GRAPHITE CORP - FORM 10-Q - November 19, 2014

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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, 2014

¨ 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 ¨

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	¨	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 ¨ 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 18, 2014, there were 153,739,164 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, 2014

INDEX

Index		Page

Part I. Financial Information

Item 1.	Financial Statements		4

	Balance Sheet as of September 30, 2014 (unaudited).		4

	Statements of Operations for the three ended September 30, 2014 (unaudited), and from Inception (May 22, 2014) through September 30, 2014.		5

	Statements of Cash Flows from Inception (May 22, 2014) through September 30, 2014 (unaudited).		7

	Notes to Condensed Financial Statements (unaudited).		8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.		23

Item 4.	Controls and Procedures.		23

Part II. Other Information

Item 1.	Legal Proceedings.		24

Item 1A.	Risk Factors.		24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.		24

Item 3.	Defaults Upon Senior Securities.		24

Item 4.	Mine Safety Disclosures.		24

Item 5.	Other Information.		24

Item 6.	Exhibits.		25

Signatures			26

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

			September 30,
			2014
ASSETS

CURRENT ASSETS

	Cash		$	41,468

NON-CURRENT ASSETS

	License			100,000

		TOTAL ASSETS	$	141,468


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

	Accounts payable		$	27,567
	Accounts payable - related party			4,257
	Related party payable			18,276
	Loan payable			15,000
	Loan payable - default			30,000

		Total Current Liabilities		95,100

STOCKHOLDERS' EQUITY (DEFICIT)

	Preferred stock: $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding as of September 30, 2014
	Common stock: $0.0001 par value, 300,000,000 shares authorized, 151,411,416 issued and outstanding as of September 30, 2014			15,141
	Addiitional paid-in capital			68,166
	Other comprehense income			226
	Deficit accumulated during the exploration stage			(37,165	)

		Total Stockholders' Equity (Deficit)		46,368

		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	141,468

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

					From Inception
		Three Months			on May 22, 2014
		Ended			Through
		September 30,			September 30,
			2014			2014

REVENUES		$	-		$	-

EXPENSES

	Professional fees		8,349			8,349
	Consulting		12,800			12,800
	General and administrative		16,016			16,016

TOTAL EXPENSES			37,165			37,165

NET LOSS			(37,165	)		(37,165	)

BASIC AND DILUTED LOSS PER SHARE			(0.00	)

WEIGHTED AVERAGE SHARES OUTSTANDING,
	BASIC AND DILUTED		83,289,339

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

Graphite Corp.
(An Exploration Stage Company)
Consolidated Statement of Comprehensive Income
(unaudited)

	From Inception on May 22, 2014
	Through
	September 30
	2014

Net Loss	$	(37,165	)

Foreign Currency Translation Gain		226

Other Comprehensive Income		226

TOTAL COMPREHENSIVE (INCOME)	$	(36,939	)

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

Graphite Corp.
(An Exploration Stage Company)
Consolidated Statement of Cash Flows
(unaudited)

				From Inception
				on May 22, 2014
				Through
				September 30,
					2014
OPERATING ACTIVITIES
	Net loss				(37,165	)
	Changes in operating assets and liabilities
		(Decrease) in accounts payable			(1,632	)
		Increase in accounts payable - related party			4,257
			Net Cash Used in
			Operating Activities		(34,540	)

INVESTING ACTIVITIES
		Effect of reverse merger			15,782
		Cash paid for license			(100,000	)
			Net Cash used in
			Investing Activities		(84,218	)

FINANCING ACTIVITIES
		Common stock issued for cash			160,000
			Net Cash Provided by
			Financing Activities		160,000

Foreign currency adjustment					226

		NET INCREASE (DECREASE) IN CASH			41,468
		CASH AT BEGINNING OF PERIOD			-

		CASH AT END OF PERIOD			41,468

SUPPLEMENTAL DISCLOSURES OF
	CASH FLOW INFORMATION

	CASH PAID FOR:
		Interest			-
		Income Taxes			-

	NONCASH FINANCING ACTIVITIES
		Stock issued for reverse merger			12,000

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

GRAPHITE CORP.

(A Development Stage Company)

Notes to Consolidated Financial Statements

September 30, 2014

(unaudited)

NOTE 1 – NATURE OF OPERATIONS AND REVERSE MERGER

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.

Reverse Merger

On August 11, 2014, the Company entered into a share exchange agreement with Advance Graphene Ltd. (“AGL”). Pursuant to the agreement, the Company acquired all of the outstanding shares of common stock of AGL by issuing 120,000,000 common shares. As a result of the share exchange, the former shareholders of the AGL controlled approximately 80.85% of the issued and outstanding common shares of the Company resulting in a change in control. The transaction was accounted for as a reverse recapitalization transaction, as the Company qualifies as a non-operating public shell company given the fact that the Company held nominal net monetary assets, consisting of only cash at the time of merger transaction. As AGL is deemed to be the purchaser for accounting purposes under recapitalization accounting, the equity of the Company is presented as the equity of the combined company and the capital stock account of the Company is adjusted to reflect the part value of the outstanding and issued common stock of the legal acquirer (AGL) after giving effect to the number of shares issued in the share exchange agreement.

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, 2014, 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, 2014, the Company had not adopted a stock option plan.

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 Income

ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive income and its components in the financial statements. As at September 30, 2014, the Company had comprehensive income of $226 as a result of foreign currency transactions.

