Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 14, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | Graphite Corp. | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Entity Central Index Key | 1,420,239 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding | 199,859,352 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash | $ 8,292 | $ 129,152 |
NON-CURRENT ASSETS | ||
License, net of amortization of $5,984 and $0, respectively | 34,016 | 40,000 |
TOTAL ASSETS | 42,308 | 169,152 |
CURRENT LIABILITIES | ||
Accounts payable | 68,569 | 61,501 |
Accounts payable-related party | 274,203 | 59,517 |
Accrued interest | 10,276 | 4,472 |
Related party payable | 15,776 | 14,776 |
Loan payable, net of discount of $23,063 and $0 respectively | 47,437 | 10,000 |
Loan payable - default | 35,000 | 35,000 |
Total Current Liabilities | 451,261 | 185,266 |
Total Liabilities | $ 451,261 | $ 185,266 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock: $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding as of September 30, 2015 and December 31, 2014 | ||
Common stock: $0.0001 par value, 300,000,000 shares authorized, 199,026,019 as of September 30, 2015 and 195,601,362 as of December 31, 2014 | $ 19,902 | $ 19,560 |
Stock payable | 961,209 | 716,305 |
Additional paid-in capital | 2,808,660 | 2,732,747 |
Other comprehense income | 337 | 310 |
Accumulated deficit | (4,199,061) | (3,485,036) |
Total Stockholders' Equity (Deficit) | (408,953) | (16,114) |
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) | $ 42,308 | $ 169,152 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
NON-CURRENT ASSETS | ||
License, net of amortization | $ 5,984 | $ 0 |
CURRENT LIABILITIES | ||
Loan payable, net of discount | $ 23,063 | $ 0 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 300,000,000 | 300,000,000 |
Common Stock, shares issued | 199,026,019 | 195,601,362 |
Common Stock, shares outstanding | 199,026,019 | 195,601,362 |
Consolidated Statement of Opera
Consolidated Statement of Operations (Unaudited) - USD ($) | 3 Months Ended | 4 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | |
Consolidated Statement Of Operations | ||||
REVENUES | ||||
EXPENSES | ||||
Accounting and legal | $ 56,444 | $ 8,349 | $ 8,349 | $ 72,444 |
Consulting | 106,354 | $ 12,800 | $ 12,800 | 456,410 |
Interest expense | 16,734 | 23,052 | ||
Investor relations | $ 2,750 | 15,439 | ||
Research and development | 101,617 | |||
Website costs | 3,976 | |||
General and administrative | $ 4,418 | $ 16,016 | $ 16,016 | 21,475 |
Travel | 19,612 | |||
TOTAL EXPENSES | $ 186,700 | $ 37,165 | $ 37,165 | 714,025 |
NET LOSS | $ (186,700) | $ (37,165) | $ (37,165) | $ (714,025) |
BASIC AND DILUTED LOSS PER SHARE | $ 0 | $ 0 | $ 0 | $ 0 |
WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED | 196,122,505 | 83,289,339 | 66,957,716 | 195,776,985 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 4 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | |
Consolidated Statement Of Comprehensive Income | ||||
Net Loss | $ (186,700) | $ (37,165) | $ (37,165) | $ (714,025) |
Foreign Currency Translation Gain | (137) | 226 | 226 | (27) |
Other Comprehensive Income | (137) | 226 | 226 | (27) |
TOTAL COMPREHENSIVE (LOSS) | $ (186,837) | $ (36,939) | $ (36,939) | $ (714,052) |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Unaudited) - USD ($) | 4 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2015 | |
OPERATING ACTIVITIES | ||
Net loss | $ (37,165) | $ (714,025) |
Changes in non-cash items: | ||
Consulting fees in stock payable | 232,904 | |
Amortization of license | 5,984 | |
Amortization of debt discount | 17,248 | |
Shares issued for services | 47,945 | |
Changes in operating assets and liabilities | ||
Increase (Decrease) in accounts payable | $ (1,632) | 7,067 |
Increase in accounts payable - related party | $ 4,257 | 214,686 |
Increase in accrued interest | 5,804 | |
Net Cash Used in Operating Activities | $ (34,540) | $ (182,387) |
INVESTING ACTIVITIES | ||
Effect of reverse merger | 15,782 | |
Cash paid for license | (100,000) | |
Net Cash provided by Investing Activities | (84,218) | |
FINANCING ACTIVITIES | ||
Common stock issued for cash | $ 160,000 | |
Increase in loans payable | $ 60,500 | |
Increase in due to related party | 1,000 | |
Net Cash provided by Financing Activity | $ 160,000 | 61,500 |
Foreign currency adjustment | 226 | 27 |
NET INCREASE (DECREASE) IN CASH | $ 41,468 | (120,860) |
CASH AT BEGINNING OF PERIOD | 129,152 | |
CASH AT END OF PERIOD | $ 41,468 | $ 8,292 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
CASH PAID FOR: Interest | ||
CASH PAID FOR: Income Taxes | ||
NON CASH ITEMS: | ||
Debt discount from inducement | $ 10,000 | |
Debt discount from beneficial conversion feature | $ 28,311 | |
Stock issued for reverse merger | $ 12,000 |
NATURE OF OPERATIONS AND REVERS
NATURE OF OPERATIONS AND REVERSE MERGER | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
