UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K 

X .	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Fiscal Year Ended December 31, 2012
.	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
	For the Transition Period from ________ to _________

GRAPHITE CORP.

(Exact name of registrant as specified in its charter)

Nevada	000-54336	26-0641585
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification Number)
	1031 Railroad Street, Suite 102A Elko, NV 89801
	(Address of principal executive offices)
	(775) 753-6605
	(Registrant’s Telephone Number)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes      . No  X .

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes      . No  X .

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.  Yes  X . 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). Yes  X . No      .

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.      .

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See 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	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $9,065,000 based upon the price ($0.35) at which the common stock was last sold as of the last business day of the most recently completed second fiscal quarter, multiplied by the approximate number of shares of common stock held by persons other than executive officers, directors and five percent stockholders of the registrant without conceding that any such person is an “affiliate” of the registrant for purposes of the federal securities laws. Our common stock is traded in the over-the-counter market and quoted on the Over-The-Counter Bulletin Board under the symbol “GRPH.OB”

As of April 1, 2013, there were 28,700,000 shares of the registrant’s $0.0001 par value common stock issued and outstanding.

Documents incorporated by reference: None

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Table of Contents

		Page
	PART I
Item 1	Business	4
Item 1A	Risk Factors	13
Item 1B	Unresolved Staff Comments	13
Item 2	Properties	13
Item 3	Legal Proceedings	14
Item 4	Mine Safety Disclosures	14
	PART II
Item 5	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15
Item 6	Selected Financial Data	15
Item 7	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 7A	Quantitative and Qualitative Disclosures about Market Risk	18
Item 8	Financial Statements and Supplementary Data	F-1
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	19
Item 9A	Controls and Procedures	19
Item 9B	Other Information	20
	PART III
Item 10	Directors and Executive Officers and Corporate Governance	20
Item 11	Executive Compensation	23
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	24
Item 13	Certain Relationships and Related Transactions, and Director Independence	25
Item 14	Principal Accounting Fees and Services	26
	PART IV
Item 15	Exhibits	27

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:

·

The availability and adequacy of our cash flow to meet our requirements;

·

Economic, competitive, demographic, business and other conditions in our local and regional markets;

·

Changes or developments in laws, regulations or taxes in our industry;

·

Actions taken or omitted to be taken by third parties including our competitors, as well as legislative, regulatory, judicial and other governmental authorities;

·

Competition in our industry;

·

The loss of or failure to obtain any license or permit necessary or desirable in the operation of our business;

·

Changes in our business strategy, capital improvements or development plans;

·

The availability of additional capital to support capital improvements and development; and

·

Other risks identified in this report and in our other filings with the Securities and Exchange Commission or the SEC.

 

This report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Use of Term

 

Except as otherwise indicated by the context, references in this report to “Company”, “GRPH”, “we,” “us” and “our” are references to Graphite Corp. All references to “USD” or United States Dollars refer to the legal currency of the United States of America.

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PART I

ITEM 1.  

BUSINESS

DESCRIPTION OF OUR BUSINESS

We were incorporated in the State of Nevada on August 3, 2007 under the name Medzed, Inc.  We were originally established for the purpose of becoming a third party reseller of medical office business solutions.  However, due to poor performance related to the sales of the medical office business solutions, we believe as of September 30, 2008, the Company became a “shell” company, as that term is defined in Rule 12b-2 of the Securities Exchange Act of 1934.  

 

From the time that the Company was considered a shell company until the time that we ceased being a shell company, we had focused our efforts on developing a new business, merging with, or acquiring an operating company with an operating history and assets. Accordingly, we refocused the Company's business direction to include a new business plan based on the exploration of mineral claims. We decided to enter the mining business because we were seeking out viable and feasible alternatives to create value for our shareholders. We determined that staking and exploring potential mineral claims could be an excellent long term investment strategy that could lead to lucrative business opportunities. To reflect the Company’s new focus, on August 19, 2010, we filed an amendment to our Articles of Incorporation with the Nevada Secretary of State changing our name to First Resources Corp.  The Company subsequently narrowed its focus to graphite mining and on June 14, 2012, we again filed an amendment to our Articles of Incorporation with the Nevada Secretary of State changing our name to Graphite Corp.  

We are considered an exploration or exploratory stage company because we are involved in the examination and investigation of land that we believe may contain valuable minerals, for the purpose of discovering the presence of graphite and other minerals, if any, and their extent.  Because we are an exploration stage company, there is no assurance that a commercially viable mineral deposit exists on the properties underlying our mineral claims, and a great deal of further exploration will be required before a final evaluation as to the economic and legal feasibility for our future exploration is determined. We have no known reserves of any type of mineral. To date, we have not discovered an economically viable mineral deposit, and there is no assurance that we will discover one.

Exploration for minerals is a speculative venture involving substantial risk. The expenditures to be made by us on our exploration program may not result in the discovery of commercially exploitable reserves of valuable minerals.  The probability of a mineral claim ever having commercially exploitable reserves is extremely remote, and in all probability, our mineral claims may not contain any reserves. If we are unable to find reserves of valuable minerals or if we cannot remove the minerals because we either do not have the capital to do so, or because it is not economically feasible to do so, then we will cease operations and potential investors will lose their investment.

We anticipate that any additional funding that we require will be in the form of equity financing from the sale of our Common Stock. However, there is no assurance that we will be able to raise sufficient funding from the sale of our Common Stock. The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable mine can be demonstrated. We do not have any arrangements in place for any future equity financing. If we are unable to secure additional funding, we will cease or suspend operations. We have no plans, arrangements or contingencies in place in the event that we cease operations.

If we discontinue our exploration of our properties, we may seek to acquire other natural resource exploration properties. Any such acquisition(s) will involve due diligence costs in addition to the acquisition costs. We will also have an ongoing obligation to maintain our periodic filings with the appropriate regulatory authorities, which will involve legal and accounting costs. In the event that our available capital is insufficient to acquire an alternative resource property and sustain minimum operations, we will need to secure additional funding or else we will be compelled to discontinue our business. We are presently in the exploration stage of our business and have not commenced planned principal operations. We can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such deposits are discovered, that we will enter into further substantial exploration programs.

If commercially marketable quantities of mineral deposits exist on the properties underlying our mineral claims and sufficient funds are available, we will evaluate the financial viability, technical and financial risks of extraction, including an evaluation of the economically recoverable portion of the deposit, the metallurgy and ore recoverability, marketability and payability of the ore concentrates, engineering concerns, milling and infrastructure costs, finance and equity requirements and an analysis of the proposed mine from the initial excavation all the way through to reclamation. After we conduct this analysis and determine that a given ore body is worth recovering, we will begin the development process. Development will require us to obtain a processing plant and other necessary equipment including delivery equipment to transport the processed ore to our future customers.

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To date, we have not earned any revenues and have incurred a net loss of $712,966, in the year ended December 31, 2012 and a net loss of $2,078,734 since inception. We do not anticipate earning revenues until such time as we enter into commercial production of our mineral properties.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its plan of operations described herein and eventually attain profitable operations.

The Company had previously staked four claims, the MDZ Lode Claims, situated in Mohave County, Arizona.  The Company staked the land and provided the Arizona Bureau of Land Management with the requisite Location Notice of Lode Mining Claim.  Upon providing the location notice and the requisite fees, the Company was entitled to enter onto the property with its employees, representatives and agents, and to prospect, explore, test, develop, work and mine the property as the Company saw fit. As of the date of this Report, the Company has not renewed the MDZ Lode Claims for the year 2013.

On October 22, 2011, the Company entered into that certain Property Option Agreement (the "Option Agreement") with MinQuest, Inc. ("MinQuest"). Pursuant to the terms and conditions of the Option Agreement, MinQuest granted the Company with the right and option (the “Option”) to acquire one hundred percent (100%) of the mining interests in that certain Property known as Sheep Mountain West (the “Sheep Mountain Property”), which is comprised of 27 mining claims and is located in Yavapai County, Arizona.  As of the date of this Report, the Company has elected not to exercise the Option.

