GRAPHITE CORP - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - GRAPHITE CORP	Financial_Report.xls
EX-32.1 - CERTIFICATION - GRAPHITE CORP	grph_ex321.htm
EX-31.1 - CERTIFICATION - GRAPHITE CORP	grph_ex311.htm
EX-31.2 - CERTIFICATION - GRAPHITE CORP	grph_ex312.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 March 31, 2014

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

For the transition period from _____ to ____

Commission File No. 000-54336

GRAPHITE CORP.

(Exact name of registrant as specified in its charter)

Nevada		26-0641585
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer 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 o

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

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act): Yes o 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 oNo o

APPLICABLE ONLY TO CORPORATE ISSUERS

As of May 13, 2014, there were 27,700,000 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 MARCH 31, 2014

INDEX

Index			Page

Part I.	Financial Information

	Item 1.	Financial Statements	4

		Balance Sheets as of March 31, 2014 (unaudited) and December 31, 2013.		4

		Statements of Operations for the three months ended March 31, 2014 (unaudited) and 2013, and from Inception (August 3, 2007) through March 31, 2014.		5

		Statements of Cash Flows for the three months ended March 31, 2014 (unaudited) and 2013, and from Inception (August 3, 2007) through March 31, 2014.		7

		Notes to Condensed Financial Statements (Unaudited).		8

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		18

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.		24

	Item 4.	Controls and Procedures.		24

Part II.	Other Information

	Item 1.	Legal Proceedings.		25

	Item 1A.	Risk Factors.		25

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.		25

	Item 3.	Defaults Upon Senior Securities.		25

	Item 4.	Mine Safety Disclosures.		25

	Item 5.	Other Information.		25

	Item 6.	Exhibits.		26

Signatures				27

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.
(An Exploration Stage Company)
Balance Sheets
(unaudited)

	March 31,			December 31,
	2014			2013

ASSETS

CURRENT ASSETS

Cash	$	4,639		$	253

Total Current Assets		4,639			253


TOTAL ASSETS	$	4,639		$	253

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

Accounts payable	$	13,693		$	13,657
Accounts payable - related party		53,482			44,991
Related party payable		14,776			14,776
Loan payable		45,000			30,000

Total Current Liabilities		126,951			103,424

STOCKHOLDERS' EQUITY (DEFICIT)

Preferred stock: $0.0001 par value, 10,000,000 shares
authorized, none issued and outstanding
as of March 31, 2014 and December 31, 2013 respectively
Common stock: $0.0001 par value, 300,000,000 shares authorized,
27,700,000 issued and outstanding as of March 31, 2014 and
28,700,000 issued and outstanding as of December 31, 2013 respectively		2,770			2,870
Additional paid-in capital		2,371,889			2,347,914
Deficit accumulated during the exploration stage		(2,496,971	)		(2,453,955	)

Total Stockholders' Equity (Deficit)		(122,312	)		(103,171	)

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)	$	4,639		$	253

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

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

	For the			For the			From Inception
	Three Months			Three Months			on August 3,
	Ended			Ended			2007 Through
	March 31,			March 31,			March 31,
	2014			2013			2014

REVENUES	$	-		$	-		$	-

EXPENSES

Mineral claims and exploration		1,043			71,394			242,666
Mineral claim Impairment		-			-			375,831
Professional fees		6,750			23,615			142,546
Consulting		15,000			9,000			153,125
General and administrative		27,223			58,976			1,585,135

Total Expenses		50,016			162,985			2,499,303

LOSS FROM OPERATIONS		(50,016	)		(162,985	)		(2,499,303	)

Debt settlement		7,000			-			2,332
Income tax expense		-			-			-

NET LOSS	$	(43,016	)	$	(162,985	)	$	(2,496,971	)

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

WEIGHTED AVERAGE SHARES OUTSTANDING,
BASIC AND DILUTED		28,555,556			28,700,000

The accompanying notes are an integral part of these financial statements

Graphite Corp.

