0001493152-13-000072.txt : 20130116 0001493152-13-000072.hdr.sgml : 20130116 20130116135842 ACCESSION NUMBER: 0001493152-13-000072 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20121130 FILED AS OF DATE: 20130116 DATE AS OF CHANGE: 20130116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: National Graphite Corp CENTRAL INDEX KEY: 0001409432 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 260665441 STATE OF INCORPORATION: WY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-53284 FILM NUMBER: 13532171 BUSINESS ADDRESS: STREET 1: 7230 INDIAN CREEK LN. STREET 2: STE 201 CITY: LAS VEGAS STATE: NV ZIP: 89149 BUSINESS PHONE: (702) 839-4029 MAIL ADDRESS: STREET 1: 7230 INDIAN CREEK LN. STREET 2: STE 201 CITY: LAS VEGAS STATE: NV ZIP: 89149 FORMER COMPANY: FORMER CONFORMED NAME: Lucky Boy Silver Corp. DATE OF NAME CHANGE: 20100331 FORMER COMPANY: FORMER CONFORMED NAME: Sierra Ventures, Inc. DATE OF NAME CHANGE: 20070809 10-Q 1 form10q.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (the “Exchange Act”)

 

For the quarterly period ended November 30, 2012

 

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from _______ to _______

 

Commission file number: 333-146675

 

NATIONAL GRAPHITE CORP.

(Exact name of small business issuer in its charter)

 

Nevada   27-3787574
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification No.)

 

7230 Indian Creek Ln., Ste 201,

Las Vegas, NV

  89149
(Address of principal executive offices)   (Zip Code)

 

Issuer’s telephone number: (702) 839-4029

  

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

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [  ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [  ]

 

Indicate by check mark 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.

 

Large accelerated filer [  ]   Accelerated filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company) Smaller reporting company [X]

 

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

Yes [  ] No [X]

 

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:

 

State the number of shares outstanding of each of the issuer’s classes of common and preferred equity, as of the latest practicable date:68,169,881 shares of common stock and 675,000 preferred shares each carrying a 100:1 voting and conversion right as of January 15, 2013.

 

 

 

 
 

  

TABLE OF CONTENTS

 

    Page 
PART I – FINANCIAL INFORMATION     
      
ITEM 1. FINANCIAL STATEMENTS   3 
      
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION   4 
      
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   12 
      
ITEM 4. CONTROLS AND PROCEDURES   12 
      
PART II – OTHER INFORMATION     
      
ITEM 1. LEGAL PROCEEDINGS   13 
      
ITEM 1A. RISK FACTORS   14 
      
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS   19 
      
ITEM 3. DEFAULTS UPON SENIOR SECURITIES   21 
      
ITEM 4. [REMOVED AND RESERVED]   21 
      
ITEM 5. OTHER INFORMATION   21 
      
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K   22 
      
SIGNATURES   24 

 

2
 

  

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

    Page 
      
Condensed Balance Sheets – November 30, 2012 (Unaudited) and May 31, 2012   F-1 
      
Condensed Statements of Operations for the three and six months ended November 30, 2012 and 2011, and for the period October 19, 2006 (Inception) to November 30, 2012 (Unaudited)   F-2 
      
Condensed Statements of Cash Flows for the three and six months ended November 30, 2012 and 2011, and for the period October 19, 2006 (Inception) to November, 2012 (Unaudited)   F-3 
      
Notes to Condensed Financial Statements   F-5 

 

3
 

 

NATIONAL GRAPHITE CORP.

(FKA LUCKY BOY SILVER CORPORATION)

(An Exploration Stage Company)

Balance Sheets

 

   November 30, 2012   May 31, 2012 
   (unaudited)     
ASSETS
CURRENT ASSETS         
           
Cash  $112,441   $108,209 
Prepaid expenses   -    3,500 
           
Total Current Assets   112,441    111,709 
           
PROPERTY AND EQUIPMENT, net   945    1,350 
           
OTHER ASSETS          
           
Deposits   1,400    26,400 
Mineral interests   528,869    401,389 
           
Total Other Assets   530,269    427,789 
           
TOTAL ASSETS  $643,655   $540,848 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY
           
CURRENT LIABILITIES          
           
Accounts payable and accrued expenses  $9,545   $1,595 
           
Total Current Liabilities   9,545    1,595 
           
STOCKHOLDERS’ EQUITY          
Preferred stock, 1,000,000 shares authorized at par value of $0.001; 675,000 and 675,000 shares issued and outstanding, respectively   675    675 
Common stock, 499,000,000 shares authorized at par value of $0.001; 67,669,881 and 75,153,214 shares issued and outstanding, respectively   67,670    75,153 
Additional paid-in capital   2,192,805    1,875,322 
Other comprehensive income   59    59 
Deficit accumulated during the exploration stage   (1,627,099)   (1,411,956)
           
Total Stockholders’ Equity   634,110    539,253 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $643,655   $540,848 

 

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

 

F-1
 

  

NATIONAL GRAPHITE CORP.

(FKA LUCKY BOY SILVER CORPORATION)

(An Exploration Stage Company)

Statements of Operations

(unaudited)

 

                   From Inception on 
   For the Three Months Ended   For the Six Months Ended   October 19, 2006 
   November 30,   November 30,   Through 
   2012   2011   2012   2011   November 30, 2012 
                     
REVENUES  $-   $-   $-   $-   $- 
                          
OPERATING EXPENSES                         
                          
Exploration of resource properties   36,400    14,093    93,398    18,708    184,543 
Impairment of mineral interests   -    7,500    -    7,500    115,000 
Depreciation expense   202    202    404    404    1,482 
Professional fees   17,713    92,841    46,951    179,138    1,043,036 
General and administrative expenses   32,020    20,146    74,390    39,408    283,038 
                          
Total Operating Expenses   86,335    134,782    215,143    245,158    1,627,099 
                          
LOSS FROM OPERATIONS   (86,335)   (134,782)   (215,143)   (245,158)   (1,627,099)
                          
PROVISION FOR INCOME TAXES   -    -    -    -    - 
                          
NET LOSS  $(86,335)  $(134,782)  $(215,143)  $(245,158)  $(1,627,099)
                          
BASIC AND DILUTED LOSS PER SHARE  $(0.00)  $(0.00)  $(0.00)  $(0.00)     
                          
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING   71,889,661    74,153,214    73,654,671    74,153,214      

 

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

 

F-2
 

 

NATIONAL GRAPHITE CORP.

(FKA LUCKY BOY SILVER CORPORATION)

(An Exploration Stage Company)

Statements of Cash Flows

(unaudited)

 

           From Inception on 
   For the Six Months Ended   October 19, 2006 
   November 30,   Through 
   2012   2011   November 30, 2012 
             
CASH FLOWS FROM OPERATING ACTIVITIES               
Net loss  $(215,143)  $(245,158)  $(1,627,099)
Adjustments to reconcile net loss to net cash used in operating activities:               
Depreciation expense   405    404    1,483 
Contributed services by an officer   -    -    150 
Other comprehensive loss   -    -    59 
Amortization of prepaid expense   -    127,849    561,000 
Common stock issued for services   -    -    120,000 
Impairment of mineral interests   -    7,500    112,101 
Changes to operating assets and liabilities:               
Restricted cash   -    12,786    - 
Prepaid expenses   3,500    (2,000)   - 
Deposits   25,000    -    (1,400)
Accounts payable   7,950    4,484    9,545 
                
Net Cash Used in Operating Activities   (178,288)   (94,135)   (824,161)
                
CASH FLOWS FROM INVESTING ACTIVITIES               
Purchase of computer equipment   -    -    (2,428)
Purchase of mineral interests   (67,480)   (47,583)   (220,970)
                
Net Cash Used in Investing Activities   (67,480)   (47,583)   (223,398)
                
CASH FLOWS FROM FINANCING ACTIVITIES               
Capital contributions   -    -    10,000 
Common stock issued for cash   250,000    -    1,150,000 
                
Net Cash Provided by Financing Activities   250,000    -    1,160,000 
                
NET INCREASE (DECREASE) IN CASH   4,232    (141,718)   112,441 
CASH AT BEGINNING OF PERIOD   108,209    146,589    - 
                
CASH AT END OF PERIOD  $112,441   $4,871   $112,441 

 

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

 

F-3
 

  

NATIONAL GRAPHITE CORP.

(FKA LUCKY BOY SILVER CORPORATION)

(An Exploration Stage Company)

Statements of Cash Flows

 (unaudited)

 

           From Inception on 
   For the Six Months Ended   October 19, 2006 
   November 30,   Through 
   2012   2011   November 30, 2012 
             
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION               
                
CASH PAID FOR:               
Interest  $-   $-   $- 
Income Taxes  $-   $-   $- 
                
NON CASH FINANCING ACTIVITIES:               
Preferred stock issued in conversion of common stock  $-   $-   $67,500 
Common stock issued for prepaid expenses  $-   $-   $561,000 
Common stock issued for mineral interests  $60,000   $-   $420,000 

 

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

 

F-4
 

 

NATIONAL GRAPHITE CORPORATION

(FKA Lucky Boy Silver Corporation)

(An Exploration Stage Company)

Notes to Condensed Financial Statements

November 30, 2012 and May 31, 2012

 

NOTE 1 – CONDENSED FINANCIAL STATEMENTS

 

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at November 30, 2012, and for all periods presented herein, have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s May 31, 2012 audited financial statements. The results of operations for the periods ended November 30, 2012 and 2011 are not necessarily indicative of the operating results for the full years.

 

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 and no revenues are anticipated until the Company begins extracting and selling gold, and there is no assurance that a commercially viable deposit exists on the mineral claims that the Company has under option. These conditions raise substantial doubt as to the Company’s ability 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.

 

Management’s plan to support the Company in its operations and to maintain its business strategy is to raise funds through public offerings and to rely on officers and directors to perform essential functions with minimal compensation. If the Company does not raise all of the money it needs from public offerings, it will have to find alternative sources, such as a second public offering, a private placement of securities, or loans from its officers, directors or others. If the Company requires additional cash and can’t raise it, it will either have to suspend operations until the cash is raised, or cease business entirely.

 

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 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

In preparing financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses in the statement of operations. Actual results could differ from those estimates.

 

Basic Loss per Common Share

 

Basic loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. Due to net losses at November 30, 2012 and 2011, the effect of the potential common shares resulting from warrants was excluded, as the effect would have been anti-dilutive.

 

F-5
 

 

NATIONAL GRAPHITE CORPORATION

(FKA Lucky Boy Silver Corporation)

(An Exploration Stage Company)

Notes to Condensed Financial Statements

November 30, 2012 and May 31, 2012

 

   For the
Six Months Ended
December 31, 2012
   For the
Six Months Ended
November 30, 2011
 
Net Loss (numerator)  $(215,143)  $(245,158)
           
Common Shares (denominator)   73,654,671    74,153,214 
Net loss per share amount  $(0.00)  $(0.00)

 

Recent Accounting Pronouncements

 

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.

 

NOTE 4 – MINERAL INTERESTS

 

As of May 31, 2012 the Company had capitalized $401,389 of costs related to the acquisition of mineral interests on mineral properties located throughout the United States. During the six months ended November 30, 2012, the Company capitalized $42,479 of additional cash expenditures and $60,000 in stock issuances related to the acquisition of mineral interests. The Company also reclassified $25,000 of cash payments previously recorded as deposits to mineral interest as the terms of the deposit were fulfilled during the six month period, leaving a balance of capitalized mineral interests of $528,868 as of November 30, 2012. The company is in default of the acquisition agreement with GeoXplor Corporation as of November 30, 2012. The terms of the agreement with GeoXplor are as follows:

 

The purchase price for the Property is a total of $425,000 in cash, an issuance of 2,500,000 shares of the Company’s Restricted Common Stock, and a work commitment on the Property of up to $1,000,000 over four years as follows:

 

a.) Cash Consideration: Purchaser will pay Seller $425,000 USD in cash consideration as follows :

 

i)USD $50,000 upon the signing of the Agreement ( the “Effective Date”),
ii)an additional USD $25,000 on or before 6 months from the Effective Date ,
iii)an additional USD $25,000 on or before 12 months from the Effective Date,
iv)an additional USD $50,000 on or before 18 months from the Effective Date,

v)an additional USD $75,000 on or before 24 Months from the Effective Date,
vi)an additional USD $50,000 on or before 30 months from the Effective Date,
vii)an additional USD $50,000 on or before 36 months from the Effective Date,
viii)an additional USD $50,000 on or before 42 months from the Effective Date,
ix)an additional USD $50,000 on or before 48 months from the Effective Date (for a total cash consideration of $425,000 on or before 48 months from and after the Effective Date.)

