UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-K



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



For the fiscal year ended May 31, 2012



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



For the transition period from _______ to _______



Commission file number: 000-53284



National Graphite Corp.

(formerly Lucky Boy Silver Corp.)

(Exact name of registrant as specified in its
charter)



|Nevada                                                                 | 26-0665441                          
|---------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of
        incorporation or organization) | (I.R.S. Employer Identification No.)
|                                                                       |                                     
|5466 Canvasback Rd.,                                                   |                                     
|Blaine, Washington                                                     | 98230                               
|(Address of principal executive offices)                               | (Zip Code)                          



Registrant’s telephone number, including
area code: (702) 839-4029



Securities registered under Section 12(b) of the Act:



|Title of each class |  | Name of each exchange on which registered
|------------------- |  | -----------------------------------------
|None                |  | N/A                                      



Securities registered pursuant to Section 12(g)
of the Act:



|Common Stock    
|----------------
|(Title of class)



Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined by Rule 405 of the Securities Act

Yes [  ] No [X]



Indicate by check mark if the registrant is not required to file
reports pursuant to Rule 13 or Section 15(d) of the Act

Yes [  ] No [X]



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 Rule 405
of Regulation S-T (§220.405 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 [  ] Not applicable.



Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge,
in definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form
10-K. [X]



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 [  ] (Do not check if a smaller reporting company) | Smaller reporting company [X]



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

Yes [  ] No [X]



State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked
price of such common equity, as of the last business day of the registrant’s most recently completed third fiscal quarter.



74,653,215 common shares at $0.65 on February 29,
2012, which is the quotation posted on the Over-the-Counter Bulletin Board (“OTC-BB” under the symbol
“NGRC”).



(APPLICABLE ONLY TO CORPORATE REGISTRANTS)



Indicate the number of shares outstanding of each
of the registrant’s classes of common stock, as of the latest practicable date 75,669,881 common shares
issued and outstanding as of August 27, 2012.



DOCUMENTS INCORPORATED BY REFERENCE



List hereunder the following documents if incorporated by reference
and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security
holders; (2) Any proxy or information statement and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities
Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980). Not applicable.


















TABLE OF CONTENTS



|CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS                                                            | 3 
|-------------------------------------------------------------------------------------------------------------------- | --
|                                                                                                                     |   
|GLOSSARY OF EXPLORATION TERMS                                                                                        | 4 
|                                                                                                                     |   
|PART I                                                                                                               | 8 
|                                                                                                                     |   
|Item 1. Business                                                                                                     | 8 
|                                                                                                                     |   
|Item 1A Risk Factors                                                                                                 | 12
|                                                                                                                     |   
|Item 1B. Unresolved Staff Comments                                                                                   | 17
|                                                                                                                     |   
|Item 2 Properties                                                                                                    | 17
|                                                                                                                     |   
|Item 3. Legal Proceedings                                                                                            | 31
|                                                                                                                     |   
|Item 4. (Removed and Reserved)                                                                                       | 31
|                                                                                                                     |   
|PART II                                                                                                              | 31
|                                                                                                                     |   
|Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 31
|                                                                                                                     |   
|Item 6. Selected Financial Data                                                                                      | 32
|                                                                                                                     |   
|Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations                        | 32
|                                                                                                                     |   
|Item 7A. Quantitative and Qualitative Disclosures About Market Risk                                                  | 36
|                                                                                                                     |   
|Item 8. Financial Statements and Supplementary Data                                                                  | 36
|                                                                                                                     |   
|Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                         | 39
|                                                                                                                     |   
|Item 9A(T). Controls and Procedures                                                                                  | 39
|                                                                                                                     |   
|Item 9B. Other Information                                                                                           | 40
|                                                                                                                     |   
|PART III                                                                                                             | 41
|                                                                                                                     |   
|Item 10. Directors, Executive Officers and Corporate Governance                                                      | 41
|                                                                                                                     |   
|Item 11. Executive Compensation                                                                                      | 44
|                                                                                                                     |   
|Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters              | 46
|                                                                                                                     |   
|Item 13. Certain Relationships and Related Transactions, and Director Independence                                   | 47
|                                                                                                                     |   
|Item 14. Principal Accounting Fees and Services                                                                      | 47
|                                                                                                                     |   
|PART IV                                                                                                              | 48
|                                                                                                                     |   
|Item 15. Exhibits, Financial Statement Schedules                                                                     | 48
|                                                                                                                     |   
|SIGNATURES                                                                                                           | 49



2







CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS



This annual report contains forward-looking statements. These statements
relate to future events or our future financial performance. Forward-looking statements are often identified by words like: “believe”,
“expect”, “estimate”, “anticipate”, “intend”, “project” and similar
expressions or words which, by their nature, refer to future events. In some cases, you can also identify forward-looking statements
by terminology such as “may”, “should”, “plan”, “predict”, “potential”
or “continue” or the negative of these terms or other comparable terminology. Examples of forward-looking statements
made in this annual report on Form 10-K include statements about:



|● |  | Our future exploration programs and results,
|- |  | --------------------------------------------



|● |  | Our future capital expenditures, and
|- |  | ------------------------------------



|● |  | Our future investments in and acquisitions of mineral resource properties.
|- |  | --------------------------------------------------------------------------



These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including



|● |  | risks and uncertainties relating to the interpretation of sampling results, the geology,
grade and continuity of mineral deposits;
|- |  | ----------------------------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

|● |  | risks and uncertainties that results of initial sampling and mapping will not be consistent
with our expectations;
|- |  | ------------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

|● |  | mining and development risks, including risks related to accidents, equipment breakdowns,
labor disputes or other unanticipated difficulties with or interruptions in production;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

|● |  | the potential for delays in exploration activities;
|- |  | ---------------------------------------------------

| |  | 
| |  | 

|● |  | risks related to the inherent uncertainty of cost estimates and the potential for
unexpected costs and expenses;
|- |  | ----------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

|● |  | risks related to commodity price fluctuations;
|- |  | ----------------------------------------------

| |  | 
| |  | 

|● |  | the uncertainty of profitability based upon our limited history;
|- |  | ----------------------------------------------------------------

| |  | 
| |  | 

|● |  | risks related to failure to obtain adequate financing on a timely basis and on acceptable
terms for our planned exploration project;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

|● |  | risks related to environmental regulation and liability;
|- |  | --------------------------------------------------------

| |  | 
| |  | 

|● |  | risks that the amounts reserved or allocated for environmental compliance, reclamation,
post-closure control measures, monitoring and on-going maintenance may not be sufficient to cover such costs;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

|● |  | risks related to tax assessments;
|- |  | ---------------------------------

| |  | 
| |  | 

|● |  | political and regulatory risks associated with mining development and exploration;
and
|- |  | --------------------------------------------------------------------------------------

| |  | 
| |  | 

|● |  | the risks in the section entitled “Risk Factors”,
|- |  | -------------------------------------------------



any of which may cause our company’s or our industry's actual
results, levels of activity, performance or achievements to be materially different from any future results, levels of activity,
performance or achievements 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 achievements. 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.



Our financial statements are stated in United States Dollars (US$)
and are prepared in accordance with United States Generally Accepted Accounting Principles. References to common shares refer to
common shares in our capital stock.



As used in this annual report, the terms “we”, “us”,
“our” and “Lucky Boy” mean National Graphite Corp. unless otherwise indicated.



3







GLOSSARY
OF EXPLORATION TERMS



The following terms, when used in this report, have the respective
meanings specified below:



Amortization - The gradual and systematic writing off of
a balance in an account over an appropriate period.



Amphibolite - A gneiss or schist largely made up of amphibole
and plagioclase minerals.



Anomaly - Any departure from the norm which may indicate
the presence of mineralization in the underlying bedrock.



Assay - A chemical test performed on a sample of ores or
minerals to determine the amount of valuable metals contained.



Assessment work - The amount of work, specified by mining
law, that must be performed each year in order to retain legal control of mining claims.



Base metal - Any non-precious metal (e.g. copper, lead, zinc,
nickel, etc.).



Bedding - The arrangement of sedimentary rocks in layers.



Biotite - A platy magnesium-iron mica, common in igneous
rocks.



Chalcopyrite - A sulphide mineral of copper and iron; the
most important ore mineral of copper.



Chip sample - A method of sampling a rock exposure whereby
a regular series of small chips of rock is broken off along a line across the face.



Claim - A portion of land held either by a prospector or
a mining company. In Canada, the common size is 1,320 ft. (about 400 m) square, or 40 acres (about 16 ha).



Clay - A fine-grained material composed of hydrous aluminum
silicates.



Cleavage - The tendency of a mineral to split along crystallographic
planes.



Contact - A geological term used to describe the line or
plane along which two different rock formations meet.



Contact metamorphism - Metamorphism of country rocks adjacent
to an intrusion, caused by heat from the intrusion.



Country rock - Loosely used to describe the general mass
of rock adjacent to an orebody. Also known as the host rock.



Crosscut - A horizontal opening driven from a shaft and (or
near) right angles to the strike of a vein or other orebody.



Development - Underground work carried out for the purpose
of opening up a mineral deposit. Includes shaft sinking, crosscutting, drifting and raising.



Diorite - An intrusive igneous rock composed chiefly of sodic
plagioclase, hornblende, biotite or pyroxene.



Drift - A horizontal underground opening that follows along
the length of a vein or rock formation as opposed to a crosscut which crosses the rock formation.



4







Exploration - Prospecting, sampling, mapping, diamond drilling
and other work involved in searching for ore.



Face - The end of a drift, crosscut or stope in which work
is taking place.



Felsic - Term used to describe light-colored rocks containing
feldspar, feldspathoids and silica.



Fracture - A break in the rock, the opening of which allows
mineral-bearing solutions to enter. A "cross-fracture" is a minor break extending at more-or-less right angles to the
direction of the principal fractures.



Geochemistry- The study of the chemical properties of rocks.



Geology- The science concerned with the study of the rocks
which compose the Earth.



Gneiss - A layered or banded crystalline metamorphic rock,
the grains of which are aligned or elongated into a roughly parallel arrangement.



Greenstone belt - An area underlain by metamorphosed volcanic
and sedimentary rocks, usually in a continental shield.



Host rock - The rock surrounding an ore deposit.



Igneous rocks - Rocks formed by the solidification of molten
material from far below the earth's surface.



Intrusive - A body of igneous rock formed by the consolidation
of magma intruded into other rocks, in contrast to lavas, which are extruded upon the surface.



Lava - A general name for the molten rock ejected by volcanoes.



Lens - Generally used to describe a body of ore that is thick
in the middle and tapers towards the ends.



Limestone - A bedded, sedimentary deposit consisting chiefly
of calcium carbonate.



Lode - A mineral deposit in solid rock.



Mafic - Igneous rocks composed mostly of dark, iron- and
magnesium-rich minerals.



Magma- The molten material deep in the Earth from which
rocks are formed.



Magnetic survey - A geophysical survey that measures the
intensity of the Earth's magnetic field.



Metamorphic rocks - Rocks which have undergone a change in
texture or composition as the result of heat and/or pressure.



Metamorphism - The process by which the form or structure
of rocks is changed by heat and pressure.



Mineral - A naturally occurring homogeneous substance having
definite physical properties and chemical composition and, if formed under favorable conditions, a definite crystal form.



Net smelter return - A share of the net revenues generated
from the sale of metal produced by a mine.



Option - An agreement to purchase a property reached between
the property vendor and some other party who wishes to explore the property further.



Ore - A mixture of ore minerals and gangue from which at
least one of the metals can be extracted at a profit.



5







Orebody- A natural concentration of valuable material that
can be extracted and sold at a profit.



Outcrop - An exposure of rock or mineral deposit that can
be seen on surface, that is, not covered by soil or water.



Plug - A common name for a small offshoot from a large body
of molten rock.



Plutonic - Refers to rocks of igneous origin that have come
from great depth.



Pyrite - A yellow iron sulphide mineral, normally of little
value. It is sometimes referred to as "fool's gold".



Pyrrhotite - A bronze-colored, magnetic iron sulphide mineral.



Quartz - Common rock-forming mineral consisting of silicon
and oxygen.



Quartzite - A metamorphic rock formed by the transformation
of a sandstone by heat and pressure.



Reclamation - The restoration of a site after mining or exploration
activity is completed.



Resource - The calculated amount of material in a mineral
deposit, based on limited drill information.



Rock - Any natural combination of minerals; part of the earth's
crust.



Royalty - An amount of money paid at regular intervals by
the lessee or operator of an exploration or mining property to the owner of the ground. Generally based on a certain amount per
ton or a percentage of the total production or profits. Also, the fee paid for the right to use a patented process.



Sample - A small portion of rock or a mineral deposit taken
so that the metal content can be determined by assaying.



Sampling - Selecting a fractional but representative part
of a mineral deposit for analysis.



Sandstone - A sedimentary rock consisting of grains of sand
cemented together.



Schist - A foliated metamorphic rock the grains of which
have a roughly parallel arrangement; generally developed by shearing.



Sedimentary rocks - Secondary rocks formed from material
derived from other rocks and laid down under water. Examples are limestone, shale and sandstone.



Shaft- A vertical or inclined excavation in rock for the
purpose of providing access to an orebody. Usually equipped with a hoist at the top, which lowers and raises a conveyance for handling
workers and materials.



Shale - Sedimentary rock formed by the consolidation of mud
or silt.



Shear or shearing - The deformation of rocks by lateral movement
along innumerable parallel planes, generally resulting from pressure and producing such metamorphic structures as cleavage and
schistosity.



Shear zone - A zone in which shearing has occurred on a large
scale.



Silica- Silicon dioxide. Quartz is a common example.



Siliceous- A rock containing an abundance of quartz.



6







Sill - An intrusive sheet of igneous rock of roughly uniform
thickness that has been forced between the bedding planes of existing rock.



Silt - Muddy deposits of fine sediment usually found on the
bottoms of lakes.



Spot price - Current delivery price of a commodity traded
in the spot market.



Stope - An excavation in a mine from which ore is, or has
been, extracted.



Strike - The direction, or bearing from true north, of a
vein or rock formation measure



on a horizontal surface.



Sulphide - A compound of sulphur and some other element.



Trench- A long, narrow excavation dug through overburden,
or blasted out of rock, to expose a vein or ore structure.



Tuff - Rock composed of fine volcanic ash.



Vein - A fissure, fault or crack in a rock filled by minerals
that have travelled upwards from some deep source.



Volcanic
rocks- Igneous rocks formed from magma that has flowed out or has been violently ejected from a volcano.



Zone - An area of distinct mineralization.



7







PART
I



Item 1. Business.



Overview



We were incorporated in the State of Wyoming
on October 19, 2006, as Sierra Ventures, Inc. and established a fiscal year end of May 31. Our statutory registered agent's office
is located at 1620 Central Avenue, Suite 202, Cheyenne, Wyoming 82001 and our business office is located at 5466 Canvasback Rd.,
Blaine, Washington 98230. Our telephone number is (702) 839-4029. On February 5, 2010 we filed an Amendment to Articles with the
Wyoming Secretary of State and changed our name from “Sierra Ventures Inc.” to “Lucky Boy Silver Corp.”
On May 9, 2012 we changed the name of our Company to National Graphite Corp. We changed the name of our company to better reflect
the direction and business of our company.



On March 22, 2011, the
corporation converted from a Wyoming corporation to a Nevada corporation pursuant to Wyoming Statutes Title 17, ch. 16,
Sect.(s) 820, 821 and 1114 and Nevada Revised Statutes 92A.205. This conversion did not alter the number of authorized
shares, or the number of issued and outstanding shares, of the corporation. The voting and other rights of the common and
preferred shares of the company’s capital stock remain substantially similar under Nevada law. The powers of the
company’s officers, directors and shareholders also remain substantially the same. Our authorized capital stock
continues to consist of 499,000,000 shares of common stock, par value $0.001 per share and 1,000,000 shares of preferred
stock, par value $0.001 per share. Our statutory registered agent's office is located at 701 N. Green Valley Pkwy, Ste
200-238, Henderson, NV 89074. Our telephone number is (702) 839-4029.



We are a start-up, exploration-stage company engaged in the search
for gold, silver, graphite and related minerals. Our mineral properties are without known reserves and our proposed program is
explanatory in nature. There is no assurance that commercially viable mineral deposits exist on our mineral properties. Further
exploration and/or drilling will be required before a final evaluation as to the economic and legal feasibility of our projects
is determined.



Effective April 6, 2010, we conducted a 15:1 forward stock split
of our common stock. The split was approved by FINRA for taking effect on the OTC-BB at the open of business on March 31, 2010.
The transfer agent effected the forward split on their records as of April 6, 2010. Our statements of stockholder’s equity
have been retroactively restated to reflect the split.



Our Current Business – Mineral Exploration



On March 22, 2007, as amended on May 15, 2009, we optioned a 25
percent interest in a gold exploration property referred to as the Zhangjiafan Mining Property located in Jiangxi Province, People’s
Republic of China, 13 kilometres northwest of Dexing City which is approximately 8 hours by aircraft and ground transportation
west of Shanghai by entering into an Option to Purchase and Royalty Agreement with Jiujiang Gao Feng Mining Industry Limited Company
of Jiangxi City, Jiangxi Province, China (“Jiujiang”), the beneficial owner of the property, an arms-length Chinese
corporation, to acquire an interest in the property by making certain expenditures and carrying out exploration work. Work commenced
on the phase I exploration program on our optioned Zhangjiafan mineral property on April 27 and concluded on June 04, 2009. Our
portion of the phase I geological exploration program on the property cost $30,000 (paid) (25% of the totally budgeted cost of
$120,000) which was a reflection of local costs for the specified type of work. Costs for phase I were made up of wages, fees,
geological and geochemical supplies, assaying, equipment, diamond drilling and costs of operation. At the completion of the field
work on this property, management has determined that further expenditures or issuance of stock for this property is not in the
best interest of the Company and the project has been abandoned.