1. NATURE OF OPERATIONS AND REVERSE MERGER | Nature of Operations Graphite Corp. (formerly First Resources Corp.) (the "Company") was organized on August 3, 2007, under the laws of the State of Nevada to engage in any lawful activity. The Company intends engage in the exploration of certain mineral interests in the states of Alabama and Montana. On August 19, 2010, the Company filed Amended and Restated Articles of Incorporation with the Nevada Secretary of State. As a result of the Amendment the Registrant, among other things, has: (i) changed its name to "First Resources Corp.;" and, (ii) increased the aggregate number of authorized shares to 310,000,000 shares, consisting of 300,000,000 shares of Common Stock, par value $0.0001 per share and 10,000,000 shares of preferred stock, par value $0.0001 per share. On June 22, 2012, the Company filed Amended and Restated Articles of Incorporation with the Nevada Secretary of State. As a result of the Amendment the Registrant has changed its name to "Graphite Corp." The Company's financial statements are prepared using the accrual method of accounting. The Company has elected a December 31 year-end. Reverse Merger On August 11, 2014, the Company entered into a share exchange agreement with Advance Graphene Ltd. ("AGL"). Pursuant to the agreement, the Company acquired all of the outstanding shares of common stock of AGL by issuing 120,000,000 common shares. As a result of the share exchange, the former shareholders of the AGL controlled approximately 80.85% of the issued and outstanding common shares of the Company resulting in a change in control. The transaction was accounted for as a reverse recapitalization transaction, as the Company qualifies as a non-operating public shell company given the fact that the Company held nominal net monetary assets, consisting of only cash at the time of merger transaction. As AGL is deemed to be the purchaser for accounting purposes under recapitalization accounting, the equity of the Company is presented as the equity of the combined company and the capital stock account of the Company is adjusted to reflect the part value of the outstanding and issued common stock of the legal acquirer (AGL) after giving effect to the number of shares issued in the share exchange agreement. |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
2. GOING CONCERN | The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
3. SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company's fiscal year-end is December 31. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of September 30, 2015 and December 31, 2014, the Company had no cash equivalents. Stock-based Compensation The Company accounts for stock-based compensation issued to employees based on ASC Topic "Share Based Payment" which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. The Topic does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans". It requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award the requisite service period (usually the vesting period). It further requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of the Topic includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. As at September 30, 2015, the Company had not adopted a stock option plan. Basic and Diluted Net Loss Per Share The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. Income Taxes Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740, Income Taxes, as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. Comprehensive Income ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive incomeand its components in the financial statements. During the three months ended September 30, 2015, the Company had comprehensive loss of $137 as a result of foreign currency transactions. Financial Instruments The Company adopted the FASB standard related to fair value measurement at inception. The standard defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The standard applies under other accounting pronouncements that require or permit fair value measurements and, accordingly, does not require any new fair value measurements. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The recorded values of long-term debt approximate their fairvalues, as interest approximates market rates. As a basis for considering such assumptions, the standard established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows. Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The Company's financial instruments are cash, accounts receivable, and accounts payable. The recorded values of cash, accounts receivable, and accounts payable approximate their fair values based on their short-term nature. The following table presents assets and liabilities within the fair value hierarchy utilized to measure fair value on a recurring basis as of September 30, 2015 and December 31, 2014: Description Level 1 Level 2 Level 3 Total Realized Loss September 30, 2015 None $ - $ - $ - $ - December 31, 2014 None $ - $ - $ - $ - Recently issued accounting pronouncements On November 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-16Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update do not change the current