UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended December 31, 2015

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from __________ to __________

000-54521
Commission File Number

American Graphite Technologies Inc.
(Exact name of registrant as specified in its charter)

Nevada	27-2841739
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3651 Lindell Rd., Ste D#422, Las Vegas, NV	89103
(Address of principal executive offices)	(Zip Code)

(702) 473-8227
(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports 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 [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[ ]	Accelerated filer	[ ]

Non-accelerated filer	[ ]	Smaller reporting company	[X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [ X ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes [ ] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

96,083,348 common shares outstanding as of January 12, 2016

(Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.)

AMERICAN GRAPHITE TECHNOLOGIES INC.

		Page
	PART I – Financial Information
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4.	Controls and Procedures	12

	PART II – Other Information
Item 1.	Legal Proceedings	13
Item 1A.	Risk Factors	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	13
Item 4.	Mine Safety Disclosures	13
Item 5.	Other Information	13
Item 6.	Exhibits	14
	Signatures	15

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the six month period ended December 31, 2015, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2016. For further information refer to the financial statements and footnotes thereto included in our company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015 as filed with the Securities and Exchange Commission on October 19, 2015.

REPORTED IN UNITED STATES DOLLARS

	Page
Consolidated Balance Sheets	F-1
Consolidated Statements of Operations and Comprehensive loss	F-2
Consolidated Statements of Cash Flows	F-3
Notes to Consolidated Financial Statements	F-4 to F-14

Table of Contents

AMERICAN GRAPHITE TECHNOLOGIES INC. BALANCE SHEETS


	December 31, 2015 (Unaudited)			June 30, 2015 (Audited)
ASSETS

CURRENT ASSETS
Cash	$	12,800		$	114,605
Prepaid expenses		5,042			336,494
TOTAL CURRENT ASSETS		17,842			451,099
TOTAL ASSETS	$	17,842		$	451,099

LIABILITIES AND STOCKHOLDERS’ EQUITY(DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	70		$	4,136
Accounts payable and accrued liabilities – related party		31,740			44,740
TOTAL CURRENT LIABILITIES		31,810			48,876

Derivative warrant liabilities (Notes 2, 6)		546,059			574,673

TOTAL LIABILITIES		577,869			623,549

STOCKHOLDERS’ EQUITY(DEFICIT)
Capital stock Authorized - 200,000,000 shares of common stock, $0.001 par value. Issued and outstanding 96,083,348 shares of common stock, as at December 31, 2015 and June 30, 2015		96,083			96,083
Additional paid in capital		1,357,448			1,357,448
Accumulated deficit		(2,013,558	)		(1,625,981	)
TOTAL STOCKHOLDERS’ EQUITY(DEFICIT)		(560,027	)		(172,450
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY(DEFICIT)	$	17,842		$	451,099

The accompanying notes are an integral part of these financial statements.

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F-1

AMERICAN GRAPHITE TECHNOLOGIES INC.

STATEMENTS OF OPERATIONS

UNAUDITED

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2015			2014			2015			2014

REVENUE	$	-		$	-		$	-		$	-

OPERATING EXPENSES
Exploration expenses		16,685			25,648			16,685			25,648
Unrealized royalty interest		335,000			-			335,000			-
Office and general		3,014			14,774			8,081			16,814
Management fees		15,000			26,250			30,000			63,750
Consulting fees		5,231			7,522			11,229			20,236
Professional fees		4,259			6,541			15,196			18,642
OPERATING LOSS		(379,189	)		(80,735	)		(416,191	)		(145,090	)


OTHER INCOME (EXPENSE)
Change in the fair value of warranty liability		6,116			(4,435	)		28,614			(7,497	)

NET LOSS	$	(373,073	)	$	(85,170	)	$	(387,577	)	$	(152,587	)

NET LOSS PER COMMON SHARE - BASIC	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING- BASIC		96,083,348			96,083,348			96,083,348			96,083,348

COMPREHENSIVE LOSS
Net loss	$	(373,073	)	$	(85,170	)	$	(387,577	)	$	(152,587	)
Foreign currency translation adjustment		-			34			-			34
TOTAL COMPREHENSIVE LOSS	$	(373,073	)	$	(85,136	)	$	(387,577	)	$	(152,553	)

The accompanying notes are an integral part of these financial statements.

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F-2

AMERICAN GRAPHITE TECHNOLOGIES INC.

STATEMENTS OF CASH FLOWS

UNAUDITED



	Six Months ended December 31,
	2015			2014
OPERATING ACTIVITIES
Net loss	$	(387,577	)	$	(152,587	)
Adjustments to reconcile net loss to net cash used by
Change in the fair value of warrant liability		(28,614	)		7,497
Changes in operating assets and liabilities:
(Increase) in prepaid expenses		331,452			-
(Decrease) in accounts payable and accrued liabilities		(4,066	)		(4,261	)
(Decrease) in accounts payable, related party		(13,000	)		12,000
NET CASH USED IN OPERATING ACTIVITIES		(101,805	)		(137,351	)

Effect of foreign exchange on transactions		-			34

NET INCREASE (DECREASE) IN CASH		(101,805	)		(137,317	)

CASH BEGINNING OF PERIOD		114,605			307,693

CASH, END OF PERIOD	$	12,800		$	170,376

Supplemental cash flow information and noncash financing activities:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

The accompanying notes are an integral part of these financial statements.

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F-3

AMERICAN GRAPHITE TECHNOLOGIES INC.

Notes to the Financial Statements

(Unaudited)

NOTE 1 – NATURE OF OPERTIONS AND BASIS OF PRESENTATION

American Graphite Technologies Inc. (Formerly “Green & Quality Home Life, Inc.”) (the “Company”) is in the initial exploration stage and has incurred losses since inception totaling $1,640,485. The Company was incorporated on June 1, 2010 in the State of Nevada and established a fiscal year end at June 30. We were originally organized to offer a portfolio of products and services to provide solutions for every family to automate domestic activities, making them less time consuming, easy to manage and leveraging the quality of life of every member of a family.

On May 23, 2012, Rick Walchuk, a director of American Graphite Technologies Inc., acquired a total of 12,000,000 pre-forward split shares of the Company’s common stock from Fabio Alexandre Narita, the Company’s former director and officer, in a private transaction for an aggregate total of $350,000. The funds used for this share purchase were Mr. Walchuk’s personal funds. Mr. Walchuk’s 12,000,000 shares amounted to approximately 98% of the Company’s then currently issued and outstanding common stock. This transaction effected a change in control of the Company. With the change in control of the Company management determined to abandon the original business plan and has determined to enter into the business of exploration and development of mining projects and technology related to graphite and grapheme. The Company currently has no projects and is in negotiations to acquire both mining concessions and technology.

As part of the sale of his shares Mr. Narita agreed to extinguish all debts owed to him by the Company.

Also on May 23, 2012, Fabio Alexandre Narita resigned as a director, President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer of the Company. In connection with the resignation of Mr. Narita, Rick Walchuk was appointed President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Treasurer, Secretary and a director. On December 13, 2013, the Board of Directors of the Company appointed Con Evan Anast to the Board of Directors of the Company and elected him Secretary of the Company, having received the resignation of Mr. Walchuk as Company Secretary.