On October 11, 2007, a registration statement relating to our initial
public offering of common stock was filed with the SEC. A total of 2,900,000 shares of common stock were sold to the public for
$0.05 per share (consisting of 2,000,000 sold by us for gross proceeds of $100,000 and 900,000 shares sold by the selling stockholders)
prior to the declaration of an effective date of the registration statement under our mistaken assumption that the registration
statement had become effective through the passage of time after its filing. Selling shares prior to the establishment of an effective
date can result in potential violations of federal and state securities laws. As a result, these stock issuances and re-sales may
have violated the Securities Act of 1933. Rescission offers for such potential violations are commonly made by companies in these
situations and the filing of a registration statement is a normal part of the rescission offer process. We have previously disclosed
in our regulatory filings that all of the subscribers had been informed of this situation. As a result, we were prepared to refund
part or all associated monies and to cancel part or all associated common shares that could have been tendered for rescission.



8







On February 27, 2009, we filed an S-1 rescission offering registration
statement which became effective on March 5, 2009, and which addressed federal and state securities laws compliance issues by allowing
the holders of the shares covered by the rescission offer to rescind the underlying securities transactions and sell those securities
back to us or the selling shareholders. In addition, we conducted the offering in order to be able to reduce our contingent liabilities.



The rescission offer process closed on April 24, 2009, with no shares
being submitted for rescission. When the rescission offer expired, any person who did not accept the offer received freely tradable
stock.



During the year ended May 31, 2010, the Company
issued for cash 425,000 pre-split (6,375,000 post-split) shares of its par value $0.001 common stock for $170,000.



On January 24, 2010 the Company issued 290,000 and 150,000 (10,000
pre-split) shares of the Company’s common stock to a consultant and two board members for services provided to the Company.
The shares were valued at $0.40 per share based on the recent cash sales price. The Company recorded $120,000 of expense in professional
fees.



During February 2010 the Company entered into
two lease agreements for mineral leases located in the Mineral County, Nevada. On February 8, 2010, we acquired 38 unpatented BLM
claims including those known as the Silver Summit and Silver Strike claims and two historic, silver mine leases (“AG Properties”)
known as Lucky Boy Silver Mine and the Black Butte Silver Mine. The Company issued 150,000 post-split shares of common stock for
the mining claims. These shares were valued at $0.40 per share based on the recent cash sale price.



Under these agreements the Company committed $17,500 in non-refundable
upfront lease payments, $10,000 in future payments to be made every nine months and $7,500 in future payments to be made annually
as long as the lease is in force. In a geological report compiled by Hunsaker dated May 2010, Hunsaker opined that further work
on the Lucky Boy project was not recommended while further exploration on the Black Butte project was justified. The lease for
the Lucky Boy mineral property was not renewed.



On May 25, 2011 we expanded our claims in the
Silver Strike area to 62 unpatented claims renaming them the LAG claims.



On April 20, 2012, the Company entered into an agreement with Habitants
Minerals Ltd. (“Habitants”) granting the Company the sole and exclusive right to purchase 100% right, title and interest
in and to the applications and subsequent claims to be issued by Quebec Ministry of Resources and Fauna for the following applications:



The Quebec applications cover ground referred to in reports GM19842,
GM35169, GM35267, GM19844, GM20308, GM13866, reports which report historic graphite occurrences on Lot 32 and Lot 33 Range 11 in
Low Township, Lot 1 Range 2 in Suffolk Township, Lot 9 and Lot 16 Range 3 and Lot 10 Range 9 all in Clarendon Township, Lot 46
Range 11 in Low Township, and ground in Lochaber Township covering historic mag anomalies.



APPLICATION
1186716 (29 claims)

APPLICATION
1187995 (14 claims)

APPLICATION
1187994 (12 claims)

APPLICATION
1187992 (10 claims)

65
claims approx., 60 hectares each = 3900 hectares



The consideration for the transaction was payment by the Company
to Habitants a total of Fifty Thousand United States Dollars (US$50,000.00) consisting of Twenty Five Thousand United States Dollars
($25,000.00) on the date of execution of this Agreement and Twenty Five Thousand United States Dollars ($25,000.00) upon the issuance
of the claims in the Company’s name, and the issuance of 100,000 shares of the Company’s common stock within 15 days
of the date of the closing of the transaction described in the Agreement or within 15 days of any Regulatory Approvals required
for the issuance of the shares.



9







On April 24, 2012, the Company entered into an agreement with GeoXplor
Corporation to purchase a 100% interest in and to the Chedic Graphite Property consisting of 20 Mineral Lode Claims in Township,
15 North, Range 19 East, Sections 25 & 26 Carson City, NV mining claims compromising approximately 400 acres.



The purchase price for the Property is a total of $425,000 in cash,
an issuance of 2,500,000 shares of the Company’s Restricted Common Stock, and a work commitment on the Property of up to
$1,000,000 over four years as follows:



a.) Cash Consideration: Purchaser will pay
Seller $425,000 USD in cash consideration as follows :



|i) |  | USD $50,000 upon the signing of the Agreement ( the “Effective Date” ),
|-- |  | -----------------------------------------------------------------------

|ii) |  | an additional USD $25,000 on or before 6 months from the Effective Date ,
|--- |  | -------------------------------------------------------------------------

|iii) |  | an additional USD $25,000 on or before 12 months from the Effective Date,
|---- |  | -------------------------------------------------------------------------

|iv) |  | an additional USD $50,000 on or before 18 months from the Effective Date,
|--- |  | -------------------------------------------------------------------------

|v) |  | an additional USD $75,000 on or before 24 Months from the Effective Date,
|-- |  | -------------------------------------------------------------------------

|vi) |  | an additional USD $50,000 on or before 30 months from the Effective Date,
|--- |  | -------------------------------------------------------------------------

|vii) |  | an additional USD $50,000 on or before 36 months from the Effective Date,
|---- |  | -------------------------------------------------------------------------

|viii) |  | an additional USD $50,000 on or before 42 months from the Effective Date,
|----- |  | -------------------------------------------------------------------------

|ix) |  | an additional USD $50,000 on or before 48 months from the Effective Date ( for a total
cash consideration of $425,000 on or before 48 months from and after the Effective Date. )
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



b) Stock Consideration:
(restricted common shares)



|i) |  | 500,000 shares upon the signing of the Agreement (the “Effective Date“),
|-- |  | ------------------------------------------------------------------------

|ii) |  | 500,000 shares on or before 6 months from the Effective Date,
|--- |  | -------------------------------------------------------------

|iii) |  | 500,000 shares on or before 18 months from the Effective Date,
|---- |  | --------------------------------------------------------------

|iv) |  | 500,000 shares on or before 24 months from the Effective Date,
|--- |  | --------------------------------------------------------------

|v) |  | 500,000 shares on or before 48 months from the Effective Date,
|-- |  | --------------------------------------------------------------



c) Work Commitment:



Purchaser
will provide funds for the conduct of a program of work to be undertaken by the Seller for the benefit of the Property of not
less than USD $1,000,000 over 4 years as follows:



|i) |  | $100,000 on or before 12 months from the Effective Date,
|-- |  | --------------------------------------------------------

|ii) |  | $300,000 on or before 24 months from the Effective Date,
|--- |  | --------------------------------------------------------

|iii) |  | $300,000 on or before 36 months from the Effective date ,
|---- |  | ---------------------------------------------------------

|iv) |  | $300,000 on or before 48 months from the Effective Date.
|--- |  | --------------------------------------------------------



Our Proposed Exploration Program – Plan of Operation



Our business plan is to abandon exploration of the Zhangjiafan property
and proceed with exploration on the Black Butte and Lucky Boy projects to determine if there are commercially exploitable deposits
of gold and silver, and if we decide not to proceed, to seek other mineral exploration properties.



We do not have any ores or reserves whatsoever at this time on our
optioned property or other mineral properties.



Gao Fenglin, Senior Engineer, originally recommended a two-phase
exploration program for the Zhangjiafan property to properly evaluate the potential of the property. However, management has determined
that further exploration on this property is not warranted.



During February 2010 the Company entered into two additional lease
agreements for mineral leases located in the Mineral County, Nevada, including the Black Butte and Lucky Boy projects. Under these
agreements the Company has committed $17,500 in non-refundable up-front lease payments, $10,000 in future payments to be made every
nine months and $7,500 in future payments to be made annually as long as the lease is in force. Additionally, the Company has committed
to spend a minimum of $100,000 over the first three years of the lease on exploration and property development. The Company also
has agreed to pay a total of 3% for each lease net smelter return production royalty which can be bought out for $2,000,000/ per
cent NSR ($1,000,000 per lease) with approval and consent of the lessor. If payments are in default for 30 days or the work commitment
is not completed as agreed, the lessor must vacate the property immediately and settle all accounts related to the property.



10







We retained the services of the Hunsaker Inc.,
a geological company, to assess the results of our program. In a report compiled by Hunsaker dated February 2011, Hunsaker concluded
that the Silver Strike claims warranted additional exploration whereas the Silver Summit claims did not. Our mineral properties
are currently without known reserves and our proposed programs are exploratory in nature. On May 25, 2011 we expanded our claims
in the Silver Strike area to 66 unpatented claims by staking the LAG claims.



Our business plan for the Black Butte and Lucky Boy projects is
to proceed with the initial exploration of the gold and silver properties to determine if there are commercially exploitable deposits
of gold and silver. We retained the services of the Hunsaker Inc., a geological company, to assess the results of our program.In
a geological report compiled by Hunsaker dated May 2010, Hunsaker opined that further work on the Lucky Boy project is not recommended
while further exploration on the Black Butte project is justified. We did not renew the Lucky Boy Silver Mine lease.



As per the purchase agreement
of the Nevada graphite property, the Company is committed to anexpenditure of at least $100,000 on the property over the next twelve
months.



Competition



We are a mineral resource exploration company. We compete with other
mineral resource exploration companies for financing and for the acquisition of new mineral properties. Many of the mineral resource
exploration companies with whom we compete have greater financial and technical resources than those available to us. Accordingly,
these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their
mineral properties and on development of their mineral properties. In addition, they may be able to afford more geological expertise
in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties
of greater quality and interest to prospective investors who may finance additional exploration and development. This competition
could adversely impact on our ability to achieve the financing necessary for us to conduct further exploration of our mineral properties.



We also compete with other mineral resource exploration companies
for financing from a limited number of investors that are prepared to make investments in mineral resource exploration companies.
The presence of competing mineral resource exploration companies may impact on our ability to raise additional capital in order
to fund our exploration programs if investors are of the view that investments in competitors are more attractive based on the
merit of the mineral properties under investigation and the price of the investment offered to investors. We also compete with
other mineral resource exploration companies for available resources, including, but not limited to, professional geologists, camp
staff, helicopter or float planes, mineral exploration supplies and drill rigs.



Government Regulations



Any operations at the our mineral properties will be subject to
various federal and state laws and regulations in the United States and laws and regulations in Canada which govern prospecting,
development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment,
mine safety, hazardous substances and other matters. We will be required to obtain those licenses, permits or other authorizations
currently required to conduct exploration and other programs. There are no current orders or directions relating to us or our properties
with respect to the foregoing laws and regulations. Such compliance may include feasibility studies on the surface impact of our
proposed operations, costs associated with minimizing surface impact, water treatment and protection, reclamation activities, including
rehabilitation of various sites, on-going efforts at alleviating the mining impact on wildlife and permits or bonds as may be required
to ensure our compliance with applicable regulations. It is possible that the costs and delays associated with such compliance
could become so prohibitive that we may decide to not proceed with exploration, development, or mining operations on any of our
mineral properties. We are not presently aware of any specific material environmental constraints affecting our properties that
would preclude the economic development or operation of property in the United States and in Canada.



The U.S. Forest Service requires that mining operations on lands
subject to its regulation obtain an approved plan of operations subject to environmental impact evaluation under the National
Environmental Policy Act. Any significant modifications to the plan of operations may require the completion of an environmental
assessment or Environmental Impact Statement prior to approval. Mining companies must post a bond or other surety to guarantee
the cost of post-mining reclamation. These requirements could add significant additional cost and delays to any mining project
undertaken by us.



11







Under the U.S. Resource Conservation and Recovery Act, mining
companies may incur costs for generating, transporting, treating, storing, or disposing of hazardous waste, as well as for closure
and post-closure maintenance once they have completed mining activities on a property. Any future mining operations at our mineral
properties may produce air emissions, including fugitive dust and other air pollutants, from stationary equipment, storage facilities,
and the use of mobile sources such as trucks and heavy construction equipment which are subject to review, monitoring and/or control
requirements under the Federal Clean Air Act and state air quality laws. Permitting rules may impose limitations on our production
levels or create additional capital expenditures for pollution control in order to comply with the rules.



The U.S. Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended ("CERCLA"), imposes strict joint and several liability on parties associated with
releases or threats of releases of hazardous substances. Those liable groups include, among others, the current owners and operators
of facilities which release hazardous substances into the environment and past owners and operators of properties who owned such
properties at the time the disposal of the hazardous substances occurred. This liability could include the cost of removal or remediation
of the release and damages for injury to the surrounding property. We cannot predict the potential for future CERCLA liability
with respect to our mineral properties or surrounding areas.



Employees



At present, we have no employees. We currently operate with two
executive officers, who devote their time as required to our business operations. Our executive officers are not presently compensated
for their services and do not have an employment agreement with us.



Item 1A Risk Factors



Risks Associated with our Business



We are an exploration stage company, lack a business history
and have losses that we expect to continue into the future. If the losses continue we will have to suspend operations or cease
functioning.



We were incorporated in the State of Wyoming on October 19, 2006,
and have only started our proposed business but have not realized any revenues. We have no business history upon which an evaluation
of our future success or failure can be made. Our net loss since inception is $1,411,956.



Our ability to achieve and maintain profitability and positive cash
flow is dependent upon:



|• |  | our ability to find a profitable exploration property;
|- |  | ------------------------------------------------------

|• |  | our ability to generate revenues; and
|- |  | -------------------------------------

|• |  | our ability to reduce exploration costs.
|- |  | ----------------------------------------



Because of the speculative nature of exploration of mineral
properties, we may never discover a commercially exploitable quantity of minerals, our business may fail and investors may lose
their entire investment.



We are in the very early exploration stage and cannot guarantee
that our exploration work will be successful or that any minerals will be found or that any production of minerals will be realized.
The search for valuable minerals as a business is extremely risky. We can provide investors with no assurance that exploration
on our properties will establish that commercially exploitable reserves of minerals exist on our property. Additional potential
problems that may prevent us from discovering any reserves of minerals on our property include, but are not limited to, unanticipated
problems relating to exploration and additional costs and expenses that may exceed current estimates. If we are unable to establish
the presence of commercially exploitable reserves of minerals on our property our ability to fund future exploration activities
will be impeded, we will not be able to operate profitably and investors may lose all of their investment in our company.



12







Because of the unique difficulties and uncertainties inherent
in mineral exploration ventures, we face a high risk of business failure.



Potential investors should be aware of the difficulties normally
encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must
be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration
of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems
relating to exploration, and additional costs and expenses that may exceed current estimates. The expenditures to be made by us
in the exploration of the mineral claim may not result in the discovery of mineral deposits. Problems such as unusual or unexpected
formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the
results of our exploration do not reveal viable commercial mineralization, we may decide to abandon our claims. If this happens,
our business will likely fail.



Because of the inherent dangers involved in mineral exploration,
there is a risk that we may incur liability or damages as we conduct our business.



The search for valuable minerals involves numerous hazards. As a
result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot
insure or against which we may elect not to insure. At the present time we have no coverage to insure against these hazards. The
payment of such liabilities may have a material adverse effect on our financial position.



We have no known mineral reserves and we may not find any
gold, silver or graphite if we find gold, silver or graphite it may not be in economic quantities. If we fail to find any gold,
silver or graphite or if we are unable to find gold, silver or graphite in economic quantities, we will have to suspend operations.



We have no known mineral reserves. Even if we find gold, silver
or graphite, it may not be of sufficient quantity so as to warrant recovery. Additionally, even if we find gold, silver or graphite
in sufficient quantity to warrant recovery it ultimately may not be recoverable. Finally, even if any gold, silver or graphite
is recoverable, we do not know that this can be done at a profit. Failure to locate gold, silver or graphite in economically recoverable
quantities will cause us to suspend operations.



The potential profitability of mineral ventures depends in
part upon factors beyond the control of our company and even if we discover and exploit mineral deposits, we may never become commercially
viable and we may be forced to cease operations.



The commercial feasibility of mineral properties is dependent upon
many factors beyond our control, including the existence and size of mineral deposits in the properties we explore, the proximity
and capacity of processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental
regulation. These factors cannot be accurately predicted and any one or a combination of these factors may result in our company
not receiving an adequate return on invested capital. These factors may have material and negative effects on our financial performance
and our ability to continue operations.



We may be adversely affected by fluctuations in ore and precious
metal prices.