criteria in GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. That is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly and closely related to those of the host contract, among other relevant criteria. The amendments clarify how current GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. The effects of initially adopting the amendments in this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods. On November 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-17Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The amendments in this Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. On August 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-15, Presentation of Financial Statements Going Concerns (Subtopic 205-40): Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern. The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations. In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation , to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations. |
RELATED PARTY PAYABLES
RELATED PARTY PAYABLES | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
4. RELATED PARTY PAYABLES | As of September 30, 2015, the Company has a payable balance owing of $14,776 (December 31, 2014: $14,776), to a company affiliated with a former officer of the Company. As of September 30, 2015, the Company had a payable balance owing of $216,048 (December 31, 2014: $55,502) to two officers. As of September 30, 2015, the Company had a payable balance owing of $54,167 (December 31, 2014: $4,015) to a company 50% owned by a major shareholder. As of September 30, 2015 and December 31, 2014, the Company owed an officer of the Company 9% of the issued and outstanding common shares as at the agreement date of December 12, 2014. This amounted to 17,641,234 common shares payable with a fair market value of $511,596. As of September 30, 2015 and December 31, 2014, the Company owed an officer of the Company 8% of issued and outstanding common shares as at the agreement date of July 15, 2014. This amounted to 2,274,547 common shares payable with a fair market value of $204,709. As of September 30, 2015, the Company owed a director of the Company 1% of issued and outstanding common shares as at the agreement date of January 9, 2015. This amounted to 519,129 common shares payable with a fair market value of $16,622. As of September 30, 2015, the Company owed a director of the Company 6% of issued and outstanding common shares as at the agreement date of January 9, 2015. This amounted to 3,102,975 common shares payable with a fair market value of $99,732. As of September 30, 2015, the Company owed a director of the Company 1,500,000 bonus common shares payable with a fair market value of $48,150. During the period ended December 31, 2014, the Company issued 40,000,000 common shares as a finder's fee related to the introduction of the Rice University license agreement. As of September 30, 2015, the Company owed a shareholder of the Company $1,000. The amount does not have specific repayment terms, is non-interest bearing and unsecured. As of September 30, 2015, the Company owed $3,988 to Graphene Materials, a company controlled by a shareholder. |
LICENSE
LICENSE | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
5. LICENSE | The Company purchased a royalty-bearing license to develop, exploit, utilize and commercialize licensed intellectual property and products. Consideration for the license is an annual license fee of $7,500 for the first three years and $20,000 for each year thereafter and $350,000 of research and development expenses until October 1, 2015 and royalties ranging between 3% and 5% subject to a $50,000 minimum. These expenditures were expensed as incurred. The Company entered into a license agreement to license Rice University's grapheme carbon nanotube hybrid material technology in exchange for $40,000. The term of the agreement is from signing until the final licenses patent expires in approximately 17 years. Upon the fifth anniversary of the agreement, should the Company become insolvent, as defined within the agreement, shall result in any amounts owing from sub-licensees to the Company shall be payable directly to Rice University. During the nine month period ended September 30, 2015, the Company has recorded $5,984 in amortization expense related to this license. |
LOANS PAYABLE
LOANS PAYABLE | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
