WEB NEWS Comments & Business Outlook
CALCULATION OF REGISTRATION FEE
Title of Each Class of Security Being Registered
Proposed Maximum Aggregate Offering Price(1)
Amount of Registration Fee(2)
Common Stock, $0.001 par value
$
50,000,000
$
5,035.00
Underwriter Warrants (3)
$
-
$
-
Common Stock Underlying Underwriter Warrants (4)
$
1,200,000
$
120.84
Total
$
51,200,000
$
5,155.84
(5)
Comments & Business Outlook
https://www.sec.gov/Archives/edgar/data/1516805/000121390016013433/f10q0316_moxianinc.htm MOXIAN, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the
For the
For the
For the
Three Months
Three Months
Six Months
Six Months
Ended
Ended
Ended
Ended
March 31,
March 31,
March 31,
March 31,
Revenues, net
$
7,358
$
22,661
$
12,942
$
68,166
Cost of revenues
(1,583
)
(11,648
)
(2,889
)
(11,648
)
Gross Profit
5,775
11,013
10,053
56,518
Depreciation and amortization expenses
457,109
221,663
900,553
256,744
Research and development
625,756
270,828
1,514,296
515,986
Selling, general and administrative expenses
1,212,913
668,234
2,694,739
1,420,772
Loss from operations
(2,290,003
)
(1,149,712
)
(5,099,535
)
(2,136,984
)
Finance expense
(197
)
(12,792
)
(197
)
(12,792
)
Interest income
675
2,267
1,559
2,278
Foreign exchange loss
(456,283
)
-
(456,283
)
-
Other income (expenses)
(1,052
)
-
449
-
Loss before income tax
(2,746,860
)
(1,160,237
)
(5,554,007
)
(2,147,498
)
Income tax benefits
21,398
-
24,317
-
Net loss
(2,725,462
)
(1,160,237
)
(5,529,690
)
(2,147,498
)
Foreign currency translation adjustments
55,719
49,395
161,157
191,744
Comprehensive loss
$
(2,669,743
)
$
(1,110,842
)
$
(5,368,533
)
$
(1,955,754
)
Basic and diluted loss per common share
$
(0.02
)
$
(0.01
)
$
(0.03
)
$
(0.01
)
Basic and diluted weighted average common shares outstanding
177,442,250
198,300,000
196,259,128
198,300,000
Auditor trail
ITEM 4.01 CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT
Previous Independent Accountants
On April 2, 2016, Moxian, Inc. (the “Company,”) dismissed Dominic K.F. Chan & Co (“Chan”) as the Company’s independent registered public accounting firm. The reports of Chan, on our financial statements for each of the past two fiscal years contained no adverse opinion or a disclaimer of opinion and were not modified. The decision to change independent accountants was approved by our Board of Directors on April 2, 2016.
During our two most recent fiscal years and through the date of this report, we have had no disagreements with Chan, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Chan, would have caused it to make reference to the subject matter of such disagreements in its report on our financial statements for such periods.
During our two most recent fiscal years and through the date of this report on Form 8-K, there have been no reportable events as defined under Item 304(a)(1)(v) of Regulation S-K adopted by the Securities and Exchange Commission (the “SEC”).
We provided Chan, with a copy of this disclosure before the filing was made with the SEC. We requested that Chan, provide us with a letter addressed to the SEC stating whether or not it agrees with the above statements, and we received a letter from Chan, stating that it agrees with the above statements. A copy of such letter, dated as of April 5, 2016 is filed as Exhibit 16.1 to this report.
New Independent Accountants
Our Board of Directors appointed Friedman LLP, Certified Public Accountants (“Friedman”) as our new independent registered public accounting firm, effective April 2, 2016. During the two most recent fiscal years and through the date of our engagement, we did not consult with Friedman regarding either (1) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, or (2) any matter that was either the subject of a disagreement or a reportable event (as defined in Item 304(a)(1)(v) of Regulation S-K). In approving the selection of Friedman as the Company’s new independent registered public accounting firm, the Board of Directors considered all relevant factors.
Deal Flow
CALCULATION OF REGISTRATION FEE
Title of Each Class of Security Being Registered
Proposed Maximum Aggregate Offering Price(1)(2)
Amount of Registration Fee(3)
Common Stock, $0.001 par value
$
57,500,000
$
5,790.25
Underwriter Warrants (4)
$
-
$
-
Common Stock Underlying Underwriter Warrants (5)
$
1,200,000
$
120.84
Total
$
58,700,000
$
5,911.09
Deal Flow
Item 3.02 Unregistered Sales of Equity Securities.