Our Acquisitions

1.

The Carr Leases and Cahaba Forest Management Leases Option

On June 1, 2012, the Company entered into that certain Property Option Agreement (the "Option Agreement") with Mr. Stanley Smith ("Mr. Smith").  Pursuant to the terms and conditions of the Option Agreement, Mr. Smith shall grant the Company the right and option (the “Option”) to acquire one hundred percent (100%) of the mining interests in that certain Property known as the Carr Leases and the Cahaba Forest Management Leases (the “Carr Cahaba Property”) which is comprised of a total of 3,759.6 acres (Cahaba 2967.9 acres and Carr 791.7 acres) and is located in Clay County, Alabama. In order to exercise the Option, the Company shall be required to: (i) pay an initial cash payment of one hundred fifty thousand dollars ($150,000) to Mr. Smith; (ii) issue an aggregate of three million (3,000,000) shares, of which one million (1,000,000) shares have been paid, of the Company’s common stock to Mr. Smith; (iii) pay an additional aggregate payment of one hundred fifty thousand dollars ($150,000) over a three (3) year period; of which $150,000 has been paid, and (iv) pay a production royalty (the “Royalty”) to Mr. Smith equal to two percent (2%) of the net smelter returns, per the terms and conditions of the Option Agreement. The Option Agreement also provides that the Company shall have a one-time right to purchase fifty percent (50%) of the Royalty in the Carr Cahaba Property for five hundred thousand dollars ($500,000). Pursuant to the Option Agreement, Mr. Smith has agreed to enter into an eighteen (18) month voluntary lock up agreement for the initial one million (1,000,000) shares he will receive upon execution of the Option Agreement.  The above description of the Option Agreement is intended as a summary only and is qualified in its entirety by the terms and conditions set forth therein, and may not contain all information that is of interest to the reader.  For further information regarding the terms and conditions of the Option Agreement, this reference is made to such agreement, which was filed on June 7, 2012 with the SEC as part of our Current Report on Form 8-K.

The Company recorded an impairment allowance on the property as the Company has not been able to prove certainty around future production, reserves, cash flows or salvage value. As such, the Company recorded an impairment allowance of $350,000.

Location and Access

The Carr Cahaba Property is situated in Clay County, Alabama, near the towns of Ashland and Lineville.  Historically a mining-friendly state, Alabama offers modern graphite developers excellent conditions including:

·

A number of paved secondary roads with numerous gravel & forestry roads throughout the general areas of both properties.

·

Power available along all secondary roads, with high tension lines in the area

·

Accommodation, supplies etc. are available in Oxford/Anniston approximately 24 miles north of the sites

·

Accommodation, and office-warehouse plans are underway for Lineville or Ashland in support of on-going field programs

·

Local labor readily available. The local population is interested in mining opportunities proposed for the area

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Climate

In Clay County, Alabama, temperatures reach 70’s in the spring and fall and climb into the 90’s in the summer and rarely dip below freezing in the winter.  The average annual precipitation is 59.4 inches.  

Temperatures in the winter range from 33 to 52 degrees Fahrenheit.  Temperatures in the spring range from 49 to 73 degrees Fahrenheit.  Summer temperatures range from 69 to 88 degrees Fahrenheit and Fall temperatures range from 52 to 73 degrees Fahrenheit.

Property Geology

The extensive flake-graphite deposits of Alabama are delineated by a belt extending about 60 miles southwest from the northeast corner of Clay County across Coosa County to the edge of the Coastal Plain in Chilton County.

The continuity of the beds is broken by a 10-mile gap between Millerville in Clay County and Goodwater in Coosa County. The Clay County beds extend about 27 miles northwest of this gap, with a width of 3 to 4 miles near Millerville and of less than a mile at the northeast end.  The Coosa-Chilton block is about 33 miles long with a fairly consistent width of 2 to 3 miles.

Geologically the graphite belt lies near the northeast boundary of the outcrop of high-grade metamorphic rocks of the Ashland series, a complex group of intensely folded and faulted beds of pre-Cambrian age composed mostly of quartz-mica schist, where the mica is predominantly muscovite; garnet-mica schist, in which biotite is more common; and hornblende schist.

Preliminary sampling on the Clay county leases determined that flake graphite is typically in the range of 2 - 3%.

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2.

The Crystal Project

On July 11, 2012, the Company entered into that certain Minerals Lease Agreement (the “Agreement") with Mr. Jonathan B. Smith, Mr. James I. Smith and Ms. Celinda S. Hicks (the "Lessors"), giving the Company the right to conduct mineral exploration activities on and in certain land and mining claims, which are comprised of a total of approximately one hundred acres (100) collectively known as the “Crystal Project” situated in Beaverhead County, Montana, for a term of twenty five (25) years (the “Term”) with the right to renew.  As consideration, the Company shall pay Lessors: (i) an annual payment of three thousand five hundred dollars ($3,500) over the Term of the Agreement; and (ii) a production royalty (the “Royalty”) equal to three percent (3%) of the net smelter returns on the 1^st of each month, per the terms and conditions of the Agreement. The Agreement also provides that the Company shall have a one-time right to purchase one and one half percent (1.5%) of the Royalty in the Crystal Project for one million five hundred thousand dollars ($1,500,000). Additionally, pursuant to the Agreement, the Company shall be granted the subsequent right to participate in the development of minerals from the Crystal Project subject to the terms and conditions of the Agreement.  The above description of the Agreement is intended as a summary only and is qualified in its entirety by the terms and conditions set forth therein, and may not contain all information that is of interest to the reader.  For further information regarding the terms and conditions of the Agreement, this reference is made to such agreement, which was filed on August 1, 2012 with the SEC as part of our Current Report on Form 8-K.  During September of 2012, 83 claims were filed in the area around the leased portion of the Crystal Project. The claims added approximately 1600 acres of mineral rights to the project.

The Company recorded an impairment allowance on the property as the Company has not been able to prove certainty around future production, reserves, cash flows or salvage value.  As such, the Company recorded an impairment allowance of $25,381.

Location and Access

The Crystal Project is located in Beaverhead County, Montana, in Section 31, Township 8S, Range 7W, located towards the southern end of the Ruby Range, about 10 miles east of Dillon, at an altitude of approximately 7,500 feet.

The Crystal Project can be reached by a gravel and dirt road that is in relatively good condition, and passable during a good portion of the year.

Climate

The climate of Beaverhead County is both cold and dry. Precipitation varies widely; average annual amounts range from 10 inches in Dillon to over 50 inches in mountains forming the Continental Divide to the west. Two-thirds of precipitation in mountains is snow.

The average temperature in January is 21 degrees Fahrenheit and the average temperature in July is 66 Fahrenheit.

Property Geology

The rocks on the Crystal Project are a metamorphosed sedimentary series that has been correlated with the Cherry Creek group of Precambrian age. Garnetiferous granite gneiss, schists, marbles, and quartzites strike approximately N. 60°- 75° E. and dip 70°- 80° NW. but show local variation. They contain small pegmatitic bodies that range from nearly massive un-metamorphosed to markedly metamorphosed. 

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The richest graphite ore in the deposit occurs as fracture fillings in pegmatite and gneiss. The fillings range from thin films to veins more than 2 feet thick.  They are short, and very few reach lengths of 50 feet. In places the veins form closely spaced intersecting networks that resemble stockworks.  The veins contain graphite as the only primary mineral, but movement along the fractures has dragged fragments of the wall rock into the veins in places, apparently both during and after graphite deposition. The graphite occurs mostly as coarse interlocking plates as much as 1 inch long, but in places it shows well developed comb or needle structure. Contacts between graphite veins and wall rock are sharp, and no alteration of the wall rock is evident.