On June 11, 2012, our Board of Directors unanimously approved the following items:

1. an amendment to our Articles of Incorporation to change our name to “American Graphite Technologies Inc.” (the “Name Change”);

2. an amendment to our Articles of Incorporation to increase our authorized capital from 75,000,000 to 200,000,000 shares of common stock, $0.001 par value (the “Increase in Authorized Capital”); and

3. an authorization to the Board of Directors to effect a forward split of the Company’s common stock, par value $0.001 per share at an exchange ratio of one hundred and twenty-five (125) for one (1) (the “Forward Split”) and to file such amendments as may be required with the requisite regulatory bodies to effect the Forward Split, so that everyone (1) outstanding share of Common Stock before the Forward Split shall represent one hundred and twenty-five (125) shares of Common Stock after the Forward Split.

On June 11, 2012, our majority stockholder executed written consent in lieu of a special meeting approving the Amendments.

Pursuant to these actions to be undertaken by the Company, Mr. Walchuk returned a total of 11,640,000 pre-forward split shares of common stock which were cancelled by the Company and returned to treasury.

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F-4

AMERICAN GRAPHITE TECHNOLOGIES INC.

Notes to the Financial Statements

(Unaudited)

NOTE 1 – NATURE OF OPERTIONS AND BASIS OF PRESENTATION (continued)

Effective July 18, 2012, in accordance with approval from the Financial Industry Regulatory Authority (“FINRA”), we changed our name from Green & Quality Home Life, Inc. to American Graphite Technologies Inc. and increased our authorized capital from 75,000,000 to 200,000,000 shares of common stock, par value of $0.001. In addition, our issued and outstanding shares of common stock increased from 619,500 to 77,437,500 shares of common stock, par value of $0.001 on the basis of a 125:1 forward split of our issued and outstanding shares of common stock. The forward split has been retroactively applied to all shares and per share figures in these financial statements.

On October 16, 2014, the Company incorporated a wholly owned subsidiary, 9311-2571 Québec Inc. in order to stake additional mineral claims in the Province of Quebec.

Unaudited Interim Financial Statements

The unaudited interim consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended June 30, 2015, included in the Company’s Annual Report on Form 10-K, filed with the SEC. The interim unaudited consolidated financial statements should be read in conjunction with those audited financial statements included in Form 10-K. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the tsix month period ended December 31, 2015 are not necessarily indicative of the results that may be expected for the year ending June 30, 2016.

Going Concern

The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have material assets aside from cash and prepaid expenses, nor does it have operations or a source of revenue sufficient to cover its operating costs. While there are sufficient funds to carry out the current operations of the Company, with no revenue generating operations there remains substantial doubt about our ability to continue as a going concern. As at December 31, 2015, the Company has an accumulated deficit of $2,013,558. While we presently have cash on hand, the Company may be dependent upon the raising of additional capital through placement of our common stock or debt financing in order to fully implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern.

The ability of the Company to continue as a going concern is dependent on attaining profitable operations, accordingly there remains substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amount and classification of liabilities that might cause results from this uncertainty.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, 9311-2571 Québec Inc. All intercompany balances and transactions have been eliminated in consolidation.

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F-5

AMERICAN GRAPHITE TECHNOLOGIES INC.

Notes to the Financial Statements

(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

Use of Estimates and Assumptions

Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Warrants

We account for common stock warrants in accordance with applicable accounting guidance provided in ASC Topic 815 “Derivatives and Hedging – Contracts in Entity’s Own Equity” (ASC Topic 815), as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement. We classify derivative warrant liabilities on the balance sheet as a liability, which is revalued at each balance sheet date, subsequent to the initial issuance. We use the Monte Carlo Options Lattice model, depending on the applicable terms of the warrant agreement, to value the derivative warrant liabilities. Changes in the fair value of the warrants are reflected in the statement of operations as “Change in the fair value of warrant liability.” See, Note 6 – financial agreement – (3) Securities Purchase Agreement, for a detailed description of our accounting for derivative warrant liabilities.

Income Taxes

The Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC Topic 740, “Income Taxes,” which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized. Accounting guidance now codified as FASB ASC Topic 740-20, “Income Tax – Intra-period Tax Allocation,” clarifies the accounting for uncertainties in income taxes recognized in accordance with FASB ASC Topic 740-20 by prescribing guidance for the recognition, de-recognition and measurement in financial statements of income tax positions taken in previously filed tax returns or tax positions expected to be taken in tax returns, including a decision whether to file or not to file in a particular jurisdiction. FASB ASC Topic 740-20 requires that any liability created for unrecognized tax benefits is disclosed. The application of FASB ASC Topic 740-20 may also affect the tax bases of assets and liabilities and therefore may change or create deferred tax liabilities or assets.

Net Loss per Share

Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.

The Company had the following potential common stock equivalents at December 31, 2015:

Warrants

4,012,500

Since the Company reflected a net loss in in three and six months ended December 31, 2015 and 2014, respectively, the effect of considering any common stock equivalents, if outstanding, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented.

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F-6

AMERICAN GRAPHITE TECHNOLOGIES INC.

Notes to the Financial Statements

(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value of Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2015 and 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.

Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.

Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

As set forth in ASC 820 Fair Value in Financial Instruments to increase consistency, a fair value hierarchy was developed to rank the reliability of inputs that reflect assumptions, used as a basis for determining fair value. ASC 820 emphasizes that valuation techniques (income, market, and cost) used to measure the fair value of an asset or liability should maximize the use of observable inputs, that is, inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. The ASC 820 accounting standard requires companies use actual market data, when available or models, when unavailable. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available, except when it might not represent fair value at the measurement date. When using models, ASC 820 provides guidance on appropriate valuation techniques and addresses the inherent valuation issue of risk. A fair value measurement should include an adjustment for risk if market participants would include one in pricing the related asset or liability, even if the adjustment is difficult to determine.

We analyzed the derivative financial instruments, in accordance with EITF 07-05 and FAS 133. EITF 07-5 is effective for fiscal years beginning after December 15, 2009, and interim periods within those fiscal years. It should be applied to outstanding instruments as of the beginning of the fiscal year in which it is adopted. Any adjustment would be recognized in the opening balance of retained earnings. The objective of EITF 07-5 is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception under Paragraph 11(a) of FAS 133 which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of EITF 00-19 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. The EITF reached a consensus that would establish a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions.

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F-7

AMERICAN GRAPHITE TECHNOLOGIES INC.

