UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DCD.C. 20549

FORM 10-Q

~~x QUARTERLY~~þ Quarterly ~~REPORT~~report ~~PURSUANT~~pursuant TOto ~~SECTION~~Section 13 ORor 15(d) OFof ~~THE~~the ~~SECURITIES~~Securities ~~EXCHANGE~~Exchange ~~ACT~~Act OFof 1934

For the quarterly period ended ~~December~~March 31, ~~2011~~2012

o ~~TRANSITION~~ Transition ~~REPORT~~report ~~UNDER~~pursuant ~~SECTION~~to Section 13 ORor 15(Dd) OFof ~~THE~~the ~~SECURITIES~~Securities ~~EXCHANGE~~Exchange ~~ACT~~Act OFof 1934

For the transition period from ~~___________~~__________to to ____________

Commission File Number: 000-52043

AGR TOOLS, INC.

(Exact name of registrant as specified in its charter)

Nevada	~~98-0480810~~	98-0480810
(State or other jurisdiction of incorporation or	(I.R.S. Employer Identification No.)
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
organization)

~~100~~3500 ~~Lido~~Fairmount ~~Circle~~Street, Suite ~~C-1~~501, Dallas, Texas 75219

Lakeway, TX 78724

(Address of principal executive offices)

~~936~~214-~~539~~613-~~5744~~6400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (~~Registrant’s~~1) ~~telephone~~has ~~number,~~filed ~~including~~all ~~area~~reports ~~code~~required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant ~~(1)~~ has ~~filed~~submitted ~~all~~electronically ~~reports~~and ~~required~~posted toon beits ~~filed~~corporate byWeb ~~Section~~site, 13if orany, ~~15(d)~~every ofInteractive ~~the~~Data ~~Securities~~File ~~Exchange~~required ~~Act~~to be submitted and posted pursuant to Rule 405 of ~~1934~~Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was ~~require~~required to ~~file~~submit ~~such reports),~~ and ~~(2)~~post ~~has been subject to~~ such ~~filing requirements for the past 90 days~~files). Yes ~~o No~~ þ No o

Indicate by check mark whether the registrant ~~has~~is ~~submitted~~a ~~electronically~~large ~~and~~accelerated ~~posted~~filer, onan ~~its~~accelerated ~~corporate Web site~~filer, ifa ~~any~~non-accelerated filer, ~~every~~or ~~Interactive~~a ~~Data~~smaller ~~File~~reporting ~~required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232~~company.~~405~~ See ~~of this chapter) during~~ the ~~preceding~~definitions ~~12 months (~~of ~~for~~“large ~~such~~accelerated ~~shorter~~filer,” ~~period~~“accelerated ~~that~~filer” ~~the~~and ~~registrant~~“smaller ~~was~~reporting ~~required~~company” toin ~~submit~~Rule ~~and~~12b-2 ~~post~~of ~~such~~the ~~files). Yes þ No~~Exchange oAct.

~~Indicate~~Large ~~by check mark whether the registrant is a large~~ accelerated filer, ano ~~accelerated~~Accelerated filer, ao ~~non~~Non-accelerated filer, oro aSmaller ~~smaller~~ reporting company. ~~See~~þ ~~the~~(Do ~~definitions~~not ofcheck ~~“large~~if ~~accelerated~~a ~~filer”, “accelerated filer” and “~~smaller reporting company~~” in Rule 12b-2 of the Exchange Act.~~)

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

AsIndicate the number of ~~January~~shares ~~31,~~outstanding ~~2012,~~of ~~there~~each ~~were~~of ~~91,823,986 shares~~the issuer’s classes of common stock, as of the ~~registrant~~latest ~~outstanding~~practicable date.

Class		Outstanding at May 14, 2012
Common Stock, par value $0.001 per share		183,661

Table of Contents

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION		Page

Item 1--	Financial Statements		3

Item 2--	Management’s Discussion and Analysis Of Financial Condition and Results of Operations		9

Item 3--	Quantitative and Qualitative Disclosures About Market Risk		13

Item 4T--	Controls and Procedures		13

PART II – OTHER INFORMATION

Item 1--	Legal Proceedings		14

Item 1A--	Risk Factors		14

Item 2--	Unregistered Sales of Equity Securities and Use of Proceeds		14

Item 3--	Defaults Upon Senior Securities		14

Item 4—	(Removed and Reserved)		14

Item 5--	Other Information		14

Item 6--	Exhibits		14

	Signatures		15

PART I – FINANCIAL INFORMATION
Item 1.	Unaudited Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	4
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7
Item 4.	Controls and Procedures	8
PART II- OTHER INFORMATION
Item 1.	Legal Proceedings	9
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3.	Defaults Upon Senior Securities	9
Item 4.	(Removed and Reserved)	9
Item 5.	Other Information	9
Item 6	Exhibits	9

~~Table~~PART ofI ~~Contents~~– FINANCIAL INFORMATION

~~AGR~~ITEM ~~TOOLS, INC~~1. FINANCIAL STATEMENTS

(formerly known as Laburnum Ventures, Inc.)

AGR TOOLS, INC
Consolidated Balance Sheets

	March 31, 2012			June 30, 2011
	(unaudited)
ASSETS

Current assets

Cash	$	289		$	8,621
Accounts receivable		-			2,731
Inventory		-			258,177
Prepaid expenses and deposits		3,000			12,018
Total current assets		3,289			281,547

Property and equipment, net		-			10,758

Total assets	$	3,289		$	292,305

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities

Bank line of credit	$	-		$	23,126
Accounts payable		209,301			226,413
Accounts payable - related parties		16,635			16,485
Accrued liabilities		98,673			58,106
Customer deposits		118,057			121,266
Convertible debt, net of discount		120,750			64,860
Current portion of loans payable		325,000			325,000
Total current liabilities		888,416			835,256

Total liabilities		888,416			835,256

Stockholders' deficit

Common stock		91,825			87,825
Authorized:200,000,000 shares, par value
$0.001 per share, Issued and outstanding: 91,823,986 shares
as of March 31, 2012 (June 30, 2011 - 87,823,986 shares)

Additional Paid in Capital		1,150,743			1,139,943
Accumulated deficit		(2,127,695	)		(1,770,719	)
Total stockholders' deficit		(885,127	)		(542,951	)
Total liabilities and stockholders' deficit	$	3,289		$	292,305

Consolidated Financial Statements

For the three and six months ended December 31, 2011 and 2010

Item 1. Financial Statements

	Index
Consolidated Balance Sheets (unaudited)	F–1
Consolidated Statements of Operations (unaudited)	F–2
Consolidated Statements of Stockholders’ Deficit (unaudited)	F–3
Consolidated Statements of Cash Flows (unaudited)	F–4
Notes to the Consolidated Financial Statements (unaudited)	F–5

Table of Contents

AGR TOOLS, INC.
Consolidated Statement of Operations
Unaudited

	Three months ended March 31,						Nine months ended March 31,
	2012			2011			2012			2011
Revenue	$	-		$	59,192		$	67,313		$	375,353
Cost of goods sold		-			32,604			40,953			216,381
Gross profit		-			26,588			26,360			158,972