Graphite also occurs as flakes, films, and rosettes disseminated in the pegmatites and the gneisses which is noticeably more abundant near the graphite veins. In the wall rocks the graphite occupies minute fractures between or within mineral grains and occurs as flakes formed by replacement of quartz or feldspar. Where the country rock is foliated, the graphite flakes are oriented parallel to the foliation.  There is evidence that structural features have helped to localize graphite deposition, with the deposit being associated with an isoclinal fold that strikes about N. 50° E. and dips about 45° NW.  The nose of this fold plunges N. 20° W. at about 45 degrees. There is extensive fracturing around the nose of the fold both on the surface and in underground exposures. These fractures contain graphite that constitutes the richest ore body exposed in the deposit.

Glossary of Technical Geological Terms

 

The following defined technical geological terms are used in our annual report:

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Management Experience

Our President, Brian Goss, has ten years of experience in mineral exploration and the mining industry, but limited experience working in an actual mine. As such, he may not be able to recognize or take advantage of potential acquisition and exploration opportunities in the sector without the aid of additional qualified geological consultants.

Competitive Factors

We are a new mineral resources exploration company. The mining industry is highly fragmented and we will be competing with many other exploration companies looking for minerals. While we will generally compete with other exploration companies, there is no competition for the exploration or removal of minerals from our acquired properties.  

However, we will compete with other mineral resource exploration companies for the acquisition of new mineral properties and for available resources. Many of the mineral resource exploration companies with whom we will compete have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford more geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration. This competition could adversely impact our ability to finance further exploration and development of our mineral properties.  We will be competing with other mineral resource exploration companies for available resources, including, but not limited to: professional geologists, camp staff, mineral exploration supplies and drill rigs. Competing for available resources will depend on our technical abilities, financial capacities, industry contacts, and any consulting arrangements we may have in place.

We will also compete with other mineral resource exploration companies for financing from investors that are prepared to make investments in mineral resource exploration companies.  The presence of competing mineral resource exploration companies may impact our ability to raise additional capital in order to fund our exploration programs if investors view our competitors as more attractive investments, based on the merit of the mineral properties under investigation and the price of the investment offered to investors.

Plan of Operations

1.

The Carr Leases and Cahaba Forest Management Leases Option

 Under the leadership of our President, Brian Goss, surface sampling and grid survey is underway on the Carr Cahaba Property and moving ahead as planned. Initial sampling focused on historical mine locations and expanded to known locations prospective for significant graphite shows. Based on those early results, sampling has now been extended to a comprehensive survey encompassing the largest sampling area to-date. Visual evaluation alone of each sample has identified varying grades with the majority of samples presenting visual graphite mineralization.

The Company has increased the proposed sampling grid based upon the visual confirmation of mineralization and tightened up the sample spacing in the mineralized areas. The survey was originally engineered to undertake an estimated 1,358 samples taken at surface along designated grid lines. The samples will be submitted to laboratory testing for graphitic carbon (Cg) and the data from the grid results is designed to test the width of the graphite bearing geologic formations.

Initial sampling limited to the old mine workings previously returned values ranging from a low of 2.2% up to 6.01% graphitic carbon in unconsolidated or semi-consolidated schist. The average of these samples was 3.54% graphitic carbon. Subsequent samples taken from several localities throughout the property offered uniform grades of over 2% crystalline flake graphite throughout. These findings are consistent with prior observations including historic reports from the U.S. Bureau of Mines. The majority of samples have mainly presented in very soft, strongly weathered rocks comprised of moderate to large (+50mesh) flakes.

Low-level geologic mapping and logging of rock types at each sample site is contributing to a geologic and geochemical data set aimed at delineating drill targets as part of plans for the commencement of a proposed drill program in order to confirm and provide a regulatory compliant evaluation of the underlying asset prior to commercial production.

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2.

The Crystal Project

During September of 2012, 83 claims were filed in the area around the leased portion of the Crystal Project. The claims added approximately 1600 acres of mineral rights to the project. During the claim staking, samples were collected to test the surface rocks for graphite.

Samples taken from the Crystal Project were consistent with prior observations. The rock type the samples were taken in were a pegmatite and the metamorphic rocks adjacent to the pegmatite. The samples were taken from the historically mined localities throughout the Crystal Project and the grades were all over 10% graphite and multiple samples contained >20%, exceeding the 20% limitation of the assay method.

Sample Results

	C-Graphite
Sample	%
AB-20120912-02	10.5
AB-20120912-05	>20
AB-20120912-13	>20
AB-20120912-17	13
AB-20120912-18	>20

The geological work was led by our President, Brian Goss, and Director, Jason Babcock. The assay work was conducted by INSPECTORATE (A Bureau Veritas Group Company) of Sparks, Nevada. The study included a physical review of the mineral lease areas to include specific details and features of interest.

The Industry

The recent surge in interest and value of graphite is built on long standing and solid fundamentals as a well-established industrial mineral. Natural graphite has been mostly consumed in steel making; for refractories and foundry facings; as a lubricant and as a containment lining in nuclear applications. Other uses have included automobile brake linings and transmission components, but with the extraordinary increase in the use of lithium-Ion batteries, graphite has experienced a huge growth surge and the auto industry is sure to be at the forefront of this growth.

Prices of large-flake, high carbon graphite has increased from $600 per metric ton during the 1990s to highs of approximately $2,500 per metric ton recently. Industry participants believe that positive trends in graphite prices could continue in the coming years as China is expected to continue to tighten regulations regarding exports of graphite.

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A report by Industrial Minerals, a leading source of information on critical minerals, stated that the Chinese government is focused on consolidating the domestic graphite industry and is going ahead with plans to reduce the number of graphite mines in Hunan province from 230 to around 20, with increased government supervision aimed at reducing environmental impact due to harmful mining practices. This is expected to lead to a loss of around 100,000 metric tons of graphite per year, or approximately 10 percent of the global supply.

Recent prices for flake graphite has seen $1,500 - 3,000 per tonne depending on flake size and grade. Graphite prices have seen increases for large flake, high purity graphite (+80 mesh, 94-97%C) and have more than doubled in recent years. China, which produces about 80 percent of the world's graphite, is reducing its 200 amorphous graphite mines to 20 and creating a state-run monopoly causing disruptions in supply. Industrial Minerals recently reported exports from China in January and February 2012 have been reduced by 55.3% and 60.1% from 2011 level exports from Hunan Province. It is not expected that current graphite mines in other countries could replace Chinese amorphous supply. 

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Currently, the largest graphite mines produce only 20,000 tonnes per year. Predictions are that the current world-wide graphite consumption of 1.2 million tonnes per year will increase by 200,000 tonnes per year by 2015. This would require approximately ten mines of 20,000 tonnes per year to come on stream to meet demand. If changes to graphite mining in China are fully implemented, there could be added pressure on demand and a corresponding price increase as indicated by the increasing prices in the last two years.

Government Regulations

 

Exploration activities are subject to various national, state, foreign and local laws and regulations, which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters.  We believe that we are in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations promulgated by the States of Arizona, Montana, Alabama and the United States Federal Government.  Currently, there are no costs associated with our compliance with such regulations and laws.

 

Our exploration activities are subject to various federal, state and local laws and regulations governing protection of the environment.  These laws are continually changing and, as a general matter, are becoming more restrictive.  Our policy is to conduct business in a way that safeguards public health and the environment.  We believe that our exploration activities are conducted in material compliance with applicable laws and regulations.  Changes to current local, state or federal laws and regulations in the jurisdictions where we operate could require additional capital expenditures and increased operating and/or reclamation costs.  Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could render certain exploration activities uneconomic.