(An Exploration Stage Company)

Statements of Stockholders' Equity (Deficit)

(unaudited)

									Deficit
									Accumulated
							Additional		During the			Total
	Common Stock						Paid-in		Exploration			Stockholders'
	Shares			Amount			Capital		Stage			Equity

Balance at inception, August 3, 2007		-		$	-		$	-	$	-		$	-

Common stock issued for cash		1,500,000			150			14,850		-			15,000

Net loss from inception on August 3,
2007 through December 31, 2007		-			-			-		(19,589	)		(19,589	)

Balance, December 31, 2007		1,500,000			150			14,850		(19,589	)		(4,589	)

Common stock issued for cash		1,000,000			100			39,900		-			40,000

Net loss for the year ended
December 31, 2008		-			-			-		(34,552	)		(34,552	)

Balance, December 31, 2008		2,500,000			250			54,750		(54,141	)		859

Imputed interest		-			-			576		-			576

Net loss for the year ended
December 31, 2009		-			-			-		(19,409	)		(19,409	)

Balance, December 31, 2009		2,500,000			250			55,326		(73,550	)		(17,974	)

Shares issued to President for Cash		10,000,000			1,000			24,000		-			25,000
Stock based compensation		-			-			875,000		-			875,000
Stock issued for services		200,000			20			339,980		-			340,000
Imputed interest		-			-			1,450		-			1,450
Net loss for the year ended
December 31, 2010		-			-			-		(1,246,808	)		(1,246,808	)

Balance, December 31, 2010		12,700,000			1,270			1,295,756		(1,320,358	)		(23,332	)

Imputed interest		-			-			1,360		-			1,360
Net loss for the year ended
December 31, 2011		-			-			-		(45,410	)		(45,410	)

Balance, December 31, 2011		12,700,000			1,270			1,297,116		(1,365,768	)		(67,382	)

Common stock issued for cash		15,000,000			1,500			748,500		-			750,000
Shares granted for mineral options		1,000,000			100			199,900					200,000
Stock based compensation		-			-			5,571		-			5,571
Net loss for the year ended
December 31, 2012		-			-			-		(718,537	)		(718,537	)

Balance, December 31, 2012		28,700,000			2,870			2,251,087		(2,084,305	)		169,652

Stock based compensation		-			-			96,827		-			96,827
Net loss for the year ended
December 31, 2013		-			-			-		(369,650	)		(369,650	)

Balance, December 31, 2013		28,700,000			2,870			2,347,914		(2,453,955	)		(103,171	)

Cancelled shares		(1,000,000	)		(100	)		100		-			-
Stock based compensation		-			-			23,875		-			23,875
Net loss for the period ended
March 31, 2014		-			-			-		(43,016	)		(43,016	)

Balance, March 31, 2014		27,700,000		$	2,770		$	2,371,889	$	(2,496,971	)	$	(122,312	)

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

Graphite Corp.

(An Exploration Stage Company)

Statements of Cash Flows

(unaudited)

	For the			For the			From Inception
	Three Months			Three Months			on August 3,
	Ended			Ended			2007 Through
	March 31,			March 31,			March 31,
	2014			2013			2014
OPERATING ACTIVITIES
Net loss	$	(43,016	)	$	(162,985	)	$	(2,496,971	)
Adjustments to reconcile net loss to net cash
used by operating activities:
Stock based compensation		23,875			23,875			1,341,273
Impairment of mining options		-			-			350,000
Imputed interest on shareholder loan		-			-			3,386
Changes in operating assets and liabilities
Increase (decrease) in accounts payable		36			(7,819	)		13,693
Increase (decrease) in accounts payable - related party		8,491			21,444			53,482
Net Cash Used in
Operating Activities		(10,614	)		(125,485	)		(735,137	)

INVESTING ACTIVITIES
Cash paid for mining option		-			-			(150,000	)
Net Cash used in
Investing Activities		-			-			(150,000	)

FINANCING ACTIVITIES
Proceeds from related party loans		-			-			69,276
Repayments on related party loans		-			-			(54,500	)
Proceeds from loans		15,000			-			45,000
Common stock issued for cash		-			-			830,000
Net Cash Provided by
Financing Activities		15,000			-			889,776

NET INCREASE (DECREASE) IN CASH		4,386			(125,485	)		4,639
CASH AT BEGINNING OF PERIOD		253			184,989			-

CASH AT END OF PERIOD	$	4,639		$	59,504		$	4,639

SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION

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

NONCASH FINANCING ACTIVITIES
Stock issued for mineral option	$	-		$	-		$	200,000
Cancellation of shares	$	100		$	-		$	100

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

GRAPHITE CORP.

