GRAPHITE CORP - FORM 10-Q - November 19, 2013

Attached files

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EXCEL - IDEA: XBRL DOCUMENT - GRAPHITE CORP	Financial_Report.xls
EX-31.1 - EXHIBIT 31.1 SECTION 906 CERTIFICATION - GRAPHITE CORP	f10q093013_ex31z1.htm
EX-31.2 - EXHIBIT 31.2 SECTION 302 CERTIFICATION - GRAPHITE CORP	f10q093013_ex31z2.htm
EX-32.1 - EXHIBIT 32.1 SECTION 906 CERTIFICATION - GRAPHITE CORP	f10q093013_ex32z1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

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

For the quarterly period ended September 30, 2013

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

For the transition period from _____ to ____

Commission File No. 000-54336

GRAPHITE CORP.

(Exact name of registrant as specified in its charter)


Nevada	26-0641585
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1031 Railroad Street, Suite 102A

Elko, Nevada 89801

(Address of principal executive offices, zip code)

(775) 753-6605

(Registrant’s telephone number, including area code)

______________________________________________________________

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

Indicate by check mark whether the issuer (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 . No X .

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):


Large accelerated filer	.	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 Exchange Act Rule 12b-2 of the Exchange Act): Yes . No X .

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes . No .

APPLICABLE ONLY TO CORPORATE ISSUERS

As of November 19, 2013, there were 28,700,000 shares of common stock, $0.0001 par value per share, outstanding.

GRAPHITE CORP.

(An Exploration Stage Company)

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED SEPTEMBER 30, 2013

INDEX


Index			Page

Part I.	Financial Information		4

	Item 1.	Financial Statements	4

		Balance Sheets as of September 30, 2013 (unaudited) and December 31, 2012.	4

		Statements of Operations for the three and nine months ended September 30, 2013 and 2012, and the period from August 3, 2007 (Inception) to September 30, 2013 (unaudited).	5

		Statements of Cash Flows for the nine months ended September 30, 2013 and 2012, and the period from August 3, 2007 (Inception) through September 30, 2013 (unaudited).	6

		Notes to Financial Statements (unaudited).	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	13

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	20

	Item 4.	Controls and Procedures.	20

Part II.	Other Information		21

	Item 1.	Legal Proceedings.	21

	Item 1A.	Risk Factors	21

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	21

	Item 3.	Defaults Upon Senior Securities.	21

	Item 4.	Mining Safety Disclosures.	21

	Item 5.	Other Information.	21

	Item 6.	Exhibits.	22

Signatures			22

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q of Graphite Corp., a Nevada corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things: the volatility of minerals prices, the possibility that exploration efforts will not yield economically recoverable quantities of minerals, accidents and other risks associated with mineral exploration and development operations, the risk that the Company will encounter unanticipated geological factors, the Company’s need for and ability to obtain additional financing, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration and development plans, other factors over which we have little or no control; and other factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”).

Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED FINANCIAL STATEMENTS.


Graphite Corp.
(formerly First Resources Corp.)
(An Exploration Stage Company)
Balance Sheets
(unaudited)

				September 30		December 31,
				2013		2012
ASSETS

CURRENT ASSETS

	Cash		$	520	$	184,989
	Prepaid expenses			2,283		5,363

		Total Current Assets		2,803		190,352

		TOTAL ASSETS	$	2,803	$	190,352

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

	Accounts payable		$	54,818	$	5,924
	Related party payable			14,776		14,776
	Loan payable			30,000		-

		Total Current Liabilities		99,594		20,700

STOCKHOLDERS' EQUITY (DEFICIT)

	Common stock: $0.0001 par value, 300,000,000 shares authorized, 28,700,000 issued and outstanding as of September 30, 2013 and December 31, 2012 respectively

				2,870		2,870
	Additional paid-in capital			2,323,508		2,251,087
	Deficit accumulated during the exploration stage			(2,423,169)		(2,084,305)

		Total Stockholders' Equity (Deficit)		(96,791)		169,652

		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	2,803	$	190,352


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


Graphite Corp.
(Formerly First Resources Corp.)
(An Exploration Stage Company)
Statements of Operations
(unaudited)