 

Employees

We have no significant employees other than our officers and directors.  We believe that until such time that we have fully developed our plan of operations we will not have any employees and that we will frequently use consultants to assist in the completion of various projects.  We believe that consultants will be instrumental to keep the exploration of projects on time and on budget.

WHERE YOU CAN GET ADDITIONAL INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC.  You may read and copy our reports or other filings made with the SEC at the SEC’s Public Reference Room, located at 100 F Street, N.W., Washington, DC 20549.  You can obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  You can also access these reports and other filings electronically on the SEC’s web site, www.sec.gov.

ITEM 1A.  

RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 1B.  

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.  

PROPERTIES

Our principal executive office is located at 1031 Railroad Street, Suite 102A, Elko, NV 89801.  Our telephone number is (775) 753-6605.  It is our belief that the space is adequate for our immediate needs. Additional space may be required as we expand our operations. We do not foresee any significant difficulties in obtaining any required additional facilities. We do not presently own any real property.

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On June 1, 2012, the Company entered into that certain Property Option Agreement (the "Option Agreement") with Mr. Stanley Smith ("Mr. Smith").  Pursuant to the terms and conditions of the Option Agreement, Mr. Smith shall grant the Company the right and option (the “Option”) to acquire one hundred percent (100%) of the mining interests in that certain Property known as the Carr Leases and the Cahaba Forest Management Leases (the “Carr Cahaba Property”) which is comprised of a total of 3,759.6 acres and is located in Clay County, Alabama. In order to exercise the Option, the Company shall be required to: (i) pay an initial cash payment of one hundred fifty thousand dollars ($150,000) to Mr. Smith; (ii) issue an aggregate of three million (3,000,000) shares of the Company’s common stock to Mr. Smith; (iii) pay an additional aggregate payment of one hundred fifty thousand dollars ($150,000) over a three (3) year period; and (iv) pay a production royalty (the “Royalty”) to Mr. Smith equal to two percent (2%) of the net smelter returns, per the terms and conditions of the Option Agreement. The Option Agreement also provides that the Company shall have a one-time right to purchase fifty percent (50%) of the Royalty in the Carr Cahaba Property for five hundred thousand dollars ($500,000). Pursuant to the Option Agreement, Mr. Smith has agreed to enter into an eighteen month voluntary lock up agreement for the initial 1,000,000 shares he will receive upon execution of the Option Agreement.  

The Company recorded an impairment allowance on the property as the Company has not been able to prove certainty around future production, reserves, cash flows or salvage value.  As such, the Company recorded an impairment allowance of $350,000.

On July 11, 2012, the Company entered into that certain Minerals Lease Agreement (the “Agreement") with Mr. Jonathan B. Smith, Mr. James I. Smith and Ms. Celinda S. Hicks (the "Lessors"), giving the Company the right to conduct mineral exploration activities on and in certain land and mining claims, which are comprised of a total of approximately one hundred acres (100) collectively known as the “Crystal Project”, situated in Beaverhead County, Montana, for a term of twenty five (25) years (the “Term”) with the right to renew.  As consideration, the Company shall pay Lessors: (i) an annual payment of three thousand five hundred dollars ($3,500) over the Term of the Agreement; and (ii) a production royalty (the “Royalty”) equal to three percent (3%) of the net smelter returns on the 1^st of each month, per the terms and conditions of the Agreement. The Agreement also provides that the Company shall have a one-time right to purchase one and one half percent (1.5%) of the Royalty in the Crystal Project for one million five hundred thousand dollars ($1,500,000). Additionally, pursuant to the Agreement, the Company shall be granted the subsequent right to participate in the development of minerals from the Crystal Project subject to the terms and conditions of the Agreement.   During September of 2012, 83 claims were filed in the area around the leased portion of the Crystal Project. The claims added approximately 1600 acres of mineral rights to the project.

The Company recorded an impairment allowance on the property as the Company has not been able to prove certainty around future production, reserves, cash flows or salvage value.  As such, the Company recorded an impairment allowance of $25,381.

ITEM 3.  

LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation.  There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 4.  

MINE SAFETY DISCLOSURES

Not Applicable.

14

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PART II

ITEM 5.  

MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Common Stock

Our common stock is currently quoted on the OTC Bulletin Board.  Our common stock has been quoted on the OTC Bulletin Board since March 12, 2009 under the symbol “MEZE.OB”.  On June 22, 2012, our symbol changed to “GRPH.OB.”  Because we are quoted on the OTC Bulletin Board, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.

The following table sets forth the high and low bid prices for our Common Stock per quarter as reported by the OTCBB for the period from January 1, 2011 through December 31, 2012, based on our fiscal year end December 31. These prices represent quotations between dealers without adjustment for retail mark-up, markdown or commission and may not represent actual transactions.  

		First Quarter				Second Quarter				Third Quarter			Fourth Quarter
2011 – High		$0.80				$0.80				$0.75			$0.75
2011 – Low		$0.80				$0.38				$0.75			$0.75
2012 – High		$1.05				$0.80				$0.35			$1.01
2012 – Low		$0.75				$0.0001				$0.35			$0.35

Record Holders

 

As of December 31, 2012, there were 28,700,000 shares of the registrant’s $0.0001 par value common stock issued and outstanding and were owned by approximately 11 holders of record, based on information provided by our transfer agent.

 

Recent Sales of Unregistered Securities

 

Other than as previously disclosed, none.

Re-Purchases of Equity Securities

None.

Dividends

 

We have not paid any cash dividends on our Common Stock since inception and presently anticipate that all earnings, if any, will be retained for development of our business and that no dividends on our Common Stock will be declared in the foreseeable future.  Any future dividends will be subject to the discretion of our Board of Directors and will depend upon, among other things, future earnings, operating and financial condition, capital requirements, general business conditions and other pertinent facts.  Therefore, there can be no assurance that any dividends on our Common Stock will be paid in the future.  

Securities Authorized for Issuance Under Equity Compensation Plans

 

On December 11, 2012, the Company adopted the 2012 Share Incentive Plan (the “Plan").  Pursuant to the Plan, the aggregate number of shares of the Company’s common stock issuable under the Plan shall not exceed ten million (10,000,000) shares.

ITEM 6.  

SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

15

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ITEM 7.  

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections.  We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements.  These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted.  You should read this report completely and with the understanding that actual future results may be materially different from what we expect.  The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report.  We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

RESULTS OF OPERATIONS

Working Capital

	December 31, 2012 $	December 31, 2011 $
Current Assets	190,352	70
Current Liabilities	20,700	67,452
Working Capital (Deficit)	169,652	(67,382)

 

Cash Flows

	Year ended December 31, 2012 $	Year ended December 31, 2011 $
Cash Flows from (used in) Operating Activities	(373,285)	(37,170)
Cash Flows from (used in) Financing Activities	708,204	37,024
Cash Flows from (used in) Investing Activities	(150,000)	-
Net Increase (decrease) in Cash During Period	184,919	(146)

Operating Revenues

Operating revenues for the period ended December 31, 2012 was $Nil.

Operating revenues for the period ended December 31, 2011 was $Nil.

Operating Expenses and Net Loss

Operating expenses for the years ended December 31, 2012 and 2011 was $713,869 and $45,410 and is comprised of expenses related to mineral claims and general and administrative expenses.

Net loss for the years ended December 31, 2012 and 2011 was $718,537 and $45,410 is comprised of expenses related to mineral claims and general and administrative expenses.

Liquidity and Capital Resources

As at December 31, 2012, the Company’s cash and total asset balance was $190,352 compared to $70 as at December 31, 2011.  The increase in total assets is attributed to funds received through the issuance of stock.

16

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As at December 31, 2012, the Company had total liabilities of  $20,700  compared with total liabilities of $67,452 as at December 31, 2011.  The decrease in total liabilities was attributed to the Company using proceeds from their equity financing to repay liabilities.

