Business context and reporting period
This is Moxian (BVI) Inc.’s transition report for the year ended December 31, 2022, prepared under U.S. GAAP—not a standalone fourth-quarter report. The filing identifies the issuer as Moxian (BVI) Inc.; the request metadata names Abits Group Inc. The filing says the company changed its business toward bitcoin mining in 2022 and divested its PRC subsidiary in July 2022.
The company’s 2022 mining operations in Buffalo, New York, and Columbus, Georgia, were suspended by June because of bitcoin prices and electricity costs. At year-end, the company was pursuing a new Tennessee site. Its shares traded on Nasdaq under MOXC; 35,554,677 ordinary shares were outstanding at December 31, 2022.
Financial performance and position
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | $164,428 | $219,330 |
| Loss from operations | $(19,260,227) | $(2,866,140) |
| Loss before tax | $(22,544,693) | $(2,739,850) |
| Comprehensive loss | $(22,544,693) | $(2,724,264) |
| Basic and diluted loss per ordinary share | $(0.659) | $(0.145) |
| Cash and cash equivalents at year-end | $2,505,286 | $2,507,404 |
| Digital assets at year-end | $7,087,747 | $5,000,000 |
| Property, equipment and vehicles, net | $12,553,408 | — |
| Total assets | $24,531,417 | $7,737,112 |
| Total liabilities | $613,455 | $1,170,096 |
| Stockholders’ equity | $23,917,962 | $6,567,016 |
Revenue declined about 25%, while operating and net losses increased substantially. The filing reports $461,290 of direct costs against 2022 revenue. It records $11.889 million of equipment write-offs, $6.265 million of depreciation, a $1.618 million loss associated with the divestment, and $76,681 of digital-asset impairment. These items contributed to the loss; the filing does not provide a clear operating margin measure.
Cash-flow data show $7.199 million used in operating activities, $32.707 million used in investing activities, and $40 million of proceeds from the issuance of shares. The company raised $40 million in a February 2022 private placement by issuing 16 million ordinary shares at $2.50 each. It reports no long-term debt outstanding. Year-end current liabilities were $613,455, compared with cash of $2.505 million; other receivables were $2.385 million.
Material changes, outlook and risks
- The company says bitcoin fell from roughly $40,000 at the start of 2022 to about $15,000 late in the year. Management attributed mining-site closures to weak bitcoin prices and volatile, high electricity costs.
- Management described a Tennessee mining center as under development after year-end: the company acquired land for $1.2 million in April 2023 and awarded a $1.6 million construction management contract, with completion targeted for August 2023. A local utility supply contract was still under negotiation in the filing. These are subsequent events, not 2022 operating results.
- The company had placed an irrevocable order for 1,140 mining servers costing $5.273 million, with delivery expected from July 2023. It reported $2.375 million paid to Bitmain and the remaining balance payable progressively upon delivery. Management also described a proposed Kazakhstan joint venture requiring an initial investment below $0.5 million.
- Management expressed optimism about restarting mining but gave no quantified revenue, earnings, production or cash-flow guidance. It warned that profitability depends on bitcoin prices, mining rewards, electricity costs, equipment performance, site execution and access to financing.
- Other material risks include cybersecurity and custody of digital assets, reliance on a single miner model and third-party mining pools, regulatory uncertainty, possible Nasdaq listing noncompliance, and the possibility of additional capital needs. The company said it did not expect to pay cash dividends in the foreseeable future.
- The company reported ineffective disclosure controls and ineffective internal control over financial reporting at December 31, 2022, including material weaknesses involving mining records and reconciliations, asset records, consolidation documentation, and management’s understanding of Nasdaq requirements. It described remediation steps, including improved reconciliations and a fixed-asset register.
- The 2022 financial statements received an unqualified audit opinion from Audit Alliance LLP. The auditor identified the $11.889 million property-and-equipment impairment assessment as a critical audit matter; the opinion did not express assurance on internal-control effectiveness.
Most important facts to verify
- Confirm the issuer and filing identity: the filing is for Moxian (BVI) Inc., although the request metadata says Abits Group Inc.
- Review the audited financial statements and notes against the selected-financial-data table. The filing contains differing figures for 2021 operating overheads and for operating loss in its summary versus audited statements.
- Reconcile the digital-asset impairment disclosure: the notes cite an $84,750 allowance in one passage, while the statements and digital-asset rollforward report $76,681.
- Verify the recoverability and status of the $2.385 million in other receivables, the server order and related payments, and the Tennessee construction, utility arrangements and planned operating start.
- Assess whether the disclosed internal-control remediation has been implemented and tested, and whether mining can operate profitably at the new site with available power and equipment.