Operating expenses
Advertising		-			865			3,000			18,796
Automotive		-			1,427			1,975			4,053
Bad debts		1,987			6,596			(2,213	)		(8,904	)
Consulting fees		-			-			2,080			6,537
Depreciation		-			686			6,231			5,411
Insurance		-			804			233			6,552
Office and miscellaneous		(2,350	)		4,579			30,298			12,988
Professional fees		-			19,775			3,154			61,579
Rent and utilities		-			8,281			38,335			66,120
Telephone and internet		-			1,632			3,185			7,230
Travel		-			200			-			677
Wages and benefits		-			39,395			-			137,564
Impairment		270,915			-			270,915			-
Total operating expenses		270,552			84,240			357,193			318,603
Loss from operations		(270,552	)		(57,652	)		(330,833	)		(159,631	)

Other income (expenses)
Interest income		-			676			75			2,493
Interest expense		(2,673	)		(34,074	)		(38,575	)		(55,829	)
Gain (Loss) on extinguishment of debt		23,157			-			12,357			-
Gain on disposal of property and equipment		-			-			-			2,871
Total other expenses		20,484			(33,398	)		(26,143	)		(50,465	)

Loss before income taxes		(250,068	)		(91,050	)		(356,976	)		(210,096	)
Income taxes		-			-			-			-

Net loss	$	(250,068	)	$	(91,050	)	$	(356,976	)	$	(210,096	)

Net loss per share, basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average nubmer of shares outstanding		91,823,986			85,039,073			90,935,097			85,039,073

~~AGR TOOLS, INC.~~4

(formerly known as Laburnum Ventures, Inc.)

AGR TOOLS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited
	Nine months ended March 31,
	2012			2011
Operating activities
Net loss	$	(356,976	)	$	(210,096	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation		6,231			5,411
Bad debt (recovery) expense		1,987			(8,904	)
Debt discount amortization		15,140			36,202
Shares issued for consulting fees		-			15,000
Gain on disposal of property and equipment		-			(2,871	)
Impairment loss		270,915			-
Gain from cancellation of debt		(12,357	)		-

Changes in operating assets and liabilities:
Accounts receivable		744			13,401
Advances receivable		-			1,772
Inventory		(8,210	)		39,729
Prepaid expenses and deposits		9,018			(2,652	)
Accounts payable		(13,113	)		(35,901	)
Accrued liabilities		40,567			48,865
Due to related parties		150			(34,319	)
Customer deposits		(3,209	)		(27,667	)

Net cash used by operating activities		(49,113	)		(162,030	)

Financing activities
Line of credit advances (net)		31			1,772
Loans provided by related parties (net)		-			67,000
Convertible debt (net)		40,750			90,000
Net cash provided by financing activities		40,781			158,772

Change in cash		(8,332	)		(3,258	)
Cash, beginning of year		8,621			11,396
Cash, end of year	$	289		$	8,138


Non-cash investing and financing activities:
Debt exchanged for shares	$	4,000		$	520,012
Beneficial conversion featur of short term debt		-			82,506
Cancellation of shares		-			27,088

Supplemental disclosures:
Interest paid	$	4,858		$	10,336
Income taxes paid		-			-

~~Consolidated Balance Sheets~~5

	December 31, 2011 $			June 30, 2011 $
	(unaudited)
ASSETS
Current assets
Cash		3,169			8,621
Accounts receivable		1,987			2,731
Inventory		266,387			258,177
Prepaid expenses and deposits		3,000			12,018
Total current assets		274,543			281,547
Property and equipment, net		4,528			10,758
Advances receivable, net		-			-
Total assets		279,071			292,305
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Bank indebtedness		23,157			23,126
Accounts payable		255,281			226,413
Accounts payable –related parties		16,635			16,485
Accrued liabilities		96,000			58,106
Customer deposits		118,057			121,266
Convertible debt, net of discount		80,000			64,860
Current portion of loans payable		325,000			325,000
Total current liabilities		914,130			835,256
Total liabilities		914,130			835,256
Stockholders’ deficit
Preferred stock Authorized: 100,000,000 shares, par value $0.001 per share, Issued and outstanding: nil		-			-
Common stock Authorized: 200,000,000 shares, par value $0.001 per share Issued and outstanding: 91,823,986 shares as of December 31, 2011 (June 30, 2011 – 87,823,986 shares)		91,825			87,825
Additional Paid in Capital		1,150,743			1,139,943
Accumulated deficit		(1,877,627	)		(1,770,719	)
Total stockholders’ deficit		(635,059	)		(542,951	)
Total liabilities and stockholders’ deficit		279,071			292,305

AGR Tools, Inc.

~~(The~~NOTES ~~accompanying~~TO ~~notes~~CONSOLIDATED ~~are~~FINANCIAL ~~an integral part of these consolidated financial statements)~~STATEMENTS

F-(1) BASIS OF PRESENTATION

~~Table~~The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of ~~Contents~~the United States Securities and Exchange Commission. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed, there has been no material change in the information disclosed in the notes to the consolidated financial statements included in the Annual Report on Form 10-K of AGR Tools, Inc. for the year ended June 30, 2011. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine-month period ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ending June 30, 2012. The consolidated financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. The Company’s accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of these consolidated financial statements.

~~AGR~~Going ~~TOOLS, INC.~~Concern

~~(formerly~~These ~~known~~financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as ~~Laburnum~~a ~~Ventures~~going concern is dependent upon the continued financial support from its shareholders, ~~Inc~~the ability of management to raise additional equity capital through private and public offerings of its common stock, and the attainment of profitable operations.) As of March 31, 2012, the Company has a working capital deficit of $885,127, and has an accumulated deficit of $2,127,695 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

~~Consolidated~~(2) ~~Statements~~CHANGE ofIN ~~Operations~~CORPORATE CONTROL

~~Unaudited~~In January 2012, the three largest shareholders sold an aggregate 40,267,390 shares of common stock of the Company to third parties. In connection with the sale of the shares, the then-current Board of Directors (comprised of the controlling shareholders) resigned from their officer and director positions and concurrently appointed Mr. Vern O.C. Wilson to the Board of Directors appointed as Chief Executive Officer, Secretary and Treasurer. Additional information on the sale and changes in the Board of Directors is available on Form 8-K, filed with the SEC on February 14, 2102 and incorporated by reference

	Three months ended						Six months ended
	December 31,						December 31,
	2011			2010			2011			2010
Revenue		33,589			110,718			67,313			316,161
Cost of goods sold		17,914			60,642			40,953			183,777
Gross profit		15,675			50,076			26,360			132,384
Operating expenses
Advertising and promotion		-			3,561			3,000			17,931
Automotive		989			1,022			1,975			2,626
Bad debts		(4,200	)		(15,000	)		(4,200	)		(15,500	)
Consulting fees		2,080			5,037			2,080			6,537
Depreciation		1,438			1,125			6,231			4,725
Insurance		-			2,532			233			5,748
Office and miscellaneous		3,851			2,499			32,648			8,409
Professional fees		15			882			3,154			41,804
Rent and utilities		18,478			32,588			38,335			57,839
Telephone and internet		1,583			1,598			3,185			5,598
Travel		-			350			-			477
Wages and benefits		-			43,972			-			98,169
Total operating expenses		24,234			80,166			86,641			234,363
Loss from operations		(8,559	)		(30,090	)		(60,281	)		(101,979	)
Other income(expenses)
Interest income		-			906			75			1,816
Interest and bank charges		(15,781	)		(13,942	)		(35,902	)		(21,755	)
Loss on extinguishment of debt		-			-			(10,800	)
Gain on disposal of property and equipment		-			-			-			2,872
Total other expenses		(15,781	)		(13,036	)		(46,627	)		(17,067	)
Loss before income taxes		(24,340	)		(43,126	)		(106,908	)		(119,046	)
Income taxes (recovery)		-			-			-			-
Net loss for the year		(24,340	)		(43,126	)		(106,908	)		(119,046	)
Net loss per share, basic and diluted		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Weighted average number of shares outstanding		91,823,986			86,265,976			90,106,591			92,286,029