												From
				For the		For the		For the		For the		Inception
				Three		Three		Nine		Nine		on August
				Months		Months		Months		Months		3, 2007
				Ended		Ended		Ended		Ended		Through
				September		September		September		September		September
				30, 2013		30, 2012		30, 2013		30, 2012		30, 2013
REVENUES			$	-	$	-	$	-	$	-	$	-

EXPENSES

	Mineral claims and exploration			18,072		31,172		125,112		32,373		251,623
	Mineral claim Impairment			-		-		-		-		375,831
	Professional fees			7,585		-		45,875		-		135,466
	Consulting			18,000		-		27,000		-		129,125
	General and administrative			34,660		112,173		140,877		195,023		1,526,456

		Total Expenses		78,317		143,345		338,864		227,396		2,418,501

LOSS FROM OPERATIONS				(78,317)		(143,345)		(338,864)		(227,396)		(2,418,501)

	Debt settlement			-		-		-		-		(4,668)
	Income tax expense			-		-		-		-		-

NET LOSS			$	(78,317)	$	(143,345)	$	(338,864)	$	(227,396)	$	(2,423,169)

BASIC AND DILUTED LOSS PER SHARE				(0.00)		(0.01)		(0.01)		(0.01)

WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED				28,700,000		16,956,204		28,700,000		19,685,401


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


(Formerly First Resources Corp.)
(An Exploration Stage Company)
Statements of Cash Flows
(unaudited)

									From
					For the		For the		Inception
					Nine		Six		on August
					Months		Months		3, 2007
					Ended		Ended		Through
					September		September		September
					30, 2013		30, 2012		30, 2013
OPERATING ACTIVITIES
	Net loss			$	(338,864)	$	(227,396)	$	(2,423,169)
	Adjustments to reconcile net loss to net cash used by operating activities:

		Stock based compensation			72,421		-		1,292,992
		Impairment of mining options			-		-		350,000
		Imputed interest on shareholder loan			-		9,204		3,386
	Changes in operating assets and liabilities
		(Decrease) increase in prepaid expenses			3,080		(4,725)		(2,283)
		Increase (decrease) in accounts payable			48,894		7,711		54,818
			Net Cash Used in
			Operating Activities		(214,469)		(215,206)		(724,256)

INVESTING ACTIVITIES
		Website			-		(20,000)		-
		Cash paid for mining option			-		(153,500)		(150,000)
			Net Cash used in
			Investing Activities		-		(173,500)		(150,000)

FINANCING ACTIVITIES
		Proceeds from loan			30,000		-		30,000
		Proceeds from related party loans			-		3,500		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		30,000		699,000		874,776

		NET INCREASE (DECREASE) IN CASH			(184,469)		310,294		520
		CASH AT BEGINNING OF PERIOD			184,989		70		-

		CASH AT END OF PERIOD		$	520	$	310,364	$	520

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

	CASH PAID FOR:
		Interest		$	-	$	-	$	-
		Income Taxes		$	-	$	-	$	-

	NONCASH FINANCING ACTIVITIES
		Stock issued for mineral option		$	-	$	-	$	200,000


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

GRAPHITE CORP.

(Formerly First Resources Corp.)

(An Exploration Stage Company)

Notes to Financial Statements

September 30, 2013

(unaudited)

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 September 30, 2013 and December 31, 2012, the Company had no cash equivalents.

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 September 30, 2013, the Company had not adopted a stock option plan. For the period ended September 30, 2013, stock option expense of $72,421 was recorded for the 250,000 options granted on December 10, 2012 (see note 6). For September 30, 2012 there were no stock options or related expense.

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 September 30, 2013 and December 31, 2012, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

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 and liabilities within the fair value hierarchy utilized to measure fair value on a recurring basis as of September 30, 2013 and December 31, 2012:


	Description	Level 1	Level 2	Level 3	Total Realized Loss
Sept. 30, 2013	None	$ -	$ -	$ -	$ -
Dec. 31, 2012	None	$ -	$ -	$ -	$ -

Recently issued accounting pronouncements

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and

Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

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.