The value and price of our shares of common stock, our financial
results, and our exploration, development and mining activities, if any, may be significantly adversely affected by declines in
the price of precious metals and ore. Mineral prices fluctuate widely and are affected by numerous factors beyond our control such
as interest rates, exchange rates, inflation or deflation, fluctuation in the value of the United States dollar and foreign currencies,
global and regional supply and demand, and the political and economic conditions of mineral producing countries throughout the
world.



The prices used in making resource estimates for mineral projects
are disclosed, and generally use significantly lower metal prices than daily metals prices quoted in the news media. The percentage
change in the price of a metal cannot be directly related to the estimated resource quantities, which are affected by a number
of additional factors. For example, a 10% change in price may have little impact on the estimated resource quantities, or it may
result in a significant change in the amount of resources.



13







Transportation difficulties and weather interruptions may
affect and delay proposed mining operations and impact our proposed business.



Our mineral properties are accessible by road. The climate in the
area is hot and dry in the summer but cold and subject to snow in the winter, which could at times hamper accessibility depending
on the winter season precipitation levels. As a result, our exploration plans could be delayed for several months each year.



Supplies needed for exploration may not always be available.



Competition and unforeseen limited sources of supplies needed for
our proposed exploration work could result in occasional spot shortages of supplies of certain products, equipment or materials.
There is no guarantee we will be able to obtain certain products, equipment and/or materials as and when needed, without interruption,
or on favorable terms. Such delays could affect our proposed business plans.



Management will devote only a limited amount of time to National
Graphite’s business. Failure of our management to devote a sufficient amount of time to our business plans may adversely
affect the success of our business.



Mr. Kenneth B. Liebscher
will be devoting approximately 20 hours per week to National Graphite’s business. Failure of our management to devote a sufficient
amount of time to our business plans may adversely affect the success of our business.



Management lacks formal training in mineral exploration.



Our officers and directors have no professional accreditation or
formal training in the business of exploration. With no direct training or experience in these areas our management may not be
fully aware of many of the specific requirements related to working within this industry. Decisions so made without this knowledge
may not take into account standard engineering management approaches that experienced exploration corporations commonly make. Consequently,
our business, earnings and ultimate financial success could suffer irreparable harm as a result of management’s lack of experience
in the industry. Thus, we will retain such technical experts as are required to provide professional and technical guidance.



We require substantial funds merely to determine if mineral reserves
exist on our mineral properties.



Any potential development and production of our exploration properties
depends upon the results of exploration programs and/or feasibility studies and the recommendations of duly qualified engineers
and geologists. Such programs require substantial additional funds. Any decision to further expand our plans on these exploration
properties will involve the consideration and evaluation of several significant factors including, but not limited to:



|● |  | Costs of bringing the property into production including exploration work, preparation
of production feasibility studies and construction of production facilities;
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



|● |  | Availability and costs of financing;
|- |  | ------------------------------------



|● |  | Ongoing costs of production;
|- |  | ----------------------------



|● |  | Market prices for the products to be produced;
|- |  | ----------------------------------------------



|● |  | Environmental compliance regulations and restraints; and
|- |  | --------------------------------------------------------



|● |  | Political climate and/or governmental regulation and control.
|- |  | -------------------------------------------------------------



14







Risks Associated with our Common Stock



There is no active trading market for our common stock and if
a market for our common stock does not develop, our investors will be unable to sell their shares.



Few shares of our common stock have been traded on the OTC Bulletin
Board. As a result, our stockholders may find it difficult to dispose of, or to obtain accurate quotations of the price of, shares
of our common stock. This severely limits the liquidity of shares of our common stock and has a material adverse effect on the
market price for shares of our common stock and on our ability to raise additional capital. An active public market for shares
of our common stock may not develop, or if one should develop, it may not be sustained, and as a result, investors may not be able
to resell shares of our common stock that they have purchased and may lose all of their investment.



We do not intend to pay dividends on any investment in the
shares of stock of our company.



We have never paid any cash dividends and currently do not intend
to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in
our financing plan, our funding sources may prohibit the payment of a dividend. Because we do not intend to declare dividends,
any gain on an investment in our company will need to come through an increase in the stock’s price. This may never happen
and investors may lose all of their investment in our company.



Because we can issue additional shares of common stock, purchasers
of our common stock may incur immediate dilution and may experience further dilution.



We are authorized to issue up to 499,000,000 shares of common stock,
of which 75,669,881 shares are issued and outstanding as of August 27, 2012. We have 1,000,000 preferred shares authorized of which
675,000 are issued and outstanding and held by Kenneth B. Liebscher, our President and CEO. Our board of directors has the authority
to cause us to issue additional shares of common stock, and to determine the rights, preferences and privileges of such shares,
without consent of any of our stockholders. Consequently, the stockholders may experience more dilution in their ownership of our
stock in the future.



A decline in the price of our common stock could affect our
ability to raise further working capital, it may adversely impact our ability to continue operations and we may go out of business.



A prolonged decline in the price of our common stock could result
in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because we may attempt to
acquire a significant portion of the funds we need in order to conduct our planned operations through the sale of equity securities,
a decline in the price of our common stock could be detrimental to our liquidity and our operations because the decline may cause
investors to not choose to invest in our stock. If we are unable to raise the funds we require for all our planned operations,
we may be forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan
and operations, including our ability to develop new products and continue our current operations. As a result, our business may
suffer, and not be successful and we may go out of business. We also might not be able to meet our financial obligations if we
cannot raise enough funds through the sale of our common stock and we may be forced to go out of business.



Our stock is a penny stock. Trading of our stock may be restricted
by the Securities and Exchange Commission’s penny stock regulations which may limit a stockholder’s ability to buy
and sell our stock.



Our stock is a penny stock. The Securities and Exchange Commission
has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as
defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities
are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons
other than established customers and “accredited investors”. The term “accredited investor” refers generally
to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which
provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson
in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account.
The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally
or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s
confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from
these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules
discourage investor interest in and limit the marketability of our common stock.



15







FINRA sales practice requirements may also limit a stockholder's
ability to buy and sell our stock.



In addition to the “penny stock” rules promulgated by
the Securities and Exchange Commission, the Financial Industry Regulatory Authority (FINRA) has adopted rules that require that
in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers
must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives
and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers
to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.



Risks Related to our Financial Results and Need for Additional
Financing



Our auditors’ reports contain a statement that our
net loss and limited working capital raise substantial doubt about our ability to continue as a going concern.



Our independent registered public accountants have stated in their
report, included in this annual report that our significant operating losses and working capital deficiency raise substantial doubt
about our ability to continue as a going concern. We had net losses of $375,546 and $658,714, respectively, for the fiscal years
ended May 31, 2012 and 2011. We will be required to raise substantial capital to fund our capital expenditures, working capital
and other cash requirements since our current cash assets are exhausted. We are currently searching for sources of additional funding,
including potential joint venture partners, while we continue the initial exploration phase on our mining claims. The successful
outcome of future financing activities cannot be determined at this time and there are no assurances that, if achieved, we will
have sufficient funds to execute our intended business plan or generate positive operational results.



We will need additional capital to achieve our current business
strategy and our inability to obtain additional financing will inhibit our ability to expand or even maintain our research, exploration
and development efforts.



In addition to our current accumulated deficit, we expect to incur
additional losses in the foreseeable future. Until we are able to determine if there are mineral deposits available for extraction
on our properties, we are unlikely to be profitable. Consequently, we will require substantial additional capital to continue our
exploration and development activities. There is no assurance that we will not incur additional and unplanned expenses during our
continuing exploration and development activities. When additional funding is required, we intend to raise funds either through
private placements or public offerings of our equity securities. There is no assurance that we will be able to obtain additional
financing through private placements and/or public offerings necessary to support our working capital requirements. To the extent
that funds generated from any private placements and/or public offerings are insufficient, we will have to raise additional working
capital through other sources, such as bank loans and/or financings. No assurance can be given that additional financing will be
available, or if available, will be on acceptable terms.



If we are unable to secure adequate sources of funds, we may be
forced to delay or postpone the exploration, development and research of our properties, and as a result, we might be required
to diminish or suspend our business plans. These delays in development would have an adverse effect on our ability to generate
revenues and could require us to possibly cease operations. In addition, such inability to obtain financing on reasonable terms
could have a negative effect on our business, operating results or financial condition to such extent that we are forced to restructure,
file for bankruptcy protection, sell assets or cease operations, any of which could put your investment dollars at significant
risk.



16







We are incurring increased costs as a result of being a publicly-traded
company.



As a public company, we incur significant legal, accounting and
other expenses that we would not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, as well as new rules
subsequently implemented by the Securities and Exchange Commission, has required changes in corporate governance practices of public
companies. These new rules and regulations have increased our legal and financial compliance costs and have made some activities
more time-consuming and costly. For example, as a result of becoming a public company, we have adopted policies regarding internal
controls and disclosure controls and procedures. In addition, we have incurred additional costs associated with our public company
reporting requirements. These new rules and regulations have made it more difficult and more expensive for us to obtain director
and officer liability insurance, which we currently cannot afford to do. As a result of the new rules, it may become more difficult
for us to attract and retain qualified persons to serve on our board of directors or as executive officers. We cannot predict or
estimate the amount of additional costs we may incur as a result of being a public company or the timing of such costs and/or whether
we will be able to raise the funds necessary to meet the cash requirements for these costs.



Because we may never earn revenues from our operations, our
business may fail and then investors may lose all of their investment in our company.



We have no history of revenues from operations. We have never had
significant operations and have no significant assets. We have yet to generate positive earnings and there can be no assurance
that we will ever operate profitably. Our company has a limited operating history and is in the exploration stage. The success
of our company is significantly dependent on the uncertain events of the discovery and exploitation of mineral reserves on our
properties or selling the rights to exploit those mineral reserves. If our business plan is not successful and we are not able
to operate profitably, then our stock may become worthless and investors may lose all of their investment in our company.



Prior to completion of the exploration stage, we anticipate that
we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into
the foreseeable future. We recognize that if we are unable to generate significant revenues from the exploration of our mineral
claims in the future, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption
as to the likelihood that we will prove successful, and we can provide no assurance that we will generate any revenues or ever
achieve profitability. If we are unsuccessful in addressing these risks, our business will fail and investors may lose all of their
investment in our company.



Item 1B. Unresolved Staff Comments.



Not applicable.



Item 2 Properties.



Principal Office



Our principal office is located at 7230 Indian
Creek Lane, Las Vegas, Nevada 89149. Our telephone number is (702) 849-4029. On January 1, 2012 our office rental agreement
was adjusted to a $500 per month rental fee for office space in Nevada. The term of the agreement is on a month-to-month
basis starting from January 1, 2012.



Our Mineral Properties



The Black Butte and Lucky Boy Projects



On February 8, 2010, we acquired 38 unpatented
BLM claims including those known as Silver Summit and Candelaria and 2 historic silver mine leases ("Ag Properties")
known as Lucky Boy Silver Mine and the Black Butte Silver Mine. As part of the mining lease proposal for the Lucky Boy Silver Mine,
the Company agreed to pay a $10,000 non-refundable lease payment and an additional $10,000 lease payment every nine months commencing
on November 17, 2010, and every nine months thereafter as long as the lease is in force. The Company deposited $50,000 in an escrow
account to be drawn against invoices for work done on the property including access upgrading, exploration activities and geological
expenses. Upon the recommendation of our consulting geologist, we did not renew the lease of the Lucky Boy Silver Mine.



17







On May 25, 2011 we expanded our claims in the
Candelaria area to 66 unpatented claims by staking the LAG claims.



These mineral properties are without known
reserves and the proposed program is explanatory in nature.



The Graphite Prospects



On April 20, 2012, Lucky Boy Silver Corp. entered into an agreement
with Habitants Minerals Ltd. granting Lucky Boy the sole and exclusive right to purchase 100% right, title and interest in and
to the applications and subsequent claims to be issued by Quebec Ministry of Resources and Fauna for the following applications:



The Quebec applications cover ground referred to in reports GM19842,
GM35169, GM35267, GM19844, GM20308, GM13866, reports which report historic graphite occurrences on Lot 32 and Lot 33 Range 11 in
Low Township, Lot 1 Range 2 in Suffolk Township, Lot 9 and Lot 16 Range 3 and Lot 10 Range 9 all in Clarendon Township, Lot 46
Range 11 in Low Township, and ground in Lochaber Township covering historic mag anomalies.



APPLICATION
1186716 (29 claims)

APPLICATION
1187995 (14 claims)

APPLICATION
1187994 (12 claims)

APPLICATION
1187992 (10 claims)

65
claims approx., 60 hectares each = 3900 hectares



On April 24, 2012, Lucky Boy Silver Corp. entered into an agreement
with GeoXplor Corporation to purchase a 100% interest in and to the Chedic Graphite Property consisting of 20 Mineral Lode Claims
in Township, 15 North, Range 19 East, Sections 25 & 26 Carson City, NV mining claims compromising approximately 400 acres.



Location and Means and Access



We have acquired an interest in the Black Butte
and Lucky Boy projects in the Mineral County, Nevada. Black Butte is in T7N/R34E sections 25 and 26.Candelaria is in T3N/R35E sections
1,2, and 3; T4N/R35E sections 25, 35, and 36.



18











Figure 1: Black Butte and Candelaria Location
Map



19







Black Butte



The Black Butte Project is approximately 30 miles east of Hawthorne
on the east flank of Black Dyke Mountain at the eastern end of the Garfield Hills. The project can be reached by traveling 29.5
miles east on U.S. Highway 95 to a well-graded dirt road into the project area. Further access by vehicle is limited to several
steep, primitive 4-wheel drive tracks.



The land position initially consisted of the Black Butte unpatented
lode mining claims (Table 1 and Figure 2). Additional lode claims (BB-1 to6) were staked on August 12, 2010 to cover the interpreted
extensions of the mineralized zone.



|Owner/Claimant             |  | Claim
    Name     |  | Land
    Tenure                  |  | Tenure
    Number
|-------------------------- |  | ------------------ |  | -------------------------------- |  | -----------------
|G.
    L. Buffington       |  | Black
    Butte    |  | Unpatented
    Lode Mining Claim |  | NMC
    95801    
|G.
    L. Buffington       |  | Black
    Butte #1 |  | Unpatented
    Lode Mining Claim |  | NMC
    95802    
|G.
    L. Buffington       |  | Black
    Butte #2 |  | Unpatented
    Lode Mining Claim |  | NMC
    95803    
|G.
    L. Buffington       |  | Black
    Butte #3 |  | Unpatented
    Lode Mining Claim |  | NMC
    95804    
|Lucky
    Boy Silver Corp. |  | BB-1               |  | Unpatented
    Lode Mining Claim |  | NMC
    1026931  
|Lucky
    Boy Silver Corp. |  | BB-2               |  | Unpatented
    Lode Mining Claim |  | NMC
    1026932  
|Lucky
    Boy Silver Corp. |  | BB-3               |  | Unpatented
    Lode Mining Claim |  | NMC
    1026933  
|Lucky
    Boy Silver Corp. |  | BB-4               |  | Unpatented
    Lode Mining Claim |  | NMC
    1026934  
|Lucky
    Boy Silver Corp. |  | BB-5               |  | Unpatented
    Lode Mining Claim |  | NMC
    1026935  
|Lucky
    Boy Silver Corp. |  | BB-6               |  | Unpatented
    Lode Mining Claim |  | NMC
    1026936  



Table 1: Black Butte and Lucky Boy Land Description



The claims Black Butte,
Black Butte #1 to #3, BB-1 to BB-6 , and LAG 1 to 66 are valid until September 1, 2012.



|Lucky Boy Silver Corp. | LAG 1 to
        LAG 38  | Unpatented Lode Mining Claim | NMC 1047475 to
        NMC 1047512
|---------------------- | ------------------------ | ---------------------------- | ----------------------------------
|                       |                          |                              |                                   
|Lucky Boy Silver Corp. | LAG 39 to
        LAG 66 | Unpatented Lode Mining Claim | NMC 1051010 to
        NMC 1051037

20











Figure 2: Black Butte Project Land Map



21







GEOLOGY



Regional Geology



The Black Butte project area is located in the Walker
Lane Mineral Belt in western Nevada (Figure 1). Rocks in the region encompassing the project areas range from Triassic age sediments
to recent alluvium filling the basins. The western side of the region is dominated by Cretaceous age intrusive rocks forming the
Wassuk Range.



The Walker Lane is a major northwest-southeast-trending
fault zone which displays right lateral movement that ranges from 30 to 40 miles in its central portion, and hosts a variety of
precious metal and base metal mineral deposits (as well as geothermal activity) along its length. Late Cenozoic faults of the central
Walker Lane form a complex array of variably oriented structures characterized by coeval strike-slip and dip-slip motions.



The rock formations for the project areas fit into the
regional setting described for Mineral County (Figure 6, and Ross, 1961):



“About 30,000 feet of structurally complex calcareous,
clastic, and volcanic rocks of Triassic and Jurassic age exposed in the central part of the county are flanked on the south by
a few thousand feet of calcareous and clastic rocks of Cambrian, Ordovician, and Permian age. Intrusive into this sequence are
granitic rocks, chiefly quartz monzonite, which are probably satellitic to the composite Sierra Nevada Batholith of Cretaceous
age.”



Black Butte Project Geology



The Black Butte Project area lithology is mapped as Triassic
Excelsior Formation which is summarized as a sequence of felsic volcanic rocks, clastic rocks, and tuffs (Figure 7). To the south
of the project area the Excelsior is in fault contact with the Triassic Luning Formation described as a sequence of limestone,
dolomite, and shale.