6. LOANS PAYABLE | The Company received a loan of $15,000 on June 27, 2013 that bears interest at 8% per annum and is due on June 27, 2014. The Company received a loan of $15,000 on August 22, 2013 that bears interest at 8% per annum and is due on August 22, 2014. The Company received a loan of $5,000 on January 16, 2014 that bears interest at 8% per annum and is due on January 16, 2015. The Company received a loan of $10,000 on March 12, 2014 that bears interest at 8% per annum and is due on March 12, 2016. The Company received a loan of $10,000 on June 28, 2015 that bears interest at 20% per annum and is due on February 1, 2016. In addition, the Company is to grant 1,000,000 as consideration for this loan, which has a fair market value of $12,000 and will be included in interest expense over the vesting term. Included on the balance sheet is a $5,688 debt discount from inducement with $6,312 expensed during the period ended September 30, 2015. The Company received a loan of $33,000 on June 15, 2015 that bears interest at 8% per annum and is due on March 18, 2016. The loan included an original debt discount of $28,311 and, at September 30, 2014, included on the balance sheet is a $17,375 debt discount from beneficial conversion feature with $10,936 expensed during the period ended September 30, 2015. As of September 30, 2015, there is accrued interest on the above loans in the amount of $10,276 (December 31, 2014: $4,472). |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
7. STOCKHOLDERS EQUITY | On August 11, 2014, the Company entered into a share exchange agreement with AGL. Under the terms of the agreement, the Company issued 120,000,000 common shares for 100% of the issued and outstanding shares of AGL. The agreement results in management and shareholders of AGL to hold 81% of the issued and outstanding common shares of the Company, resulting in a reverse capitalization transaction (see Note 1). Following the above events, there were 148,431,837 shares outstanding including: Shares Held by: 120,000,000 AGL Shareholders 28,431,837 Graphite Corp. Shareholders During the year ended December 31, 2014, the Company issued 7,169,525 common shares for $385,000. During the period ended December 31, 2014, the Company issued 40,000,000 common shares as a finder's fee related to the introduction of the Rice University license agreement (see Note 4). As of September 30, 2015 and December 31, 2014, the Company owed an officer of the Company 9% of the issued and outstanding common shares as at the agreement date of December 12, 2014. This amounted to 17,641,234 common shares payable with a fair market value of $511,596. As of September 30, 2015 and December 31, 2014, the Company owed an officer of the Company 8% of issued and outstanding common shares as at the agreement date of July 15, 2014. This amounted to 2,274,547 common shares payable with a fair market value of $204,709. As of September 30, 2015, the Company owed a director of the Company 1% of issued and outstanding common shares as at the agreement date of January 9, 2015. This amounted to 519,129 common shares payable with a fair market value of $16,622. As of September 30, 2015, the Company owed a director of the Company 6% of issued and outstanding common shares as at the agreement date of January 9, 2015. This amounted to 3,102,975 common shares payable with a fair market value of $99,732. As of September 30, 2015, the Company owed a director of the Company 1,500,000 bonus common shares payable with a fair market value of $48,150. As of September 30, 2015, the Company owed two consultants an aggregate of 4,000,000 shares for services provided, valued at $68,400 using a closing price on the grant date February 23, 2015. As of September 30, 2015, the Company owed a lender 1,000,000 shares as inducement to provide debt to the Company, valued at $12,000 and included in stock payable as September 30, 2015. The debt discount will be included in interest expense over the vesting term. Included on the balance sheet is a $5,688 debt discount from inducement with $6,312 expensed during the period ended September 30, 2015. During the period ended September 30, 2015, the Company issued 3,424,657 common shares in lieu of paying legal and professional fees in relation to their Equity Purchase Agreement dated September 16, 2015. Shares were valued at the closing price of the stock on the date of the agreement for a total of $47,945. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
8. SUBSEQUENT EVENTS | On October 14, 2015, the Company replaced a promissory note owing to Vis Vires Group, Inc. in the amount of $33,000 with a promissory note owing to Coventry Enterprises, LLC in the amount of $33,890. The new note includes a conversion feature at a 58% discount to market on the average of the lowest 3 trading days of the previous 10 days prior to the conversion request. The note bears interest at 8% per annum and is payable on October 14, 2016. On October 29, 2015, the board approved a Securities Purchase Agreement with Auctus Fund, LLC dated October 7, 2015. The agreement includes a principal loan amount of $42,250 bearing interest at 10%, is due on July 29, 2016 and convertible into common shares of the Company at a 40% discount to the lowest trading price in the previous 25 trading days prior to the conversion or 50% discount to the market price, whichever is lower. The Company issued 833,333 to Auctus Fund, LLC as inducement for the loan. |
SIGNIFICANT ACCOUNTING POLICI15
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Significant Accounting Policies Policies | |
Basis of Presentation | These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company's fiscal year-end is December 31. |
