Karat Platinum (KRAT) 10-Q 2008 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10 - Q

Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2008

Commission File Number 000-52706

KARAT PLATINUM INC.

(Formerly Sentra Consulting Corp.)

(Exact Name of Registrant as Specified in Its Charter)

Nevada	20-5297544
(State or Other Jurisdiction of	(IRS Employer
Incorporation or Organization)	Identification No.)

15 Hoover Street
Inwood, NY	11096
(Address of Principal Executive Offices)	(Zip Code)

(516) 592-5600

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former

Fiscal Year if Changed Since Last Report)

Indicate by check 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 past 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 xNo o

Indicate by check 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 “small reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

Large Accelerated Filer o	Accelerated Filer o
Non-Accelerated Filer o	Smaller Reporting Company x

(Do not check if a smaller reporting company)

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

Yes oNo x

The number of common equity shares outstanding as of November 13, 2008 was 33,125,000 shares of Common Stock, $.001 par value.

INDEX

PART I. FINANCIAL INFORMATION		Page
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets -
	September 30, 2008 (Unaudited) and March 31, 2008	3
	Condensed Consolidated Statements of Operations -
	Three and Six Months ended September 30, 2008 and 2007 (Unaudited)	4
	Condensed Consolidated Statement of Stockholders’ Deficiency -
	Six Months ended September 30, 2008 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows -
	Six Months ended September 30, 2008 and 2007 (Unaudited)	6-7
	Notes to Condensed Consolidated Financial Statements	8-15
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of
	Operations	16-24
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	24
Item 4.	Controls and Procedures	24
PART II. OTHER INFORMATION
Item 1	Legal Proceedings	25
Item 1A	Risk Factors	25
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3	Defaults Upon Senior Securities	25
Item 4	Submission of Matters to a Vote of Security Holders	25
Item 5	Other Matters	25
Item 6.	Exhibits	25
SIGNATURES		26

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KARAT PLATINUM INC. (Formerly Sentra Consulting Corp.) AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2008			March 31, 2008
	(Unaudited)			(Note 1)
ASSETS
Current assets:
Cash	$	1,152		$	236,872
Accounts receivable, net of allowance for sales returns and doubtful accounts of $0 and $15,622		338,551			56,806
Inventories		2,205,227			2,368,478
Prepaid expenses and other current assets		196,898			75,002
Total current assets		2,741,828			2,737,158
Property and equipment, net of accumulated depreciation of $29,427 and $21,071		74,557			79,100
Patents		369,641			284,949
TOTAL ASSETS	$	3,186,026		$	3,101,207
LIABILITIES AND STOCKHOLDERS’DEFICIENCY
Current liabilities:
Accounts payable and accrued liabilities	$	1,274,667		$	573,513
Advances due to related parties		309,500			-
Short-term notes payable		3,470,184			2,244,917
Due to prior affiliates		367,995			367,995
Current portion of long-term debt		3,966,491			2,187,088
Total current liabilities		9,388,837			5,373,513
Long-term debt, net of current portion		-			1,804,403
Total liabilities		9,388,837			7,177,916
Commitments and contingencies
Stockholders’ deficiency:
Preferred Stock, $.001 par value; 9,995,500 shares authorized, none issued and outstanding		-			-
Series A Convertible Preferred Stock, $.001 par value; 3,000 shares authorized, 1,547 shares issued and outstanding; aggregate liquidation preference $1,547,000		6			6
Series B Convertible Preferred Stock, $.001 par value; 1,500 shares authorized, none issued and outstanding		-			-
Common stock, par value $.001; 100,000,000 shares authorized; 33,125,000 issued and outstanding at September 30, 2008 and March 31, 2007		33,125			33,125
Paid-in capital		3,585,547			3,585,547
Accumulated deficit		(9,821,489	)		(7,695,387	)
Total stockholders’ deficiency		(6,202,811	)		(4,076,709	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY	$	3,186,026		$	3,101,207

See accompanying notes to condensed consolidated financial statements.

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KARAT PLATINUM INC. (Formerly Sentra Consulting Corp.) AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
Net revenue	$	488,316		$	111,549		$	745,529		$	115,855
Cost of goods sold		481,284			188,113			781,516			269,310
Gross profit (loss)		7,032			(76,564	)		(35,987	)		(153,455	)
Selling, general and administrative expenses		490,224			678,334			1,249,663			1,209,237
Loss from continuing operations before other income and interest expense		(483,192	)		(754,898	)		(1,285,650	)		(1,362,692	)
Other income		26,697			-			229,104			-
Interest expense		528,323			101,424			1,069,556			350,154
Loss from continuing operations		(984,818	)		(856,322	)		(2,126,102	)		(1,712,846	)
Loss from operations of 15 Hoover Street, deconsolidated on December 21, 2007		-			(36,481	)		-			(112,480	)
Net loss		($984,818	)		($892,803	)		($2,126,102	)		($1,825,326	)
Basic and diluted net loss per common share:
From continuing operations		($.03	)		($.03	)		($.06	)		($.06	)
From discontinued operations		( .00	)		( .00	)		( .00	)		( .00	)
Net loss		($.03	)		($.03	)		($.06	)		($.06	)
Weighted average number of common shares outstanding: basic and diluted		33,125,000			30,000,000			33,125,000			30,000,000

See accompanying notes to condensed consolidated financial statements.

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KARAT PLATINUM INC. (Formerly Sentra Consulting Corp.) AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY

SIX MONTHS ENDED SEPTEMBER 30, 2008

(UNAUDITED)

		Series A Preferred Stock				Common Stock				Paid-In		Accumulated
		Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance, March 31, 2008			1,547	$	6		33,125,000	$	33,125	$	3,585,547		($7,695,387	)		($4,076,709	)
Net loss			-		-		-		-		-		(2,126,102	)		(2,126,102	)
	��
Balance, September 30, 2008			1,547	$	6		33,125,000	$	33,125	$	3,585,547		($9,821,489	)		($6,202,811	)

See accompanying notes to condensed consolidated financial statements.

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KARAT PLATINUM INC. (Formerly Sentra Consulting Corp.) AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended September 30,
	2008			2007
OPERATING ACTIVITIES:
Net loss	$	(2,126,102	)	$	(1,825,326	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		8,356			63,340
Warrants issued at fair value		-			187,680
Accretion of interest expense due to beneficial conversion feature		725,267			-
Inventory reserve		-			6,349
Interest converted to long-term debt		-			60,000
Changes in operating assets and liabilities, net of effects of deconsolidating 15 Hoover Street LLC on December 21, 2007:
Accounts receivable		(281,745	)		143,081
Inventories		163,251			(718,173	)
Prepaid expenses and other current assets		(121,896	)		17,247
Advances due to related parties		309,500			-
Accounts payable and accrued liabilities		701,154			(26,193	)
Net cash used in operating activities		(622,215	)		(2,091,995	)
INVESTING ACTIVITIES:
Patents		(84,692	)		(26,372	)
Capital expenditures		(3,813	)		(2,717	)
Net change in cash of 15 Hoover Street LLC, deconsolidated on December 21, 2007		-			(48,576	)
Net cash used in investing activities		(88,505	)		(77,665	)
FINANCING ACTIVITIES:
Payments on long-term debt		(25,000	)		(93,268	)
Payments on loan from shareholder		-			(12,351	)
Borrowings under short-term notes payable		500,000			1,960,000
Net cash provided by financing activities		475,000			1,854,381
Net decrease in cash		(235,720	)		(315,279	)
Cash, beginning of period		236,872			318,468
Cash, end of period	$	1,152		$	3,189

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KARAT PLATINUM INC. (Formerly Sentra Consulting Corp.) AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(CONTINUED)

(UNAUDITED)

	Six Months Ended September 30,
	2008		2007
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	35,614	$	53,474
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of balance due to affiliate to long-term note payable with third party	$	-	$	1,663,450

See accompanying notes to condensed consolidated financial statements.

