UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2016

.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: 000-52636

HK Battery Technology Inc.

(Exact name of registrant as specified in its charter)


Delaware		20-3724068
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


800 E. Colorado Blvd., Suite 888
Pasadena, CA		91101
(Address of principal executive offices)		(Zip Code)

626-683-7330

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No .

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X . No .

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


Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (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 Exchange Act). Yes X . No .

As of May 23, 2016, there were 67,096,142 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

HK BATTERY TECHNOLOGY INC.

Form 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2016

TABLE OF CONTENTS


		PAGE

	PART I - FINANCIAL INFORMATION	3

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14

Item 4.	Controls and Procedures	14

	PART II - OTHER INFORMATION	15

Item 1.	Legal Proceedings	15

Item 1A.	Risk Factors	15

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15

Item 3.	Defaults Upon Senior Securities	15

Item 4.	Mine Safety Disclosures	15

Item 5.	Other Information	15

Item 6.	Exhibits	16

	SIGNATURES	17

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (Unaudited)

The accompanying condensed consolidated unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in our Form 10-K for the fiscal year ended December 31, 2015 filed with the SEC on April 14, 2016. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.

TABLE OF CONTENTS


		PAGE

Condensed Consolidated Balance Sheets as of March 31, 2016 (unaudited) and December 31, 2015		4

Condensed Consolidated Statements of Operations for the three month periods ended March 31, 2016 and 2015 (unaudited)		5

Condensed Consolidated Statements of Cash Flows for the three month periods ended March 31, 2016 and 2015 (unaudited)		6

Notes to the Condensed Consolidated Financial Statements (unaudited)		7

HK Battery Technology, Inc.

CONDENSED CONSOLIDATED BALANCE SHEET


	March 31,		December 31,
	2016		2015
	(unaudited)		(audited)
ASSETS
Current assets
Cash	$	26,708,585	$	39,156,512
Prepaid expenses		10,125,000		10,125,000
Prepaid purchase		1,684,582		-
Notes receivable - related party		200,000		200,000
Accrued interest receivable - related party		25,052		25,052
Account receivable		-		279,729
Loan to New Century Innovation		10,000,000		-
Total current assets		48,743,219		49,786,293

Other Assets
Investment-HK BTI LLC & HKSI		1,489		1,489

Total assets	$	48,744,708	$	49,787,782


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable	$	20,451	$	20,451
Note payable to related party (ACI)		-		-
Accounts payable – others		5,750,000		5,750,000
Due to Employees		-		595
Advance from related party (ACI)		88,340		74,426
Other payables		29,454		3,375
Accrued expenses and other liabilities		-		-
Total current liabilities		5,888,245		5,848,847

Total liabilities		5,888,245		5,848,847

Stockholders' Equity
Preferred stock, $.001 par value; 10,000,000 shares authorized, no shares issued and outstanding as of March 31, 2016 and December 31, 2015		−		−
Common stock, $.001 par value; 1,200,000,000 shares authorized, 67,096,142 shares and 429,475 shares issued and outstanding as of March 31, 2016 and December 31, 2015		109,532		109,532
Additional paid-in capital		55,220,635		55,220,635
Accumulated deficit		(12,473,703)		(11,391,231)
Total stockholders' equity		42,856,464		43,938,936

Total liabilities and stockholders' equity	$	48,744,708	$	49,787,782

The accompanying notes are integral part of these unaudited condensed consolidated financial statements.

HK Battery Technology, Inc.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(unaudited)


		For the three months ended March 31,
	2016		2015

Revenues	$	−	$	−

Operating Expenses
General and administrative		1,114,429		314,211
Total operating expenses		1,114,429		314,211

Loss from operations		(1,114,429)		(314,211)

Interest income (expense)
Interest income		31,957		2,988
Interest expense		-		(29,288)
Total interest income (expense)		31,957		(26,299)

Loss before income taxes		(1,082,472)		(340,511)

Provision for income taxes		−		−

Net loss	$	(1,082,472)	$	(340,511)

Net loss per share of common stock:
Basic	$	(0.02)	$	(0.79)

Weighted average number of shares outstanding		67,096,142		429,475

The accompanying notes are integral part of these unaudited condensed consolidated financial statements.