 

b) Stock Consideration: (restricted common shares)

 

i)500,000 shares upon the signing of the Agreement (the “Effective Date”),
ii)500,000 shares on or before 6 months from the Effective Date,

 

F-6
 

 

NATIONAL GRAPHITE CORPORATION

(FKA Lucky Boy Silver Corporation)

(An Exploration Stage Company)

Notes to Condensed Financial Statements

November 30, 2012 and May 31, 2012

 

iii)500,000 shares on or before 18 months from the Effective Date,
iv)500,000 shares on or before 24 months from the Effective Date,
v)500,000 shares on or before 48 months from the Effective Date,

 

c) Work Commitment:

 

Purchaser will provide funds for the conduct of a program of work to be undertaken by the Seller for the benefit of the Property of not less than USD $1,000,000 over 4 years as follows:

 

i)$100,000 on or before 12 months from the Effective Date,
ii)$300,000 on or before 24 months from the Effective Date,
iii)$300,000 on or before 36 months from the Effective date ,
iv)$300,000 on or before 48 months from the Effective Date.

 

According to the agreement a payment of $25,000 was due during the period ending November 30, 2012 along with the issuance of 500,000 shares of the Company’s common stock. On December 7, 2012 the Company issued 500,000 shares of common stock to GeoXplor to satisfy the required stock issuance that was due during the period ended November 30, 2012. The Company intends to make the required $25,000 payment that was due during the period ended November 30, 2012. In addition, the Company intends to satisfy the terms of the agreement in full and complete the acquisition.

 

NOTE 5 – STOCKHOLDERS’ EQUITY

 

Six Months Ended November, 2012

 

On April 20, 2012, the Company entered into an agreement to purchase mineral claims in Quebec, Canada. The purchase was not complete due to the fact that the Company was waiting for registration approval from the Quebec government. The company completed the purchase during the six month period ended November 30, 2012. As consideration for the acquisition, the Company agreed to pay $50,000 in cash and issue 100,000 shares of common stock. The Company had paid $25,000 of the $50,000 in cash, which was held in a deposit until the purchase was closed. On July 18, 2012 the Company made its second $25,000 payment to complete the agreed upon $50,000 payment. On July 23, 2012 the Company issued the agreed upon 100,000 shares of common stock to complete the purchase of mineral claims in Quebec, Canada. The shares were valued at $0.60 per share, which was equal to the most recent price per share of common stock issued for cash.

 

On July 18, 2012 the Company issued 416,667 shares of common stock for $250,000 cash.

 

On October 17, 2012 the Company entered into a Share Issuance Agreement with an unrelated third party entity. Pursuant to the terms of the agreement, the third party agreed to provide a financing line to the Company of no greater than $2,500,000, from which the Company can receive advances of no more than $250,000 per advance. In exchange for any advances made, the Company agrees to issue shares of its common stock. The number of shares to be issued shall be based upon a ten percent discount to the average of the closing trading prices of the five day period immediately prior to issuance. As of November 30, 2012 no advances have been received by the Company.

 

On October 19, 2012 the Company cancelled 8,000,000 shares of common stock held by a director of the Company and is a related party.

 

Fiscal Year Ended May 31, 2011

 

On January 3, 2011 the Company exchanged 67,500,000 common shares for 675,000 preferred shares with 1 to 100 voting and conversion ratio preferred to common shares.

 

F-7
 

 

NATIONAL GRAPHITE CORPORATION

(FKA Lucky Boy Silver Corporation)

(An Exploration Stage Company)

Notes to Condensed Financial Statements

November 30, 2012 and May 31, 2012

 

On December 29, 2010, the Company issued 360,000 common shares to a consultant for services to be rendered from the date of issuance to March 31, 2011. On the same date the Company issued 300,000 common shares to a consultant for services to be performed from the date of issuance for a twelve month period with automatic renewal for another twelve month period unless notice of termination is received by either party 30 days in advance. The consulting services have been recorded as a prepaid expense and are being amortized over the life of the contracts.

 

On December 15, 2010, the Company issued 47,060 common shares for $40,000 cash.

 

NOTE 6 – STOCK OPTIONS AND WARRANTS

 

The Company utilizes the Black-Scholes option-pricing model for calculating the fair value of the options granted as defined by ASC Topic 718, which is an acceptable valuation approach under ASC 718. This model requires the input of subjective assumptions, including the expected price volatility of the underlying stock.

 

Projected data related to the expected volatility and expected life of stock options is based upon historical and other information, and notably, the Company’s common stock has limited trading history. Changes in these subjective assumptions can materially affect the fair value of the estimate, and therefore, the existing valuation models do not provide a precise measure of the fair value of the Company’s employee stock options.

 

On October 25, 2010 the Company issued 356,154 units consisting of one share of common stock and one warrant for cash at $0.63 per share. The attached warrants are exercisable for two years from issuance and have an exercise price of $0.85 per share for one year from issuance which increased to $1.05 in the second year. The Company used the Black-Scholes option pricing model to value the warrants based on the terms of the warrant, a volatility of 350 percent, risk free rate of 0.37 percent, and a stock price and issuance of $0.63. Based on this calculation, the Company determined that the relative fair value of the warrants is $136,699 and allocated this amount of the additional paid-in capital to the warrants. As of November 30, 2012 all the above options have expired and the Company no longer has any outstanding unexercised warrants.

 

A summary of all warrants outstanding and exercisable as of November 30, 2012 and changes during the year then ended is set forth below:

 

   Shares   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Life (Years)
   Aggregate
Intrinsic
Value
 
Outstanding at May 31, 2012   356,154   $0.38    0.40   $136,699 
Granted   -    -    -    - 
Expired   356,154    -    -    - 
Exercised   -    -    -    - 
Forfeited   -    -    -    - 
Outstanding at November 30, 2012   -    -    -    - 
Exercisable at November 30, 2012   -    -    -    - 

 

NOTE 7 – SUBSEQUENT EVENTS

 

On December 7, 2012 the Company issued 500,000 shares of common stock to GeoXplor Corporation.

 

In accordance with ASC 855 Company management reviewed all material events through filing of these financial statements and there are no material subsequent events to report.

 

F-8
 

  

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This quarterly report contains forward-looking statements. These forward-looking statements relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this report. Forward-looking statements are often identified by words like: “believe”, “expect”, “estimate”, “anticipate”, “intend”, “project” and similar expressions or words which, by their nature, refer to future events.

 

In some cases, you can also identify forward-looking statements by terminology such as “may”, “will”, “should”, “plans”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in Item 1A. Risk Factors on page 15 that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

 

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

GENERAL INFORMATION

 

Our financial statements are stated in United States Dollars (USD or US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. All references to “common shares” refer to the common shares in our capital stock.

 

As used in this quarterly report, the terms “we”, “us”, “our”, “National Graphite Corp and or Lucky Boy Silver Corp.” and “Lucky Boy” or National Graphite mean National Graphite Corp., unless otherwise indicated.

 

Our company is an exploration stage company. There is no assurance that commercially viable mineral deposits exist on the mineral property that we have under option. Further exploration will be required before a final evaluation as to the economic and legal feasibility of the claim is determined.

 

The following analysis of the results of operations and financial condition of the corporation for the period ending August 31, 2012, should be read in conjunction with the corporation’s financial statements, including the notes thereto contained elsewhere in this form 10-Q and in our annual report filed on form 10-K.

 

Overview

 

We are a start-up, exploration stage, company engaged in the search for gold, silver and related minerals. Currently our business plan calls for development of our 100% interest in and to the Chedic Graphite Property consisting of 20 U.C. Mineral Lode Claims in Township, 15 North, Range 19 East, Sections 25 & 26 Carson City, NV mining claims compromising approximately 400 acres. On Sept 17th 2012, the Company expanded its interests with the acquisition of 15 additional Lode Claims thus expanding the Chedic holdings to 700 acres. The Company will continue to proceed with exploration on the Company’s Black Butte and Silver Strike projects to determine if there are commercially exploitable deposits of gold and silver, and if we decide not to proceed, to seek other mineral exploration properties as more fully described under the section entitled “The Business.” Our mineral properties are without known reserves and our proposed program is exploratory in nature. There is no assurance that commercially viable mineral deposits exist on our mineral properties. Further exploration and/or drilling will be required before a final evaluation as to the economic and legal feasibility of our projects is determined.

 

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We were incorporated in the State of Wyoming on October 19, 2006, as Sierra Ventures, Inc. and established a fiscal year end of May 31. On February 5, 2010 we filed an Amendment to Articles with the Wyoming Secretary of State and changed our name from “Sierra Ventures Inc.” to “Lucky Boy Silver Corp.” We changed the name of our company to better reflect the direction and business of our company. On March 22, 2011, the corporation converted from a Wyoming corporation to a Nevada corporation pursuant to Wyoming Statutes Title 17, ch. 16, Sect.(s) 820, 821 and 1114 and Nevada Revised Statutes 92A.205. This conversion did not alter the number of authorized shares, or the number of issued and outstanding shares, of the corporation. The voting and other rights of the common and preferred shares of the company’s capital stock remain substantially similar under Nevada law. The powers of the company’s officers, directors and shareholders also remain substantially the same. Our authorized capital stock continues to consist of 499,000,000 shares of common stock, par value $0.001 per share and 1,000,000 shares of preferred stock, par value $0.001 per share. Our statutory registered agent’s office is located at 701 N. Green Valley Pkwy, Ste. 200-238, Henderson, NV 89074. Our telephone number is (702) 839-4029.

 

On March 22, 2007, as amended on May 15, 2009, we optioned a 25 percent interest in a gold exploration property referred to as the Zhangjiafan Mining Property located in Jiangxi Province, People’s Republic of China, by entering into an Option to Purchase and Royalty Agreement with JiujiangGaoFeng Mining Industry Limited Company of Jiangxi City, Jiangxi Province, China (“Jiujiang”), the beneficial owner of the property, an arms-length Chinese corporation, to acquire an interest in the property by making certain expenditures and carrying out exploration work. At the completion of the field work on this property, management determined that further expenditures or issuance of stock for this property was not in the best interest of the Company and the project was abandoned.

 

During February 2010 the Company entered into two lease agreements for mineral leases located in the Mineral County, Nevada. On February 8, 2010, we acquired 38 unpatented BLM claims including those known as the Silver Summit and Silver Strike claims and two historic, silver mine leases (“AG Properties”) known as Lucky Boy Silver Mine and the Black Butte Silver Mine. Under these agreements the Company committed $17,500 in non-refundable upfront lease payments, $10,000 in future payments to be made every nine months and $7,500 in future payments to be made annually as long as the lease is in force. In a geological report compiled by Hunsaker dated May 2010, Hunsaker opined that further work on the Lucky Boy project was not recommended and the lease for the Lucky Boy mineral property was not renewed.