NOTE 4 – RELATED PARTY PAYABLES

As of September 30, 2013 and December 31, 2012, the Company has received cash advances from a shareholder or related party of $14,776 and $14,776. 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 establshed, 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.

The Company has not met it’s obligation for June 1, 2013 due to a dispute with respect to the underlying title of the mineral interest. As such, the option is currently being examined further. The Company has not accrued the June 1, 2013 payment as there is significant doubt as to whether this payment will be made.

NOTE 6 – LOANS PAYABLE

The Company received a loan of $15,000 on June 27, 2013 that bears interest at 8% per annum and is due on June 27, 2014. Interest expense of $309 was recorded for this loan.

The Company received a loan of $15,000 on August 22, 2013 that bears interest at 8% per annum and is due on August 22, 2014. Interest expense of $131 was recorded for this loan.

NOTE 7 – 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.

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 closing 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 valued at $200,000 based on the closing trading value of the shares on the date of issuance being $0.20 per share. (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	2.69	$0.70	-

The Company recorded $72,421 (2012: $Nil) in stock option compensation expense, in relation to these options, during the period ended September 30, 2013. No stock option compensation expense was recorded in the nine months ended September 30, 2012.

NOTE 8 - INCOME TAXES

The Company has a net operating loss carried forward of $780,177 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:


	Nine Months Ended September 30, 2013 $	Nine Months Ended September 30, 2012 $

Income tax recovery at statutory rate	90,590	77,315

Valuation allowance change	(90,590)	(77,315)

Provision for income taxes	–	–

The significant components of deferred income tax assets and liabilities at September 30, 2013 and December 31, 2012 are as follows:


	September 30, 2013 $	December 31, 2012 $

Net operating loss carried forward	265,260	174,670

Valuation allowance	(265,260)	(174,670)

Net deferred income tax asset	–	–

NOTE 9 – 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.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following information should be read in conjunction with (i) the financial statements of Graphite Corp., a Nevada corporation and exploration-stage company, and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the December 31, 2012 audited financial statements and related notes included in the Company’s Annual Report on Form 10-K (File No. 000-54336), as filed with the Securities and Exchange Commission on April 8, 2013. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute “forward-looking” statements

OVERVIEW

Graphite Corp. (the “Company”) was incorporated in the State of Nevada on August 3, 2007 and established a fiscal year end of December 31. It is an exploration-stage Company.

Going Concern

To date the Company has no operations or revenues and consequently has incurred recurring losses from operations. No revenues are anticipated until we complete the financing we endeavor to obtain, as described in our Annual Report on Form 10-K (File No. 000-54336), as filed with the Securities and Exchange Commission on April 8, 2013, and implement our initial business plan. The ability of the Company to continue as a going concern is dependent on raising capital to fund our business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.

Our activities have been financed from the proceeds of share subscriptions and loans from shareholders. From our inception to September 30, 2013, we have raised a total of $830,000 from private offerings of our common stock and received proceeds of $69,276 in related party loans, and $30,000 in a non-related party loan.

The Company plans to raise additional funds through debt or equity offerings. There is no guarantee that the Company will be able to raise any capital through this or any other offerings.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the policies below as critical to our business operations and to the understanding of our financial results:

Basis of Presentation

Use of Estimates

Cash and Cash Equivalents

Mineral Properties

Stock-based Compensation

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”.

Basic and Diluted Net Loss Per Share

Income Taxes

Comprehensive Loss

Financial Instruments

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 following table presents assets and liabilities within the fair value hierarchy utilized to measure fair value on a recurring basis as of September 30, 2013 and December 31, 2012:


	Description	Level 1	Level 2	Level 3	Total Realized Loss
Sept. 30, 2013	None	$ -	$ -	$ -	$ -
Dec. 31, 2012	None	$ -	$ -	$ -	$ -

Recently issued accounting pronouncements

PLAN OF OPERATION

Our plan of operation for the next twelve months is as follows.

The Carr Leases and Cahaba Forest Management Option Agreement

The following table represents the work that Graphite Corp. plans to accomplish on the property underlying the Carr Leases and Cahaba Forest Management Option Agreement in the upcoming 12-month period. We will need to secure additional funding to accomplish all the work in the plan and the amount of work may be cut or re-prioritized based on available funding.