HK Battery Technology, Inc.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Unaudited


	For the three months ended March 31, 2016		For the three months ended March 31, 2015

Operating Activities
Net Income	$	(1,082,472)	$	(340,511)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Prepaid expense		-		-
Prepaid purchase		(1,684,582)		-
Accrued interest receivable – related party		-		(1,500)
Account receivable		279,729		-
Due to employee		(595)		-
Prepaid rent		-		(33,169)
Accrued interest – related party		-		26,088
Advance from ACI – related party		13,914		3,039
Other payable		26,079		9,388
Account payable – Other		-		5,750,000
Net cash (used in) operating activities		(2,447,926)		5,413,334

Investing Activities
Investment in Lianyungang		-		(3,750,000)
Notes receivable – related parties		-		-
Loan to New Century Innovation		(10,000,000)		-
Investment – HK BTI LLC & HKSI		-		-
Net cash provided by (used in) investing activities		(10,000,000)		(3,750,000)

Financing Activities
Proceeds from notes payable		-		50,000
Proceeds from common stock issuance		-		-
Net cash provided by financing activities		-		50,000

Net change in cash		(12,447,927)		1,713,335

Cash at the beginning of year		39,156,512		84,663

Cash at the end of year	$	26,708,585	$	1,797,998

The accompanying notes are integral part of these unaudited condensed consolidated financial statements.

HK Battery Technology Inc.

Notes to the Condensed Consolidated Financial Statements

For the three month period ended March 31, 2016

(Unaudited)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization, Nature of Business and Trade Name

HK Battery Technology Inc. (the “Company”), 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. (the “Merger”). 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. Acordingly, 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 changed 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 company and our wholly-owned subsidiary, managed by Junwen Hou. As of March 31, 2016, neither of these subsidiaries conducted any business, had any income or expenses or 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 management’s estimates or assumptions could have a material impact on the Company’s 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 March 31, 2016, the Company bank balances in these bank accounts exceeded the insured amount by $26,708,585. The Company has not experienced any losses related to this concentration of risk. There are no cash equivalents as of March 31, 2016.

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 $0.02 as of March 31, 2016. 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 March 31, 2016 and 2015.

NOTE 2 - GOING CONCERN

The Company sustained operating losses during the first quarter of and incurred negative cash flows of $1,082,472 from operations in 2016. The company’s 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 Company’s 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 Company’s 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 Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material adverse effect upon it and its shareholders.

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 $25,052 as of March 31, 2016 and December 31, 2015, respectively.

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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 March 31, 2016, the balance of the Notes payable to ACI was $0. The total accrued interest was $0 and $159,562 for the quarter ended March 31, 2016 and 2015, respectively.

NOTE 5 – ACCOUNTS PAYABLE - OTHERS

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.

NOTE 6 – STOCKHOLDER’S EQUITY

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 Company’s outstanding shares of its common stock, respectively, approved an amendment and restatement of the Company’s 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 Company’s Amended and Restated Certificate of Incorporation with the Delaware Secretary of State on August 8, 2014. On the Effective Date, the Company’s 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 People’s Republic of China (the “Purchaser”), pursuant to which the Company agreed to issue and sell to the Purchaser 132,000,000 shares of the Company’s common stock, at a per share price of $0.75, for aggregate proceeds of $99,000,000.

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 Stockholder’s rights arising thereunder, in exchange for the Company’s 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 Company’s 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 Stockholder’s rights thereto. The Amendment was effective as of April 6, 2016.

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.

As of March 31, 2016, the Company had 67,096,142 shares of common stock and zero share of preferred stock issued and outstanding, respectively.

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 Company’s transit buses.

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	$	1,545,955

NOTE 9 – 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 People’s 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 People’s 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).

NOTE 10 – SUBSEQUENT EVENTS

These financial statements were approved by management and available for issuance on May 23, 2016. Subsequent events have been evaluated through this date.