Notes to the Financial Statements

(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value of Financial Instruments (continued)

Derivative financial instruments should be recorded as liabilities in the consolidated balance sheet and measured at fair value. For purposes of this engagement and report, we utilized fair value as the basis for formulating our opinion which has been defined by the Financial Accounting Standards Board (“FASB”) as “the amount for which an asset (or liability) could be exchanged in a current transaction between knowledgeable, unrelated willing parties when neither party is acting under compulsion”. The FASB has provided guidance that its definition of fair value is consistent with the definition of fair market value in IRS Rev. Rule 59-60. In determining the fair value of the derivatives we assumed that the Company’s business would be conducted as a going concern. These derivative liabilities will need to be marked-to-market each quarter with the change in fair value recorded in the income statement. The FASB and IRS have provided guidance that its definition of fair value is consistent with the definition of fair market value in IRS Rev. Rule 59-60. Our opinion of Fair Value relied on a “value in use” or “going concern” premise. To properly apply this fair value standard, we gave consideration to the Holder’s intentions regarding whether or not the Securities purchased were to be held, sold, or abandoned. Our analysis also reflects assumptions that would be made by market participants if these market participants were to buy or sell each identified asset on an individual basis.

The Warrants issued with debt contain derivatives and require accounting under ASC 815 until exercised or expired. The derivative liability is marked to market each subsequent reporting period.

The following table summarizes the components of the derivate liabilities:

Warrant liability:	December 31, 2015		June 30, 2015
3,750,000 common stock purchase agreement dated March 14, 2014		546,059		574,673
	$	546,059	$	574,673

*On March 14, 2014, the 3 subscribers, who were subscribers in an offering undertaken by the Company on September 9, 2013, along with 2 subscribers that did not elect to participate in this offering, executed a waiver and consent in regard to their rights under the September 9, 2013 offering (the “Original SPA”), whereby they waived the rights to receive any additional shares of common stock under the Original SPA agreements and the Company and the 5 investors agreed to a re-pricing of the warrants issued under the Original SPA from an exercise price of $0.30 per share to $0.0724 per share and that such reduction of the Exercise Price was deemed a reduction in connection with a Dilutive Issuance (as defined in the Warrants) and the number of Warrant Shares that may be purchased upon exercise of the Warrants increased. On March 14, 2014 through March 21, 2014, the Company received notices and executed cashless exercise from the subscribers under the Original SPA.

The following table summarizes the number of common shares indexed to the derivative financial instruments as of December 31, 2015 and June 30, 2015

	Warrant Derivatives

3,750,000 common stock purchase agreement dated March 14, 2014		4,012,500
		4,012,500

The following table summarizes the effects on our income (expense) associated with changes in the fair values of our derivative financial instruments by type of financing:

	Six Months ended December 31,
		2015		2014
3,750,000 common stock purchase agreement dated March 14, 2014		28,614		(7,497	)
	$	28,614	$	(7,497	)

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F-8

AMERICAN GRAPHITE TECHNOLOGIES INC.

Notes to the Financial Statements

(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Related Parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence.

Stock-based Compensation

Stock-based compensation is accounted for using the Equity-Based Payments to Non-Employees Topic of the FASB ASC, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. The Company determines the value of stock issued at the date of grant. It also determines at the date of grant, the value of stock at fair market value or the value of services rendered (based on contract or otherwise) whichever is more readily determinable.

Recent Accounting Pronouncements

On June 10, 2014, The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, consolidation, which removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. For the first annual period beginning after December 15, 2014, the presentation and disclosure requirements in Topic 915 will no longer be required for the public business entities. The revised consolidation standards are effective one year later, in annual periods beginning after December 15, 2015. Early adoption is permitted. The Company has adopted the amendment.

On September 25, 2015, the FASB issued Accounting Standards Update, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. The amendments are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this Update with earlier application permitted for financial statements that have not been issued. This amendment will not have a material impact on our financial statements.

In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes." Under this guidance, deferred tax liabilities and assets are required to be classified as noncurrent in a classified statement of financial position. Prior to this guidance, the deferred taxes for each jurisdiction (or tax-paying component of a jurisdiction) would be presented as a net current asset or liability and net non-current asset or liability. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016 with earlier application permitted. This amendment will not have a material impact on our financial statements.

There are several new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. As of December 31, 2015, none of these pronouncements is expected to have a material effect on the financial position, results of operations or cash flows of the Company.

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F-9

AMERICAN GRAPHITE TECHNOLOGIES INC.

Notes to the Financial Statements

(Unaudited)

NOTE 3 – TECHNOLOGY AGREEMENTS

On December 3, 2012 we entered into and executed a non-exclusive technology License agreement for patent and trade secret technology in the field of graphene oxide or “Bucky” paper with Cheap Tubes, Inc. (“Cheap Tubes”). Pursuant to the terms of the agreement, we acquired the rights to further develop, commercialize, market and distribute certain proprietary inventions and know-how related to the manufacturing processes for graphene products, including graphene paper, also known as Bucky Paper. We agreed to fund commercial development activities based on the payment schedules defined below and we received a license for the rights on a nonexclusive basis for marketing products and/or services. Pursuant to the terms of the agreement, we agreed to provide the following payments to Cheap Tubes:

A minimum of $250,000 over 18 months, payable as follows:

	-	$10,000 on the execution of the agreement; (paid)
	-	$40,000 per quarter on January 1, 2013, April 1, 2013, July 1, 2013 and October 1, 2013 and on January 1, 2014 and April 1, 2014.

Under the terms of the agreement, Cheap Tubes was to incorporate a new corporation (“Newco”) and assign all rights and obligations of the agreement with us as well as the patent agreement. The newly formed corporation would then become the party to this agreement. Until such time as Newco was formed all funds paid were to remain in an attorney escrow. Further, in order to have funds released from escrow the parties were to formulate and agree to a milestone schedule to be met by Cheap Tubes or Newco as the case may be. Each quarter the milestones from the prior quarter must be met as a pre-condition to the upcoming quarterly funding. Under the agreement the Company was granted a non-exclusive license to market and distribute Bucky Paper using the patents, trade secrets and knowhow (the “Proprietary Rights”) throughout the world. Newco or Cheap Tubes will manufacture the Bucky Paper products and we shall have no rights to sublicense the Proprietary Rights to a third party. As the agreement is non-exclusive, Cheap Tubes will also have the right to market and distribute Bucky Paper products, subject to our ongoing fees, as described below.

As consideration for funding, we will receive 40% of the Net Sales Revenue for Bucky Paper until the amount we have received equals our capital investment regardless of whether we, Cheap Tubes or CTI are the ultimate vendors on the sale. Thereafter, we will receive 30% of our capital investment until such time as we have received an amount equal to 20% of the capital invested, 25% for the next five years and 20% for the remaining five years, at which time all obligations to us from Cheap Tubes or CTI shall cease.

Under the agreement, any new opportunities presented to us or Mike Foley (the shareholder of Cheap Tubes), Cheap Tubes or CTI are to be negotiated and if agreement is reached then shall be formalized in a mutually acceptable definitive agreement; with no obligation upon either party to enter into an agreement should they not be able to negotiate mutually acceptable terms. However, it is the intent of the parties to work toward furthering the business of Cheap Tubes, CTI, our business and any new business that may present itself.

As at June 30, 2014, the Company has paid cash in the amount of $335,000 pursuant to the agreement, and recorded the amount as prepaid expense - advances on future revenue under the licensing agreement. All payments due under the licensing agreement are current per the terms of the agreement.

