UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-K

 

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended September 30, 2014

 

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to __________

 

Commission File No. 333-173172

 

MOXIAN CHINA, INC.
(Exact Name of Registrant as Specified in its Charter)

 

Nevada   27-3729742
(State or Other Jurisdiction of
Incorporation or   Organization)
  (I.R.S. Employer
Identification No.)

 

Room 2313-2315 , Block B,
Zhongshen Garden, Caitian South Road,
Futian District, Shenzhen Guangdong Province, China 518101
  Tel: +86 (0)755-66803251
(Address of Principal Executive Offices and Zip Code)   Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Securities Exchange Act:   None

 

Securities registered pursuant to Section 12(g) of the Securities Exchange Act:   Common Stock, par value $.001

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  o   No  x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes  o  No  x

 

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  o

 

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x  No  o

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

 

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 definition 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 Smaller reporting company

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes  o  No  x

 

The aggregate market value of the voting common equity held by non-affiliates based upon the price at which Common Stock was last sold as of March 31, 2014, the last business day of the registrant’s most recently completed second fiscal quarter was approximately $17,491.

 

As of December 31, 2014, the number of shares of the registrant’s common stock outstanding was 198,300,000.

 

 

 

 
 

 

FORM 10-K

 

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014

 

TABLE OF CONTENTS

 

Cautionary Note Regarding Forward-Looking Statements

 

PART I    
Item 1. Business 4
Item 1A. Risk Factors 14
Item 1B. Unresolved Staff Comments 15
Item 2. Properties 15
Item 3. Legal Proceedings 15
Item 4. Mine Safety Disclosure 15
     
PART II    
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 15
Item 6. Selected Financial Data 17
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 17
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 19
Item 8. Financial Statements and Supplementary Data 19
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 19
Item 9A. Controls and Procedures 19
Item 9B. Other Information 21
     
PART III    
Item 10. Directors, Executive Officers and Corporate Governance 21
Item 11. Executive Compensation 24
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 25
Item 13. Certain Relationships and Related Transactions, and Director Independence 26
Item 14. Principal Accountant Fees and Services 26
     
PART IV    
Item 15. Exhibits and Financial Statement Schedules 27
SIGNATURES   29

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:

 

The availability and adequacy of our cash flow to meet our requirements;

 

Economic, competitive, demographic, business and other conditions in our local and regional markets;

 

Changes or developments in laws, regulations or taxes in our industry;

 

Actions taken or omitted to be taken by third parties including our suppliers and competitors, as well as legislative, regulatory, judicial and other governmental authorities;

 

Competition in our industry;

 

The loss of or failure to obtain any license or permit necessary or desirable in the operation of our business;

 

Changes in our business strategy, capital improvements or development plans;

 

The availability of additional capital to support capital improvements and development; and

 

Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations.
   
Uncertainties with respect to the PRC legal system could adversely affect us.
   
Our contractual arrangements with our affiliated entity may not be as effective in providing operational control as direct ownership.
   
The uncertainties of the development of internet and social media industry in China may have negative effect on us.
   

Other risks identified in this report and in our other filings with the Securities and Exchange Commission or the SEC.

 

This report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Use of Defined Terms

 

Except as otherwise indicated by the context, references in this Report to:

 

 

The “Company,” “we,” “us,” or “our,” “Moxian” are references to the combined business of the (i) Moxian China, Inc., a company incorporated under the laws of Nevada; (ii) Moxian CN Group Limited, a company incorporated under the laws of Independent State of Samoa (“Moxian CN Samoa”); (iii) Moxian Group Limited, a company incorporated under the laws of British Virgin Islands (“Moxian BVI”), (iv) Moxian (Hong Kong) Limited, a limited liability company incorporated under the laws of Hong Kong (“Moxian HK”), (v) Moxian Technologies (Shenzhen) Co., Ltd. (“Moxian Shenzhen”), (vi) Moxian Malaysia SDN BHD (“Moxian Malaysia”), and (vii) Shenzhen Moyi Technologies Co. Ltd., a contractually controlled affiliate of Moxian Shenzhen formed under the laws of People’s Republic of China (“Moyi”).
   

 

“REBL” refers to Rebel Group, Inc. (“Rebel”) and its wholly-owned subsidiary, Moxian Intellectual Property Limited under the laws of Samoa (“Moxian Samoa”), and before the License and Acquisition Agreement, Moxian BVI, Moxian HK, Moxian Shenzhen, and Moxian Malaysia.

   

“Common Stock” refers to the common stock, par value $.001, of the Company;
   

“HK” refers to the Hong Kong;

 

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“U.S. dollar,” “$” and “US$” refer to the legal currency of the United States;
   

“Securities Act” refers to the Securities Act of 1933, as amended; and
   

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended.

 

Unless otherwise noted, all currency figures in this filing are in U.S. dollars.

 

References to "yuan" or "RMB" are to Chinese yuan (also known as the renminbi). According to the currency exchange website www.xe.com, as of December 29, 2014, US$1.00 = 6.2214 yuan; 1 yuan= US$0.1607.

 

References to “HKD” or “HKD $” are to Hong Kong Dollar. According to the currency exchange website www.xe.com, as of December 29, 2014, US$1.00 = HKD 7.75828; 1 HKD = US$0.12889.

 

References to “MYR” or “RM” are to Malaysian Ringgit. According to the currency exchange website www.xe.com, as of December 29, 2014, US$1.00 = MYR 3.50666; 1 MYR = US$0.28517.

 

PART I

 

ITEM 1. BUSINESS

 

Introduction

 

Moxian China, Inc. (“Moxian China,” the “Company,” “we,” “our,” or “us”), formerly SECURE NetCheckIn Inc., previously engaged in the business of offering a cloud-based scheduling and notification product targeted to urgent care facilities and medical offices to increase the satisfaction of patients in scheduling and timing of appointments. On February 21, 2014, we entered into a License and Acquisition Agreement with REBL (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 REBL. Pursuant to the License and Acquisition Agreement, REBL 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 in cash. 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, REBL also agreed to grant us the exclusive right to use REBL’s intellectual property rights (collectively, the “IP Rights”) in Mainland China, Malaysia, and other countries and regions where REBL conducts its business (the “Licensed Territory”), and the exclusive right to solicit, promote, distribute and sell REBL products and services in the Licensed Territory for five years (the “License”). In exchange for such License, the Company agreed to pay to REBL: (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 REBL 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 REBL relating to the development Moxian Platform, which is an integrated platform for online-offline shopping, entertainment, and social platform (the “Moxian Business”)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 REBL products and services related to the business related to Moxian Business. Since the acquisition of Moxian BVI and the grant of the License from REBL, we changed our business to develop and explore the social media business, and distributing, selling, and promoting the products and services of REBL mainly in the China and Malaysia regions.

 

On February 17, 2014, the Company incorporated Moxian CN Group Limited (“Moxian CN Samoa”) under the laws of Independent State of Samoa.

 

Moxian BVI was incorporated on July 3, 2012 under the laws of British Virgin Islands. Moxian HK was incorporated on January 18, 2013 and became Moxian BVI’s subsidiary since February 14, 2013.

 

Moxian HK is currently engaged in the business of online social media and will launch its business in China and Malaysia.

 

Moxian Shenzhen was invested and wholly owned by Moxian HK. Moxian Shenzhen was incorporated on April 8, 2013 and is engaged in the business of internet technology, computer software, commercial information consulting, etc.

 

Moxian Malaysia was incorporated on March 1, 2013 and became Moxian HK’s subsidiary since April 2, 2013. Moxian Malaysia is conducting its business in IT Services and Media Advertising industry.

 

On July 15, 2014, Moxian Shenzhen entered into a series of agreements with Shenzhen Moyi Technologies Co., Ltd., a company incorporated under the laws of People’s Republic of China (“Moyi”), and its shareholders which permit us to operate Moyi and the right to purchase all of its equity interests from its shareholders as summarized below (the “Moyi Agreements”).

 

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Moyi, which is owned solely by Chinese shareholders, is granted an Internet Content Provider license (“ICP License”). Businesses in China that are engaged in the business of Internet information services, including online advertisement and e-commerce services, are required to obtain an ICP Permit. Due to Chinese regulatory restrictions on foreign investments in the Internet sector, we operate our marketing platform and conduct our business through Moyi pursuant to the Moyi Agreements. Under the Moyi Agreements, Moyi will be treated as a variable interest entity in which the Company does not have direct or controlling equity interest but the historical financial results of such entity will be consolidated in our financial statements in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). The Moyi Agreements include:

 

Exclusive Business Cooperation Agreement.   Pursuant to the Exclusive Business Cooperation Agreement, dated July 15, 2014, between Moxian Shenzhen and Moyi, Moxian Shenzhen has the exclusive right to provide to Moyi technical and systems support, marketing consulting services, training for technical personnel and technical consulting services.  As payment for these services, Moyi has agreed to pay Moxian Shenzhen a service fee equal to 100% Moyi’s pre-tax profit. The initial term of this agreement is 10 years and the term can be renewed upon expiration by Moxian Shenzhen’s discretion. The agreement can be terminated by Moxian Shenzhen by a 30-day written notice or by Moyi upon Moxian Shenzhen’s gross negligence or fraudulent action.

