UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2013
Commission file number 000-54665
WESTERN GRAPHITE INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
Hudson Bay Centre
2 Bloor Street East, Suite 3500
Toronto, Ontario M4W 1A8
(Address of principal executive offices, including zip code)
416 915 1661
(Telephone number, including area code)
Lauren Notar
Hudson Bay Centre, 2 Bloor Street East, Suite 3500
Toronto, Ontario M4W 1A8
(Name and Address of Agent for Service)
4100 W. Flamingo Road, Suite 2750, Las Vegas, NV 89103
(Former Address of principal executive offices, including zip code.)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 last 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). YES [X] NO [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer, "accelerated filer,"
"non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES [ ] NO [X]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 71,100,000 shares as of August 9,
2013
ITEM 1. FINANCIAL STATEMENTS
The un-audited financial statements for the quarter ended June 30, 2013
immediately follow.
2
WESTERN GRAPHITE INC.
(An Exploration Stage Company)
Balance Sheets (Unaudited)
--------------------------------------------------------------------------------
As of As of
June 30, December 31,
2013 2012
------------ ------------
ASSETS
CURRENT ASSETS
Cash $ 20,293 $ 73
Deposit 1,483 3,937
------------ ------------
TOTAL CURRENT ASSETS 21,776 4,010
------------ ------------
FIXED ASSETS
Mining Properties 1,513,000 --
------------ ------------
TOTAL FIXED ASSETS 1,513,000 --
------------ ------------
TOTAL ASSETS $ 1,534,776 $ 4,010
============ ============
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts Payable $ 2,952 $ 60
Loan Payable - Related Party 37,325 31,325
Accrued Interest 739 --
Note Payable 50,000 --
Property Payments Due 1,500,000 --
------------ ------------
Total Current Liabilities 1,591,016 31,385
------------ ------------
TOTAL LIABILITIES 1,591,016 31,385
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, ($0.001 par value, 750,000,000 shares authorized;
71,000,000 shares and 58,000,000 shares issued and outstanding
as of June 30, 2013 and December 31, 2012 respectively) 71,000 58,000
Additional paid-in capital 16,000 16,000
Deficit accumulated during exploration stage (143,240) (101,375)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (56,240) (27,375)
------------ ------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) $ 1,534,776 $ 4,010
============ ============
See Accompanying Notes
3
WESTERN GRAPHITE INC.
(An Exploration Stage Company)
Statements of Operations (Unaudited)
--------------------------------------------------------------------------------
December 15, 2006
Three Months Three Months Six Months Six Months (inception)
Ended Ended Ended Ended through
June 30, June 30, June 30, June 30, June 30,
2013 2012 2013 2012 2013
------------ ------------ ------------ ------------ ------------
REVENUES
Revenues $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------ ------------
TOTAL REVENUES -- -- -- -- --
OPERATING COSTS
Mineral Property Expenditures 12,277 -- 12,277 -- 28,605
Administrative Expenses 13,255 1,170 17,625 17,649 56,144
Professional Fees 3,483 1,900 11,224 5,000 57,752
------------ ------------ ------------ ------------ ------------
NET OPERATING LOSS 29,016 3,070 41,126 22,649 142,501
OTHER EXPENSES
Interest Expense 739 739 739
------------ ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (29,755) $ (3,070) $ (41,865) $ (22,649) $ (143,240)
============ ============ ============ ============ ============
BASIC EARNINGS (LOSS) PER SHARE $ (0.00) $ (0.00) (0.00) $ (0.00)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 71,000,000 58,000,000 66,629,834 58,000,000
============ ============ ============ ============
See Accompanying Notes
4
WESTERN GRAPHITE INC.
(An Exploration Stage Company)
Statements of Cash Flows (Unaudited)
--------------------------------------------------------------------------------
December 15, 2006
Six Months Six Months (inception)
Ended Ended through
June 30, June 30, June 30,
2013 2012 2013
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (41,865) $ (22,649) $ (143,240)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
(Increase) decrease in Deposit 2,454 -- (1,483)
Increase (Decrease) in Accounts Payable and Accrued Liabilities 3,631 (1,660) 3,691
Increase (Decrease) in Property Payments Due 1,500,000 -- 1,500,000
------------ ------------ ------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 1,464,220 (24,309) 1,358,968
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Mining Properties (1,513,000) -- (1,513,000)
------------ ------------ ------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (1,513,000) -- (1,513,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Note Payable 50,000 -- 50,000
Loan Payable - Related Party 6,000 28,000 37,325
Issuance of common stock 13,000 -- 87,000
------------ ------------ ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 69,000 28,000 174,325
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH 20,220 3,691 20,293
CASH AT BEGINNING OF PERIOD 73 17 --
------------ ------------ ------------
CASH AT END OF PERIOD $ 20,293 $ 3,708 $ 20,293
============ ============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ -- $ -- $ --
============ ============ ============
Income Taxes $ -- $ -- $ --
============ ============ ============
See Accompanying Notes
5
WESTERN GRAPHITE INC.