As at December 31, 2012, the Company had working capital of $169,652 compared with a working capital deficit of $67,382 as at December 31, 2011.

Cashflow from Operating Activities

During the period ended December 31, 2012, the Company used $373,285 of cash for operating activities compared to the use of $37,170 of cash for operating activities during the period ended December 31, 2011.  The change in net cash used in operating activities is attributed to increase in funds spent on mining activities.

Cashflow from Financing Activities

During the period ended December 31, 2012, the Company received $708,204 of cash from financing activities compared to $37,024 for the period ended December 31, 2011.

Cashflow from Investing Activities

During the period ended December 31, 2012 the Company used $150,000 to purchase a mineral property lease.  The Company did not have investing activities during the year-ended December 31, 2011.

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities.  For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Future Financings

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations.  Issuances of additional shares will result in dilution to existing stockholders.  There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis.  The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements.  A complete summary of these policies is included in the notes to our financial statements.  In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances.  Actual results could differ from those estimates made by management.

Contractual Obligations

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

17

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Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial statements.    

ITEM 7A.  

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

18

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ITEM 8. 

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

GRAPHITE CORP.

(An Exploration Stage Company)

For the Periods Ended December 31, 2012 and 2011

Report of Independent Registered Public Accounting Firm	F-2
Balance Sheets	F-3
Statements of Operations	F-4
Statements of Stockholders’ Deficit	F-5
Statements of Cash Flows	F-6
Notes to the Financial Statements	F-7

F-1

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Graphite Corp.

(An Exploration Stage Company)

We have audited the accompanying balance sheets of Graphite Corp. (An Exploration Stage Company) as of December 31, 2012 and 2011, and the related statements of operations, changes in stockholders’ deficit, and cash flows for the years then ended and for the period from August 3, 2007 (inception) through December 31, 2012.  These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Graphite Corp. (An Exploration Stage Company) as of December 31, 2012 and 2011, and the results of its operations and cash flows for the periods described above in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company suffered net losses from operations and has a deficit from inception, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ M&K CPAS, PLLC

 www.mkacpas.com

Houston, Texas

April 5, 2013

F-2

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Graphite Corp.
(formerly First Resources Corp.)
(An Exploration Stage Company)
Balance Sheets
				December 31,			December 31,
				2012			2011
ASSETS
CURRENT ASSETS
	Cash			$	184,989		$	70
	Prepaid expenses				5,363			-
		Total Current Assets			190,352			70
		TOTAL ASSETS		$	190,352		$	70
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
	Accounts payable			$	5,924		$	10,880
	Related party payable				14,776			56,572
		Total Current Liabilities			20,700			67,452
STOCKHOLDERS' EQUITY (DEFICIT)
	Common stock: $0.0001 par value, 300,000,000 shares   authorized, 28,700,000 and 12,700,000 issued and outstanding   as of December 31, 2012 and December 31, 2011, respectively
					2,870			1,270
	Additional paid-in capital				2,251,087			1,297,116
	Deficit accumulated during the exploration stage				(2,084,305)			(1,365,768)
		Total Stockholders' Equity (Deficit)			169,652			(67,382)
		TOTAL LIABILITIES AND STOCKHOLDERS  EQUITY (DEFICIT)		$	190,352		$	70
The accompanying notes are an integral part of these financial statements.

F-3

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Graphite Corp.
(Formerly First Resources Corp.)
(An Exploration Stage Company)
Statements of Operations
			For the			For the			From Inception
			Year			Year			on August 3,
			Ended			Ended			2007 Through
			December 31			December 31			December 31
			2012			2011			2012
REVENUES			$	-		$	-		$	-
EXPENSES
	Mineral claims and exploration			99,682			23,829			126,511
	Mineral Claw Impairment			375,831			-			375,831
	Professional fees			77,591			12,000			89,591
	Consulting			102,125			-			102,125
	General and administrative			58,640			9,581			1,385,579
		Total Expenses		713,869			45,410			2,079,637
LOSS FROM OPERATIONS				(713,869)			(45,410)			(2,079,637)
	Debt settlement			(4,668)			-			(4,668)
	Income tax expense			-			-			-
NET LOSS			$	(718,537)		$	(45,410)		$	(2,084,305)
BASIC AND DILUTED LOSS PER SHARE				(0.03)			(0.00)
WEIGHTED AVERAGE SHARES OUTSTANDING,    BASIC AND DILUTED
				21,951,366			12,700,000
The accompanying notes are an integral part of these financial statements

F-4

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F-5

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Graphite Corp.
(Formerly First Resources Corp.)
(An Exploration Stage Company)
Statements of Cash Flows
					For the			For the			From Inception
					Year ended			Year ended			on August 3,
					Ended			Ended			2007 Through
					December 31			December 31			December 31
					2012			2011			2012
OPERATING ACTIVITIES
	Net loss				$	(718,537)		$	(45,410)		$	(2,084,305)
	Adjustments to reconcile net loss to net cash   used by operating activities:
		Stock based compensation				5,571			-			1,220,571
		Impairment of mining options				350,000			-			350,000
		Imputed interest on shareholder loan				-			1,360			3,386
	Changes in operating assets and liabilities
		(Decrease) increase in prepaid expenses				(5,363)			-			(5,363)
		Increase (decrease) in accounts payable				(4,956)			6,880			5,924
			Net Cash Used in    Operating Activities
						(373,285)			(37,170)			(509,787)
INVESTING ACTIVITIES
		Cash paid for mining option				(150,000)			-			(150,000)
			Net Cash Provided by    Financing Activities
						(150,000)			-			(150,000)
FINANCING ACTIVITIES
		Proceeds from related party loans				12,704			37,024			69,276
		Repayments on related party loans				(54,500)						(54,500)
		Common stock issued for cash				750,000			-			830,000
			Net Cash Provided by    Financing Activities
						708,204			37,024			844,776
		NET DECREASE IN CASH				184,919			(146)			184,989
		CASH AT BEGINNING OF PERIOD				70			216			-
		CASH AT END OF PERIOD			$	184,989		$	70		$	184,989
SUPPLEMENTAL DISCLOSURES OF   CASH FLOW INFORMATION
	CASH PAID FOR:
		Interest			$	-		$	-		$	-
		Income Taxes			$	-		$	-		$	-
	NONCASH FINANCING ACTIVITIES
		Stock issued for mineral option			$	200,000		$	-		$	200,000
The accompanying notes are an integral part of these financial statements.

F-6

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GRAPHITE CORP.

(Formerly First Resources Corp.)

(An Exploration Stage Company)

Notes to Financial Statements

December 31, 2012

NOTE 1 – NATURE OF OPERATIONS

Graphite Corp. (formerly First Resources Corp.) (the “Company”) was organized on August 3, 2007, under the laws of the State of Nevada to engage in any lawful activity. The Company intends engage in the exploration of certain mineral interests in the states of Alabama and Montana. The Company is in the exploration stage.

On August 19, 2010, the Company filed Amended and Restated Articles of Incorporation with the Nevada Secretary of State. As a result of the Amendment the Registrant, among other things, has: (i) changed its name to “First Resources Corp.;” and, (ii) increased the aggregate number of authorized shares to 310,000,000 shares, consisting of 300,000,000 shares of Common Stock, par value $0.0001 per share and 10,000,000 shares of preferred stock, par value $0.0001 per share

On June 22, 2012, the Company filed Amended and Restated Articles of Incorporation with the Nevada Secretary of State.  As a result of the Amendment the Registrant has changed its name to “Graphite Corp.”

The Company's financial statements are prepared using the accrual method of accounting. The Company has elected a December 31 year-end.

 

NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company’s fiscal year-end is December 31.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of December 31, 2012 and December 31, 2011, the Company had no cash equivalents.