(An Exploration Stage Company)

Notes to Financial Statements

March 31, 2014

(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 March 31, 2014 and December 31, 2013, 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 March 31, 2014, the Company had not adopted a stock option plan. For the period ended March 31, 2014, stock option expense of $23,875 (2013: $23,875) was recorded.

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 March 31, 2014 and December 31, 2013, 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 March 31, 2014 and December 31, 2013:

Description

Level 1

Level 2

Level 3

Total Realized

Loss

March 31, 2014

None

Dec. 31, 2013

None

Recently issued accounting pronouncements

In July 2013, FASB issued ASU No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." The provisions of ASU No. 2013-11 require an entity to present an unrecognized tax benefit, or portion thereof, in the statement of financial position as a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward, with certain exceptions related to availability. ASU No. 2013-11 is effective for interim and annual reporting periods beginning after December 15, 2013. The adoption of ASU No. 2013-11 is not expected to have a material impact on the Company's Consolidated Financial Statements.

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 March 31, 2014 and December 31, 2013, the Company has received cash advances from a shareholder or related party of $0 and $14,776. The advances are non interest bearing, unsecured and due upon demand.

As of March 31, 2014 and December 31, 2013, the Company has a payable balance owing of $53,482 and $44,991, respectively, to a company affiliated with an officer of the Company.

NOTE 5 – MINERAL PROPERTY

On June 1, 2012, the Company entered into that certain Property Option Agreement whereby the the Company shall be granted 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”) 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).

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. As a result of the dispute, 1,000,000 shares were returned to the Company and cancelled.

On July 11, 2012, the Company entered into that certain Minerals Lease Agreement 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 1st 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.

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.

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.

The Company received a loan of $5,000 on January 16, 2014 that bears interest at 8% per annum and is due on January 16, 2015.

The Company received a loan of $10,000 on March 12, 2014 that bears interest at 8% per annum and is due on March 12, 2016.

Interest expense of $533 was recorded during the three months ended March 31, 2014 related to the above loans, totaling $45,000 as of March 31, 2014.

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).

During the period ended March 31, 2014, 1,000,000 shares were returned to the Company and cancelled.

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..44	$	0.70		-

The Company recorded $23,875 (2013: $23,875) in stock option compensation expense, in relation to these options, during the three months ended March 31, 2014.

NOTE 8 – INCOME TAXES

The Company has a net operating loss carried forward of $805,698 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:

	Three Months Ended March 31, 2014 $			Three Months Ended March 31, 2013 $

Income tax recovery at statutory rate		6,508			47,297

Valuation allowance change		(6,508	)		(47,297	)

Provision for income taxes		–			–

The significant components of deferred income tax assets and liabilities at March 31, 2014 and December 31, 2013 are as follows:

	March 31, 2014 $			December 31, 2013 $

Net operating loss carried forward		273,938			267,430

Valuation allowance		(273,938	)		(267,430	)

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, 2013 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 4, 2014. 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 4, 2014, 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.

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”.

As at March 31, 2014, the Company had not adopted a stock option plan. For the period ended March 31, 2014, 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

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 March 31, 2014 and December 31, 2013:

Description

Level 1

Level 2

Level 3

Total Realized Loss

March 31, 2014

None

Dec. 31, 2013

None

Recently issued accounting pronouncements

PLAN OF OPERATION

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

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. The sample results from the Crystal Project are as follows:

	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 directed 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 samples were taken using industry standard geologists’ best practices for rock chip sampling. The types of rock chip samples included spot/grab samples, composite rock chip samples, and channel samples. All the samples were taken from outcropping rocks or roadcuts at surface. Inspectorate processed the samples through its sister company, ACME Labs in Vancouver, BC. The process used to assay the samples for graphitic carbon was Inspectorate code C-GP-OR and/or ACME code 2A09. The process involved preparing the sample by crushing it, heating the sample to 600 degrees C, using an HCl leach, and testing the residue for graphitic carbon by using the LECO method. ACME Lab is an ISO 17025 certified lab and its internal check assays and equipment calibration meet the ISO 17025 standards. The field study also included a physical review of the mineral lease areas to include specific details and features of interest.