During the period ended September 30, 2014, CTI provided the Company with a notice claiming that additional payments are due under the terms of the agreement with them. The Company has responded advising that all payments required pursuant to the terms of the agreement have been paid in full. As at December 31, 2015 and June 30, 2015, the Company has not made any further expenditures on this project. The Company impaired a total of $335,000 in unrealized royalty interest income during the six month period ended December 31, 2015.

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F-10

AMERICAN GRAPHITE TECHNOLOGIES INC.

Notes to the Financial Statements

(Unaudited)

NOTE 3 – TECHNOLOGY AGREEMENTS (continued)

Technology Development Agreement

On April 24, 2013 the Company signed a letter of intent (LOI) with the National Academy of Science of Ukraine; National Science Centre; Kharkov Institute of Physics and Technology (“KIPT”), Kharkov, Ukraine in regard to a research project dubbed “P-600”.

P-600 will research the properties of nanocarbon contained matter (graphene) as working material for 3D printing. The project will be a partnership between the Company, Science and Production Establishment “Renewable Energy Sources and Sustainable Technologies” (“RESST”) National Science Center “KIPT” National Academy of Science of Ukraine and Institute of Solid State Physics and Material Science National Science Center “KIPT” National Academy of Science of Ukraine.

On October 17, 2013, the Company finalized an intellectual property agreement for its 3D Project P-600 with the project manager and National Science Centre KIPT of the National Academy of Sciences of Ukraine and remitted the funds to allow commencement of the Project.

Under the agreement, the Company agreed to Project costs of $42,697. Changes to the proposed budget could be made based on agreement of both sides.

On November 1, 2014, the Company entered into an amendment to the Agreement for a term of six months at no additional cost to the Company in order to allow completion of the research as outlined in the Agreement resulting from certain unforeseen delays experienced at the National Science Centre KIPT of the National Academy of Sciences of Ukraine as reported by the project manager. A further amendment was entered into during the last quarter of 2015 so that the Agreement will continue until such time as the report is received.The Company expected the final report and recommendations from the collaboration partner no later than December 31, 2015, however this report has not yet been received.

During the fiscal year ended June 30, 2014, the Company paid a total of $44,832 as Project costs which have been recorded as research and development expenditures. There were no additional expenditures during the fiscal year ended June 30, 2015, or during the six months ended December 31, 2015.

NOTE 4 – MINERAL PROPERTIES

During fiscal 2015, the Company was unable to pursue a proposed exploration program on certain mineral claims originally acquired in January 2013. An expenditure of $120,000 on the claims was required by mid-January 2015 to keep them in good standing. During fiscal 2015 and 2014, the Company did not expend any funds on these claims. The claims expired prior to January 31, 2015.

On October 24, 2014, the Company entered into a consulting agreement with Geomap Exploration to stake further graphite exploration claims in the region. The 84 staked mineral claims known as The Lac Rouge Graphite Property is one contiguous block totaling 4,982 hectares (12,311 acres) of land near the town of Mont-Laurier in southern Québec. The mineral claims are 100% owned by the Company with no royalty or net smelter return requirements and will remain in good standing until the close of 2016. The Company is presently working with Geomap on the scope of an exploration work program for the current year ended June 30, 2016. The claims are held by our 100% owned Quebec subsidiary.

Costs to stake the claims totaled USD$24,502 (CDN$27,300) including applicable taxes. The Company paid a further $1,146 to transfer all staked claims to its wholly owned Quebec subsidiary. The total amount of $25,648 was recorded as exploration expenses during the fiscal year ended June 30, 2015. During the six months ended December 31, 2015 the Company spent $16,685 on further expenditures on the claims.

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F-11

AMERICAN GRAPHITE TECHNOLOGIES INC.

Notes to the Financial Statements

(Unaudited)

NOTE 5 – PREPAID EXPENSES AND ADVANCES

The following table provides detail of the Company’s prepaid expenses as of December 31, 2015 and June 30, 2015:

	December 31, 2015		June 30, 2015
Filing fees	$	2,048	$	-
Consulting fee		1,500		-
News releases		1,494		1,494
Advances related to technology agreement – Note 3		-		335,000
	$	5,042	$	336,494

NOTE 6 – SECURITIES PURCHASE AGREEMENT

On March 14, 2014, the Company closed a financing with three subscribers, whom had previously completed a financing with the Company. Under this Securities Purchase Agreement (the “SPA”) the Company raised a total $300,000 with three accredited investors introduced by Palladium to the Company. Under the terms of the SPA, the purchasers subscribed for a total of 3,750,000 shares of the common stock of the Company at $0.08 per share and an equal number of warrants exercisable at $0.15 per share for a period of five years. Under the SPA the purchasers have the option to purchase up to an equal number of shares and warrants as those purchased on the initial closing for a period of nine months from the initial closing date. Each purchaser shall be entitled to one closing on the exercise of the subsequent closing and option warrants have piggy back registration rights. Subject to no effective registration statement registering the warrants within 180 days after the initial exercise date of the warrants, then the warrants shall have a cashless exercise provision. The warrants further have exercise limitations of 9.99% as a beneficial ownership limitation which the holder may increase or decrease upon 61 days prior notice to the Company, however, the beneficial ownership limitation shall not exceed 9.99% of the number of shares held by the holder.

Under the terms of the SPA, the purchasers that hold outstanding stock or warrants at the time of any subsequent funding have the right to participate in any subsequent financing up to 100% of the subsequent financing on the terms negotiated with any funders for a period of eighteen months from the date of the SPA, Further, the shares of common stock issued under the SPA have a purchase price reset until the sooner of (i) the purchaser no longer holds and securities, and (ii) five years after the initial closing date whereby should the Company issue or sell any shares of common stock or any common stock equivalent at a price less than the per share purchase price (the “Dilutive Financing”), then the Company shall issue additional shares of common stock to the purchasers who hold outstanding shares on the date of such Dilutive Financing for no additional consideration. The warrants also have a warrant dilution adjustment which requires the issuance of additional warrant shares to reflect any dilutive financing undertaken by the Company whereby the holders of any outstanding warrants shall receive additional warrants based on the price of the Dilutive Financing.

The following table summarizes the number of common shares indexed to the derivative financial instruments as of December 31, 2015 and June 30, 2015:

		December 31, 2015				June 30, 2015
3,7500,000 common stock purchase agreement dated March 14, 2014			3,750,000				3,750,000

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F-12

AMERICAN GRAPHITE TECHNOLOGIES INC.

Notes to the Financial Statements

(Unaudited)

NOTE 6 – SECURITIES PURCHASE AGREEMENT (continued)

Information and significant assumptions embodied in our valuations (including ranges for certain assumptions during the subject periods that instruments were outstanding) as of December 31, 2015 and June 30, 2015 are illustrated in the following tables:

	Warrant Derivative
	Revaluation Date (December 31, 2015)				Revaluation Date (June 30, 2015)
Warrants to purchase common stock:
Strike price		$	0.15		$	0.15
Volatility			168.99	%		178.17	%
Term (years)			2.69			3.70
Risk-free rate			1.76	%		1.63	%
Dividends			-			-

On December 31, 2015 as a result of the revaluation of the warrant derivatives the Company recorded a gain of $28,614 in respect of the change in the fair value of the warrant liability.