 

In the same geological report compiled by Hunsaker dated May 2010, further exploration on the Black Butte project was justified, and defined by Hunsaker in their follow up work Summary Report and Update with Recommendations for the Candelaria Project, Esmeralda County, Nevada - December 2011 delivered to the Lucky Boy December 20th, 2011

 

The Candelaria Project is comprised of 68 unpatented lode mining claims in Esmeralda and Mineral County Formerly reported on as the Silver Strike project the broader program is now referred to as the Candelaria Project and currently covers 1363 acres in the Candelaria District immediately east of Silver Standard Resources Northern Belle and Mount Diablo open pit silver mines in sections 25, 35, 36, 1, 2, 3, 10, and 11 T 3 & 4N/R35E. The property is approximately 45 miles west of Tonopah, Nevada

 

Between June and September, 2011 68 new lode claims were located. The claims cover the ground from which high-grade silver samples were taken. The geologic setting of the samples extends from the open pit mines controlled by Silver Standard Resources onto the LAG claims (Table 1 and Figure 2).

 

Claim   Date Located   County   BLM-NMC Number
LAG 1 to 38   April 8, 2011   Esmeralda   1047475-1047512
LAG 39 to 50   May 25, 2011   Esmeralda & Mineral   1051010-1051021
LAG 50 to 66   June 4, 2011   Esmeralda & Mineral   1051022-1051037
LAG 67 to 68   September 20, 2011   Esmeralda   1060537-1060538

 

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On September 27th, 2011 the shares of National Graphite Corp (formerly Lucky Boy Silver Corp.) became Depository Trust Corp. (DTC) eligible for electronic transfer.

 

On May 25, 2011 we expanded our claims in the Silver Strike area to 62 unpatented claims renaming them the LAG claims.

 

On April 20, 2012, the Company entered into an agreement with Habitants Minerals Ltd. (“Habitants”) granting the Company the sole and exclusive right to purchase 100% right, title and interest in and to the applications and subsequent claims to be issued by Quebec Ministry of Resources and Fauna for the following applications:

 

The Quebec applications cover ground referred to in reports GM19842, GM35169, GM35267, GM19844, GM20308, GM13866, reports which report historic graphite occurrences on Lot 32 and Lot 33 Range 11 in Low Township, Lot 1 Range 2 in Suffolk Township, Lot 9 and Lot 16 Range 3 and Lot 10 Range 9 all in Clarendon Township, Lot 46 Range 11 in Low Township, and ground in Lochaber Township covering historic mag anomalies.

 

APPLICATION 1186716 (29 claims)

APPLICATION 1187995 (14 claims)

APPLICATION 1187994 (12 claims)

APPLICATION 1187992 (10 claims)

65 claims approx., 60 hectares each = 3900 hectares

 

The consideration for the transaction was payment by the Company to Habitants a total of Fifty Thousand United States Dollars (US$50,000.00) consisting of Twenty Five Thousand United States Dollars ($25,000.00) on the date of execution of this Agreement and Twenty Five Thousand United States Dollars ($25,000.00) upon the issuance of the claims in the Company’s name, and the issuance of 100,000 shares of the Company’s common stock within 15 days of the date of the closing of the transaction described in the Agreement or within 15 days of any Regulatory

 

On April 24, 2012, the Company entered into an agreement with GeoXplor Corporation to purchase a 100% interest in and to the Chedic Graphite Property consisting of 20 Mineral Lode Claims in Township, 15 North, Range 19 East, Sections 25 & 26 Carson City, NV mining claims compromising approximately 400 acres.

 

The purchase price for the Property is a total of $425,000 in cash, an issuance of 2,500,000 shares of the Company’s Restricted Common Stock, and a work commitment on the Property of up to $1,000,000 over four years as follows:

 

a.) Cash Consideration: Purchaser will pay Seller $425,000 USD in cash consideration as follows:

 

i) USD $50,000 upon the signing of the Agreement (the “Effective Date”),

ii) an additional USD $25,000 on or before 6 months from the Effective Date ,

iii) an additional USD $25,000 on or before 12 months from the Effective Date,

iv) an additional USD $50,000 on or before 18 months from the Effective Date,

v) an additional USD $75,000 on or before 24 Months from the Effective Date,

vi) an additional USD $50,000 on or before 30 months from the Effective Date,

vii) an additional USD $50,000 on or before 36 months from the Effective Date,

viii) an additional USD $50,000 on or before 42 months from the Effective Date,

ix) an additional USD $50,000 on or before 48 months from the Effective Date ( for a total cash consideration of $425,000 on or before 48 months from and after the Effective Date.)

 

b) Stock Consideration: (restricted common shares)

 

i) 500,000 shares upon the signing of the Agreement (the “Effective Date”),

ii) 500,000 shares on or before 6 months from the Effective Date,

iii) 500,000 shares on or before 18 months from the Effective Date,

iv) 500,000 shares on or before 24 months from the Effective Date,

v) 500,000 shares on or before 48 months from the Effective Date,

 

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c) Work Commitment:

 

Purchaser will provide funds for the conduct of a program of work to be undertaken by the Seller for the benefit of the Property of not less than USD $1,000,000 over 4 years as follows:

 

i)$100,000 on or before 12 months from the Effective Date,
ii)$300,000 on or before 24 months from the Effective Date,
iii)$300,000 on or before 36 months from the Effective date ,
iv)$300,000 on or before 48 months from the Effective Date.

 

According to the agreement a payment of $25,000 was due during the period ending November 30, 2012 along with the issuance of 500,000 shares of the Company’s common stock. On December 7, 2012 the Company issued 500,000 shares of common stock to GeoXplor to satisfy the required stock issuance that was due during the period ended November 30, 2012. The Company intends to make the required $25,000 payment that was due during the period ended November 30, 2012. In addition, the Company intends to satisfy the terms of the agreement in full and complete the acquisition.

 

On Sept 17th 2012, the Company expanded its interests with the acquisition of 15 additional Lode Claims thus expanding the Chedic holdings to 700 acres.

 

Our Current Business – Mineral Exploration

 

Our current business plan is to return the Chedic property to full production and has authorized the Management of the Company to proceed with the development of the Chedic mine property and complete a evaluation of the available graphite tonnage. The company has approved expenditures for the next phase of development.

 

The Company will continue its exploration and expansion of the Black Butte and Candelaria properties and determine if there are commercially exploitable deposits of gold and silver. We retained the services of the Hunsaker Inc., a geological company, to assess the results of our program. In a report compiled by Hunsaker dated February 2011, Hunsaker concluded that the Candelaria claims warranted additional exploration whereas the Silver Summit claims did not. The development of these properties was additionally defined in Hunsaker’s December 2011 update. Our mineral properties are currently without known reserves and our proposed programs are exploratory in nature.

 

Our Proposed Exploration Program – Plan of Operation

 

We have reviewed the Company’s geologist Report on the Chedic Mine viability and believe further expenditures are warranted. The work to date has discovered a second viable vein of graphite ore and commissioned a drill program to further outline the length and depth of the existing veins.

 

We will review the Summary Report and Update with Recommendations for the Candelaria Project, Esmeralda County, Nevada - December 2011 and proceed with exploration on the Black Butte and Candelaria projects to determine if there are commercially exploitable deposits of gold and silver, and if we decide not to proceed, to seek other mineral exploration properties.

 

We do not have any ores or reserves whatsoever at this time on our properties.

 

Competition

 

We compete with other mineral resource exploration companies for financing and for the acquisition of new mineral properties. Many of the mineral resource exploration companies with whom we compete have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford more geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact on our ability to achieve the financing necessary for us to conduct further exploration of our mineral properties.

 

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We also compete with other mineral resource exploration companies for financing from a limited number of investors that are prepared to make investments in mineral resource exploration companies. The presence of competing mineral resource exploration companies may impact on our ability to raise additional capital in order to fund our exploration programs if investors are of the view that investments in competitors are more attractive based on the merit of the mineral properties under investigation and the price of the investment offered to investors. We also compete with other mineral resource exploration companies for available resources, including, but not limited to, professional geologists, camp staff, helicopter or float planes, mineral exploration supplies and drill rigs.

 

Government Regulations

 

Any operations at the our mineral properties will be subject to various federal and state laws and regulations in the United States which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. We will be required to obtain those licenses, permits or other authorizations currently required to conduct exploration and other programs. There are no current orders or directions relating to us or our properties with respect to the foregoing laws and regulations. Such compliance may include feasibility studies on the surface impact of our proposed operations, costs associated with minimizing surface impact, water treatment and protection, reclamation activities, including rehabilitation of various sites, on-going efforts at alleviating the mining impact on wildlife and permits or bonds as may be required to ensure our compliance with applicable regulations. It is possible that the costs and delays associated with such compliance could become so prohibitive that we may decide to not proceed with exploration, development, or mining operations on any of our mineral properties. We are not presently aware of any specific material environmental constraints affecting our properties that would preclude the economic development or operation of property in the United States.

 

The U.S. Forest Service requires that mining operations on lands subject to its regulation obtain an approved plan of operations subject to environmental impact evaluation under the National Environmental Policy Act. Any significant modifications to the plan of operations may require the completion of an environmental assessment or Environmental Impact Statement prior to approval. Mining companies must post a bond or other surety to guarantee the cost of post-mining reclamation. These requirements could add significant additional cost and delays to any mining project undertaken by us.

 

Under the U.S. Resource Conservation and Recovery Act, mining companies may incur costs for generating, transporting, treating, storing, or disposing of hazardous waste, as well as for closure and post-closure maintenance once they have completed mining activities on a property. Any future mining operations at our mineral properties may produce air emissions, including fugitive dust and other air pollutants, from stationary equipment, storage facilities, and the use of mobile sources such as trucks and heavy construction equipment which are subject to review, monitoring and/or control requirements under the Federal Clean Air Act and state air quality laws. Permitting rules may impose limitations on our production levels or create additional capital expenditures for pollution control in order to comply with the rules.

 

The U.S. Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (“CERCLA”), imposes strict joint and several liability on parties associated with releases or threats of releases of hazardous substances. Those liable groups include, among others, the current owners and operators of facilities which release hazardous substances into the environment and past owners and operators of properties who owned such properties at the time the disposal of the hazardous substances occurred. This liability could include the cost of removal or remediation of the release and damages for injury to the surrounding property. We cannot predict the potential for future CERCLA liability with respect to our mineral properties or surrounding areas.

 

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Employees

 

At present, we have no employees. We currently operate with two executive officers, who devote their time as required to our business operations. Our executive officers are not presently compensated for their services and do not have an employment agreement with us.

 

Results of Operations

 

Our comparative periods for the period ended November 30, 2012 and May 31, 2011 are presented in the following discussion.

 

Since inception, we have used our common stock to raise money for our optioned acquisitions and for corporate expenses. Net cash provided by financing activities (less offering costs) from inception on October 19, 2006 to November 30, 2012, was $1,160,000, with $1,150,000 as proceeds received from sales of our common stock and $10,000 of contributed capital.

 

Three Months Ended November 30, 2012 and November 30, 2011

 

Revenues

 

We did not generate any revenues from operations for the three month periods ended November 30, 2012 or 2011. To date, we have not generated any revenues from our mineral exploration business.

 

Expenses

 

The table below shows our operating results for the three month periods ended November 30, 2012 and 2011.

 

   Three months
Ended
November 30, 2012
   Three months
Ended
November 30, 2011
 
Professional fees  $17,713    92,841 
Depreciation   202    202 
Impairment of mineral interests   -    7,500 
Exploration of resource property   36,400    14,093 
General and administrative   32,020    20,146 
Total operating expenses  $86,335    134,782 

 

Operating expenses have and will vary from quarter to quarter based on the level of corporate activity, exploration operations and capital-raising. Operating expenses in the most recently completed quarter decreased relative to the comparable period of the prior year due primarily to the fact that we have significantly decreased the professional expenses incurred. This decrease in professional fees was partially offset by increases in exploration expenses and general and administrative expenses.

 

We continue to carefully control our expenses and overall costs as we move our business development plan forward. We do not have any employees and engages personnel through outside consulting contracts or agreements or other such arrangements, including for legal, accounting and technical consultants.