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KARAT PLATINUM INC. (Formerly Sentra Consulting Corp.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - DESCRIPTION OF BUSINESS:

Description of Business:

On December 21, 2007, Sentra Consulting Corp. (“Sentra”) entered into an Exchange Agreement (the “Exchange Agreement”) with Karat Platinum LLC, a New York limited liability company (“Karat Platinum”), and the members of Karat Platinum (the “Karat Members”). On April 17, 2008, Sentra changed its name to Karat Platinum Inc. (the “ Company”).

Pursuant to the terms of the Exchange Agreement, Sentra acquired 100% of the membership interests of Karat Platinum by purchasing from the Karat Members all of their respective membership interests in Karat Platinum. In consideration, therefore, Sentra issued to the Karat Members an aggregate of 30,000,000 shares of Sentra's common stock, representing 90.43% of the issued and outstanding stock of Sentra. As a result of the transactions contemplated by the Exchange Agreement (hereinafter referred to as the “Exchange”), Karat Platinum became a wholly-owned subsidiary of the Company. Prior to the Exchange, Sentra was a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange of 1934, as amended (the “Exchange Act”)).

Each of the Karat Members who exchanged their membership interests for Sentra common stock entered into a Lock-Up Agreement with the Company whereby each member agreed that until December 21, 2009 he or she will not sell any of the shares of common stock of Sentra. Although the Lock-Up Agreement provides for customary exceptions for transfers to family members and gifts, each transferee must agree to be bound by the transfer restrictions of the Lock-Up Agreement. In addition, the provisions of the agreement could be waived upon the approval of 80% of the Board of Directors of the Company.

The Exchange was accounted for as a reverse-merger, equivalent to a recapitalization, through the issuance of stock by Sentra for the net monetary assets and recapitalization of Karat Platinum for financial reporting purposes. Consequently, the assets and liabilities and the operations reflected in the historical financial statements prior to the Exchange are those of Karat Platinum and are recorded at the historical cost basis of Karat Platinum, and the condensed consolidated financial statements after completion of the Exchange will include the assets and liabilities of the Company and Karat Platinum and historical operations of Karat Platinum and operations of the Company from the closing date of the Exchange.  Stockholders’ deficiency has been retroactively restated to reflect the exchange of shares for members’ interest.

Karat Platinum manufactures and sells platinum alloy (“585 Platinum”) and jewelry under the brand names KARAT PLATINUM™, 14 KARAT PLATINUM ® and 14 Kt.Pt.®. Management believes that they sell Karat Platinum's products at prices which are significantly lower than existing market prices for similar types of platinum jewelry, thus making platinum jewelry more affordable to consumers worldwide. The alloy is comprised of 58.5% platinum and 41.5% copper and cobalt.

Karat Platinum is the exclusive worldwide distributor of the newly engineered 585 Platinum. The alloy was developed by Allgemeine Gold - und Silberscheideanstalt AG (“Agosi”), who granted Karat Platinum an exclusive worldwide license to the alloy through January 13, 2009.

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15 Hoover Street LLC ("Hoover") which, prior to the Exchange, was under common ownership with Karat Platinum, owns and operates a 25,000 square foot building located at 15 Hoover Street, Inwood, New York. Hoover leases 12,000 square feet to Karat Platinum and was a variable interest entity ("VIE") through December 21, 2007. In accordance with Financial Accounting Standards Board Interpretation 46(R), “Consolidation of Variable Interest Entities,” Hoover no longer meets the criteria of a VIE and, therefore, has been deconsolidated effective December 21, 2007. The operations of Hoover have been reflected as loss from operations deconsolidated on December 21, 2007 on the condensed consolidated statements of operations. In addition, the assets and liabilities of Hoover have been deconsolidated as of December 21, 2007.

Principles of consolidation:

The condensed consolidated financial statements include the financial statements of Karat Platinum and Hoover for the three and six month periods ended September 30, 2007 and the Company and its subsidiary Karat Platinum, LLC for the three and six months period ended September 30, 2008. All material intercompany accounts and transactions have been eliminated in the accompanying condensed consolidated financial statements.

General:

The accompanying unaudited interim condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America and the interim financial statement rules and regulations of the Securities and Exchange Commission ("SEC"). In the opinion of management, these statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the condensed consolidated financial statements. The interim operating results are not necessarily indicative of the results for a full year or any interim period.

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 pursuant to such rules and regulations relating to interim financial statements. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended March 31, 2008 filed on Form 10-K. The March 31, 2008 consolidated balance sheet of the Company has been derived from the audited consolidated financial statements included on Form 10-K filed on June 30, 2008.

Basis of presentation:

As reflected in the accompanying condensed consolidated financial statements, the Company has an accumulated deficit of $9,821,489 and a working capital deficiency of $6,647,009 and cash used in operations of $622,215 for the six months ended September 30, 2008. These matters raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time. In addition, the Company might be required to sell certain of its assets. These actions, while necessary for the continuance of operations during a time of cash constraints and a shortage of working capital, could adversely affect the Company’s business.

New financing will be required to fund working capital and operations should the Company be unable to generate positive cash flow from operations in the near future. The Company is exploring the possible sale of equity securities and/or debt financing, and believes that additional financing will be available under terms and conditions that are acceptable to the Company. However, there can be no assurance that additional financing will be available. In the event financing is not available in the time frame required, the Company will be forced to reduce its rate of growth, if any, reduce operating expenses and curtail sales and marketing activities.

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In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying condensed consolidated balance sheet is dependent upon continued operations of the Company, which, in turn, is dependent upon the Company’s ability to continue to raise capital and generate positive cash flows from operations. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue its existence. There is no assurance that the Company will operate at a profit in the future.

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Revenue Recognition:

Sales are recorded when the earnings process is complete, which occurs when products are shipped in accordance with the terms of agreements, title and risk transfer to customers, collection is probable and pricing is fixed or determinable. Revenue is not recognized unless collectibility is reasonably assured.

