Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Apr. 11, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | HK BATTERY TECHNOLOGY INC | ||
Entity Trading Symbol | hkbt | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,369,203 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 67,096,142 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 0 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash | $ 39,156,512 | $ 84,663 |
Prepaid expenses | 10,125,000 | 0 |
Notes receivable - related party | 200,000 | 200,000 |
Accrued interest receivable - related party | 25,052 | 19,052 |
Other receivables | 279,729 | 0 |
Total current assets | 49,786,293 | 303,715 |
Other assets | ||
Investment - HK BTI LLC & HKSI | 1,489 | 0 |
Total assets | 49,787,782 | 303,715 |
Current liabilities | ||
Accounts payable | 20,451 | 20,451 |
Note payable - ACI - related party | 0 | 3,445,000 |
Accounts payable - others | 5,750,000 | 0 |
Due to employees | 595 | 0 |
Advance from ACI - related party | 74,426 | 85,787 |
Other payables | 3,375 | 3,750 |
Accrued expenses and other liabilities | 0 | 133,475 |
Total current liabilities | 5,848,847 | 3,688,463 |
Total liabilities | 5,848,847 | 3,688,463 |
Stockholders' equity | ||
Preferred stock, $.001 par value; 10,000,000 shares authorized, no share issued and outstanding as of December 31, 2015 and December 31, 2014 | 0 | 0 |
Common stock, $.001 par value; 1,200,000,000 shares authorized, 67,096,142 shares and 429,475 shares issued and outstanding as of December 31, 2015 and December 31, 2014 | 109,532 | 42,865 |
Additional paid-in capital | 55,220,635 | 5,287,302 |
Accumulated deficit | (11,391,231) | (8,714,914) |
Total stockholders' equity | 43,938,936 | (3,384,748) |
Total liabilities and stockholders' equity | $ 49,787,782 | $ 303,715 |
CONSOLIDATED BALANCE SHEET PARE
CONSOLIDATED BALANCE SHEET PARENTHETICALS - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Parentheticals | ||
Common stock par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 1,200,000,000 | 1,200,000,000 |
Common stock shares issued | 67,096,142 | 429,475 |
Common stock shares outstanding | 67,096,142 | 429,475 |
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues {1} | ||
Sales | $ 279,729 | $ 0 |
Total revenues | 279,729 | 0 |
Cost of sales | ||
Cost of goods sold | 248,648 | 0 |
Total cost of sales | 248,648 | 0 |
Gross profit | 31,081 | 0 |
Operating expenses | ||
General and administrative | 2,721,446 | 1,245,432 |
Total operating expenses | 2,721,446 | 1,245,432 |
Loss from operations | (2,690,365) | (1,245,432) |
Interest income (expense) | ||
Interest income | 71,048 | 6,508 |
Interest expense | (56,999) | (81,955) |
Total interest income (expense) | (14,049) | (75,447) |
Loss before income taxes | (2,676,317) | (1,320,879) |
Provision for income taxes | 0 | 0 |
Net loss | $ (2,676,317) | $ (1,320,879) |
Net loss per share of common stock: | ||
Basic | $ (0.11) | $ (3.08) |
Weighted average number of shares outstanding | 23,808,471 | 429,475 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Preferred Stock Shares | Preferred Stock Amount | Common Stock Shares | Common Stock Amount | Additional Paid in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2013 | 0 | 0 | 429,475 | 42,865 | 5,287,302 | (7,394,036) | (2,063,869) |
Net loss, year ended December 31, 2014 | $ (1,320,879) | $ (1,320,879) | |||||
Balance. at Dec. 31, 2014 | 0 | 0 | 429,475 | 42,865 | 5,287,302 | (8,714,915) | (3,384,748) |
Net loss, year ended December 31,2015 | $ (2,676,317) | $ (2,676,317) | |||||
Common Stock Issuance | 66,666,667 | 66,667 | 49,933,334 | 50,000,000 | |||
Balance at Dec. 31, 2015 | 0 | 0 | 67,096,142 | 109,532 | 55,220,635 | (11,391,231) | 43,938,936 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities | ||
Net loss | $ (2,676,317) | $ (1,320,879) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Prepaid expenses | (10,125,000) | 0 |
Accrued interest receivable - related party | (6,000) | (6,000) |
Accounts receivable | (279,729) | 0 |
Other receivables | 0 | 13,792 |
Accrued interest - related party | (133,475) | 81,850 |
Due to employees | 595 | 0 |
Advance from ACI - related party | (11,361) | 17,872 |
Other payable | (375) | (500) |
Account payable - other | 5,750,000 | 0 |
Account receivable - Delta | (3,750,000) | 0 |
Account receivable - Delta net off | 3,750,000 | 0 |
Net cash used by operating activities | (7,481,662) | (1,213,863) |
Investing activities | ||
Investment in Lianyungang | (3,750,000) | 0 |
Note receivable - related party | 3,750,000 | 0 |
Investment - HK BTI LLC & HKSI | (1,489) | 0 |
Net cash provided (used) in investing activities | (1,489) | 0 |
Financing activities | ||
Proceeds from note payable - net off with A/R - ACI | (3,445,000) | 1,250,000 |
Proceeds from common stock issuance | 50,000,000 | 0 |
Net cash provided by financing activities | 46,555,000 | 1,250,000 |
Net change in cash | 39,071,849 | 36,136 |
Cash at the beginning of year | 84,663 | 48,528 |