22











Figure 3: Legend for all Geological Maps



23











Figure 4: Black Butte Project Geology Map



24











Figure 5: Looking west at Black Butte Project
Area







Figure 6: Looking at Black Butte Vein Zone



25







MINERALIZATION



Black Butte Project Mineralization



No historical data was found for the Black Butte Project area. There
are at least four adits that collar on the vein and drive along the strike. These adits appear to be interconnected by raises and
winzes. The lowermost adit (near samples LBR-14 and 21, Figure 11) has power and lights behind a locked door which services the
seismograph equipment located within.



The mineralization is a quartz vein zone trending northeast-southwest
and exposed at the surface for approximately 800 feet in a series of adits and prospect pits (Figure 7, Figure 8, and Figure 9).
To the northeast the vein appears to go under alluvial cover. Going to the southwest along the strike of the vein the hill becomes
higher and beyond the last exposed part of the vein strong, pervasive zones of iron oxidation are much more prominent as well as
a zone of carbonate alteration (calcite veining). These alteration zones are typical of the uppermost extent of the alteration
associated with an epithermal quartz vein system.



The vein zone is poly-phase, with multiple bands of silica that
are sulfide bearing. The vein zone is from two to ten feet wide; within the wider parts of the zone there are distinct anastomosing
quartz veins separated by orange and brown clay/gouge (frontispiece-note pencil for scale). Sulfides of iron, copper, lead, and
silver were obvious on some of the dumps.



Gold values along the vein are anomalous (2.59, 3.4, and 6.22 ppm
gold) to strongly anomalous (46.7 ppm gold) (Figure 12). The 46.7 ppm gold (1.36 opt) sample was a 10 inch channel sample across
the quartz vein. Most of the higher grade gold values appear to be in the quartz; however the clay/gouge within the vein zone between
the quartz does also carry some lesser gold values.



Silver values along the vein are also highly anomalous (316, 403,
630, 684 ppm silver) (Figure 13). The silver is highly correlative to the gold. Overall the system appears to be silver dominant
with silver to gold ratio equal to 43:1.



Lead, copper, and zinc values are also anomalous; as might be expected
in a silver dominated epithermal vein system (Figure 14 and Table 2).





|Black
    Butte Rock Geochemical Summary
|----------------------------------------
|                                        
|High                                    
|Low                                     
|Average                                 
|No.
    Samples                         



Table 2: Black Butte Geochemical Summary Table



26











Figure 7: Black Butte Rock Sample Location
Map



27











Figure 8: Black Butte Gold in Rock Map



28











Figure 9: Black Butte Silver in Rock Map



29











Figure 10: Black Butte Lead in Rock



30







Item 3. 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 National Graphite.



Item 4. (Removed and Reserved).



PART
II



Item 5. Market for Registrant’s Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities.



Market Information



Our shares of common stock are quoted on the OTC Bulletin Board
under the symbol “NGRC”. Our CUSIP number is 631268 104. The quotation was first posted at the opening on May 29, 2009
with an opening bid of $0.05 ($0.0033 post-split) and offer at $0.10 ($0.0067 post-split).



Holders of our Common Stock



As of the date of this report the shareholders' list of our common
shares showed 22 registered shareholders. There are 75,669,881 shares outstanding.



Dividends



We have not declared any dividends since incorporation and do not
anticipate that we will do so in the foreseeable future. Although there are no restrictions that limit the ability to pay dividends
on our common shares, our intention is to retain future earnings for use in our operations and the expansion of our business.



Securities Authorized for Issuance under Equity Compensation
Plans



We do not have any equity compensation plans in place.



Recent Sales of Unregistered Securities; Use of Proceeds from
Registered Securities



On October 25, 2010 the Company issued 356,154 units consisting
of one share of common stock and one warrant for cash at $0.63 per share. The attached warrants are exercisable for two years from
issuance and have an exercise price of $0.85 per share for one year from issuance which increased to $1.05 in the second year.
The Company used the Black-Scholes option pricing model to value the warrants based on the terms of the warrant, a volatility of
350%risk free rate of 0.37%, and a stock price and issuance of $0.65. Based on this calculation, the Company determined that the
relative fair value of the warrants is $113,148 and allocated this amount of the additional paid-in capital to the warrants



On December 15, 2010 the Company issued 47,060 shares of its restricted
common stock issued to 20 shareholders subscribed for at a price of $0.85 per share in private placements for $40,000 cash.



During the year ended May 31, 2012 the Company issued 500,000 shares
of its restricted common stock issued to non-afilliated shareholders subscribed for at a price of $0.60 per share in private placements
for $300,000 cash.



31







During the year ended May 31, 2012 the Company issued 500,000 shares
of its restricted common stock as consideration for the purchase of certain mineral interests in Carson City, Nevada. These shares
were valued at $0.60 per share, resulting in an aggregate value of $300,000.



All of these shares were issued to accredited investors under the
exemption from Section 5 of the Securities Act of 1933 (the “Act”) contained in Section 4(6) of the Act.



Purchases of Equity Securities by the Issuer and Affiliated Purchasers



None.



Item 6. Selected Financial Data.



Not applicable.



Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations.



Overview



You should read the following discussion of our financial condition
and results of operations together with the audited financial statements and the notes to audited financial statements included
elsewhere in this report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those anticipated in these forward-looking statements.



We are a start-up, exploration stage company engaged in the search
for gold, silver, graphite and related minerals. Our mineral properties are without known reserves and our proposed program is
explanatory in nature. There is no assurance that commercially viable mineral deposits exist on our mineral properties. Further
exploration and/or drilling will be required before a final evaluation as to the economic and legal feasibility of our projects
is determined.



Our business plan is to proceed with exploration of the Black Butte
and our unpatented LAG claims to determine if there are commercially exploitable deposits of gold and silver, and if we decide
not to proceed, to seek other mineral exploration properties. As per our purchase agreement, the Company is obligated to spend
a minimum of $100,000 over the next twelve months on its Chedic graphite claims in Nevada.



The Black Butte Project – Our Proposed Exploration Program



Our business plan for the Black Butte Project is to proceed with
the initial exploration of the gold and silver properties to determine if there are commercially exploitable deposits of gold and
silver. We retained the services of the Hunsaker Inc., a geological company, to assess the results of our program.In
a geological report compiled by Hunsaker dated May 2010, Hunsaker opined that further exploration on the Black Butte project is
justified.



Over the twelve months ending May 31, 2013 we
intend to use almost all available funds to commence exploration of our mineral properties in Nevada. We anticipate that
phase II will not be carried out until 2013 or 2014 and will be contingent upon favorable results from phase I and specific
recommendations in the resulting report. Specifics of the work to be carried out have not yet been determined and will be
delineated as recommendations in the reporting of the results of phase I. The second phase may require up to six weeks work.
Four months may be required for analysis and the preparation of a report and evaluation on the work accomplished.



32







Employees



We intend to continue to use the services of subcontractors for
manual labor exploration work and an engineer or geologist to manage the exploration program. In regards to phase I of the planned
exploration program, we have retained Buster Hunsaker as senior geological consultant.



At present, we have no employees. We currently operate with two
executive officers, who devote their time as required to our business operations. Our executive officers are not presently compensated
for their services and do not have an employment agreement with us.



We presently do not have pension, health, annuity, insurance, stock
options, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal
benefits available to employees.



Results of Operations



|                   |  | Year Ended |         
|------------------ |  | ---------- | --------
|                   |  | May 31,    |         
|                   |  | 2012       |         
|Revenue            |  | $          | -       
|Operating Expenses |  | $          | 375,546 
|Net Profit (Loss)  |  | $          | (375,546



Revenue



We have not earned any revenues since our inception.



Expenses



Our operating expenses for the years ended May 31, 2012 and 2011
are outlined in the table below:



|                                    |  | Year Ended |        
|----------------------------------- |  | ---------- | -------
|                                    |  | May 31,    |        
|                                    |  | 2012       |        
|Professional fees                   |  | $          | 256,566
|Exploration of resource property    |  |            | 27,316 
|Depreciation                        |  |            | 808    
|Impairment of mining claims         |  |            | -      
|General and administrative expenses |  |            | 90,856 
|Total Operating Expenses            |  | $          | 375,546



33







Operating expenses for the year ended May 31, 2012, increased by
283,168 as compared to 2011, primarily as a result of the commencement of our business plan.



During the year ended May 31, 2012, National Graphite incurred operating
expenses of $375,546 as compared to $658,714 for 2011 and a total of $1,411,956 for the period from inception on October 19, 2006,
to May 31, 2012. The costs incurred can be further subdivided into the following categories.



PROFESSIONAL FEES: National Graphite incurred $256,566 in professional
fees for the fiscal year ended on May 31, 2012, as compared to $538,333 for the previous fiscal year. Decreased costs were incurred
in the past year as the result of the completion of the filing of an S-1 rescission offering registration statement and the attendant
legal, accounting and filing expenses. From inception to October 19, 2006, we have incurred $996,085 in professional fees mainly
spent on legal and accounting matters. This expense category will vary annually depending on corporate capital raising activities.



EXPLORATION OF RESOURCE PROPERTIES COSTS: We incurred $27,316 in
mineral interest acquisition and exploration costs for the year ended May 31, 2012 compared to $28,829 for the year ended May 31,
2011. For the period October 19, 2006 (inception) through May 31, 2012, $91,145 was recorded for exploration work on our optioned
projects. This category will vary from year to year dependent on the exploration activities of the Company.



IMPAIRMENT OF MINING CLAIMS: During May of 2010 the Company had
a preliminary geology study performed to assess the potential reserves of its newly acquired claims. Based on this report and managements
future expectations of additional capital expenditures and future cash flows of the claims, management determined that the carrying
value of the claims be impaired to a net book value of $57,500. This resulted in the Company recognizing a $57,500 impairment charge
recorded in operating expenses for the year ended May 31, 2011. No such impairments were recorded in the 2012 fiscal year.



GENERAL AND ADMINISTRATIVE EXPENSES: National Graphite incurred
$90,856 in general and administrative expenses during the fiscal year ended May 31, 2012 as compared to $33,782 in 2011. Since
inception through May 31, 2012 the Company has incurred a total of $208,648. The Company spent less on office and travel expenses
during 2011 which contributed to the decrease in expenses.



RESEARCH AND DEVELOPMENT: National Graphite has not incurred any
expenses for research and development since inception on October 19, 2006.



COMPENSATION: No compensation costs were incurred for the fiscal
year ended on May 31, 2012, and none were incurred in the previous fiscal year which ended on May 31, 2011. From inception to May
31, 2012, there have been no charges to the compensation account.



INCOME TAX PROVISION: As a result of operating losses, there has
been no provision for the payment of income taxes to date in 2008 – 2012 or from the date of inception.



At the end of the fiscal year under review, May 31, 2012, and as
of the date of this report, National Graphite had 75,153,214 common shares issued and outstanding.



Liquidity and Financial Condition



Working Capital



|                    |  | May 31, |        
|------------------- |  | ------- | -------
|                    |  | 2012    |        
|Current Assets      |  | $       | 111,709
|Current Liabilities |  |         | (1,595 
|Working Capital     |  | $       | 110,114



34







Cash Flows



|                                          |  | Year Ended |         
|----------------------------------------- |  | ---------- | --------
|                                          |  | May 31,    |         
|                                          |  | 2012       |         
|Net Cash Used in Operating Activities     |  | $          | (239,891
|Net Cash Used In Investing Activities     |  |            | (98,489 
|Net Cash Provided by Financing Activities |  |            | 300,000 
|Effect of Exchange Rate Changes           |  |            | -       
|Increase In Cash During The Period        |  | $          | (38,380 



Since inception we have used common stock to raise money for our
optioned mineral acquisition and corporate expenses. Net cash provided by financing activities in the most recent fiscal year ended
May 31, 2012 was $300,000, compared to $ 265,000 during the fiscal year ended May 31, 2011. Net cash provided by financing activities
from inception on October 19, 2006 was $910,000.



Presently, our revenues are not sufficient to meet operating and
capital expenses. We have incurred operating losses since inception, and this is likely to continue through fiscal 2012 - 2013.
Management projects that we may require $1,730,000 to fund our ongoing operating expenses and working capital requirements for
the next twelve months, broken down as follows:



|General and administrative expenses |  | $ | 150,000   | 
|----------------------------------- |  | - | --------- | 
|Operating expenses                  |  |   | -         | 
|Future property acquisitions        |  |   | 430,000   | 
|Working capital                     |  |   | 150,000   | 
|Development of properties           |  |   | 1,000,000 | 
|                                    |  | $ | 1,730,000 | 



As at May 31, 2012, we had a working capital surplus of $110,114.
We plan to raise the additional capital required to meet the balance of our estimated funding requirements for the next twelve
months primarily through the sale of equity based securities or loans from related parties. We do not anticipate that we will be
able to satisfy any of these funding requirements internally until we significantly generate revenues.



Going Concern



We are in the exploration stage, have not yet achieved profitable
operations and are dependent on our ability to raise capital from stockholders or other sources to meet obligations arising from
normal business operations when they become due. Therefore, in their report on our audited financial statements for the year ended
May 31, 2012, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a
going concern. Our financial statements contain additional note disclosure describing the circumstances that lead to this disclosure.



Future Financings



We will require additional financing in order to enable us to proceed
with our plan of operations. There can be no assurance that additional financing will be available to us when needed or, if available,
that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis,
we will not be able to meet our other obligations as they become due. We are pursuing various alternatives to meet our immediate
and long-term financial requirements.



35







On October 29, 2010 we announced that the Company had entered into
an equity financing agreement for up to $2,500,000 from Cardinal Capital Holdings, Limited. Under the terms of the agreement, the
Company may from time to time request a purchase of up to $250,000 per request. On October 28, 2010 wereceived our first
draw of $225,000. Under the terms of the agreement, we may draw up to a total of $1,500,000 through October 19th, 2011. The investment
group, at its discretion, may invest an additional $1,000,000 at $.65 when the total first round has been completed.



Based on our current plan of operations, we have sufficient funds
for the next 6 months, after which time we will require additional funds to continue our exploration operations.



Presently, our revenues are not sufficient
to meet operating and capital expenses. We have incurred operating losses since inception, and this is likely to continue through
fiscal 2012-2013. Management projects that we will require up to $1,730,000 to fund ongoing operating expenses and working capital
requirements for the next 12 months, broken down as follows:



|General and administrative expenses |  | $ | 150,000   | 
|----------------------------------- |  | - | --------- | 
|Future property acquisitions        |  |   | 430,000   | 
|Working capital                     |  |   | 150,000   | 
|Development of properties           |  |   | 1,000,000 | 
|                                    |  | $ | 1,730,000 | 



We anticipate continuing to rely on equity sales of our common stock
in order to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There
is no assurance that we will achieve any additional sales of equity securities or arrange for debt or other financing to fund our
planned business activities.



We presently do not have any arrangements for additional financing
and no potential lines of credit or sources of financing are currently available for the purpose of proceeding with our plan of
operations.



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 is material to stockholders.



Item 7A. Quantitative and Qualitative Disclosures About Market
Risk.



Not applicable.



Item 8. Financial Statements and Supplementary Data.



Our financial statements are stated in United States Dollars (US$)
and are prepared in accordance with United States Generally Accepted Accounting Principles.



The Reports of the Independent Registered Public Accounting firm
by Sadler, Gibb & Associates LLC for the audited financial statements for the year ended May 31, 2012,



36







NATIONAL GRAPHITE CORP.



AUDIT REPORT OF INDEPENDENT ACCOUNTANTS

AND

FINANCIAL STATEMENTS



For the Fiscal Years Ended May 31,
2012 and 2011

and from inception on October 19,
2006 through May 31, 2012





37







NATIONAL GRAPHITE CORP.

Table of Contents



|                                                                                                                                          |  | Page
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                          |  |     
|Report of Independent Registered Public
    Accounting Firm                                                                               |  | F-1 
|                                                                                                                                          |  |     
|Balance Sheets – May 31, 2012 and
    2011                                                                                                |  | F-2 
|                                                                                                                                          |  |     
|Statements of Operations for the fiscal
    years ended May 31, 2012 and 2011 and from inception on October 19, 2006 through May 31, 2012 |  | F-3 
|                                                                                                                                          |  |     
|Statement of Stockholders’ Equity
    from inception on October 19, 2006 through May 31, 2012                                             |  | F-4 
|                                                                                                                                          |  |     
|Statements of Cash Flows for the fiscal
    years ended May 31, 2012 and 2011 and from inception on October 19, 2006 through May 31, 2012 |  | F-6 
|                                                                                                                                          |  |     
|Notes to Financial Statements                                                                                                             |  | F-8 



38













REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM



To the Board of Directors

National Graphite Corp.

(An Exploration Stage Company)



We
have audited the accompanying balance sheets of National Graphite Corp. as of May 31, 2012 and 2011, and from inception on
October 19, 2009 through May 31, 2012 and the related statements ofoperations,
stockholders’ equity and cash flows for the periods then ended. These financial statements are the responsibility of
the Company’s management. Our responsibility is to express an opinion on these financial statements based on our
audits.



We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.



In our opinion the financial
statements referred to above present fairly, in all material respects, the financial position of National Graphite Corp. as
of May 31, 2012 and 2011 and from inception on October 19, 2009 through May 31, 2012, and the results of their operations and
their cash flows for the periods then ended, in conformity with U.S. generally accepted accounting principles.



