Filing summary
Issuer and period: The supplied filing is a Form 20-F transition report for Moxian (BVI) Inc. (formerly Moxian, Inc.), covering October 1 through December 31, 2020. This does not match the request metadata naming Abits Group Inc.; verify the issuer identity before relying on this summary. The financial statements are unaudited and prepared under U.S. GAAP.
The transition followed a fiscal year-end change from September 30 to December 31 in connection with the company’s August 2021 redomicile to the British Virgin Islands. The filing was signed February 7, 2022.
Financial results and condition
| Metric | Three months ended Dec. 31, 2020 | Three months ended Dec. 31, 2019 |
|---|---|---|
| Revenue | $0 | $383,375 |
| Selling, general and administrative expenses | $387,160 | $158,957 |
| Operating and net result | Loss of $387,160 | Income of $224,418 |
| Comprehensive result | Loss of $309,493 | Income of $196,896 |
| Basic and diluted earnings per share | $(0.02) | $0.01 |
| Cash from operating activities | $(86,222) | $(366,273) |
With no revenue in the quarter, a revenue margin is not meaningful. The filing does not provide a clear comparable gross margin. Revenue ceased because the major digital-advertising client, Beijing Bi Er, could not hold large public events amid COVID-19 concerns.
At December 31, 2020, cash was $19,402, down from $5,249 at September 30. Current assets were $2,192,192 and current liabilities were $2,100,912, leaving working capital of $91,280. Current assets included $1,345,080 in accounts receivable, net of a $176,680 doubtful-account provision, and an $827,710 share-subscription receivable. Total current liabilities included $1,718,655 of accruals and other payables and $382,257 of loans payable. The balance sheet reports net assets of $91,280.
Operating cash outflow was partly offset by $22,708 of financing cash flow and a $77,667 favorable foreign-exchange effect, resulting in a $14,153 net increase in cash. The company had no off-balance-sheet arrangements. Operating lease expense was $56,522; the company reported no minimum rentals under non-cancellable leases at period-end.
Material changes, outlook and risks
- Compared with the prior-year quarter, revenue fell from $383,375 to zero, and the company shifted from net income to a $387,160 net loss. SG&A increased by $228,203.
- The company had a skeletal staff of 11 and continued operating primarily in digital advertising after suspending its mobile-app operation in 2018. It had incurred losses since inception and disclosed substantial doubt about its ability to continue as a going concern without timely additional capital. The statements were prepared on a going-concern basis.
- COVID-19 materially harmed the quarter’s results by preventing the major client from staging large events. Management said future effects remained uncertain, including the possibility of further outbreaks and related restrictions.
- Subsequent to the reporting period, the company reported completing a private placement and said it intended to use some proceeds to acquire bitcoin-mining equipment and assets through its Hong Kong subsidiary, with the balance for working capital. The filing gives no clear amount for the placement or acquisition.
- A Beijing court ordered repayment of RMB 2.22 million (approximately $323,000) to an unrelated creditor. The creditor assigned the debt to Beijing Bi Er in December 2020; the debt-assignment agreement became effective in January 2021. The company also reported that the share-subscription receivable was fully settled by January 14, 2021 through offsets and cash receipts.
- Nasdaq notified the company in October 2020 that its market value of listed securities had been below the $35 million continued-listing threshold for 30 consecutive business days, giving it until May 3, 2021 to regain compliance. The provided text does not state the eventual outcome.
- After the period, the company amended its charter to authorize 150 million ordinary shares and 50 million preferred shares. The filing also describes a proposed Btab share exchange that had not been consummated as of the report date.
- Additional risks include dependence on China operations and exposure to PRC political, regulatory, economic and currency conditions. No material legal proceedings were otherwise reported.
Important facts to verify
- Confirm whether this Moxian filing is the intended document for the Abits Group Inc. request.
- Assess collectability of the $1.345 million Beijing Bi Er receivable and confirm the reported settlement of the $827,710 subscription receivable.
- Review the company’s going-concern position, available liquidity, debt and payable obligations, and the terms and proceeds of the subsequent private placement.
- Verify the outcome of the Nasdaq market-value deficiency and the status and funding requirements of the bitcoin-mining asset acquisition.
- Reconcile filing inconsistencies: the equity statement shows 16,181,529 shares at December 31, 2020, while the cover and balance sheet report 16,191,529; the equity roll-forward labels are also unclear.