F-7

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Mineral Properties

Costs of exploration, carrying and retaining unproven mineral lease properties are expensed as incurred.  Mineral property acquisition costs are capitalized including licenses and lease payments.  Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company's title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.  Impairment losses are recorded on mineral properties used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount.

Stock-based Compensation

The Company accounts for stock-based compensation issued to employees based on ASC Topic “Share Based Payment” which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.

The Topic does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, “Employers’ Accounting for Employee Stock Ownership Plans”.

It requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award – the requisite service period (usually the vesting period). It further requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of the Topic includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.

As at December 31, 2011, the Company had not adopted a stock option plan nor had it granted any stock options. No stock based compensation was recorded in the years ended December 31, 2012 and 2011.

Basic and Diluted Net Loss Per Share

The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.

Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740, Income Taxes, as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

Comprehensive Loss

ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at December 31, 2012 and December 31, 2011, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

F-8

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Financial Instruments

The Company adopted the FASB standard related to fair value measurement at inception. The standard defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The standard applies under other accounting pronouncements that require or permit fair value measurements and, accordingly, does not require any new fair value measurements. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The recorded values of long-term debt approximate their fair values, as interest approximates market rates. As a basis for considering such assumptions, the standard established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows.

Level 1. Observable inputs such as quoted prices in active markets;

Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The Company’s financial instruments are cash, accounts receivable, and accounts payable. The recorded values of cash, accounts receivable, and accounts payable approximate their fair values based on their short-term nature.

The following table presents assets that were measured and recognized at fair value as of December 31, 2012 and the year then ended on a recurring basis:

Description	Level 1	Level 2	Level 3	Total Realized Loss
None	$ -	$ -	$ -	$ -

Recently issued accounting pronouncements

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income” in Accounting Standards Update No. 2011-05. This update defers the requirement to present items that are reclassified from accumulated other comprehensive income to net income in both the statement of income where net income is presented and the statement where other comprehensive income is presented. The adoption of ASU 2011-12 is not expected to have a material impact on our financial position or results of operations.

F-9

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In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company is currently evaluating the impact, if any, that the adoption of this pronouncement may have on its results of operations or financial position.

NOTE 4 – RELATED PARTY PAYABLES

As of December 31, 2012 and December 31, 2011, the Company has received cash advances from a shareholder or related party of $14,776 and $56,572. The advances are non interest bearing, unsecured and due upon demand.

NOTE 5 – MINERAL PROPERTY

On June 1, 2012, the Company entered into that certain Property Option Agreement (the "Option Agreement") with Mr. Stanley Smith ("Mr. Smith").  Pursuant to the terms and conditions of the Option Agreement, Mr. Smith shall grant the Company the right and option (the “Option”) to acquire one hundred percent (100%) of the mining interests in that certain Property known as the Carr Leases and the Cahaba Forest Management Leases (the “Carr Cahaba Property”) which is comprised of a total of 3,759.6 acres (Cahaba 2967.9 acres and Carr 791.7 acres) and is located in Clay County, Alabama. In order to exercise the Option, the Company shall be required to: (i) pay an initial cash payment of one hundred fifty thousand dollars ($150,000) to Mr. Smith; (ii) issue an aggregate of three million (3,000,000) shares of the Company’s common stock to Mr. Smith; (iii) pay an additional aggregate payment of one hundred fifty thousand dollars ($150,000) over a three (3) year period; and (iv) pay a production royalty (the “Royalty”) to Mr. Smith equal to two percent (2%) of the net smelter returns, per the terms and conditions of the Option Agreement. The Option Agreement also provides that the Company shall have a one-time right to purchase fifty percent (50%) of the Royalty in the Carr Cahaba Property for five hundred thousand dollars ($500,000). Pursuant to the Option Agreement, Mr. Smith has agreed to enter into an eighteen (18) month voluntary lock up agreement for the initial one million (1,000,000) shares he will receive upon execution of the Option Agreement.

In order to exercise its option, the Company must:

Due Date	Consideration
June 1, 2012	$150,000		(paid)
June 1, 2012	1,000,000	shares	(paid)
June 1, 2013	$50,000
June 1, 2013	500,000	shares
June 1, 2014	$50,000
June 1, 2014	500,000	shares
June 1, 2015	$50,000
June 1, 2015	1,000,000	shares

Due to a lack of certainty surrounding estimated future production no reserves established, no future cash flows or salvage value could be established, we have impaired all of the carrying value of the acquisitions of the Carr and Cahaba Forest Management Leases.  This represents an impairment allowance of $350,000.

NOTE 6 – STOCKHOLDERS’ EQUITY

During the year ended December 31, 2007, the Company issued 1,500,000 shares of its par value $0.0001 common stock for cash at $0.01 per share.  

During the year ended December 31, 2008, the Company issued 1,000,000 shares of its par value $0.0001 common stock for cash at $0.04 per share.  

During the year ended December 31, 2010, the Company issued to the President of the Company, 10,000,000 shares of its par value $0.0001 common stock for cash at $0.0025 per share. Stock based compensation in the amount of $875,000 was recorded because the Company issued the stock to a related party.  The stock based compensation on the issuance to a related party was based on the quoted trading value of the shares on the date of issuance being $0.09 per share.

F-10

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During the year ended December 31, 2010, the Company issued 200,000 shares of its par value $0.0001 common stock for services valued at $340,000 based on the quoted trading value of the shares on the date of issuance being $1.70 per share.

During the year ended December 31, 2012, the Company issued 10,000,000 shares of its par value $0.0001 common stock for cash at $0.05 per share.  

During the year ended December 31, 2012, the Company issued 5,000,000 units of its par value $0.0001 common stock for cash at $0.05 per share.  Each unit consisted of one common share and one warrant granting the holder the right to purchase an additional share for $0.10.  The relative fair value, using the Black Scholes Model, of these warrants is $214,445 assuming a discount rate of 0.23% and volatility of 214%.

During the year ended December 31, 2012, the Company issued 1,000,000 shares as consideration for its mineral property (See Note 5).

Stock Based Compensation

 

On December 10, 2012, the Company granted 250,000 options at an exercise price of $0.70 to consultants in exchange for various professional services. 62,500 options vest every six months from the date of grant.  The Company uses the Black-Scholes option valuation model to value stock options granted. The Black- Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The model requires management to make estimates, which are subjective and may not be representative of actual results. Assumptions used to determine the fair value of the stock based compensation is as follows:

Risk free interest rate	0.24%
Expected dividend yield	0%
Expected stock price volatility	491%
Expected life of options	2 years

Exercise price		Total Options Outstanding		Weighted Average Remaining Life (Years)		Total Weighted Average Exercise Price		Options Exercisable
$0.70		250,000		2.94		$0.70		-

The Company recorded $5,571 (2011: $Nil) in stock option compensation expense, in relation to these options, during the year ended December 31, 2012. Total stock option compensation expense is calculated at $193,654, to be recognized over the expected life of 2 years.

F-11

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NOTE 7 - INCOME TAXES

The Company has a net operating loss carried forward of $513,734 available to offset taxable income in future years which commence expiring in fiscal 2027.

The Company is subject to United States federal and state income taxes at an approximate rate of 34%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:

		Year Ended December 31, 2012 $		Year Ended December 31, 2011 $
Income tax recovery at statutory rate		123,408		15,439
Valuation allowance change		(123,408)		(15,439)
Provision for income taxes		–		–

The significant components of deferred income tax assets and liabilities at December 31, 2012 and December 31, 2011 are as follows:

		December 31, 2012 $		December 31, 2011 $
Net operating loss carried forward		174,670		51,261
Valuation allowance		(174,670)		(51,261)
Net deferred income tax asset		–		–

NOTE 8 – SUBSEQUENT EVENT

The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported.  The Management of the Company determined that there were no reportable subsequent events to be disclosed.