The Shares have not been registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration under or an applicable exemption from such registration requirements. This Current Report on Form 8-K does not constitute an offer to sell, or a solicitation of an offer to purchase, the Shares in any jurisdiction in which such offer or solicitation would be unlawful.
Comments & Business Outlook
ITEM 8.01 Other Events.
On February 22, 2016, Good Eastern Investment Limited (‘GEL’), Stellar Elite Limited (‘SEL’) and Moxian China Limited (‘MCL’), collectively, the Shareholders, entered into a Share Cancellation Agreement (the ‘Agreement’) with the Company. Pursuant to the Agreement, on February 22, 2016, the Shareholders cancelled 94,845,081 shares of the Company common stock which represented 42.93% of our issued and outstanding shares for no consideration. The cancelled shares were returned to treasury resulting in GEL, SEL and MCL owning after the share cancellation 19,980,000, 39,660,000 and 35,205,081 shares of common stock or any other securities of the Company respectively.
Comments & Business Outlook
ITEM 4.02: NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW.
On February 5, 2016, the management and the audit committee (the “Audit Committee”) of Moxian, Inc. (the “Company”) determined that the Company’s previously issued audited financial statements for the year ended September 30, 2015 (the “2015 Financial Statements”), and its unaudited financial statements for the three and six months ended March 31, 2015 and for the three and nine months ended June 30, 2015 (together with the 2015 Financial Statements, the “Prior Financial Statements”) should not be relied upon.
While preparing the Company’s consolidated financial statements ended December 31, 2015, the management identified misstatements in the application of certain accounting practices and procedures, including (i) the Acquisition of Moxian Intellectual Property Limited (the “Moxian IP”) should be accounted for as an asset acquisition, and not a business acquisition, for the three and six months ended March 31, 2015 and for the three and nine months ended June 30, 2015; (ii) the recognition of deferred tax assets derived from net operating loss should not be recognized for the year ended September 30, 2015; and (iii) overstated intangible assets and accruals and other payable as of September 30, 2015.
1. Acquisition of Moxian IP
In connection with the acquisition of Moxian IP on January 30, 2015, the Company accounted for this transaction as a business acquisition and recognized goodwill of USD 6,782,000. The Company identified that this transaction should be accounted as an asset acquisition and the USD 6,782,000 intangible assets - Intellectual Property Rights should be recognized. Accordingly, the amortization of the intangible assets would increase by USD 169,550 and USD 169,550 for the three and six months ended March 31, 2015, respectively, and it would increase by USD 169,550 and USD 339,100 for the three and nine months ended June 30, 2015, respectively. The net loss would increase by the same amounts for each period for the abovementioned.
Moreover, the Company identified that the amortization of the abovementioned intangible assets was over accrued by USD 169,550 for the year ended September 30, 2015. As a result, the amortization of intangible assets would decrease by USD 169,550 and the net loss would decrease by USD 169,550 for the year ended September 30, 2015.
The Company recognized USD 1.46 million of deferred tax assets derived from net operating loss at the year ended September 30, 2015. Management considered this amount was over accrued by USD 1.41 million according to their best estimation. As a result, the deferred tax assets would decrease USD 1.41 million as of September 30, 2015, the income tax expenses – deferred tax benefit would also decrease by USD 1.41 million and the net loss would increase by USD 1.41 million for the year ended September 30, 2015.
The Company identified that the intangible assets was overstated by USD 173,177 as of September 30, 2015. As a result, the intangible assets would decrease USD 173,177 and accruals and other payables would decrease USD 173,177 as of September 30, 2015.
We expect that the restatement will not have an effect on the Company’s liquidity, cash resources, or future business operation because they are all non-cash adjustments.
The Company intends to promptly file amendments to its periodic reports described above that were previously filed with the Securities and Exchange Commission to reflect the matters discussed in this Item 4.02.