 

Loan Agreement. Pursuant to the Loan Agreement, dated July 15, 2014, by and among Moxian Shenzhen and Zhang Guohui and Guan Fensheng (collectively, the “Moyi Shareholders”), who collectively own 100% equity interests of Moyi, Moxian Shenzhen provided a loan in the amount of RMB 1 million (or $161,651) (the “Loan”) to the Moyi Shareholders for a term of 10 years. The Moyi Shareholders can only use the Loan as working capital of Moyi. Moxian Shenzhen shall have the right to purchase a part or all of Moyi’s equity interests from the Moyi Shareholders.

 

Share Pledge Agreement.    Pursuant to the Share Pledge Agreement, dated July 15, 2014, among Moxian Shenzhen and the Moyi Shareholders, the Moyi Shareholders pledged all of their equity interests in Moyi to Moxian Shenzhen to ensure the performance of Moyi’s obligations under the Exclusive Business Cooperation Agreement. The Moyi Shareholders also agreed not to transfer, dispose of their equity interest in Moyi without the prior written consent of Moxian Shenzhen.

 

Power of Attorney.     Pursuant to the power of attorney dated July 15, 2014, the Moyi Shareholders irrevocably entrusted to Moxian Shenzhen the following rights: (1) the right to attend shareholder meetings of Moyi; and (2) all the rights to exercise its voting power of Moyi on for an indefinite period of time.

 

Exclusive Option Agreement.     Pursuant to the Exclusive Option Agreement dated July 15, 2014 between Moxian Shenzhen and the Moyi Shareholders, Moxian Shenzhen or its designee has an exclusive option to purchase from the Moyi Shareholders, to the extent permitted under the laws of the People’s Republic of China, all or part of their 100% equity interest in Moyi in one or more installments in consideration of RMB10 (or $1.62) per share or the appraised price as required by the laws of PRC. Other than Moxian Shenzhen and its designee, other third party has no right to purchase any equity interest of Moyi from the Moyi Shareholders.

 

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The following diagram sets forth the structure of the Company as of the date of this Report:

 

 

 

 

Our web site address is  www.moxianchina.com .  Information contained on our web site is not part of this Annual Report on Form 10-K or our other filings with the Securities and Exchange Commission (“SEC”).

   

Our Business

 

General Development and Plan of Operations

 

Moxian is a social network that integrates social media and business into one single platform. We utilize our website as a social media platform to promote our clients’ business and assist our clients to find consumers online and bring them into real-world stores. In Moxian, our registered consumer users can share photos, post messages in their timeline, and most importantly, interact with our merchant clients to receive up-to-date offers or deals through both the web and mobile applications. We believe that through the Moxian Platform, merchants and retailers can increase their in-store sales by attracting more consumers through online advertisements and promotions.

 

We believe that Moxian Platform provides significant opportunities for our merchant clients to promote and market their businesses. We offer different types of products for our merchant clients to advertise through our website, www.moxian.com, and enable them to leverage our combination of reach, social context and engagement. Therefore, we believe that we enable our merchant clients to maximize the growth of their businesses. In addition, we also offer useful tools that enable consumer users to connect, share, discover, and communicate with each other and our consumer users can maximize the value of using our website through obtaining rewards and buying deals from our merchant clients.

 

Moxian principally operates in Malaysia and China. We launched Moxian Platform in Malaysia and in China in June 2013 and July 2014, respectively, and we currently have limited revenues from our operations. The Company has incurred substantially more losses than its revenues to date. The Company plans to expand to Eastern and Southeastern Asian countries and districts, such as Singapore, Malaysia, Indonesia, Philippine, India, Thailand, Brunei, Vietnam, Taiwan during 2015 to 2016.

 

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Our Users

 

Users of Moxian consist of the following two categories:

 

Merchant clients – we provide our merchant clients with both free and paid accounts. For free accounts, merchant clients can obtain a Do It Yourself webpage for business promotion activities only. For paid accounts, after the merchant clients purchase one of our MO-Tube packages (as described below), they are allowed to issue MO-Points to our consumer users, post the contents of their products and services at MO-Promo e-catalog sites, promote their products and services on a mobile directory listing, display advertisements on Moxian main page and on the timeline of their web pages.
   
Consumer users, or MO-Pals in the language of Moxian website – Moxian offers free service for MO-Pals. MO-Pals can sign up a Moxian account for free, invite friends and family members, meet new groups, share stories, photos and videos, send micro-blog messages, play online games and earn MO-Points from Moxian and its affiliated merchants.

 

Our Products

 

MO-Promo Platform

 

Moxian designed and developed a social marketing platform, branded as “MO-Promo,” which serves as an online sale promotion website for our clients’ businesses. It is a social marketing platform which consists of the following components: (a) Social Customer Relationship Management (“SCRM”) system, (b) MO-Points, (c) online games, (d) a social networking website known as MO-Zone and (d) Social Loyalty Program that rewards MO-Pal as users or customers who are using MO-Points. Moxian’s registered consumer users can access the online stores by visiting “MO-Promo” at  www.moxianchina.com . In Mo-Promo, they can be rewarded with MO-Points for free by playing games and wining prizes that are sponsored by Moxian and client merchants. In this way, the registered consumer users are encouraged to visit our website and the online stores. Our merchant clients can also advertise, run marketing campaigns, and learn about their customers through our MO-Promo Platform. Below are the detailed descriptions of Mo-Promo Platform.

 

SCRM System

 

The SCRM system enables our merchant clients to interact with their consumers and better understand their needs and preferences. SCRM combines the work of people including market researchers, PR staff, marketing teams, and sales teams. It is a platform for merchants to connect to their business partners and existing/prospective consumers (our subscribers). Our SCRM system allows merchant clients to find insights into a brand's overall visibility through interactions and communications of consumer users in Moxian so that they can identify opportunities for engagement, assess competitor’s activities, and be alerted to any negative feedback from consumers on their products. Our SCRM monitoring tools can be used to obtain quantitative and qualitative responses to advertising campaigns for promotions, identify opportunities to improve a brand, uncover significant unmet customer needs, and identify people who may be highly predisposed to purchasing a brand or a product. Our SCRM system also provides information about emerging trends and consumers’ opinions on specific topics, brands or products.

 

MO-Points

 

MO-Points are the electronic points in the Moxian Social Loyalty Program. Registered users can use MO-Points to (i) play games, which must be activated with MO-Points, to win prizes at our Incentive Games Center, and (ii) claim rewards or gifts from Moxian or Moxian’s merchant clients. There are multiple ways of earning MO-Points. Registered users can receive MO-Points by: (i) playing our online games, (ii) making purchases at our merchant clients’ stores, or (iii) referring friends or family to Moxian’s merchant clients (including sharing photos, submitting comments and sending messages). MO-Points cannot be transferred, gifted, resold or exchanged for cash.

 

Moxian currently provides 500 MO-Points to its merchant clients for no charge (the “Trial MO-Points”) when they first sign up for Moxian’s service packages. The merchant clients may use them to promote their businesses by granting free Mo-Points to those users who purchase their products and services from such merchants’ offline stores. We believe Mo-Points create an incentive to consumers to make purchases and provide positive feedback about their experience and products and services to other  consumers. If a merchant client gives out all the Trial MO-Points and it decides to continue marketing itself by utilizing the MO-Promo Platform, such merchant will need to pay for the full Moxian’s service packages, which offer MO-Points ranging from 3000 to 10,000 points.

 

Social Loyalty Program

 

The Moxian Social Loyalty Program is a system which encourages registered consumer users to spend MO-Points and return to the MO-Promo Platform. We encourage our users to return to Moxian through rewarding users with reward prizes for “spending” MO-Points in our Incentive Game Center. We believe that spending MO-Points can lead to consumers seeking additional MO-Points by making purchases from our merchant clients and thereby creating customer and brand loyalty. Merchants can also promote specific products by providing reward points solely for purchases of those products. These promotions provide a low cost method for small to medium business owners with limited resources to increase their revenue by rewarding their frequent customers for their purchases.

 

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Online Games

 

Our online games consist of two categories: (i) Incentive Game Center (“Incentive Game Center”) such as MO-Bid, MO-Grab, MO-Chess that encourages users to play to win prizes, which are either sponsored by Moxian or its merchant clients; and (ii) other online games, known as MO-Puzzle games, which enables users to play for fun and earn MO-Points. The online games are part of the social media platform which attract consumer users to visit our website.

 

MO-Zone

 

MO-Zone permits Moxian users to share photos, write posts and diaries, exchange information, watch video clips, and communicate with each other. Every user can customize MO-Zone to their preferences. It is also the social networking site where Moxian users can share their shopping experiences.