Cash at the end of year | $ 39,156,512 | $ 84,663 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization, Nature of Business and Trade Name HK Battery Technology Inc., a development stage company, was incorporated under the laws of the State of Delaware on April 16, 2004 as Nano Holdings International, Inc., and subsequently changed its name to Nevada Gold Holdings, Inc. Nevada Gold Enterprises, Inc., a Nevada corporation, was incorporated under the laws of the State of Nevada on October 2, 2008. On December 31, 2008, Nevada Gold Acquisition Corp., a Nevada corporation and a wholly owned subsidiary of Nevada Gold Holdings, Inc., merged with and into Nevada Gold Enterprises, Inc. Nevada Gold Enterprises, Inc. was the surviving corporation in the Merger. As a result of the Merger, Nevada Gold Enterprises, Inc., became a wholly-owned subsidiary of Nevada Gold Holdings, Inc. The Merger was treated as a reverse merger and recapitalization for financial accounting purposes. As a result of the Merger, the Company recorded an aggregate stock issuance of 2,626,263 shares of common stock, with a net value of $(180,978). The negative recapitalization net value recognized was the result of the Company restating the equity structure of the legal subsidiary using the exchange ratio established in the definitive Merger agreement to reflect the number of shares of the legal parent issued in the Merger. Nevada Gold Enterprises, Inc. was considered the acquirer for accounting purposes, and Nevada Gold Holdings, Inc. was considered the surviving company for legal purposes. Accordingly, the accompanying financial statements present the historical financial statements of Nevada Gold Enterprises, Inc., as the historical financial statements of Nevada Gold Holdings, Inc., i.e. a reverse merger. The Company was previously engaged in the acquisition, exploration and development of gold mining claims in Nevada. In February 2013, the Company withdrew from the gold exploration business to explore opportunities in the battery technology field. On August 7, 2013, the Company was approved to change its name to HK Battery Technology Inc. As of November 23, 2015, our wholly-owned subsidiary, Nevada Gold Enterprises, Inc., was dissolved. On June 21, 2015, we formed HK Battery Technology LLC, a Nevada limited liability company and our wholly-owned subsidiary, managed by Jianguo Xu, and HK System Integration LLC, a Nevada limited liability and our wholly-owned subsidiary, managed by Junwen Hou. As of December 31, 2015, neither these subsidiaries conducted any business, had any income or expenses nor had any bank accounts. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Use of Estimates The preparation of consolidated financial statements using accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements estimates or assumptions could have a material impact on the Companys financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, HK Battery Technology LLC and HK System Integration LLC. The wholly-owned subsidiaries have not conducted any business, have not had an income nor incurred any expenses, and do not have any employees or bank accounts. Cash Cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when purchased. The Company's cash is held with local and national banking institutions and subjected to current insurance limits of the Federal Deposit Insurance Corporation (FDIC) of $250,000 per banking institution. As of December 31, 2015, the Company bank balances in these bank accounts exceeded the insured amount by $38,906,512. The Company has not experienced any losses related to this concentration of risk . Loss Per Share Basic loss per share is computed by dividing net loss available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. We calculated the loss per share as $0.11 as of December 31, 2015. No Diluted earnings per share have been calculated for the reported period. Recent Accounting Pronouncements In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates (ASU) 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception to-date information on the statements of operations, cash flows and stockholders equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company adopted ASU 2014-10 during the quarter ended September 30, 2014, thereby no longer presenting or disclosing any information previously required by Topic 915. Income Taxes We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized. As a result of the implementation of certain provisions of ASC 740, Income Taxes (ASC 740), which clarifies the accounting and disclosure for uncertainty in tax position, as defined, ASC 740 seeks to reduce the diversity in practice associated with certain aspect of the recognition and measurement related to accounting for income taxes. We adopted the provisions of ASC 740 as of October 2, 2008, and have analyzed filing positions in each of the federal and state jurisdictions where we are required to file income tax returns, as well as open tax years in these jurisdictions. We have identified the U.S. federal and Delaware as our major tax jurisdictions and generally, we remain subject to Internal Revenue Service examination of our 2007 through 2014 U.S. federal income tax returns. However, we have certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized. We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. In addition, we did not record a cumulative effect adjustment related to the adoption of ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes. We have no interest or penalties as of December 31, 2015 and 2014. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2015 | |