NOTE 7 – COMMITMENTS

On August 1, 2014, the Company entered into a consulting agreement with Jim Matthew whereby Jim Matthew will provide the Company with services to include telephone and email investor inquiry responses; dissemination of the Company’s public information upon request to investors and third parties; and maintenance of the Company’s investor database and circulation of all press releases or other announcements to the membership list. The agreement is for a term of twelve months until July 31, 2015. The Term may be extended by mutual agreement upon the within terms, or such other terms, as the Company and the Consultant may agree in writing. The Company shall pay $1,500 per month, payable in advance on the 1st of each month. On August 1, 2015 the Company and Mr. Matthew agreed to extend the term of the agreement for a further period of one year at the same rate of monthly compensation.

During the six month period ended December 31, 2015, the Company paid $10,500 (2014 - $7,500) to Jim Matthew pursuant the agreement.

NOTE 8 – CAPITAL STOCK

Share issuances during the six months ended December 31, 2015:

None

As of December 31, 2015 and June 30, 2015, 96,083,348 shares of common stock were issued and outstanding.

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F-13

AMERICAN GRAPHITE TECHNOLOGIES INC.

Notes to the Financial Statements

(Unaudited)

NOTE 9 – SHARE PURCHASE WARRANTS

On March 14, 2014, the Company entered into securities purchase agreements to raise a total $300,000 with three accredited investors introduced by Palladium to the Company. Under the terms of the SPA, the purchasers subscribed for a total of 3,750,000 shares of the common stock of the Company at $0.08 per share and an equal number of warrants exercisable at $0.15 per share for a period of five years (see note 6 above).

As at December 31, 2015, the Company had the following warrants outstanding:

Exercise Price			Expiry Date		Weighted Average Remaining Contractual Life (Years)				Outstanding at June 30, 2015				Issued				Exercised				Waived				Expired				Outstanding at December 31, 2015
$	0.15		March 14, 2019			3.20				4,012,500				-				-				-				-				4,012,500

NOTE 10 – RELATED PARTY TRANSACTIONS

On December 15, 2013, the Company entered into a consulting agreement with Mr. Anast for the provision of services to the Company as Secretary and management consultant. Under the terms of the consulting agreement, Mr. Anast agreed to provide a minimum of 40 hours per month to the Company’s business operations. The contract is for a term of three years commencing on December 15, 2013 for a monthly consulting fee of $5,000 per month, of which a total of $2,000 is payable and $3,000 per month is to be accrued monthly. Effective May 1, 2014 it was agreed that Mr. Anast would be paid $3,000 per month and $2,000 would be accrued as a result of increased hours required to be devoted to corporate efforts. During the six month period ended December 31, 2015 Mr. Anast invoiced the Company a total of $30,000 of which a total of $12,000 was accrued. In addition, the Company paid $25,000 to Mr. Anast in the period with respect to amounts previously accrued and unpaid. As at December 31, 2015 a total amount of $31,740 (June 30, 2015 - $44,740) is payable to Mr. Anast in respect of the services provided.

NOTE 11 – PROVISION FOR INCOME TAXES

Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.

Operating loss carry-forwards generated during the period from June 1, 2010 (date of inception) through December 31, 2015 of approximately $1,135,442, will begin to expire in 2030. The Company applies a statutory income tax rate of 35%.

Accordingly, deferred tax assets related to net operating loss carry-forwards total approximately $397,400 at December 31, 2015. For the six month period ended December 31, 2015 and 2014, the valuation allowance increased by approximately $18,400 and $53,400, respectively.

The Company has no tax positions at June 30, 2015, or June 30, 2014, for which the ultimate deductibility is highly uncertain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no accruals for interest and penalties since inception.

The tax returns for the years from July 1, 2010 to June 30, 2015 are subject to examination by the Internal Revenue Service.

NOTE 12 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through the date that the financial statements were issued and determined that there were no subsequent events to disclose.

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F-14

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

FORWARD-LOOKING STATEMENTS

This quarterly 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").

As used in this quarterly report, the terms "we", "us", "our", and "our company" means American Graphite Technologies Inc. and our wholly owned subsidiary, 9311-2571 Québec Inc., a Quebec, Canada corporation, unless otherwise indicated.

Corporate Information

The address of our principal executive office is 3651 Lindell Road, Ste. D#422, Las Vegas, Nevada. Our telephone number is (702) 473-8227. Our website is http://americangraphitetechnologies.com

Our company was incorporated in the State of Nevada on June 1, 2010 under the name “Green & Quality Home Life, Inc.”.

On May 23, 2012, we underwent a change of control and on June 11, 2012, our company’s newly appointed sole director and majority shareholder approved a name change to “American Graphite Technologies Inc.” and a 125 new for 1 old forward stock split of our company’s issued and outstanding shares of common stock. Concurrent with the forward split, we amended our authorized capital from 75,000,000 to 200,000,000.

Effective July 12, 2012, we filed the Certificate of Amendment with the State of Nevada and effective July 18, 2012 in accordance with approval from the Financial Industry Regulatory Authority (“FINRA”), we changed our name from “Green & Quality Home Life, Inc.” to “American Graphite Technologies Inc.” and increased our authorized capital from 75,000,000 to 200,000,000 shares of common stock, par value of $0.001. In addition, our issued and outstanding shares of common stock increased from 619,500 to 77,437,500 shares of common stock, par value of $0.001 on the basis of a 125:1 forward split of our issued and outstanding shares of common stock.

New management of our company determined to change the direction of our company and to enter into mining exploration and development related to graphite and the acquisition and development of technologies related thereto. Our company has several projects, a mineral exploration project whereby we intend to explore for graphite, a technology development project to research the properties of nanocarbon contained matter (graphene) as working material for 3D printing, and a licensing agreement for the development and marketing of a technology related to the graphene industry.

Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.

Previous Business

Before we went through a change of control and business focus, we were a development stage company intending to create a portfolio of products and services (controlling heating, ventilation and air conditioning) and develop a set of solutions which would automate these domestic activities. The lack of funds and the present economy prevented that from happening. As we were unable to raise the capital necessary to develop our business plan, we began a search for other business opportunities which may benefit our shareholders and allow us to raise capital and operate.

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Current Business

Shortly after changing our business focus to exploration stage properties, we identified certain opportunities to engage in the development of technologies relate to graphite and graphene and determined to pursue that business. We entered into negotiations on projects, both graphite properties and technologies. On July 31, 2012, our company entered into a Letter of Intent with a private US company for an option to participate in a 100% interest in all of certain property rights held by the U.S. private company. We were unable to close that acquisition.