 

Six Months Ended November 30, 2012 and November 30, 2011

 

Revenues

 

We did not generate any revenues from operations for the six month periods ended November 30, 2012 or 2011. To date, we have not generated any revenues from our mineral exploration business.

 

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Expenses

 

The table below shows our operating results for the six month periods ended November 30, 2012 and 2011.

 

   Six months
Ended
November 30, 2012
   Six months
Ended
November 30, 2011
 
Professional fees  $46,951    179,138 
Depreciation   404    404 
Impairment of mineral interests   -    7,500 
Exploration of resource property   93,398    18,708 
General and administrative   74,390    39,408 
Total operating expenses  $215,143    245,158 

 

Operating expenses have and will vary from quarter to quarter based on the level of corporate activity, exploration operations and capital-raising. Operating expenses in the most recently completed quarter decreased relative to the comparable period of the prior year due primarily to the fact that we have significantly decreased the professional expenses incurred. This decrease in professional fees was partially offset by increases in exploration expenses and general and administrative expenses.

 

We continue to carefully control our expenses and overall costs as we move our business development plan forward. We do not have any employees and engages personnel through outside consulting contracts or agreements or other such arrangements, including for legal, accounting and technical consultants.

 

Plan of Operation and Anticipated Cash Requirements

 

On October 17, 2012 we announced that the Company had entered into an equity financing agreement for up to $2,500,000. Under the terms of the agreement, the Company may from time to time request a purchase of up to $250,000 per request at price of 10% discount to the average price of our shares over the previous five trading days. As part of the terms of the financing, management cancelled 8,000,000 of its common shares in order to minimize dilution as a result of this transaction.

 

Based on our current plan of operations, we have sufficient funds for approximately the next six months, after which time we will require additional funds to continue our exploration operations.

 

Presently, our revenues are not sufficient to meet operating and capital expenses. We have incurred operating losses since inception, and this is likely to continue through fiscal 2012-2013. Management projects that we will require up to $1,410,000 to fund ongoing operating expenses and working capital requirements for the next 12 months, broken down as follows:

 

General and administrative expenses  $80,000 
Future property acquisitions   180,000 
Working capital   50,000 
Development of properties   1,100,000 
   $1,410,000 

 

Going Concern

 

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on the annual financial statements for the year ended May 31, 2012, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional notes describing the circumstances that lead to this disclosure by our independent auditors. Our issuance of additional equity securities could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

 

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There are no assurances that we will be able to obtain further funds required for continued operations. We are pursuing various financing alternatives to meet immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it could be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our obligations as they come due.

 

Liquidity and Capital Resources

 

As of November 30, 2012, we have yet to generate any revenues.

 

Since inception, we have used our common stock and loans or advances from our officers and directors to raise money for our optioned acquisition and for corporate expenses.

 

Working Capital

 

As of November 30, 2012, we had $102,896 in unallocated working capital.

 

   November 30, 2012   May 31, 2011 
Current Assets  $112,441    111,709 
Current Liabilities   9,545    1,595 
Working Capital  $102,896    110,114 

 

We have incurred recurring losses from inception. Our ability to meet our financial obligations and commitments is primarily dependent upon continued financial support of our shareholders, directors and the continued issuance of equity to new and existing shareholders.

 

Cash Flows

 

   Six months   Six months 
   Ended   Ended 
   November 30, 2012   November 30, 2011 
Net cash used in operating activities  $(178,288)  $(94,135)
Net cash used in investing activities   (67,480)   (47,583)
Net cash provided by financing activities   250,000    - 
Net increase (decrease) in cash  $4,232   $(141,718)

 

Net cash used in operating activities

 

Net cash used in operating activities from inception on October 19, 2006, to November 30, 2012 was $824,161. This negative cash flow from operations is due to the fact that the Company has not generated revenue to date.

 

Net cash used in investing activities

 

Net cash used in investing activities from inception on October 19, 2006, to November 30, 2012, was $223,398 as a result of the purchase of additional mining claims and computer equipment.

 

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Net cash provided by financing activities

 

Net cash provided by financing activities from inception on October 19, 2006, to November 30, 2012, was $1,160,000 as a result of gross proceeds received from sales of our common stock and capital contribution from Company officers.

 

Inflation / Currency Fluctuations

 

Inflation has not been a factor during the six months ended November 30, 2012. Although inflation is moderately higher than it was during 2012 the actual rate of inflation is not material and is not considered a factor in our contemplated capital expenditure program.

 

Subsequent Events

 

On December 7, 2012 the Company issued 500,000 shares of common stock to GeoXplor Corporation.

 

In accordance with ASC 855 Company management reviewed all material events through the date of this report and there are no material subsequent events to report.

 

Off-Balance Sheet Arrangements

 

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

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not Applicable

 

ITEM 4. CONTROLS AND PROCEDURES

 

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 

As of January 15th, 2013, under the direction of the Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a — 15(e) under the Securities Exchange Act of 1934, as amended. Based on the evaluation of these controls and procedures required by paragraph (b) of Sec. 240.13a-15 or 240.15d-15 the disclosure controls and procedures have been found to be ineffective.

 

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in our reports filed under the securities Exchange Act, is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

  

Evaluation of Internal Control Over Financial Reporting

 

Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of November 30,2012. In making this assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. In management’s assessment of the effectiveness of internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) as required by Exchange Act Rule 13a-15(c), our management concluded as of the end of the fiscal year covered by this Annual Report on Form 10-K that our internal control over financial reporting has not been effective.

 

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As defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments,” established by the Public Company Accounting Oversight Board (“PCAOB”), a material weakness is a deficiency or combination of deficiencies that results more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses as of October 18, 2012:

 

i)  Lack of segregation of duties.  At this time, our resources and size prevent us from being able to employ sufficient resources to enable us to have adequate segregation of duties within our internal control system. Management will periodically re-evaluate this situation.

 

ii)  Lack of an independent audit committee. Although we have an audit committee it is not comprised solely of independent directors. We may establish an audit committee comprised solely of independent directors when we have sufficient capital resources and working capital to attract qualified independent directors and to maintain such a committee.

 

iii)  Insufficient number of independent directors. At the present time, our Board of Directors does not consist of a majority of independent directors, a factor that is counter to corporate governance practices as set forth by the rules of various stock exchanges.

 

Our management determined that these deficiencies constituted material weaknesses. Due to a lack of financial resources, we are not able to, and do not intend to, immediately take any action to remediate these material weaknesses. We will not be able to do so until we acquire sufficient financing to do so. We will implement further controls as circumstances, cash flow, and working capital permit. Notwithstanding the assessment that our ICFR was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements fairly present our financial position, results of operations and cash flows for the years covered thereby in all material respects.

 

CHANGES IN INTERNAL CONTROLS.

 

There was no change in our internal controls or in other factors that could affect these controls during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

 

The Company has not taken any steps at this time to address these weaknesses but will formulate a plan before fiscal year ending May 31, 2013.

  

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

 

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

 

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ITEM 1A. RISK FACTORS

 

Risks Associated With Our Business

 

We are an exploration stage company, lack a business history and have losses that we expect to continue into the future. If the losses continue we will have to suspend operations or cease functioning.

 

We are in the very early exploration stage and cannot guarantee that our exploration work will be successful or that any minerals will be found or that any production of minerals will be realized. The search for valuable minerals as a business is extremely risky. We have no business history upon which an evaluation of our future success or failure can be made. As of November 30, 2012 our net loss since inception was $1,627,099. Our ability to achieve and maintain profitability and positive cash flow is dependent upon:

 

  our ability to find a profitable exploration property;

 

  our ability to generate revenues; and

 

  our ability to reduce exploration costs.

 

Because of the speculative nature of exploration of mineral properties, we may never discover a commercially exploitable quantity of minerals, our business may fail and investors may lose their entire investment.

 

We can provide investors with no assurance that exploration on our properties will establish that commercially exploitable reserves of minerals exist on our property. Additional potential problems that may prevent us from discovering any reserves of minerals on our property include, but are not limited to, unanticipated problems relating to exploration and additional costs and expenses that may exceed current estimates. If we are unable to establish the presence of commercially exploitable reserves of minerals on our property our ability to fund future exploration activities will be impeded, we will not be able to operate profitably and investors may lose all of their investment in our company.

 

Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure.

 

Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The expenditures to be made by us in the exploration of the mineral claim may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of our exploration do not reveal viable commercial mineralization, we may decide to abandon our claims. If this happens, our business will likely fail.

 

Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.

 

The search for valuable minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. At the present time we have no coverage to insure against these hazards. The payment of such liabilities may have a material adverse effect on our financial position.

 

We have no known mineral reserves and we may not find any commercial quantities of graphite, gold or silver if we find graphite, gold or silver it may not be in economic quantities. If we fail to find any graphite, gold or silver or if we are unable to find graphite, gold or silver in economic quantities, we will have to suspend operations.

 

We have no known mineral reserves. Even if we find gold or silver, it may not be of sufficient quantity so as to warrant recovery. Additionally, even if we find gold or silver in sufficient quantity to warrant recovery it ultimately may not be recoverable. Finally, even if any gold or silver is recoverable, we do not know that this can be done at a profit. Failure to locate gold or silver in economically recoverable quantities will cause us to suspend operations.

 

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The potential profitability of mineral ventures depends in part upon factors beyond the control of our company and even if we discover and exploit mineral deposits, we may never become commercially viable and we may be forced to cease operations.

 

The commercial feasibility of mineral properties is dependent upon many factors beyond our control, including the existence and size of mineral deposits in the properties we explore, the proximity and capacity of processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental regulation. These factors cannot be accurately predicted and any one or a combination of these factors may result in our company not receiving an adequate return on invested capital. These factors may have material and negative effects on our financial performance and our ability to continue operations.

 

We may be adversely affected by fluctuations in ore and precious metal prices.

 

The value and price of our shares of common stock, our financial results, and our exploration, development and mining activities, if any, may be significantly adversely affected by declines in the price of precious metals and ore. Mineral prices fluctuate widely and are affected by numerous factors beyond our control such as interest rates, exchange rates, inflation or deflation, fluctuation in the value of the United States dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of mineral producing countries throughout the world.

 

The prices used in making resource estimates for mineral projects are disclosed, and generally use significantly lower metal prices than daily metals prices quoted in the news media. The percentage change in the price of a metal cannot be directly related to the estimated resource quantities, which are affected by a number of additional factors. For example, a 10% change in price may have little impact on the estimated resource quantities, or it may result in a significant change in the amount of resources.

 

Transportation difficulties and weather interruptions may affect and delay our proposed mining operations and impact our proposed business.

 

Our mineral properties are accessible by road. The climate in the area is hot and dry in the summer but cold and subject to snow in the winter, which could at times hamper accessibility depending on the winter season precipitation levels. As a result, our exploration plans could be delayed for several months each year.

 

Supplies needed for exploration may not always be available.

 

Competition and unforeseen limited sources of supplies needed for our proposed exploration work could result in occasional spot shortages of supplies of certain products, equipment or materials. There is no guarantee we will be able to obtain certain products, equipment and/or materials as and when needed, without interruption, or on favorable terms. Such delays could affect our proposed business plans.

 

Management will devote only a limited amount of time to Lucky Boy’s business. Failure of our management to devote a sufficient amount of time to our business plans may adversely affect the success of our business.

 

Mr. Kenneth B. Liebscher will be devoting approximately 20 hours per week to Lucky Boy’s business. Failure of our management to devote a sufficient amount of time to our business plans may adversely affect the success of our business.

 

Management lacks formal training in mineral exploration.

 

Our officers and directors have no professional accreditation or formal training in the business of exploration. With no direct training or experience in these areas our management may not be fully aware of many of the specific requirements related to working within this industry. Decisions so made without this knowledge may not take into account standard engineering management approaches that experienced exploration corporations commonly make. Consequently, our business, earnings and ultimate financial success could suffer irreparable harm as a result of management’s lack of experience in the industry. Thus, we will retain such technical experts as are required to provide professional and technical guidance.