 

Moxian Advertisements

 

Merchant clients can advertise their products or services through posting banner ads or other advertisements on the Moxian website. In addition, the clients can create their own Moxian page. On their page, they can specify content to which a user is directed if he or she clicks on the page. They can present their products and services on the page, and post any discount information or any activities in the physical stores regarding their products or services. Merchant clients can further engage their intended audiences by incorporating social context with their marketing messages. Social context includes actions a user’s friends have taken, such as visible history when the user’s friend has visited a merchant’s web page. With the social context, the merchants can highlight the interactions of a user’s friends with a brand or product.

 

Moxian Mobile Applications

 

Moxian mobile applications provide consumer users another approach to experience our website. Moxian currently provides its platform on both Apple-based products (iOS) and Android-based products. They can be downloaded for free in the Apple Store and Google Play. Our mobile application allows users to redeem points, use social media features such as checking in to the application, sharing photos, a shortcut to the MO-Promo platform, and allows use of our MO-Points to purchase or bid items at the MO-Promo platform.

 

Our Primary Benefits to Merchants

 

We believe that the most significant feature of Moxian is that we develop insights into social conversations and behaviors, levels of engagement, influence, and activities of our registered users, or MO-Pals. We analyze the profiles of MO-Pals. Each time a MO-Pal redeems MO-Points, a message will appear in the user’s timeline page. Therefore, we can record the occurrence and analyze the data, including age, gender, marital status, and race. The MO-Pal’s preference in buying different brands of products is also recorded in their social profile, as well as their direct communications with their contacts. Because we provide merchant clients with the information we collect, our clients tailor their message to a select audience to market their products and services more effectively.

 

MO-Tube Packages

 

We provide the basic features of MO-Promo Platform for all merchant clients for free. Such free packages include the basic SCRM features with 500 Trial MO-Points offered. In order to make use of all the MO-Promo features, merchant clients will have to purchase MO-Tube packages at various prices. Under our MO-Tube packages, the merchant clients can make use of the full SCRM features, advertise on our websites, and conduct online activities to their targeted customers with the goal of increasing offline sales.

 

After subscribing for the MO-Tube packages, the merchant clients will have access to more detailed data from consumer users who have made a purchase. In addition, MO-Points are allocated to our clients based on the MO-Tube package subscribed for. As an incentive to boost subscriptions, Moxian bundles these packages with offline advertising opportunities with our business partners in offline media such as roadside billboard and magazines.

 

Value for Our Merchant Clients

 

We are dedicated to creating value for our merchant clients. By purchasing the MO-Tube service packages, we believe our clients are able to leverage our MO-Promo platform for their advertising and marketing needs targeted towards their current clients and potential clients. We believe we offer our clients a unique combination of interaction with consumer users, targeting the right customers, learning the users’ preference in their purchase, and engaging the users with innovative promotion methods.

 

Interaction.  We offer our consumer users a platform to interact with their friends and discover new products and services. While doing so, our merchant clients are able to communicate with these users through this platform, running promotions such as giving out prizes and discounts.

 

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Targeted Consumer Users.  Our merchants can target users on Moxian based on users’ interests and personal information which users have chosen to share with us on Moxian. Because consumer users can be attracted by advertisements and promotional campaigns that are targeted to them, the promotional campaigns targeted at either first time customers or returning customers can generate more revenues for our merchant clients.
   
Purchasing Preference.  We are a strong believer in “word of mouth” marketing and Moxian can assist our consumer users to express their purchasing preferences. We allow consumer users to show their history of visiting the merchants’ Moxian page in their own timeline. This allows messages to be communicated to their friends who may be potential customers to our merchant clients’ outlets or stores and promote their business. In addition, when a consumer user redeems MO-Points at our merchant’s outlet, the redemption of MO-Points automatically subscribes the consumer to a news feed of the merchant’s business site on the consumer user’s homepage (MO-Zone).

 

Engagement. We encourage constant interaction between merchants and their consumers. Moxian offers a platform for both merchants and consumers to be actively involved. Further, merchants not only can engage with existing customers, but also potential customers who can be introduced to the merchants in the process of such engagement. Our platform encourages innovative methods for our merchants, such as promotional campaigns, sharing of information, discovering new products/services, or polling to understand the needs of customers.

 

We believe that the MO-Promo platform offers a significant opportunity and financial incentives for our merchant clients to sign up for our website and purchase MO-Tube Packages. In addition, we believe we create value for our merchant clients through MO-Zone. When a promotional campaign is started by a merchant, subscribed users’ login/homepage on MO-Zone receive notifications which we believe allows merchant clients to maximize their revenues through the interaction and engagement with consumer users.

 

Social Media Marketing Services

 

In order to better serve our clients and subscribers, we, through MO-Promo and other Moxian applications, also provide various consulting and management services to small and medium-sized businesses, including:

 

We provide social media consulting services, with a consultant will be assigned to each client;

 

We publish interactive content for merchant clients in the social communities of their respective industries;

 

We design and customize social webpages for merchant clients, including running feedback, adding coupons or promotions and embedding clients’ product videos and images in clients’ social websites;

 

We manage marketing campaigns on our clients’ social webpages; and

 

We provide analysis and statistics for visitors to clients’ social webpages and hold free strategy sessions to assist clients on generating more traffic on their social webpages.

  

Marketing Strategy

 

Referral marketing is an increasingly popular method for marketers to add new revenue streams or to streamline sales processes with business partners. Moxian has two types of referral programs where different marketers assist us to broaden our client base. The first one is referrals by MO-Pals. MO-Pals (our subscribers) can refer other users to earn extra free MO-Points. We believe this motivates our subscribers to visit our merchants’ social webpages or online/offline stores, which can stimulate sales of our merchants’ products and services. In addition, we believe referrals among MO-Pals can increase Moxian’s user information database, which enables us to provide more accurate analysis and statistics regarding consumer behavior and preferences for our merchants.

 

Second, we utilize sales representatives who target those who are interested in building Moxian business in a region, such as Malaysia and Singapore, where they represent Moxian for referring merchant clients to us. Moxian usually pays 30% of the purchase price of the sold products or services that are paid by first-time consumers as referral fees. Sales representatives are not entitled to any referral fees from a transaction by repeat consumers in our merchants’ stores.

 

We believe there are two advantages of our marketing strategy. First, we believe sending our sales representatives to visit potential merchant clients helps the Company to identify and establish relationship with prospective customers through in-person communication. Once the prospective customer are identified, Moxian’s internal sales teams can focus their efforts on those activities required to close the deal and make the sale, rather than devoting time to acquiring and developing the lead, as would typically be the case with other types of marketing programs. Second, referrals of new users by our subscribers to our merchant clients’ stores incur no cost to the Company, because it is the merchant clients that grant free MO-Points to the referring subscribers. In addition, with the MO-Points that are granted in consideration of the referral, we believe that subscribers are more likely to return to our merchant clients’ stores to purchase their products or services with the granted MO-Points. As a result, we believe referral programs can create higher number of returning customers than other types of marketing programs.

 

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Other methods of promoting Moxian include online ads, event campaigns, and print media such as local-based booklet magazines, cross social media marketing, which is an integrated marketing strategy with digital channels, social media and website or blog, with a role for e-mail marketing and online forms.

 

Customers

 

Moxian’s customers include retail merchants, manufacturers, shopping mall operators, transportation, telecommunication providers, software developers, online e-commerce operators, payment providers, and news media. As of December 25, 2014, we had 244 paying merchant clients and a total of 17,741 merchant clients (with 16,800 in China and 941 in Malaysia) that are using our platform on a trial basis.

 

Industry

 

Moxian is seeking to build an Online-to-Offline (“O2O”) platform model. It is widely believed that O2O platforms can substantially enhance marketing and commerce performance for brands and retailers compared to traditional digital marketing approaches. O2O refers to any and all activities that originate online and eventually result in a shopper going to a physical store. Forrester Research predicts that by 2016, more than half of the $3.5 trillion spent in the US retail offline will be influenced by the web ( Forrester’s US Cross-Channel Retail Forecast, 2011 To 2016 ).

 

The O2O platform model has been recognized as a trillion dollar opportunity ( http://techcrunch.com/2010/08/07/why-online2offline-commerce-is-a-trillion-dollar-opportunity/ ). According to official statistics, China’s O2O market reached 98.7 billion yuan (approx. US$9 billion) in 2011. Industry analysts anticipate that the China O2O market will quadruple to 418 billion yuan (approx. US$67 billion) in 2016 ( http://www.prnewswire.com/news-releases/chinas-o2o-market-the-path-to-success-is-not-uni-directional-201906281.html ). Moxian is able to capture a share in this market by offering its platform to merchants. Our platform allows users to be aware of their interested merchants’ on-going promotion so as to attract them to purchase offline.

 

We anticipate that we will face challenges coming from the pioneers of the e-commerce industry both in Asia and overseas majors trying to expand into Asia. However, we believe our business model is capable in obtaining a significant market share. Our market is not restricted to China as compared to other potential competitors. We will be targeting a number of Asian countries which can result in a bigger market share.