The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the
Company has not yet established an ongoing source of revenue sufficient to cover its operating costs which raises substantial doubt
about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note
2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



|/s/ Sadler, Gibb & Associates, LLC | 
|---------------------------------- | 
|Sadler, Gibb & Associates, LLC     | 
|Farmington, UT                     | 
|August 28, 2012                    | 













F-1









NATIONAL GRAPHITE CORP.

(FKA LUCKY BOY SILVER CORPORATION)

(An Exploration Stage Company)

Balance Sheets



|                                                                                                                                          |  | May 31, 2012 |            |   | May 31, 2011 |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | - | ------------ | -
|                                                                                                                                          |  |              |            |   |              |  
|ASSETS                                                                                                                                    |  |              |            |   |              |  
|CURRENT ASSETS                                                                                                                            |  |              |            |   |              |  
|                                                                                                                                          |  |              |            |   |              |  
|Cash                                                                                                                                      |  | $            | 108,209    |   |              | $
|Restricted cash                                                                                                                           |  |              | -          |   |              |  
|Prepaid expenses                                                                                                                          |  |              | 3,500      |   |              |  
|                                                                                                                                          |  |              |            |   |              |  
|Total Current Assets                                                                                                                      |  |              | 111,709    |   |              |  
|                                                                                                                                          |  |              |            |   |              |  
|PROPERTY AND EQUIPMENT, net                                                                                                               |  |              | 1,350      |   |              |  
|                                                                                                                                          |  |              |            |   |              |  
|OTHER ASSETS                                                                                                                              |  |              |            |   |              |  
|                                                                                                                                          |  |              |            |   |              |  
|Deposits                                                                                                                                  |  |              | 26,400     |   |              |  
|Mineral interests                                                                                                                         |  |              | 401,389    |   |              |  
|                                                                                                                                          |  |              |            |   |              |  
|Total Other Assets                                                                                                                        |  |              | 427,789    |   |              |  
|                                                                                                                                          |  |              |            |   |              |  
|TOTAL ASSETS                                                                                                                              |  | $            | 540,848    |   |              | $
|                                                                                                                                          |  |              |            |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                      |  |              |            |   |              |  
|                                                                                                                                          |  |              |            |   |              |  
|CURRENT LIABILITIES                                                                                                                       |  |              |            |   |              |  
|                                                                                                                                          |  |              |            |   |              |  
|Accounts payable and accrued expenses                                                                                                     |  | $            | 1,595      |   |              | $
|                                                                                                                                          |  |              |            |   |              |  
|Total Current Liabilities                                                                                                                 |  |              | 1,595      |   |              |  
|                                                                                                                                          |  |              |            |   |              |  
|STOCKHOLDERS' EQUITY                                                                                                                      |  |              |            |   |              |  
|                                                                                                                                          |  |              |            |   |              |  
|Preferred stock, 1,000,000 shares authorized at par value of $0.001; 675,000 and 675,000 shares issued and outstanding, respectively      |  |              | 675        |   |              |  
|Common stock, 499,000,000 shares authorized at par value of $0.001; 75,153,214 and 74,153,214 shares issued and outstanding, respectively |  |              | 75,153     |   |              |  
|Additional paid-in capital                                                                                                                |  |              | 1,875,322  |   |              |  
|Other comprehensive income                                                                                                                |  |              | 59         |   |              |  
|Deficit accumulated during the exploration stage                                                                                          |  |              | (1,411,956 | ) |              |  
|                                                                                                                                          |  |              |            |   |              |  
|Total Stockholders' Equity                                                                                                                |  |              | 539,253    |   |              |  
|                                                                                                                                          |  |              |            |   |              |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                |  | $            | 540,848    |   |              | $



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

F-2







NATIONAL GRAPHITE CORP.

(FKA LUCKY BOY SILVER CORPORATION)

(An Exploration Stage Company)

Statements of Operations



|                                                                |  | For the Years Ended  May 31, |            |   | From Inception  on October 19,  2006 Through   May 31, |  
|--------------------------------------------------------------- |  | ---------------------------- | ---------- | - | ------------------------------------------------------ | -
|                                                                |  | 2012                         |            |   | 2011                                                   |  
|                                                                |  |                              |            |   |                                                        |  
|REVENUES                                                        |  | $                            | -          |   |                                                        | $
|                                                                |  |                              |            |   |                                                        |  
|OPERATING EXPENSES                                              |  |                              |            |   |                                                        |  
|                                                                |  |                              |            |   |                                                        |  
|Exploration of resource properties                              |  |                              | 27,316     |   |                                                        |  
|Impairment of mineral interests                                 |  |                              | -          |   |                                                        |  
|Depreciation expense                                            |  |                              | 808        |   |                                                        |  
|Professional fees                                               |  |                              | 256,566    |   |                                                        |  
|General and administrative expenses                             |  |                              | 90,856     |   |                                                        |  
|                                                                |  |                              |            |   |                                                        |  
|Total Operating Expenses                                        |  |                              | 375,546    |   |                                                        |  
|                                                                |  |                              |            |   |                                                        |  
|LOSS FROM OPERATIONS                                            |  |                              | (375,546   | ) |                                                        |  
|                                                                |  |                              |            |   |                                                        |  
|PROVISION FOR INCOME TAXES                                      |  |                              | -          |   |                                                        |  
|                                                                |  |                              |            |   |                                                        |  
|NET LOSS                                                        |  | $                            | (375,546   | ) |                                                        | $
|                                                                |  |                              |            |   |                                                        |  
|BASIC AND DILUTED LOSS PER SHARE                                |  | $                            | (0.01      | ) |                                                        | $
|                                                                |  |                              |            |   |                                                        |  
|BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING |  |                              | 74,308,694 |   |                                                        |  





The accompanying
notes are an integral part of these financial statements



F-3











NATIONAL GRAPHITE CORP.

(FKA LUCKY BOY SILVER CORPORATION)

(An Exploration Stage Company)

Statements of Stockholders’ Equity



|                                                                         |  |                 |   |  |              |   |   | Additional |  |  | Stock         |  |  | Other         |         |  | Deficit
Accumulated
During the |   |         | Total         | 
|------------------------------------------------------------------------ |  | --------------- | - |  | ------------ | - | - | ---------- |  |  | ------------- |  |  | ------------- | ------- |  | ------------------------------ | - | ------- | ------------- | 
|                                                                         |  | Preferred Stock |   |  | Common Stock |   |   | Paid-in    |  |  | Subscriptions |  |  | Comprehensive |         |  | Exploration                    |   |         | Stockholders' | 
|                                                                         |  | Shares          |   |  | Amount       |   |   | Shares     |  |  | Amount        |  |  | Capital       |         |  | Payable                        |   |         | Income        | 
|                                                                         |  |                 |   |  |              |   |   |            |  |  |               |  |  |               |         |  |                                |   |         |               | 
|Balance, October 19, 2006                                                |  |                 | - |  |              | $ | - |            |  |  | -             |  |  | $             | -       |  |                                | $ | -       |               | 
|Common shares issued for cash                                            |  |                 | - |  |              |   | - |            |  |  | 103,500,000   |  |  |               | 103,500 |  |                                |   | (88,500 | )             | 
|Currency exchange loss                                                   |  |                 | - |  |              |   | - |            |  |  | -             |  |  |               | -       |  |                                |   | -       |               | 
|Contributed Administrative Support & other services rendered by officers |  |                 | - |  |              |   | - |            |  |  | -             |  |  |               | -       |  |                                |   | 100     |               | 
|Net loss for the year ended                                              |  |                 |   |  |              |   |   |            |  |  |               |  |  |               |         |  |                                |   |         |               | 
|May 31, 2007                                                             |  |                 | - |  |              |   | - |            |  |  | -             |  |  |               | -       |  |                                |   | -       |               | 
|Balance, May 31, 2007                                                    |  |                 | - |  |              |   | - |            |  |  | 103,500,000   |  |  |               | 103,500 |  |                                |   | (88,400 | )             | 
|Common shares issued for cash                                            |  |                 | - |  |              |   | - |            |  |  | -             |  |  |               | -       |  |                                |   | -       |               | 
|Contributed Administrative Support & other services rendered by officers |  |                 | - |  |              |   | - |            |  |  | -             |  |  |               | -       |  |                                |   | 50      |               | 
|Currency exchange gain                                                   |  |                 | - |  |              |   | - |            |  |  | -             |  |  |               | -       |  |                                |   | -       |               | 
|Net loss for the year ended May 31, 2008                                 |  |                 | - |  |              |   | - |            |  |  | -             |  |  |               | -       |  |                                |   | -       |               | 
|Balance, May 31, 2008                                                    |  |                 | - |  |              |   | - |            |  |  | 103,500,000   |  |  |               | 103,500 |  |                                |   | (88,350 | )             | 
|Common shares issued for cash                                            |  |                 | - |  |              |   | - |            |  |  | 30,000,000    |  |  |               | 30,000  |  |                                |   | 70,000  |               | 
|Net loss for the year ended May 31, 2009                                 |  |                 | - |  |              |   | - |            |  |  | -             |  |  |               | -       |  |                                |   | -       |               | 
|Balance, May 31, 2009                                                    |  |                 | - |  |              |   | - |            |  |  | 133,500,000   |  |  |               | 133,500 |  |                                |   | (18,350 | )             | 
|Capital contribution                                                     |  |                 | - |  |              |   | - |            |  |  | -             |  |  |               | -       |  |                                |   | 10,000  |               | 
|Common stock issued for cash at $0.40 per common share                   |  |                 | - |  |              |   | - |            |  |  | 6,375,000     |  |  |               | 6,375   |  |                                |   | 163,625 |               | 
|Common stock issued for services                                         |  |                 | - |  |              |   | - |            |  |  | 440,000       |  |  |               | 440     |  |                                |   | 119,560 |               | 
|Common stock issued for mining claims                                    |  |                 | - |  |              |   | - |            |  |  | 150,000       |  |  |               | 150     |  |                                |   | 59,850  |               | 
|Net loss for the year ended May 31, 2010                                 |  |                 | - |  |              |   | - |            |  |  | -             |  |  |               | -       |  |                                |   | -       |               | 
|Balance, May 31, 2010                                                    |  |                 | - |  |              | $ | - |            |  |  | 140,465,000   |  |  | $             | 140,465 |  |                                | $ | 334,685 |               | 



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





F-4









NATIONAL GRAPHITE CORP.

(FKA LUCKY BOY SILVER CORPORATION)

(An Exploration Stage Company)

Statements of Stockholders' Equity



|                                                                    |  |                 |         |  |              |   |     | Additional |  |  | Stock        |   |  | Other         |         |   | Deficit
Accumulated
During the |   |           | Total         | 
|------------------------------------------------------------------- |  | --------------- | ------- |  | ------------ | - | --- | ---------- |  |  | ------------ | - |  | ------------- | ------- | - | ------------------------------ | - | --------- | ------------- | 
|                                                                    |  | Preferred Stock |         |  | Common Stock |   |     | Paid-in    |  |  | Subscription |   |  | Comprehensive |         |   | Exploration                    |   |           | Stockholders' | 
|                                                                    |  | Shares          |         |  | Amount       |   |     | Shares     |  |  | Amount       |   |  | Capital       |         |   | Payable                        |   |           | Income        | 
|                                                                    |  |                 |         |  |              |   |     |            |  |  |              |   |  |               |         |   |                                |   |           |               | 
|Balance, May 31, 2010                                               |  |                 | -       |  |              | $ | -   |            |  |  | 140,465,000  |   |  | $             | 140,465 |   |                                | $ | 334,685   |               | 
|Common stock issued pursuant to stock subscription payable          |  |                 | -       |  |              |   | -   |            |  |  | 125,000      |   |  |               | 125     |   |                                |   | 49,875    |               | 
|Common stock issued for cash and warrants at $0.63 per common share |  |                 | -       |  |              |   | -   |            |  |  | 356,154      |   |  |               | 356     |   |                                |   | 224,644   |               | 
|Common stock issued for cash at $0.85 per common share              |  |                 | -       |  |              |   | -   |            |  |  | 47,060       |   |  |               | 47      |   |                                |   | 39,953    |               | 
|Common stock issued for prepaid services at $0.85 per common share  |  |                 | -       |  |              |   | -   |            |  |  | 660,000      |   |  |               | 660     |   |                                |   | 560,340   |               | 
|Common stock exchanged for preferred stock                          |  |                 | 675,000 |  |              |   | 675 |            |  |  | (67,500,000  | ) |  |               | (67,500 | ) |                                |   | 66,825    |               | 
|Net loss for the year ended May 31, 2011                            |  |                 | -       |  |              |   | -   |            |  |  | -            |   |  |               | -       |   |                                |   | -         |               | 
|Balance, May 31, 2011                                               |  |                 | 675,000 |  |              |   | 675 |            |  |  | 74,153,214   |   |  |               | 74,153  |   |                                |   | 1,276,322 |               | 
|Common stock issued for cash at $0.60 per common share              |  |                 | -       |  |              |   | -   |            |  |  | 500,000      |   |  |               | 500     |   |                                |   | 299,500   |               | 
|Common stock issued for acquisition of mineral claims               |  |                 | -       |  |              |   | -   |            |  |  | 500,000      |   |  |               | 500     |   |                                |   | 299,500   |               | 
|Net loss for the year ended May 31, 2012                            |  |                 | -       |  |              |   | -   |            |  |  | -            |   |  |               | -       |   |                                |   | -         |               | 
|Balance, May 31, 2012                                               |  |                 | 675,000 |  |              | $ | 675 |            |  |  | 75,153,214   |   |  | $             | 75,153  |   |                                | $ | 1,875,322 |               | 



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





F-5









NATIONAL GRAPHITE CORP.

(FKA LUCKY BOY SILVER CORPORATION)

(An Exploration Stage Company)

Statements of Cash Flows



|                                                                            |  | For the Years Ended |          |   | From Inception 
on October 19, 2006 Through |  
|--------------------------------------------------------------------------- |  | ------------------- | -------- | - | ------------------------------------------- | -
|                                                                            |  | May 31,             |          |   | May 31,                                     |  
|                                                                            |  | 2012                |          |   | 2011                                        |  
|                                                                            |  |                     |          |   |                                             |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                        |  |                     |          |   |                                             |  
|                                                                            |  |                     |          |   |                                             |  
|Net loss                                                                    |  | $                   | (375,546 | ) |                                             | $
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                     |          |   |                                             |  
|Depreciation expense                                                        |  |                     | 808      |   |                                             |  
|Contributed services by an officer                                          |  |                     | -        |   |                                             |  
|Other comprehensive loss                                                    |  |                     | -        |   |                                             |  
|Amortization of prepaid expense                                             |  |                     | 137,849  |   |                                             |  
|Common stock issued for services                                            |  |                     | -        |   |                                             |  
|Impairment of mineral interests                                             |  |                     | -        |   |                                             |  
|Changes to operating assets and liabilities:                                |  |                     |          |   |                                             |  
|Restricted cash                                                             |  |                     | 12,786   |   |                                             |  
|Prepaid expenses                                                            |  |                     | 13,801   |   |                                             |  
|Deposits                                                                    |  |                     | (25,200  | ) |                                             |  
|Accounts payable                                                            |  |                     | (4,389   | ) |                                             |  
|                                                                            |  |                     |          |   |                                             |  
|Net Cash Used in Operating Activities                                       |  |                     | (239,891 | ) |                                             |  
|                                                                            |  |                     |          |   |                                             |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                        |  |                     |          |   |                                             |  
|Purchase of computer equipment                                              |  |                     | -        |   |                                             |  
|Purchase of mineral interests                                               |  |                     | (98,489  | ) |                                             |  
|                                                                            |  |                     |          |   |                                             |  
|Net Cash Used in Investing Activities                                       |  |                     | (98,489  | ) |                                             |  
|                                                                            |  |                     |          |   |                                             |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                        |  |                     |          |   |                                             |  
|Capital contributions                                                       |  |                     | -        |   |                                             |  
|Common stock issued for cash                                                |  |                     | 300,000  |   |                                             |  
|                                                                            |  |                     |          |   |                                             |  
|Net Cash Provided by Financing Activities                                   |  |                     | 300,000  |   |                                             |  
|                                                                            |  |                     |          |   |                                             |  
|NET INCREASE (DECREASE) IN CASH                                             |  |                     | (38,380  | ) |                                             |  
|CASH AT BEGINNING OF PERIOD                                                 |  |                     | 146,589  |   |                                             |  
|                                                                            |  |                     |          |   |                                             |  
|CASH AT END OF PERIOD                                                       |  | $                   | 108,209  |   |                                             | $





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





F-6











NATIONAL GRAPHITE CORP.

(FKA LUCKY BOY SILVER CORPORATION)

(An Exploration Stage Company)

Statements of Cash Flows





|                                                     |  | For the Years Ended |         |  | From Inception  on October 19, 2006 Through |  
|---------------------------------------------------- |  | ------------------- | ------- |  | ------------------------------------------- | -
|                                                     |  | May 31,             |         |  | May 31,                                     |  
|                                                     |  | 2012                |         |  | 2011                                        |  
|                                                     |  |                     |         |  |                                             |  
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION    |  |                     |         |  |                                             |  
|                                                     |  |                     |         |  |                                             |  
|CASH PAID FOR:                                       |  |                     |         |  |                                             |  
|Interest                                             |  | $                   | -       |  |                                             | $
|Income Taxes                                         |  | $                   | -       |  |                                             | $
|                                                     |  |                     |         |  |                                             |  
|NON CASH FINANCING ACTIVITIES:                       |  |                     |         |  |                                             |  
|Preferred stock issued in conversion of common stock |  | $                   | -       |  |                                             | $
|Common stock issued for prepaid expenses             |  | $                   | -       |  |                                             | $
|Common stock issued for mineral interests            |  | $                   | 300,000 |  |                                             | $











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





F-7







NATIONAL GRAPHITE CORP.