 

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We require substantial funds merely to determine if mineral reserves exist on our mineral properties.

 

Any potential development and production of our exploration properties depends upon the results of exploration programs and/or feasibility studies and the recommendations of duly qualified engineers and geologists. Such programs require substantial additional funds. Any decision to further expand our plans on these exploration properties will involve the consideration and evaluation of several significant factors including, but not limited to:

 

  Costs of bringing the property into production including exploration work, preparation of production feasibility studies and construction of production facilities;

 

  Availability and costs of financing;

 

  Ongoing costs of production;

 

  Market prices for the products to be produced;

 

  Environmental compliance regulations and restraints; and

 

  Political climate and/or governmental regulation and control.

 

Risks Associated With Our Common Stock

 

We do not intend to pay dividends on any investment in the shares of stock of our company.

 

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock’s price. This may never happen and investors may lose all of their investment in our company.

 

Because we can issue additional shares of common stock, purchasers of our common stock may incur immediate dilution and may experience further dilution.

 

We are authorized to issue up to 499,000,000 shares of common stock, of which 67,669,881 shares are issued and outstanding as of November 30, 2012 and 1,000,000 shares of preferred stock, of which 675,000 shares are issued and outstanding as of November 30, 2012. Each share of preferred stock is convertible into 100 shares of common stock (1:100) and each share of preferred stock is entitled to 100 votes and thus the conversion of our preferred stock would result in significant dilution to holders of our common stock. Our board of directors has the authority to cause us to issue additional shares of common stock, and to determine the rights, preferences and privileges of such shares, without consent of any of our stockholders. Consequently, the stockholders may experience more dilution in their ownership of our stock in the future.

 

A decline in the price of our common stock could affect our ability to raise further working capital, it may adversely impact our ability to continue operations and we may go out of business.

 

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because we may attempt to acquire a significant portion of the funds we need in order to conduct our planned operations through the sale of equity securities, a decline in the price of our common stock could be detrimental to our liquidity and our operations because the decline may cause investors to not choose to invest in our stock. If we are unable to raise the funds we require for all our planned operations, we may be forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. As a result, our business may suffer, and not be successful and we may go out of business. We also might not be able to meet our financial obligations if we cannot raise enough funds through the sale of our common stock and we may be forced to go out of business.

 

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Our stock is a penny stock. Trading of our stock may be restricted by the Securities and Exchange Commission’s penny stock regulations which may limit a stockholder’s ability to buy and sell our stock.

 

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

 

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

 

In addition to the “penny stock” rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority (FINRA) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.

 

Risks Related To Our Financial Results and Need For Additional Financing

 

Our auditors’ reports contain a statement that our net loss and limited working capital raise substantial doubt about our ability to continue as a going concern.

 

Our independent registered public accountants have stated in their report, included in this annual report that our significant operating losses and working capital deficiency raise substantial doubt about our ability to continue as a going concern. We had net losses of $375,546 and $658,714, respectively, for the fiscal years ended May 31, 2012 and 2011. We will be required to raise substantial capital to fund our capital expenditures, working capital and other cash requirements since our current cash assets are exhausted. We are currently searching for sources of additional funding, including potential joint venture partners, while we continue the initial exploration phase on our mining claims. The successful outcome of future financing activities cannot be determined at this time and there are no assurances that, if achieved, we will have sufficient funds to execute our intended business plan or generate positive operational results.

 

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We will need additional capital to achieve our current business strategy and our inability to obtain additional financing will inhibit our ability to expand or even maintain our research, exploration and development efforts.

 

In addition to our current accumulated deficit, we expect to incur additional losses in the foreseeable future. Until we are able to determine if there are mineral deposits available for extraction on our properties, we are unlikely to be profitable. Consequently, we will require substantial additional capital to continue our exploration and development activities. There is no assurance that we will not incur additional and unplanned expenses during our continuing exploration and development activities. When additional funding is required, we intend to raise funds either through private placements or public offerings of our equity securities. There is no assurance that we will be able to obtain additional financing through private placements and/or public offerings necessary to support our working capital requirements. To the extent that funds generated from any private placements and/or public offerings are insufficient, we will have to raise additional working capital through other sources, such as bank loans and/or financings. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms.

 

If we are unable to secure adequate sources of funds, we may be forced to delay or postpone the exploration, development and research of our properties, and as a result, we might be required to diminish or suspend our business plans. These delays in development would have an adverse effect on our ability to generate revenues and could require us to possibly cease operations. In addition, such inability to obtain financing on reasonable terms could have a negative effect on our business, operating results or financial condition to such extent that we are forced to restructure, file for bankruptcy protection, sell assets or cease operations, any of which could put your investment dollars at significant risk.

 

We are incurring increased costs as a result of being a publicly-traded company.

 

As a public company, we incur significant legal, accounting, and other expenses that we would not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, as well as new rules subsequently implemented by the Securities and Exchange Commission, has required changes in corporate governance practices of public companies. These new rules and regulations have increased our legal and financial compliance costs and have made some activities more time-consuming and costly. For example, as a result of becoming a public company, we have adopted policies regarding internal controls and disclosure controls and procedures. In addition, we have incurred additional costs associated with our public company reporting requirements. These new rules and regulations have made it more difficult and more expensive for us to obtain director and officer liability insurance, which we currently cannot afford to do. As a result of the new rules, it may become more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. We cannot predict or estimate the amount of additional costs we may incur as a result of being a public company or the timing of such costs and/or whether we will be able to raise the funds necessary to meet the cash requirements for these costs.

 

Because we may never earn revenues from our operations, our business may fail and then investors may lose all of their investment in our company.

 

We have no history of revenues from operations. We have never had significant operations and have no significant assets. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. Our company has a limited operating history and is in the exploration stage. The success of our company is significantly dependent on the uncertain events of the discovery and exploitation of mineral reserves on our properties or selling the rights to exploit those mineral reserves. If our business plan is not successful and we are not able to operate profitably, then our stock may become worthless and investors may lose all of their investment in our company.

 

Prior to completion of the exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from the exploration of our mineral claims in the future, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide no assurance that we will generate any revenues or ever achieve profitability. If we are unsuccessful in addressing these risks, our business will fail and investors may lose all of their investment in our company.

 

18
 

  

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

 

During the past five years, National Graphite Corp (formerly Lucky Boy Silver Corp.) has sold the following securities which were not registered under the Securities Act:

 

October 31, 2006

 

We issued 90,000,000 (6,000,000 pre-split) shares of restricted common stock at a price of $0.001 per share through a Section 4(2) exemption to Ian Jackson our founder, officer and director on October 31, 2006 for cash consideration of $6,000.

 

Mr. Jackson is a sophisticated investor and was in possession of all material information relating to Lucky Boy. Further, no commissions were paid in connection with the sale of the shares and no general solicitation was made. These shares were subsequently purchased by Kenneth B. Liebscher, our President and CEO. The purchase price of the shares was $200,000, which was paid in cash and by the personal funds of Mr. Liebscher.

 

November 30, 2006

 

We issued 13,500,000(900,000 pre-split) shares of restricted common stock at a price of $0.01 per share through a Rule 504D offering in November, 2006 for cash consideration of $9,000 to four (4) individuals.

  

Name and Address  Date   Shares   Consideration 
Ray Urquart
155 Tyee Drive, No. 428
Point Roberts, WA 98281
   November 14, 2006    

3,750,000

(250,000 pre-split)

   $2,500 
Elizabeth O’Connor
174 Gulf Road, No. 34
Point Roberts, WA 98281
   November 16, 2006    

2,250,000

(150,000 pre-split)

   $1,500 
John McNulty
P.O. Box 4370
Seattle, WA 98194
   November 14, 2006    

3,000,000

(200,000 pre-split)

   $2,000 
Troy Jackson
1685 H Street, No. 155
Blaine, WA 98230
   November 14, 2006    

4,500,000

(300,000 pre-split)

   $3,000 

 

None of the above are deemed to be accredited investors and each was in possession of all material information relating to

 

National Graphite (Lucky Boy). Further, no commissions were paid to anyone in connection with the sale of the shares and no general solicitation was made to anyone. All of the purchasers are known to our directors

 

We completed the offering pursuant to Regulation D of the Securities Act. Each purchaser represented his intention to acquire the securities for investment only and not with a view toward distribution. Appropriate legends were affixed to the stock certificate issued to each purchaser in accordance with Regulation D. Each investor was given adequate access to sufficient information about us to make an informed investment decision. None of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved. No registration rights were granted to any of the purchasers.

 

The issuance of securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) or Rule 504D of the Securities Act as transactions by an issuer not involving any public offering. The recipients of securities in each such transaction represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the share certificates and other instruments issued in such transactions. The sales of these securities were made without general solicitation or advertising.

 

19
 

  

May 31, 2008

 

We issued 30,000,000 (2,000,000 pre-split) shares of unrestricted common stock at a price of $0.05 per share between March 01 and May 31, 2008 for cash consideration of $100,000 to thirty (30) individuals. In addition, four selling shareholders resold 900,000 shares, acquired as outlined above, to four arm’s length individuals. We sold the shares or acknowledged the resale of the selling shareholder’s shares prior to the declaration of an effective date for our SB-2 registration statement filed on October 11, 2007 under our mistaken assumption that the registration statement had become effective through the passage of time after its filing.

 

Selling shares prior to the establishment of an effective date can result in potential violations of federal and state securities laws. As a result, these stock issuances and resales may have violated the Securities Act of 1933. Rescission offers for such potential violations are commonly made by companies in these situations and the filing of a registration statement is a normal part of the rescission offer process. We have previously disclosed in our regulatory filings that all of the subscribers had been informed of this situation. As a result, we were prepared to refund part or all associated monies and to cancel part or all associated common shares that could have been tendered for rescission.

 

On February 27, 2009, we filed an S-1 rescission offering registration statement which became effective on March 5, 2009, and which addressed federal and state securities laws compliance issues by allowing the holders of the shares covered by the rescission offer to rescind the underlying securities transactions and sell those securities back to us or the selling shareholders. In addition, we conducted the offering in order to be able to reduce our contingent liabilities.

 

The rescission offer process closed on April 24, 2009, with no shares being submitted for rescission. When the rescission offer expired, any person who did not accept the offer received freely tradable stock.

 

On January 24, 2010 the Company issued 290,000 and 150,000 (10,000 pre-split) shares of its common stock to officers of the Company for services provided. The fair value of the shares was determined based on the market price of $0.40 per share on the date of issuance. The Company recorded $120,000 of professional fees in conjunction with this issuance.

 

On January 27, 2010 the Company issued 5,625,000 (375,000 pre-split) shares of its common stock for $150,000 cash.

 

On January 27, 2010 the Company issued 750,000 (50,000 pre-split) shares of its common stock for $20,000 cash.

 

On February 8, 2010 the Company issued 150,000 post-split shares of its common stock in exchange for mineral claims. The fair value of the shares was determined based on the market price of $0.40 per share on the date of issuance.

 

On March 12, 2010 the Company’s board of directors approved a 15:1 forward stock split. This change has been retroactively applied to the Company’s statement of stockholder’s equity.

 

On May 17, 2010 the Company received a $50,000 payment for 125,000 shares of common stock. As of May 31, 2010, the Company had not issued these shares and has recognized a stock subscription payable for the $50,000 deposit. These shares were issued on August 28, 2010.

 

On October 25, 2010 the Company issued 356,154 units consisting of one share of common stock and one warrant for cash at $0.63per share. The attached warrants are exercisable for two years from issuance and have an exercise price of $0.85 per share for one year from issuance which increased to $1.05 in the second year. The Company used the Black-Scholes option pricing model to value the warrants based on the terms of the warrant, a volatility of 350% risk free rate of 0.37%, and a stock price and issuance of $0.65. Based on this calculation, the Company determined that the relative fair value of the warrants is $113,148 and allocated this amount of the additional paid-in capital to the warrants.