 

Competition

 

Although major global social network platform providers have the advantage of an existing user base, we believe Moxian has a unique social business model and social media features that can enable us to stand out among the competition. Other major social network platforms usually focus on personal photo sharing, video sharing, chat features, group chatting, micro-blogging, following groups’ online activities, rating and commenting on products and services. What we believe makes Moxian stand out is that our merchant clients have: (i) their own promotion webpages, (ii) local event programs for their customer users, (iii) location-based promotion information, (iv) mobile chat applications, (v) give-away free prizes for consumer users, (vi) timeline advertising on Moxian’s social webpage, (vii) a social customer relationship management system for merchants, (viii) social loyalty program, and (ix) customized online games to promote merchants’ brand and group sales promotions.

 

Our competitors are the major players in the social networking industry such as Facebook, Google, Twitter, Myspace, Linkedin, YouTube, and Foursquare. Below is the table of comparison between Moxian’s services and its competitors’ services.

 

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Our Strategy

 

In order for us to compete in the social media and the O2O market, our strategies include:

 

Expand our user base.  We are dedicated to attracting more users and our goal is to retain existing and acquire new subscribers by providing more real-time deals, delivering high quality customer service and expanding the number and categories of deals we offer. We continue to focus on growing our user base across Asia in large markets such as China and Malaysia. We intend to grow our user base by continuing our marketing efforts and enhancing our products, including mobile apps, in order to make Moxian more accessible and useful. We continue to develop a variety of activities to attract more loyal users by give-away prizes, offline events sponsored by our partners, sales promotions and rewards programs. In addition, we adopt the word-of-mouth and referral marketing strategy to increase users’ sign-ups in Moxian.

 

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Increase the number and variety of our products.  We focus on product development that we believe will create engaging interactions between our consumer users and merchant clients, across the web, and on mobile devices. We continue to invest significantly in improving our core products such as MO-Promo, MO-Zone, and MO-Points and develop other new products to increase the varieties of our products.

 

Generate sticky content.  In order to attract more users, we intend to develop content on our website in order to attract users’ attention for longer viewing time and for them to return to our website. We plan to tailor the contents based on our analysis of the users and generate such contents that are favorable to our consumer users.

 

Cooperate with more branded businesses.  In order to develop Moxian’s reputation, we intend to develop more merchant clients who have established their brand in local and global markets. Our merchant expansion efforts are focused on providing merchants with a positive experience by offering placement of their deals to our website at a lower cost and high quality customer service and tools to manage deals more effectively.

 

Regulation

 

Because we are launching in Malaysia and China first, the following discussions about regulations that govern Moxian’s operations will focus on Malaysia and China.

 

With respect to collecting information via user registration and consumption of MO-Points data, we will have to comply with The Personal Data Protection Act in Malaysia (“PDPA”). Non-compliance of such rules may result in a fine in the amount of MYR100,000 to MYR 500,000. Directors of Moxian Malaysia may also be personally liable for the Company’s violation of The Personal Data Protection Act in Malaysia. We have taken the following steps to ensure the compliance of PDPA: (i) our Privacy Policy has been drafted to be in compliance with PDPA; (ii) we have registered as “Data Users” with the Commission of Personal Data Protection in Malaysia; (iii) we trained and ensured our staff to be aware of PDPA and the protection of personal data; and (iv) we are the in the process of engaging a counsel in Malaysia to ensure our ongoing compliance with PDPA.

 

In the PRC, we will have to comply with laws and regulations relating to the distribution of Internet content in China such as obtaining an Internet Content Provider license (an “ICP License”) and our data usage policy has to be in accordance with Regulations of The People’s Republic of China for Safety Protection of Computer Information System. Due to the Chinese government’s restrictions on foreign investment in the Internet sector, we cannot apply or directly own an ICP License. Therefore, we entered into a series of contractual agreements with Moyi, a Chinese domestic company, in July 2014, so that we can operate and distribute Internet content in China with the ICP License held by Moyi. Noncompliance with such rules in China may result in the shutdown of our website.

 

Our website is maintained through a server in Hong Kong. Therefore, our data usage policy and regular terms of service for both our users and merchants must to comply with the applicable rules and regulations in Hong Kong, SAR. As information from our merchants and consumer users are preserved in Hong Kong, we will need to comply with the Hong Kong Personal Data (Privacy) Ordinance (Cap 486). Non-compliance of such rules in Hong Kong may result in a fines of up to HKD $500,000. Directors of Moxian Hong Kong may also be personally liable for the Company’s violation of Hong Kong Personal Data (Privacy) Ordinance.

 

Security

 

Social media offers important business advantages to companies and organizations. However, it has potential security risks. In order to mitigate these security risks, we have established and enforced social media usage policies. We have deployed strategies such as multilayered security at the gateway and end point, content classification, content filtering, and data loss prevention (“DLP”).

 

Moxian believes that effective security for social networking must leverage both decentralized and centralized modes of IT security. In other words, Moxian must protect both the network and the users at the end point.

 

Our centralized security holds the key to safeguard enterprises’ data and network resources. As hackers become more aggressive in their attacks on social media, we continue to set up the use of traditional protection tools such as scanning to verify incoming content and traffic. In addition, we implemented a web security tool and configured our Internet gateway to block malicious inbound traffic such as cross-site scripting exploits and phishing. Moxian also has inbound content filtering, which employs spam blockers and anti-virus applications to block or allow a communication based on analysis of its content.

 

For outgoing traffic, a DLP solution enables the business to screen content before it leaves the corporate network. It monitors outbound traffic to detect and potentially stop the communication of sensitive information by under protected means. DLP can identify sensitive data at rest, control its usage at user end points, and monitor or block its egress from network perimeters.

 

Whenever user personal data is processed, Moxian takes utmost care in keeping their data secured. We use a variety of industry-standard security technologies and procedures to help protect their personal data from unauthorized access or disclosure. We store data behind a firewall, a barrier designed to prevent outsiders from accessing our servers. Even though Moxian takes significant steps to ensure that the users and clients’ personal data is not intercepted, accessed, used or disclosed by unauthorized persons, we cannot eliminate security risks entirely particularly where the internet is concerned.

 

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Employees

 

As of the date of this Report, the Company had over 90 employees, with 12 persons working as management, 35 persons working in the product development and technical department, 10 people working in administration and over 30 people working in the sales and marketing department. The Company considers its employee relations to be good, and to date has not experienced a work stoppage due to a labor dispute. 

 

Intellectual Property

 

Pursuant to the License and Acquisition Agreement, we obtained a License to utilize the IP Rights of REBL. The following are the intellectual property rights that the Company is permitted to use, the details of which are set forth in the following table:

 

Trademarks

 

Type Marks Application No. Country Status
Trademark 85931344 United States of America Pending
Trademark 302534274 Hong Kong Approved
Trademark 13460714 China Pending
Trademark 13460852 China Pending
Trademark 10624504 China Approved
Trademark 魔线 13461178 China Pending
Trademark 10624435 China Approved

 

Patents

 

Moxian Shenzhen submitted an application in China on December 27, 2013 (Patent Application No. 201310734492.2) to patent the marketing and promotional methods utilized by the Moxian Platform. The marketing method to be patented is that online users (such as merchants) may use the statistics and data collected from consumers to promote and market their businesses on the Internet. The primary feature of such marketing method is that it can locate merchants that match consumers’ needs and provide a series of interactive tools for merchants to promote their sales, including, granting rewards points, granting reward prizes, providing online games for consumers to earn rewards points, etc.

 

Copyright

 

The copyright application of Moxian’s mascot “Moya” has been submitted by Moxian Shenzhen  on December 2, 2013 (Application No. 201330592230.8). Moya is a mascot representing Moxian Platform. Below are some pictures of Moya with different expressions:

 

         

 

 

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Recent Development

 

On September 28, 2014, Moxian HK entered into loan agreements with three entities: Moxian China Limited (“MCL”), Ace Keen Limited and Jet Key Limited (collectively, the “Creditors”). Pursuant to the loan agreements, Moxian HK obtained loans in the aggregate amount of $908,048 (the “Moxian HK Loans”). On the same day, Moxian Malaysia also signed three loan agreements with the Creditors, pursuant to which Moxian Malaysia borrowed an aggregate of $2,020,221 from the Creditors (the “Moxian Malaysia Loans”). Also on the same day, Moxian Shenzhen entered into three loan agreements with the Creditors, and borrowed an aggregate of $2,961,460 (the “Moxian Shenzhen Loans”). MCL owns 33.8% of total outstanding shares of the Company. Ace Keen Limited is controlled by Mr. Zhang Guo Hui, who is the holder of 70% of the equity interests in Moyi, our variable interest entity in China. Jet Key Limited is owned and controlled by Ms. Zhang Ying, who is Mr. Zhang Guo Hui’s sister. The terms of Moxian HK Loans, Moxian Malaysia Loan, and Moxian Shenzhen Loans are the same: the term is six months and they are unsecured and bear no interest. The Creditors are negating with the Company and they intend to convert the aforementioned loans into the shares of the Company by the end of December 2015.