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2013
--------------------------------------------------------------------------------
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Western Graphite Inc.
(f/k/a Lucky Strike Explorations Inc.), have been prepared in accordance with
accounting principles generally accepted in the United States of America and the
rules of the Securities and Exchange Commission, and should be read in
conjunction with the audited financial statements and notes thereto contained in
Lucky Strike's Form 10-K filed with SEC. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of financial position and the results of operations for the interim
periods presented have been reflected herein. The results of operations for
interim periods are not necessarily indicative of the results to be expected for
the full year. Notes to the financial statements which would substantially
duplicate the disclosure contained in the audited financial statements for
fiscal 2012 as reported in the Form 10-K have been omitted.
NOTE 2. GOING CONCERN
As of June 30, 2013, Western Graphite has not generated revenues and has
accumulated losses since inception. The continuation of Western Graphite as a
going concern is dependent upon the continued financial support from its
shareholders, its ability to obtain necessary equity financing to continue
operations, and the attainment of profitable operations. These factors raise
substantial doubt regarding Western Graphite's ability to continue as a going
concern.
NOTE 3. NOTE PAYABLE - RELATED PARTY
As of June 30, 2013, $37,325 is owed to an ex-officer and director of the
Company and is non-interest bearing with no specific repayment terms.
NOTE 4. NOTE PAYABLE
Note payable as of June 30, 2013 is:
Unsecured promissory note payable, dated May 10, 2013
bearing interest at 10% per annum. $ 50,000
Interest expense incurred under debt obligations amounted to $739 and $0 for the
three months ended June 30, 2013 and 2012, respectively, and $739 and $0 for the
twelve months ended June 30, 2013 and 2012, respectively. Accrued interest was
$739 and $0 as of June 30, 2013 and 2012, respectively.
6
WESTERN GRAPHITE INC.
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2013
--------------------------------------------------------------------------------
NOTE 5. ACQUISITION OF MINES
On February 27, 2013, the Company acquired all the rights, title and interest in
certain lands covering approximately 495 hectares and known as the Amorf
Graphite property and located in the district of Bozyazi, in the village of
Cabukkoyaoi, Mersin Province Turskey. The Company acquired the property pursuant
to an agreement with Dr. Ahmet Unsal in exchange for 3,000,000 (three million)
shares of the Company's restricted common stock along with 2 future payments
totalling $1,500,000.
On March 4, 2013, the Company entered into an agreement of purchase and sale
with Seyit Kucuk for the acquisition of five (5) claims located in the Omineca
Mining Division of the Province of British Columbia. The claims, which cover
approximately 2,524 hectares, are known as the "Pure Flake Graphite" property
and are subject to a 2% net milling royalty. In consideration for the
acquisition of these claims, the company issued 10,000,000 (ten million) shares
of the Company's restricted common stock.
The Company has determined that the fair market value of the shares issued by
the Company for the property acquisitions cannot be reliably determined and
therefore it has deemed it appropriate to value the shares issued based on the
fair market value of the securities underlying the transaction. The Company has
further determined that the period end price of its common stock as quoted at
www.otcbb.com can not be used to determine fair market value as the stock had
never traded. Furthermore, as the Company has not issued any shares for cash in
the past 2 years is has determined that a reasonable value at this time for the
shares being issued is $.001, the par value of the common stock.
NOTE 6. STOCK TRANSACTIONS
Transactions, other than employees' stock issuance, are in accordance with ASC
No. 505. Thus issuances shall be accounted for based on the fair value of the
consideration received. Transactions with employees' stock issuance are in
accordance with ASC No. 718. These issuances shall be accounted for based on the
fair value of the consideration received or the fair value of the equity
instruments issued, or whichever is more readily determinable.
On December 15, 2006, the Company issued a total of 2,000,000 shares of common
stock to Michael Noble for cash in the amount of $0.005 per share for a total of
$10,000.
On February 23, 2007, the Company issued a total of 800,000 shares of common
stock to Michael Noble for cash in the amount of $0.005 per share for a total of
$4,000.
On April 5, 2007, the Company issued a total of 3,000,000 shares of common stock
from its registered SB-2 offering to 27 shareholders at $.02 per share to raise
an aggregate amount of $60,000.
7
WESTERN GRAPHITE INC.