 

20
 

  

On December 15, 2010 the Company issued 47,060 shares of its restricted common stock issued to 20 shareholders subscribed for at a price of $0.85 per share in private placements for $40,000 cash.

 

On December 29, 2010 the Company issued 300,000 of its restricted common stock to a related party at $0.001 per share for consulting services valued at $255,000.

 

On December 31, 2010 the Company issued 360,000 of its restricted common stock for investor relation services at $0.001 valued at $306,000.

 

On January 3, 2011 the Company exchanged 67,500,000 common shares for 675,000 preferred shares with 1 to 100 voting and conversion ratio preferred to common shares.

 

On January 6, 2012 the Company issued 83,334 shares of its common stock for $50,000 cash.

 

On February 14, 2012 the Company issued 416,667 shares of its common stock for $250,000 cash.

 

On July 18, 2012 the Company issued 416,667 shares of its common stock for $250,000 cash.

 

On July 23, 2012 the Company issued 100,000 shares of its common stock to complete the acquisition of certain mineral claims in Quebec, Canada.

 

On October 19, 2012 the Company cancelled 8,000,000 shares of common stock held by a director of the Company who is a related party.

 

On December 7, 2012 the Company issued 500,000 shares of common stock to GeoXplor Corporation.

 

All of these shares were issued to accredited investors under the exemption from Section 5 of the Securities Act of 1933 (the “Act”) contained in Section 4(6) of the Act.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

Not Applicable

 

ITEM 4. [REMOVED AND RESERVED]

 

ITEM 5. OTHER INFORMATION

 

Change of Jurisdiction

 

On March 22, 2011, the corporation converted from a Wyoming corporation to a Nevada corporation pursuant to Wyoming Statutes Title 17, ch. 16, Sect.(s) 820, 821 and 1114 and Nevada Revised Statutes 92A.205. This conversion did not alter the number of authorized shares, or the number of issued and outstanding shares, of the corporation. The voting and other rights of the common and preferred shares of the company’s capital stock remain substantially similar under Nevada law. The powers of the company’s officers, directors and shareholders also remain substantially the same. Our authorized capital stock continues to consist of 499,000,000 shares of common stock, par value $0.001 per share and 1,000,000 shares of preferred stock, par value $0.001 per share.

 

Name Change

 

On February 5, 2010 we filed an Amendment to Articles with the Wyoming Secretary of State and changed our name from “Sierra Ventures Inc.” to “Lucky Boy Silver Corp.” Our shares of common stock were quoted on the OTC Bulletin Board under the symbol “LUCB”. Our CUSIP number was 549517 100. The quotation was first posted at the opening on May 29, 2009 with an opening bid of $0.05 ($0.0033 post-split) and offer at $0.10 ($0.0067 post-split). On September 27, 2011 the Company’s common shares became eligible for DTC electronic trading.

 

21
 

  

On May 9, 2012 the Company changed its name to National Graphite Corp. to more accurately reflect the focus of the Company. Our shares of common stock are now quoted on the OTC Bulletin Board under the symbol “NGRC”. Our new CUSIP number is 636268 104.

 

Letter Agreement

 

On February 8, 2010, Ken Liebscher, our President, Chief Executive Officer, signed a letter agreement with Monte Cristo Projects LLC and Alan Chambers, whereby Mr. Liebscher has agreed to acquire 38 unpatented BLM claims including those known as Silver Summit and Silver Strike and two historic silver mine leases known as Lucky Boy Silver Mine and the Black Butte Silver Mine (“AG Properties”), all located in Mineral County, State of Nevada.

 

In consideration for the claims, Mr. Liebscher agreed to pay US$55,000 to Monte Cristo Projects LLC and we issued 75,000 shares of common stock of our company to Monte Cristo Projects LLC and 75,000 shares of common stock of our company to Alan Chambers.

 

On February 23, 2010, Mr. Liebscher assigned all of his right, title and interest in and to the letter agreement and the AG Properties to our company in consideration for $1.00. Our company will carry out the obligations and take the benefit of the letter agreement.

 

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

 

Exhibit No.   Description
3.1   Articles of Incorporation filed as an exhibit to our Form SB-2 filed on October 12, 2007
3.2   Bylaws filed as an exhibit to our Form SB-2 filed on October 12, 2007
3.3   Filed Articles of Conversion and Corporate Charter issued by the Secretary of State of the State of Nevada filed as an exhibit to our Form 8-K on April 5, 2011
3.4   Filed Amended Articles changing name to National Graphite Corp. filed as an exhibit to our
Form 8K on 9/04/12.
10.1   Option to Purchase and Royalty Agreement dated March 22, 2007 with JiujiangGaoFeng Mining
Industry Limited Company filed as an exhibit to our Form SB-2 filed on October 12, 2007
10.2   Form of Private Placement subscription agreement attached as an exhibit to our Form SB-2 filed on October 12, 2007
10.3   Escrow Agreement dated November 25, 2008 between Ian Jackson, Sierra Ventures Inc. and Harcourt Chan filed as an exhibit to our Form S-1/A filed on January 14, 2009
10.4   First Amendment to Option to Purchase and Royalty Agreement) between Sierra Ventures, Inc. and JiujiangGaoFeng Mining Industry Limited Company dated May 15 2009 filed as an exhibit to our
Form 10-K filed on September 8, 2009
10.5   Form of Private Placement subscription agreement filed as an exhibit to our Form 8-K filed on
December 31, 2009
10.6   Letter Agreement dated February 8, 2010 between Ken Liebscher, Monte Cristo Projects LLC and Alan Chambers filed as an exhibit to our current report on Form 8-K filed on March 1, 2010
10.7   Assignment Agreement dated February 23, 2010 with Ken Liebscher filed as an exhibit to our
current report on Form 8-K filed on March 1, 2010
10.8   Business Consulting Agreement dated December 21, 2009 with Wannigan Consulting Corp.
(incorporated by reference to an exhibit to our annual report on Form 10K filed September 14, 2010.
10.9   Share Issuance Agreement dated October 25, 2010 between Lucky Boy Silver Corp. and Cardinal
Capital Holdings Limited (incorporated by reference to an exhibit to our current report on Form 8-K filed October 29, 2010)

 

22
 

10.10   Investor Relations Agreement dated December 31, 2010 with International IR, Inc. (incorporated by
reference to an exhibit to our current report on Form 10Q filed January 17, 2012)
10.11   Share Issuance Agreement dated October 16, 2012 between National Graphite Corp. and Calypso
Financial Limited with addendum.
14.1   Code of Ethics filed as an exhibit to our Form SB-2 filed on October 12, 2007
31.1*   Certification Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002
31.2*   Certification Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002
32.1*   Certification Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
99.0   Form 14c authorizing change in Company shares authorized from 500,000,000 common to 499,000,000 common and 1,000,000 preferred with conversion and voting rights of 1:100 files on Form 8-K filed on December 27, 2010
99.1  

Purchase Agreement with Habitant Minerals filed as an exhibit to our current report on Form 8K

filed on April 23, 2012.

99.2   Purchase Agreement with GeoXplorInc. filed as an exhibit to our current report on Form 8K filed on May 02, 2012.

 

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

 

*attached herewith

 

23
 

   

SIGNATURES

 

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

 

NATIONAL GRAPHITE Corp.

(Registrant)

 

Date: January 16, 2013

 

By: /s/ Kenneth Liebscher   By: /s/ Fortunato Villamagna
  KENNETH B. LIEBSCHER,     DR. FORTUNATO VILLAMAGNA,
  President, Chief Executive Officer     Secretary, Treasurer, Chief Financial Officer
  Principal Executive Officer     Principal Financial, Officer and
        Principal Accounting Officer

 

24
 

EX-31.1 2 ex31-1.htm Exhibit 31.1

 

Exhibit 31.1

 

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

 

I, Kenneth B. Liebscher, certify that:

 

  1. I have reviewed this quarterly report of National Graphite Corp. for the period ended November 30, 2012,
     

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
     

  4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Registrant and have:
     

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which the report is being prepared;
     

  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     

  c. Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     

  d. Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
     

  5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
     

  a. All significant deficiencies and material weaknesses in the design of operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
     

  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

 

Date: January 16, 2013

 

/s/ Kenneth B. Liebscher  
Kenneth B. Liebscher, CEO  

 

 
 

EX-31.2 3 ex31-2.htm Exhibit 31.2

 

 Exhibit 31.2

 

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

 

I, Fortunato Villamagna, certify that:

 

1.I have reviewed this quarterly report of National Graphite Corp. for the period ended November 30, 2012.
   
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
   
4.The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Registrant and have:
   
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which the report is being prepared;
   
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
   
c.Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
   
d.Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
   
5.The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
   
a.All significant deficiencies and material weaknesses in the design of operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
   
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

 

Date: January 16, 2013

 

/s/ Fortunato Villamagna  
FortunatoVillamagna, CFO  

 

 
 

 

EX-32.1 4 ex32-1.htm Exhibit 32.1

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

The undersigned hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to their knowledge, the Quarterly Report on Form 10-Q for the period ended November 30, 2012 of National Graphite Corp (formerly Lucky Boy Silver Corp.) (the “Company”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in such periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in such report.

 

Very truly yours,

 

/s/ Kenneth B. Liebscher  
Kenneth B. Liebscher  
Chief Executive Officer  
   
Dated: January 16, 2013  

 

/s/ Fortunato Villamagna

 
Fortunato Villamagna  
Chief Financial Officer  
   
Dated: January 16, 2013  

 

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been

provided to National Graphite Corp. and will be furnished to the Securities and Exchange Commission or its staff

upon request.

 

 
 

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Weighted Average Exercise Price Share Based Compensation Arrangement By Share Based Payment Award Warrants Forfeitures Weighted Average Remaining Contractual Life Years Share Based Compensation Arrangement By Share Based Payment Award Warrants Granted Aggregate Intrinsic Value Share Based Compensation Arrangement By Share Based Payment Award Warrants Granted Weighted Average Exercise Price Share Based Compensation Arrangement By Share Based Payment Award Warrants Granted Weighted Average Remaining Contractual Life Years Share Based Compensation Arrangement By Share Based Payment Award Warrants Outstanding Aggregate Intrinsic Value Share Based Compensation Arrangement By Share Based Payment Award Warrants Outstanding Weighted Average Exercise Price Share Based Compensation Arrangement By Share Based Payment Award Warrants Outstanding Weighted Average Remaining Contractual Life Years Stock Options And Warrants Disclosure [Abstract] Stock Options And Warrants Disclosure [Text Block] Upon Signing Of Agreement From Effective Date [Member] Warrants at fair value Warrants exeicisable period Warrants Exercise Price Per Share Warrants Exercise Price Per Share Second Year Warrants risk free rate Warrants volatility rate Assets, Current Other Assets Assets Liabilities, Current Development Stage Enterprise, Deficit Accumulated During Development Stage Stockholders' Equity Attributable to Parent Liabilities and Equity Operating Expenses Operating Income (Loss) Increase (Decrease) in Prepaid Expense Increase (Decrease) in Deposits Net Cash Provided by (Used in) Operating Activities Payments to Acquire Machinery and Equipment Payments to Acquire Mineral Rights Net Cash Provided by (Used in) Investing Activities Net Cash Provided by (Used in) Financing Activities Cash and Cash Equivalents, Period Increase (Decrease) Mineral interests [Default Label] Aggregate Intrinsic Value, Exercisable, ending balance Share-based Compensation Arrangement by Share-based Payment Award, Non-Option 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Mineral Interests
6 Months Ended
Nov. 30, 2012
Mineral Interests  
Mineral Interests

NOTE 4 – MINERAL INTERESTS

 

As of May 31, 2012 the Company had capitalized $401,389 of costs related to the acquisition of mineral interests on mineral properties located throughout the United States. During the six months ended November 30, 2012, the Company capitalized $42,479 of additional cash expenditures and $60,000 in stock issuances related to the acquisition of mineral interests. The Company also reclassified $25,000 of cash payments previously recorded as deposits to mineral interest as the terms of the deposit were fulfilled during the six month period, leaving a balance of capitalized mineral interests of $528,868 as of November 30, 2012. The company is in default of the acquisition agreement with GeoXplor Corporation as of November 30, 2012. The terms of the agreement with GeoXplor are as follows:

 

The purchase price for the Property is a total of $425,000 in cash, an issuance of 2,500,000 shares of the Company’s Restricted Common Stock, and a work commitment on the Property of up to $1,000,000 over four years as follows:

 

a.) Cash Consideration: Purchaser will pay Seller $425,000 USD in cash consideration as follows :

 

i)   USD $50,000 upon the signing of the Agreement ( the “Effective Date”),

 

ii)   an additional USD $25,000 on or before 6 months from the Effective Date ,

 

iii)   an additional USD $25,000 on or before 12 months from the Effective Date,

 

iv)   an additional USD $50,000 on or before 18 months from the Effective Date,

 

v)   an additional USD $75,000 on or before 24 Months from the Effective Date,

 

vi)   an additional USD $50,000 on or before 30 months from the Effective Date,

 

vii)   an additional USD $50,000 on or before 36 months from the Effective Date,

 

viii)   an additional USD $50,000 on or before 42 months from the Effective Date,

 

ix)   an additional USD $50,000 on or before 48 months from the Effective Date (for a total cash consideration of $425,000 on or before 48 months from and after the Effective Date.)