Comments & Business Outlook
(A DEVELOPMENT STAGE COMPANY)
AUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Stated in US Dollars)
For the period
For the
For the
from Inception
Year
Year
October 12,
Ended
Ended
2010 to
September 30, 2015
September 30, 2014
September 30, 2015
Revenues, net
$
83,870
$
56,122
$
139,992
Cost and expenses
Cost of sales
25,269
15,514
48,694
Depreciation and amortization expenses
1,012,849
78,571
1,091,420
Selling, general and administrative expenses
5,443,815
2,176,963
7,822,691
Impairment of goodwill
-
2,600,315
2,600,315
Loss from operations
(6,398,063
)
(4,815,241
)
(11,423,128
)
Interest expenses
-
-
-
Interest income
2,258
23,899
26,157
Loss before income tax
(6,395,805
)
(4,791,342
)
(11,396,971
)
Income tax expenses
1,457,460
-
1,457,460
Net loss
(4,938,345
)
(4,791,342
)
(9,939,511
)
Foreign currency translation adjustments
61,730
52,929
114,659
Comprehensive loss
$
(4,876,615
)
$
(4,738,413
)
$
(9,824,852
)
Earnings per share (note 6)
Basic and diluted loss per common share
$
(0.02
)
$
(0.02
)
Basic and diluted weighted average common shares outstanding
199,996,173
198,300,000
Management Discussion and Analysis
The Company received sales revenues of $83,870 in the year ended September 30, 2015 compared to $56,122 being generated in the year ended September 30, 2014.
Net loss for the year ended September 30, 2015 and year ended September 30, 2014, were $(6,395,805) and $(4,791,342), respectively. Basic and diluted net income (loss) per share amounted $(0.02) and $(0.02) respectively for the year ended September 30, 2015 and year ended September 30, 2014.
Comments & Business Outlook
MOXIAN, INC.
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Stated in US Dollars)
For the period
For the For the For the For the from Inception
Three Months Three Months Nine Months Nine Months October 12,
Ended Ended Ended Ended 2010 to
June 30, June 30, June 30, June 30, June 30,
Revenues, net $ 18,187 $ 15,802 $ 86,353 $ 15,802 $ 142,475
Cost and expenses
Cost of sales 15,203 - 26,852 - 50,277
Depreciation and amortization expenses 68,498 26,417 155,693 41,774 234,264
Selling, general and administrative expenses 1,661,660 793,125 3,598,417 1,144,753 5,977,293
Impairment of goodwill - - - - 2,600,315
Loss from operations (1,727,174 ) (803,740 ) (3,694,609 ) (1,170,725 ) (8,719,674 )
Interest expenses (19,416 ) - (32,194 ) - (8,295 )
Interest income - 51 2,264 59 2,264
Loss before income tax (19,416 ) 51 (29,930 ) 59 (6,031 )
Income tax expenses - - - - -
Net loss (1,746,590 ) (803,689 ) (3,724,539 ) (1,170,666 ) (8,725,705 )
Foreign currency translation adjustments 85,003 7,128 276,747 7,128 329,676
Comprehensive loss $ (1,661,587 ) $ (796,561 ) $ (3,447,792 ) $ (1,163,538 ) $ (8,396,029 )
Earnings per share (note 6)
Basic and diluted loss per common share $ (0.01 ) $ (0.00 ) $ (0.02 ) $ (0.01 )
Basic and diluted weighted average common shares outstanding 198,300,000 198,300,000 198,300,000 198,300,000
Management Discussion and Analysis
Gross Revenues
The Company received sales revenues of $18,187 in the three months ended June 30, 2015 com-pared to $15,802 being generated in the three months ended June 30, 2014.
Net loss for the three months ended June 30, 2015 and three months ended June 30, 2014, were ($1,746,590) and ($803,689), respectively. Basic and diluted net income (loss) per share amounted to ($0.01) and ($0.00) respectively for the three months ended June 30, 2015 and three months ended June 30, 2014.
The increase in net loss for the three months ended June 30, 2015 and three months ended June 30, 2014 was due to an increase in general and administrative expenses.
Comments & Business Outlook
ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR.
Effective July 29, 2015, Moxian China, Inc. , a Nevada corporation (the “Company”), amended its Articles of Incorporation to change its name to Moxian, Inc ., which was approved by the Financial Industry Regulatory Authority effective on July 29, 2015. The Company’s stock symbol remains “MOXC” and its CUSIP number remains 624697 108.
