XOTC:USGT USA Graphite Inc Quarterly Report 10-Q Filing - 8/31/2012

Effective Date 8/31/2012

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

þ  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended August 31, 2012

 

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

 

For the transition period from _________ to _________

 

Commission File Number: 000-52044

 

USA GRAPHITE INC.

(Name of Small Business Issuer in its charter)

 

Nevada

26-2940624

(state or other jurisdiction of incorporation or organization)

(I.R.S. Employer I.D. No.)


848 N. Rainbow Blvd. #3550

Las Vegas, Nevada 89107

(Address of principal executive offices)

 

(603) 525-3380

Issuer’s telephone number

 

Indicate by check mark whether the registrant (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 require to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   þ   No o  

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 definition of large accelerated filer, accelerated filer and smaller 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 þ

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o     No   þ

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

As of October 2, 2012 the registrant had 169,400,000 shares of common stock outstanding.

 

                
             

USA GRAPHITE INC.

 

Table of Contents

 

PART I - FINANCIAL INFORMATION

 

Item 1.  Financial Statements

2

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

3

Item 3.  Quantitative and Qualitative Disclosures About Market Risk .

6

Item 4 Controls and Procedures

7


PART II – OTHER INFORMATION

7

Item 1.  Legal Proceedings.

7

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

7

Item 3.  Defaults Upon Senior Securities.

7

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

8

Item 5.  Other Information.

8

Item 6.  Exhibits

8


SIGNATURES


9


 

2                

             


PART I - FINANCIAL INFORMATION

 


Safe Harbor Statement


This report on Form 10-Q contains certain forward-looking statements.  All statements other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.


These forward-looking statements involve significant risks and uncertainties, including, but not limited to, the following: competition, promotional costs, and risk of declining revenues.  Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors.  These forward-looking statements are made as of the date of this filing, and we assume no obligation to update such forward-looking statements.  The following discusses our financial condition and results of operations based upon our financial statements which have been prepared in conformity with accounting principles generally accepted in the United States.  It should be read in conjunction with our financial statements and the notes thereto included elsewhere herein.

 

Item 1.  Financial Statements

 

The unaudited interim financial statements of USA Graphite Inc. (the “Company”, “Magnum”, “we”, “our”, “us”) follow.  All currency references in this report are in U.S. dollars unless otherwise noted. The accompanying Financial Statements of USA Graphite Inc. should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended February 28, 2012.  Significant accounting policies disclosed therein have not changed except as noted below.


3                

             

USA GRAPHITE INC.

(A Development Stage Company)

Unaudited

(Express in U.S. Dollars)


August 31, 2012

 

Unaudited Consolidated Balance Sheets 

F-1

Unaudited Consolidated Statements of Operations 

F-2

Unaudited Consolidated Statement of Stockholders’ Deficit 

F-3

Unaudited Consolidated Statements of Cash Flows 

F-4

Unaudited Consolidated Notes to the Financial Statements 

F-5

 


4                

             


USA GRAPHITE INC.

(Formerly MAGNUM OIL, INC.)

(A Development Stage Company)

 CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

August 31, 2012

 

February 29, 2012

 

 

 

 

 

 

 

Unaudited

 

Audited

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash

 

 

 

 

$

3

$

2,935

Prepaid Expenses

 

 

 

 

2,000

 

5,912

TOTAL ASSETS

 

 

 

$

2,003

$

8,847

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

23,405

$

15,880

Note Payable

 

 

 

 

41,757

 

40,808

Loans from Related Party

 

 

 

 

105,044

 

91,931

TOTAL CURRENT LIABILITIES

 

 

$

170,206

$

148,619

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

Capital stock

 

 

 

 

 

 

 

Authorized

 

 

 

 

 

 

 

 

10,000,000 preferred shares, par value $0.001 par value

 

 

 

 

800,000,000 shares of common stock, $0.001 par value

 

 

 

 

Issued and outstanding

 

 

 

 

 

 

 

      169,400,000 shares of common stock

 

$

169,400

$

169,400

        Additional Paid in Capital

 

 

 

(104,400)

 

(104,400)

Deficit accumulated during the development stage

 

 

(233,203)

 

(204,772)

TOTAL STOCKHOLDERS' DEFICIT

 

 

 

 

 

$

(168,203)

$

(139,772)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

$

2,003

$

8,847

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements



 F-1               

             


USA GRAPHITE INC.