Inventories:

Inventories are valued at the lower of cost (determined by the first-in, first-out method or "FIFO") or market. Inventory costs include materials, labor, inbound freight and receiving costs. Inventories are comprised of raw materials of $569,989 and finished goods of $1,635,238 at September 30, 2008 and raw materials of $784,771 and finished goods of $1,583,707 at March 31, 2008.

Patents:

Patents still pending are not amortized until effective. Patents once approved will be amortized on a straight-line basis over management's estimate of their economic useful life which has not, as of yet, been determined.

Property and Equipment:

Property and equipment is carried at cost and depreciated on the straight-line method over the estimated useful lives of the related property and equipment. Expenditures for maintenance and repairs of property and equipment are expensed as incurred. Major improvements are capitalized and amortized over the remaining useful life of the related asset.

Use of Estimates:

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Generally, matters subject to estimation and judgment include amounts related to accounts receivable realization, inventory obsolescence, asset impairments, useful lives of intangible and fixed assets. Actual results may differ from estimates provided.

Income Taxes:

Income taxes are accounted for under the asset and liability method in accordance with Statement of Financial Accounting Standard ("SFAS") No. 109, “Accounting for Income Taxes” (“SFAS 109”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established to reduce deferred tax assets to the amounts more likely than not to be realized.

Customer/Supplier Arrangement:

The Company has an arrangement with a customer/supplier, whereby we sell our platinum alloy for their own use, as well as to produce product for us. Since we sell alloy to this customer and purchase product from them, we typically have an accounts receivable due from them and an accounts payable due to them. From time to time, these amounts are offset, and the difference is either paid by them or paid to them.

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Fair Value of Financial Instruments:

Management believes that the fair value of financial instruments, consisting of cash, accounts receivable, accounts and notes payable, short-term borrowings and certain other liabilities, approximates carrying value due to their relatively short maturities. The fair value of inventories is approximately $1,699,868 and $3,622,000 as of September 30, 2008 and March 31, 2008, respectively, based on quoted market prices for platinum. The fair value of long-term debt approximates the carrying value since the stated rate of interest approximates a market rate of interest.

Concentrations of Credit Risk:

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company maintains its cash in bank deposits, the balances of which, at times, may exceed Federally insured limits. Exposure to credit risk is reduced by placing such deposits in high credit quality financial institutions. At September 30, 2008, the Company did not have cash balances in excess of Federally insured limits.

The Company sells its products to customers on an open credit basis. The Company’s trade accounts receivable are due from such customers and are generally uncollateralized. The Company closely monitors the extension of credit to its customers while maintaining allowances for potential credit losses, if required. On a periodic basis the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts, if required, based on a history of write-offs, collections and current credit conditions.

Long-Lived Assets:

The Company reviews long-lived assets and patents for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of asset exceeds the fair value of the asset.

Accounting for Derivative Instruments:

The Company accounts for derivative instruments in accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended ("SFAS 133"), which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments imbedded in other financial instruments or contracts. The Company also considers the Emerging Issues Task Force (“EITF”) 00-19, “Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in, a Company’s Own Stock” (“EITF 00-19”), which provides criteria for determining whether freestanding contracts that are settled in a company’s own stock, including common stock warrants, should be designated as either an equity instrument, an asset or as a liability under SFAS 133. The Company evaluates the conversion feature embedded in its Convertible Preferred Stock, Series A and B (see Note 4) and convertible notes payable at each reporting period based on the criteria of SFAS 133 and EITF 00-19 to determine whether the conversion feature would be required to be bifurcated from the Preferred Stock or convertible notes and accounted for separately as derivative liabilities.  Based on management’s evaluation, the embedded conversion feature did not require bifurcation and derivative accounting as of September 30, 2008.

Fair Value Measurements:

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”) which establishes a single authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. SFAS 157 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date”. For the Company, SFAS 157 is effective for the fiscal year beginning April 1, 2008. Management has determined there is no impact from adopting SFAS 157 on the Company’s condensed consolidated financial statements.

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On February 15, 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115” (“SFAS 159”) which permits an entity to measure financial instruments and certain other items at estimated fair value. Most of the provisions of SFAS 159 are elective; however, the amendment to FASB No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” applies to all entities that own trading and available-for-sale securities. The fair value option created by SFAS 159 permits an entity to measure eligible items at fair value as of specified election dates. The fair value option (a) may generally be applied instrument by instrument, (b) is irrevocable unless a new election date occurs, and (c) must be applied to the entire instrument and not to only a portion of the instrument. SFAS 159 is effective as of the beginning of the first fiscal year that begins after November 15, 2007. Management has determined that there is no impact from adopting SFAS 159 on the Company’s condensed consolidated financial statements.

Recent Accounting Pronouncements:

In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business Combinations" (“SFAS 141”). SFAS 141 requires an acquirer to measure the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree at their fair values on the acquisition date, with goodwill being the excess value over the net identifiable assets acquired. SFAS 141 also requires the fair value measurement of certain other assets and liabilities related to the acquisition such as contingencies. SFAS 141 applies prospectively to business combinations and is effective for fiscal years beginning on or after December 15, 2008. The Company is currently evaluating the impact that SFAS 141 will have on the accounting for future acquisitions and its condensed consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in Consolidated Financial Statements" (“SFAS 160”). SFAS 160 requires that a non-controlling interest in a subsidiary be reported as equity in the consolidated financial statements. Consolidated net income should include the net income for both the parent and the non-controlling interest with disclosure of both amounts on the consolidated statement of income. The presentation provisions of SFAS 160 are to be applied retrospectively, and SFAS 160 is effective for fiscal years beginning on or after December 15, 2008. The Company is currently evaluating the impact that SFAS 160 will have on its condensed consolidated financial statements.

Loss Per Share:

Basic loss per share is computed by dividing loss available to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Since the effect of outstanding warrants and conversion of Preferred Stock are anti-dilutive due to the losses incurred by the Company, they have been excluded from the Company’s computation of net loss per share for periods presented. The total number of potentially dilutive securities excluded from the calculation of diluted loss per share for the three and six months ended September 30, 2008 was 13,084,000 which were comprised of 6,188,000 from conversion of the Series A Convertible Preferred Stock; 6,000,000 from Series B Convertible Preferred Stock underlying the convertible note payable and 896,000 warrants to purchase one share of the Company’s common stock. The total number of potentially dilutive securities excluded from the calculation of diluted loss per share for the three and six months ended September 30, 2007 was 800,000 related to the warrants to purchase one share of the Company’s common stock.

NOTE 3 - SHORT-TERM NOTES PAYABLE:

As of September 30, 2008, four secured promissory note-holders held an aggregate of $1,600,000 outstanding principal amounts due to them from the Company. The principal amounts of each of these notes were originally due and payable on dates between July 30, 2008 and September 3, 2008. Interest was prepaid for the first four months at the time of entering into each note, with the remaining interest due on the fourth month anniversary of each note at 12% per annum. Each of these notes are secured by all inventories of the Company. The Company paid to each note-holder an origination fee of 1.5% of the note held by the holder thereof. During the period ending September 30, 2008, the Company amended each of the notes to extend the due dates of all the notes to November 30, 2008. Interest on each of the notes for the extension period will be paid at maturity. In addition, one of the notes in the principal amount of $100,000 became unsecured in this amendment.

