|                                                                                                 |  |                                     |         
|Cash flows from financing activities:                                                            |  |                                     |         
|Proceeds from sale of common stock                                                               |  |                                     | 500,603 
|Proceeds from notes payable                                                                      |  |                                     | 11,404  
|Repayment of convertible notes - related party                                                   |  |                                     | (32,500 
|Proceeds from convertible notes - related party                                                  |  |                                     | 35,000  
|Proceeds from exercise of stock options                                                          |  |                                     | -       
|Net cash provided by financing activities                                                        |  |                                     | 514,507 
|                                                                                                 |  |                                     |         
|Net change in cash and cash equivalents                                                          |  |                                     | 10,869  
|Cash and cash equivalents, beginning of period                                                   |  |                                     | 52,088  
|Cash and cash equivalents, end of period                                                         |  | $                                   | 62,957  
|                                                                                                 |  |                                     |         
|Supplemental disclosures:                                                                        |  |                                     |         
|Interest paid                                                                                    |  | $                                   | -       
|Income taxes paid                                                                                |  | $                                   | -       
|                                                                                                 |  |                                     |         
|Non-cash investing and financing activities:                                                     |  |                                     |         
|Conversion of accounts payable to convertible notes - related party                              |  | $                                   | 33,500  
|Debt discount on convertible
    notes payable - related party                                   |  | $                                   | 70,570  
|Conversion of convertible notes
    payable - related party and accrued interest to common stock |  | $                                   | 49,869  
|Debt discount on convertible notes                                                               |  | $                                   | 350,000 
|Conversion of convertible notes
    payable and     accrued interest to common stock             |  | $                                   | 384,883 
|Stock issued to settle accounts payable                                                          |  | $                                   | -       







See accompanying notes to unaudited consolidated
financial statements.





5







BERING EXPLORATION, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS

JUNE 30, 2012



Note 1.  Basis of Presentation



The accompanying unaudited consolidated financial statements
of Bering Exploration, Inc. (the "Company" or "Bering") have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and
Article 8-03 of Regulation S-X related to smaller reporting companies. These consolidated financial statements should be read in
conjunction with the audited financial statements and notes, which are included as part of the Company's Form 10-K filed with the
Securities and Exchange Commission (“SEC”) on July 16, 2012.  In the opinion of management, all adjustments, consisting
only of normal recurring adjustments, considered necessary for a fair presentation, have been included in the accompanying unaudited
consolidated financial statements.  Operating results for the periods presented are not necessarily indicative of the
results that may be expected for the full year.  Notes to the consolidated financial statements which substantially duplicate
the disclosures contained in the audited consolidated financial statements for fiscal year ended March 31, 2012 as reported in
the 10-K have been omitted.



Significant accounting policies



Principles of Consolidation



The consolidated financial statements include the accounts of
Bering Exploration, Inc. and its wholly owned subsidiaries, Secure Voice Communications, Inc. (Texas) and Bering Operations, Inc.
All significant inter-company accounts and transactions have been eliminated.



Use of Estimates



In preparing financial statements in conformity with accounting
principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect
the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.



Oil and Natural Gas Properties



We account for our oil and natural gas producing activities
using the full cost method of accounting as prescribed by the SEC. Under this method, subject to a limitation based on estimated
value, all costs incurred in the acquisition, exploration, and development of proved oil and natural gas properties, including
internal costs directly associated with acquisition, exploration, and development activities, the costs of abandoned properties,
dry holes, geophysical costs, and annual lease rentals are capitalized within a cost center on a country by country basis. 
Costs of production and general and administrative corporate costs unrelated to acquisition, exploration, and development activities
are expensed as incurred.



Costs associated with unevaluated properties are capitalized
as oil and natural gas properties but are excluded from the amortization base during the evaluation period. When we determine whether
the property has proved recoverable reserves or not, or if there is an impairment, the costs are transferred into the amortization
base and thereby become subject to amortization.  We evaluate unevaluated properties for impairment at least annually.