GOING CONCERN | |
GOING CONCERN | NOTE 2 - GOING CONCERN The Company sustained operating losses during the years ended December 31, 2015 and 2014 and incurred negative cash flows of $7,481,662 from operations in 2015. The companys continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional financing, as may be required. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Companys ability to do so. The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. During the next year, the Companys foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with research and development. The Company may experience a cash shortfall and be required to raise additional capital. Through future public or private offerings of the Companys stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Companys failure to do so could have a material adverse effect upon it and its shareholders. |
NOTES RECEIVABLE RELATED PARTIE
NOTES RECEIVABLE RELATED PARTIES | 12 Months Ended |
Dec. 31, 2015 | |
NOTES RECEIVABLE RELATED PARTIES | |
NOTES RECEIVABLE RELATED PARTIES | NOTE 3 NOTES RECEIVABLE RELATED PARTIES On January 26, 2011, the Company made a loan of $200,000 to Hybrid Kinetic Motors Corporation, a related party. The loan is unsecured and due on demand with 3% interest per annum. The balance of the accrued interest is $ 25,052 and $19,052 as of December 31, 201 5 and December 31, 2014, respectively . |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2015 | |
NOTES PAYABLE | |
NOTES PAYABLE | NOTE 4 NOTES PAYABLE The Company converted the old payables to American Compass Inc. (ACI) with the amount of $775,000 to a new note at the end of 2012. In 2013, the Company borrowed additional amounts from ACI at a 3% per year interest rate. As of December 31, 2013, the balance of the Note to ACI was $2,195,000. The Notes are unsecured with an interest rate of 3%. On March 25, 2014, the Company entered into a Demand Promissory Note with ACI, borrowing the amount of $360,000 (the March Note) in order to cover the Companys operating expenses. The Note provides for interest of three percent (3%) per annum and is due upon demand from American Compass Inc. The Company will use the proceeds of the loan to fund the general and administrative expenses of the Company as the Company does not currently generate any revenues. On June 25, 2014, the Company entered into a Demand Promissory Note with ACI, borrowing the amount of $230,000 (the June Note) in order to cover the Companys operating expenses. The Additional Note provides for interest of three percent (3%) per annum and is due upon demand from ACI. The Company will use the proceeds of the loan to fund the general and administrative expenses of the Company as the Company does not currently generate any revenues. On July 31, 2014, the Company entered into a Demand Promissory Note with ACI, borrowing the amount of $80,000 (the July Note) in order to cover the Companys operating expenses. The Additional Note provides for interest of three percent (3%) per annum and is due upon demand from ACI. The Company will use the proceeds of the loan to fund the general and administrative expenses of the Company as the Company does not currently generate any revenues. On August 31, 2014, the Company entered into a Demand Promissory Note with ACI, borrowing the amount of $90,000 (the August Note) in order to cover the Companys operating expenses. The Additional Note provides for interest of three percent (3%) per annum and is due upon demand from ACI. The Company will use the proceeds of the loan to fund the general and administrative expenses of the Company as the Company does not currently generate any revenues. On September 30, 2014, the Company entered into a Demand Promissory Note with ACI, borrowing the amount of $110,000 (the September Note) in order to cover the Companys operating expenses. The Additional Note provides for interest of three percent (3%) per annum and is due upon demand from ACI. The Company will use the proceeds of the loan to fund the general and administrative expenses of the Company as the Company does not currently generate any revenues. On October 31, 2014, the Company entered into a Demand Promissory Note with ACI, borrowing the amount of $110,000 (the October Note) in order to cover the Companys operating expense. The Additional Note provides for interest of three percent (3%) per annum and is due upon demand from ACI. The Company will use the proceeds of the loan to fund the