F-12

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ITEM 9. 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A.  

CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2012.  Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f).  The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2012, using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").  

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.  In its assessment of the effectiveness of internal control over financial reporting as of December 31, 2012, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.

19

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Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control—Integrated Framework issued by COSO. 

  

Changes in Internal Control over Financial Reporting

 

There has been no change in our internal control over financial reporting identified in connection with our evaluation we conducted of the effectiveness of our internal control over financial reporting as of December 31, 2012, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Managements report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.

Continuing Remediation Efforts to address deficiencies in Company’s Internal Control over Financial Reporting

Once the Company is engaged in a business of merit and has sufficient personnel available, then our Board of Directors, in particular and in connection with the aforementioned deficiencies, will establish the following remediation measures:

	1.	Our Board of Directors will nominate an audit committee or a financial expert on our Board of Directors in the next fiscal year.
	2.	We will appoint additional personnel to assist with the preparation of the Company’s monthly financial reporting, including preparation of the monthly bank reconciliations.

ITEM 9B.

OTHER INFORMATION

None.

PART III

ITEM 10.

DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Identification of Directors and Executive Officers

The following table sets forth the names and ages of our current directors and executive officers:

Name	Age	Position with the Company	Date of Appointment
Brian Goss	34	President, Chief Executive Officer, Chief Financial Officer, Treasurer and a Director	July 9, 2012
Jeanne Goss	34	Secretary	September 21, 2012
Jason Babcock	40	Director	October 31, 2012

The board of directors has no nominating, audit or compensation committee at this time.

Term of Office

Each of our officers is elected by the Company’s Board of Directors and their terms of office are at the discretion of the Board.  Our officers serve until the earlier occurrence of the election of his or her successor at the next meeting of stockholders, death, resignation or removal by the Board of Directors.  All of our directors hold office for a term of one year until the next annual general meeting of the shareholders or until their successors are elected and qualified.

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Background and Business Experience

The business experience during the past five years of each of the persons presently listed above as an Officer or Director of the Company is as follows:

BRIAN GOSS.  Mr. Goss graduated from Wayne State University with a Bachelor of Science Degree in Geology in 2003.  Mr. Goss worked the 2002-2003 field seasons for Kennecott Exploration during the early exploration stages of the Eagle Project, a Duluth Type high grade nickel and copper deposit in Michigan’s Upper Peninsula.  At the end of 2003, he moved to Northeast Nevada to explore for Carlin Type gold deposits.  From 2004-2007, he worked as a staff geologist for Cameco Corporation, and subsequently in its spin out company, Centerra Gold Inc., on the REN deposit where the exploration team drilled deep exploration holes using pre-collars with core tails to contribute to the expansion of the +1 million ounce gold deposit that was subsequently taken over by Barrick Gold.  Mr. Goss also held several other project geologist positions before founding Rangefront Consulting, LLC in early 2008. Mr. Goss has built Rangefront into a premier geological services company that caters to a large spectrum of clients in the mining and minerals exploration industries.

JEANNE GOSS.  Ms. Jeanne Goss graduated from the University of Utah in 2004 with a Bachelor of Science degree in Geology.  While obtaining her degree, Ms. Goss assisted in the study and preparation of oil and gas maps, reports, and GIS data compilation on various projects in the Western U.S., Mexico, and Africa.  Ms. Goss also worked as an engineering technician conducting laboratory and field testing of soils, asphalt and concrete as well as researching and generating Geotechnical and Phase-I Environmental reports.  In 2004, Ms. Goss was hired by Placer Dome as a Project Geologist at Cortez Gold Mines; she subsequently held a staff position at Cortez with Barrick Gold after Barrick’s acquisition of Placer Dome. Ms. Goss managed exploration projects in the Cortez area and was part of the exploration team that discovered and began delineating the Cortez Hills and Goldrush Projects. In early 2008, Ms. Goss was involved with the founding of Rangefront Geological, a premier exploration services company based in Elko, Nevada. Currently, Ms. Goss is the Chief Geologic Modeler at Rangefront and oversees the production of geologic models to be used for exploration and resource modeling for clients on several world renowned projects; Ms. Goss also enjoys teaching the skills needed to build geologic models using Vulcan and GOCAD software. Ms. Goss is currently Vice President and Treasurer of Geopinion, Inc. and Managing Member and Registered Agent of Geopinion, LLC.

JASON BABCOCK.  Mr. Babcock brings over 15 years of direct experience as a professional exploration geologist with particular expertise in Project Management and GIS-based field geological mapping.  From 2003 to 2008, Mr. Babcock was Principle Field Geologist and Project Manager for Gateway Gold Corporation, where he was responsible for overseeing Nevada field efforts and data collection for a significant drilling operation.  From 2009 to 2011, Mr. Babcock worked for Fronteer Gold in Nevada and participated in their Long Canyon and Northumberland Projects including various endeavors on related Carlin Trend efforts.  Since 2011, Mr. Babcock has served in the capacity of Senior Geologist and Project Manager for Navaho Gold on seven Nevada-based joint venture gold exploration projects.  During this period, he aided in generating a number of new exploration projects as well as managing extensive drilling operations including deep diamond drill programs.  Mr. Babcock was appointed as a Director of the Company on account of his broad experiences, which have fostered an in-depth understanding and expertise in the exploration for and delineation of mineral, base metal, and precious metal deposits. He offers a proven technical background alongside excellent problem-solving capabilities and is an active member of the Society of Economic Geologists, Northwest Mining Association and the Geological Society of Nevada.

Identification of Significant Employees

We have no significant employees other than our officers and directors.

Family Relationships

Ms. Jeanne Goss is married to Mr. Brian Goss.  Other than the foregoing, there are no other officers or directors of the Company who are related to each other.

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Involvement in Certain Legal Proceedings

During the past ten years no director, executive officer, promoter or control person of the Company has been involved in the following:

(1)

A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

(2)

Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

i.

Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

ii.

Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

iii.

Engaging in any type of business practice; or

iv.

Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

(3)

Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;

(4)

Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

(5)

Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

(6)

Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

i.

Any Federal or State securities or commodities law or regulation; or

ii.

Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

iii.

Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

(7)

Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

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Code of Ethics

Our Board of Directors has not adopted a code of ethics due to the fact that we presently only have two directors and we are in the exploration stage of our operations.  We anticipate that we will adopt a code of ethics when we increase either the number of our directors and officers or the number of our employees.

Audit Committee and Audit Committee Financial Expert

The Company does not have an audit committee or an audit committee financial expert (as defined in Item 407 of Regulation S-K) serving on its Board of Directors. All current members of the Board of Directors lack sufficient financial expertise for overseeing financial reporting responsibilities. The Company has not yet employed an audit committee financial expert on its Board due to the inability to attract such a person.

The Company intends to establish an audit committee of the board of directors, which will consist of independent directors.  The audit committee’s duties will be to recommend to the Company’s board of directors the engagement of an independent registered public accounting firm to audit the Company’s financial statements and to review the Company’s accounting and auditing principles.  The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls.  The audit committee will at all times be composed exclusively of directors who are, in the opinion of the Company’s board of directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of change in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to us under Rule 16a-3(e) during the year ended December 31, 2012, Forms 5 and any amendments thereto furnished to us with respect to the year ended December 31, 2012, and the representations made by the reporting persons to us, we believe that during the year ended December 31, 2012, our executive officers and directors and all persons who own more than ten percent of a registered class of our equity securities complied with all Section 16(a) filing requirements.

ITEM 11.  