Capitalized costs included in the amortization base are depleted
using either the units of production method based on proved reserves where the Company operates the well or the percentage of depletion
method when the Company does not operate the well.  Depletion is calculated using the capitalized costs included in the
amortization base, including estimated asset retirement costs, plus the estimated future expenditures to be incurred in developing
proved reserves, net of estimated salvage values.



The net book value of all capitalized oil and natural gas properties
within a cost center, less related deferred income taxes, is subject to a full cost ceiling limitation which is calculated quarterly.  Under
the ceiling limitation, costs may not exceed an aggregate of the present value of future net revenues attributable to proved oil
and natural gas reserves discounted at 10 percent using current prices, plus the lower of cost or market value of unproved
properties included in the amortization base, plus the cost of unevaluated properties, less any associated tax effects.  Any
excess of the net book value, less related deferred tax benefits, over the ceiling is written off as expense. Impairment expense
recorded in one period may not be reversed in a subsequent period even though higher oil and gas prices may have increased the
ceiling applicable to the subsequent period.



Sales or other dispositions of oil and
natural gas properties are accounted for as adjustments to capitalized costs, with no gain or loss recorded unless the ratio of
cost to proved reserves would significantly change.





6









BERING EXPLORATION, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS

JUNE 30, 2012





Note 2.  Going Concern



These consolidated financial statements
have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities
in the normal course of business.  The Company has not generated significant revenue since its inception and is unlikely
to generate earnings in the immediate or foreseeable future.  The continuation of the Company as a going concern is dependent
upon the continued financial support from its shareholders and the ability of the Company to obtain necessary equity financing
to continue operations and the attainment of profitable operations.  As of June 30, 2012, the Company has accumulated
losses of $7,653,653 since inception and negative working capital of $154,882.  These factors raise substantial doubt
regarding the Company's ability to continue as a going concern. These financial statements do not include any adjustments to the
recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.



Note 3. Oil and Gas Properties



In June 2012, the Company acquired the
N. Edna field for total cash consideration of $200,000. The single well in the N. Edna field was not producing at the time of
purchase. The Company intends to perform a workover on the well in an effort to restore production.





Note 4. Related Party Transactions



In April 2012, a shareholder advanced the
Company $35,000 in exchange for a convertible note payable due March 31, 2013, bearing interest at 12% per annum and convertible
into shares of the Company’s common stock at $0.50 per share. In May 2012, the note was amended to allow for conversion at
$0.09 per share.



In May 2012, shareholder notes and accrued
interest totaling $49,869 were converted into 554,105 shares of common stock.



In May 2012, the Company made principal
payments totaling $12,500 to an officer of the Company on an outstanding convertible note payable.



In May 2012, the Company issued a stock
option to the Chairman of the Board to purchase 500,000 shares of the Company’s common stock at a price of $0.10 per share,
vesting immediately, with a five year term. The fair market value of the option on the date of grant was $99,270.



In May 2012, the Company issued a stock
option to the Chief Financial Officer to purchase 200,000 shares of the Company’s common stock at a price of $0.10 per share,
vesting as follows: 100,000 shares vest immediately and 100,000 shares vest on January 1, 2013, with a five year term. The fair
market value of the option on the date of grant was $39,708 and will be recognized over the term of the vesting period.





In June 2012, the Company made a payment
on a related party payable in the amount of $20,000.





7









BERING EXPLORATION, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS

JUNE 30, 2012



Note 5.  Debt



Debt as of June 30, 2012 and March 31,
2012 consists of the following:



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |          |         
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------- | --------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | June 30, |         
|Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | 2012     |         
|Note payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |          |         
|In June 2012, the Company financed the unpaid balance of a general liability insurance policy in the amount of $11,404 with a premium finance company.  The financing agreement bears annual interest at 8% and is due in April 2013 and calls for monthly principal and interest payments of $1,193.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | $        | 11,404  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |          |         
|Convertible note payable - related party                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |          |         
|On September 30, 2008, the
    Company entered into a note agreement with J. Leonard Ivins, an Officer of the Company, in the principal amount of $63,302
    at     an annual interest rate of 10%.  The note was executed in exchange for the cancellation of Mr. Ivins’
    employment     agreement and all outstanding amounts due to him as of September 30, 2008.  In April 2010, the note was
    amended and is     convertible into the Company’s common stock at the rate of $0.05 per share.  During the
    quarter ended June     30, 2012, the Company made a $12,500 cash payment on this note. The note is due upon demand.   In
    connection with the modifications, the Company     recorded a beneficial conversion feature of $70,570 which was amortized
    during the three months ended June 30, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | $        | 28,200  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |          |         
|Convertible notes, net of discount                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |          |         
|On February 28, 2011, the Company entered into a
    series     of convertible note agreements (the 2011 Convertible Notes) at an
    annual     interest     rate     of 12%     that     were     convertible     into         the     Company’s     common
    stock        at     the     rate of     $0.50     per     share.  In May 2012,     certain     notes issued to
    third     parties     totaling     $350,000,     were modified to     reduce     the conversion price     to $0.09     per
    common     share.  This     modification resulted in a     beneficial     conversion     feature     (BCF) on the
    notes     amounting        to     $350,000.  These notes     were subsequently     assigned to     unrelated
    third     parties.  In     connection with     the     assignment,     the Company agreed to pay         additional
    consideration     of     $35,027 to the     assignors.  The BCF was         recorded as     a debt discount and
    amortized     over the     term of     the     notes.     In     May     2012, notes      with     a principal     balance of
    $284,359,     additional     consideration     of     $35,027, and accrued        interest     totaling $65,496 were
    converted to     equity and the     Company       issued 4,206,575     common shares.     In     May         2012, the
    due date     on the     notes was     extended     toAugust 31, 2012. |  | $        | 65,641  
|Less:  Beneficial conversion feature discount                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |          | (350,000
|Add:  Amortization of discount                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |          | 316,884 
|Total convertible notes, net of discount                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | $        | 32,525  



Note 6.  Common Stock



In May 2012, the Company issued 4,760,680 shares of its common
stock upon the conversion of certain convertible notes payable.



In May 2012, the Company completed a private placement of 1,430,295
shares of common stock for gross proceeds of $500,603.





8









BERING EXPLORATION, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS

JUNE 30, 2012





Note 7. Stock Options and Warrants



In March 2012, the Company entered into
an Option Agreement (the “Agreement”) with an investment banking firm. Per the Agreement, the counterparty is to raise
$2,500,000 of capital, net of any fees and costs related to the financing, for the Company on or before June 30, 2012. As inducement
for performance, the Company granted an option to acquire 10% of the issued and outstanding common stock of the Company (based
at the date of exercise) for an exercise price of $100,000. As the option vests conditional to performance by the counterparty,
the Company will recognize the vesting of the option only upon the satisfaction of the performance conditions. In July 2012, the
counterparty informed the Company that it would not meet the performance conditions. Accordingly, the option expired without being
exercised.



In May 2012, the Company issued a stock
option to the Chairman of the Board to purchase 500,000 shares of the Company’s common stock at a price of $0.10 per share,
vesting immediately, with a five year term. The fair market value of the option on the date of grant was $99,270.



In May 2012, the Company issued a stock
option to the Chief Financial Officer to purchase 200,000 shares of the Company’s common stock at a price of $0.10 per share,
vesting as follows: 100,000 shares vest immediately and 100,000 shares vest on January 1, 2013, with a five year term. The fair
market value of the option on the date of grant was $39,708 and will be recognized over the term of the vesting period.



A summary of option activity for the three months ended June
30, 2012 is presented below:



|                           |  |         |           |  |          |   |      | Weighted     |  |  |           | 
|-------------------------- |  | ------- | --------- |  | -------- | - | ---- | ------------ |  |  | --------- | 
|                           |  |         |           |  | Weighted |   |      | Average      |  |  |           | 
|                           |  |         |           |  | average  |   |      | Remaining    |  |  | Aggregate | 
|                           |  |         |           |  | exercise |   |      | contracutal  |  |  | intrinsic | 
|                           |  | Options |           |  | price    |   |      | life (years) |  |  | value     | 
|Outstanding March 31, 2012 |  |         | 2,300,000 |  |          | $ | 0.10 |              |  |  | 4.25      | 
|Granted                    |  |         | 700,000   |  |          |   | 0.10 |              |  |  | 4.84      | 
|Exercised                  |  |         | -         |  |          |   | -    |              |  |  | -         | 
|Forfeited                  |  |         | -         |  |          |   | -    |              |  |  | -         | 
|Expired                    |  |         | -         |  |          |   | -    |              |  |  | -         | 
|Outstanding June 30, 2012  |  |         | 3,000,000 |  |          | $ | 0.10 |              |  |  | 4.67      | 
|Exercisable                |  |         | 2,900,000 |  |          | $ | 0.10 |              |  |  | 4.67      | 





9







BERING EXPLORATION, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS

JUNE 30, 2012





The weighted average grant date fair value for the options granted
during the period was $0.20.



A summary of warrant activity for the three months ended June
30, 2012 is presented below:



|                           |  |          |        |  |          |   |      | Weighted     |  |  |           | 
|-------------------------- |  | -------- | ------ |  | -------- | - | ---- | ------------ |  |  | --------- | 
|                           |  |          |        |  | Weighted |   |      | average      |  |  |           | 
|                           |  |          |        |  | average  |   |      | remaining    |  |  | Aggregate | 
|                           |  |          |        |  | exercise |   |      | contracutal  |  |  | intrinsic | 
|                           |  | Warrants |        |  | price    |   |      | life (years) |  |  | value     | 
|Outstanding March 31, 2012 |  |          | 46,000 |  |          | $ | 7.50 |              |  |  | 4.10      | 
|Granted                    |  |          | -      |  |          |   | -    |              |  |  | -         | 
|Exercised                  |  |          | -      |  |          |   | -    |              |  |  | -         | 
|Forfeited                  |  |          | -      |  |          |   | -    |              |  |  | -         | 
|Expired                    |  |          | -      |  |          |   | -    |              |  |  | -         | 
|Outstanding June 30, 2012  |  |          | 46,000 |  |          | $ | 7.50 |              |  |  | 3.85      | 
|Exercisable                |  |          | 15,333 |  |          | $ | 7.50 |              |  |  | 3.85      | 



Note 8.  Subsequent Events



In July 2012, the Company issued 500,000 shares of its common
stock to the Company’s operations manager. The fair market value of the shares on the date of issuance was $180,000.



In July 2012, the Company borrowed $78,000 from a shareholder
in exchange for a convertible note bearing interest at 10%. The note may be converted into the Company’s common stock at
$0.15 per share and is due July 31, 2013.





10









|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | ------------------------------------------------------------------------------------



The following discussion and analysis
of the Company’s financial condition as of June 30, 2012 and 2011, and its results of operations for the three months ended
June 30, 2012 and 2011, should be read in conjunction with the audited consolidated financial statements and notes included in
Bering Exploration Inc.’s Form 10-K for the year ended March 31, 2012, filed with the Securities and Exchange Commission.



Overview



In July 2010, the Company determined to
primarily focus its business on the exploration, acquisition, development, production and sale of natural gas, crude oil and natural
gas liquids from conventional reservoirs within the United States.



In addition, the Company owns 25% of Intertech
Bio, which is developing products to treat cancer, infectious diseases and other medical conditions associated with compromised
immune systems.  The Company is not actively involved in the management of Intertech Bio.



A description of the Company’s oil
and gas properties follows.



Central Texas Project,

Caldwell County, Texas



In March 2011, the Company leased the mineral
rights on 1,282.974 gross acres targeting the Eagle Ford shale play in Central Texas.  This prospect has an aeromagnetic
survey and the company expects to utilize it and other advanced techniques to maximize oil recovery from the Eagle Ford, Austin
Chalk, Buda and Edwards zones. Bering will retain a 100% working interest and an 81% net revenue interest with a two year lease
term.



The Eagle Ford Shale is a shale rock formation
located in multiple counties in South Texas. It underlies the Austin Chalk and the Edwards limestone formation is just below it.
It is considered by geologists to be the “source rock”, or the original source of hydrocarbons (oil and gas) that are
now found in the Austin Chalk above it.