(Formerly MAGNUM OIL, INC.)

(A Development Stage Company)

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inception date

 

 

Three months

 

Three months

 

Six months

 

Six months

 

(December 13, 2005)

 

 

ended

 

ended

 

ended

 

ended

 

to

 

 

August 31, 2012

 

August 31, 2011

 

August 31, 2012

 

August 31, 2011

 

August 31, 2012

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office and general

$

2,707

$

13,444

$

4,591

$

15,191

$

64,813

Professional Fees

 

6,915

 

6,711

 

22,890

 

13,787

 

96,106

Total Expenses

$

9,622

$

20,155

$

27,481

$

28,978

$

160,919

 

 

 

 

 

 

 

 

 

 

 

Operating Loss

 

(9,622)

 

(20,155)

 

(27,481)

 

(28,978)

 

(160,919)

 

 

 

 

 

 

 

 

 

 

 

Other losses

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(475)

 

(475)

 

(950)

 

(950)

 

(4,074)

Foreign Currency transaction loss

 

-    

 

-    

 

-    

 

 

 

(120)

Net loss

 

(475)

 

(475)

 

(950)

 

(950)

 

(4,194)

Net Loss from continued operations

 

(10,097)

 

(20,630)

 

(28,431)

 

(29,928)

 

(165,113)

 

 

 

 

 

 

 

 

 

 

 

Discontinued Business

 

-    

 

-    

 

-    

 

-    

 

(151,510)

Forgiveness of Debt

 

-    

 

-    

 

-    

 

-    

 

83,420

Total other Expenditure

 

-    

 

-    

 

-    

 

-    

 

(68,090)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

$

(10,097)

$

(20,630)

$

(28,431)

$

(29,928)

$

(233,203)

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED LOSS PER COMMON SHARE - DISCONTINUED OPERATION

 

 

 

 

 

 

 

 

 

 

$

-    

$

-    

$

-    

$

-    

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

169,400,000

$

169,400,000

 

169,400,000

 

169,400,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements



  F-2              

             


USA GRAPHITE INC.

(Formerly MAGNUM OIL, INC.)

(A Development Stage Company)

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

From inception (December 13, 2005) to August 31, 2012

Unaudited

 

 

 

 

 

 

 

Deficit

 

 

 

 

 

Common Stock

 

 

 

accumulated

 

Accumulated

 

 

 

 

 

Additional

 

during the

 

Other

 

 

 

Number of

 

 

 

Paid-in

 

development

 

Comprehensive

 

 

 

shares

 

Amount

 

Capital

 

stage

 

Income(loss)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash at $0.000065

 

 

 

 

 

 

 

 

 

 

per share on December 14, 2005

77,000,000

$

77,000

$

(72,000)

$

-    

$

-    

$

5,000

 

 

 

 

 

 

 

 

 

 

 

 

Net loss, February 28, 2006

 

 

 

 

 

 

(983)

 

 

 

(983)

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

34

 

34

Balance, February 28, 2006

77,000,000

$

77,000

$

(72,000)

$

(983)

$

34

$

4,051

Stock issued for cash during the quarter

 

 

 

 

 

 

 

 

 

 

 

August 31, 2006 @$0.00065 per share

92,400,000

 

92,400

 

(32,400)

 

 

 

 

 

60,000

 

 

 

 

 

 

 

 

 

 

 

 

Net loss, February 28, 2007

 

 

 

 

 

 

-    

 

 

 

-    

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

2,683

 

2,683

Balance, February 28, 2007

169,400,000

$

169,400

$

(104,400)

$

(983)

$

2,717

$

66,734

 

 

 

 

 

 

 

 

 

 

 

 

Net loss, February 28, 2008

 

 

 

 

 

 

(52,058)

 

 

 

(52,058)

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

350

 

350

Balance, February 28, 2008

169,400,000

$

169,400

$

(104,400)

$

(53,041)

$

3,067

$

15,026

 

 

 

 

 

 

 

 

 

 

 

 

Net loss, February 28, 2009

 

 

 

 

 

 

(75,309)

 

 

 

(75,309)

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

5,988

 

5,988

Balance, February 28, 2009

169,400,000

$

169,400

$

(104,400)

$

(128,350)

$

9,055

$

(54,295)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss, February 28, 2010

 

 

 

 

 

 