general and administrative expenses of the Company as the Company does not currently generate any revenues. On November 30, 2014, the Company entered into a Demand Promissory Note with ACI, borrowing the amount of $40,000 (the November Note) in order to cover the Companys operating expense. The Additional Note provides for interest of three percent (3%) per annum and is due upon demand from ACI. The Company will use the proceeds of the loan to fund the general and administrative expenses of the Company as the Company does not currently generate any revenues. On December 31, 2014, the Company entered into a Demand Promissory Note with ACI, borrowing the amount of $230,000 (the December Note together with the March Note, June Note, July Note and August Note, September Note, October Note, November Note, collectively, the Notes) in order to cover the Companys operating expense. The Additional Note provides for interest of three percent (3%) per annum and is due upon demand from ACI. The Company will use the proceeds of the loan to fund the general and administrative expenses of the Company as the Company does not currently generate any revenues. On January 31, 2015, the Company entered into a Demand Promissory Note with ACI, borrowing the amount of $50,000 (the January Note together with the March Note, June Note, July Note and August Note, September Note, October Note, November Note and December Note, collectively, the Notes) in order to cover the Companys operating expense. The January Note provides for interest of three percent (3%) per annum and is due upon demand from ACI. The Company will use the proceeds of the loan and administrative expenses of the Company. On June 28, 2015 (Effective Date), the Company entered into a Debt Offset Agreement with Delta Advanced Technology Corporation, a Nevada corporation (DATC), and American Compass, Inc., a California corporation (ACI), to offset certain indebtedness owed to ACI. As of the Effective Date, DATC is indebted to the Company in the amount of $3,750,000.00 (the DATC Debt) and the Company is indebted to ACI in the amount of $3,750,000.00 (the Company Debt). As of the Effective Date, ACI is indebted to DATC in the amount of $3,750,000.00 (the ACI Debt). Pursuant to the Debt Offset Agreement, (i) ACI assumed the DATC Debt to the Company; (ii) the Company unconditionally and irrevocably released DATC of all liabilities and obligations to the Company; (iii) DATC unconditionally and irrevocably released ACI of all liabilities and obligations to DATC; and (iv) ACI and the Company acknowledged and agreed to offset the Company Debt against the DATC Debt assumed by ACI, leaving a balance due from ACI to the Company in the amount of $0 (the Remaining Balance). As of December 31, 2015, the balance of the Notes payable to ACI was $0. The total accrued interest was $0 and $133,475 for the periods ended December 31, 2015 and December 41, 2014, respectively. |
NOTE PAYABLE - RELATED PARTY
NOTE PAYABLE - RELATED PARTY | 12 Months Ended |
Dec. 31, 2015 | |
NOTE PAYABLE - RELATED PARTY | |
NOTE PAYABLE - RELATED PARTY | NOTE 5 NOTE PAYABLE - RELATED PARTY On April 15, 2015, the Company entered into a Demand Promissory Note with Billion Energy Holdings Limited, a Hong Kong corporation (BEHL), pursuant to which the Company promised to pay to BEHL $5,750,000 (the Note). The Note provides for 0% interest and is due upon demand from BEHL. |
STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY | 12 Months Ended |
Dec. 31, 2015 | |
STOCKHOLDER'S EQUITY | |
STOCKHOLDER'S EQUITY | NOTE 6 STOCKHOLDERS EQUITY On October 29, 2010 the Company consummated a private placement offering (the offering) whereby the Company issued 37,751,986 units at $0.10 per unit for total proceeds of $3,883,337. The proceeds consisted of $3,450,000 in cash, conversions of $313,337 in convertible notes payable, and $120,000 as credit on certain of the Companys trade payables. Each unit consists of one share of the Companys common stock and one warrant to purchase one share of the Companys common stock at $.10 per share, exercisable for a period of five years from the date of closing. On August 7, 2013, the Company approved an increase in authorized capitalization from 300,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share, to 1,200,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. On July 21, 2014, the Board of Directors and stockholders holding a majority of the Companys outstanding shares of its common stock, respectively, approved an amendment and restatement of the Companys Certificate of Incorporation to effectuate a 1-for-100 reverse stock split. The reverse stock split became effective on September 5, 2014 (Effective Date), after filing of the Companys Amended and Restated Certificate of Incorporation with the Delaware Secretary of State on August 8, 2014. On the Effective Date, the Companys 42,865,074 outstanding shares of common stock were reduced to approximately 429,475 outstanding shares of common stock. On August 21, 2015, HK Battery Technology Inc., a Delaware corporation (the Company), entered into a Stock Purchase Agreement (the Purchase Agreement) with Lianyungang HK New Energy Vehicle System Integration Corporation, a company organized under the laws of the Peoples Republic of China (the Purchaser), pursuant to which the Company agreed to issue and sell to the Purchaser 132,000,000 shares of the Companys common stock, at a per share price of $0.75, for aggregate proceeds of $99,000,000. In accordance of the SPA, on August 26, 2015, the Company issued 66,666,667 shares of common stock to the Purchaser. As of December 31, 2015, the Company had 67,096,142 shares of common stock and zero share of preferred stock issued and outstanding, respectively. |