 

On October 31, 2014 and November 30, 2014, Moxian Shenzhen received RMB 630,000 (approximately $102,942) and RMB 90,000 (approximately $14,486), respectively, as loans (the “MCL Shenzhen Loans”) from MCL. The term of such loans is twelve months and they bear no interest. On December 31, 2014, the Company, MCL and Moxian Shenzhen entered into a Loan Agreement, where the Company agreed to issue a convertible promissory note (the “Note”) to MCL for the repayment of the MCL Shenzhen Loans.

 

On October 31, 2014 and November 30, 2014, Moxian Malaysia received a loan in the amount of RM 118,800 (approximately $34,032) and RM 23,100 (approximately $6,605), respectively, from MCL (the “MCL Malaysia Loans”). The term of such loans is twelve months and they bear no interest. On December 31, 2014, the Company, MCL and Moxian Malaysia entered into a Loan Agreement, where the Company agreed to issue a Note to MCL for the repayment of the MCL Malaysia Loans.

 

On November 30, 2014, Moxian HK received HKD $500,000 (approximately $64,437) as a loan from MCL (the “MCL HK Loan”). The term of such loan is twelve months and it bears no interest. On December 31, 2014, the Company, MCL and Moxian HK entered into a Loan Agreement, where the Company agreed to issue a Note to MCL for the repayment of the MCL HK Loan.

 

The Notes issued to MCL by the Company in consideration of the MCL Shenzhen Loans, the MCL Malaysia Loans and the MCL HK Loan are of substantially similar terms. The Notes will be due and payable in one year and bears no interest. Upon consummation of a financing that generates at least $5,000,000 by the Company (“Qualified Financing”), the Notes will automatically convert into shares of the Company’s Common Stock at a conversion price equal to the price of the Company’s securities sold in the Qualified Financing. If no Qualified Financing is consummated prior to the maturity date of Notes and as long as there remains any outstanding principal or interest of the Notes, holders of the Notes shall have the option to convert the Notes within 30 days after the maturity date at a conversion price that is equal to the volume weighted average price of Common Stock during a 20-day trading period prior to the conversion of the Notes.

 

The foregoing description of the terms of the Loan Agreements and the Notes is qualified in its entirety by reference to the provisions of the Loan Agreements and the form of the Notes which are included as Exhibits 10.8, 10.9, 10.10 and 4.2 to this Annual Report and are incorporated by reference herein.

 

Please also see “ Item 9A. Controls and Procedure ” on page 19 on this Annual Report for the weaknesses in our internal control over financial reporting identified by our management in connection with the MCL Shenzhen Loans, the MCL Malaysia Loans and the MCL HK Loan.

 

Available Information

 

The Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company is subject to the informational requirements of the Exchange Act and files or furnishes reports, proxy statements, and other information with the SEC. Such reports and other information filed by the Company with the SEC are available via the Company’s website at www.moxian.com when such reports are available on the SEC’s website. The public may read and copy any materials filed by the Company with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C.  20549.  The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of these websites are not incorporated into this filing. Further, the Company’s references to the URLs for these websites are intended to be inactive textual references only.

 

Principal Executive Offices

 

Our principal executive offices are located at Room 2313-2315, Block B, Zhongshen Garden, Caitian South Road, Futian District, Shenzhen Guangdong Province, China 518101.  Our principal telephone number at such location is +86 (0)755-66803251.

 

ITEM 1A. RISK FACTORS

 

Disclosure in response to this item is not required of a smaller reporting company.

 

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ITEM 1B. UNRESOLVED STAFF COMMENTS

 

Disclosure in response to this item is not required of a smaller reporting company.

 

ITEM 2. PROPERTIES

 

The Company currently does not own any properties. We are currently renting an office in Shenzhen. The monthly rent is RMB 50,000 (or approximately $8,196). We are also renting an office in Malaysia. The monthly rent for the Malaysia office is RM 20,000 (or approximately $6,700). The Company believes that such office space will be sufficient for its current needs.

 

ITEM 3. LEGAL PROCEEDINGS

 

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.  Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.  There are currently no legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Our common stock is not quoted on any exchange.  Our common stock was traded under the symbol “SNEC” until December 13, 2013and is currently quoted on the OTCQB under the trading symbol “MOXC.” Our common stock did not trade prior to April 10, 2013. Trading in stocks quoted on the OTCQB is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to do with a company’s operations or business prospects. We cannot assure you that there will be a market for our common stock in the future.

 

OTCQB securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTCQB securities transactions are conducted through a telephone and computer network connecting brokers.

 

For the periods indicated, the following table sets forth the high and low bid prices per share of common stock. The following quotations reflect the high and low bids for our shares of common stock based on inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. All prices are split-adjusted to reflect the 60-for-1 stock split in December 2013. 

  

      High       Low  
Fiscal Year 2013*     Bid       Bid  
First Quarter   $ -     $ -  
Second Quarter   $ -     $ -  
Third Quarter   $ -     $ -  
Fourth Quarter   $ -     $ -  

 

    High     Low  
Fiscal Year 2014   Bid     Bid  
First Quarter*   $ -     $ -  
Second Quarter*   $ -     $ -  
Third Quarter*   $ 5.20     $ 3.00  
Fourth Quarter   $ 11.00     $ 4.30  

 

* The Company’s Common Stock did not trade until April 10, 2014.

 

As of December 29, 2014, the last sale price reported on the OTCQB for the Company’s Common Stock was approximately $5.50 per share.

 

Holders

 

As of September 30, 2014, we had 198,300,000 shares of our common stock par value, $.001 issued and outstanding. There were approximately 119 beneficial owners of our common stock.

 

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Transfer Agent and Registrar

 

The transfer agent for our capital stock is Island Stock Transfer, located at 15500 Roosevelt Boulevard, Suite 301.

 

Penny Stock Regulations

 

The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share. Our Common Stock, when and if a trading market develops, may fall within the definition of penny stock and be subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000, or annual incomes exceeding $200,000 individually, or $300,000, together with their spouse).

 

For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser’s prior written consent to the transaction. Additionally, for any transaction, other than exempt transactions, involving a penny stock, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the Securities and Exchange Commission relating to the penny stock market. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. In addition, the broker-dealer must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the “penny stock” rules may restrict the ability of broker-dealers to sell our Common Stock and may affect the ability of investors to sell their Common Stock in the secondary market.

 

In addition to the "penny stock" rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit the investors’ ability to buy and sell our stock.

 

Dividend Policy

 

Any future determination as to the declaration and payment of dividends on shares of our Common Stock will be made at the discretion of our board of directors out of funds legally available for such purpose. We are under no contractual obligations or restrictions to declare or pay dividends on our shares of Common Stock. In addition, we currently have no plans to pay such dividends. Our board of directors currently intends to retain all earnings for use in the business for the foreseeable future.

 

Equity Compensation Plan Information

 

Currently, there is no equity compensation plan in place.

 

Unregistered Sales of Equity Securities

 

On October 31, 2014 and November 30, 2014, Moxian Shenzhen received RMB 630,000 (approximately $102,942) and RMB 90,000 (approximately $14,486), respectively, as loans (the “MCL Shenzhen Loans”) from Moxian China Limited (“MCL”). The term of such loans is twelve months and they bear no interest. On December 31, 2014, the Company, MCL and Moxian Shenzhen entered into a Loan Agreement, where the Company agreed to issue a convertible promissory note (the “Note”) to MCL for the repayment of the MCL Shenzhen Loans.

 

On October 31, 2014 and November 30, 2014, Moxian Malaysia received a loan in the amount of RM 118,800 (approximately $34,032) and RM 23,100 (approximately $6,605), respectively, from MCL (the “MCL Malaysia Loans”). The term of such loans is twelve months and they bear no interest. On December 31, 2014, the Company, MCL and Moxian Malaysia entered into a Loan Agreement, where the Company agreed to issue a Note to MCL for the repayment of the MCL Malaysia Loans.

 

On November 30, 2014, Moxian HK received HKD $500,000 (approximately $64,437) as a loan from MCL (the “MCL HK Loan”). The term of such loan is twelve months and it bears no interest. On December 31, 2014 the Company, MCL and Moxian HK entered into a Loan Agreement, where the Company agreed to issue a Note to MCL for the repayment of the MCL HK Loan.

 

The issuances of the Notes under the Securities Exchange Agreement were exempt from registration under the Securities Act pursuant to Regulation S promulgated thereunder.

 

Except as disclosed above, all unregistered sales of the Company’s securities have been disclosed on the Company’s current reports on Form 8-K and the Company’s quarterly reports on Form 10-Q.

 

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Purchases of Equity Securities by the Registrant and Affiliated Purchasers

 

We have not repurchased any shares of our common stock during the fiscal year ended September 30, 2014.

 

ITEM 6. SELECTED FINANCIAL DATA

 

Disclosure in response to this item is not required of a smaller reporting company.

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Introduction

 
The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those financial statements appearing elsewhere in this Report.