(3) LINE OF CREDIT

(The ~~accompanying~~Company ~~notes~~has ~~are~~a anrevolving ~~integral~~bank ~~part~~credit line with a limit of ~~these~~$24,300.00 ~~consolidated~~that ~~financial~~bears ~~statements~~interest at 9.75% per annum and is secured by a personal guarantee of the former Vice-President of the Company. The balance in this account at December 31, 2011 was $23,157 (June 30, 2011 - $23,126). In connection with the change in control described in Note 2 above, the former Vice-President of the Company has assumed the line of credit. Therefore, the balance as of March 31, 2012 was $0.

~~F-2~~(4) CONVERTIBLE NOTES

~~Table~~During the year ended June 30, 2011, the Company issued two convertible notes for a total principal of ~~Contents~~$45,000 and $45,000, respectively. These notes carry an 8% annual interest rate. These convertible notes of $45,000 each have stated terms as the following, convertible at the greater of a fixed conversion price of $.00009 or 55% of lowest average 3 trading price over 10 days preceding the day of the note. In addition, there is a cap on the number of shares convertible under the note to prevent a derivative and these subordinated convertible debentures may have conversion prices that at issuance could be lower than the fair market value of the underlying stock.

~~AGR TOOLS, INC.~~6

~~(formerly~~In ~~known~~addition, the Company recognized and measured the embedded beneficial conversion feature present in the convertible debts by allocating a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in-capital. The intrinsic value of the feature was calculated on the commitment date using the effective conversion price of the convertible debt. This intrinsic value is limited to the portion of the proceeds allocated to the convertible debt. This beneficial conversion feature is amortized as ~~Laburnum~~a ~~Ventures~~non-cash interest expense from the issuance date of the debenture through the earlier of the stated redemption date, ~~Inc~~which is nine months from issuance, or conversion into common stock.) The amortization was calculated on a quarterly basis using the effective interest method. The offset was a credit to the discount. The notes were discounted $82,506 at issuance for a carrying value of $7,494. During the year ending June 30, 2011, the notes were accreted $67,366 and have a balance as of June 30, 2011 of $64,860. During the nine months ended March 31, 2012, the remaining $15,140 was accreted.

~~Consolidated~~During ~~Statements~~the nine months ended March 31, 2012, the convertible notes were refinanced into a single convertible note and additional principal of ~~Stockholder’s~~$40,750 ~~Deficit~~was advanced to the Company. The new note carries an interest rate of 8% and matures on December 21, 2012. The principal balance as of March 31, 2012 is $120,750.

~~For~~During the ~~six~~year ~~months~~ ended June 30, 2011, the company issued non-convertible promissory notes in the amount of $325,000. There were three notes and they were denominated in the amounts of $25,000, $100,000, and $200,000. The note with a face value of $25,000 is due on August 13, 2011 and accrues interest of 12%. The notes with face values of $100,000 and $200,000 are due on December 3114, 2011 and accrue interest of 12%. The notes were extended in January 2012 and mature June 30, 2012. As of March 31, 2012, the principal balance owed is $325,000.

	Common stock
	Number		Amount		Additional Paid in Capital		Accumulated deficit			Total stockholders’ deficit
Balance, June 30, 2011		87,823,986		87,825		1,139,943		(1,770,719	)		(542,951	)
Conversion of promissory note into common shares		4,000,000		4,000		10,800		-			14,800
Net loss for the period (unaudited)		–		–		–		(106,908	)		(106,908	)
Balance, December 31, 2011		91,823,986		91,825		1,150,743		(1,877,627	)		(635,059	)

(5) IMPAIRMENTS

(The ~~accompanying~~Company ~~notes~~did ~~are~~not sell any of its inventory during the quarter ended March 31, 2012. The last sale occurred in November 2011. There is substantial doubt as to the amount, if any, the Company may realize on the sale of the remaining inventory. Consequently, Management has determined that the carrying value of the Company’s inventory should be impaired. For the quarter ended March 31, 2012, the Company recorded an ~~integral~~impairment ~~part~~expense related to inventory of ~~these~~$266,387. The ~~consolidated~~carrying ~~financial~~value ~~statements)~~of inventory on the Company’s balance sheet as of March 31, 2012 is $0.

~~F-3~~Additionally, the Company recorded an impairment expense of $4,528 related to the remaining book value of the Company’s depreciable equipment. The book value of equipment on the Company’s balance sheet as of March 31, 2012 is $0.

~~Table~~(6) ofCOMMON ~~Contents~~STOCK

~~AGR~~On ~~TOOLS~~September 17, ~~INC~~2011, the Company settled debt of $4,000 by issuing 4,000,000 shares of stock at the fair market value of the date of grant, valued at $14,800. This resulted in a loss of $10,800.

~~(formally known as Laburnum Ventures, Inc.)~~7

~~Consolidated~~(7) ~~Statements~~RELATED ofPARTY ~~Cash Flows~~TRANSACTIONS

~~Unaudited~~One of the shareholders who acquired the stock from former shareholders as described in Note 2 above was the holder of the promissory notes described in Note 4 above.

	Six months ended
	December 31,
	2011			2010
Operating activities
Net loss for the period		(106,908	)		(119,046	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		6,231			4,725
Debt discount amortization		15,140			9,358
Shares issued for consulting fees		-			15,000
Loss on extinguishment of debt		10,800			-
Loss on disposal of property and equipment		-			(2,871	)
Changes in operating assets and liabilities:
Accounts receivable		744			(223	)
Advances receivable		-			1,286
Inventory		(8,210	)		57,979
Prepaid expenses and deposits		9,018			6,366
Accounts payable		32,867			(41,319	)
Accrued liabilities		37,894			10,357
Due to related parties		150			(34,874	)
Customer deposits		(3,209	)		(38,428	)
Corporate taxes		-			-
Net cash used in operating activities		(5,483	)		(131,690	)
Financing activities
Bank indebtedness, net		31			1,766
Loans provided by related parties, net		-			58,000
Convertible debt, net		-			90,000
Net cash provided by financing activities		31			149,766
Change in cash		(5,452	)		18,076
Cash, beginning of year		8,621			11,396
Cash, end of year		3,169			29,472
Non-cash investing and financing activities:
Debt exchanged for shares		4,000			520,012
Beneficial conversion feature of short term debt		-			82,506
Cancellation of shares		-			25,000
Supplemental disclosures:
Interest paid		4,858			7,143
Income taxes paid		-			-

During the nine months ended March 31, 2012, the Company paid rent of $Nil (2010: $3,000) to the former President of the Company. As of March 31, 2012 the Company owes $12,500 to the former President of the Company.