ENTRY INTO MATERIAL DEFINITIVE
ENTRY INTO MATERIAL DEFINITIVE AGREEMENT | 12 Months Ended |
Dec. 31, 2015 | |
ENTRY INTO MATERIAL DEFINITIVE AGREEMENT: | |
ENTRY INTO MATERIAL DEFINITIVE AGREEMENT | NOTE 7 ENTRY INTO MATERIAL DEFINITIVE AGREEMENT Effective December 17, 2015, the Company entered into a Fuel Cell System Development Agreement (the Agreement) with Chimerica Investment LLC, a Nevada limited liability company (Chimerica). Pursuant to the Agreement, on December 28, 2015, the Company paid Chimerica Ten Million United States Dollars ($10,000,000) to design and develop a fuel cell system to be used in the development of the Companys transit buses. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 COMMITMENTS AND CONTINGENCIES The Company is not currently a party to any legal action. The Company is in a lease agreement for its office space for a term of 69 months, beginning on May 1, 2011. Rent increases by 2.7% per year and is payable in installments. The lease will terminate on Jan 31, 2017. Annual minimum lease commitment for 5 years: 12/31/2013 $ 367,350 12/31/2014 $ 377,269 12/31/2015 $ 369,967 12/31/2016 $ 397,916 12/31/2017 $ 33,453 Total annual Lease commitments $ 1,563,443 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 9 RELATED PARTY TRANSACTIONS On February 17, 2015, the Company entered into a Business Agent Agreement with Billion Energy Holdings Limited, a Hong Kong corporation (BEHL), pursuant to which the Company agreed to facilitate the execution of certain business transactions of BEHL by acting as a paying agent for BEHL. Hybrid Kinetic Group Ltd. is the parent of BEHL as well as the parent of the Companys then-controlling stockholder, Far East Golden Resources. On March 9, 2015, the Company received $13,000,000 from BEHL, which, pursuant to a payment instruction letter delivered under the Business Agent Agreement, was immediately released and remitted to ACI. The $13,000,000 is subject to the terms and conditions of a promissory note entered into by and between ACI and BEHL. The proceeds of the loan will be used by ACI to fund its research and development in new battery technologies. |
PREPAYMENT TO LYG - RELATED PAR
PREPAYMENT TO LYG - RELATED PARTY | 12 Months Ended |
Dec. 31, 2015 | |
PREPAYMENT TO LYG - RELATED PARTY | |
PREPAYMENT TO LYG - RELATED PARTY | NOTE 10 PREPAYMENT TO LYG RELATED PARTY On March 23, 2015, the Company entered into a Securities Purchase Agreement (the SPA) with Apollo Acquisition Corporation, a Cayman Islands Exempted Company (Apollo). The SPA contemplated that the Company would sell Apollo ten million (10,000,000) shares of its common stock in exchange for a twenty (20) year exclusive license to certain inventions, technology, patents and other intellectual property rights regarding the production of materials for use in lithium batteries throughout the Peoples Republic of China (the License). The terms of the License were memorialized in a Technology License Agreement (the License Agreement), which was executed by the Company and Apollo concurrently with the SPA. The transactions contemplated within the SPA have not closed and the parties have mutually agreed to cancel the SPA and License Agreement, pursuant to a Termination Agreement, dated as of June 26, 2015. On March 23, 2015, the Company entered a joint venture agreement (the JV Agreement) with Jiangsu New Head Line Development Group Co. Ltd., a company established and existing under the laws of the Peoples Republic of China. The JV Agreement provided that Lianyungang HK Battery Technology Co. LTD (the JV Entity) would be established for the purpose of building manufacturing plants in China to produce advanced materials and parts for new energy vehicles. Effective, as of June 24, 2015, the Company has assigned and transferred its sixty-two and one-half percent (62.5%) equity interest in the JV Entity to Delta Advanced Technology Corporation in exchange for Three Million Seven Hundred Fifty Thousand United States Dollars ($3,750,000.00). |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAX: | |