Subsequently, we identified the opportunities for entry into our business by way of an agreement for the licensing and marketing of Bucky Paper, which is a product currently under development that is produced from graphene. On December 3, 2012, we entered into and executed a non-exclusive technology license agreement for patent and trade secret technology in the field of graphene oxide or “Bucky” paper with Cheap Tubes, Inc. Pursuant to the terms of the agreement, we acquired the rights to further develop, commercialize, market and distribute certain proprietary inventions and know-how related to the manufacturing processes for graphene products, including Bucky Paper. We agreed to fund commercial development activities and we received a license for the rights on a non-exclusive basis for marketing products and/or services. Up to June 30, 2015 and 2014, our company has funded a total of $335,000 in respect of this commercial development project, and Cheap Tubes has set up a production line and research and development facility in its new facility in Vermont. During the period ended September 30, 2014, Cheap Tubes provided our company with a notice claiming that additional payments are due under the terms of the agreement with them. Our company has responded advising that all payments required pursuant to the terms of the agreement have been paid in full. As at June 30, 2015, our company has not made any further expenditures on this project and is presently making a determination on the next steps in order to conclude this commercial development project. We hope to bring this development project to completion during our current fiscal year ended June 30, 2016.

During the month of January 2013, our company undertook the staking of certain mining claims in the Province of Quebec, Canada. In order to hold the property in the Province of Quebec, either a principal of our company or our company must have a prospector’s license. The prospector’s license was granted to our director, Rick Walchuk on February 2, 2013 and the mineral concession is held in the name of Mr. Walchuk under a trust agreement with our company. The mining claims are in an active area of graphite exploration and production. We had intended to undertake an exploration program on the claims during the year ended June 30, 2014, but were delayed in getting a proposal underway by a qualified geologist. Additionally, we focused the majority of our efforts funding the Bucky Paper commercialization project, as well as a research project for 3D printing, as described below. During fiscal 2015, our company was unable to pursue the proposed exploration plan for a total required expenditure of $120,000 on these claims by mid-January 2015 to keep them in good standing. The claims expired prior to January 31, 2015. As a result, our company determined to pursue additional claims in order to continue with its exploration efforts for graphite.

On October 24, 2014, our company entered into a consulting services agreement with Geomap Exploration Inc. (“Geomap”) whereunder Geomap was retained as the prospector to acquire further graphite exploration property(ies). Our company transferred all staked claims to its newly incorporated and wholly owned Quebec subsidiary. The 84 staked mineral claims known as the Lac Rouge Graphite Property is one contiguous block totaling 4,982 hectares (12,311 acres) of land near the town of Mont-Laurier in southern Québec. The mineral claims are 100% owned by our company with no royalty or net smelter return requirements and will remain in good standing until the close of 2016. During the month of November 2015 the Company undertook Phase 1 Exploration work on these claims including: ground prospecting, limited geological mapping of outcrops, and surface sampling. Mr. Afzaal Pirzada, P.Geo., of Geomap, a professional geologist with over 25 years’ experience in mineral exploration and mining was contracted for the work program.

Results of the work program were announced in January 2016. According to the report prepared by Mr. Pirzada, P.Geo, flake graphite mineralization in the range of 1-3 mm was identified on the property during fieldwork, which type of large flake graphite in its naturally occurring form is required for producing high purity, technology grade graphite commercially. The exploration work also identified graphite mineralization on adjacent grounds; therefore, the Company has staked additional prospective ground in the vicinity of the existing claims. A total of 15 new claims were staked covering an approximate area of 885 hectares (2,186 acres), and their details will be provided as soon as the claims are granted by the Quebec Ministry for Natural Resources and Mines (MRNF Quebec).

A total of 44 grab surface samples were also collected during the fieldwork. The samples were submitted to SGS Laboratories, Lakefield, Ontario, which are globally accredited laboratories for geochemistry and metallurgy.

The Company is presently reviewing data in order to determine a course of action for further exploratory work.

During the month of April, 2013, we met with representatives of the National Academy of Science of the Ukraine National Science Center – Kharkov Institute of Physics and Techniques (the “Kharkov Institute”) in regards to the establishment of a collaboration between the Kharkov Institute and our company on a project for the research of the properties of grapheme contained matter as a working material for 3D-printing and other uses. Our company and the Kharkov Institute will be working under the auspices of the Science and Technology Center in the Ukraine, which is an intergovernmental organization founded by the governments of the Ukraine, Canada, the EU and the USA which supports research and development activities for peaceful applications by Ukrainian, Georgian, Uzbekistani, Azerbaijani, and Moldovan scientists and engineers. The project requires the approval of the U.S. Department of State, Bureau of International Security and Nonproliferation Office of Cooperative Threat Reduction. On April 1, 2013, we submitted the documents to the U.S. Department of State. On October 1, 2013, the project was granted live status and our company can now commence the research project. The project is called P600 and is a collaboration between our company and the Kharkov Institute.

The project is designed to research the properties of nanocarbon contained matter as a working material for 3D printing. The project team will consist of 8 scientists and doctors with experience in the fields of nanotechnology, 3D printing, solid state physics, physical materials and thermal physics.

The mandate of the project is to research the properties of materials containing nanostructured carbon, primarily graphene, to research the existing and prospective methods of 3D printing and analyze the possibility of applying the techniques to create 3D objects using nanocarbon material. During the year ended June 30, 2014, we paid a total of $44,832 as project costs in order to fully fund the program as required. This project experienced some delays in fiscal 2015 due to political issues in the Ukraine and our company has entered into two extensions in order to allow the project to proceed to completion, with no additional cost. While the Company expected the final report and recommendations from the collaboration partner no later than December 31, 2015, as at the date hereof, we have not yet received the report.

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Liquidity and Capital Resources

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, 2015, along with the accompanying notes.

Cash on hand at December 31, 2015 was $12,800 as compared to $114,605 as of June 30, 2015. We had a total of $5,042 in prepaid expenses on December 31, 2015 and $336,494 on June 30, 2015. Prepaid expenses at June 30, 2015 relate to amounts totaling $335,000 paid against the licensing agreement with Cheap Tubes, which amount has been fully impaired in the current period due to management’s current assessment as to collectability in the current fiscal year, and the balance are prepaid expenses related to general and administration costs in the amount of $1,494 related to deposits on account with a news dissemination service. In the current six months ended December 31, 2015, the prepaid expense totaling $5,042 relates to deposits for Edgar services and consulting services rendered subsequent to the period end.

Our total current liabilities at December 31, 2015 were $31,810 as compared to $48,876 as at June 30, 2015. The total long term liabilities at December 31, 2015 were $546,059 as compared to $574,673 at June 30, 2015.