During the nine months ended March 31, 2012, the Company incurred rent of $Nil (~~The~~2010: ~~accompanying~~$3,000) ~~notes~~to ~~are~~the anSecretary ~~integral~~and ~~part~~Treasurer of ~~these~~the ~~consolidated~~Company. ~~financial~~As ~~statements)~~of March 31, 2012, the Company owes $2,194 to the former Secretary and Treasurer of the Company.

~~F-4~~At March 31, 2012, the Company owes $1,961 to a former director of the Company.

~~Table~~(8) ~~of Contents~~LITIGATION

AGR TOOLS, INC.

Notes to Consolidated Financial Statements

(unaudited)

1. Interim Financial Statements

While the information presented in the accompanying interim financial statements for the three and six months ending December 31, 2011 is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period presented in accordance with the accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. It is suggested that these financial statements be read in conjunction with the Company’s June 30, 2011, financial statements. Operating results for the three and six months ended December 31, 2011 are not necessarily indicative of the results that can be expected for the year ending June 30, 2012.

2. Nature of Operations and Continuance of Business

Laburnum Ventures Inc. (the “Company”) was incorporated in the State of Nevada on March 11, 2004. On June 22, 2004, the Company acquired a 100% interest in five mineral claims located in the Similkameen Mining Division in British Columbia, Canada. In 2007 the Company abandoned these mineral claims. On September 10, 2009, the Company changed its name to AGR Tools, Inc. The Company was an exploration stage company, as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, “Development Stage Entities”.

AGR Stone & Tools USA, Inc. (“AGR USA”) was incorporated in the State of Texas on December 23, 2004 and is a manufacturer of diamond tooling and related products. The Company specializes in producing consumable tools for the natural stone, engineered stone, concrete and masonry industries.

Effective May 27, 2010, the Company closed a share exchange agreement with AGR USA., whereby the Company acquired all of the issued and outstanding shares of AGR USA. For financial statement reporting purposes, the share exchange was treated as a reverse acquisition with AGR USA deemed the accounting acquirer and the Company deemed the accounting acquiree under the purchase method of accounting in accordance with Accounting Standards Codification (“ASC”) 805-10-40, Business Combinations – Reverse Acquisitions. The reverse merger is deemed a recapitalization and the consolidated financial statements represent the continuation of the financial statements of AGR USA (the accounting acquirer/legal subsidiary) except for its capital structure, and the consolidated financial statements reflect the assets and liabilities of AGR USA recognized and measured at their carrying value before the combination and the assets and liabilities of the Company (the accounting acquiree/legal parent). The equity structure reflects the equity structure of the Company, the legal parent, and the equity structure of AGR Stone and Tools, USA, Inc., the accounting acquirer, as restated using the exchange ratios established in the share exchange agreement to reflect the numbers of shares of the legal parent.

3. Going Concern

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of management to raise additional equity capital through private and public offerings of its common stock, and the attainment of profitable operations. As at December 31, 2011, the Company has a working capital deficit of $639,587, and has an accumulated deficit of $1,877,627 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

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AGR TOOLS, INC.

Notes to Consolidated Financial Statements

(unaudited)

4. Summary of Significant Accounting Policies

a) Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America.

b) Use of Estimates

The preparation of financial statements in conformity with U.S. 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. The Company regularly evaluates estimates and assumptions related to allowance for doubtful accounts, inventory valuation, the useful lives and recoverability of long-lived assets, stock-based compensation and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

c) Reclassification in prior period

Certain reclassifications to the financial statements have been made to prior period amounts to conform to the presentation of the current period.

d) 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. There were no cash equivalents at December 31, 2011 and June 30, 2011.

e) Accounts Receivable

The Company recognizes allowances for doubtful accounts to ensure accounts receivable are not overstated due to the inability or unwillingness of its customers to make required payments. The allowance is based on the age of receivable and the specific identification of receivables the Company considers at risk. The allowance for doubtful accounts was $0 at December 31, 2011 and June 30, 2011.

f) Advances Receivable

g) Inventory

Inventory consists of diamond tools and is carried at the lower of cost and market value. The Company uses the FIFO inventory costing method.

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AGR TOOLS, INC.

Notes to Consolidated Financial Statements

(unaudited)

4. Summary of Significant Accounting Policies (continued)

h) Property and Equipment

Property and equipment are stated at cost. The Company depreciates the cost of property and equipment straight-line over their estimated useful lives:

Automotive	3 years
Computer equipment	3 years
Furniture and equipment	5 years

The depreciation expense for the three and six months ended December 31, 2011 was $1,438 and $6,231 (December 31, 2010: $1,125 and $4,725) respectively.

i) Corporate Taxes Receivable

Corporate taxes receivable pertain to refundable amounts owed to the Company for corporate taxes from the United States Treasury. These amounts are recorded at the value anticipated to be received based on tax returns filed.

j) Long-lived Assets

In accordance with ASC 360, Impairment or Disposal of Long-Lived Assets, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. There was no impairment of long-lived assets for periods ended December 31, 2011 and June 30, 2011.

k) Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

The Company files federal, state and local income tax returns in the U.S., as applicable. The open taxation years range from 2008 to 2010. In certain circumstances, the U.S. federal statute of limitations can reach beyond the standard three and six year period. U.S. state statutes of limitations for income tax assessment vary from state to state. Tax authorities of the U.S. have not audited any of the Company’s income tax returns for the open taxation years noted above.

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AGR TOOLS, INC.

Notes to Consolidated Financial Statements

(unaudited)

4. Summary of Significant Accounting Policies (continued)

The Company recognizes interest and penalties related to uncertain tax positions in tax expense. During the three and six months ended December 31, 2011 and June 30, 2011, there were no charges for interest or penalties.

l) Revenue Recognition

The Company earns revenue from the sale of diamond tooling and related products. The Company recognizes revenue in accordance with ASC 605, Revenue Recognition. Revenue is recognized when the price is fixed or determinable, persuasive evidence of an arrangement exists, the goods have been delivered, and collectability is reasonably assured. Sales returns are recognized as incurred. The amount of returns is not significant and the Company evaluates the need to record an allowance for each reporting period.

m) Financial Instruments and Fair Value Measures

ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments consist principally of cash, accounts receivable, advances receivable, bank demand loan, accounts payable, accrued liabilities, corporate taxes payable/receivable, loans payable, and amount due to a related party. Pursuant to ASC 820, the fair value of cash is determined based on Level 1 inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

n) Concentrations

As at December 31, 2011, 95% (June 30, 2011 – 91%) of accounts receivable is comprised of two customers. (June 30, 2011 – two customers). As at December 31, 2011, the specific concentrations of each customer included in this total were 68% and 27%. As at June 30, 2011, the specific concentrations of each customer included in this total were 65% and 26%. During the six month period ended December 31, 2011, the Company has four customers that total 66% of its revenue. The specific concentrations of each customer included in this total were 26%, 16, 14% and 10%.

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AGR TOOLS, INC.

Notes to Consolidated Financial Statements

(unaudited)

4. Summary of Significant Accounting Policies (continued)

o) Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, Compensation Stock 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.

The Company uses the Black-Scholes option-pricing model to calculate the fair value of stock-based awards. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.

p) Earnings (Loss) Per Share

The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earning Per Share”. ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. All potentially dilutive shares as of December 31, 2011 were anti-dilutive. There were no potentially dilutive shares as of June 30, 2011.

q) Comprehensive Loss

ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at December 31, 2011 and June 30, 2011, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

r) Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (FASB) issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (ASU 2011-04), which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 will become effective for the Company on April 1, 2012. We are currently evaluating ASU 2011-04 and have not yet determined the impact that adoption will have on our financial statements.