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On September 16, 2008, the Company issued a secured promissory note to a company who is affiliated with our Chairman of the Board and another Board member in the amount of $500,000.This note matures on March 16, 2009 and interest accrues at 12% per annum and is payable at maturity. This note along with the above mentioned notes, is secured by all inventories of the Company.

As of September 30, 2008, and continuing through this filing, the Company was in default of the minimum inventory coverage requirement contained in the security agreement related to the above secured notes. On November 13, 2008, the Company received waivers from the note-holders whereby, the note-holders waived the default for the period September 30, 2008 through November 30, 2008. On November 3, 2008, the Company repaid one of these notes in the amount of $100,000.

On October 8, 2007, the Company issued a promissory note to its former Treasurer, Secretary and a current director, in consideration for loans made and to be made to the Company of up to an aggregate of $1,500,000. The outstanding principal and accrued interest at 12% per annum, are due and payable on November 1, 2008. Pursuant to the promissory note, at any time, such note-holder has the right to convert all or any portion of the outstanding principal amount and accrued interest thereon into shares of the Company’s Series B Convertible Preferred Stock. Subsequent to September 30, 2008, the Company extended the due date of this note to April 30, 2009.

This convertible note is deemed to be Convertible Securities with Beneficial Conversion Features, and has been recorded in accordance with EITF Issue No. 98-5 (“EITF 98-5”), “ Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios” and EITF No. 00-27 (“EITF 00-27”), “Application of Issue No. 98-5 to Certain Convertible Instruments” (“EITF 98-5”). As of September 30, 2008, the carrying amount of this convertible note is $1,370,184, which is net of a discount in the amount of $129,816, representing the un-accreted amount of the intrinsic value, as defined in EITF 98-5. This discount will be accreted through interest expense to the maturity date, November 1, 2008, utilizing the effective yield method. In the three and six months ended September 30, 2008, $357,222 and $725,267of interest was accreted through interest expense. At the time of the merger, the carrying amount of the convertible note was $194,024, which reflects the total borrowings on the convertible note as of December 21, 2007 of $1,030,000, net of a discount of $835,976 representing the un-accreted discount as of that date.

NOTE 4- CAPITALIZATION:

Common Stock:

We are authorized to issue 100,000,000 shares of common stock, par value $0.001, of which 33,125,000 shares are issued and outstanding as of September 30, 2008. Each holder of shares of our common stock is entitled to one vote for each share held of record on all matters submitted to the vote of stockholders, including the election of directors.

Preferred Stock:

We are authorized to issue 10,000,000 shares of preferred stock, par value $0.001. On August 20, 2007, the Company’s Board of Directors designated 3,000 shares of preferred stock as Series A Convertible Preferred Stock (the “Series A Preferred”) of which 1,547 shares are issued and outstanding as of September 30, 2008. Each share of Series A Preferred shall, at the option of the holder thereof, at any time, be convertible into shares of fully paid and non-assessable shares of common stock of the Company. Each share of Series A Preferred is convertible into the amount of shares of common stock as is calculated by dividing the original issue price of the Series A Preferred (currently $1,000) by the lower of (i) $0.25 per share, as adjusted, and (ii) the daily volume weighted average market price of the common stock for the 30 trading days prior; provided, however, that this number shall not be less than $0.20 per share. The holders of the Series A Preferred shall be entitled to receive dividends, on an as-converted basis when, as, and if paid on the common stock. Each holder of Series A Preferred shall have a right to purchase their respective pro rata portion of all, or any part, of common stock and securities convertible into common stock, subject to certain exceptions, that the Company may propose to issue. Each holder of Series A Preferred shall be entitled to the number of votes equal to the number of shares of common stock into which such shares of Series A Preferred could be converted and shall have voting rights and powers equal to the voting rights and powers of the common stock. The holders of Series A Preferred vote together with the holders of the common stock as a single class.   At any time following the two-year anniversary of the issue date of the Series A Preferred, the Company has the right to (i) redeem all of the issued and outstanding Series A Preferred at a redemption price equal to the original issue price or (ii) convert all the issued and outstanding shares of Series A Preferred to common stock at the then applicable conversion rate.  

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In January 2008, the Company sold 497 shares of Series A Preferred to seven individuals for $497,000. Each of the individuals entered into a Subscription Agreement reflecting the terms of the Series A Preferred, as defined above. The Series A Preferred issued in these transactions are deemed to be convertible securities with beneficial conversion features, and have been recorded in accordance with EITF 98-5 and EITF 00-27. These issues have reset provisions based on the trading price of the Company’s stock, any reset will be recorded at the time of reset.

On October 29, 2007, the Company filed a Certificate of Designation with the State of Nevada designating 1,500 shares of preferred stock as Series B Convertible Preferred Stock (the “Series B Preferred”). Each share of Series B Preferred is convertible into the amount of shares of common stock determined by dividing the original issue price of the Series B Preferred (currently $1,000) by $0.25 per share, as adjusted; however, this number shall not be less than $0.20 per share. The Certificate of Designation provides for full ratchet anti-dilution provisions with respect to certain securities issuances. The holders of the Series B Preferred vote with the holders of the common stock on an as converted basis and are entitled to dividends, on an as-converted basis when, as and if paid on the common stock, but not before the declaration and payment of any dividends payable to the holders of the Company’s outstanding Series A Preferred. In the event of any liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, the holders of Series B Preferred shall have preference to any distribution of the assets of the Company to the holders of common stock of the Company, after the holders of the Series A Preferred. At any time after the two-year anniversary from the date of purchase, the Company has the right to redeem all of the issued and outstanding shares of Series B Preferred at a redemption price equal to the original issue price of said shares or convert all the issued and outstanding shares of Series B Preferred into the Company’s common stock at the then applicable conversion rate.

On November 13, 2008, the Company filed a Certificate of Designation with the State of Nevada designating 5,000 shares of preferred stock as Series C Convertible Preferred Stock (the “Series C Preferred”). Each share of Series C Preferred is convertible into the amount of shares of common stock determined by dividing the original issue price of the Series C Preferred (currently $1,000) by $1.00 per share, as adjusted; however, this number shall not be less than $0.20 per share. The Certificate of Designation provides for full ratchet anti-dilution provisions with respect to certain securities issuances. The holders of the Series C Preferred vote with the holders of the common stock on an as converted basis and are entitled to dividends, on an as-converted basis when, as and if paid on the common stock, but not before the declaration and payment of any dividends payable to the holders of the Company’s outstanding Series A Preferred and Series B Preferred. In the event of any liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, the holders of Series C Preferred shall have preference to any distribution of the assets of the Company to the holders of common stock of the Company, after the holders of the Series A Preferred and Series B Preferred. At any time after the three-year anniversary from the date of purchase, the Company has the right to redeem all of the issued and outstanding shares of Series C Preferred at a redemption price equal to the original issue price of said shares or convert all the issued and outstanding shares of Series C Preferred into the Company’s common stock at the then applicable conversion rate.