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2013
--------------------------------------------------------------------------------
NOTE 6. STOCK TRANSACTIONS (CONT)
On February 27, 2013 the Company effected a 10 for 1 forward split of its issued
and outstanding share capital such that every one share of common stock issued
and outstanding prior to the split was exchanged for ten post-split shares of
common stock. The number of shares referred to in the previous paragraphs is
post-split number of shares. The Company's post-split authorized capital has
increased to 750,000,000 shares of common stock with a par value of $0.001 per
share. All share amounts have been retroactively adjusted for all periods
presented.
On February 27, 2013 the the Company issued a total of 3,000,000 shares of
common stock to one individual as part of the payment for the acquisition of the
Amorf Graphite property valued at $.001 per share for a total of $3,000.
On March 4, 2013 the the Company issued a total of 10,000,000 shares of common
stock to one individual as payment for the acquisition of the Pure Flake
Graphite property valued at $.001 per share for a total of $10,000.
As of June 30, 2012 the Company had 71,000,000 shares of common stock issued and
outstanding.
NOTE 7. STOCKHOLDERS' EQUITY
The stockholders' equity section of the Company contains the following classes
of capital stock as of June 30, 2013:
Common stock, $ 0.001 par value: 750,000,000 shares authorized; 71,000,000
shares issued and outstanding.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements that involve risk and
uncertainties. We use words such as "anticipate", "believe", "plan", "expect",
"future", "intend", and similar expressions to identify such forward-looking
statements. Investors should be aware that all forward-looking statements
contained within this report are good faith estimates of management as of the
date of this report and actual results may differ materially from historical
results or our predictions of future results.
RESULTS OF OPERATIONS
We are still in our exploration stage and have generated no revenues to date.
Our net loss from inception (December 15, 2006) through June 30, 2013 was
$143,240.
We incurred operating expenses of $29,016 for the three months ended June 30,
2013. These expenses consisted of general operating expenses and professional
fees incurred in connection with the day to day operation of our business and
the preparation and filing of our required reports with the U.S. Securities and
Exchange Commission. Operating expenses for the same period ending June 30, 2012
were $3,070.
We incurred operating expenses of $41,126 for the six months ended June 30,
2013. These expenses consisted of general operating expenses and professional
fees incurred in connection with the day to day operation of our business and
the preparation and filing of our required reports with the U.S. Securities and
Exchange Commission. Operating expenses for the same period ending June 30, 2012
were $22,649.
We have sold $74,000 in equity securities since inception, $14,000 from the sale
of 2,800,000 shares of stock to our officer and director and $60,000 from the
sale of 3,000,000 shares registered pursuant to our SB-2 Registration Statement
which became effective on March 12, 2007.
On February 27, 2013 the Company effected a 10 for 1 forward split of its issued
and outstanding share capital such that every one share of common stock issued
and outstanding prior to the split was exchanged for ten post-split shares of
common stock. The number of shares referred to in the previous paragraphs is
post-split number of shares. The Company's post-split authorized capital has
increased to 750,000,000 shares of common stock with a par value of $0.001 per
share. All share amounts have been retroactively adjusted for all periods
presented.
On February 27, 2013 the Company issued a total of 3,000,000 shares of common
stock to one individual as part of the payment for the acquisition of the Amorf
Graphite property valued at $.001 per share for a total of $3,000.
On March 4, 2013 the Company issued a total of 10,000,000 shares of common stock
to one individual as payment for the acquisition of the Pure Flake Graphite
property valued at $.001 per share for a total of $10,000.
On June 19, 2013, in a private transaction, Lauren Notar purchased the
14,000,000 shares of common stock held by Michael Noble, a former officer and
director, for $2,000 or $.000143 per share.
The following table provides selected financial data about our company for the
quarter ended June 30, 2013.
Balance Sheet Data: 6/30/12
------------------- -----------
Cash $ 20,293
Total assets $ 1,534,776
Total liabilities $ 1,591,016
Shareholders' equity $ (56,240)
9
LIQUIDITY AND CAPITAL RESOURCES
Our cash in the bank at June 30, 2013 was $20,293 with $1,591,016 in outstanding
liabilities. Management does not believe our current cash is sufficient to fund
our operations over the next twelve months.
PLAN OF OPERATION
Our plan of operation over the next 12 months is to begin operations on the
Amorf Graphite property and the Pure Flake property.
Western Graphite has hired Paul Gray, principal of PDGGC to manage and conduct a
Phase 1 project reconnaissance; rock sampling and compilation work on our Pure
Flake Mineral Claim Group in the Slocan Mining District in British Columbia,
which began in spring of 2013.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including
our principal executive officer and the principal financial officer, we have
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934, as of the end of the period
covered by this report. Based on this evaluation, our principal executive
officer and principal financial officer concluded as of the evaluation date that
our disclosure controls and procedures were effective such that the material
information required to be included in our Securities and Exchange Commission
reports is accumulated and communicated to our management, including our
principal executive and financial officer, recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms relating to
our company, particularly during the period when this report was being prepared.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There have been no changes in our internal control over financial reporting that
occurred during the last fiscal quarter ended June 30, 2013 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
ITEM 5. OTHER INFORMATION
Effective July 8, 2013, Seyit Kucuk resigned as President, Chief Executive
Officer and Director of our company. Mr. Kucuk's resignation was not the result
of any disagreements with our company regarding our operations, policies,
practices or otherwise.