Deal Flow
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
Also on June 4, 2015, the Company and Xinhua entered into a new Subscription Agreement (“Xinhua Subscription Agreement”) on substantially the same terms as the Zhongtou Subscription Agreement (the “Transaction”). Pursuant to the Xinhua Subscription Agreement, if the Company fails to contract with 25,000 new paying merchants by September 30, 2016, the Company shall issue an additional number of shares of Common Stock to Xinhua, equal to 50% of the accumulated number of Warrant Shares exercised and acquired by Xinhua as of September 30, 2016, for no additional consideration (“Make Good Provision”). The Make Good Provision will be available only if Xinhua has exercised the Warrant and acquired more than 16,000,000 Warrant Shares (the “Condition”). Further, the Company shall issue 4,000,000 shares of Common Stock to Xinhua for no additional consideration if the Company fails to publish its full working version of the Moxian mobile application version 2.0 by September 30, 2015, or if the Company fails to uplist to a national securities exchange in the U.S. by June 30, 2017. Xinhua shall also have the right to nominate (i) one member of the Company’s accounting department; and (ii) one member of the board of directors provided that the Condition has been met. The Transaction is expected to close on or about July 31, 2015.
The foregoing summary is qualified in its entirety by reference to the forms of the Zhontou Subscription Agreement, the Termination Agreement and Xinhua Subscription Agreement filed herewith as Exhibits 10.1, 10.2 and 10.3, respectively.
Comments & Business Outlook
MOXIAN CHINA, INC.
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Stated in US Dollars)
For the
For the
For the
For the
For the
Three Months
Three Months
Six Months
Six Months
2010
Ended
Ended
Ended
Ended
to
March 31,
March 31,
March 31,
March 31,
March 31,
Revenues, net
$
22,661
$
-
$
68,166
$
-
$
124,288
Cost and expenses
Cost of sales
11,648
-
11,648
-
35,073
Depreciation and amortization expenses
52,113
15,357
87,194
15,357
165,765
Selling, general and administrative expenses
939,062
351,628
1,936,758
351,628
4,315,634
Impairment of goodwill
-
-
-
-
2,600,315
Loss from operations
(980,162
)
(366,985
)
(1,967,434
)
(366,985
)
(6,992,499
)
Interest expenses
(12,792
)
-
(12,792
)
-
(12,792
)
Interest income
2,267
8
2,278
8
26,177
Loss before income tax
(990,687
)
(366,977
)
(1,977,948
)
(366,977
)
(6,979,114
)
Income tax expenses
-
-
-
-
-
Net loss
(990,687
)
(366,977
)
(1,977,948
)
(366,977
)
(6,979,114
)
Foreign currency translation adjustments
49,395
7,887
191,744
7,887
244,673
Comprehensive loss
$
(941,292
)
$
(359,090
)
$
(1,786,204
)
$
(359,090
)
$
(6,734,441
)
Earnings per share (note 6)
Basic and diluted loss per common share
$
0.00
$
0.00
$
(0.01
)
$
0.00
Basic and diluted weighted average common shares outstanding*
198,300,000
198,300,000
198,300,000
198,300,000
Management Discussion and Analysis
Gross Revenues
The Company received sales revenues of $22,661 in the three months ended March 31, 2015 compared to $0 in the three months ended March 31, 2014. The Company launched its marketing platform by offering it to merchants for free and during the last three months of 2014 started collecting monthly fees from merchants. Of the approximately 30,000 merchants on the platform as of March 31, 2015, approximately 721 were paying as of that date.
Net loss for the three months ended March 31, 2015 and three months ended March 31, 2014, were ($990,687) and ($366,977), respectively. Basic and diluted net income (loss) per share amounted to ($0.00) and ($0.00) respectively for the three months ended March 31, 2015 and three months ended March 31, 2014.
The increase in net loss for the three months ended March 31, 2015 was due to an increase in general and administrative expenses.
Comments & Business Outlook
MOXIAN CHINA, INC.
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Stated in US Dollars)
For the Three Months Ended
For the Three Months Ended
For the period from Inception
December 31, 2014
December 31, 2013
December 31, 2014
Revenues, net
$
45,505
$
-
$
101,627
Cost and expenses
Cost of sales
7,911
-
23,425
Depreciation and amortization expenses
35,081
-
113,652
Selling, general and administrative expenses
989,785
-
3,376,572
Impairment of goodwill
-
-
2,600,315
Loss from operations
(987,272 )
-
(6,012,337 )
Other income
Interest income
11
-
23,910
Loss before income tax
(987,261 )
-
(5,988,427 )
Income tax expenses
-
-
-
Net loss
(987,261 )
-
(5,988,427 )
Foreign currency translation adjustments
142,349
-
195,278
Comprehensive loss
$
(844,912
)
$
-
$
(5,793,149
)
Earnings per share (note 6)
Basic and diluted loss per common share
$
(0.00
)
$
0.00
Basic and diluted weighted average common shares outstanding*
198,300,000
198,300,000
Management Discussion and Analysis
Gross Revenues
The Company made sales revenues of $45,505 in the three months ended December 31, 2014 compared to nil being generated in the three months ended December 31, 2013.
