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AGIN > SEC Filings for AGIN > Form 10-Q on 20-May-2014All Recent SEC Filings

Show all filings for AMERICAN GRAPHITE TECHNOLOGIES INC.

Form 10-Q for AMERICAN GRAPHITE TECHNOLOGIES INC.


20-May-2014

Quarterly Report


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

This current report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. You should not place undue reliance on these statements, which speak only as of the date that they were made. These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results, later events or circumstances or to reflect the occurrence of unanticipated events.

In this report unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares of our capital stock.

The management's discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

The following discussion of our financial condition and results of operations should be read in conjunction with our audited financial statements for the year ended June 30, 2013, along with the accompanying notes. As used in this quarterly report, the terms "we", "us", "our", and the "Company" means American Graphite Technologies Inc.

Cash on hand at March 31, 2014 was $409,264 as compared to $116,588 as of June 30, 2013. We had a total of $286,494 in prepaid expenses on March 31, 2014 as compared to $170,000 in prepaid expenses as at June 30, 2013. Prepaid expenses relate to amounts totaling $285,000 (2013- $170,000) paid against the licensing agreement with Cheap Tubes and the balance are prepaid expenses related to general and administration costs in the amount of $1,494 (2013 - Nil).

Our total current liabilities at March 31, 2014 were $18,628 as compared to $8,806 as at June 30, 2013. The total long term liabilities at March 31, 2014 were $545,588 as compared to $Nil at June 30, 2013. This significant change is solely related to a derivative warrant liability which occurred as a result of operating funds received from two unit private placements undertaken during the nine months ended March 31, 2014, whereby the Company raised $900,000 to fund operations. The private placements required the issuance of warrants, which are accounted for as a derivative liability. We currently have mineral claims which potentially could have graphite deposits and two projects related to graphene or products related to graphene.

During our nine month period ended March 31, 2014 and the fiscal year ended June 30, 2013, the Company was successful in raising the required funding for operations by way of private placements. During the period ended March 31, 2014 the Company completed private placements in the amount of $600,000 (net $533,000) and $300,000 (net $266,500) which the Company believes will be sufficient to meet its ongoing expenditures through to the fiscal year ended June 30, 2014. The Company believes it now has sufficient funds on hand for all its current commitments including $120,000 that is required for exploration of its mineral claims, should we determine to commence exploration. Additionally we believe we have sufficient funds on hand should there be additional cash requirements for the Cheap Tubes project and the development of the 3-D project during the current fiscal year. At this time, the additional cash requirements for the Cheap Tubes project and the 3-D projects cannot be estimated. Operating costs for the Company over the next twelve months for general and administrative expenses, including contractual expenses and fees for legal, accounting, audit and filing fees are estimated to be approximately $200,000. The Company may need to raise additional capital for operations and its Cheap Tubes if warranted. We have new warrants outstanding pursuant to our recent financings, however, there can be no assurance that the


Company will raise any funds from warrant exercises and the Company currently has no other financing agreements under which it can raise funding. There can be no assurance that such funding, if required, will be available and if available it will be on favorable terms. You may face substantial dilution in your share holdings on any ongoing financings which the Company may negotiate. Should the Company not be able to raise additional funding if and when required, it may have to delay or terminate its ongoing technology development. At this time, the Company cannot state with certainty that it will be able to raise sufficient funding to continue with all of its intended projects.

Results of Operations

We do not have any revenues and have not had any revenue since inception on June 1, 2010.

Three Month Period Ended March 31, 2014 Compared to Three Month Period Ended March 31, 2013

We had significant increase in net losses of $329,665 for the three months ended March 31, 2014 as compared to a net loss of $193,937 for three months ended March 31, 2013 due to an offset of $189,680 during the three months ended March 31, 2014 related to the change in the valuation of warrant liabilities which offset operating expenses of $139,985 during the three months ended March 31, 2014 as compared to operating expenses of $193,937 during the three months ended March 31, 2013. Therefore, while we had significant increases in net losses, the Company had a significant decrease in operating losses of $53,953. The decrease for the three month period ended March 31, 2014 is related to stock based compensation in the amount of $45,313, with $109,200 in comparative three months ended March 31, 2013. Management fees increased to $37,500 (2014) from $15,000 (2013), consulting fees increased to $22,714 (2014) from $13,056 (2013) and professional fees increased to $8,756 (2014) from $5,006 (2013) as the Company continued to increase activities related to operations, including financing activities.

Basic and diluted losses per share for the respective three month periods ended March 31, 2014 and March 31, 2013was ($0.00).

Nine month Period ended March 31, 2014 Compared to Nine month Period Ended March 31, 2013

We have a net loss of $647,145 for the nine months ended March 31, 2014 as compared to a net loss of $448,078 for nine months ended March 31, 2013 and operating losses of $487,464 for the nine months ended March 31, 2014 as compared to operating losses of $447,312 for the nine months ended March 31, 2013. Net loss for the nine months ended March 31, 2014 was offset by the valuation of the change in the fair value of the warrant liability with no comparable offset during the nine months ended March 31, 2013. The increase in operating losses of $40,152 was mainly related to increased activities related to operations, including financing activities. Research and development expenses for the nine months ended March 31, 2014 were $45,532, with no comparable expense during the nine months ended March 31, 2013. Office and general administrative expenses increased to $108,513 from $63,040 (2013) due to increased fees related to reporting requirements as the Company created derivative warrant liability reporting with its financing agreements, additionally, management fees increased to $85,400 (2014) from $35,000 (2013) due to a contractual increase in fees, consulting fees increased to $122,040
(2013) from $107,739 (2013) and professional fees increased to $38,666 (2013) from $29,865 (2012) as the Company continued to increase activities related to operations, including financing activities. The 2014 losses reflected a decrease in stock based compensation to $87,313 for the nine months ended March 31, 2014 as compared to $187,200 during the nine months ended March 31, 2013.

From inception we have had a net loss of $1,288,989 and an operating loss of $1,128,431.

Basic and diluted losses per share for the respective nine month periods ended March 31, 2014 and March 31, 2013 was ($0.01).

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