Table 1: Carr Leases and Cahaba Forest Management Twelve Month Operating Budget.


Land title research of Carr/Cahaba Properties	20,000

Assays for grid survey phase 1($45/sample)	67,500
Geologic mapping and surveying mines	37,500

Geophysical EM baseline study	25,000
Geophysical EM survey	75,000

Drill program permitting	15,000
Drill Mobe and De-mobe	30,000
Drilling cost ($40/ft * 10,000 ft.)	400,000
Project geologists'	100,000
Warehouse/core facility	13,500
set up warehouse, saw, tables, etc.	15,000
core processing (2 geotechs)	45,000
Assays of drill core (2000 samples @ $45/samp)	90,000
sample shipping (2000 samples * $10/samp)	20,000

Land research in new areas	25,000
Prospecting new ground	45,000
Land payments	55,000

10% Contingency	119,725

Total 2013 Budget for Clay County Project:	1,198,225

We plan to commence the exploration program detailed above in the winter of 2013-2014. We expect the work program to take approximately 12 months to complete, assuming the company raises the funds to complete the work. The Company does not have the funds to commence work. Costs are management’s estimates and the actual project costs may exceed our estimates. To date, we have not commenced exploration. In order to begin work detailed above on the Carr Leases and Cahaba Forest Management Option Agreement, we will need to raise approximately $1,316,975. Until such funds are obtained by the Company via debt, equity or other form of financing, we will be unable to take concrete steps towards the implementation of work plan. In order to commence work, we will need to secure additional financing. Currently, we have no plan or commitment which would provide us with the required capital to begin work. The Company plans to hire third-parties to perform the work detailed above.

The Crystal Project

The following table represents the work that Graphite Corp plans to accomplish on the property underlying the Crystal Project in the upcoming 12-month period. We will need to secure additional funding to accomplish all the work in the plan and the amount of work may be cut or re-prioritized based on available funding.

Table 2: Crystal Project Twelve Month Operating Budget.


Land Holding	28,966
Planning	19,500

Geophysical EM baseline study	15,000
Geophysical EM survey	35,000

Disturbance Permit Preperation and Application	8,000
Reclamation Bond	25,000

Dirtwork-Trench Excavation	25,000
Dirtwork oversight and Geologic Mapping	15,000
Geochemical Sampling-Surface	10,000
Surface Sampling Assay Cost (300 samples * $45/sample)	13,500

Dirtwork-Road and Pad Building	35,000
Reverse Circulation Rig-Drill 5 holes	65,000
Drilling Project Geologist/Supervisor	25,000
Dirtwork-Reclamation	30,000
Bond Refund	(25,000)

10% Contingency	32,497

Total 2013 Budget for Crystal Project:	357,463

We plan to commence the exploration program detailed above in the spring of 2013-2014. We expect the work program to take approximately 12 months to complete, assuming the company raises the funds to complete the work. The Company does not have the funds to commence work. Costs are management’s estimates and the actual project costs may exceed our estimates. To date, we have not commenced exploration. In order to begin work detailed above on the property underlying the Crystal Project, we will need to raise approximately $357,463. Until such funds are obtained by the Company via debt, equity or other form of financing, we will be unable to take concrete steps towards the implementation of work plan. In order to commence work, we will need to secure additional financing. Currently, we have no plan or commitment which would provide us with the required capital to begin work. The Company plans to hire third-parties to perform the work detailed above.

Results of Operations

The three and nine months ended September 30, 2013 and 2012, and the period from August 3, 2007 (Inception) to September 30, 2013 (unaudited)

We recorded no revenues for the three months ended September 30, 2013 and 2012. From the period of August 3, 2007 (inception) to September 30, 2013, we recorded no revenues.

For the three months ending September 30, 2013, total operating expenses were $78,317, of which mineral claims and exploration were $18,072, professional fees were $7,585, consulting fees were $18,000 and general and administrative expenses were $34,660. For the three months ending September 30, 2012, total operating expenses were $143,345, which comprised of mineral claims and exploration of $31,172 and general and administrative expenses of $112,173.