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Warrants:

As of September 30, 2008, the Company had an aggregate of 896,000 warrants issued and outstanding. Of these warrants, 96,000 were granted by Sentra prior to the reverse merger. Currently exercisable and terminating three years from the date of issuance, the holder has the right to purchase one share of common stock per each warrant at an exercise price of $.50 per warrant share. The number of shares issuable upon exercise of each warrant and the exercise price are all subject to adjustment. Upon the creation of the Series B Preferred on October 29, 2007 (discussed above), the exercise price for the 96,000 warrants was reduced to $0.25 per share. At the time the exercise price was reduced, Sentra revalued these warrants using the Black-Scholes option-pricing model, and recorded additional expense.

Pursuant to the terms of the Stock Purchase Warrant issued by Karat Platinum to ABN AMRO Bank N.V. (“ABN Amro”), upon consummation of the Exchange Agreement said warrant was amended and restated by a warrant issued by the Company. Such warrant provides ABN Amro with the right from June 29, 2010 until June 29, 2017 to purchase 800,000 shares of common stock of the Company for $0.01 per share. The warrant provides for customary anti-dilution provisions as well as piggyback registration rights. In addition, under certain circumstances ABN Amro shall have the right to tag along and participate in certain sales.  

NOTE 5- SUBSEQUENT EVENTS:

Subsequent to September 30, 2008, the Company extended the maturity date on a note payable to a related party that was originally due on or before October 31, 2008 to July 15, 2009. As of September 30, 2008, the unpaid principal and interest balance amounted to $2,087,088.

Subsequent to September 30, 2008, the Company sold 200 shares of Series C Preferred Stock to two individuals for $200,000. Each of the individuals entered into a Subscription Agreement reflecting the terms of the Series C Preferred, as defined above.

On October 29, 2008, the Company issued a secured promissory note to a company who is affiliated with our Chairman of the Board and another Board member in the amount of $300,000.This note matures on March 29, 2009 and interest accrues at 12% per annum and is payable at maturity. This note is secured by all inventories of the Company.

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains forward-looking information. Forward-looking information includes statements relating to future actions, acceptance in the marketplace of our products, payment of our outstanding obligations, future performance, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management, and other such matters of the Company. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as that information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information.

Forward-looking information may be included in this Quarterly Report or may be incorporated by reference from other documents filed with the Securities and Exchange Commission (the “SEC”) by us. You can find many of these statements by looking for words including, for example, “believes,” “expects,” “anticipates,” “estimates” or similar expressions in this Quarterly Report on Form 10-Q or in documents incorporated by reference in this Quarterly Report on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events.

We have based the forward-looking statements relating to our operations on management's current expectations, estimates, and projections about us and the industry in which we operate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In particular, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, our actual results may differ materially from those contemplated by these forward-looking statements. Any differences could result from a variety of factors, including, but not limited to general economic and business conditions, competition, and other factors.

Overview

On December 21, 2007, Sentra Consulting Corp. (“Sentra”) entered into an Exchange Agreement (the “Exchange Agreement”) with Karat Platinum LLC, a New York limited liability company (“Karat Platinum”), and the members of Karat Platinum (the “Karat Members”). On April 17, 2008, Sentra changed its name to Karat Platinum, Inc. (the “Company”).

Pursuant to the terms of the Exchange Agreement, Sentra acquired 100% of the membership interests of Karat Platinum by purchasing from the Karat Members all of their respective membership interests in Karat Platinum. In consideration, therefore, Sentra issued to the Karat Members an aggregate of 30,000,000 shares of Sentra's common stock, representing 90.43% of the issued and outstanding stock of Sentra. As a result of the transactions contemplated by the Exchange Agreement (hereinafter referred to as the “Exchange”), Karat Platinum became a wholly-owned subsidiary of the Company. Prior to the Exchange, Sentra was a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange of 1934, as amended (the “Exchange Act”).

Each of the Karat Members who exchanged their membership interests for Sentra common stock entered into a Lock-Up Agreement with the Company whereby each member agreed that until December 21, 2009 he or she will not sell any of the shares of common stock of Sentra. Although the Lock-Up Agreement provides for customary exceptions for transfers to family members and gifts, each transferee must agree to be bound by the transfer restrictions of the Lock-Up Agreement. In addition, the provisions of the agreement could be waived upon the approval of 80% of the Board of Directors of the Company.

The Exchange was accounted for as a reverse-merger, equivalent to a recapitalization, through the issuance of stock by Sentra for the net monetary assets and recapitalization of Karat Platinum for financial reporting purposes. Consequently, the assets and liabilities and the operations reflected in the historical financial statements prior to the Exchange are those of Karat Platinum and are recorded at the historical cost basis of Karat Platinum, and the condensed consolidated financial statements after completion of the Exchange will include the assets and liabilities of the Company and Karat Platinum and historical operations of Karat Platinum and operations of the Company from the closing date of the Exchange.  Stockholders’ deficit has been retroactively restated to reflect the exchange of shares for members’ interest.

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The Company manufactures and sells platinum alloy (the “Alloy” or “585 Platinum”) and platinum jewelry at a price that it believes is lower than existing market prices for currently existing platinum jewelry. The Company has a total of 17 full time employees.

The Product

Traditionally, platinum used in the jewelry industry consists of a minimum of 85%-95% platinum blended with certain precious metals such as iridium or palladium, known as platinum group metals. The Company’s alloy, which is a blend of 58.5% platinum with 41.5% cobalt and copper (non-precious metals), is a less expensive substitute for the alloys currently used by the jewelry industry.

Karat Platinum believes that its 585 Platinum provides three significant benefits:

1. It is less expensive than traditional platinum alloys because of its lower platinum content and the significant difference in price between copper and cobalt and the platinum group metals used in traditional platinum alloys, which are all costly precious metals.

2. The Alloy has a lower density than 85-95% platinum resulting in greater expansive properties. It therefore reduces the quantity of raw material content needed thus further reducing the cost for platinum content.

3. 585 Platinum is more durable and workable than traditional alloys.

Supply of the Product

On January 13, 2004, Karat Platinum entered into a Cooperation and License Agreement, as amended on March 30, 2006 and July 2, 2007, with Allgemeine Gold - und Silberscheideanstalt AG, German corporation (“Agosi”) whereby the Company became the exclusive worldwide distributor and patent co-applicant for 585 Platinum in the jewelry industry. Pursuant to the agreement, Agosi exclusively produces and supplies 585 Alloy to us. Under the agreement, the Company is subject to minimum purchase requirements of platinum alloy per calendar year. If the minimum purchase obligations in any year are not met, we must pay liquidated damages in the amount of 50% of the applicable purchase price, as of December 30 of the corresponding year, of the shortfall. We did not meet our minimum purchase requirement for 2007, and on May 16, 2008, we entered into a letter agreement with Agosi establishing the final liquidating damage amount for 2007 in the amount of $31,600. In addition, this letter agreement modified the minimum purchase requirement for 2009 to 1,000kg of our platinum alloy. Our exclusive license agreement with Agosi will expire on January 13, 2009.