 

b) Stock Consideration: (restricted common shares)

 

i)   500,000 shares upon the signing of the Agreement (the “Effective Date”),

 

ii)   500,000 shares on or before 6 months from the Effective Date,

 

iii)   500,000 shares on or before 18 months from the Effective Date,

 

iv)   500,000 shares on or before 24 months from the Effective Date,

 

v)   500,000 shares on or before 48 months from the Effective Date,

 

c) Work Commitment:

 

Purchaser will provide funds for the conduct of a program of work to be undertaken by the Seller for the benefit of the Property of not less than USD $1,000,000 over 4 years as follows:

 

i)   $100,000 on or before 12 months from the Effective Date,

 

ii)   $300,000 on or before 24 months from the Effective Date,

 

iii)   $300,000 on or before 36 months from the Effective Date,

 

iv)   $300,000 on or before 48 months from the Effective Date.

 

According to the agreement a payment of $25,000 was due during the period ending November 30, 2012 along with the issuance of 500,000 shares of the Company’s common stock. On December 7, 2012 the Company issued 500,000 shares of common stock to GeoXplor to satisfy the required stock issuance that was due during the period ended November 30, 2012. The Company intends to make the required $25,000 payment that was due during the period ended November 30, 2012. In addition, the Company intends to satisfy the terms of the agreement in full and complete the acquisition.

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Summary of Significant Accounting Policies
6 Months Ended
Nov. 30, 2012
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

In preparing financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses in the statement of operations. Actual results could differ from those estimates.

 

Basic Loss per Common Share

 

Basic loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. Due to net losses at November 30, 2012 and 2011, the effect of the potential common shares resulting from warrants was excluded, as the effect would have been anti-dilutive.

 

    For the
Six Months Ended
December 31, 2012
    For the
Six Months Ended
November 30, 2011
 
Net Loss (numerator)   $ (215,143 )   $ (245,158 )
                 
Common Shares (denominator)     73,654,671       74,153,214  
Net loss per share amount   $ (0.00 )   $ (0.00 )

 

Recent Accounting Pronouncements

 

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.

XML 15 R2.htm IDEA: XBRL DOCUMENT v2.4.0.6
Condensed Balance Sheets (Unaudited) (USD $)
Nov. 30, 2012
May 31, 2012
CURRENT ASSETS    
Cash $ 112,441 $ 108,209
Prepaid expenses    3,500
Total Current Assets 112,441 111,709
PROPERTY AND EQUIPMENT, net 945 1,350
OTHER ASSETS    
Deposits 1,400 26,400
Mineral interests 528,869 401,389
Total Other Assets 530,269 427,789
TOTAL ASSETS 643,655 540,848
CURRENT LIABILITIES    
Accounts payable and accrued expenses 9,545 1,595
Total Current Liabilities 9,545 1,595
STOCKHOLDERS' EQUITY    
Preferred stock, 1,000,000 shares authorized at par value of $0.001; 675,000 and 675,000 shares issued and outstanding, respectively 675 675
Common stock, 499,000,000 shares authorized at par value of $0.001; 67,669,881 and 75,153,214 shares issued and outstanding, respectively 67,670 75,153
Additional paid-in capital 2,192,805 1,875,322
Other comprehensive income 59 59
Deficit accumulated during the exploration stage (1,627,099) (1,411,956)
Total Stockholders' Equity 634,110 539,253
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 643,655 $ 540,848
XML 16 R6.htm IDEA: XBRL DOCUMENT v2.4.0.6
Condensed Financial Statements
6 Months Ended
Nov. 30, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Condensed Financial Statements

NOTE 1 – CONDENSED FINANCIAL STATEMENTS

 

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at November 30, 2012, and for all periods presented herein, have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s May 31, 2012 audited financial statements. The results of operations for the periods ended November 30, 2012 and 2011 are not necessarily indicative of the operating results for the full years.

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XML 18 R7.htm IDEA: XBRL DOCUMENT v2.4.0.6
Going Concern
6 Months Ended
Nov. 30, 2012
Mineral interests [Default Label]  
Going Concern

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 and no revenues are anticipated until the Company begins extracting and selling gold, and there is no assurance that a commercially viable deposit exists on the mineral claims that the Company has under option. These conditions raise substantial doubt as to the Company’s ability 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.

 

Management’s plan to support the Company in its operations and to maintain its business strategy is to raise funds through public offerings and to rely on officers and directors to perform essential functions with minimal compensation. If the Company does not raise all of the money it needs from public offerings, it will have to find alternative sources, such as a second public offering, a private placement of securities, or loans from its officers, directors or others. If the Company requires additional cash and can’t raise it, it will either have to suspend operations until the cash is raised, or cease business entirely.

 

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.

XML 19 R3.htm IDEA: XBRL DOCUMENT v2.4.0.6
Condensed Balance Sheets (Parenthetical) (USD $)
Nov. 30, 2012
May 31, 2012
Statement of Financial Position [Abstract]    
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares issued 675,000 675,000
Preferred stock, shares outstanding 675,000 675,000
Common stock, shares authorized 499,000,000 499,000,000
Common stock, par value $ 0.001 $ 0.001
Common stock, shares issued 67,669,881 75,153,214
Common stock, shares outstanding 67,669,881 75,153,214
XML 20 R17.htm IDEA: XBRL DOCUMENT v2.4.0.6
Mineral Interests (Details Narrative) (USD $)
0 Months Ended 6 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended
Dec. 07, 2012
Nov. 30, 2012
May 31, 2012
Nov. 30, 2012
Upon Signing Of Agreement From Effective Date [Member]
Nov. 30, 2012
On Or Before 6 Months From Effective Date [Member]
Nov. 30, 2012
On Or Before 12 Months From Effective Date [Member]
Nov. 30, 2012
On Or Before 18 Months From Effective Date [Member]
Nov. 30, 2012
On Or Before 24 Months From Effective Date [Member]
Nov. 30, 2012
On Or Before 30 From Effective Date [Member]
Nov. 30, 2012
On Or Before 36 Months From Effective Date [Member]
Nov. 30, 2012
On Or Before 42 Months From Effective Date Member [Member]
Nov. 30, 2012
On Or Before 48 Months From Effective Date [Member]
Nov. 30, 2012
On Or Before 48 Months From And After Effective Date [Member]
Capitalized mineral interests   $ 528,869 $ 401,389                    
Capitalized additional cash expenditure   42,479                      
Stock issuances related to acquisition of mineral interests   60,000                      
Reclassification of cash payments   25,000                      
Cash consideration acquisition price for the property   425,000   50,000 25,000 25,000 50,000 75,000 50,000 50,000 50,000 50,000 425,000
Company's restricted common stock issued   2,500,000   500,000 500,000   500,000 500,000       500,000  
Work Commitment amount   1,000,000       100,000   300,000   300,000   300,000  
Work Commitment amount expiration period   4 years                      
Agreement payment cash due   $ 25,000                      
Company issued shares of common stock to GeoXplor Corporation 500,000                        
XML 21 R1.htm IDEA: XBRL DOCUMENT v2.4.0.6
Document and Entity Information
6 Months Ended
Nov. 30, 2012
Jan. 15, 2013
MineralInterestDisclosureTextBlock    
Entity Registrant Name National Graphite Corp  
Entity Central Index Key 0001409432  
Document Type 10-Q  
Document Period End Date Nov. 30, 2012  
Amendment Flag false  
Current Fiscal Year End Date --05-31  
Is Entity a Well-known Seasoned Issuer? No  
Is Entity a Voluntary Filer? No  
Is Entity's Reporting Status Current? Yes  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   68,169,881
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2013  
XML 22 R18.htm IDEA: XBRL DOCUMENT v2.4.0.6
Stockholders' Equity (Details Narrative) (USD $)
0 Months Ended 6 Months Ended 73 Months Ended 0 Months Ended
Oct. 17, 2012
Oct. 19, 2012
Jul. 23, 2012
Jul. 18, 2012
Jan. 03, 2011
Dec. 15, 2010
Nov. 30, 2012
Nov. 30, 2011
Nov. 30, 2012
Dec. 29, 2011
Consultant 1 [Member]
Dec. 29, 2011
Consultant 2 [Member]
Amount payable in cash for acquisition             $ 50,000        
Common stock shares issued with consideration     100,000       100,000        
Cash paid on agreement       25,000     25,000        
Common stock shares valued price per share             $ 0.60        
Stock issued for cash, shares       416,667   47,060 416,667        
Stock issued for cash       250,000   40,000 250,000        
Cancellation of common stock, shares   8,000,000                  
Proceeds from third party 2,500,000                    
Receipt of advances not more than $ 250,000                    
Common stock issued in exchange of preferred stock         67,500,000            
Preferred stock shares exchanged for common stock         675,000            
Preferred stock voting rights         1 to 100            
Common shares issued for services                   561,000 360,000 300,000
XML 23 R4.htm IDEA: XBRL DOCUMENT v2.4.0.6
Condensed Statements of Operations (Unaudited) (USD $)
3 Months Ended 6 Months Ended 73 Months Ended
Nov. 30, 2012
Nov. 30, 2011
Nov. 30, 2012
Nov. 30, 2011
Nov. 30, 2012
Income Statement [Abstract]          
REVENUES               
Exploration of resource properties 36,400 14,093 93,398 18,708 184,543
Impairment of mineral interests    7,500    7,500 115,000
Depreciation expense 202 202 404 404 1,482
Professional fees 17,713 92,841 46,951 179,138 1,043,036
General and administrative expenses 32,020 20,146 74,390 39,408 283,038
Total Operating Expenses 86,335 134,782 215,143 245,158 1,627,099
LOSS FROM OPERATIONS (86,335) (134,782) (215,143) (245,158) (1,627,099)
PROVISION FOR INCOME TAXES               
NET LOSS $ (86,335) $ (134,782) $ (215,143) $ (245,158) $ (1,627,099)
BASIC AND DILUTED LOSS PER SHARE $ 0 $ 0 $ 0.00 $ 0.00  
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 71,889,661 74,153,214 73,654,671 74,153,214  
XML 24 R12.htm IDEA: XBRL DOCUMENT v2.4.0.6
Subsequent Events
6 Months Ended
Nov. 30, 2012
Subsequent Events [Abstract]  
Subsequent Events

NOTE 7 – SUBSEQUENT EVENTS

 

On December 7, 2012 the Company issued 500,000 shares of common stock to GeoXplor Corporation.