ChicasLocas Field,

Victoria County, Texas



In June 2011, the Company entered into
a joint development agreement to co-develop an approximately 640 acre tract in Victoria County, Texas.  The Company will
retain a 50% working interest in this prospect.  Our net revenue interest in this field is 75%. In August 2011, the first
well developed in this area began producing oil.  The well is currently producing 4 bbl of oil per day. The operator
of the well has determined that the well is producing more natural gas than oil and has installed a gas pipeline to connect the
well to a commercial pipeline. In April 2012, the pipeline was completed and we began producing natural gas accordingly. Our share
of net production on this well was $8,169 during the quarter ended June 30, 2012.



Singer Prospect,

Beauregard Parish, Louisiana



In August and October 2011, the Company
leased the mineral rights on 320 gross acres in Singer, Louisiana.  Initial geological assessment reveals four sands
in zones from 9,600’ to 10,600’ with four potential drilling locations.  Bering retains a 90% working interest
in the prospect and a 75% net revenue interest.



Ashland Prospect,

Concordia Parish, Louisiana



In July 2011, the Company purchased a 10%
working interest in the Ashland prospect in Concordia Parish, Louisiana.  Our net revenue interest in this well is 75%.
The prospect contains 1,200 acres.  Preliminary geological analysis reveals two sands between 6,900’ and 7,100’.   In
September 2011, the Sharp Heirs A No. 1 (A-1) well was successfully drilled on the prospect.  The well was completed
in November 2011 and is producing approximately 26 gross barrels of oil per day. In November 2011, a second well was drilled on
this prospect. It was not commercially viable and was converted into a salt water disposal well. This well will be used to off
load water produced in the first well and allow for production to increase on the first well. This work was completed and permitted
in July 2012. A third well was drilled in May 2012 and is in the process of being completed. Our share of net production on the
A-1 well was $15,907 during the quarter endedJune 30, 2012.



Gohlke Project,

Texas Gulf Coast



In October 2011, the Company leased the
mineral rights to 10,000 feet on 272 gross acres in South Texas.  The tract has 12 potential drilling locations.  Preliminary
geological assessment reveals 3 sands at depths of 3,800’, 5,500’ and 8,100’. Bering currently holds a 95% working
interest and a 76.5% net revenue interest.





11







North Edna Project,

Jefferson Davis Parish, Louisiana



In May 2012, the Company acquired a 74%
net revenue interest and a 100% of working interests in the North Edna Field located in Jefferson Davis Parish, Louisiana (“N.
Edna”). N. Edna consists of 384.84 gross acres and the Lejeune No. 1 oil and gas well (Lejeune 1). The Lejeune 1 was not
producing at the date of acquisition. The Company began a workover of this well in July 2012 in an effort to restart production.
The workover has not been completed as of the date of this filing.There are 3 new potential wells located on this lease.



South Texas Project,

Texas Gulf Coast



In September 2010, the Company obtained
a 5% back in after payout working interest in a single well being drilled in South Texas, along the Texas Gulf Coast. The well
was successfully completed and is producing natural gas.  The operator of the well estimates that payout will be achieved
in twelve months, at which time the Company’s net working interest will be established.  Until such time as payout
is achieved, the Company has no rights to the production from this well and accordingly, has not recognized any oil and gas revenues
or reserves from this well.



Comparison of Three Months Ended June 30, 2012 and 2011.



The Company had revenue of $24,077 for
the three months ended June 30, 2012 and no revenue for the three months ended June 30, 2011. The increase in revenues was due
to the success of two wells completed in the calendar quarter ending December 31, 2011.



The Company’s expenses decreased from $446,974 for three
months ended June 30, 2011 to $380,912for three months ended June 30, 2012.  The decrease of $66,062 was mainly due to
the following: increase in oil and gas operating expenses of $35,534, increase in office administration costs of $28,901, increase
in professional fees of $65,191 and an increase in depletion, depreciation and amortization of $16,065 and a decrease in stock
based compensation of $69,229, decrease in investor relations costs of $128,292 and a decrease in other expenses of $14,232.