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

This report contains forward-looking statements. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including without limitation, statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding our financial position, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believe,” “expects,” “anticipates,” “intends,” “estimates,” “projects,” “target,” “goal,” “plans,” “objective,” “should,” or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties including those related to changes in economic conditions, new business opportunities and general financial and business conditions, actual results may differ materially from those expressed or implied by the forward-looking statements.

Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this Form 10-Q to be accurate as of the date hereof. Changes may occur after that date. We will not update that information except as required by law in the normal course of its public disclosure practices.

Additionally, the following discussion regarding our financial condition and results of operations should be read in conjunction with the financial statements and accompanying notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and with the Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and accompanying notes included our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC.

Unless the context otherwise requires, the terms the “Company,” “we,” “us” and “our” refer to HK Battery Technology Inc. (formerly Nevada Gold Holdings, Inc.)

OVERVIEW AND RECENT DEVELOPMENTS

During the fiscal year ended December 31, 2013, we engaged in limited oil and gas activities, had minimal operations, and generated no revenues. We did not pay to the Tempo property lessor, Gold Standard Royalty Corporation, an Advance Minimum Royalty Payment of approximately $150,000 that was due by January 15, 2013, and as of February 15, 2013, Gold Standard Royalty Corporation terminated our lease of the 206 contiguous unpatented lode claims on the Tempo Mineral Prospect. As a result, the Company does not hold any mineral lease or property, and our Board has determined that we will not in the future hold any mineral lease or property. Management, along with the Board of Directors, determined it was in the best interest of the Company and its stockholders to explore opportunities in the battery technology field. Current members of management and of the Board of Directors have experience in this field.

The Company at this time intends to seek a merger, combination or other business transaction with a company that develops and/or manufactures battery packs with advanced technologies, and believe that the change of our name will facilitate such efforts. However, the Company has not yet entered into any agreement, nor does it have any commitment to enter into or become engaged in such a transaction with any party.

Our Board of Directors may at any time determine to redirect the Company’s efforts to find a combination or acquisition target to another business or industry. We may not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business. Further, we may acquire or combine with a venture that is in its preliminary or development stage, one that is already in operation or one that is in a more mature stage of its corporate existence. Accordingly, business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities difficult and complex. See Part I, Item 1, “Business—Our Business Plan,” and Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, filed with the SEC, for additional information and risks associated with our proposed business plan.

On July 21, 2014, the Board of Directors and stockholders holding a majority of the Company’s outstanding shares of its common stock, respectively, approved an amendment and restatement of the Company’s Certificate of Incorporation to effect a 1-for-100 reverse stock split. The reverse stock split became effective on September 5, 2014 (“Effective Date”), after filing of the Company’s Amended and Restated Certificate of Incorporation with the Delaware Secretary of State on August 8, 2014. On the Effective Date, the Company’s 42,865,074 outstanding shares of common stock were reduced to approximately 429,475 outstanding shares of common stock.

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 March 31, 2016, neither these subsidiaries conducted any business, had any income or expenses nor had any bank accounts.

We expect that we will need to raise funds in order to effectuate a business plan. We may seek additional investors to purchase our stock to provide us with working capital to fund our operations. Thereafter, we will seek to establish or acquire businesses or assets with additional funds raised either via the issuance of shares or debt. There can be no assurance that additional capital will be available to us at all or on acceptable terms. We may seek to raise the required capital by other means. We may have to issue debt or equity or enter into a strategic arrangement with a third party. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability to raise funds will have a severe negative impact on our ability to remain a viable company. In pursuing the foregoing goals, we may seek to expand or change the composition of the Board or make changes to our current capital structure, including issuing additional shares or debt and adopting a stock option plan.

We do not expect to generate any revenues over the next twelve months. Our principal business objective for the next twelve months will be to seek, investigate and, if such investigation warrants, engage in a business combination with a private entity whose business presents an opportunity for our stockholders.