(FKA Lucky Boy Silver Corporation)

(An Exploration Stage Company)

Notes to Financial Statements

May 31, 2012 and 2011



NOTE 1 – NATURE OF OPERATIONS



National
Graphite Corporation formerly known as Lucky Boy Silver Corporation, which was formerly known as Sierra Ventures, Inc. (“the
Company”) was incorporated under the laws of the State of Wyoming on October 19, 2006. On May 8, 2012 the Company filed
an Amendment to Articles with and changes its name from “Lucky Boy Silver Corporation” to “National Graphite
Corporation.” On February 5, 2010 the Company filed an Amendment to Articles with the Wyoming Secretary of State and changed
its name from “Sierra Ventures Inc.” to “Lucky Boy Silver Corporation.” On March 22, 2011, the Company
pursuant to Wyoming and Nevada law converted from a Wyoming corporation to a Nevada corporation.



The
Company is an “exploration stage company” as defined in the ASC Topic Accounting and Reporting by Development Stage
Companies. The Company is devoting its resources to establishing the new business, and its planned operations have not yet
commenced, accordingly, no revenues have been earned during the period from October 19, 2006 (date of inception) to May 31, 2012.



NOTE 2 – GOING CONCERN



The
Company’s financial statements at May 31, 2012 and 2011 and for the period October 19, 2006 (inception) through May 31,
2012 have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and
commitments in the normal course of business. The Company incurred a loss of $1,411,956 for the period from October 19, 2006 (inception)
through May 31, 2012. In addition, the Company has not generated any revenues and no revenues are anticipated until the Company
begins extracting and selling ore, and there is no assurance that commercially viable deposits exist on the mineral claims that
the Company has under option. These conditions raise substantial doubt as to the Company’s ability to continue as a going
concern.



Management’s
plan to support the Company in its operations and to maintain its business strategy is to raise funds through public offerings
and to rely on officers and directors to perform essential functions with minimal compensation. If the Company does not raise
all of the money it needs from public offerings, it will have to find alternative sources, such as a second public offering, a
private placement of securities, or loans from its officers, directors or others. If the Company requires additional cash and
can’t raise it, it will either have to suspend operations until the cash is raised, or cease business entirely.



The
accompanying financial statements do not include any adjustments related to the recoverability and classification of assets or
the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.



NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES



Basis
of Presentation

The
Company’s accounting and reporting policies conform to accounting principles generally accepted in the United States of
America applicable to exploration stage enterprises. The Company has elected a May 31 fiscal year end.



Use
of Estimates

In
preparing financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities
in the balance sheet and revenues and expenses in the statement of operations. Actual results could differ from those estimates.



Concentration
of Credit Risk

Financial
instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents. The
Company places its cash with high quality financial institutions and at times may exceed the FDIC insurance limit.



F-8







NATIONAL GRAPHITE CORP.

(FKA Lucky Boy Silver Corporation)

(An Exploration Stage Company)

Notes to Financial Statements

May 31, 2012 and 2011



NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)



Cash
and Cash Equivalents

For
purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity
of three months or less to be cash equivalents.



The
Company has established and escrow account wherein $50,000 was deposited in accordance with the mining lease entered into on January
28, 2008. These funds are to be drawn down against work done on the mineral properties including access upgrading, exploration
activities and geologist expense related to completing a NI 43-101 report. The balance of this account is recorded as restricted
cash on the balance sheet. As of May 31, 2012 and 2011 there was $-0- and $12,786 in restricted cash, respectively.



Impairment
or Disposal of Long Lived Assets

In
August 2001, ASC Topic, “Accounting for the Impairment or Disposal of Long-Lived Assets” was issued. It clarifies
the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of
business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying
value of the asset may not be recoverable. When necessary, impaired assets are written down to their estimated fair value based
on the best information available.



Fair
Value of Financial Instruments

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



Level
1



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



Level
2



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



Level
3



Level
3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to
the measurement of the fair value of the assets or liabilities.



The
Company’s financial instruments consist principally of cash, amounts receivable, accounts payable, accrued liabilities,
notes payable, and amounts due to related parties. Pursuant to ASC 820, the fair value of our cash is determined based on “Level
1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded
values of all of our other financial instruments approximate their current fair values because of their nature and respective
maturity dates or durations.



F-9







NATIONAL GRAPHITE CORP.

(FKA Lucky Boy Silver Corporation)

(An Exploration Stage Company)

Notes to Financial Statements

May 31, 2012 and 2011



NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)



Mineral
Property Acquisition Costs

The
costs of acquiring mineral properties are capitalized and amortized over their estimated useful lives following the commencement
of production or expensed if it is determined that the mineral property has no future economic value or the properties are sold
or abandoned.



Cost
includes cash consideration and the fair market value of shares issued on the acquisition of mineral properties. Properties acquired
under option agreements, whereby payments are made at the sole discretion of the Company, are recorded in the accounts at such
time as the payments are made.



The
recoverable amounts for mineral properties is dependent upon the existence of economically recoverable reserves; the acquisition
and maintenance of appropriate permits, licenses and rights; the ability of the Company to obtain financing to complete the exploration
and development of the properties; and upon future profitable production or alternatively upon the Company's ability to recover
its spent costs from the sale of its interests. The amounts recorded as mineral properties reflect actual costs incurred and are
not intended to express present or future values.



The
capitalized amounts may be written down if potential future cash flows, including potential sales proceeds, related to the property
are estimated to be less than the carrying value of the property. Management of the Company reviews the carrying value of each
mineral property interest quarterly, and whenever events or changes in circumstances indicate that the carrying value may not
be recoverable. Reductions in the carrying value of each property would be recorded to the extent the carrying value of the investment
exceeds the estimated future net cash flows.



Exploration
and Development Costs

Exploration
costs are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced
based on established proven (measured) and probable (indicated) reserves, further exploration costs and development costs incurred
after such determination will be capitalized. The establishment of proven and probable reserves is based on results of final feasibility
studies which indicate whether a property is economically feasible. Upon commencement of commercial production, capitalized costs
will be transferred to the appropriate asset category and amortized over their estimated useful lives. Capitalized costs, net
of salvage values, relating to a deposit which is abandoned or considered uneconomic for the foreseeable future, will be written
off.



Impairment
of Mineral Rights

The
Company reviews mineral rights for indicators of impairment whenever events or changes in circumstances indicate that the carrying
value may not be recoverable. If the review indicates that the carrying amount of the asset may not be recoverable, the potential
impairment is measured based on a projected discounted cash flow method using a discount rate that is considered to be commensurate
with the risk inherent in the company's current business model. During the years ended May 31, 2012 and 2011, the Company recorded
impairment to mineral rights of $-0- and $57,500, respectively.



Asset
Retirement Obligations

The
Company has adopted the provisions of SFAS No. 143 "Accounting for Asset Retirement Obligations," which establishes
standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment or other
disposal of long-lived tangible assets arising from the acquisition, construction or development and for normal operations of
such assets. The adoption of this standard has had no effect on the Company's financial position or results of operations. As
of May 31, 2012 any potential costs relating to the ultimate disposition of the Company's mineral property interests have not
yet been determinable.



F-10







NATIONAL GRAPHITE CORP.

(FKA Lucky Boy Silver Corporation)

(An Exploration Stage Company)

Notes to Financial Statements

May 31, 2012 and 2011



NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)



Stock-Based
Compensation

The
Company accounts for its stock-based compensation in accordance with ASC 718 “Stock Compensation.” The Company recognizes
in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees
and non-employees.



Income
Taxes

The
Company has adopted the ASC 740 “Income Taxes” as of its inception. The Company recognizes deferred tax assets and
liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax
rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation
allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.



Basic
and Diluted Net Loss Per Share

The
Company computes net income (loss) per share in accordance with ASC 260 “Earnings per Share”. The basic net loss per
common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss
per share gives effect to all dilutive potential common shares outstanding during the period using the “as if converted”
basis. As of May 31, 2012 and 2011, there were 356,154 common stock warrants outstanding, none of which were considered “in
the money” at May 31, 2012.



Recent
Accounting Pronouncements

The
Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact
on the Company’s financial position, or statements.



NOTE 4 – PROPERTY AND EQUIPMENT



The
Company’s property and equipment consist of the following amounts as of May 31, 2012 and 2011:



|                         |  | May 31, 2012 |        |   | May 31, 2011 |  
|------------------------ |  | ------------ | ------ | - | ------------ | -
|Computer equipment       |  | $            | 2,428  |   |              | $
|Accumulated depreciation |  |              | (1,078 | ) |              |  
|Total                    |  | $            | 1,350  |   |              | $



Depreciation
expense was $808 and $270, for the years ended May 31, 2012 and 2011, respectively.



NOTE 5 – MINERAL INTERESTS



On
February 23, 2010 the Company entered into an agreement to purchase 38 unpatented BLM claims and two historic silver mine leases
located in Mineral County, Nevada. As consideration for options on the mineral properties, the Company paid $55,000 in cash and
issued 150,000 shares at $0.40 for $60,000 for a total purchase price of $115,000 of the Company’s common stock. During
2010 the Company had a preliminary geology study performed to assess the potential reserves of these newly acquired claims. Based
on this report and managements future expectations of additional capital expenditures and future cash flows of the claims, management
determined that the carrying value of the claims be fully impaired to a net book value of $-0-. This resulted in the Company recognizing
a $-0- and $57,500 of impairment charges recorded in operating expenses during the years ended May 31, 2012 and 2011, respectively.



F-11







NATIONAL GRAPHITE CORP.

(FKA Lucky Boy Silver Corporation)

(An Exploration Stage Company)

Notes to Financial Statements

May 31, 2012 and 2011



NOTE 5 – MINERAL INTERESTS (CONTINUED)



During
the year ended May 31, 2012 the Company incurred various costs of exploration and development on mining claims owned by the Company
located in the Candelaria region of Nevada. The ongoing acquisition costs incurred with respect to these claims have been capitalized
as mineral interests and total $48,490 as of May 31, 2012.



On
April 20, 2012, the Company entered into an agreement to purchase mineral claims in Quebec, Canada. The purchase is not complete
due to the fact that the Company is waiting for registration approval from the Quebec government. As consideration for the acquisition,
the Company agreed to pay $50,000 in cash and issue 100,000 shares of common stock. The Company has paid $25,000 in cash, which
is held in a deposit until the purchase is closed. As of May 31, 2012, the Company has not issued the agreed upon shares of common
stock as it is awaiting registration approval of the mineral claims by the Quebec government to do so.



On
April 24, 2012, the Company entered into an agreement to purchase mineral claims in Carson City, Nevada. As consideration for
the purchase, the Company agreed to pay a total $425,000 in cash and to issue a total 2,500,000 shares of common stock. The Company
has also agreed to a work commitment of no less than $1,000,000 in exploration and development costs over the next 48 months.
As of May 31, 2012, the Company has paid $50,000 in cash and has issued 500,000 shares of common stock under the following payment
structure:



a)
Cash Consideration:



|i)    |  | USD $50,000 upon the signing of the Agreement (the “Effective Date” ),                                                                
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------
|ii)   |  | an additional USD $25,000 on or before 6 months from the Effective Date ,                                                             
|iii)  |  | an additional USD $25,000 on or before 12 months from the Effective Date,                                                             
|iv)   |  | an additional USD $50,000 on or before 18 months from the Effective Date,                                                             
|v)    |  | an additional USD $75,000 on or before 24 Months from the Effective Date,                                                             
|vi)   |  | an additional USD $50,000 on or before 30 months from the Effective Date,                                                             
|vii)  |  | an additional USD $50,000 on or before 36 months from the Effective Date,                                                             
|viii) |  | an additional USD $50,000 on or before 42 months from the Effective Date,                                                             
|ix)   |  | an additional USD $50,000 on or before 48 months from the Effective
        Date
        (for a total cash consideration of $425,000).



b) Stock Consideration:



|i)   |  | 500,000 shares upon the signing of the Agreement (the “Effective Date“),                                                                    
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|ii)  |  | 500,000 shares on or before 6 months from the Effective Date,                                                                               
|iii) |  | 500,000 shares on or before 18 months from the Effective Date,                                                                              
|iv)  |  | 500,000 shares on or before 24 months from the Effective Date,                                                                              
|v)   |  | 500,000 shares on or before 48 months from the Effective Date, (for
        a total
        stock consideration of 2,500,000 common shares).



c) Work Commitment:



| |  | The Company has agreed to provide funds for the conduct of a program of work to be undertaken by
the seller for the benefit of the property of not less than USD $1,000,000 over 4 years as follows:
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|i)   |  | $100,000 on or before 12 months from the Effective Date,
|---- |  | --------------------------------------------------------
|ii)  |  | $300,000 on or before 24 months from the Effective Date,
|iii) |  | $300,000 on or before 36 months from the Effective Date,
|iv)  |  | $300,000 on or before 48 months from the Effective Date.



F-12







NATIONAL GRAPHITE CORP.

(FKA Lucky Boy Silver Corporation)

(An Exploration Stage Company)

Notes to Financial Statements

May 31, 2012 and 2011



NOTE 6 – STOCKHOLDERS’ EQUITY



The
Company’s authorized capital consists of 1,000,000 preferred shares with 675,000 preferred shares issued and outstanding
at a par value of $0.001 per preferred share. Common stock consists of 499,000,000 authorized shares of $0.001 par value common
stock. As of May 31, 2012 and 2011 there were 75,153,214 and 74,153,214 shares issued and outstanding, respectively.



Effective
April 6, 2010, the Company conducted a 15:1 forward stock split of its common stock. The split was approved by FINRA for taking
effect on the OTC-BB at the open of business on March 31, 2010. The transfer agent effected the forward split on their records
as of April 6, 2010. The Company’s statements of stockholders’ equity have been retroactively restated to reflect
the split.



Common
Stock Activity, Fiscal Year Ended May 31, 2012



The
Company issued 500,000 shares of its common stock at $0.60 per share for $300,000 cash. The
shares issued were valued at the cash price per share received. The Company also issued 500,000 shares of its common stock
at $0.60 for acquisition of mineral interests in Carson City, NV. The shares
issued were valued at the value of the most recent issuance of common stock for cash.



Common
Stock Activity, Fiscal Year Ended May 31, 2011



On
January 3, 2011 the Company exchanged 67,500,000 common shares for 675,000 preferred shares with 1 to 100 voting and conversion
ratio preferred to common shares. On December 29, 2010, the Company issued 360,000 common shares for consulting services to be
rendered from the date of issuance to March 31, 2011. On the same date the Company issued 300,000 common shares for services to
be performed from the date of issuance for a twelve month period with automatic renewal for another twelve month period unless
notice of termination is received by either party 30 days in advance. The consulting services have been recorded as a prepaid
expense and are being amortized over the life of the contracts. On December 15, 2010, the Company issued 47,060 common shares
for $40,000 cash.



On
October 25, 2010 the Company issued 356,154 units consisting of one share of common stock and one warrant for cash at $0.63 per
share. The attached warrants are exercisable for two years from issuance and have an exercise price of $0.85 per share for one
year from issuance which increased to $1.05 in the second year. The Company used the Black-Scholes option pricing model to value
the warrants based on the terms of the warrant, a volatility of 350 percent, risk free rate of 0.37 percent, and a stock price
and issuance of $0.65. Based on this calculation, the Company determined that the relative fair value of the warrants is $136,699
and allocated this amount of the additional paid-in capital to the warrants.



NOTE 7 – STOCK OPTIONS AND WARRANTS



The
Company utilizes the Black-Scholes option-pricing model for calculating the fair value of the options granted as defined by ASC
Topic 718, which is an acceptable valuation approach under ASC 718. This model requires the input of subjective assumptions, including
the expected price volatility of the underlying stock.



Projected
data related to the expected volatility and expected life of stock options is based upon historical and other information, and
notably, the Company's common stock has limited trading history. Changes in these subjective assumptions can materially affect
the fair value of the estimate, and therefore, the existing valuation models do not provide a precise measure of the fair value
of the Company's employee stock options.



F-13







NATIONAL GRAPHITE CORP.

(FKA Lucky Boy Silver Corporation)

(An Exploration Stage Company)

Notes to Financial Statements

May 31, 2012 and 2011



NOTE 7 – STOCK OPTIONS AND WARRANTS
(CONTINUED)



On
October 25, 2010 the Company issued 356,154 units consisting of one share of common stock and one warrant for cash at $0.63 per
share. The attached warrants are exercisable for two years from issuance and have an exercise price of $0.85 per share for one
year from issuance which increased to $1.05 in the second year. The Company used the Black-Scholes option pricing model to value
the warrants based on the terms of the warrant, a volatility of 350 percent, risk free rate of 0.37 percent, and a stock price
and issuance of $0.63. Based on this calculation, the Company determined that the relative fair value of the warrants is $136,699
and allocated this amount of the additional paid-in capital to the warrants.