 

In accordance with ASC 855 Company management reviewed all material events through filing of these financial statements and there are no material subsequent events to report.

XML 25 R11.htm IDEA: XBRL DOCUMENT v2.4.0.6
Stock Options and Warrants
6 Months Ended
Nov. 30, 2012
Stock Options And Warrants  
Stock Options and Warrants

NOTE 6 – STOCK OPTIONS AND WARRANTS

 

The Company utilizes the Black-Scholes option-pricing model for calculating the fair value of the options granted as defined by ASC Topic 718, which is an acceptable valuation approach under ASC 718. This model requires the input of subjective assumptions, including the expected price volatility of the underlying stock.

 

Projected data related to the expected volatility and expected life of stock options is based upon historical and other information, and notably, the Company’s common stock has limited trading history. Changes in these subjective assumptions can materially affect the fair value of the estimate, and therefore, the existing valuation models do not provide a precise measure of the fair value of the Company’s employee stock options.

 

On October 25, 2010 the Company issued 356,154 units consisting of one share of common stock and one warrant for cash at $0.63 per share. The attached warrants are exercisable for two years from issuance and have an exercise price of $0.85 per share for one year from issuance which increased to $1.05 in the second year. The Company used the Black-Scholes option pricing model to value the warrants based on the terms of the warrant, a volatility of 350 percent, risk free rate of 0.37 percent, and a stock price and issuance of $0.63. Based on this calculation, the Company determined that the relative fair value of the warrants is $136,699 and allocated this amount of the additional paid-in capital to the warrants. As of November 30, 2012 all the above options have expired and the Company no longer has any outstanding unexercised warrants.

 

A summary of all warrants outstanding and exercisable as of November 30, 2012 and changes during the year then ended is set forth below:

 

    Shares     Weighted Average 
Exercise 
Price
    Weighted Average Remaining Contractual
Life (Years)
    Aggregate Intrinsic
Value
 
Outstanding at May 31, 2012     356,154     $ 0.38       0.40     $ 136,699  
Granted     -       -       -       -  
Expired     356,154       -       -       -  
Exercised     -       -       -       -  
Forfeited     -       -       -       -  
Outstanding at November 30, 2012     -       -       -       -  
Exercisable at November 30, 2012     -       -       -       -  

XML 26 R19.htm IDEA: XBRL DOCUMENT v2.4.0.6
Stock Options and Warrants (Details Narrative) (USD $)
0 Months Ended
Oct. 25, 2010
Stock Options And Warrants  
Issuance of common stock and warrants for cash 356,154
Common stock and Warrants price per share $ 0.63
Warrants exercisable period 2 years
Warrants exercise price per share $ 0.85
Warrants exercise price per share in second year $ 1.05
Warrants volatility rate 350.00%
Warrants risk free rate 0.37%
Warrants at fair value $ 136,699
XML 27 R15.htm IDEA: XBRL DOCUMENT v2.4.0.6
Stock Options and Warrants (Tables)
6 Months Ended
Nov. 30, 2012
Stock Options And Warrants  
Summary of Warrants Outstanding and Exercisable

A summary of all warrants outstanding and exercisable as of November 30, 2012 and changes during the year then ended is set forth below:

 

    Shares     Weighted Average 
Exercise 
Price
    Weighted Average Remaining Contractual
Life (Years)
    Aggregate Intrinsic
Value
 
Outstanding at May 31, 2012     356,154     $ 0.38       0.40     $ 136,699  
Granted     -       -       -       -  
Expired     356,154       -       -       -  
Exercised     -       -       -       -  
Forfeited     -       -       -       -  
Outstanding at November 30, 2012     -       -       -       -  
Exercisable at November 30, 2012     -       -       -       -  

XML 28 R13.htm IDEA: XBRL DOCUMENT v2.4.0.6
Summary of Significant Accounting Policies (Policies)
6 Months Ended
Nov. 30, 2012
Summary Of Significant Accounting Policies Policies  
Use of Estimates

Use of Estimates

 

In preparing financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses in the statement of operations. Actual results could differ from those estimates.

Basic Loss Per Common Share

Basic Loss per Common Share

 

Basic loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. Due to net losses at November 30, 2012 and 2011, the effect of the potential common shares resulting from warrants was excluded, as the effect would have been anti-dilutive.

 

    For the
Six Months Ended
December 31, 2012
    For the
Six Months Ended
November 30, 2011
 
Net Loss (numerator)   $ (215,143 )   $ (245,158 )
                 
Common Shares (denominator)     73,654,671       74,153,214  
Net loss per share amount   $ (0.00 )   $ (0.00 )

Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.

XML 29 R14.htm IDEA: XBRL DOCUMENT v2.4.0.6
Summary of Significant Accounting Policies (Tables)
6 Months Ended
Nov. 30, 2012
Accounting Policies [Abstract]  
Schedule of Basic Loss Per Common Share

Due to net losses at November 30, 2012 and 2011, the effect of the potential common shares resulting from warrants was excluded, as the effect would have been anti-dilutive.

 

    For the
Six Months Ended
December 31, 2012
    For the
Six Months Ended
November 30, 2011
 
Net Loss (numerator)   $ (215,143 )   $ (245,158 )
                 
Common Shares (denominator)     73,654,671       74,153,214  
Net loss per share amount   $ (0.00 )   $ (0.00 )

XML 30 R16.htm IDEA: XBRL DOCUMENT v2.4.0.6
Schedule of Basic Loss Per Common Share (Details) (USD $)
3 Months Ended 6 Months Ended 73 Months Ended
Nov. 30, 2012
Nov. 30, 2011
Nov. 30, 2012
Nov. 30, 2011
Nov. 30, 2012
Accounting Policies [Abstract]          
Net Loss (numerator) $ (86,335) $ (134,782) $ (215,143) $ (245,158) $ (1,627,099)
Common Shares (denominator) 71,889,661 74,153,214 73,654,671 74,153,214  
Net loss per share amount $ 0 $ 0 $ 0.00 $ 0.00  
XML 31 R21.htm IDEA: XBRL DOCUMENT v2.4.0.6
Subsequent Events (Details Narrative)
0 Months Ended
Dec. 07, 2012
Subsequent Events [Abstract]  
Company issued shares of common stock to GeoXplor Corporation 500,000
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Condensed Statements of Cash Flows (Unaudited) (USD $)
6 Months Ended 73 Months Ended
Nov. 30, 2012
Nov. 30, 2011
Nov. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES      
Net loss $ (215,143) $ (245,158) $ (1,627,099)
Depreciation expense 404 404 1,482
Contributed services by an officer       150
Other comprehensive loss       59
Amortization of prepaid expense    127,849 561,000
Common stock issued for services       120,000
Impairment of mineral intersts    7,500 112,101
Changes to operating assets and liabilities:      
Restricted cash    12,786   
Prepaid expenses 3,500 (2,000)   
Deposits 25,000    (1,400)
Accounts payable 7,950 4,484 9,545
Net Cash Used in Operating Activities (178,288) (94,135) (824,161)
CASH FLOWS FROM INVESTING ACTIVITIES      
Purchase of computer equipment       (2,428)
Purchase of mineral interests (67,480) (47,583) (220,970)
Net Cash Used in Investing Activities (67,480) (47,583) (223,398)
CASH FLOWS FROM FINANCING ACTIVITIES      
Capital contributions       10,000
Common stock issued for cash 250,000    1,150,000
Net Cash Provided by Financing Activities 250,000    1,160,000
NET INCREASE (DECREASE) IN CASH 4,232 (141,718) 112,441
CASH AT BEGINNING OF PERIOD 108,209 146,589   
CASH AT END OF PERIOD 112,441 4,871 112,441
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION      
Interest         
Income Taxes         
NON CASH FINANCING ACTIVITIES:      
Preferred stock issued in conversion of common stock       67,500
Common stock issued for prepaid expenses       561,000
Common stock issued for mineral interests $ 60,000    $ 420,000

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Stockholders' Equity
6 Months Ended
Nov. 30, 2012
Equity [Abstract]  
Stockholders' Equity

NOTE 5 – STOCKHOLDERS’ EQUITY

 

Six Months Ended November, 2012

 

On April 20, 2012, the Company entered into an agreement to purchase mineral claims in Quebec, Canada. The purchase was not complete due to the fact that the Company was waiting for registration approval from the Quebec government. The company completed the purchase during the six month period ended November 30, 2012. As consideration for the acquisition, the Company agreed to pay $50,000 in cash and issue 100,000 shares of common stock. The Company had paid $25,000 of the $50,000 in cash, which was held in a deposit until the purchase was closed. On July 18, 2012 the Company made its second $25,000 payment to complete the agreed upon $50,000 payment. On July 23, 2012 the Company issued the agreed upon 100,000 shares of common stock to complete the purchase of mineral claims in Quebec, Canada. The shares were valued at $0.60 per share, which was equal to the most recent price per share of common stock issued for cash.

 

On July 18, 2012 the Company issued 416,667 shares of common stock for $250,000 cash.

 

On October 17, 2012 the Company entered into a Share Issuance Agreement with an unrelated third party entity. Pursuant to the terms of the agreement, the third party agreed to provide a financing line to the Company of no greater than $2,500,000, from which the Company can receive advances of no more than $250,000 per advance. In exchange for any advances made, the Company agrees to issue shares of its common stock. The number of shares to be issued shall be based upon a ten percent discount to the average of the closing trading prices of the five day period immediately prior to issuance. As of November 30, 2012 no advances have been received by the Company.

 

On October 19, 2012 the Company cancelled 8,000,000 shares of common stock held by a director of the Company is a related party.

 

Fiscal Year Ended May 31, 2011

 

On January 3, 2011 the Company exchanged 67,500,000 common shares for 675,000 preferred shares with 1 to 100 voting and conversion ratio preferred to common shares.

 

On December 29, 2010, the Company issued 360,000 common shares to a consultant for services to be rendered from the date of issuance to March 31, 2011. On the same date the Company issued 300,000 common shares to a consultant for services to be performed from the date of issuance for a twelve month period with automatic renewal for another twelve month period unless notice of termination is received by either party 30 days in advance. The consulting services have been recorded as a prepaid expense and are being amortized over the life of the contracts.

 

On December 15, 2010, the Company issued 47,060 common shares for $40,000 cash.

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Summary of Warrants Outstanding and Exercisable (Details) (USD $)
6 Months Ended
Nov. 30, 2012
Stock Options And Warrants  
Shares, Outstanding, beginning balance 356,154
Shares, Granted   
Shares, Expired 356,154
Shares, Exercised   
Shares, Forfeited   
Shares, Outstanding, ending balance   
Shares, Exercisable   
Weighted Average Exercise Price, Outstanding, beginning balance $ 0.38
Weighted Average Exercise Price, Granted   
Weighted Average Exercise Price, Expired   
Weighted Average Exercise Price, Exercised   
Weighted Average Exercise Price, Forfeited   
Weighted Average Exercise Price, Outstanding, ending balance   
Weighted Average Exercise Price, Exercisable $ 0.38
Weighted Average Remaining Contractual Life (Years), Outstanding. beginning balance 4 months 24 days
Weighted Average Remaining Contractual Life (Years), Outstanding, ending balance 0 years
Weighted Average Remaining Contractual Life (Years), Exercisable 0 years
Aggregate Intrinsic Value, Outstanding, beginning balance $ 136,699
Aggregate Intrinsic Value, Granted   
Aggregate Intrinsic Value, Expired   
Aggregate Intrinsic Value, Exercised   
Aggregate Intrinsic Value, Forfeited   
Aggregate Intrinsic Value, Outstanding, ending balance   
Aggregate Intrinsic Value, Exercisable