 

Certain statements in this Report constitute forward-looking statements. These forward-looking statements include statements, which involve risks and uncertainties, regarding, among other things, (a) our projected sales, profitability, and cash flows, (b) our growth strategy, (c) anticipated trends in our industry, (d) our future financing plans, and (e) our anticipated needs for, and use of, working capital. They are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plan,” “potential,” “project,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” or the negative of these words or other variations on these words or comparable terminology. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements.

 

The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.

 

The "Company", "we," "us," and "our," refer to (i) Moxian China, Inc., a company incorporated under the laws of Nevada; (ii) Moxian CN Group Limited, a company incorporated under the laws of Independent State of Samoa (“Moxian CN Samoa”); (iii) Moxian Group Limited, a company incorporated under the laws of British Virgin Islands (“Moxian BVI”), (iv) Moxian (Hong Kong) Limited, a limited liability company incorporated under the laws of Hong Kong (“Moxian HK”), (v) Moxian Technologies (Shenzhen) Co., Ltd. (“Moxian Shenzhen”), and (vi) Moxian Malaysia SDN BHD (“Moxian Malaysia”), and (vii) Shenzhen Moyi Technologies Co. Ltd., a contractually controlled affiliate of Moxian Shenzhen formed under the laws of People’s Republic of China (“Moyi”).

 

Overview

 

Moxian China, Inc., formerly known as SECURE NetCheckIn, Inc., engages in the business of providing a social marketing and promotion platform to merchants who desire to promote their businesses through online social media. Our products and services aim to enhance the interaction between users and merchant clients by allowing merchant clients to study consumer behavior through data compiled from our database of users’ activities. We design our products and services to allow our merchant clients to run advertisement campaigns and promotions to target their customers. Our platform is also designed and built to entice users to return and to encourage new consumer users to subscribe our website.

 

We launched our marketing platform in Malaysia and China in June 2013 and July 2014, respectively. We have generated limited revenues and we have incurred substantially more losses than our revenues to date.

 

As of September 30, 2013 and September 30, 2014, our accumulated deficits were $209,824 and $5,001,166, respectively. Our stockholders’ equity (deficiency) was ($11,524) and ($4,587,023) as of September 30, 2013 and September 30, 2014, respectively. We have so far generated $56,122 in revenue. Our losses have principally been attributed to operating expenses, administrative and other operating expenses.

 

Results of Operations

 

For the year ended September 30, 2014 compared with the year ended September 30, 2013.

 

Gross Revenues

 

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.

 

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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.

 

Operating Expenses

 

Operating expenses for the years ended September 30, 2014 and September 30, 2013, were $2,176,963 and $31,411, respectively. The expenses consisted of filing fees, professional fees, payroll and benefits and other general expenses.

 

We expect that our general and administrative expenses will continue to increase as we incur additional costs to support the growth of our business.

 

Net Loss

 

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.

 

Liquidity and Capital Resources

 

At September 30, 2014 we had working capital of ($4,935,692) consisting of cash on hand of $1,770,196 as compared to working capital of ($12,019) and our cash of $28 at September 30, 2013.

 

Net cash used in operating activities for the year ended September 30, 2014 was $2,106,329 as compared to net cash provided by operating activities of $523 for the year ended September 30, 2013. The cash used in operating activities are mainly for filing fees, professional fees, payroll and benefits and general expenses.

 

Net cash provided by investing activities for the year ended September 30, 2014 was $667,730 as compared to net cash used in investing activities of $523 for the year ended September 30, 2013. The cash used in investing activities are mainly for the purchases of equipment. The cash provided by investing activities are mainly from the net cash inflow from the acquisition of subsidiaries.

 

Net cash provided by financing activities for the year ended September 30, 2014 was $3,155,839 as compared to nil for the year ended September 30, 2013. The cash provided by financing activities are mainly from loan borrowings.

 

Currently, we have limited operating capital. We believe that our current capital and our other existing resources will be sufficient only to provide a limited amount of working capital, and the revenues, if any, generated from our business operations alone may not be sufficient to fund our operations or planned growth.

 

We will likely require additional capital to continue to operate our business, and to further expand our business. Sources of additional capital through various financing transactions or arrangements with third parties may include equity or debt financing, bank loans or revolving credit facilities. Management has plans to seek additional capital from private equity funds in Asia in the next 12 months. We may not be successful in locating suitable financing transactions in the time period required or at all, and we may not obtain the capital we require by other means, such as conducting a public offering of our common stock. Our inability to raise additional funds when required may have a negative impact on our operations, business development and financial results.

 

Critical Accounting Policies and Estimates

 

Use of Estimates

 

The preparation of financial statements in conformity with 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 liabilities at dates of the financial statements and the reported amounts of revenue and expenses during the periods. Actual results could differ from these estimates. Our significant estimates and assumptions include depreciation and the fair value of our stock, stock-based compensation, debt discount and the valuation allowance relating to the Company’s deferred tax assets.

 

Recently Issued Accounting Pronouncements

 

Reference is made to the “Recent Accounting Pronouncements” in Note 2 to the Financial Statements included in this Report for information related to new accounting pronouncement, none of which had a material impact on our consolidated financial statements, and the future adoption of recently issued accounting pronouncements, which we do not expect will have a material impact on our consolidated financial statements.

 

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Going Concern

 

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities and business development. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

 

Off-Balance Sheet Arrangements

 

As of September 30, 2014, we did not have any off-balance sheet arrangements.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Disclosure in response to this item is not required of a smaller reporting company.

 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

The Company's consolidated financial statements, together with the report of the independent registered public accounting firm thereon and the notes thereto, are presented beginning at page F-1. The Company’s balance sheets as of September 30, 2014 and 2013 and the related statements of operations, changes in stockholders’ deficit and cash flows for the years then ended have been audited by Dominic K.F. Chan & Co. Dominic K.F. Chan & Co is an independent registered public accounting firm. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and pursuant to Regulation S-K as promulgated by the Securities and Exchange Commission and are included herein pursuant to Part II, Item 8 of this Form 10-K. The financial statements have been prepared assuming the Company will continue as a going concern.

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

Previous Independent Accountants

 

On February 19, 2014, our Board of Directors terminated Tarvaran, Askelson& Company LLP (“TA”), as our independent accountant. The reports of TA, on our financial statements for the past two fiscal years contained no adverse opinion or a disclaimer of opinion and were not modified; however, the reports were qualified as to the uncertainty of our ability to continue as a going concern due to our dependence on a successful execution of our plan of operations and ability to raise additional financing, lack of our generation of revenues, and our stockholders’ deficit and negative working capital. The decision to change independent accountants was approved by our Board of Directors on February 19, 2014.

 

During two most recent fiscal years and through February 14, 2014, we have had no disagreements with TA, 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 TA, 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 February 19, 2014, there have been no reportable events as defined under Item 304(a)(1)(v) of Regulation S-K.

  

New Independent Accountants

 

Our Board of Directors appointed Dominic K.F. Chan & Co. (“Chan”) as our new independent registered public accounting firm effective as of February 19, 2014. During the two most recent fiscal years and through the date of our engagement, we did not consult with Chan 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.

 

ITEM 9A. CONTROLS AND PROCEDURES

 

Disclosures Control and Procedures

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

 

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
   
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

 

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Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

 

As of September 30, 2014, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on such evaluation, the Company’s management concluded that, during the period covered by this Report, internal controls and procedures over financial reporting were not effective. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

 

Identified Material Weakness

 

A material weakness in internal control over financial reporting is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected.

 

Management identified the following material weaknesses during its assessment of internal controls over financial reporting as of September 30, 2014:

 

(1) Lack of internal audit function . The Company discovered that some subsidiaries of the Company borrowed a series of loans from a shareholder of the Company (the “Shareholder Loans”) in September, October, and November of 2014. Management believes that the foregoing is due to the fact that the Company lacks qualified resources to perform the internal audit functions properly and that the scope and effectiveness of the internal audit function are yet to be developed. Specifically, the reporting mechanism between the accounting department and the Board of Directors and the CEO was not effective, therefore resulting in the delay of recording and reporting.

 

(2) No Segregation of Duties Ineffective controls over financial reporting : In addition, the Company did not disclose the Shareholder Loans in its current reports or quarterly report filed with the SEC in a timely manner. As of September 30, 2014, we had no full-time employees with the requisite expertise in the key functional areas of finance and accounting. As a result, there is a lack of proper segregation of duties necessary to insure that all transactions are accounted for accurately and in a timely manner.

 

(3) Lack of a functioning audit committee : Due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, and no audit committee has been elected, the oversight in the establishment and monitoring of required internal controls and procedures is inadequate.

 

(4) Written Policies & Procedures : Due to lack of written policies and procedures for accounting and financial reporting, the Company did not establish a formal process to close our books monthly and account for all transactions and thus failed to properly record the Shareholder Loans or disclose such transactions in its SEC filings in a timely manner.

 

As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of September 30, 2014 based on criteria established in Internal Control—Integrated Framework issued by COSO. However, management does not believe that any of our annual or interim financial statements issued to date contain a material misstatement as a result of the aforementioned weaknesses in our internal control over financial reporting.