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AGR TOOLS, INC.

Notes to Consolidated Financial Statements

(unaudited)

4. Summary of Significant Accounting Policies (continued)

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (ASU 2011-05), which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 will become effective for the Company on April 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. The adoption of ASU 2011-05 is not expected to have a material impact on our financial position or results of operations.

In December 2010, the FASB issued ASU 2010-29, “Business Combinations (Topic 805): Disclosure of supplementary pro forma information for business combinations.” This update changes the disclosure of pro forma information for business combinations. These changes clarify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Also, the existing supplemental pro forma disclosures were expanded to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. These changes become effective for the Company beginning January 1, 2011. The Company’s adoption of this update did not have an impact on the Company’s financial condition or results of operations. In June 2009, In August 2009, the FASB issued an amendment to the accounting standards related to the measurement of liabilities that are recognized or disclosed at fair value on a recurring basis. This standard clarifies how a company should measure the fair value of liabilities and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard is effective for the Company on October 1, 2009. The adoption of this amendment did not have a material effect on the Company’s financial statements.

5. Property and Equipment

	December 31, 2011 Net carrying value $		June 30, 2011 Net carrying value $
Automotive		-		-
Computer equipment		-		3,665
Furniture and equipment		4,528		7,093
		4,528		10,758

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AGR TOOLS, INC.

Notes to Consolidated Financial Statements

(unaudited)

6. Bank Indebtedness

The Company has a revolving bank credit line with a limit of $24,300.00 that bears interest at 9.75% per annum and is secured by a personal guarantee of the Vice-President of the Company. The balance in this account at December 31, 2011 was $23,157 (June 30, 2011 - $23,126).

7. Convertible Notes

During the year ended June 30, 2011, the Company issued convertible notes for a total principal of $45,000 and $45,000, respectively. These notes carry an 8% annual interest rate. These convertible notes of $45,000 each have stated terms as the following, convertible at the greater of a fixed conversion price of $.00009 or 55% of lowest average 3 trading price over 10 days preceding the day of the note. In addition, there is a cap on the number of shares convertible under the note to prevent a derivative and these subordinated convertible debentures may have conversion prices that at issuance could be lower than the fair market value of the underlying stock.

In addition, the Company recognized and measured the embedded beneficial conversion feature present in the convertible debts by allocating a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in-capital. The intrinsic value of the feature was calculated on the commitment date using the effective conversion price of the convertible debt. This intrinsic value is limited to the portion of the proceeds allocated to the convertible debt. This beneficial conversion feature is amortized as a non-cash interest expense from the issuance date of the debenture through the earlier of the stated redemption date, which is nine months from issuance, or conversion into common stock. The amortization was calculated on a quarterly basis using the effective interest method. The offset was a credit to the discount. The notes were discounted $82,506 at issuance for a carrying value of $7,494. During the year ending June 30, 2011, the notes were accreted $67,366 and have a balance as of June 30, 2011 of $64,860. During the six months ended December 31, 2011, the remaining $15,140 was accreted and the balance as of December 31, 2011 is $80,000.

During the year ended June 30, 2011, the company issued non-convertible promissory notes in the amount of $325,000. There were three notes and they were denominated in the amounts of $25,000, $100,000, and $200,000. The note with a face value of $25,000 is due on August 13, 2011 and accrues interest of 12%. The notes with face values of $100,000 and $200,000 are due on December 14, 2011 and accrue interest of 12%. The note issued for $200,000 was issued as a payment for services rendered to a third party.

8. Related Party Transactions

a) During the period ended December 31, 2011, the Company paid rent of $Nil (2010: $3,000) to the former President of the Company. As of December 31, 2011 the Company owes $12,500 to the former President of the Company.

b) During the period ended December 31, 2011, the Company incurred rent of $Nil (2010: $3,000) to the Secretary and Treasurer of the Company. As of December 31, 2011, the Company owes $2,194 to the former Secretary and Treasurer of the Company.

c) At December 31, 2011, the Company owes $1,961 to a former director of the Company.

9. Common Stock

Stock transactions during the six months ended December 31, 2011:

a) On September 17, 2011, the Company settled debt of $4,000 by issuing 4,000,000 shares of stock at the fair market value of the date of grant, valued at $14,800. This resulted in a loss of $10,800.

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Table of Contents

AGR TOOLS, INC.

Notes to Consolidated Financial Statements

(unaudited)

10. Litigation

The company is not aware of any material pending or threatened litigation through the date of these financial statements. On January 13, 2012, a mediation involving the Company and a stocking dealer was concluded. The stocking dealer had purchased inventory from the Company, but had subsequently refused delivery and demanded a refund. The mediator held that the Company is required to deliver inventory of equal value to the stocking dealer.

~~11. Subsequent~~(9) ~~Events~~SUBSEQUENT EVENTS

InOn ~~January~~April 24, 2012, the ~~three~~Board ~~largest~~of ~~shareholders~~Directors ~~sold~~approved anand ~~aggregate~~recommended ~~40,267,390~~the ~~shares~~shareholders of ~~common stock of~~ the Company toapprove a ~~third~~500:1 ~~parties.~~reverse Instock ~~connection~~split ~~with~~of the ~~sale~~Company’s ofcommon ~~the~~stock. The ~~shares,~~reverse ~~the~~split ~~then-current~~was ~~Board~~subsequently ofapproved ~~Directors~~by ~~(comprised~~a majority of the ~~controlling~~ shareholders~~) resigned from their officer and director positions and concurrently appointed Mr~~. Immediately ~~Vern~~prior ~~O.C. Wilson~~ to the ~~Board~~stock ofsplit ~~Directors~~there ~~appointed~~were ~~as Chief Executive Officer~~91,823,982 ~~Secretary~~shares ~~and~~of ~~Treasurer.~~common ~~Additional~~stock ~~information~~issued ~~on the sale~~ and ~~changes~~outstanding. Immediately inafter the ~~Board~~reverse ofsplit, ~~Directors~~there iswere ~~available on Form 8-K~~183,661 ~~filed~~shares ~~with~~of ~~the~~common ~~SEC~~stock onissued ~~February 14, 2102~~ and ~~incorporated by reference to Exhibit 17~~outstanding.1.

~~F-12~~8

~~Table~~ITEM of2. ~~Contents~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

~~Item~~CAUTIONARY ~~2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations~~STATEMENT

As You ~~used~~should read the following discussion and analysis in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto contained elsewhere in this report. The information contained in this quarterly report: ~~(i)~~on ~~the~~Form ~~terms~~10-Q ~~“we”,~~is ~~“us”,~~not “a complete description of our”, ~~and~~business or the ~~“Company”~~risks ~~mean~~associated ~~AGR~~with ~~Tools,~~an ~~Inc~~investment in our common stock. ~~and~~We ~~its~~urge ~~subsidiaries,~~you ~~unless~~to ~~otherwise~~carefully ~~indicated~~review and ~~(ii)~~consider ~~all~~the ~~dollar~~various ~~amounts~~disclosures made by us in this ~~quarterly~~report and in our other reports filed with the Securities and Exchange Commission, or SEC, including our annual report ~~refer~~on toForm ~~U.S.~~10-K ~~dollars~~for ~~unless~~the ~~otherwise~~year ~~indicated~~ended June 30, 2011 and subsequent reports on Form 8-K, which discuss our business in greater detail.