Concurrently with the resignation of Seyit Kucuk, we appointed Lauren Notar as
President and Chief Executive Officer. Ms. Notar also acts as Treasurer, Chief
Financial Officer, Secretary and Director of our company. We also appointed
Harry Bygdnes as a Director of our company effective July 1, 2013.
On July 8, 2013, we agreed to provide Mr. Bygdnes with monthly compensation of
$2,000 and will issue to him 100,000 shares of our common stock.
10
HARRY BYGDNES - DIRECTOR 73
Mr. Bygdnes graduated from the University of British Columbia in 1967 with a
Bachelor of Science degree in physics and mathematics.
Upon completion of his formal education Mr. Bygdnes joined Texaco Canada in
Calgary Alberta where he held the position of Assistant to the Chief
Geophysicist for Canada. In his role as Geophysicist his responsibilities
included acquisition and interpretation of seismic data, mapping and joint
recommendations for well site locations in conjunction with company geological
personnel, and field supervision of seismic crew operations as company
representative.
Mr.Bygdnes left Texaco in 1971 and joined a small Calgary firm called
Explor-Alta to become Field Supervisor of Arctic marine operations in summer and
Operation Manager for land seismic operations in winter. Explor-Alta was able to
provide important seismic data for companies such as Texaco, Exxon and Gulf Oil.
In 1973, Mr. Bygdnes left Explor-Alta to set up his own private company
specializing in acquisition and computer processing of seismic data. In 1980 Mr.
Bygdnes moved to Vancouver to form a small public company called Consort Energy
Corp. The company originally participated in small joint venture oil well
drilling operations in Texas, Oklahoma and Kansas. When the oil business
faltered in the early nineteen-eighties Mr. Bygdnes turned the attention of the
company to mineral exploration and conducted an extensive joint venture drilling
program with major mining company adjacent to the Echo Bay Lupin Goldmine in the
NWT.
In 1988, Mr. Bygdnes and a partner purchased the rights to a patented ice
replacement product from an inventor in San Diego. The previous exploration
programs had limited results so Mr. Bygdnes consolidated the company and formed
Cryopak Industries Inc. Mr. Bygdnes acted as President, and Chief Executive
Officer of Cryopak for 12 years at which time he retired to the position of
Chairman of the Board bringing his considerable expertise into the company.
During this time with the company, Mr. Bygdnes was able to raise in excess of
CDN$12,000,000 largely through European investors. The company having sales in
excess of $14,000,000 annually.
In 2002, Mr. Bygdnes and a partner formed B&K Productions Inc., a production
company focused on entering into the television-programming field. B&K
Productions produced three episodes of the TV show "Hook Line and Supper" a show
that combines fishing with gourmet cooking. Mr. Bygdnes participated as host of
the show as well as producer. Bygdnes introduced the show at the MIPTV festival
in Cannes France in 2003. Although the show received much interest it has not
sold at present.
Mr. Bygdnes presently holds the position of President of County Line Energy
Corp., a start-up over-the-counter trading US company seeking opportunity in the
resource sector. Mr. Bygdnes presently consults to several junior companies in
the resource field.
11
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS.
The following exhibits are included with this quarterly filing:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
31.1 Sec. 302 Certification of Principal Executive Officer
31.2 Sec. 302 Certification of Principal Financial Officer
32.1 Sec. 906 Certification of Principal Executive Officer
32.2 Sec. 906 Certification of Principal Financial Officer
101 Interactive data files pursuant to Rule 405 of Regulation S-T
----------
* Document is incorporated by reference and can be found in its entirety in
our Registration Statement on Form SB-2, SEC File Number 333-140839, at the
Securities and Exchange Commission website at www.sec.gov.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe it meets all of
the requirements for filing Form 10-Q and authorized this report to be signed on
its behalf by the undersigned, in the city of Toronto, province of Ontario on
August 9, 2013.
Western Graphite Inc.
/s/ Lauren Notar
--------------------------------------
By: Lauren Notar
(Principal Executive Officer)
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following person in the capacities and
date stated.
/s/ Lauren Notar August 9, 2013
------------------------------------- --------------
Lauren Notar, President, Secretary, Date
Treasurer & Director
(Principal Executive Officer
Principal Financial Officer &
Principal Accounting Officer)
/s/ Harry Bygdnes August 9, 2013
------------------------------------- --------------
Harry Bygdnes, Director Date
12