Financial Instruments

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, 2014:

Description

Level 1

Level 2

Level 3

Total Realized
Loss

Sept 30, 2014

None

Recently issued accounting pronouncements

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations.

In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation , to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations.

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.

NOTE 4 – RELATED PARTY PAYABLES

As of September 30, 2014, the Company has a payable balance owing of $18,726, to a company affiliated with a former officer of the Company.

As of September 30, 2014, the Company had a payable balance owing of $4,257 to an officer.

NOTE 5 – LICENSE

The Company purchased a royalty-bearing license to develop, exploit, utilize and commercialize licensed intellectual property and products.

Consideration for the license is an annual license fee of $7,500 for the first three years and $20,000 for each year thereafter and $350,000 of research and development expenses until October 1, 2015 and royalties ranging between 3% and 5% subject to a $50,000 minimum. As of September 30, 2014, $100,000 has been spent on the license.

NOTE 6 – MINERAL PROPERTY

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 1^stof 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 7 – 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, default.

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, default.

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.

NOTE 8 – STOCKHOLDERS’ EQUITY

On August 11, 2014, the Company entered into a share exchange agreement with AGL. Under the terms of the agreement, the Company issued 120,000,000 common shares for 100% of the issued and outstanding shares of AGL. The agreement results in management and shareholders of AGL to hold 81% of the issued and outstanding common shares of the Company, resulting in a reverse capitalization transaction (see Note 1). Following the above events, there were 148,431,837 shares outstanding including:

Shares		Held by:
120,000,000		AGL Shareholders
28,431,837		Graphite Corp. Shareholders

During the period ended September 30, 2014, the Company issued 2,979,579 common shares for $160,000.

NOTE 9 – SUBSEQUENT EVENTS

The Company is negotiating a service agreement with each of its chief executive officer and chief operating officer, the terms of which shall be disclosed when the agreements are signed.

Subsequent to September 30, 2014, the Company entered into an agreement with Change the World Technology, Ltd. whereby the Company signed a license agreement to license Rice University’s grapheme carbon nanotube hybrid material technology in exchange for 40,000,000 shares of common stock and reimbursement of expenses in the amount of $111,000.

Subsequent to September 30, 2014, the Company issued 2,327,748 common shares.

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 revenues and consequently has incurred recurring losses from operations. No revenues are anticipated until we implement our new business plan, as described in our current report on Form 8-K filed with the SEC on August 13, 2014. 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

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, 2014 the Company had no 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 September 30, 2014, the Company had not adopted a stock option plan.

Basic and Diluted Net Loss Per Share

Income Taxes

Comprehensive Income

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 following table presents assets and liabilities within the fair value hierarchy utilized to measure fair value on a recurring basis as of September 30, 2014:

Description

Level 1

Level 2

Level 3

Total Realized
Loss

September 30, 2014

None

Recently issued accounting pronouncements

- 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.

PLAN OF OPERATION

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

Graphene Flake Commercialization

On August 11, 2014, we became the licensee of a process of producing high-quality, low-defect graphene flakes at a cost that is expected to be substantially lower than current production costs for graphene of similar quality. We intend to commercialize this process by raising funds for and experimenting with and optimizing our production parameters and method so that we can consistently produce larger and larger quantities of high-quality graphene flakes. If and when we are satisfied with our graphene flake production results in terms of quality and quantity, we will then seek a partner to produce our graphene flakes on an industrial scale pending receipt of orders therefor. In this connection, we have been producing graphene flakes since September 2014.

In parallel with the foregoing activities, we have commenced marketing and promotion activities to generate interest in purchasing our graphene flakes and are in initial discussions with various groups with interest in using our graphene flakes.

We are also reviewing and negotiating licenses for various graphene technologies from universities around the world. We intend to assemble a portfolio of graphene technologies that we believe have broad application across a range of industries and will be capable of commercialization subject to raising adequate funds.

Graphite Mining

The Crystal Project

On July 11, 2012, the Company entered into a 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. 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 from 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 the Company’s then 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 2015. 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 months ended September 30, 2014 and the period from May 22, 2014 (Inception) to September 30, 2014 (unaudited)

We recorded no revenues for the three month period ended September 30, 2014. From the period of May 22, 2014 (inception) to September 30, 2014, we recorded no revenues.

For the three months ending September 30, 2014, total operating expenses were $37,165, of which professional fees were $8,349, consulting fees were $12,800 and general and administrative expenses were $16,016.

From the period of May 22, 2014 (inception) to September 30, 2014, we incurred total operating expenses and a loss from operations of $37,165. Our net loss at September 30, 2014, was $37,165.

Liquidity and Capital Resources

At September 30, 2014, we had a cash balance of $41,468. 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 September 30, 2014, the Company used $34,540 of cash for operating activities resulting from a loss of $37,165 offset by increases in operating assets and liabilities of $2,625.

Cashflow from Investing Activities

During the period ended September 30, 2014, the Company used $84,218 of cash for investing activities for the purchase of a license offset by the effect of the reverse merger transaction.

Cashflow from Financing Activities

During the period ended September 30, 2014, the Company received $160,000 of cash from financing activities.

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 September 30, 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.

In the period from September 30, 2014 to-date we issued 2,347,748 shares of our common stock to non-US investors in transactions outside of the United States at a price of U.S. $0.0537 per share for aggregate consideration of $125,000.

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: November 19, 2014	By:	/s/ Mark Radom
	Name:	Mark Radom
	Title:	Chief Executive Officer

Graphite Corp.

(An Exploration Stage Company)

Consolidated Balance Sheet

(unaudited)