~~Cautionary~~In ~~Statement~~this ~~Regarding~~report ~~Forward~~we make, and from time to time we otherwise make, written and oral statements regarding our business and prospects, such as projections of future performance, statements of management’s plans and objectives, forecasts of market trends, and other matters that are forward-~~Looking~~looking ~~Information~~statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements containing the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimates,” “projects,” “believes,” “expects,” “anticipates,” “intends,” “target,” “goal,” “plans,” “objective,” “should” or similar expressions identify forward-looking statements, which may appear in documents, reports, filings with the Securities and Exchange Commission, news releases, written or oral presentations made by officers or other representatives made by us to analysts, stockholders, investors, news organizations and others, and discussions with management and other of our representatives. For such statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

~~The~~Our ~~statements~~future inresults, ~~this~~including ~~report~~results ~~that~~related ~~are~~to ~~not~~forward-looking ~~reported~~statements, ~~financial~~involve ~~results~~a ornumber ~~other~~of ~~historical~~risks ~~information~~and ~~are~~uncertainties. Such ~~“forward-looking~~risks ~~statements”~~and ~~within~~uncertainties ~~the~~include, ~~meaning~~but ofare ~~the~~not ~~Private~~limited ~~Securities~~to, ~~Litigation~~changes ~~Reform~~in ~~Act~~local, ~~of 1995~~regional, asand ~~amended.~~national ~~These~~economic ~~statements~~and ~~appear~~political inconditions, athe ~~number~~effect of ~~different~~governmental ~~places~~regulation, incompetitive ~~this~~market ~~report~~conditions, ~~and~~our ~~can~~ability beto ~~identified~~obtain byadditional ~~words~~financing, ~~such~~and asother ~~“estimates”,~~risks ~~“projects”,~~detailed ~~“expects”,~~herein ~~“intends”,~~and ~~“believes”,~~from ~~“plans”,~~time orto ~~their~~time ~~negatives~~in orour ~~other~~SEC ~~comparable words~~reports. ~~Also~~No ~~look~~assurance ~~for~~can ~~discussions~~be ofgiven ~~strategy~~ that ~~involve~~the ~~risks~~results ~~and~~reflected ~~uncertainties.~~in ~~Forward~~any forward-looking statements ~~include,~~will ~~among~~be ~~others,~~achieved. ~~statements~~Any ~~regarding~~forward-looking ~~our~~statement ~~markets~~speaks ~~and~~only as of the ~~demand~~date ~~for~~on ~~our~~which ~~services~~such statement is made.

~~You~~Overview ~~are~~of ~~cautioned that any such forward-looking statements are not guarantees and may involve risks and uncertainties.~~ Our actual results may differ materially from those in the forward-looking statements due to risks facing us or due to actual facts differing from the assumptions underlying our estimates. Some of these risks and assumptions include those set forth in reports and other documents we have filed with or furnished to the United States Securities and Exchange Commission (“SEC”). We advise you that these cautionary remarks expressly qualify in their entirety all forward-looking statements attributable to us or persons acting on our behalf. Readers are cautioned not to place undue reliance on our forward-looking statements, as they speak only as of the date made. Except as required by law, we assume no duty to update or revise our forward-looking statements. However, you should carefully review the reports and other documents we file from time to time with the SEC.Business

Our Business

We were incorporated under the name “Laburnum Ventures Inc.” on March 11, 2004, under the laws of the State of Nevada. Until recently, we were a pre-exploration stage company engaged in the acquisition and exploration of mineral properties. We formerly owned a 100% undivided interest in a mineral property located in the Province of British Columbia, Canada known as the Sum Mineral Claim, but we decided not to pursue this claim.

On July 21, 2009, we entered into a share exchange agreement (the “Original Share Exchange Agreement”) with AGR Stone & Tools USA, Inc., a private Texas company (“AGR USA”). Pursuant to the terms of the Original Share Exchange Agreement, we agreed to acquire all of the outstanding shares of AGR USA from its shareholders in exchange for our shares on a one-for-one basis, which, if completed, would result in AGR USA becoming our wholly owned subsidiary.

On September 15, 2009, in contemplation of the completion of the share exchange with AGR USA, we completed a name change from Laburnum Ventures Inc. to AGR Tools, Inc. in accordance with Nevada law.

On October 29, 2009, pursuant to the terms of the Original Share Exchange Agreement, we agreed to terminate the Original Share Exchange Agreement with AGR USA and enter into a new share exchange agreement (the “New Share Exchange Agreement”). Under the New Share Exchange Agreement, we agreed to carry out the exchange of shares with the shareholders of AGR USA through a statutory process pursuant to Part 5 of the Texas Business Corporation Act in order to effect the transaction in a more efficient manner.

The closing of the transactions contemplated by the New Share Exchange Agreement occurred on May 27, 2010, at which time AGR USA became our wholly-owned operating subsidiary and we adopted the business of AGR USA. In connection with the closing, we issued 46,186,516 shares of our common stock to the shareholders of AGR USA and our former sole officer and director, Thomas Brown, cancelled 25,000,000 shares of our common stock held in his name.

Table of Contents

In January 2012, our directors and officers resigned from the Company and sold all of their shares of the Company to third parties, resulting in a change of ownership of approximately 43.85% of the outstanding shares of common stock of the Company. The resignations were voluntary and did not involve a disagreement with the Company on any matters relating to the Company’s operations, policies or practice. A new director was concurrently appointed by the departing board members to fill the resulting vacancies pursuant to NRS § 78.130 and the sole board member subsequently appointed a new officer to fill all vacant positions.

We are a Texas-based company in the business of manufacturing and selling tooling and accessories to the construction, building, maintenance and demolition industries in the United States and Canada. Tooling is the consumable disposal portion of a tool that makes the tool work. It wears out as the tool is operated, and as a result, demand for our products is driven by the need for original and replacement tool parts, not the tools themselves. We currently sell more than 700 products through our stocking dealer network, which consists of dealers in 15 U.S. states and two Canadian provinces. Our products include diamond-based blades, diamond drill bits, diamond cup wheels, resin polyesters, glues, inks, resin-based waterproof grinding stones and diamond polishing pads, all of which are manufactured in a number of different sizes.

Our products are manufactured in China on a contract basis and we subject the manufacturers to strict standards. We field-test the products by using them in construction, building and demolition projects. We also test our products alongside the products of our competitors both in the field and in our testing facility. All of our products are accompanied by a warranty against defects in workmanship.

We currently focus on sales through our stocking dealers. We also sell a number of our products through our website, which are delivered to customers either through our storage centers or our stocking dealers. Our stocking dealers act as face-to-face contacts for our customers and provide support to one another by sharing order fulfillment with our storage centers. We train and provide training manuals to our stocking dealers and require each one to be familiar with at least 200 of our products during their initial training. We currently do not have brokers or commission sales representatives involved in the distribution of our products.

Results of Operations

The following discussion and analysis of our results of operations and financial condition for the three months ended ~~December~~March 31, ~~2011~~2012 should be read in conjunction with our interim financial statements and related notes included in this quarterly report, as well as our most recent annual report on Form 10-K.