 

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Management’s Remediation Initiatives

 

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

 

(1) We plan to appoint one or more outside directors to our board of directors who will be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.
     
(2) We plan to add financial personnel to our management team. These additional staff members will be responsible for making sure that information required to be disclosed in our reports filed and submitted under the Exchange Act is recorded, processed, summarized and reported as and when required and will the staff members will have segregated responsibilities with regard to these responsibilities.
     
(3) We plan to prepare written policies and procedures for accounting and financial reporting to establish a formal process to close our books monthly on an accrual basis and account for all transactions, including equity and debt transactions.

 

We anticipate that these initiatives will be at least partially, if not fully, implemented by the end of fiscal year 2015. Additionally, we plan to test our updated controls and remediate our deficiencies in year 2015.

 

Changes in internal controls over financial reporting

 

Except the following, there was no change in our internal controls over financial reporting that occurred during the period covered by this Report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting:

 

On November 14, 2013, Brandi DeFoor, the Company’s Chief Executive Officer, Secretary, Treasurer and director of the Board of Directors (the “Board”) resigned from all of her positions as director and officer of the Company and Mark DeFoor, the Company’s Chief Financial Officer, President, and director of the Board resigned from all of his positions as director and officer of the Company.

 

Also effective on November 14, 2013, Mr. Ng Kian Yong was appointed as the Chief Executive Officer, President, Treasurer, Secretary and director of the Board of the Company, and Mr. Qin Chang Jian was elected as a director of the Board of the Company.

 

This annual report does not include an attestation report of the Company’s registered independent public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s registered independent public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report on Form 10-K.

  

ITEM 9B. OTHER INFORMATION

 

None.

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

The following table sets forth the name and position of our current executive officers and directors.

 

Name   Age   Position
Ng Kian Yong   25   Chief Executive Officer, President, Treasurer, Secretary, and Director
         
Qin Chang Jian   31   Director
         
James Mengdong Tan   52   Director

 

Mr. Ng Kian Yong , age 25, currently serves as the sales & marketing manager at Morolling International Limited, where he is in charge of marketing new products of the company in China. From 2011 to 2012, Mr. Ng was the marketing manager at Extromas Sdn Bhd, where he was actively involved in the company’s marketing program. Prior to that, Mr. Ng worked as a marketing executive at Bestwin(China) Limited from 2010 to 2011, where he was mainly responsible for increasing direct sales of products and establishing products distribution network in China. Mr. Ng graduated from SMK Taman Tun Aminah (SMKTTA), Malaysia in 2010.

 

The Board of Director reached a conclusion that Mr. Ng should serve as a Director of the Company based on his experience in management of sales and marketing teams.

 

21
 

 

Mr. Qin Chang Jian , age 31, has over 9-year experience in accounting, products procurement management, and human resources management. From 2006 to 2012, Mr. Qin was an information technology engineer in Saison Electronic Ltd. (Hong Kong), where he was responsible for the implementation of software and hardware solutions of telecommunication and Internet. From 2004 to 2006, Mr. Qin was as a manager of information technology department of Jin Hong Yuan Electronic Company, an equipment manufacturer in China with a focus on mobile phone manufacturing.  Mr. Qin received his Finance degree from Sichuan Commerce and Trade College of China in 2002.

 

The Board of Director reached a conclusion that Mr. Qin should serve as a Director of the Company based on his extensive experience in technology and social media business.

 

Mr. James Mengdong Tan , age 52, has more than 20 years’ experience in managing private and public companies based in Asia and USA. Mr. Tan is currently the Director and CEO of 8i Capital Limited. Until 2009, he was the Chairman and CEO of Vashion Group, a company listed on the Singapore Stock Exchange. Until 2009, he was the Executive Director and CEO of Vantage Corporation Limited, a company listed on the Singapore Stock Exchange departing. At the same time, he served as a director on the Board of Pacific Internet Ltd, a company listed on Nasdaq until its sale to Connect Holdings, a group comprising of Ashmore Investment Management Limited, Spinnaker Capital Limited and Clearwater Capital Partners. James graduated from the National University of Singapore (NUS) with a Bachelor of Arts in 1985.

 

The Board of Director reached a conclusion that Mr. Tan should serve as a Director of the Company based on his extensive experience in managing publicly traded companies.

 

All directors hold office until the next annual meeting of shareholders and until their successors have been duly elected and qualified. Directors are elected at the annual meetings to serve for one-year terms.  Any non-employee director of the Company or its subsidiaries is reimbursed for expenses incurred for attendance at meetings of the Board and any committee of the board of directors although no such committee has been established.

  

Each officer is appointed by the board of directors and holds his office at the pleasure and discretion of the board of directors or until his earlier resignation, removal or death.

 

There are no material proceedings to which any director, officer or affiliate of the Company, any owner of record or beneficially of more than five percent of any class of voting securities of the Company, or any associate of any such director, officer, affiliate of the Company or security holder is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.

 

Director Independence

 

Our securities are not listed on a national securities exchange or in an inter-dealer quotation system which has requirements that directors be independent.  We do not have majority of independent directors.

 

Committees of the Company’s Board of Directors

 

Because our board of directors currently consists of two members, we do not have a standing nominating, compensation or audit committee.  Rather, our full board of directors performs the functions of these committees. Also, we do not have a “financial expert” on our board of directors as that term is defined by Item 401(e)(2) of Regulation S-K. We do not believe it is necessary for our board of directors to appoint such committees because the volume of matters that come before our board of directors for consideration permits the Board of Directors to give sufficient time and attention to such matters to be involved in all decision making. Additionally, because our Common Stock is not listed for trading or quotation on a national securities exchange, we are not required to have such committees. In considering candidates for membership on the Board of Directors, the Board of Directors will take into consideration the needs of the Board of Directors and the candidate's qualifications. The Board of Directors will request such information as:

 

  The name and address of the proposed candidate;

 

  The proposed candidates resume or a listing of his or her qualifications to be a director of the Company;

 

 

A description of any relationship that could affect such person's qualifying as an independent director, including identifying all other public company board and committee memberships;

 

  A confirmation of such person's willingness to serve as a director if selected by the Board of Directors; and

 

  Any information about the proposed candidate that would, under the federal proxy rules, be required to be included in the Company's proxy statement if such person were a nominee.

 

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Once a person has been identified by the Board of Directors as a potential candidate, the Board of Directors may collect and review publicly available information regarding the person to assess whether the person should be considered further. Generally, if the person expresses a willingness to be considered and to serve on the Board of Directors and the Board of Directors believes that the candidate has the potential to be a good candidate, the Board of Directors would seek to gather information from or about the candidate, including through one or more interviews as appropriate and review his or her accomplishments and qualifications generally, including in light of any other candidates that the Board of Directors may be considering. The Board of Director's evaluation process does not vary based on whether the candidate is recommended by a shareholder.

 

The Board of Directors will, from time to time, seek to identify potential candidates for director nominees and will consider potential candidates proposed by the Board of Directors and by management of the Company.

 

Meetings of the Board of Directors

 

During its fiscal year ended September 30, 2014, the Board of Directors did not meet on any occasion, but rather transacted business by unanimous written consent.

 

Board Leadership Structure and Role in Risk Oversight

 

Our Board recognizes that the leadership structure and combination or separation of the chief executive officer and chairman roles is driven by the needs of the Company at any point in time.  Currently, Mr. Ng serves as the sole officer of the Company as well as a director of our Board, and Mr. Qin serves as a director of our board.  We have no policy requiring the combination or separation of leadership roles and our governing documents do not mandate a particular structure.  This has allowed, and will continue to allow, our Board the flexibility to establish the most appropriate structure for our company at any given time.

 

Code of Ethics

 

Our Board of Directors will adopt a new code of ethics that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. The new code will address, among other things, honesty and ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the federal securities laws, confidentiality, trading on inside information, and reporting of violations of the code. 

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Except as set forth below, no person who, during the year ended September 30, 2014, was a director, officer or beneficial owner of more than ten percent of the Company’s Common Stock (which is the only class of securities of the Company registered under Section 12 of the Securities Exchange Act of 1934 (the “Act”) failed to file on a timely basis, reports required by Section 16 of the Exchange Act during such fiscal year or, except as reported above, prior years.  The foregoing is based solely upon a review by the Company of Forms 3 and 4 and amendments thereto during such fiscal year as furnished to the Company under Rule 16a-3(e) under the Act, and Forms 5 and amendments thereto furnished to the Company with respect to such fiscal year, and any written representation received by the Company from any reporting person that no Form 5 is required.