In addition, interest expense increased $316,716, from $115,756
during the three months ended June 30, 2011 to $432,472 during the three months ended June 30, 2012, primarily due to the amortization
of note discounts.



As a result of the foregoing, the Company’s
net loss for the three months ended June 30, 2012 and 2011 was $789,307and $562,730, respectively.





12







Liquidity and Capital Resources



As of June 30, 2012, the Company had $62,957
in cash and negative working capital of $154,882.  In July 2012, the Company borrowed $78,000 from an investor.  The
proceeds of this note have been be used for working capital and a workover on the N. Edna project.  Additional capital
will be necessary to fund ongoing operating costs and planned drilling programs over the next twelve months.



Net cash used in operating activities for
the three months ended June 30, 2012 and 2011 was $196,470 and $187,621, respectively.



We anticipate that future liquidity requirements
will arise from the need to finance our operations and continue our lease acquisition and drilling programs. The primary sources
of funding for such requirements are expected to be raising additional capital from the sale of equity and/or debt securities.
However, we can provide no assurances that we will be able to obtain additional financing on terms satisfactory to us, if at all,
to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to
meet our obligations on a timely basis and ultimately to attain profitability. The Company is attempting to obtain cash to finance
its operations through the sale of equity, debt borrowing and/or through the sale of working interests in our drilling programs.
We can provide no assurances that financing will be available to us on terms satisfactory to us, if at all, or that we will be
able to continue as a going concern. In this respect, see Note 2 - Going Concern in our financial statements for additional information
as to the possibility that we may not be able to continue as a going concern.





ITEM 3.             QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Pursuant to Item 305(e) of Regulation S-K
(§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting
company,” as defined by Rule 229.10(f)(1).



ITEM 4.                               CONTROLS
AND PROCEDURES



(a)                        Evaluation
of Disclosure Controls and Procedures



As of the end of the period covered by this Quarterly Report
on Form 10-Q, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief
Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of our disclosure controls and procedures
(as defined in Rules13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, the CEO and CFO concluded that our
disclosure controls and procedures were not effective as of June 30, 2012 due to a lack of segregation of duties and an overreliance
on consultants in the accounting and financial reporting process.



(b)                        Changes
in Internal Controls Over Financial Reporting



There were no changes that occurred during the quarter covered
by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s
internal control over financial reporting.





13









PART II.  OTHER INFORMATION



ITEM 6. EXHIBITS



|Exhibit No.  |  | Description                                             
|------------ |  | --------------------------------------------------------
|             |  |                                                         
|31.1         |  | Certification of J. Leonard Ivins.                      
|31.2         |  | Certification of Steven M. Plumb                        
|32.1         |  | Certification for Sarbanes-Oxley Act of J. Leonard Ivins
|32.2         |  | Certification for Sarbanes-Oxley Act of Steven M. Plumb 
|             |  |                                                         
|101.INS XBRL |  | Instance Document                                       
|101.SCH XBRL |  | Taxonomy Extension Schema                               
|101.CAL XBRL |  | Taxonomy Extension Calculation Linkbase                 
|101.DEF XBRL |  | Taxonomy Extension Definition Linkbase                  
|101.LAB XBRL |  | Taxonomy Extension Label Linkbase                       
|101.PRE XBRL |  | Taxonomy Extension Definition Linkbase                  
|             |  |                                                         





14









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



|    | BERING EXPLORATION, INC.                 
|--- | -----------------------------------------
|    |                                          
|By: | /s/ J. Leonard Ivins                     
|    | J. Leonard Ivins, Chief Executive Officer
|    | Date: August 20, 2012                    



Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.



|Signature           |  | Title                       |  | Date           
|------------------- |  | --------------------------- |  | ---------------
|                    |  |                             |  |                
|/s/J. Leonard Ivins |  | Chief Executive Officer and |  | August 20, 2012
|J. Leonard Ivins    |  | Chairman of the Board       |  |                
|                    |  |                             |  |                
|/s/Steven M. Plumb  |  | Principal Financial and     |  | August 20, 2012
|Steven M. Plumb     |  | Accounting Officer          |  |                



15