Three Months Ended ~~December~~March 31, ~~2011~~2012 Compared to Three Months Ended ~~December~~March 31, ~~2010~~2011

Revenues

We generated revenue of $~~33,589~~0 during the three months ended ~~December~~March 31, ~~2011~~2012, compared to revenue of $~~110~~59,~~718~~192 during the three months ended ~~December~~March 31, ~~2010~~2011. ~~The decrease in revenue was primarily due to a decrease in overall activity in the construction, building and demolition industries in the United States and Canada during the most recent fiscal year.~~

Although the prices for our products are relatively stable, the recent global recession significantly affected demand in the construction, building and demolition industries in the United States and Canada and the corresponding demand for our products, and resulted in a decrease in the number of dealers in our network to whom we sell our products. However, as world economies recover, particularly those of the United States and Canada, activity in the construction, building and demolition industries is expected to increase from the levels experienced during the recession. We anticipate that the demand for our products will increase when these economies grow and activity in our target industries increases.10

Our cost of goods sold decreased to $~~17,914~~0 in the three months ended ~~December~~March 31, ~~2011~~2012 from $6032,~~642~~604 in the prior period ~~as a result of the decrease in overall activity in the construction, building and demolition industries in the United States and Canada during the most recent fiscal year~~. Consequently, we yielded gross profit of $~~15,675~~0 during the three months ended ~~December~~March 31, ~~2011~~2012, compared to gross profit of $5026,~~076~~588 during the three months ended ~~December~~March 31, ~~2010~~2011.

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Expenses

During the three months ended ~~December~~March 31, ~~2011~~2012, our total operating expenses ~~decreased~~were to $24270,~~234~~552 ~~from~~compared to $8084,~~166~~240 during the prior period. The ~~decrease~~increase in ~~our~~ operating expenses was primarily ~~due~~driven toby ~~the~~impairment ~~overall~~expenses ~~decrease~~related into ~~our operations resulting from~~ the ~~recent~~write ~~global~~down recession significantly affecting demand in the construction, building and demolition industries in the United States and Canada and the corresponding demand for our products, and resulted in a decrease in the number of ~~dealers in our network to whom we sell our products~~inventory.

We incurred a loss from our operations of $8270,~~559~~552 during the three months ended ~~December~~March 31, ~~2011~~2012, compared to a loss from operations of $3057,~~090~~652 during the three months ended ~~December~~March 31, ~~2010~~2011.

Our total other ~~expenses~~income during the three months ended ~~December~~March 31, ~~2011~~2012 ~~were~~was $1520,~~781~~484 compared to total other expenses of $1333,~~036~~398 during the prior period~~, primarily due to increased interest and bank charges~~.

Net Loss

During the three months ended ~~December~~March 31, ~~2011~~2012, we incurred a net loss of $2425,~~340~~068. During the three months ended ~~December~~March 31, ~~2010~~2011, we incurred a net loss of $4391,~~126~~050.

~~Six~~Nine Months Ended ~~December~~March 31, ~~2011~~2012 Compared to ~~Six~~Nine Months Ended ~~December~~March 31, ~~2010~~2011

Revenues

We generated revenue of $67,313 during the ~~six~~nine months ended ~~December~~March 31, ~~2011~~2012, compared to revenue of $~~316~~375,~~161~~353 during the ~~six~~nine months ended ~~December~~March 31, ~~2010~~2011. The decrease in revenue was primarily due to a decrease in overall activity in the construction, building and demolition industries in the United States and Canada during the most recent fiscal year.

~~Although~~Our ~~the~~cost ~~prices~~of ~~for~~goods ~~our~~sold ~~products~~decreased ~~are~~to ~~relatively stable~~$40,953 in the ~~recent~~nine ~~global~~months ~~recession~~ended ~~significantly~~March ~~affected~~31, ~~demand~~2012 infrom ~~the construction~~$216,381 ~~building and demolition industries~~ in the ~~United~~prior ~~States~~period ~~and~~as ~~Canada~~a ~~and~~result of the ~~corresponding~~decrease ~~demand for our products, and resulted~~ in aoverall ~~decrease~~activity in the ~~number of dealers in our network to whom we sell our products. However~~construction, asbuilding ~~world~~and ~~economies~~demolition ~~recover,~~industries ~~particularly~~in ~~those of~~ the United States and Canada, ~~activity~~during in the ~~construction,~~most ~~building~~recent ~~and~~fiscal ~~demolition~~year. ~~industries~~Consequently, iswe ~~expected~~yielded togross ~~increase~~profit ~~from~~of ~~the~~$23,360 ~~levels experienced~~ during the ~~recession. We~~nine ~~anticipate~~months ~~that~~ended ~~the~~March ~~demand~~31, ~~for~~2012, ~~our~~compared ~~products~~to ~~will~~gross ~~increase~~profit ~~when~~of ~~these~~$156,972 ~~economies~~during ~~grow~~the ~~and~~nine ~~activity~~months inended ~~our~~March ~~target~~31, ~~industries increases~~2012.

Our cost of goods sold decreased to $40,953 in the six months ended December 31, 2011 from $183,777 in the prior period as a result of the decrease in overall activity in the construction, building and demolition industries in the United States and Canada during the most recent fiscal year. Consequently, we yielded gross profit of $23,360 during the six months ended December 31, 2011, compared to gross profit of $132,384 during the six months ended December 31, 2010.

Expenses

During the ~~six~~nine months ended ~~December~~March 31, ~~2011~~2012, our total operating expenses ~~decreased~~increased to $86357,~~641~~193 from $~~243~~318,~~363~~603 during the prior period. The ~~decrease~~increase in ~~our~~ operating ~~expenses~~expense was primarily due to ~~the~~impairment ~~overall~~expense ~~decrease~~related into ~~our operations resulting from~~ the ~~recent~~write-down global recession significantly affecting demand in the construction, building and demolition industries in the United States and Canada and the corresponding demand for our products, and resulted in a decrease in the number of ~~dealers in our network to whom we sell our products~~inventory.

We incurred a loss from our operations of $60330,~~281~~833 during the ~~six~~nine months ended ~~December~~March 31, ~~2011~~2012, compared to a loss from operations of $~~101~~159,~~979~~631 during the ~~six~~nine months ended ~~December~~March 31, ~~2010~~2011.

Our total other expenses during the ~~six~~nine months ended ~~December~~March 31, ~~2011~~2012 were $4626,~~627~~143 compared to $1750,~~067~~465 during the prior period~~, primarily due to increased interest and bank charges and a loss on extinguishment of debt~~.

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Net Loss

During the ~~six~~nine months ended ~~December~~March 31, ~~2011~~2012, we incurred a net loss of $~~106~~356,~~908~~976. During the ~~six~~nine months ended ~~December~~March 31, ~~2010~~2011, we incurred a net loss of $~~119~~210,~~046~~096.

Liquidity and Capital Resources

As of ~~December~~March 31, ~~2011~~2012, we had $~~3,169~~289 in cash, $~~279~~3,~~071~~289 in total assets, $~~914~~888,~~130~~416 in total liabilities and a working capital deficit of $~~639~~885,~~587~~127. As of ~~December~~March 31, ~~2011~~2012, we had an accumulated deficit of $12,~~877~~127,~~627~~695. During the nine months ended March 31, 2012, operating activities used cash of $49,113, compared to $162,030 during the nine months ended March 31, 2011.