INCOME TAX | NOTE 11 INCOME TAX Net deferred tax assets consist of the following components as of December 31, 2015 and 2014: 2015 2014 Deferred tax assets: NOL carryover $ 2,676,317 $ 1,320,879 Valuation allowance (2,676,317) (1,320,879) Net deferred tax asset $ - $ - The income tax provision is summarized as follows: 2015 2014 Income tax benefit at statutory rate $ (1,043,764) $ (515,142) Valuation allowance 1,043,764 515,142 $ - $ - At December 31, 2015, the Company had net operating loss carry forwards of approximately $11.5 million that may be offset against future taxable income through 2035. No tax benefit has been reported in the December 31, 2015 and 2014 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 12 SUBSEQUENT EVENTS On March 30, 2016, the Company filed a Form 25 Notification of Removal From Listing and/or Registration Under Section 12(b) of the Securities Exchange Act of 1934 pursuant to 17 CFR 240.12d2-(c) governing the voluntary withdrawal of its common stock from listing and registration on the Exchange. Such withdrawal from registration shall be effective ninety (90) days following the filing of the Form 25. On August 21, 2015, the Company entered into a Stock Purchase Agreement (the Purchase Agreement) with Lianyungang HK New Energy Vehicle System Integration Corporation, a company organized under the laws of the Peoples Republic of China (the Stockholder), the terms of which are described in Note 6, above. On March 15, 2016, the Company and the Stockholder entered into a Stock Cancellation Agreement and Release (the Cancellation Agreement), pursuant to which the parties agreed to cancel and terminate 5,333,333 shares of the common stock issued pursuant to the Purchase Agreement, including any and all of the Stockholders rights arising thereunder, in exchange for the Companys payment of $4,000,000 to the Stockholder. On March 23, 2016, the Company and the Stockholder entered into an Amendment to the Stock Cancellation Agreement (the Amendment), pursuant to which the parties agreed to increase the number of shares of common stock cancelled and terminated to 1,333,333 shares, in exchange for the Companys payment of $10,000,000 to the Stockholder. Nothing in the Amendment shall affect the validity of the remaining 130,666,667 shares of common stock issued pursuant to the Purchase Agreement, or any of the Stockholders rights thereto. The Amendment was effective as of April 6, 2016. These financial statements were approved by management and available for issuance on April 7, 2016. Subsequent events have been evaluated through this date. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
ACCOUNTING POLICIES | |
Organization, Nature of Business and Trade Name | Organization, Nature of Business and Trade Name HK Battery Technology Inc., a development stage company, was incorporated under the laws of the State of Delaware on April 16, 2004 as Nano Holdings International, Inc., and subsequently changed its name to Nevada Gold Holdings, Inc. Nevada Gold Enterprises, Inc., a Nevada corporation, was incorporated under the laws of the State of Nevada on October 2, 2008. On December 31, 2008, Nevada Gold Acquisition Corp., a Nevada corporation and a wholly owned subsidiary of Nevada Gold Holdings, Inc., merged with and into Nevada Gold Enterprises, Inc. Nevada Gold Enterprises, Inc. was the surviving corporation in the Merger. As a result of the Merger, Nevada Gold Enterprises, Inc., became a wholly-owned subsidiary of Nevada Gold Holdings, Inc. The Merger was treated as a reverse merger and recapitalization for financial accounting purposes. As a result of the Merger, the Company recorded an aggregate stock issuance of 2,626,263 shares of common stock, with a net value of $(180,978). The negative recapitalization net value recognized was the result of the Company restating the equity structure of the legal subsidiary using the exchange ratio established in the definitive Merger agreement to reflect the number of shares of the legal parent issued in the Merger. Nevada Gold Enterprises, Inc. was considered the acquirer for accounting purposes, and Nevada Gold Holdings, Inc. was considered the surviving company for legal purposes. Accordingly, the accompanying financial statements present the historical financial statements of Nevada Gold Enterprises, Inc., as the historical financial statements of Nevada Gold Holdings, Inc., i.e. a reverse merger. The Company was previously engaged in the acquisition, exploration and development of gold mining claims in Nevada. In February 2013, the Company withdrew from the gold exploration business to explore opportunities in the battery technology field. On August 7, 2013, the Company was approved to change its name to HK Battery Technology Inc. As of November 23, 2015, our wholly-owned subsidiary, Nevada Gold Enterprises, Inc., was dissolved. On June 21, 2015, we formed HK Battery Technology LLC, a Nevada limited liability company and our wholly-owned subsidiary, managed by Jianguo Xu, and HK System Integration LLC, a Nevada limited liability and our wholly-owned subsidiary, managed by Junwen Hou. As of December 31, 2015, neither these subsidiaries conducted any business, had any income or expenses nor had any bank accounts. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements using accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements estimates or assumptions could have a material impact on the Companys financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, HK Battery Technology LLC and HK System Integration LLC. The wholly-owned subsidiaries have not conducted any business, have not had an income nor incurred any expenses, and do not have any employees or bank accounts. |