Use of Estimates | The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of September 30, 2015 and December 31, 2014, the Company had no cash equivalents. |
Stock-based Compensation | The Company accounts for stock-based compensation issued to employees based on ASC Topic "Share Based Payment" which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. The Topic does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, "Employers' Accounting for Employee Stock Ownership Plans". It requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award the requisite service period (usually the vesting period). It further requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of the Topic includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. As at September 30, 2015, the Company had not adopted a stock option plan. |
Basic and Diluted Net Loss Per Share | The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. |
Income Taxes | Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740, Income Taxes, as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. |
Comprehensive Income | ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive incomeand its components in the financial statements. During the three months ended September 30, 2015, the Company had comprehensive loss of $137 as a result of foreign currency transactions. |
Financial Instruments | The Company adopted the FASB standard related to fair value measurement at inception. The standard defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The standard applies under other accounting pronouncements that require or permit fair value measurements and, accordingly, does not require any new fair value measurements. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The recorded values of long-term debt approximate their fairvalues, as interest approximates market rates. As a basis for considering such assumptions, the standard established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows. Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The Company's financial instruments are cash, accounts receivable, and accounts payable. The recorded values of cash, accounts receivable, and accounts payable approximate their fair values based on their short-term nature. The following table presents assets and liabilities within the fair value hierarchy utilized to measure fair value on a recurring basis as of September 30, 2015 and December 31, 2014: Description Level 1 Level 2 Level 3 Total Realized Loss September 30, 2015 None $ - $ - $ - $ - December 31, 2014 None $ - $ - $ - $ - |
Recently issued accounting pronouncements | On November 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-16Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update do not change the current criteria in GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. That is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly and closely related to those of the host contract, among other relevant criteria. The amendments clarify how current GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. The effects of initially adopting the amendments in this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods. On November 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-17Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The amendments in this Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. On August 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-15, Presentation of Financial Statements Going Concerns (Subtopic 205-40): Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern. The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations. In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation , to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations. |
SIGNIFICANT ACCOUNTING POLICI16
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Significant Accounting Policies Tables | |
Fair Value Assets Measured On A Recurring Basis | The following table presents assets and liabilities within the fair value hierarchy utilized to measure fair value on a recurring basis as of September 30, 2015 and December 31, 2014: Description Level 1 Level 2 Level 3 Total Realized Loss September 30, 2015 None $ - $ - $ - $ - December 31, 2014 None $ - $ - $ - $ - |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders Equity Tables | |
Summary of shares outstanding | The agreement results in management and shareholders of AGL to hold 81% of the issued and outstanding common shares of the Company, resulting in a reverse capitalization transaction (see Note 1). Following the above events, there were 148,431,837 shares outstanding including: Shares Held by: 120,000,000 AGL Shareholders 28,431,837 Graphite Corp. Shareholders |
SIGNIFICANT ACCOUNTING POLICI18
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Description | ||
Total Realized Loss | ||
Level 1 [Member] | ||
Description | ||
Level 2 [Member] | ||
Description | ||
Level 3 [Member] | ||
Description |
SIGNIFICANT ACCOUNTING POLICI19