(45,238)

 

 

 

(45,238)

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

(6,360)

 

(6,360)

Balance, February 28, 2010

169,400,000

$

169,400

$

(104,400)

$

(173,588)

$

2,695

$

(105,893)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss, February 28, 2011

 

 

 

 

 

 

23,538

 

 

 

23,538

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

(2,695)

 

(2,695)

Balance, February 28, 2011

169,400,000

$

169,400

$

(104,400)

$

(150,050)

$

-    

$

(85,050)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss, February 29, 2012

 

 

 

 

 

 

(54,722)

 

 

 

(54,722)

 

 

 

 

 

 

 

 

 

 

 

 

Balance, February 29, 2012

169,400,000

$

169,400

$

(104,400)

$

(204,772)

$

-    

$

(139,772)

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss, August 31, 2012

 

 

 

 

 

 

(28,431)

 

 

 

(28,431)

 

 

 

 

 

 

 

 

 

 

 

 

Balance, August 31, 2012

169,400,000

$

169,400

$

(104,400)

$

(233,203)

$

 

$

(168,203)

 

 

 

 

 

 

 

 

 

 

 

 


The accompanying notes are an integral part of these financial statements


 F-3               

             


USA GRAPHITE INC.

(Formerly MAGNUM OIL, INC.)

(A Development Stage Company)

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

 

 

 

Six months

 

Six months

 

December 13, 2005

 

 

 

ended

 

ended

 

(date of inception) to

 

 

 

August 31, 2012

 

August 31, 2011

 

August 31, 2012

 

 

 

 

 

 

 

 

 OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net loss

$

(28,431)

$

(29,928)

$

(233,203)

 

Adjustment to reconcile net loss to net cash

 

 

 

 

 

 

 

used in operating activities

 

 

 

 

 

 

 

Forgiveness of debt

 

 

 

 

 

(83,420)

 

Depreciation

 

-    

 

-    

 

2,825

 

Loss on Disposition of Assets

 

-    

 

-    

 

4,608

 

Increase in Prepaid Expenses

 

3,912

 

-    

 

(2,000)

 

Foreign Transaction loss

 

-    

 

-    

 

696

 

Increase (decrease) in Accounts payable and accrued expenses

 

7,525

 

(5,600)

 

106,827

 

 

 

 

 

 

 

 

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

 

 

 

 

 

 

$

(16,994)

$

(35,528)

$

(203,667)

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

Purchase of fixed assets

 

-    

 

-    

 

(11,468)

 

Disposition of fixed assets

 

-    

 

-    

 

3,337

NET CASH PROVIDED BY INVESTING ACTIVITIES

 

 

 

 

 

 

$

-    

$

-    

$

(8,131)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

Proceeds from sale of common stock

 

-    

 

-    

 

2,200

 

Additional paid-in capital

 

-    

 

-    

 

62,800

 

Note Payable

 

949

 

950

 

41,757

 

Loan from related party

 

13,113

 

32,490

 

105,044

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

 

 

 

 

$

14,062

$

33,440

$

(211,801)

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

$

(2,932)

$

(2,088)

$

3

 

 

 

 

 

 

 

 

CASH, BEGINNING OF PERIOD

$

2,935

$

2,819

$

-    

 

 

 

 

 

 

 

 

CASH, END OF PERIOD

$

3

$

731

$

3

 

 

 

 

 

 

 

 

Supplemental cash flow information and noncash financing activities:

 

 

 

 

Cash paid for:

 

 

 

 

 

 

 

 

 

 

Interest

$

-    

$

-    

$

-    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

$

-    

$

-    

$

-    

 

 

 


The accompanying notes are an integral part of these financial statements

F-4                

             


USA GRAPHITE, INC.

(A Development Stage Enterprise)

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2012


NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION


USA GRAPHITE, INC. (Formerly MAGNUM OIL, INC.)  (the “Company”) was incorporated under the laws of the State of Nevada on December 13, 2005.  The Company is in the development stage.  Its activities to date have included capital formation, organization and development of its business plan.  The Company has commenced operations.  On April 12, 2012 the company changed its name to USA Graphite, Inc.


The Company operated through its lone subsidiary: PTM Publications Sdn Bhd, a Malaysian Corporation.


The Company decided to cease the operation of subsidiary in January 2011.