During our fiscal years ended June 30, 2015 and 2014, our company was able to use funds raised for operations by way of private placements completed in fiscal 2014 to meet our operational overhead and certain of our planned expenditures. During the period ended March 31, 2014, we completed private placements in the amount of $600,000 (net $533,000) and $300,000 (net $266,500), which funds have been sufficient to meet our expenditures to the fiscal year ended June 30, 2015. Presently our company will need to raise additional funds in order to meet all of our current commitments including $105,000 which remains to be expended in exploration of our mineral claims. We commenced exploration on these mineral claims during the quarter ended December 31, 2015 and are presently analyzing results. Additionally, while the funding for the development of the 3-D project has been completed, upon receipt of the findings report, we may require additional funds should we chose to continue development or proceed to file patents. The amount of funds required for this, cannot be estimated at this time. Our ongoing project development with Cheap Tubes has been on hold for the past fiscal year and we are presently reviewing options for recovery of the funds advanced to date, and/or alternative plans to move this development project to conclusion. Should we enter into additional agreements regarding this project, we may require additional capital expenditure for this project. The additional cash requirements for the Cheap Tubes project, if required, cannot be estimated at this time. Operating costs for our 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 $150,000. In total we anticipate we need a minimum of $255,000 in order to undertake all our currently planned operations including general overhead for the next twelve months. We have warrants outstanding pursuant to our financings, however, there can be no assurance that our company will raise any funds from warrant exercises and our company currently has no other financing agreements under which it can raise funding. Any additional funds raised above the amounts required will be used for our company to seek acquisitions of technologies related to our planned business or to further patents, if warranted, with respect to our cooperation agreement in the Ukraine. There is no guarantee we will be successful in raising the required funds.

Working Capital

	At December 31, 2015		At June 30, 2015
Current assets	$	17,842	$	451,099
Current liabilities		31,810		48,876
Working capital	$	23,968	$	402,223

We anticipate generating losses and, therefore, may be unable to continue operations further in the future.

Cash Flows

	Six Months Ended
	December 31,
	2015			2014
Net cash provided by (used in) operating activities	$	(101,805	)	$	(137,351	)
Net cash provided by (used in) investing activities		Nil			Nil
Net cash provided by (used in) financing activities		Nil			Nil
Net increase (decrease) in cash during period	$	(101,805)		$	(137,351	)

Operating Activities

Net cash used in operating activities during the six months ended December 31, 2015 was $101,805, a decrease of approximately 6% from the $137,351 net cash outflow during the six months ended December 31, 2014. The decrease in cash outflow is related to a reduction in general operating expenses period over period.

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Investing Activities

Our company had no investing activities during the six months ended December 31, 2015 and 2014.

Financing Activities

Our company had no financing activities during the six months ended December 31, 2015 and 2014.

We anticipate that we will have to raise funds under new equity or debt financing arrangements as currently have no other financing agreements under which we can raise funding. There can be no assurance that such funding will be available and if available it will be on favorable terms. You may face substantial dilution in your shareholdings on any ongoing financings which our company may negotiate. Should we not be able to raise additional funding if and when required, we may have to delay or terminate our ongoing technology development. At this time, we cannot state with any certainty that it will be able to raise sufficient funding to continue with all of our intended projects.

Results of Operations

We have not generated any revenues during the three and six months ended December 31, 2015 and December 31, 2014.

Three Month Period Ended December 31, 2015 Compared to Three Month Period Ended December 31, 2014

We have reported a net loss of $373,073 for the three months ended December 31, 2015 as compared to a net loss of $85,170 for the same period ended December 31, 2014 and operating losses of $379,189 for the three months ended December 31, 2015 as compared to operating losses of $80,735 for the three months ended December 31, 2014.

There was significant increase in our operational losses in the current period due to the fact that the Company impaired an unrealized royalty interest in the amount of $335,000 during the current quarter. This increase was offset by reductions to management fees from $26,250 (2014) to $15,000, and office and general expenses from $14,774 (2014) to $3,014. Additionally there was a slight reduction to professional fees incurred period over period. Further our expenditures on mineral exploration period over period were reduced from $25,648 (2014) to $16,685 in the current three month period ended December 31, 2015. To further offset costs, the Company recorded a gain of $6,116 as a result of changes in the fair value of our warrant liabilities as opposed to a loss of $4,435 in the prior comparative period.

Basic and diluted losses per share for the respective three month periods ended December 31, 2015 and December 31, 2014 was ($0.00).

The following table summarizes key items of comparison and their related increase (decrease) for the three month periods ended December 31, 2015 and 2014:

	Three Months Ended December 31, 2015 $			Three Months Ended December 31, 2014 $
Revenues		Nil			Nil

Exploration expenses		16,685			25,648
Unrealized royalty interest		335,000			-
Office and General		3,014			14,774
Management Fees		15,000			26,250
Consulting Fees		5,231			7,522
Professional Fees		4,259			6,541
Change in fair value of warranty liability		(6,116	)		4,435
Net loss		373,073			85,170

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Six Month Period Ended December 31, 2015 Compared to Six Month Period Ended December 31, 2014

We have reported a net loss of $387,577 for the six months ended December 31, 2015 as compared to a net loss of $152,587 for the same period ended December 31, 2014 and operating losses of $416,191 for the six months ended December 31, 2015 as compared to operating losses of $145,090 for the six months ended December 31, 2014.

There was significant increase in our operational losses in the current period due to the fact that the Company impaired an unrealized royalty interest in the amount of $335,000 during the current period. This increase was offset by reduction to management fees from $63,750 (2014) to $30,000, consulting fees from $20,236 (2014) to $11,229 and office and general expenses from $16,814 (2014) to $8,081. Additionally there was a slight reduction to professional fees period over period. Further our expenditures on mineral exploration period over period were reduced from $25,648 (2014) to $16,685 in the current six month period ended December 31, 2015.

To further offset costs, the Company recorded a substantive gain of $28,614 as a result of changes in the fair value of our warrant liabilities as opposed to a loss of $7,497 in the prior comparative period.

Basic and diluted losses per share for the respective six month periods ended December 31, 2015 and December 31, 2014 was ($0.00).

The following table summarizes key items of comparison and their related increase (decrease) for the six month periods ended December 31, 2015 and 2014:

	Six Months Ended December 31, 2015 $			Six Months Ended December 31, 2014 $
Revenues		Nil			Nil

Exploration expenses		16,685			25,648
Unrealized royalty interest		335,000			-
Office and General		8,081			16,814
Management Fees		30,000			63,750
Consulting Fees		11,229			20,236
Professional Fees		15,196			18,642
Change in fair value of warranty liability		(28,614	)		7,497
Net loss		387,577			152,587

Off-Balance Sheet Arrangements

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

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Critical Accounting Policies and Estimates

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the 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. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. Our significant accounting policies are more fully discussed in the Notes to our Financial Statements, included herein.

Warrants

Net Loss per Share

Our company had the following potential common stock equivalents at December 31, 2015:

Warrants

4,012,500

Since our company reflected a net loss in in six months ended December 31, 2015 and 2014, respectively, the effect of considering any common stock equivalents, if outstanding, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented.

