STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2015

On August 11, 2014, the Company entered into a share exchange agreement with AGL. Under the terms of the agreement, the Company issued 120,000,000 common shares for 100% of the issued and outstanding shares of AGL. The agreement results in management and shareholders of AGL to hold 81% of the issued and outstanding common shares of the Company, resulting in a reverse capitalization transaction (see Note 1). Following the above events, there were 148,431,837 shares outstanding including:

Shares		Held by:
120,000,000		AGL Shareholders
28,431,837		Graphite Corp. Shareholders

During the year ended December 31, 2014, the Company issued 7,169,525 common shares for $385,000.

During the period ended December 31, 2014, the Company issued 40,000,000 common shares as a finder's fee related to the introduction of the Rice University license agreement (see Note 4).

As of September 30, 2015 and December 31, 2014, the Company owed an officer of the Company 9% of the issued and outstanding common shares as at the agreement date of December 12, 2014. This amounted to 17,641,234 common shares payable with a fair market value of $511,596.

As of September 30, 2015 and December 31, 2014, the Company owed an officer of the Company 8% of issued and outstanding common shares as at the agreement date of July 15, 2014. This amounted to 2,274,547 common shares payable with a fair market value of $204,709.

As of September 30, 2015, the Company owed a director of the Company 1% of issued and outstanding common shares as at the agreement date of January 9, 2015. This amounted to 519,129 common shares payable with a fair market value of $16,622.

As of September 30, 2015, the Company owed a director of the Company 6% of issued and outstanding common shares as at the agreement date of January 9, 2015. This amounted to 3,102,975 common shares payable with a fair market value of $99,732.

As of September 30, 2015, the Company owed a director of the Company 1,500,000 bonus common shares payable with a fair market value of $48,150.

As of September 30, 2015, the Company owed two consultants an aggregate of 4,000,000 shares for services provided, valued at $68,400 using a closing price on the grant date February 23, 2015.

As of September 30, 2015, the Company owed a lender 1,000,000 shares as inducement to provide debt to the Company, valued at $12,000 and included in stock payable as September 30, 2015. The debt discount will be included in interest expense over the vesting term. Included on the balance sheet is a $5,688 debt discount from inducement with $6,312 expensed during the period ended September 30, 2015.

During the period ended September 30, 2015, the Company issued 3,424,657 common shares in lieu of paying legal and professional fees in relation to their Equity Purchase Agreement dated September 16, 2015. Shares were valued at the closing price of the stock on the date of the agreement for a total of $47,945.

GRAPHITE CORP 10-Q