A
summary of all warrants outstanding and exercisable as of May 31, 2012 and changes during the year then ended is set forth below:



|Options                                |  | Shares |         |  | Weighted Average Exercise Price |   |      | Weighted Average Remaining Contractual Life (Years) |  |  | Aggregate Intrinsic Value | 
|-------------------------------------- |  | ------ | ------- |  | ------------------------------- | - | ---- | --------------------------------------------------- |  |  | ------------------------- | 
|Outstanding at the beginning of period |  |        | 356,154 |  |                                 | $ | 0.38 |                                                     |  |  | 1.41                      | 
|Granted                                |  |        | -       |  |                                 |   | -    |                                                     |  |  | -                         | 
|Expired                                |  |        | -       |  |                                 |   | -    |                                                     |  |  | -                         | 
|Exercised                              |  |        | -       |  |                                 |   | -    |                                                     |  |  | -                         | 
|Forfeited                              |  |        | -       |  |                                 |   | -    |                                                     |  |  | -                         | 
|Outstanding at the end of Period       |  |        | 356,154 |  |                                 |   | 0.38 |                                                     |  |  | 0.40                      | 
|Exercisable at the end of Period       |  |        | 356,154 |  |                                 | $ | 0.38 |                                                     |  |  | 0.40                      | 



A
summary of all employee options outstanding and exercisable under the plan as of May 31, 2011 and changes during the year then
ended is set forth below:



|Options                                |  | Shares |         |  | Weighted Average Exercise Price |   |      | Weighted Average Remaining Contractual Life (Years) |  |  | Aggregate Intrinsic Value | 
|-------------------------------------- |  | ------ | ------- |  | ------------------------------- | - | ---- | --------------------------------------------------- |  |  | ------------------------- | 
|Outstanding at the beginning of period |  |        | -       |  |                                 | $ | -    |                                                     |  |  | -                         | 
|Granted                                |  |        | 356,154 |  |                                 |   | 0.38 |                                                     |  |  | 1.41                      | 
|Expired                                |  |        | -       |  |                                 |   | -    |                                                     |  |  | -                         | 
|Forfeited                              |  |        | -       |  |                                 |   | -    |                                                     |  |  | -                         | 
|Outstanding at the end of Period       |  |        | 356,154 |  |                                 |   | 0.38 |                                                     |  |  | 1.41                      | 
|Exercisable at the end of Period       |  |        | 356,154 |  |                                 | $ | 0.38 |                                                     |  |  | 1.41                      | 



NOTE 8 – INCOME TAXES



The
Company follows ASC 740, under which deferred income taxes reflect the net effect of (a) temporary difference between carrying
amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating
loss carry-forwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because
no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry-forward
has been recognized, as it is not deemed likely to be realized.



F-14







NATIONAL GRAPHITE CORP.

(FKA Lucky Boy Silver Corporation)

(An Exploration Stage Company)

Notes to Financial Statements

May 31, 2012 and 2011



NOTE 8 – INCOME TAXES (CONTINUED)



The
cumulative tax effect at the expected rate of 34 percent of significant items comprising our net deferred tax amount is as follows:



|                                        |  | May 31, 2012 |         |   | May 31, 2011 |  
|--------------------------------------- |  | ------------ | ------- | - | ------------ | -
|Income
    tax benefit attributable to: |  |              |         |   |              |  
|Net
    operating loss                  |  | $            | 25,686  |   |              | $
|Change
    in valuation allowance       |  |              | (25,686 | ) |              |  
|Net
    refundable amount               |  | $            | -       |   |              | $



The cumulative
tax effect at the expected rate of 34 percent of significant items comprising our net deferred tax amount is as follows:



|                                    |  | May 31, 2012 |         |   | May 31, 2011 |  
|----------------------------------- |  | ------------ | ------- | - | ------------ | -
|Deferred tax asset attributable to: |  |              |         |   |              |  
|Net operating loss carryover        |  | $            | 79,568  |   |              | $
|Valuation allowance                 |  |              | (79,568 | ) |              |  
|Net deferred tax asset              |  | $            | -       |   |              | $



NOTE 9 – SUBSEQUENT EVENTS



On
July 18, 2012, the Company issued 416,667 shares of common stock at $0.60 per share for cash proceeds of $250,000. On July 27,
2012, the Company paid the remaining $25,000 and on July 23, 2012 the Company issued the remaining 100,000 shares of common stock
required for the transfer of mineral claims located in Quebec, Canada which were acquired during the fiscal year ended May 31,
2012.



In
accordance with ASC 855 Company management reviewed all material events through filing of these financial statements and there
are no material subsequent events to report.





F-15







Item 9. Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure.



On April 15,
2010 our Board of Directors approved of the engagement of Sadler Gibb & Associates LLC,PO Box 411, Farmington UT, 84025,as its independent auditor. None of the reports of Sadler Gibb & Associates LLC on the Company’s financial statements
for either of the two most recent fiscal years, contain an adverse opinion or disclaimer of opinion, or was qualified or modified
as to uncertainty, audit scope or accounting principles, except that the Registrant’s audited financial statements contained
in its Form 10-K for the fiscal year ended May 31, 2011, a going concern qualification in the registrant’s audited financial
statements.There were no disagreements related to accounting principles or practices, financial statement disclosure, internal
controls or auditing scope or procedure during the past two fiscal years and interim periods.



Item 9A(T). Controls and Procedures.



As of May 31, 2012, under
the direction of the Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design
and operation of our disclosure controls and procedures, as defined in Rule 13a — 15(e) under the Securities Exchange Act
of 1934, as amended.  Based on the evaluation of these controls and procedures required by paragraph (b) of Sec. 240.13a-15
or 240.15d-15 the disclosure controls and procedures have been found to be ineffective.



The Company maintains a set
of disclosure controls and procedures designed to ensure that information required to be disclosed by us in our reports filed under
the securities Exchange Act, is recorded, processed, summarized, and reported within the time periods specified by the SEC’s
rules and forms.  Disclosure controls are also designed with the objective of ensuring that this information is accumulated
and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure.



Evaluation
of Internal Control Over Financial Reporting



Management conducted an evaluation
of the effectiveness of the Company’s internal control over financial reporting as of May 31, 2012.  In making
this assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal
control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information
and communication, and (v) monitoring. In management’s assessment of the effectiveness of internal control over financial
reporting (as defined in Exchange Act Rule 13a-15(f)) as required by Exchange Act Rule 13a-15(c), our management concluded as of
the end of the fiscal year covered by this Annual Report on Form 10-K that our internal control over financial reporting has not
been effective.



As defined by Auditing Standard
No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements and
Related Independence Rule and Conforming Amendments,” established by the Public Company Accounting Oversight Board (“PCAOB”),
a material weakness is a deficiency or combination of deficiencies that results more than a remote likelihood that a material misstatement
of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above,
management identified the following control deficiencies that represent material weaknesses as of May 31, 2012:



|i) |  | Lack of segregation of duties.  At this time, our resources and size prevent
us from being able to employ sufficient resources to enable us to have adequate segregation of duties within our internal control
system.  Management will periodically reevaluate this situation.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ii) |  | Lack of an independent audit committee. Although we have an audit committee it is
not comprised solely of independent directors. We may establish an audit committee comprised solely of independent directors when
we have sufficient capital resources and working capital to attract qualified independent directors and to maintain such a committee.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|iii) |  | Insufficient number of independent directors. At the present time, our Board of Directors
does not consist of a majority of independent directors, a factor that is counter to corporate governance practices as set forth
by the rules of various stock exchanges.
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





39







Our management determined that these deficiencies constituted material
weaknesses.  Due to a lack of financial resources, we are not able to, and do not intend to, immediately take any action
to remediate these material weaknesses. We will not be able to do so until we acquire sufficient financing to do so.  We
will implement further controls as circumstances, cash flow, and working capital permit.  Notwithstanding the assessment
that our ICFR was not effective and that there were material weaknesses as identified in this report, we believe that our financial
statements fairly present our financial position, results of operations and cash flows for the years covered thereby in all material
respects.



Changes in Internal Control
over Financial Reporting



There was no change in our internal controls
over financial reporting that occurred during the period covered by this report, that has materially affected, or is reasonable
likely to materially affect, our internal controls over financial reporting.



The Company has not taken any steps at this
time to address these weaknesses but will formulate a plan before fiscal year ending May 31, 2013.



Changes in Internal Control over Financial
Reporting



There have been no changes in our internal
control over financial reporting that occurred during our fourth fiscal quarter ended May 31, 2012 that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.



Item 9B. Other Information.



At a shareholders meeting held in December
2009, the stockholders approved the election of director, Kenneth B. Liebscher, to serve until the next Annual General Meeting
of Shareholders or until his respective successor is elected or appointed;



At a shareholders meeting held in January
2010, the stockholders approved the name change of the corporation from Sierra Ventures Inc to Lucky Boy Silver Corp. and the forward
split of our company stock of 15:1. On May 9, 2012 the stockholders approved the name change of our Company to National Graphite
Corp.



Change of Jurisdiction



On March 22, 2011, the corporation converted from a Wyoming corporation
to a Nevada corporation pursuant to Wyoming Statutes Title 17, ch. 16, Sect.(s) 820, 821 and 1114  and Nevada Revised
Statutes 92A.205. This conversion did not alter the number of authorized shares, or the number of issued and outstanding shares,
of the corporation. The voting and other rights of the common and preferred shares of the company’s capital stock remain
substantially similar under Nevada law. The powers of the company’s officers, directors and shareholders also remain substantially
the same. Our authorized capital stock continues to consist of 499,000,000 shares of common stock, par value $0.001 per share and
1,000,000 shares of preferred stock, par value $0.001per share.



Name Change



On February 5, 2010 we filed an Amendment
to Articles with the Wyoming Secretary of State and changed our name from “Sierra Ventures Inc.” to “Lucky Boy
Silver Corp.” On May 9, 2012 we changed the name of our Company to National Graphite Corp. Our shares of common stock are
quoted on the OTC Bulletin Board under the symbol “NGRC”.  Our CUSIP number is 631268 104. The quotation
was first posted at the opening on May 29, 2009 with an opening bid of $0.05 ($0.0033 post-split) and offer at $0.10 ($0.0067 post-split).



Letter Agreement



On February 8, 2010, Ken Liebscher,
our President, Chief Executive Officer, signed a letter agreement with Monte Cristo Projects LLC and Alan Chambers, whereby Mr.
Liebscher has agreed to acquire 38 unpatented BLM claims including those known as Silver Summit and Silver Strike and two historic
silver mine leases known as Lucky Boy Silver Mine and the Black Butte Silver Mine (“AG Properties”), all located in
Mineral County, State of Nevada.





40







In consideration for the claims, Mr.
Liebscher has agreed to pay US$55,000 to Monte Cristo Projects LLC and issue 75,000 shares of common stock of our company to Monte
Cristo Projects LLC and 75,000 shares of common stock of our company to Alan Chambers.



On February 23, 2010, Mr. Liebscher
assigned all of his right, title and interest in and to the letter agreement and the AG Properties to our company in consideration
for $1.00.  Our company will carry out the obligations and take the benefit of the letter agreement.



PART
III



Item 10. Directors, Executive Officers and Corporate
Governance.



The following individuals serve as the directors
and executive officers of our company as of the date of this annual report. All directors of our company hold office until the
next annual meeting of our shareholders or until their successors have been elected and qualified. The executive officers of our
company are appointed by our board of directors and hold office until their death, resignation or removal from office.



|                     |  | Position Held with Our                     |  |     |  | Date First Elected
|-------------------- |  | ------------------------------------------ |  | --- |  | ------------------
|Name                 |  | Company                                    |  | Age |  | or Appointed      
|Kenneth B. Liebscher |  | Chief Executive Officer
President/Director |  | 69  |  | December 15, 2009 
|Fortunato Villamagna |  | Chief Financial Officer
        Director   |  | 53  |  | January 5, 2010   







None of the directors or officers has professional
or technical accreditation in the exploration, development or operations of mining or mining related projects. During the past
year, our president, Mr. Liebscher, spent approximately 50% of his time (approximately 20 hours per week) on the affairs of National
Graphite. For the coming year, it is anticipated that time commitment and requirement will remain approximately the same.



Business Experience



The following is a brief account of the education
and business experience during at least the past five years of each director and executive officer of our company, indicating the
person’s principal occupation during that period, and the name and principal business of the organization in which such occupation
and employment were carried out.



Kenneth B. Liebscher, Chief Executive Officer,
President, Director



Ken Liebscher was appointed as our President,
Chief Executive Officer and a director of our company on December 14, 2009. Mr. Liebscher was our Chief Financial Officer and Secretary
from December 14, 2009 to January 5, 2010.



Mr. Liebscher is a seasoned international
businessman with over 35 years of securities and executive management experience. Mr. Liebscher is a graduate of St. George’s
School, Vancouver, British Columbia and also attended the University of British Columbia.



Mr. Liebscher held executive level positions while at the world’s
largest dental products manufacturer, Dentsply International Inc., where he spent over 22 years in positions culminating as the
Manager of their West Coast Division, headquartered in San Francisco, California. Mr. Liebscher was recruited by a major Europe-based
competitor, Ivoclar Liechtenstein in 1990 to lead their entry into the North American market and, from 1990 to 1992, became Executive
Vice President of Sales and Marketing and helped expand this company’s sales to $300M US.



Mr. Liebscher became a director of a publicly held company called
E.T.C. Industries Ltd. in 1992 and became President of its wholly owned subsidiary, THE ELECTRIC CAR COMPANY and, in 1994, led
a team that developed the MI-6 prototype electric car from the ground up.





41







Mr. Liebscher served as a director
on Belmont Resources Inc (TSX BEA), a mining exploration company from 1992 until November 2009. He served as an officer and director
of Highbank Resources Inc (TSX HBK) from 1992 through 2002. This experience has resulted in his involvement in mineral exploration
projects in Peru, Eastern Europe (Slovak Republic), and British Columbia, Ontario, Quebec and New Brunswick (Canada).



Mr. Liebscher currently also serves on the Board of Directors of
Tiger Oil & Energy, Inc. (TGRO.OTC BB).



We believe Mr. Liebscher is qualified to serve on our board of directors
because of his knowledge of our company’s history and current operations in addition to his education and business experiences
as described above.



Dr. Fortunato Villamagna, Chief Financial Officer, Director



Dr. Fortunato Villamagna was appointed as our Chief Financial Officer,
Secretary and a director of our company on January 5, 2010.



Dr. Villamagna has over 25 years of domestic and international experience
in the mining services, specialty and bulk chemicals, capital equipment, bioenergy, aerospace and energetic materials businesses
used in the mining industry. Dr. Villamagna holds a PhD in Chemistry and MBA in Global Management, and has worked throughout North
America, Europe, Australia and West Africa. In addition to joining National Graphite, Dr. Villamagna also served as CEO of UTEC
Inc. Prior to the role Dr. Villamagna served as President of BioEnergy Systems, a technology company serving the biofuels industry.
Prior to that Dr. Villamagna was Vice President – Business Development for American Pacific Corporation (AMPAC), a publically
listed company with divisions and subsidiaries that manufacture active pharmaceutical ingredients and registered intermediates,
energetic products used primarily in space flight, aerospace and defense systems, clean fire- extinguishing agents and water treatment
equipment. Prior to that Dr. Villamagna was the Vice President Technology, Americas and Europe for Orica Inc., an Australian-owned,
publicly-listed global company, and global leader in mining products and services. Prior to that Dr. Villamagna was the Director
of Bulk Delivered Products for Energetic Solutions, Inc., a part of UK Based ICI Explosive.



Dr. Villamagna currently also serves on the Board of Directors of
Northumberland Resources Inc. (NHUR.OTC BB).



We believe Dr. Villamagna is qualified to serve on our board of
directors because of his knowledge of our company’s history and current operations in addition to his education and business
experiences as described above.



Family
Relationships



There are no family relationships between
any of our directors or executive officers.



Involvement in Certain Legal Proceedings



During the past ten years, none of our executive
officers or directors have had any of the following events occur:



|● |  | a bankruptcy petition filed by or against any business of which such person was a
general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                                                                                    

|● |  | conviction in a criminal proceeding or being subject to a pending criminal proceeding,
excluding traffic violations and other minor offenses;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                              

|● |  | being subject to any order, judgment or decree, not substantially reversed, suspended
or vacated, of any court of competent jurisdiction, permanently enjoining, barring, suspending or otherwise limiting his involvement
in any type of business, securities or banking business;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                                                                                                                                                                    

|● |  | being found by a court of competent jurisdiction, in a civil action, the SEC or the
Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not
been reversed, suspended or vacated;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                                                                                                                                          

|● |  | Being the subject of, or a party to, any federal or state judicial or administrative
order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i)
any federal or state securities or commodities law or regulation; or (ii) any law or regulation respecting financial institutions
or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution,
civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (iii) any law or regulation
prohibiting mail or wire fraud or fraud in connection with any business entity; or
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

|● |  | being the subject of, or a party to, any sanction or order, not subsequently reversed,
suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Securities Exchange Act of 1934),
any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association,
entity or organization that has disciplinary authority over its members or persons associated with a member.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





42







Compliance with Section 16(a) of the Securities
Exchange Act of 1934



Section 16(a) of the Exchange Act requires
our executive officers and directors and persons who own more than 10% of our common stock to file with the SEC initial statements
of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and
other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are
required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file.