Fair Value of Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2015 and 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

As set forth in the Statement of Financial Accounting Standard No. 820-10-35-37 Fair Value in Financial Instruments (previously and herein referenced as “157”) to increase consistency, a fair value hierarchy was developed to rank the reliability of inputs that reflect assumptions, used as a basis for determining fair value. FAS 157 emphasizes that valuation techniques (income, market, and cost) used to measure the fair value of an asset or liability should maximize the use of observable inputs, that is, inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. The FAS 157 accounting standard requires companies use actual market data, when available or models, when unavailable. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available, except when it might not represent fair value at the measurement date. When using models, FAS 157 provides guidance on appropriate valuation techniques and addresses the inherent valuation issue of risk. A fair value measurement should include an adjustment for risk if market participants would include one in pricing the related asset or liability, even if the adjustment is difficult to determine.

We analyzed the derivative financial instruments, in accordance with EITF 07-05 and FAS 133. EITF 07-5 is effective for fiscal years beginning after December 15, 2009, and interim periods within those fiscal years. It should be applied to outstanding instruments as of the beginning of the fiscal year in which it is adopted. Any adjustment would be recognized in the opening balance of retained earnings. The objective of EITF 07-5 is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception under Paragraph 11(a) of FAS 133 which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of EITF 00-19 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A nonderivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. The EITF reached a consensus that would establish a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions.

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Derivative financial instruments should be recorded as liabilities in the consolidated balance sheet and measured at fair value. For purposes of this engagement and report, we utilized fair value as the basis for formulating our opinion which has been defined by the Financial Accounting Standards Board (“FASB”) as “the amount for which an asset (or liability) could be exchanged in a current transaction between knowledgeable, unrelated willing parties when neither party is acting under compulsion”. The FASB has provided guidance that its definition of fair value is consistent with the definition of fair market value in IRS Rev. Rule 59-60. In determining the fair value of the derivatives we assumed that our company’s business would be conducted as a going concern. These derivative liabilities will need to be marked-to-market each quarter with the change in fair value recorded in the income statement. The FASB and IRS have provided guidance that its definition of fair value is consistent with the definition of fair market value in IRS Rev. Rule 59-60. Our opinion of Fair Value relied on a “value in use” or “going concern” premise. To properly apply this fair value standard, we gave consideration to the Holder’s intentions regarding whether or not the Securities purchased were to be held, sold, or abandoned. Our analysis also reflects assumptions that would be made by market participants if these market participants were to buy or sell each identified asset on an individual basis.

The Warrants issued with debt contain derivatives and require accounting under FAS 133 until exercised or expired. The derivative liability is marked to market each subsequent reporting period.

The following table summarizes the components of the derivate liabilities:

Warrant liability:	December 31, 2015		June 30, 2015
3,750,000 common stock purchase agreement dated March 14, 2014		552,175		574,673
	$	552,175	$	574,673

*On March 14, 2014, the 3 subscribers, who were subscribers in an offering undertaken by our company on September 9, 2013, along with 2 subscribers that did not elect to participate in this offering, executed a waiver and consent in regard to their rights under the September 9, 2013 offering (the “Original SPA”), whereby they waived the rights to receive any additional shares of common stock under the Original SPA agreements and our company and the 5 investors agreed to a re-pricing of the warrants issued under the Original SPA from an exercise price of $0.30 per share to $0.0724 per share and that such reduction of the Exercise Price was deemed a reduction in connection with a Dilutive Issuance (as defined in the Warrants) and the number of Warrant Shares that may be purchased upon exercise of the Warrants increased. On March 14, 2014 through March 21, 2014, our company received notices and executed cashless exercise from the subscribers under the Original SPA.

The following table summarizes the number of common shares indexed to the derivative financial instruments as of December 31, 2015 and June 30, 2015

	Warrant Derivatives

3,750,000 common stock purchase agreement dated March 14, 2014		4,012,500
		4,012,500

The following table summarizes the effects on our income (expense) associated with changes in the fair values of our derivative financial instruments by type of financing:

	Six Months ended
	December 31,
		2015		2014
3,750,000 common stock purchase agreement dated March 14, 2014		28,614		(7,497	)
	$	28,614	$	(7,497	)

Recent Accounting Pronouncements

There are several new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by our company. As of December 31, 2015, none of these pronouncements is expected to have a material effect on the financial position, results of operations or cash flows of our company.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company”, we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report. Our company is in the process of adopting specific internal control mechanisms to ensure effectiveness as we grow. We have engaged an outside consultant to assist in adopting new measures to improve upon our internal controls. Future controls, among other things, will include more checks and balances and communication strategies between the management and the board, once we are able to expand our board of directors to include additional members, to ensure efficient and effective oversight over company activities as well as more stringent accounting policies to track and update our financial reporting.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.

ITEM 1A. RISK FACTORS

A smaller reporting company is not required to provide the information required by this Item.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit Number	Description
(3)	Articles of Incorporation; Bylaws
3.1	Articles of Incorporation	Incorporated by reference to the Registration Statement on Form S-1 filed on August 4, 2010.
3.1 (i)	Certificate of Amendment to the Articles of Incorporation as filed with the State of Nevada on July 12, 2012	Incorporated by reference to the Current Report on Form 8-K filed on July 13, 2012.
3.2	Bylaws	Incorporated by reference to the Registration Statement on Form S-1 filed on August 4, 2010.
(10)	Material Contracts
10.1	Patent and Technology License Agreement between our company and Cheap Tubes, Inc. dated December 3, 2012	Incorporated by reference to our Form 8-K filed with the SEC on December 18, 2012.
10.2	Schedule 2 to the Patent and Technology License Agreement between our company and Cheap Tubes, Inc.	Incorporated by reference to our Form 8-K/A filed with the SEC on February 5, 2013.
10.3	Consulting Agreement between our company and Con Anast	Incorporated by reference to our Form 8-K filed with the SEC on December 17, 2013
10.4	P-600 Partner Project Agreement dated October 1, 2013	Incorporated by reference to our Form 10-Q filed with the SEC on February 13, 2014
10.5	P-600 Project Intellectual Property Agreement executed October 17, 2013	Incorporated by reference to our Form 10-Q filed with the SEC on February 13, 2014
10.6	Consulting Services Agreement with Geomap Exploration Inc. dated October 24, 2014	Incorporated by reference to our Form 10-Q filed with the SEC on February 23, 2015
(21)	Subsidiaries of the Registrant
21.1	9311-2571 Québec Inc., a Quebec, Canada corporation (wholly owned)
(31)	Rule 13a-14(a)/15d-14(a) Certifications
31.1	Certification of Principal Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed Herewith
31.2	Certification of Principal Financial Officer and Principal Accounting Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed Herewith
(32)	Section 1350 Certifications
32.1	Certification of Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed Herewith
101	Interactive Data File (Form 10-Q for the fiscal year ended December 31, 2015 furnished in XBRL).
101.INS	XBRL Instance Document	Filed Herewith
101.SCH	XBRL Taxonomy Extension Schema	Filed Herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	Filed Herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase	Filed Herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase	Filed Herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	Filed Herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

		AMERICAN GRAPHITE TECHNOLOGIES INC.

Date:	February 16, 2016	By:	/s/ Con Evan Anast
		Name:	Con Evan Anast
		Title:	President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

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AMERICAN GRAPHITE TECHNOLOGIES INC. 10-Q