Loss Per Share | Loss Per Share Basic loss per share is computed by dividing net loss available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. We calculated the loss per share as $0.11 as of December 31, 2015. No Diluted earnings per share have been calculated for the reported period. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates (ASU) 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception to-date information on the statements of operations, cash flows and stockholders equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company adopted ASU 2014-10 during the quarter ended September 30, 2014, thereby no longer presenting or disclosing any information previously required by Topic 915. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized. As a result of the implementation of certain provisions of ASC 740, Income Taxes (ASC 740), which clarifies the accounting and disclosure for uncertainty in tax position, as defined, ASC 740 seeks to reduce the diversity in practice associated with certain aspect of the recognition and measurement related to accounting for income taxes. We adopted the provisions of ASC 740 as of October 2, 2008, and have analyzed filing positions in each of the federal and state jurisdictions where we are required to file income tax returns, as well as open tax years in these jurisdictions. We have identified the U.S. federal and Delaware as our major tax jurisdictions and generally, we remain subject to Internal Revenue Service examination of our 2007 through 2014 U.S. federal income tax returns. However, we have certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized. We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. In addition, we did not record a cumulative effect adjustment related to the adoption of ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes. We have no interest or penalties as of December 31, 2015 and 2014. |
SCHEDULE OF LEASE PAYMENTS (Tab
SCHEDULE OF LEASE PAYMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SCHEDULE OF LEASE PAYMENTS | |
SCHEDULE OF LEASE PAYMENTS | The Company is in a lease agreement for its office space for a term of 69 months, beginning on May 1, 2011. Rent increases by 2.7% per year and is payable in installments. The lease will terminate on Jan 31, 2017. Annual minimum lease commitment for 5 years: 12/31/2013 $ 367,350 12/31/2014 $ 377,269 12/31/2015 $ 369,967 12/31/2016 $ 397,916 12/31/2017 $ 33,453 Total annual Lease commitments $ 1,563,443 |
SCHEDULE OF COMPONENTS OF INCOM
SCHEDULE OF COMPONENTS OF INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SCHEDULE OF COMPONENTS OF INCOME TAXES | |
Schedule of Deferred Tax Assets and Liabilities | Net deferred tax assets consist of the following components as of December 31, 2015 and 2014: 2015 2014 Deferred tax assets: NOL carryover $ 2,676,317 $ 1,320,879 Valuation allowance (2,676,317) (1,320,879) Net deferred tax asset $ - $ - |
Schedule of Effective Income Tax Rate Reconciliation | The income tax provision is summarized as follows: 2015 2014 Income tax benefit at statutory rate $ (1,043,764) $ (515,142) Valuation allowance 1,043,764 515,142 $ - $ - |
Nature of Business and Trade Na
Nature of Business and Trade Name,Cash ,Loss Per Share (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2008 |
Nature of Business and Trade Name: | ||
Issuance of shares as a result of merger | 2,626,263 | |
Shares of common stock with a net value | $ (180,978) | |
Cash in bank balance | $ 38,906,512 | |
FDIC insurance limit | $ 250,000 | |
Shares used in computing basic per share amounts (weighted average) | $ 0.11 |
GOING CONCERN (Details)
GOING CONCERN (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Going concern details | ||
Company incurred negative cash flows | $ 7,481,662 | $ 7,481,662 |
NOTES RECEIVABLE RELATED PART24
NOTES RECEIVABLE RELATED PARTIES (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 26, 2011 |
NOTES RECEIVABLE RELATED PARTIES AS FOLLOWS: | |||
Loan to Hybrid Kinetic Motors Corporation, a related party | $ 200,000 | ||
Unsecured loan interest per annum | 3.00% | ||
The balance of the accrued interest is | $ 25,052 | $ 19,052 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Dec. 31, 2015 | Jun. 28, 2015 | Jan. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2014 | Oct. 31, 2014 | Sep. 30, 2014 | Aug. 31, 2014 | Jul. 31, 2014 | Jun. 25, 2014 | Mar. 25, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Notes Payable consists of the following: | |||||||||||||
The Company converted the old payables to American Compass Inc. ("ACI") with the amount to a new note | $ 775,000 | ||||||||||||