USA Graphite, Inc. (the parent company) is now a holding company.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Accounting


The Company’s financial statements are prepared using the accrual method of accounting.  The Company has elected a February year-end.


Basic Earnings per Share


The Company computes earnings (loss) per share in accordance with Accounting Standards Codification (“ASC”) 260, Earnings per Share.  ASC 260 specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock.  The Company has adopted the provisions of ASC 260 effective December 13, 2005 (inception).


Basic earnings (loss) per share amounts are computed by dividing the net income (loss) by the weighted average number of common shares outstanding.  Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company.

Cash Equivalents


The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.


Use of Estimates and Assumptions


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.


Stock-Based Compensation


The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation, using the fair value method.  All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.


 F-5               

             

Recent Accounting Pronouncements


The company has evaluated all the recent accounting pronouncements and believes that none of them will have a material effect on the company’s financial statement.


NOTE 3 – GOING CONCERN


The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern.  This contemplates the realization of assets and the liquidation of liabilities in the normal course of business.  Currently, the Company has a working capital deficit of $168,203, an accumulated deficit of $233,203 and net loss from operations since inception of $233,203.  The Company does not have a source of revenue sufficient to cover its operation costs giving substantial doubt for it to continue as a going concern.  The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company.  There can be no assurance that the Company will be successful in either situation in order to continue as a going concern.  The Company is funding its initial operations by way of issuing Founder’s shares.


The officers and directors have committed to advancing certain operating costs of the Company, including Legal, Audit, Transfer Agency and Edgarizing costs


NOTE 4 - FAIR VALUE OF FINANCIAL INSTRUMENTS


The Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies.  The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the short-term maturity of the instruments.


NOTE 5 - WARRANTS AND OPTIONS


There are no warrants or options outstanding to acquire any additional shares of common.


NOTE 6 - DIRECTOR'S FEES


Fees of $500 per month have been recorded for the remuneration of the director.


NOTE 7 - RELATED PARTY TRANSACTIONS


As of August 31, 2012, there is a total of $105,044 that has been forwarded by an officer of the Company; no specific repayment terms have been established. 


  F-6              

             



NOTE 8 - INCOME TAXES


We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception.  Accounting for Uncertainty in Income Taxes when it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit.  We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward period.

The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of  are as follows:


                                                              August 31, 2012

Net operating loss carryforwards                                                                        $ 233,203

Gross deferred tax assets                                                                                   $   81,621   

Valuation allowance                                                                                           $ (81,621)

Net deferred tax assets                                                                                      $          0


Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income.  As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance.


NOTE 9 - NET OPERATING LOSSES


As of August 31, 2012, the Company has a net operating loss carryforwards of approximately $233,203.  Net operating loss carryforward expires twenty years from the date the loss was incurred.


NOTE 10 - STOCK TRANSACTIONS


Transactions, other than employees’ stock issuance, are in accordance with ASC 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 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 14, 2005, the company issued a total of 22,000,000 shares of $0.000455 par value common stock as founder's shares to Jasmin Bin Omar Jayaseelan, Jefferi Bin Omar Jayaseelan and Cheryl Lim Phaik Suan, all of whom are officers and directors of the company.  Mr. Jasmin Jayaseelan and Mr. Jefferi Jayaseelan received 8,800,000 shares each, and Ms. Lim received 4,400,000 shares.  The shares were issued in exchange for cash in the aggregate amount of $5,000.

 

In August 2006, the company completed an offering of shares of common stock in accordance with an SB-2 registration statement declared effective by the Securities and Exchange Commission on May 4, 2006.  The company sold 26,400,000 shares of common stock, par value $0.001, at a price of $0.0227 per share to approximately 32 investors.  The aggregate offering price for the offering closed in August 2006 was $60,000, all of which was collected from the offering.


On May 23, 2010 the company received approval from FINRA for a forward split of common share of 22:1.


On April 17, 2012 the company received approval from FINRA for a forward slit of 3.5:1.  All share amounts have been retroactively adjusted for all periods presented.


On August 28, 2012 the company amended the authorized common shares from 175,000,000 to 800,000,000 common shares of $0.001 per share.  On the same day the company authorized 10,000,000 preferred shares, par value $0.001 per share.  None were previously authorized.


As of August 31, 2012, the Company had 169,400,000 shares of common stock issued and outstanding.