Based solely on our review of the copies of
such forms received by us, or written representations from certain reporting persons, we believe that during the fiscal year ended
May 31, 2012, all filing requirements applicable to our officers, directors and greater than 10% percent beneficial owners were
complied with, with the exception of the following:



|Name                 |  | Number of Late Reports |  | Number of Transactions Not
    Reported on a Timely Basis |  | Failure to File  Requested
    Forms
|-------------------- |  | ---------------------- |  | --------------------------------------------------------- |  | ------------------------------------
|Kenneth B. Liebscher |  | 1                      |  | 3                                                         |  | 2                                   
|Fortunato Villamagna |  | None                   |  | 1                                                         |  | 1                                   
|Ian Jackson          |  | None                   |  | 1                                                         |  | 1                                   



Code of Ethics



Our board of directors on March 22, 2007,
adopted a formal written Code of Business Conduct and Ethics and Compliance Program for all officers, directors and senior employees.
Our Code of Business Conduct and Ethics and Compliance Program was filed as an exhibit to our Form SB-2 filed with the SEC on October
12, 2007.



Audit Committee and Audit Committee Financial
Expert



Our board of directors has determined that
we do not have an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K under the Exchange
Act.



We believe that the members of our board of
directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and
procedures for financial reporting. We believe that retaining an independent director who would qualify as an “audit committee
financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages
of our development and the fact that we have not generated any material revenues to date. In addition, we currently do not have
an audit committee or committee performing similar functions nor do we have a written audit committee charter. Our board of directors
does not believe that it is necessary to have such committees because it believes the functions of such committee can be adequately
performed by our board of directors.



Nominating and Compensation Committees



We do not have nominating or compensation
committees, or committees performing similar functions. Our board of directors believe that it is not necessary to have a compensation
committee at this time because the functions of such committee are adequately performed by our board of directors. Our board of
directors has not adopted a charter for the compensation committee.





43







Our board of directors also is of the view
that it is appropriate for us not to have a nominating committee because our board of directors has performed and will perform
adequately the functions of a nominating committee. Our board of directors has not adopted a charter for the nomination committee.
There has not been any defined policy or procedure requirements for shareholders to submit recommendations or nomination for directors.
Our board of directors does not believe that a defined policy with regard to the consideration of candidates recommended by shareholders
is necessary at this time because we believe that, given the early stages of our development, a specific nominating policy would
be premature and of little assistance until our business operations are at a more advanced level. There are no specific, minimum
qualifications that our board of directors believes must be met by a candidate recommended by our board of directors. The process
of identifying and evaluating nominees for director typically begins with our board of directors soliciting professional firms
with whom we have an existing business relationship, such as law firms, accounting firms or financial advisory firms, for suitable
candidates to serve as directors. It is followed by our board of directors’ review of the candidates’ resumes and interview
of candidates. Based on the information gathered, our board of directors then makes a decision on whether to recommend the candidates
as nominees for director. We do not pay any fee to any third party or parties to identify or evaluate or assist in identifying
or evaluating potential nominee.



Item 11. Executive Compensation.



General



The particulars of the compensation paid to
the following persons:



|● |  | our principal executive officer;
|- |  | --------------------------------
|  |  |                                 

|● |  | each of our two most highly compensated executive officers who were serving as executive
officers at the end of the years ended May 31, 2012, and 2011; and
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                                            

|● |  | up to two additional individuals for whom disclosure would have been provided under
(b) but for the fact that the individual was not serving as our executive officer at the end of the years ended May 31, 2012,
and 2011,
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                                                                                                            

whom we will collectively refer to as the
named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is
provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed
$100,000 for the respective fiscal year.





|SUMMARY
    COMPENSATION TABLE                       | 
|---------------------------------------------------- | 
|Name
        and
        Principal Position          | 
|Ken
    Liebscher(1)                                 | 
|President,
    Chief Executive Officer, and Director | 
|                                                     | 
|Fortunato
    Villamagna(2)                          | 
|Chief
    Financial Officer, Secretary and Director  | 



Notes:



|(1) |  | Mr. Liebscher was appointed as our President, Chief Executive Officer and a director
of our company on December 14, 2009. Mr. Liebscher was our Chief Financial Officer and Secretary from December 14, 2009 to January
5, 2011.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Dr. Villamagna was appointed as our Chief Financial Officer, Secretary and a Director
on January 5, 2010.
|--- |  | ---------------------------------------------------------------------------------------------------------





44









Options
Grants During the Last Fiscal Year / Stock Option Plans



We do not currently have a stock option plan
in favor of any director, officer, consultant or employee of our company. No individual grants of stock options, whether or not
in tandem with stock appreciation rights known as SARs or freestanding SARs have been made to any executive officer or director
since our inception; accordingly, no stock options have been granted or exercised by any of the officers or directors since we
were founded.



Aggregated
Options Exercises in Last Fiscal Year





No individual grants of stock options, whether
or not in tandem with stock appreciation rights known as SARs or freestanding SARs have been made to any executive officer or any
director since our inception; accordingly, no stock options have been granted or exercised by any of the officers or directors
since we were founded.



Long-Tem
Incentive Plans and Awards



We do not have any long-term incentive plans
that provide compensation intended to serve as incentive for performance. No individual grants or agreements regarding future payouts
under non-stock price-based plans have been made to any executive officer or any director or any employee or consultant since our
inception; accordingly, no future payouts under non-stock price-based plans or agreements have been granted or entered into or
exercised by any of the officers or directors or employees or consultants since we were founded.



Compensation
of Directors



On January 24, 2010, we issued 150,000 post-split
(10,000 pre-split) shares of our common stock to Ken Liebscher and 30,000 post-split (2,000 pre-split) shares of our common stock
to Fortunato Villamgna as director compensation.



Except as disclosed above, the members of
the Board of Directors are not compensated by National Graphite for acting as such. Directors are reimbursed for reasonable out-of-pocket
expenses incurred. There are no arrangements pursuant to which directors are or will be compensated in the future for any services
provided as a director.



We do not have any agreements for compensating
our directors for their services in their capacity as directors, although such directors are expected in the future to receive
stock options to purchase shares of our common stock as awarded by our board of directors.



Employment
Contracts, Termination of Employment, Change-in-Control Arrangements



There are no employment contracts or other
contracts or arrangements with our officers or directors other than those disclosed in this report. There are no compensation plans
or arrangements, including payments to be made by National Graphite, with respect to the officers, directors, employees or consultants
of National Graphite that would result from the resignation, retirement or any other termination of such directors, officers, employees
or consultants. There are no arrangements for directors, officers or employees that would result from a change-in-control.



Indebtedness
of Directors, Senior Officers, Executive Officers and Other Management





None of our directors or executive officers
or any associate or affiliate of our company during the last two fiscal years is or has been indebted to our company by way of
guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.





45







Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters.



Security Ownership of Certain Beneficial
Owners and Management



The following table sets forth, as of the
date of this report, the total number of shares owned beneficially by each of our directors, named executive officers and current
executive officers, individually and our directors and current executive officers as a group, and the present owners of 5% or more
of our total outstanding shares. The shareholder listed below has direct ownership of his shares and possesses sole voting and
dispositive power with respect to the shares.



|Title of Class |  | Name and Address of Beneficial Owner                                        |  | Amount and Nature of Beneficial Ownership (1) |                         | Percentage of Class (2)
|-------------- |  | --------------------------------------------------------------------------- |  | --------------------------------------------- | ----------------------- | -----------------------
|Common         |  | Kenneth B. Liebscher
        5466 Canvasback Rd,
        Blaine, WA 98230   |  | 22,650,000(5)
        560,000(3)              | Direct
        Indirect |                        
|Preferred      |  | Kenneth B. Liebscher
        5466 Canvasback Rd,
        Blaine, WA 98230   |  | 675,000                                       | Direct                  |                        
|Common         |  | Fortunato Villamagna
        10805 Bernini Dr.,
        Las Vegas, NV 89141 |  | 30,000(6)                                     | Direct                  |                        
|Common         |  | Ian Jackson
        1685 H Street, No. 155
        Blaine, WA 98230         |  | Nil                                           | Direct                  |                        
|Common         |  | Directors and Executive Officers as a Group
        (2 persons)(4)          |  | 23,240,000                                    | Direct                  |                        



Notes:



|* |  | Less than 1%.
|- |  | -------------



| | (1) | Beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares;
and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed
to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the
shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares
(for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the
percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned
by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares
of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect
to the number of shares of common stock actually outstanding on the date of this report as of which there were 75,669,881 shares
of our common stock issued and outstanding.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| | (2) | Based on 75,669,881 number of shares of common stock issued and outstanding as of the date of this report.
| | --- | ----------------------------------------------------------------------------------------------------------
| |     |                                                                                                           

| | (3) | These shares are held of record by Wannigan Consulting Corp., a private company of which Mr Liebscher is also President and
CEO.
| | --- | --------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                 

| | (4) | Does not include Ian Jackson who resigned as our President, Chief Executive Officer, Chief Financial Officer and Secretary
on December 14, 2009 and as a director of our company on January 5, 2010.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                     

| | (5) | Includes 10,000 pre-split (150,000 post-split) shares issued to Mr. Liebscher for compensation.
| | --- | -----------------------------------------------------------------------------------------------
| |     |                                                                                                

| | (6) | Consists of 2,000 pre-split (30,000 post-split) shares issued to Mr. Villamagna for compensation.
| | --- | -------------------------------------------------------------------------------------------------





46







Changes
in Control



We do not anticipate at this time any changes
in control of National Graphite. There are no arrangements either in place or contemplated which may result in a change of control
of National Graphite. There are no provisions within our Articles or Bylaws that would delay or prevent a change of control.



Item 13. Certain Relationships and Related Transactions,
and Director Independence.



Transactions
with Related Persons



Except as disclosed herein, there has been
no transaction, since June 1, 2008, or currently proposed transaction, in which we were or are to be a participant and the amount
involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed
fiscal years, and in which any of the following persons had or will have a direct or indirect material interest.



|● |  | any director or executive officer of our company;
|- |  | -------------------------------------------------



|● |  | any beneficial owner of shares carrying more than 5% of the voting rights attached
to our outstanding shares of common stock; and
|- |  | ---------------------------------------------------------------------------------------------------------------------------------



|● |  | any member of the immediate family (including spouse, parents, children, siblings
and in-laws) of any of the foregoing persons.
|- |  | -------------------------------------------------------------------------------------------------------------------------------



Director Independence





Our board of directors consists of Kenneth
B. Liebscher and Dr. Fortunato Villamagna. Our securities are quoted on the OTC Bulletin Board which does not have any director
independence requirements. According to the definition of “independent director” used in NASDAQ rule 5605(a)(2), Mr.
Liebscher and Dr. Villamagna are not independent directors as Mr. Liebscher is our President and Chief Executive Officer and Dr.
Villamagna is our Chief Financial Officer and Secretary.



Item 14. Principal Accounting Fees and Services.



The aggregate fees billed for the most recently
completed fiscal year ended May 31, 2012, and for fiscal year ended May 31, 2011, for professional services rendered by the principal
accountants for the audit of our annual financial statements and review of the financial statements included in our quarterly reports
on Form 10-Q and services that are normally provided by the accountants in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows: Sadler, Gibb & Associates LLC.



|                   |  | Year Ended |      
|------------------ |  | ---------- | -----
|                   |  | May 31,    |      
|                   |  | 2012       |      
|Audit Fees         |  | $          | 9,500
|Audit Related Fees |  |            | -    
|Tax Fees           |  |            | -    
|All Other Fees     |  |            | -    
|Total              |  | $          | 5,500



Policy on Pre-Approval by Audit Committee
of Services Performed by Independent Registered Public Accounting Firm



Our board of directors, which acts as our
audit committee, pre-approves all services provided by our independent registered public accounting firms. All of the above services
and fees were reviewed and approved by our board of directors before the respective services were rendered.



Our board of directors has considered the
nature and amount of fees billed by our independent registered public accounting firms and believes that the provision of services
for activities unrelated to the audit is compatible with maintaining their independence.





47







PART
IV



Item 15. Exhibits, Financial Statement Schedules.



|Exhibit Number |  | Description                                                                                                                                                                              
|-------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3)            |  | Articles of Incorporation and By-laws                                                                                                                                                    
|               |  |                                                                                                                                                                                          
|3.1            |  | Articles of Incorporation (incorporated by reference to an exhibit to our registration statement on Form SB-2 filed on October 12, 2007).                                                
|               |  |                                                                                                                                                                                          
|3.2            |  | Bylaws (incorporated by reference to an exhibit to our registration statement on Form SB-2 filed on October 12, 2007).                                                                   
|               |  |                                                                                                                                                                                          
|3.3            |  | Amendment to Articles filed with the WY Secretary of State on February 5, 2010 (incorporated by reference to an exhibit to our current report on Form 8-K/A filed on April 2, 2010).     
|               |  |                                                                                                                                                                                          
|3.4            |  | Certificate of Name Change filed with the WY Secretary of State on February 5, 2010 (incorporated by reference to an exhibit to our current report on Form 8-K/A filed on April 2, 2010).
|               |  |                                                                                                                                                                                          
|99.1           |  | Certificate of Change of domicile with the Nevada Secretary of State March 22, 2011 (filed herewith).                                                                                    



|(10)  |  | Material Contracts                                                                                                                                                                                                                                                                                                  
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                                                                     
|10.1  |  | Option To Purchase And Royalty Agreement between National Graphite Silver Corp. (formerly Sierra Ventures, Inc.) and Jiujiang Gao Feng Mining Industry Limited Company (incorporated by reference to an exhibit to our registration statement on Form SB-2 filed on October 12, 2007).                              
|      |  |                                                                                                                                                                                                                                                                                                                     
|10.2  |  | First Amendment to Option to Purchase and Royalty Agreement between National Graphite Silver Corp. (formerly Sierra Ventures, Inc.) and Jiujiang Gao Feng Mining Industry Limited Company dated May 15, 2009 (incorporated by reference to an exhibit to our annual report on Form 10-K filed on September 8, 2009).
|      |  |                                                                                                                                                                                                                                                                                                                     
|10.3  |  | Escrow Agreement dated November 25, 2008 between Ian Jackson, Lucky Boy Silver Corp. (formerly Sierra Ventures, Inc.) and Harcourt Chan (incorporated by reference to an exhibit to our registration statement on Form S-1/A filed on January 14, 2009).                                                            
|      |  |                                                                                                                                                                                                                                                                                                                     
|10.4  |  | First Amendment to Option to Purchase and Royalty Agreement between Lucky Boy Silver Corp. (formerly Sierra Ventures, Inc.) and Jiujiang Gao Feng Mining Industry Limited Company dated May 15, 2009 (incorporated by reference to an exhibit to our annual report on Form 10-K filed on September 8, 2009).        
|      |  |                                                                                                                                                                                                                                                                                                                     
|10.5  |  | Form of Private Placement Subscription Agreement (incorporated by reference to an exhibit to our current report on Form 8-K filed on December 31, 2009).                                                                                                                                                            
|      |  |                                                                                                                                                                                                                                                                                                                     
|10.6  |  | Letter Agreement dated February 8, 2010 between Ken Liebscher, Monte Cristo Projects LLC and Alan Chambers (incorporated by reference to an exhibit to our current report on Form 8-K filed on March 1, 2010).                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                     
|10.7  |  | Assignment Agreement dated February 23, 2010 with Ken Liebscher (incorporated by reference to an exhibit to our current report on Form 8-K filed on March 1, 2010).                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                     
|10.8  |  | Purchase Agreement dated 4/20/12 with Habitants Minerals Ltd. (incorporated by reference to an exhibit to our current report on Form 8-K filed on April 23, 2012).                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                     
|10.9  |  | Purchase Agreement dated 4/20/12 with GeoXplor Corp. (incorporated by reference to an exhibit to our current report on Form 8-K filed on May 2, 2012).                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                     
|(14)  |  | Code of Ethics                                                                                                                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                     
|14.1  |  | Code of Business Conduct and Ethics & Compliance Program (incorporated by reference to an exhibit to our registration statement on Form SB-2 filed on October 12, 2007).                                                                                                                                            
|      |  |                                                                                                                                                                                                                                                                                                                     
|(31)  |  | Section 302 Certifications                                                                                                                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                     
|31.1* |  | Section 302 Certification of Kenneth B. Liebscher                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                     
|31.2* |  | Section 302 Certification of Fortunato Villamagna                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                     
|(32)  |  | Section 906 Certifications                                                                                                                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                     
|32.1* |  | Section 906 Certification of Kenneth B. Liebscher                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                     
|32.2* |  | Section 906 Certification of Fortunato Villamagna                                                                                                                                                                                                                                                                   



* Filed herewith





48







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.



NATIONAL GRAPHITE CORP.



|/s/ Kenneth B. Liebscher                        | 
|----------------------------------------------- | 
|By: Kenneth B. Liebscher                        | 
|President, Chief Executive Officer and Director | 
|(Principal Executive Officer)                   | 
|Date: August 29, 2012                           | 



Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



|/s/ Kenneth B. Liebscher                                       | 
|-------------------------------------------------------------- | 
|By: Kenneth B. Liebscher                                       | 
|President, Chief Executive Officer and Director                | 
|(Principal Executive Officer)                                  | 
|Date: August 29, 2012                                          | 
|                                                               | 
|/s/ Fortunato Villamagna                                       | 
|By: Fortunato Villamagna                                       | 
|Chief Financial Officer, Secretary and Director                | 
|(Principal Financial Officer and Principal Accounting Officer) | 
|Date: August 29, 2012                                          | 





49