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 4 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | Dec. 31, 2014 | |
Significant Accounting Policies Details Narrative | |||||
Cash equivalents | $ 0 | $ 0 | $ 0 | ||
Other Comprehensive Income | $ (137) | $ 226 | $ 226 | $ (27) |
RELATED PARTY PAYABLES (Details
RELATED PARTY PAYABLES (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Common shares issued | 3,424,657 | 7,169,525 |
Former officer [Member] | ||
Accounts payable-related party | $ 14,776 | $ 14,776 |
Officer [Member] | ||
Accounts payable-related party | 216,048 | 55,502 |
Major shareholder [Member] | ||
Accounts payable-related party | $ 54,167 | $ 4,015 |
Percentage of issued and outstanding common shares owed by Company | 50.00% | |
Officer One [Member] | ||
Date of agreement | Dec. 12, 2014 | |
Percentage of issued and outstanding common shares owed by Company | 9.00% | 9.00% |
Number of common shares payable | 17,641,234 | 17,641,234 |
Fair market value of common shares payable | $ 511,596 | $ 511,596 |
Officer Two [Member] | ||
Date of agreement | Jul. 15, 2014 | |
Percentage of issued and outstanding common shares owed by Company | 8.00% | 8.00% |
Number of common shares payable | 2,274,547 | 2,274,547 |
Fair market value of common shares payable | $ 204,709 | $ 204,709 |
Director [Member] | ||
Date of agreement | Jan. 9, 2015 | |
Percentage of issued and outstanding common shares owed by Company | 1.00% | |
Number of common shares payable | 519,129 | |
Fair market value of common shares payable | $ 16,622 | |
Director One [Member] | ||
Date of agreement | Jan. 9, 2015 | |
Percentage of issued and outstanding common shares owed by Company | 6.00% | |
Number of common shares payable | 3,102,975 | |
Fair market value of common shares payable | $ 99,732 | |
Director Two [Member] | ||
Number of common shares payable | 1,500,000 | |
Fair market value of common shares payable | $ 48,150 | |
Shareholder [Member] | ||
Fair market value of common shares payable | 1,000 | |
Graphene Materials [Member] | ||
Fair market value of common shares payable | $ 3,988 | |
Rice University License Agreement [Member] | ||
Common shares issued | 40,000,000 |
LICENSE (Details Narrative)
LICENSE (Details Narrative) - USD ($) | 4 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2015 | |
License Details Narrative | ||
Amortization expense related to license | $ 5,984 |
LOANS PAYABLE (Details Narrativ
LOANS PAYABLE (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Loans Payable Details Narrative | ||
Accrued interest on loans | $ 10,276 | $ 4,472 |
Debt discount from inducement | 5,688 | |
Debt discount from inducement expensed | 6,312 | |
Debt discount from beneficial conversion feature | 17,375 | |
Debt discount from beneficial conversion feature expensed | $ 10,936 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - shares | Sep. 30, 2015 | Dec. 31, 2014 |
Common Stock, shares outstanding | 199,026,019 | 195,601,362 |
AGL Shareholders [Member] | ||
Common Stock, shares outstanding | 120,000,000 | |
Graphite Corp. Shareholders [Member] | ||
Common Stock, shares outstanding | 28,431,837 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 4 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Sep. 30, 2015 | Dec. 31, 2014 | |
Common shares issued, shares | 3,424,657 | 7,169,525 | |
Common shares issued, value | $ 385,000 | ||
Company owed a lender as inducement, shares | 1,000,000 | ||
Company owed a lender as inducement, amount | $ 12,000 | ||
Debt discount from inducement | 5,688 | ||
Debt discount from inducement expensed | 6,312 | ||
Shares issued for services | $ 47,945 | ||
Officer One [Member] | |||
Percentage of issued and outstanding common shares owed by Company | 9.00% | 9.00% | |
Number of common shares payable | 17,641,234 | 17,641,234 | |
Fair market value of common shares payable | $ 511,596 | $ 511,596 | |
Date of agreement | Dec. 12, 2014 | ||
Officer Two [Member] | |||
Percentage of issued and outstanding common shares owed by Company | 8.00% | 8.00% | |
Number of common shares payable | 2,274,547 | 2,274,547 | |
Fair market value of common shares payable | $ 204,709 | $ 204,709 | |
Date of agreement | Jul. 15, 2014 | ||
Director [Member] | |||
Percentage of issued and outstanding common shares owed by Company | 1.00% | ||
Number of common shares payable | 519,129 | ||
Fair market value of common shares payable | $ 16,622 | ||
Date of agreement | Jan. 9, 2015 | ||
Director One [Member] | |||
Percentage of issued and outstanding common shares owed by Company | 6.00% | ||
Number of common shares payable | 3,102,975 | ||
Fair market value of common shares payable | $ 99,732 | ||
Date of agreement | Jan. 9, 2015 | ||
Director Two [Member] | |||
Number of common shares payable | 1,500,000 | ||
Fair market value of common shares payable | $ 48,150 | ||
Consultants [Member] | |||
Number of common shares payable | 4,000,000 | ||
Fair market value of common shares payable | $ 68,400 | ||
Date of agreement | Feb. 23, 2015 | ||
Rice University License Agreement [Member] | |||
Common shares issued, shares | 40,000,000 |