If Agosi cannot supply the Alloy in the required quantities, we are free to purchase the Alloy from another source, until such time as Agosi can resume supplying the Alloy. The Company has no contracts or agreements with any other suppliers for the purchase of platinum or the production of the Alloy.

The platinum used by Agosi for the manufacture of Alloy is purchased by us from several platinum suppliers. The platinum is purchased at the then prevailing market price and shipped by the supplier to Agosi’s facilities for processing into 585 Platinum. The Company has no contracts or agreements with any such platinum suppliers.

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Following Agosi’s conversion of the fine platinum into Alloy, and depending upon our needs, Agosi supplies the Alloy in sheet, tube, wire or shot form, which is then shipped using common secured carriers to manufacturers for production of jewelry. Such manufacturers are based in Italy, Israel, Thailand, India, Canada and the United States. Any unused or scrap Alloy is returned by the manufacturer to Agosi for reprocessing. Payment of invoices to Agosi or the manufacturers are either cash before delivery or 30 day terms with some vendors. After the manufacturer has produced the final jewelry product, it is shipped to us for distribution and sale to our customers. Karat Platinum does not have any contracts or agreements with such manufacturers.

Marketing

As noted in the Platinum 2008 report issued by Johnson Matthey, purchases of platinum by the jewelry trade fell in 2007 for the fifth year in a row, though not as precipitously as the last four years. Rising and volatile metal prices had a negative impact on the platinum jewelry market, cutting demand for new metal by an additional 4% in 2007 after an 18% drop from the previous year, dropping levels to 1.61 million ounces, the lowest figure in 14 years. Platinum has been selling for over $2,000 per ounce for most of the past year as per the London Fixed Prices PM closing price for platinum, recently plummeting to as low as $750 per ounce before rebounding slightly to its current levels above $800 per ounce. Since the jewelry industry’s demand for platinum is highly price sensitive, our sales objectives incorporate the following three factors:

1. Recapture a percentage of the platinum market demand lost because of the previous price increases,

2. Capture a percentage of the existing platinum market, based on the alloy’s price and superior durability and design properties and`

3. Capture a percentage of the existing worldwide gold jewelry market.

We believe that platinum is the metal of choice of the jewelry industry because it is a natural white, rare, durable, hypoallergenic metal that has more prestige than gold. The World Gold Council notes a shift in consumer trends from gold to platinum. The council attributes this to the rise of the white metal phenomenon, which was driven by fashion, and the dominance of platinum as the aspiration choice (IBIS World Industry Performance Study March 16, 2007).

Our business model is focused on selling our bridal and fashion line, as well as a full line of earrings, bracelets, pendants, rings and chains directly to retailers in the United States. We market our products directly to mass and mid-market retailers as well as distributors to independent jewelry stores and small chain stores. We have budgeted funds for marketing efforts and to educate consumers about the benefits of Karat Platinum and to build and establish the brand, Karat Platinum ™. In addition, it is our intention to participate with retailers in marketing, and engage in targeted efforts to increase market awareness. In addition, we plan to expand our presence on the internet.

Intellectual Property

Patents

Karat Platinum and Agosi are parties to a Cooperation and License Agreement dated January 13, 2004, and subsequently amended, which extends to January 13, 2009, and which relates to the rights of Karat Platinum and Agosi to patent protection on the Alloy. Karat Platinum and Agosi have both indicated their intent to negotiate another agreement that extends beyond January 13, 2009, and which resolves conflicting interpretations of the parties’ rights under the Cooperation and License Agreement.

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Karat Platinum and Agosi are seeking patent protection for an alloy composition of platinum combined with cobalt and copper and also seek to protect a method of preparing the alloys, and jewelry products made with the alloys. Karat Platinum and Agosi have filed patent applications on the Alloy. As such, a patent application was filed on February 4, 2004 under the Patent Cooperation Treaty (“PCT”) and a patent application was filed directly in the United States. Karat Platinum is the applicant in the United States and Agosi has retained certain rights in the U.S. Under the PCT, patent protection is being sought in Europe, Israel, Japan, and the Republic of South Africa, where Agosi is the applicant; and in Canada, India, Russia, China, Indonesia, Mexico, and Hong Kong, where Karat Platinum is the applicant and Agosi has retained certain rights in these applications. On August 12, 2008, the Company was issued U.S. patent Number 7,410,546B2 for platinum alloys. The patent covers a range of platinum-based alloys for jewelry including the Registrant’s jewelry products.  

Agosi filed two additional PCT patent applications on August 4, 2005, each of which is directed to different alloy compositions and patent protection is being sought in various countries/regions. Rights between Karat Platinum and Agosi have not been resolved for either of these PCT patent applications. 

Trademarks

In August 2004, the Jewelers Vigilance Committee (“JVC”) filed a petition with the Trademark Trial and Appeal Board (“TTAB”) to cancel six of Karat Platinum’s registered trademarks. Karat Platinum partially opposed the JVC action and continues to challenge the cancellation of its U.S. registrations for the 14 KARAT PLATINUM and 14 KT. PT. marks. 

In addition, on September 25, 2007, the JVC filed a notice of opposition to Karat Platinum’s application to Federally register the KARAT PLATINUM mark. On November 6, 2007, Karat Platinum filed an answer to this notice of opposition.  The JVC moved to consolidate the opposition to the KARAT PLATINUM mark into the pending cancellation proceeding, and the TTAB granted that motion on November 28, 2007.  The discovery period for this consolidated proceeding currently was scheduled to end on August 5, 2008.  As of September 30, 2008, no further proceedings have yet taken place.

Competition

Our Alloy competes with other precious metals that compete for the jewelry consumers’ dollars. These include, primarily, 950 platinum, 850 platinum, palladium and gold. Although a platinum alloy, consisting of 50% platinum and 50% palladium has been introduced to the market under the name Royal Platinum, based upon current market prices of platinum, we believe that since it requires other precious metals to produce, the Royal Platinum alloy is 19% more expensive than our 585 Platinum alloy.

If we obtain financing, we will utilize our marketing budget to support our direct sales efforts as well as to publicize the availability of 585 Platinum. We recently hired an outside public relations firm to assist in the development and implementation of a marketing plan.

To the best of our knowledge, other refiners have tried to create a 585 platinum alloy containing non-platinum group metals but have not been successful. A most significant point in this regard is that, scientifically, there are only certain elements that can mix with platinum to make alloy, the least expensive of which are copper and cobalt. Since we already have a pending patent application on a process incorporating those elements, if the patent issues, it may be difficult for anyone to produce an alloy that can compete with our costs.

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Government Regulation

We have been advised by the Federal Trade Commission (“FTC”) that we may label jewelry made with our Alloy as "Platinum," provided that we clearly and conspicuously disclose the percentage of our product's non-platinum group metal components. We believe we are in compliance with all applicable FTC rules and regulations.