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the compensation paid to our executive officers during the twelve month periods ended December 31, 2012 and 2011: 

Summary Compensation Table

 

Name And Principal Position	Fiscal Year Ended 12/31	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Gloria Ramirez-Martinez Former President, CEO, CFO, Treasurer	2011	-	-	-	-	-	-	-	-
	2012	-	-	-	-	-	-	-	-
Steven Radvak	2011	-	-	-	-	-	-	-	-
Former Secretary	2012	-	-	-	-	-	-	-	-
Brian Goss	2011	-	-	-	-	-	-	-	-
President, CEO, CFO, Treasurer	2012	9,000	-	-	-	-	-	-	9,000
Jeanne Goss	2011	-	-	-	-	-	-	-	-
Secretary	2012	-	-	-	-	-	-	-	-

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Narrative Disclosure to Summary Compensation Table

There are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.

Outstanding Equity Awards at Fiscal Year-End

No named executive officer or director received any equity awards, or holds exercisable or unexercisable options, as of the years ended December 31, 2012 and 2011.

Compensation of Directors

Our directors receive no extra compensation for their service on our Board of Directors.

Long-Term Incentive Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.  

Compensation Committee

 

We currently do not have a compensation committee of the Board of Directors.  The Board of Directors as a whole determines executive compensation.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security Ownership of Certain Beneficial Owners

The following table sets forth the amount certain information concerning the number of shares of our common stock owned beneficially as of April 1, 2013 by: (i) each of our directors; (ii) each of our named executive officers; and (iii) each person or group known by us to beneficially own more than 5% of our outstanding shares of common stock.  Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own.

Name and Address of Beneficial Owner	Title of Class	Amount and Nature of  Beneficial Ownership (1) (#)	Percent of Class (2) (%)
Brian Goss(3) 1031 Railroad Street, Suite 102A Elko, NV 89801	Common	0	0.00%
Jeanne Goss(4) 1031 Railroad Street, Suite 102A Elko, NV 89801	Common	0	0.00%
Jason Babcock(5) 1031 Railroad Street, Suite 102A Elko, NV 89801	Common	0	0.00%
All Officers and Directors as a Group (3 Persons)	Common	0	0.00%

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(1)

The number and percentage of shares beneficially owned is determined under the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose.  Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days through the exercise of any stock option or other right.  The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.

(2)

Based on 28,700,000 shares of common stock outstanding on April 1, 2013.

(3)

Brian Goss is the President, CEO, CFO, Treasurer and a Director of the Company.  His beneficial ownership includes 0 common shares.

(4)

Jeanne Goss is the Secretary of the Company.  Her beneficial ownership includes 0 common shares.

(5)

Jason Babcock is a Director of the Company.  His beneficial ownership includes 0 common shares.

Changes in Control

There are no present arrangements or pledges of the Company’s securities which may result in a change in control of the Company.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Director Independence

For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2).  The OTCBB on which shares of common stock are quoted does not have any director independence requirements.  The NASDAQ definition of “Independent Director” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

According to the NASDAQ definition, Brian Goss is not an independent director because he is also an executive officer of the Company.  However, Jason Babcock is an independent director of the Company.

Related Party Transactions

As of December 31, 2012 and December 31, 2011, the Company has received cash advances from a shareholder or related party of $14,776 and $56,572.  The advances are non-interest bearing, unsecured and due upon demand.  Imputed interest in the amount of $Nil and $1,360 is included in additional paid in capital for the periods ended December 31, 2012 and December 31, 2011.

 

Other than the foregoing, none of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.

With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manner:

 

·

disclosing such transactions in reports where required;

·

disclosing in any and all filings with the SEC, where required;

·

obtaining disinterested directors consent; and

·

obtaining shareholder consent where required.

Review, Approval or Ratification of Transactions with Related Persons

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

	Year Ended December 31, 2012	Year Ended December 31, 2011
Audit fees	$9,000	$9,000
Audit-related fees	$0	$0
Tax fees	$0	$0
All other fees	$0	$0
Total	$9,000	$9,000

Audit Fees

During the fiscal year ended December 31, 2012, we incurred approximately $­­­9,000 in fees to our principal independent accountants for professional services rendered in connection with the audit and review of our financial statements for fiscal year ended December 31, 2012.

During the fiscal year ended December 31, 2011, we incurred approximately $9,000 in fees to our principal independent accountants for professional services rendered in connection with the audit and review of our financial statements for fiscal year ended December 31, 2011.

Audit-Related Fees

The aggregate fees billed during the fiscal years ended December 31, 2012 and 2011 for assurance and related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements (and are not reported under Item 9(e)(1) of Schedule 14A) was $0 and $0, respectively.

Tax Fees

The aggregate fees billed during the fiscal years ended December 31, 2012 and 2011 for professional services rendered by our principal accountant tax compliance, tax advice and tax planning were $0 and $0, respectively.

All Other Fees

The aggregate fees billed during the fiscal years ended December 31, 2012 and 2011 for products and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A) was $0 and $0, respectively.

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PART IV

 

ITEM 15.

EXHIBITS.

Exhibit
Number	Description of Exhibit	Filing
3.01	Articles of Incorporation	Filed with the SEC on January 17, 2008 as part of our Registration Statement on Form SB-2.
3.01(a)	Certificate of Amendment	Filed with the SEC on January 17, 2008 as part of our Registration Statement on Form SB-2.
3.01(b)	Amended and Restated Articles of Incorporation	Filed with the SEC on September 3, 2010 as part of our Current Report on Form 8-K.
3.01(c)	Certificate of Amendment	Filed with the SEC on June 28, 2012 as part of our Current Report on Form 8-K.
3.02	Bylaws	Filed with the SEC on January 17, 2008 as part of our Registration Statement on Form SB-2.
10.01	Stock Purchase Agreement between Gloria Ramirez-Martinez and Daniel MacLean dated December 3, 2009.	Filed with the SEC on March 15, 2011 as part of our Amended Registration Statement on Form S-1/A.
10.02	Consulting Agreement between the Company and Steve Radvak dated September 10, 2010.	Filed with the SEC on September 13, 2010 as part of our Current Report on Form 8-K.
10.03	Property Option Agreement between the Company and MinQuest, Inc. dated October 22, 2011	Filed with the SEC on October 27, 2011 as part of our Current Report on Form 8-K.
10.04	Property Option Agreement between the Company and Stanley Smith dated June 1, 2012	Filed with the SEC on June 7, 2012 as part of our Current Report on Form 8-K.
10.05	Minerals Lease Agreement between the Company and Mr. Jonathan B. Smith, Mr. James I. Smith and Ms. Celinda S. Hicks dated July 11, 2012	Filed with the SEC on August 1, 2012 as part of our Current Report on Form 8-K.
10.06	Settlement Agreement between the Company and Gloria Ramirez-Martinez dated July 26, 2012	Filed with the SEC on August 1, 2012 as part of our Current Report on Form 8-K.
10.07	Advisory Board Member Agreement by and between the Company and Roger Szelmeczka dated December 10, 2012	Filed with the SEC on December 14, 2012 as part of our Current Report on Form 8-K.
16.01	Letter from Moore & Associates, Chartered dated August 11, 2009	Filed with the SEC on August 12, 2009 as part of our Current Report on Form 8-K.
16.02	Letter from Seale & Beers, CPAs dated September 15, 2009	Filed with the SEC on September 16, 2009 as part of our Current Report on Form 8-K.
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14	Filed herewith.
31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14	Filed herewith.
32.01	CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.
101.INS*	XBRL Instance Document	Filed herewith.
101.SCH*	XBRL Taxonomy Extension Schema Document	Filed herewith.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document	Filed herewith.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.

*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, 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 caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GRAPHITE CORP.

Dated:  April 5, 2013

/s/ Brian Goss                            

By: Brian Goss

Its: President, Principal Executive Officer,

Principal Financial Officer and Treasurer

Pursuant to the requirement 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:

Dated: April 5, 2013

/s/ Brian Goss                            

Brian Goss

Its:  Director

Dated: April 5, 2013

/s/ Jason Babcock                            

Jason Babcock

Its:  Director

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