The Company’s sales revenue of $45,505 in the period ended December 31, 2014 comes from payment by merchant clients who subscribed to our MO-Promo platform. In our efforts to acquire these subscribers, the company incurred costs of $7,911. These costs were mainly for printing MO-Point cards and acquiring posters and advertisement placements in newspaper and other media.
Net loss for the three months ended December 31, 2014 and the three months ended December 31, 2013 were $987,261 and nil, respectively. Basic and diluted net loss per share amounted to ($0.00) for the three months ended December 31, 2014 and the three months ended December 31, 2013.
Acquisition Activity
Item 2.01 Completion of Acquisition or Disposition of Assets
In addition, under the Equity Transfer Agreement, the Company and REBL agreed to terminate the License and Acquisition Agreement, dated February 19, 2014 (the “License and Acquisition Agreement”), whereby the Company was granted the exclusive right by REBL to use the intellectual property rights owned by Moxian IP, REBL’s subsidiary, and in consideration of such license, the Company agreed to pay to REBL (i) $1,000,000 as license maintenance royalty each year commencing on the first anniversary of the date of the License Agreement; and (ii) 3% of the gross profits resulting from the distribution and sale of the products and services on behalf of the Company as an earned royalty. In addition, we acquired all of the equity interests of Moxian Group Limited, a corporation incorporated under the laws of British Virgin Islands (“Moxian BVI”) in consideration of $1,000,000 (the “Moxian BVI Purchase Price”). Immediately prior to the execution of the Equity Transfer Agreement, the Moxian BVI Purchase Price was not yet paid and no license maintenance royalty or earned royalty under the License and Acquisition Agreement had accrued.
Under the Equity Transfer Agreement, the Company and REBL agreed to terminate the License and Acquisition Agreement and all of the Company’s liabilities owed to REBL thereunder, other than the Moxian BVI Purchase Price, were released and discharged.
Comments & Business Outlook
MOXIAN CHINA, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Stated in US Dollars)
For the period
from Inception
For the
For the
October 12,
year ended
year ended
2010 to
September 30, 2014
September 30, 2013
September 30, 2014
Revenues, net
$
56,122
$
-
$
56,122
Cost and expenses
Cost of sales
15,514
-
15,514
Depreciation and amortization expenses
78,571
-
78,571
Selling, general and administrative expenses
2,176,963
31,441
2,386,787
Impairment of goodwill
2,600,315
-
2,600,315
Loss from operations
(4,815,241 )
(31,441 )
(5,025,065 )
Other income
Interest income
23,899
-
23,899
Loss before income tax
(4,791,342 )
(31,441 )
(5,001,166 )
Income tax expenses
-
-
-
Net loss
(4,791,342 )
(31,441 )
(5,001,166 )
Foreign currency translation adjustments
52,929
-
52,929
Comprehensive loss
$
(4,738,413
)
$
(31,441
)
$
(4,948,237
)
Earnings per share (note 6)
-
Basic and diluted loss per common share
$
(0.02
)
$
(0.00
)
Basic and diluted weighted average common shares outstanding*
198,300,000
198,300,000
Management Discussion and Analysis
The Company received sales revenues of $56,122 in the year ended September 30, 2014 compared to nil being generated in the year ended September 30, 2013.
The Company’s sales revenue of $56,122 in the year ended September 30, 2014 comes from paying merchant clients who subscribed to our MO-Promo platform. In our efforts to acquire these subscribers, the costs of $15,514 consist were mainly for printing MO-Point cards and acquiring posters and advertisement placements in newspaper and other media.
Net loss for the years ended September 30, 2014 and September 30, 2013, were $4,791,342 and $31,441, respectively. Basic and diluted net loss per share amounted to ($0.02) and ($0.00) respectively for the years ended September 30, 2014 and September 30, 2013.
The increase in net loss for the year ended September 30, 2014 was contributed by an impairment of goodwill arising from acquisition.