Notes provides interest rate per annum | 0.00% | 0.00% | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% |
Balance of the Notes to ACI | $ 0 | $ 0 | $ 2,195,000 | $ 0 | |||||||||
Demand Promissory Note with ACI, borrowing the amount | $ 50,000 | $ 230,000 | $ 40,000 | $ 110,000 | $ 110,000 | $ 90,000 | $ 80,000 | $ 230,000 | $ 360,000 | ||||
DATC indebted to ACI | $ 3,750,000 |
NotesPayable -Accured Interest
NotesPayable -Accured Interest (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Accured Interest During the period details | ||
The total accrued interest | $ 0 | $ 133,475 |
NOTE PAYABLE - RELATED PARTY (D
NOTE PAYABLE - RELATED PARTY (Details) | Apr. 15, 2015USD ($) |
NOTE PAYABLE - RELATED PARTY Details | |
Company promised to pay to BEHL | $ 5,750,000 |
Note Provides for interest and is due upon demand from BEHL. | 0.00% |
Shares of common stock (Details
Shares of common stock (Details) - USD ($) | Dec. 31, 2015 | Aug. 21, 2015 | Jul. 21, 2014 | Aug. 07, 2013 | Oct. 29, 2010 |
Shares of common stock | |||||
Company issued units per unit 0.10 | 37,751,986 | ||||
Total proceeds of the company | $ 3,883,337 | ||||
The proceeds consisted of cash | 3,450,000 | ||||
Conversion of cash in convertible notes payable | 313,337 | ||||
Credit on company's trade payables | $ 120,000 | ||||
Company's common stock per share | $ 0.10 | ||||
Approved authorized capital of common stock with par value of $0.001 per share | 300,000,000 | ||||
Approved authorized capital of preferred stock with par value of $0.001 per share | 10,000,000 | ||||
Approved Increase in authorized capital of common stock with par value of $0.001 per share upto | 1,200,000,000 | ||||
Approved Increased authorized capital of preferred stock with par value of $0.001 per share | 10,000,000 | ||||
Outstanding shares of common stock were reduced to approximately | 429,475 | ||||
Company's number of outstanding shares of common stock were reduced | 42,865,074 | ||||
Company agreed to issue and sell to the Purchaser shares of the Company's common stock, at a per share price of $0.75 | 132,000,000 | ||||
Company agreed to issue and sell to the Purchaser shares of the common stock, at a per share price of $0.76 for aggregate proceeds | 99,000,000 | ||||
Company issued shares of common stock to the Purchaser | 66,666,667 | ||||
Shares of common stock issued and outstanding | 67,096,142 | ||||
Shares of preferred stock issued and outstanding | 0 |
ENTRY INTO MATERIAL DEFINITIV29
ENTRY INTO MATERIAL DEFINITIVE AGREEMENT(Details) | Dec. 28, 2015USD ($) |
Company entered into a Fuel Cell System Development Agreement | |
The Company paid Chimerica Investment LLC | $ 10,000,000 |
COMMITMENTS AND CONTINGENCIES-A
COMMITMENTS AND CONTINGENCIES-ANNUAL LEASE (Details) | Dec. 31, 2015USD ($) | May. 01, 2011 |
Commitments and Annual lease details | ||
Lease Term in months | 69 | |
Rent increases by percentage per year | 2.70% | |
Annual lease on December 31, 2013 | $ 367,350 | |
Annual lease on December 31, 2014 | 377,269 | |
Annual lease on December 31, 2015 | 369,967 | |
Annual lease on December 31, 2016 | 397,916 | |
Annual lease on December 31, 2017 | 33,453 | |
Total annual Lease commitments | $ 1,563,443 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | Mar. 09, 2015USD ($) |
Related Party transactions with BEHL | |
Company received amount from BEHL | $ 13,000,000 |
The amount received is subject to the terms and conditions of a promissory note entered into by and between ACI and BEHL | $ 13,000,000 |
PREPAYMENT TO LYG - RELATED P32
PREPAYMENT TO LYG - RELATED PARTY (Details) - USD ($) | Jun. 24, 2015 | Mar. 23, 2015 |
Agreement Details | ||
The SPA contemplated that the Company would sell Apollo shares of its common stock in exchange for a twenty year exclusive license | 10,000,000 | |
Company has assigned and transferred its equity interest in the JV Entity to Delta Advanced Technology Corporation in exchange United state Dollars | 62.50% | |
Number of Dollars Exchaged for Equity interest amounted | $ 3,750,000 |
Net deferred tax assets (Detail
Net deferred tax assets (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
NOL carryover | $ 2,676,317 | $ 1,320,879 |
Valuation allowance | (2,676,317) | $ (1,320,879) |
Net deferred tax asset | $ 0 |
Income tax provision (Details)
Income tax provision (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
The income tax provision is summarized as follows: | ||
Income tax benefit at statutory rate | $ (1,043,764) | $ (515,142) |
Valuation allowance, | 1,043,764 | 515,142 |
Net income tax provision | $ 0 | |
Company had net operating loss carry forwards of approximately | $ 11,500,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Mar. 23, 2016 | Mar. 15, 2016 |
Subsequent Events | ||
Parties agreed to cancel and terminate shares of the common stock issued | 1,333,333 | 5,333,333 |
Company's payment to the Stockholder | $ 10,000,000 | $ 4,000,000 |
Remaining shares of common stock issued | 130,666,667 |