For the nine months ending September 30, 2013, total operating expenses were $338,864, of which mineral claims and exploration were $125,112, professional fees were $45,875, consulting fees were $27,000 and general and administrative expenses were $140,877. For the nine months ending September 30, 2012, total operating expenses were $227,396, of which mineral claims and exploration were $32,373, and general and administrative expenses were $195,023.

From the period of August 3, 2007 (inception) to September 30, 2013, we incurred total operating expenses and a loss from operations of $2,418,501. Our net loss at September 30, 2013, was $2,423,169.

Liquidity and Capital Resources

At September 30, 2013, we had a cash balance of $520. We do not have sufficient cash on hand to commence any phase of our exploration program or to fund our ongoing operational expenses beyond 12 months. We will need to raise funds to commence our exploration program and fund our ongoing operational expenses. Additional funding will likely come from equity financing from the sale of our common stock or sale of part of our interest in our mineral claims. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our Company. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our exploration activities and ongoing operational expenses. In the absence of such financing, our business will likely fail. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our exploration of our minerals claims and our business will fail.

Cashflow from Operating Activities

During the period ended September 30, 2013, the Company used $214,469 of cash for operating activities compared to the use of $215,206 of cash for operating activities during the period ended September 30, 2012. The change in net cash used in operating activities is attributed to increase in losses offset by increase in accounts payable.

Cashflow from Investing Activities

During the period ended September 30, 2013, the Company used $nil of cash for investing activities compared to $173,500 for the period ended September 30, 2012, where the Company paid $153,500 to acquire an mining option and spent $20,000 to build a website.

Cashflow from Financing Activities

During the period ended September 30, 2013, the Company received $30,000 of cash from financing activities compared to $699,000 for the period ended September 30, 2012.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2013, due to the material weaknesses resulting from the Board of Directors not currently having any members who qualify as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on April 8, 2013, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

Changes in Internal Control over Financial Reporting

Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is not currently subject to any legal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either a plaintiff or defendant. There are no such pending legal proceedings to which the Company is a party that, in the opinion of management, is likely to have a material adverse effect on the Company’s business, financial condition or results of operations.

ITEM 1A. RISK FACTORS

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINING SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

(a) Exhibits required by Item 601 of Regulation SK.


Exhibit		Description

3.1.1		Amended and Restated Articles of Incorporation (1)
3.1.2		Certificate of Amendment to Articles of Incorporation (2)
3.2.1		Bylaws (3)
31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS *		XBRL Instance Document
101.SCH *		XBRL Taxonomy Extension Schema Document
101.CAL *		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF *		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB *		XBRL Taxonomy Extension Label Linkbase Document
101.PRE *		XBRL Taxonomy Extension Presentation Linkbase Document


*	XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(1)

Filed and incorporated by reference to the Company’s Current Report on Form 8-K, filed with the Commission on September 3, 2010.

(2)

Filed and incorporated by reference to the Company’s Current Report on Form 8-K, filed with the Commission on June 28, 2012.

(3)

Filed and incorporated by reference to the Company’s Registration Statement on Form SB-2, filed with the Commission on January 17, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	GRAPHITE CORP.
	(Name of Registrant)

Date: November 19, 2013	By:	/s/ Brian Goss
		Name: Brian Goss
		Title: President (principal executive officer, principal accounting officer and principal financial officer)

EXHIBIT INDEX


Exhibit		Description

3.1.1		Amended and Restated Articles of Incorporation (1)
3.1.2		Certificate of Amendment to Articles of Incorporation (2)
3.2.1		Bylaws (3)
31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS *		XBRL Instance Document
101.SCH *		XBRL Taxonomy Extension Schema Document
101.CAL *		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF *		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB *		XBRL Taxonomy Extension Label Linkbase Document
101.PRE *		XBRL Taxonomy Extension Presentation Linkbase Document


*	XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(1)

Filed and incorporated by reference to the Company’s Current Report on Form 8-K, filed with the Commission on September 3, 2010.

(2)

Filed and incorporated by reference to the Company’s Current Report on Form 8-K, filed with the Commission on June 28, 2012.

(3)

Filed and incorporated by reference to the Company’s Registration Statement on Form SB-2, filed with the Commission on January 17, 2008.

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