Results of Operations

For the Three Months Ended March 31, 2016 and 2015

Revenues and Other Income

During the three month period ended March 31, 2016, the Company did not realize any revenues from operations. Similarly, we have not realized any revenues from operations during the period from inception through March 31, 2016.

Expenses

Operating expenses, consisting entirely of general and administrative expenses, totaled $1,114,429 and $314,211 for the three month periods ended March 31, 2016 and 2015, respectively. The increase in operating expenses was primarily due to the expansion of our business and fees paid for our annual report audit service.

Net Loss

As a result of the foregoing, the Company incurred a net loss of $1,082,472 or ($0.02) per share, for the three month period ended March 31, 2016, compared to a net loss of $340,511, or ($0.79) per share (on a pre-reverse stock split basis), for the three month period ended March 31, 2015.

Liquidity and Capital Resources

As of March 31, 2016, we have $26,708,585 in cash on hand.

We may be unable to secure additional financing on terms acceptable to us, or at all, at times when we need such financing. Our inability to raise additional funds on a timely basis could prevent us from achieving our business objectives and could have a negative impact on our business, financial condition, results of operations and the value of our securities.

If we raise additional funds by issuing additional equity or convertible debt securities, the ownership percentages of existing stockholders will be reduced and the securities that we may issue in the future may have rights, preferences or privileges senior to those of the current holders of our Common Stock. Such securities may also be issued at a discount to the market price of our Common Stock, resulting in possible further dilution to the book value per share of Common Stock. If we raise additional funds by issuing debt, we could be subject to debt covenants that could place limitations on our operations and financial flexibility.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide disclosure under this Item 3.

ITEM 4. CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our principal executive officer and our principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of March 31, 2016 (the “Evaluation Date”). Based on this evaluation, such officers concluded as of the Evaluation Date that our disclosure controls and procedures were not effective to ensure that the information relating to us, including our consolidated subsidiaries, required to be disclosed by us in the reports filed or submitted by us under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

We are a small organization with limited personnel. We were unable to implement an effective system of disclosure controls and procedures as of the Evaluation Date. Nevertheless, management believes that this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report.

With the participation of our principal executive officer and our principal financial officer, we evaluated any change in our internal control over financial reporting that occurred during the fiscal quarter covered by this Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There has been no such change in our internal control over financial reporting identified in connection with that evaluation.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time we may be involved in claims arising in connection with our business. There can be no assurance as to the ultimate outcome of any such claim. The amount of reasonably possible losses in connection with any actions that may be brought against us could be material to our consolidated financial condition, operating results and/or cash flows.

As of the date of this Report, there are no material pending legal proceedings to which the Company or any of its subsidiaries is a party or of which any of their property is the subject, nor are there any such proceedings known to be contemplated by governmental authorities.

ITEM 1A. RISK FACTORS.

There have been no material changes in our Risk Factors as previously disclosed in our Form 10-K for fiscal year 2012.

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

Other than as previously reported in our Current Reports on Form 8-K or as “subsequent events” in our Annual Report on Form 10-K for the year ended December 31, 2015, we have not sold any of our equity securities during the period covered by this Report.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS

The following exhibits are included with this quarterly report.


Exhibit No.		Description

31.1		Certification of Principal Executive Officer pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**
31.2		Certification of Principal Accounting Officer pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**
32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
32.2		Certification of Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101.INS		XBRL Instance Document***
101.SCH		XBRL Taxonomy Extension Schema Document***
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document***
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document***
101.LAB		XBRL Taxonomy Extension Label Linkbase Document***
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document***

*Filed herewith.

** This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

*** Pursuant to Rule 406T of Regulation S-T, this XBRL related information shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filings.

SIGNATURE

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


		HK BATTERY TECHNOLOGY INC.


Date: May 23, 2016	By:	/s/ Jianguo Xu
		Jianguo Xu
		Chief Executive Officer (Principal Executive Officer)

Date: May 23, 2016	By:	/s/ Jimmy Wang
		Jimmy Wang
		Chief Financial Officer (Principal Accounting Officer)

HK BATTERY TECHNOLOGY INC 10-Q