History
A small shell company that tried Peruvian mining and a Texas oil deal, then became a graphene-themed vehicle ending up almost entirely controlled by an affiliate.
2008-2011: Peru mining and a Texas oil attempt
The company, then called Loreto Resources Corporation (formerly Loreto Corporation), set out in September 2008 to pursue mining in South America, starting with Peru. It raised money through a private share sale at $1.00 a share: 1,350,000 shares closed on September 9 for net proceeds of $1,312,313, and 675,000 more closed on September 17 for net proceeds of $668,000. In total that was $2,025,000 gross, meant for general corporate purposes.
The record then goes quiet for almost three years. In August 2011 the company signed a letter of intent with Eagleford Energy Inc. for a possible farm-in, meaning it would earn an interest by funding work, of up to 50% of Eagleford's working interests in two leases in Zavala County, Texas. The only binding part was a US$250,000 secured convertible bridge loan to Eagleford; the rest depended on due diligence and on the company raising at least $2.3 million. On October 18, 2011 the company terminated the letter of intent. The filing gave no reason and did not say what happened to the bridge loan commitment. The company had no revenues and funded itself with small 10% convertible notes during 2010 to 2012.
2012-2014: A shell with a restated loan
The share count fell sharply in 2012, from 70,298,322 to 702,983, and then rose to 1,277,039 in 2013, but the beats do not explain either move, so they are not interpreted here. By 2013 the company had been renamed Angstron Holdings and was based in Pasadena, California. In November 2014 it said its September 30, 2013 quarterly accounts could not be relied on, because a $4,000,000 loan from Lianyungang Hybrid Kinetic New Energy Co., Ltd. had not been recorded, understating cash and liabilities. A corrected 10-Q/A was promised. The loan had been shown correctly in later filings.
2014-2016: New owners and a graphene label
On November 26, 2014 the company lent $1,000,000 to American Compass, Inc., controlled by the same shareholder as the company. It carries no interest if repaid by November 25, 2017, and 3% a year otherwise. On December 7, 2014 Yunfeng Lu bought 3,683 Series B preferred shares for $336,667, about 73.7% of the company on an as-converted basis, a change of control. He also signed an agreement to help develop nanographene and battery-materials technology.
In February 2015 the company agreed to sell 537,418,480 shares at $0.0186 to Hybrid Kinetic (Lianyungang) New Energy Limited for $10,000,000: $6,000,000 in cash plus cancelling the $4,000,000 note. That would give the investor about 52.51% on a fully diluted basis. The company also agreed to provide graphene production consulting for a quarterly royalty of 7% of the investor's net sales revenue. The year-end 2016 count of 538,695,519 is consistent with that issue, though the beats do not confirm it closed. In June 2015 the company pledged $3,500,000 over seven years to UCLA's engineering school for a research center bearing its name, starting with $500,000 by December 31, 2015.
Effective October 1, 2015 the Lu agreement ended, and Lu agreed to sell his Series B shares to American Compass for $336,667, which would leave it with about 99.9% on a fully diluted basis. As of October 7, 2015 the company, now named HK Graphene Technology Corporation, remained a shell with no disclosed assets. In April 2016 it suspended its duty to file periodic reports with the SEC.
Written from the 11 story beats below (2008 to 19 Apr 2016), which come from the company's own announcements and filings.