~~During~~Investing ~~the six months ended December 31, 2011, operating~~ activities used cash of $~~5,483,~~0 ~~compared~~in ~~to $131,690 during~~ the ~~six~~nine months ended ~~December~~March 31, ~~2010.~~2012 Anand ~~increase in inventory reduced cash in the amount of $8,210 in the current period, compared to an increase of cash of $57,979 in the prior period~~2011. An increase in accounts payable in the current period provided cash of $32,867, compared to a decrease of $41,319 in the prior period. An increase in accrued liabilities provided cash of $37,894 in the current period, compared to a decrease of $41,319 in the prior period. An increase in amounts due to related parties provided cash of $150 in the current period, compared to a decrease in same using cash of $34,874 in the prior period. A decrease in customer deposits used cash of $3,209 in the current period, compared to a decrease in customer deposits using cash of $38,428 in the prior period.

~~Investing~~Financing activities ~~used~~in the nine months ended March 31, 2012 provided cash of $040,781, compared to $158,772 in the ~~three~~prior ~~months~~period ~~ended~~primarily ~~December~~from ~~31,~~loans ~~2011~~from ~~and~~related ~~2010~~parties.

~~Financing~~We ~~activities~~are currently reviewing our business and are evaluating whether to remain in the ~~three~~business ~~months~~of ~~ended~~manufacturing ~~September~~and ~~30,~~selling ~~2011~~tools ~~provided~~and ~~cash~~accessories ofto ~~$31~~the construction, ~~compared~~building, maintenance and demolition industries. We may or may not exit this business within the next 6 months. In the event we choose to ~~$149~~exit the business,~~766~~ we expect to enter a different business and are in the ~~prior~~process ~~period~~of ~~primarily~~evaluating ~~from~~our ~~loans~~options ~~from~~and ~~related~~developing ~~parties~~our strategy.

~~Our~~We ~~plan~~anticipate ofraising ~~operations~~additional ~~over~~funds ~~the~~required ~~next~~to 12execute ~~months~~our isstrategy tofrom ~~(i)~~the ~~expand~~sale ~~our~~of ~~stocking~~equity ~~dealer~~securities. There ~~network~~can ~~throughout~~be ~~the~~no ~~Unites~~assurance ~~States~~that ~~and~~we ~~Canada,~~will ~~(ii)~~be ~~monitor~~able ~~the~~to ~~quality~~secure ofthe ~~our~~necessary ~~products~~financing ~~and~~from ~~accessories,~~the ~~(iii)~~sale ~~further~~of ~~develop~~ our ~~website~~securities. If ~~and~~we ~~online~~are ~~sales~~unable ~~volume,~~to ~~and~~raise ~~(iv)~~sufficient ~~increase~~funds ~~our exposure~~ to ~~participants~~finance inour ~~the construction~~operations, ~~building,~~our ~~maintenance~~business ~~and~~may ~~demolition industries~~fail. An Weinvestment ~~expect~~in weour ~~will~~securities ~~require~~involves ~~approximately~~significant ~~$3.5~~risk ~~million~~and toyou ~~pursue~~could ~~our~~lose ~~plan~~your ofentire ~~operations over this period~~investment.

We intend to raise the additional funds we require from the sale of our equity securities or loans from related or third parties. There can be no assurance that we will be able to secure the necessary financing from the sale of our securities or loans from related parties. If we are unable to raise sufficient funds to finance our operations our business may fail. In addition, if we are unable to raise the funds required to expand our operations, we may be forced to proceed with a scaled back business plan based on our available financial resources. An investment in our securities involves significant risk and you could lose your entire investment.

Going Concern

Our financial statements for the ~~three~~period ~~months~~ ended ~~December~~March 31, ~~2011~~2012 have been prepared on a going concern basis and Note 2 to the financial statements identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

~~Item~~Critical 3.Accounting ~~Quantitative and Qualitative Disclosures About Market Risk~~Estimates

~~Not~~Our ~~applicable~~discussion and analysis of our financial condition and results of operations are based upon consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at year-end and the reported amounts of revenues and expenses during the year. We base our estimates on historical experience and various other assumptions that we believe are reasonable; however, actual results may differ.

712

~~Table~~Certain accounting estimates are considered to be critical if (a) the nature of ~~Contents~~the estimates and assumptions is material due to the level of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to changes; and (b) the impact of the estimates and assumptions on financial condition or operating performance is material.

~~Item~~ITEM 43. QUANTITATIVE ~~Controls~~AND ~~and~~QUALITATIVE ~~Procedures~~DISCLOSURES ABOUT MARKET RISK.

As a “smaller reporting company” defined in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.

ITEM 4T. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-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 rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, our management, with the participation of our sole officer serving as the Chief Executive Officer and acting Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer/acting Chief Financial Officer concluded that our disclosure controls and procedures were not effective to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms due to the following deficiencies:

1. Management override of existing controls is possible given our small size and lack of personnel; and

1.	Management override of existing controls is possible given our small size and lack of personnel; and
2.	We maintain an insufficient complement of personnel to carry out ongoing monitoring responsibilities and ensure effective internal control over financial reporting.

2. We maintain an insufficient complement of personnel to carry out ongoing monitoring responsibilities and ensure effective internal control over financial reporting.

In light of the existence of these control deficiencies, our management concluded that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis by our internal controls.

Management is currently evaluating remediation plans for the above control deficiencies. Management plans to enhance our risk assessment, internal control design and documentation and implement other procedures in the internal control function.

Changes in Internal Control

Other than as described above, during the three months ended ~~December~~March 31, ~~2011~~2012, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

~~Item~~ITEM 1. LEGAL ~~Legal Proceedings~~PROCEEDINGS.

We are not a party to any material pending legal proceedings and are not aware of any legal proceedings that have been threatened against us. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings.

On January 13, 2012, a mediation involving the Company and a stocking dealer was concluded. The stocking dealer had purchased inventory from the Company, but had subsequently refused delivery and demanded a refund. The mediator held that the Company is required to deliver inventory of equal value to the stocking dealer.

~~Item~~ITEM 21A. RISK ~~Unregistered Sales of Equity Securities and Use of Proceeds~~FACTORS.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

~~Item~~ITEM 34. ~~Defaults~~(REMOVED ~~Upon~~AND ~~Senior Securities~~RESERVED).

~~None~~Not applicable.

~~Item~~ITEM 45. OTHER ~~(Removed and Reserved)~~INFORMATION.

~~Item~~Not 5applicable. ~~Other Information~~

~~None~~ITEM 6. EXHIBITS.

Item 6. Exhibits

EXHIBIT NUMBER		DESCRIPTION

31.1		CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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

Exhibit Number	Exhibit Description
31.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) promulgated under the Securities Exchange Act of 1934 and 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

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

Date: February 17, 2012	AGR TOOLS, INC.
	AGR TOOLS, INC.
By:	/s/ Vern O.C. Wilson
Date: May 21, 2012	By:	/s/ Vern Wilson
	~~Vern O.C. Wilson~~	Vern O.C. Wilson
	Chief Executive Officer, President Sole Director, Acting Chief Financial Officer
		Chief Executive Officer, President
		Sole Director, Acting Chief Financial Officer

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~~Table~~Exhibits ~~of Contents~~Index

EXHIBIT NUMBER		DESCRIPTION

31.1		CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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

Filing Compare · AGR TOOLS, INC.