The FTC recently issued proposed revisions to the Guides for the Jewelry, Precious Metals and Pewter Industries that would codify guidance on how to use the word platinum when describing an alloy of at least 500 parts per thousand (“ppt”) platinum and base metals.  The FTC proposes that a company disclose the product’s full composition by name and the percentage of each metal. In addition, the proposal states that companies should describe any differences in such a product's attributes as compared with traditional products containing at least 850 ppt. The FTC has requested that interested parties comment on this proposal by August 25, 2008, which comment period has ended. We believe that the FTC's proposal is favorable to the Company, and intend to submit a comment to the FTC discussing their specific proposal.

We are also subject to the rules and regulations of the Bank Secrecy Act of 2001 as well as the Patriot Act of 2003. On June 3, 2005 the U.S, Department of the Treasury issued final rules implementing Section 352 of the USA Patriot Act. It requires dealers who both purchase and sell at least $50,000 (annually) of jewels, precious metals, precious stones and finished goods to implement an anti-money laundering program in their business. We are in the process of implementing the provisions of the Patriot Act but are not in full compliance as of the date of this Report.

Liquidity and Capital Resources

The unaudited condensed consolidated financial statements contained herein have been prepared on a “going concern” basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. For the reasons discussed herein and in the footnotes to the condensed consolidated financial statements included herein, there is a significant risk that we will be unable to continue as a going concern. Our unaudited condensed consolidated balance sheets included in this Form 10-Q contain additional note disclosures describing the circumstances that lead to this disclosure.

We finance our operations and growth primarily with cash flows generated from borrowings and operations.

Operating Activities

Net cash used in operating activities for the six months ended September 30, 2008 of $622,215 was principally the result of $1,392,479 in cash used to fund operations (net loss of $2,126,102 plus depreciation of $8,356 and accretion of interest expense due to beneficial conversion feature of $725,267) and a decrease in inventories of $163,251, offset by an increase in accounts receivable of $281,745 and an increase in prepaid expenses and other current assets of $121,896 and advances due to related parties of $309,500 and higher accounts payable and accrued expenses of $701,154.

Net cash used in operating activities for the six months ended September 30, 2007 of $2,091,995 was principally the result of $1,514,306 in cash used to fund operations (net loss of $1,825,326, plus depreciation of $63,340, for value of warrants of $187,680, and interest converted to long-term debt of $60,000) and a decrease in accounts receivable of $143,081 and prepaid expenses and other current assets of $17,247, offset by an increase in inventories of $718,173 and lower accounts payable and accrued expenses of $26,193.

Investing Activities

Net cash used in investing activities of $88,505 for the six months ended September 30, 2008 is due to expenditures for patents and property and equipment. Our operations and business model are not capital intensive at this moment.

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Net cash used in investing activities of $77,665 for the six months ended September 30, 2007 was due to expenditures for patents and property and equipment. In addition, the 2007 period reflects the net change in cash of the deconsolidation of 15 Hoover Street LLC on December 21, 2007.

Financing Activities

Net cash provided by financing activities for the six months ended September 30, 2008 of $475,000 was primarily due to borrowings under short-term notes of $500,000, offset by payments under long-term notes of $25,000.

Net cash provided by financing activities for the six months ended September 30, 2007 was $1,854,381, was primarily due to borrowings under short-term notes of $1,960,000, offset by payments under long-term notes of $93,268 and payments on loan from shareholder of $12,351.

As of September 30, 2008, the Company had cash on hand of $1,152. On or prior to November 30, 2008, we have to repay $1,600,000 in principal to four note-holders, of which $100,000 was paid on October 28, 2008 to one of these holders. On or prior to March 16, 2009, we have to repay $500,000 in principal to one note-holder. On or prior to March 29, 2009, we have to repay $300,000 in principal to one note-holder. On or prior to April 30, 2009, we will owe $1,500,000 to one of our board members. On or prior to July 15, 2009, we will owe $2,087,088 to our CEO’s wife. We also owe an aggregate of $100,000 plus accrued interest which is payable over the next 12 months. Accordingly, we do not have sufficient funds to pay our expenses for the next 12 months or to effectuate our plans with respect to our business operations.

We need to seek additional capital for the purpose of financing and operating our business. We expect to incur a minimum of approximately $14.2 million in expenses in order to effectuate our plans regarding our business, excluding the principal payments on the obligations described in the previous paragraph. We estimate that this will be comprised mostly of approximately $11.1 million towards cost of goods sold and approximately $.4 million towards interest expense. Additionally, approximately $2.7 million will be needed for general overhead expenses such as salaries, corporate legal and accounting fees, office overhead and general working capital. Over the next twelve months, we expect to hire employees for our sales, shipping and financial departments as needed. Accordingly, we will have to raise the funds to pay for these expenses. There can be no assurance that additional capital will be available to us. We have no specific plans, understandings or agreements with respect to any bank financing or capital raise, and we have given no contemplation with respect to the securities to be offered or any other issue with respect to any offering. We may seek to raise the required capital by other means. We will have to issue debt or equity or enter into a strategic arrangement with a third party. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability to raise funds for a marketing program will have a severe negative impact on our ability to remain a viable company.

Results of Operations

Revenue.  Revenue includes net sales of our platinum alloy and platinum jewelry. Net revenue is recorded net of estimated sales returns based upon specific customers.

Cost of goods sold.  Our cost of goods sold represents our costs of raw materials, including fine platinum, the cost to convert the platinum into our alloy and the labor to manufacture our jewelry products from our third party manufacturers. Cost of goods sold also includes the cost to transport these products to our facility, including customs and brokers fees. Cost of goods sold is recognized at the time products are shipped to the customer and title transfers.

Selling, general and administrative expenses.  Our selling, general and administrative expenses consist primarily of selling, marketing, salaries and related payroll and employee benefit costs, travel and insurance expenses, depreciation, professional fees, facility expenses, bank charges and outbound freight expenses.

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Three months ended September 30, 2008 compared with three months ended September 30, 2007

Revenue.  Net revenue increased to $488,316 for the three months ended September 30, 2008 compared to $111,549 for the three months ended September 30, 2007. The increase in revenue is primarily due to the addition of several new customers in the 2008 period and consisted of sales of platinum alloy as well as jewelry items. During the three months ended September 30, 2008, two customers accounted for approximately 90% of revenue.

Gross profit.  Gross profit increased to $7,032 for the three months ended September 30, 2008 compared to a gross loss of ($76,564) for the three months ended September 30, 2007. The increase in gross profit is primarily due to the increase in revenue during the 2008 period. Cost of goods sold contains certain fixed costs and is impacted by the change in the price of platinum.

Selling, general and administrative expenses.  Selling, general and administrative expenses decreased to $490,224 for the three months ended September 30, 2008 compared to $678,334 for the three months ended September 30, 2007. The decrease was a result of reducing costs associated with the operations of the business during the 2008 period over the 2007 period. The primary expenses incurred during the 2008 period consist of salaries and related costs (including benefits) of $327,507; professional fees of $30,219; advertising and trade shows of $3,795; travel and entertainment costs of $17,308 and operating expenses of $26,747.