NOTE 11 - STOCKHOLDERS’ EQUITY


The stockholders’ equity section of the Company contains the following classes of capital stock as at August 31, 2012: Common stock, $ 0.001 par value: 800,000,000 shares authorized; 169,400,000 shares issued and outstanding.


No preferred shares have been authorized or issued.


NOTE 12 - SUBSEQUENT EVENTS


In accordance with ASC 855, Subsequent Events, the Company has evaluated subsequent events through the date of issuance of the unaudited consolidated financial statements.  During this period, the Company did not have any material recognizable subsequent events.


F-7               

             


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


This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance.  Forward looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions or words which, by their nature, refer to future events.  You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report.  These forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions

 

Results of Operations

 

Our financial statements and information for the three and six months ended August 31, 2012 have been prepared by our Management on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  We generated no revenues during the three and six months ended August 31, 2012 and have incurred total net losses of $233,203 from inception to August 31, 2012.  

Three months Ended August 31, 2012 compared to the Three months Ended August 31, 2011

 

We incurred net losses of $10,097, or $0.00 per share, for the three-month period ended August 31, 2012, as compared to a net loss of $20,630, or $0.00 per share, for the three-month period ended August 31, 2011.  The decrease was mainly attributed to reduced office and general expenses ($2,707 - 2012 compared to $13,444 – 2011).  Our other expenses for the three-month period ended August 31, 2012 consisted of professional fees of $6,915 ($6,711 - 2011). 


Six months Ended August 31, 2012 compared to the Six months Ended August 31, 2011

 

We incurred net losses of $28,431, or $0.00 per share, for the six-month period ended August 31, 2012, as compared to a net loss of $29,928, or $0.00 per share, for the six-month period ended August 31, 2011.  The decrease was mainly attributed to reduced office and general expenses ($4,591 - 2012 compared to $15,191 – 2011).  Our other expenses for the six-month period ended August 31, 2012 consisted of professional fees in the amount of $22,890 ($13,787 - 2011).


Liquidity and Capital Resources

 

At August 31, 2012, we had total assets of $2,003 consisting of cash in the bank in the amount of $3 and prepaid expenses of $2,000.

 

Our accounts payable and accrued liabilities at August 31, 2012 were $23,405.

 

There are currently no options, warrants, rights or other securities conversion rights issued and/or outstanding.


Off-Balance Sheet Arrangements

 

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


Inflation

 

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position.  The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

 5               

             
 

 

Item 3.  Quantitative And Qualitative Disclosures Of Market Risk

 

We are a non-accelerated filer and a smaller reporting company, as defined in Rule 12b-2 of the of the Securities Exchange Act of 1934, and as such, are not required to provide the information under this item.

 

Item 4.  Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our sole officer, as appropriate to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our sole officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of August 31, 2012.  Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses in our internal control over financial reporting identified in our Annual Report on Form 10-K for the year ended February 28, 2012, the sole officer concluded that our disclosure controls and procedures are ineffective.

 

Changes in internal controls

 

We have not yet implemented any of the recommended changes to internal control over financial reporting listed in our Annual Report on Form 10-K for the year ended February 28, 2012.  As such, there were no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act, during the quarter ended August 31, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


 6               

             



PART II – OTHER INFORMATION

 


Item 1.  Legal Proceedings.

 

Not applicable.

 

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

 

None.

 

Item 3.  Defaults Upon Senior Securities.

 

None.

 

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

 

None.

 

Item 5.  Other Information.

 

None.

 

7                

             


Item 6.  Exhibits

Exhibit

Number

Exhibit

Description

31.1

Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

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

EX-101.INS

XBRL Instance Document

EX-101.SCH

XBRL Taxonomy Extension Schema

EX-101.CAL

XBRL Taxonomy Extension Calculation Linkbase

EX-101.LAB

XBRL Taxonomy Extension Label Linkbase

EX-101.PRE

XBRL Taxonomy Extension Presentation Linkbase

EX-101.DEF

XBRL Taxonomy Extension Definition Linkbase




SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

                                                                                                                                                                                                                                                                                       

USA GRAPHITE INC.

 

 

 

By: /s/ Patrick DeBlois

Date:  October 4, 2012

Patrick DeBlois

 

President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director




 8               

             

XOTC:USGT USA Graphite Inc Quarterly Report 10-Q Filling

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XOTC:USGT USA Graphite Inc Quarterly Report 10-Q Filing - 8/31/2012
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