Comments & Business Outlook
MOXIAN CHINA, INC.
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Stated in US Dollars)
For the period
For the
For the
For the
For the
from Inception
three months
three months
nine months
nine months
October 12,
ended
ended
ended
ended
2010 to
June 30, 2014
June 30, 2013
June 30, 2014
June 30, 2013
June 30, 2014
Revenues, net
$
15,802
$
-
$
15,802
$
-
$
15,802
Cost and expenses
Cost of sales
-
-
-
-
-
Depreciation and amortization expenses
26,417
-
41,774
-
41,774
Selling, general and administrative expenses
793,125
5,847
1,144,753
27,814
1,354,577
Loss from operations
(803,740
)
(5,847
)
(1,170,725
)
(27,814
)
(1,380,549
)
Other income
Interest income
51
-
59
-
59
Loss before income tax
(803,689
)
(5,847
)
(1,170,666
)
(27,814 )
(1,380,490
)
Income tax expenses
-
-
-
-
-
Net loss
(803,689 )
(5,847
)
(1,170,666
)
(27,814
)
(1,380,490
)
Foreign currency translation adjustments
7,128
-
7,128
-
7,128
Comprehensive loss
$
(796,561
)
$
(5,847
)
$
(1,163,538
)
$
(27,814
)
$
(1,373,362
)
Earnings per share (note 6)
Basic and diluted loss per common share
$
(0.00
)
$
(0.00
)
$
(0.01
)
$
(0.00
)
Basic and diluted weighted average common shares outstanding*
198,300,000
198,300,000
198,300,000
198,300,000
Management Discussion and Analysis
Gross Revenues
The Company made sales revenues of $15,802 in the three months ended June 30, 2014 compared to nil being generated in the three months ended June 30, 2013.
Sales revenue is mainly from sales of our merchant packages to merchant clients in the region.
Net Loss
Net loss for the three months ended June 30, 2014 and the three months ended June 30, 2013 were $803,689 and $5,847, respectively. Basic and diluted net loss per share amounted to ($0.00) for the three months ended June 30, 2014 and the three months ended June 30, 2013.
Reverse Merger Activity
On February 21, 2014, we entered into a License and Acquisition Agreement with MOXG (the “License and Acquisition Agreement”), whereby we (i) acquired all the equity interests of Moxian BVI, and (ii) obtained the license to use the intellectual property rights (as define below) of MOXG. Pursuant to the License and Acquisition Agreement, MOXG agreed to sell, convey, and transfer 100% of the equity interests of Moxian BVI to Moxian CN Samoa, a newly incorporated wholly-owned subsidiary of the Company, in consideration of an aggregate of $1,000,000. As a result, Moxian BVI, together with its subsidiaries, Moxian HK, Moxian Shenzhen, and Moxian Malaysia, became the Company’s subsidiaries. Under the License and Acquisition Agreement, MOXG also agreed to grant us the exclusive right to use MOXG’s intellectual property rights (collectively, the “IP Rights”) in Mainland China, Malaysia, and other countries and regions where MOXG conducts its business (the “Licensed Territory”), and the exclusive right to solicit, promote, distribute and sell MOXG products and services in the Licensed Territory for five years (the “License”). In exchange for such License, the Company agreed to pay to MOXG: (i) $1,000,000 as a license maintenance royalty each year commencing from the second year from the date of the agreement; and (ii) 3% of the gross profit of distribution and sale of MOXG products and services as an earned royalty. Pursuant to the License and Acquisition Agreement, the Company has the right to acquire the new IP Rights that are developed by MOXG and sub-license such rights to a third party. The Company also has the obligation to develop the social media market in the Licensed Territory of MOXG products and services.
Reverse Merger Activity
On November 14, 2013, Brandi DeFoor (“DeFoor”), a majority shareholder of Secure NetCheckIn, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with three investors (the “Purchasers”), pursuant to which DeFoor sold to the Purchasers her 3,100,000 shares of common stock, par value $.001 per share of the Company (the “Majority Interests”) for the consideration in the aggregate amount of $264,500.
As a result of the closing of the above transaction, the Purchasers now aggregately own approximately 93.8% of the total outstanding shares of the Company’s Common Stock on a fully-diluted basis as of the date of this Report. The Company, after the closing of the Purchase Agreement, intends to change its corporate name to “Moxian China, Inc.”