The following table represents the work that Graphite Corp plans and the associated costs to accomplish the first phase of graphite exploration on the property underlying the Crystal Project in the upcoming 12-month period. Initially the work will entail geologic mapping and additional geochemical sampling and a geophysical physical survey. The data generated by the mapping, sampling, and geophysics will be used to plan trenching and drill targets. Once the trenching and drilling program planning is finalized Graphite Corp. will apply for a permit with the BLM for the construction of the drill pads and roads and the digging of the trenches. The trenches will provide additional exposure to conduct geologic mapping and geochemical sampling and assist in further refining the drill program. Once drilling is completed and assays are reported, Graphite Corp. will compile the results and assess the property for further exploration or mining potential, if any. The final step in this exploration plan is to re-claim the surface disturbance of the drill pads, roads, and trenches that will no longer be needed and either recover all or some of the bond with the BLM or put the bond money towards additional disturbance on the property. We have not budgeted or planned any reclamation of disturbance that is due to historical activities, mining or otherwise. The past surface disturbance will not require reclamation and there is no known environmental concern due to the past mining activities on surface or in ground water. 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.

Item	Cost

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 Budget for Crystal Project:	$	357,463

Crystal Project Operating Budget

We plan to commence the exploration program detailed above in the summer of 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 March 31, 2014 and 2013, and the period from August 3, 2007 (Inception) to March 31, 2014 (unaudited)

We recorded no revenues for the three months ended March 31, 2014 and 2013. From the period of August 3, 2007 (inception) to March 31, 2014, we recorded no revenues.

For the three months ending March 31, 2014, total operating expenses were $50,016, of which mineral claims and exploration were $1,043, professional fees were $6,750, consulting fees were $15,000 and general and administrative expenses were $27,223.

For the three months ending March 31, 2013, total operating expenses were $162,985, of which mineral claims and exploration were $71,394, professional fees were $23,615, consulting fees were $9,000 and general and administrative expenses were $58,976.

From the period of August 3, 2007 (inception) to March 31, 2014, we incurred total operating expenses and a loss from operations of $2,499,303. Our net loss at March 31, 2014, was $2,496,971.

Liquidity and Capital Resources

At March 31, 2014, we had a cash balance of $4,639. We do not have sufficient cash on hand to commence any phase of our exploration program or to fund our ongoing operational expenses beyond 3 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 March 31, 2014, the Company used $10,614 of cash for operating activities compared to the use of $125,485 of cash for operating activities during the period ended March 31, 2013. The change in net cash used in operating activities is attributed to a decrease in operating activities.

Cashflow from Investing Activities

During the period ended March 31, 2014, the Company used $nil of cash for investing activities compared to $nil for the period ended March 31, 2013.

Cashflow from Financing Activities

During the period ended March 31, 2014, the Company received $15,000 of cash from financing activities compared to $nil for the period ended March 31, 2013.

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.

DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, our principal executive officer and our principal financial officer are responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the fiscal year covered by this report. Disclosure controls and procedures means that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective as of March 31, 2014.

There were no changes in the Company’s internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect 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.

(a) The following Exhibits, as required by Item 601 of Regulation SK, are attached or incorporated by reference, as stated below.

Number		Description

3.1		Articles of Incorporation*

3.2		Bylaws*

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 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

_________________

*	Incorporated by reference to the Registrant’s Form SB-2 (File No. 333-148719), filed with the Commission on January 17, 2008.

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.

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: May 15, 2014	By:	/s/ Brian Goss
		Name: Brian Goss
		Title: President (principal executive officer, principal accounting officer and principal financial officer)

EXHIBIT INDEX

Number		Description

3.1		Articles of Incorporation*

3.2		Bylaws*

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 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

_________________

*	Incorporated by reference to the Registrant’s Form SB-2 (File No. 333-148719), filed with the Commission on January 17, 2008.

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