Loss from continuing operations before other income and interest expense.  Loss from continuing operations before other income and interest expense decreased to ($483,192) for the three months ended September 30, 2008 compared to ($754,898) for the three months ended September 30, 2007. The decrease in loss from continuing operations before other income and interest expense for 2008 was primarily the result of higher gross profit and lower selling, general and administrative costs, as explained above.

Other income.  The Company’s product line is moving towards bridal and wedding bands and as such certain jewelry items were melted and refined. The refined platinum was sold resulting in a profit of $26,697 for the three months ended September 30, 2008.

Interest expense.  Interest expense increased to $528,323 for the three months ended September 30, 2008 compared to $101,424 for the three months ended September 30, 2007. The increase was due to higher borrowings coupled with higher interest rates paid for those borrowings in order to support the working capital needs as a result of the increase in the business operations, and to purchase inventories. In the 2008 period, interest expense included $357,222 related to the accretion of the discount on a convertible note with a beneficial conversion feature.

Loss from continuing operations.  Loss from continuing operations increased to a loss of ($984,818) for the three months ended September 30, 2008 compared to a loss of ($856,322) for the three months ended September 30, 2007. The increase was primarily the result of higher interest expense, offset by the higher gross profit and lower selling, general and administrative costs, as explained above.

Provision for income taxes.  We did not recognize any tax benefit due to the ongoing losses of the business.

Loss from operations of 15 Hoover Street, deconsolidated on December 21, 2007.  Loss from operations deconsolidated on December 21, 2007 of 15 Hoover Street of ($36,481) in 2007 relates to the losses of 15 Hoover Street LLC, a variable interest entity that was deconsolidated on December 21, 2007.

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Net loss. Net loss increased to ($984,818) for the three months ended September 30, 2008 compared to net loss of ($892,803) for the three months ended September 30, 2007 as a result of higher interest expense, offset by higher gross profit and lower selling, general and administrative costs, as explained above.

Six months ended September 30, 2008 compared with six months ended September 30, 2007

Revenue.  Net revenue increased to $745,529 for the six months ended September 30, 2008 compared to $115,855 for the six months ended September 30, 2007. The increase in revenue is primarily due to the addition of several new customers in the 2008 period and consisted of sales of platinum alloy as well as jewelry items. During the six months ended September 30, 2008, two customers accounted for approximately 70% of revenue.

Gross loss.  Gross loss decreased to ($35,987) for the six months ended September 30, 2008 compared to ($153,455) for the six months ended September 30, 2007. The decrease in gross loss is primarily due to the increase in revenue during the 2008 period. Cost of goods sold contains certain fixed costs and is impacted by the change in the price of platinum.

Selling, general and administrative expenses.  Selling, general and administrative expenses increased slightly to $1,249,663 for the six months ended September 30, 2008 compared to $1,209,237 for the six months ended September 30, 2007. The increase was a result of the increase in the operations of the business during the 2008 period over the 2007 period. The primary expenses incurred during the 2008 period consist of salaries and related costs (including benefits) of $726,293; professional fees of $168,720; advertising and trade shows of $51,723; travel and entertainment costs of $70,253 and operating expenses of $49,549.

Loss from continuing operations before other income and interest expense.  Loss from continuing operations before other income and interest expense decreased to ($1,285,650) for the six months ended September 30, 2008 compared to ($1,362,692) for the six months ended September 30, 2007. The decrease in loss from continuing operations before other income and interest expense for 2008 was primarily the result of the slightly higher selling, general and administrative costs, offset by the decrease in gross loss, as explained above.

Other income.  The Company’s product line is moving towards bridal and wedding bands and as such approximately 10,400 grams of jewelry items were melted and refined. The refined platinum was sold for $703,847, with profit of $229,104, in the six months ended September 30, 2008.

Interest expense.  Interest expense increased to $1,069,556 for the six months ended September 30, 2008 compared to $350,154 for the six months ended September 30, 2007. The increase was due to higher borrowings coupled with higher interest rates paid for those borrowings in order to support the working capital needs. In the 2008 period, interest expense included $725,267 related to the accretion of the discount on a convertible note with a beneficial conversion feature.

Loss from continuing operations.  Loss from continuing operations increased to a loss of ($2,126,102) for the six months ended September 30, 2008 compared to a loss of ($1,712,846) for the six months ended September 30, 2007. The increase was primarily the result of higher selling, general and administrative costs and interest expense, offset by the decrease in gross loss, as explained above.

Provision for income taxes.  We did not recognize any tax benefit due to the ongoing losses of the business.

Loss from operations of 15 Hoover Street, deconsolidated on December 21, 2007.  Loss from operations deconsolidated on December 21, 2007 of 15 Hoover Street of ($112,480) in 2007 relates to the losses of 15 Hoover Street LLC, a variable interest entity that was deconsolidated on December 21, 2007.

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Net loss. Net loss increased to ($2,126,102) for the six months ended September 30, 2008 compared to net loss of ($1,825,326) for the six months ended September 30, 2007 as a result of higher selling, general and administrative costs and interest expense, offset by the decrease in the gross loss, as explained above.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Quantitative and Qualitative Disclosures about Market Risk:

The Company is exposed to various market risks, including changes in interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates, commodity prices of platinum and foreign currency exchange rates. The Company does not enter into derivatives or other financial instruments for trading or speculative purposes. The Company also has not entered into financial instruments to manage and reduce the impact of changes in interest rates, commodity prices of platinum and foreign currency exchange rates, although we may enter into such transactions in the future.

Off-Balance Sheet Arrangements:

The Company has no off-balance sheet obligations nor guarantees and has not historically used special purpose entities for any transactions.

Item 4T. Controls and Procedures.

Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our principal executive officer and principal financial officer has reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13(a)-15(e) and 15(d)-15(e)) within the end of the period covered by this Quarterly Report on Form 10-Q and has concluded that the disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the last day they were evaluated by our principal executive officer and principal financial officer.

Changes in Internal Controls over Financial Reporting

There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

Item 1A. Risk Factors.

There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10K for the year ended March 31, 2008

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

There have been no unregistered sales of equity securities during the quarter ended September 30, 2008.

Purchases of equity securities by the issuer and affiliated purchasers.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

There was no matter submitted to a vote of security holders during the quarter ended September 30, 2008.

Item 5. Other Matters.

None.

Item 6.Exhibits

(a)Exhibits

31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

31.2 Certification of Vice President of Finance pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

32.1 Principal Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 

32.2 Principal Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES

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

	KARAT PLATINUM INC.
	(Formerly Sentra Consulting Corp.)
Date: November 14, 2008	By: /s/ David Neuberg
	Name: David Neuberg
	Title: Chief Executive Officer
	By: /s/ Jodi Waterman
	Name: Jodi Waterman
	Title: Vice President of Finance

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