 

Name   Date of Reporting Event   Required Filing Date   Date of Filing
Brandi DeFoor   10/19/2010 (1)   11/2/2010   Form 3 filed on 11/7/2013
Brandi DeFoor   11/14/2013 (2)   02/14/2014   No Form 5 filed
Mark DeFoor   10/25/2011 (3)   11/8/2011   No Form 3 filed
Mark DeFoor   11/14/2013 (4)   02/14/2014   No Form 5 filed
Ng Kian Yong   11/14/2013 (5)   11/24/2013   Form 3 to be filed on 1/31/2015
Qin Changjian   11/14/2013 (6)   11/24/2013   Form 3 to be filed on 1/31/2015

 

(1) Date of issuance of shares of the Company’s Common Stock.
(2) Date of sale of 3,100,000 shares of the Company’s Common Stock Brandi DeFoor owned.
(3) Date of appointment as an officer of the Company.
(4) Date of resignation from an officer and director of the Company.
(5) Date of appointment as an officer and director of the Company.
(6) Date of appointment as a director of the Company.

  

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ITEM 11. EXECUTIVE COMPENSATION

 

The following table sets forth all compensation earned or awarded by our Chief Executive Officer, Chief Financial Officer and other “named executive officers” for our last two completed fiscal years:

 

 

Name and Principal Position     Year         Salary
($)
      Bonus
($)
      Stock
Awards
($)
      Option
Awards
($)
      Non-Equity
Incentive
Plan
Compensation
($)
      Change in Pensions Value and Non-Qualified Compensation Earnings       All
Other Compensation
($)
      Total
($)  
 
Ng Kian Yong (1)     2014       -                                     -       -  
President and CEO     2013                         --                          
                                                                         
Brandi DeFoor (2)     2014                                                  
President and CEO     2013                                                  
                                                                         
Mark DeFoor (3)       2014       -       -       -       -       -       -       -       -  
CFO     2013       -       -       -       -       -       -       -       -  

 

  (1) Mr. Ng is serving as the Company’s President and CEO since November 14, 2013.
  (2) Ms. DeFoor was the Company’s President, CEO and Director from October 19, 2010 through November 14, 2013.
  (3) Mr. DeFoor was the Company’s CFO from October 25, 2011 through November 14, 2013.

 

The Company does not have an employment agreement with Mr. Ng. Mr. Ng has not received any compensation during the fiscal year of 2014. We do not provide any employee benefit programs to our employees other than a periodic grant of warrants.  

 

Outstanding Equity Awards at Fiscal Year-End

 

No unexercised options or warrants were held by any of our named executive officers at September 30, 2014. No equity awards were made during the fiscal year ended September 30, 2014.

 

Director Compensation

 

The following table sets forth the compensation paid to our directors during the years ended September 30, 2014, and 2013.

 

DIRECTOR COMPENSATION
 
Name and Position     Year      

Fees Earned or

Paid in Cash

($)

     

Option

Awards

($)

     

All Other

Compensation

($)

     

Total

($)

 
                                         
Ng Kian Yong (1)     2014       0       0       0       0  
      2013       0       0       0       0  
                                         
Qin Chang Jian (2)     2014       0       0       0       0  
      2013       0       0       0       0  
                                         
James Mengdong Tan (3)     2014       0       0       0       0  
                                         
Brandi DeFoor (4)     2014       0       0       0       0  
      2013       0       0       0       0  
                                         
Mark DeFoor (5)     2014       0       0       0       0  
      2013       0       0       0       0  

 

  (1) Mr. Ng is serving as the Company’s director since November 14, 2013.
  (2) Mr. Qin is serving as the Company’s director since November 14, 2013.
(3) Mr. Tan is serving as the Company’s director since December 31, 2014.
  (3) Ms. DeFoor was the Company’s President, CEO and Director from October 19, 2010 through November 14, 2013.
  (4) Mr. DeFoor was the Company’s Director from October 5, 2012 through November 14, 2013.

 

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ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The following table sets forth certain information regarding the beneficial ownership of the Company's Common Stock as of the date herein by (i) each stockholder known by the Company to be the beneficial owner of more than 5% of the Company's Common Stock and (ii) by the directors and executive officers of the Company. The person or company named in the table has sole voting and investment power with respect to the shares beneficially owned.

 

Name of
Beneficial Owner
  Positions with
the Company
  Title of Class    

Amount and Nature

of Beneficial

Ownership (1)

   

Percent of

Class (2)

 
Officers and Directors                            

Ng Kian Yong

Room 22I, Unit 2 Building C,

KingKey 100, Hongbao Road, Luohu District, Shenzhen

518000, China

  CEO and Director    

Common Stock,

$0.001 par value

      79,320,000 (3)     40.0 %
                             

Qian Chang Jian

Shenzhen District, Luohu Area, Chunfeng Lu,

Jingseduhui, 25/E, China

  Director    

Common Stock,

$0.001 par value

      0       0 %
                             

James Mengdong Tan

Room 2313-2315 , Block B, Zhongshen Garden,

Caitian South Road, Futian District, Shenzhen

Guangdong Province, China 518101

  Director    

Common Stock,

$0.001 par value

      39,960,000 (4)     20.2 %
                             
All officers and directors as a group
(3 persons named above)
       

Common Stock,

$0.001 par value

      119,280,000       60.2 %
5% Securities Holders                            

Good Eastern Investment Holding Limited

10 Anson Road #35-11 International Plaza

Singapore 079903

       

Common Stock,

$0.001 par value

      39,960,000       20.2 %
                             

Moxian China Limited

Unit No 304, New East Ocean Centre, No 9

Science Museum Road, T.S.T., Kowloon, Hong Kong

       

Common Stock,

$0.001 par value

      67,020,000       33.8 %
                             

Stellar Elite Limited

Unit No 304, New East Ocean Centre, No 9

Science Museum Road, T.S.T., Kowloon, Hong Kong

       

Common Stock,

$0.001 par value

      79,320,000       40.0 %

 

(1) Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Beneficial ownership also includes shares of stock subject to options and warrants currently exercisable or exercisable within 60 days of the date of this table. In determining the percent of common stock owned by a person or entity as of the date of this Report, (a) the numerator is the number of shares of the class beneficially owned by such person or entity, including shares which may be acquired within 60 days on exercise of warrants or options and conversion of convertible securities, and (b) the denominator is the sum of (i) the total shares of common stock outstanding on as of the date of this Annual Report (198,300,000 shares), and (ii) t he total number of shares that the beneficial owner may acquire upon exercise of the derivative securities.  Unless otherwise stated, each beneficial owner has sole power to vote and dispose of its shares.
(2) Based on the total issued and outstanding shares of 198,300,000 as of the date of this Report.
(3) Includes 79,320,000 shares of Common Stock that Stellar Elite Limited owns. Ng Kian Yong is the Chief Executive Officer of Stellar Elite Limited, therefore Mr. Ng is deemed to be the beneficial owner of the shares owned by Stellar Elite Limited.
(4) Includes 39,960,000 shares of Common Stock that Good Eastern Investment Holding Limited. James Mengdong Tan is the director of Good Eastern Investment Holding Limited, therefore Mr. Tan is deemed to be the beneficial owner of the shares owned by Good Eastern Investment Holding Limited.

 

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ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, DIRECTOR INDEPENDENCE

 

Except as set forth below, we have not been a party to any transaction since October 1, 2012, in which the amount involved in the transaction exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets as at the year-end for the last two completed fiscal years and in which any of our directors, executive officers or beneficial holders of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals, had or will have a direct or indirect material interest.

 

Our policy is that a contract or transaction either between the Company and a director, or between a director and another company in which he is financially interested is not necessarily void or void-able if the relationship or interest is disclosed or known to the board of directors and the stockholders are entitled to vote on the issue, or if it is fair and reasonable to our company.

 

On November 14, 2014, Ms. Brandi DeFoor (“DeFoor”), our former President and director of the Board as well as a majority shareholder of the Company, entered into a Securities Purchase Agreement (the “Purchase Agreement,” such transaction, the “Purchase Transaction”) with three accredited investors (the “Purchasers”), pursuant to which Stark sold to the Purchasers 3,100,000 shares of Common Stock of the Company for $264,500.

 

On September 28, 2014, Moxian HK entered into loan agreements with three entities: Moxian China Limited (“MCL”), Ace Keen Limited and Jet Key Limited (the “Creditors”). Pursuant to the loan agreements, Moxian HK obtained loans in the aggregate amount of $908,048 (the “Moxian HK Loans”). On the same day, Moxian Malaysia also signed three loan agreements with the Creditors, pursuant to which Moxian Malaysia borrowed an aggregate of $2,020,221 from the Creditors (the “Moxian Malaysia Loans”). Also on the same day, Moxian Shenzhen entered into three loan agreements with the Creditors, and borrowed an aggregate of $2,961,460 (the “Moxian Shenzhen Loans”). MCL owns 33.8% of total outstanding shares of the Company. Ace Keen Limited is controlled by Mr. Zhang Guo Hui, who is the holder of 70% of the equity interests in Moyi, our variable interest entity in China. Jet Key Limited is owned and controlled by Ms. Zhang Ying, who is Mr. Zhang Guo Hui’s sister. The terms of Moxian HK Loans, Moxian Malaysia Loan, and Moxian Shenzhen Loans are the same: the term is six months and they are unsecured and bear no interest. The Creditors are negating with the Company and they intend to convert the aforementioned loans into the shares of the Company by the end of December 2015.

 

On October 31, 2014 and November 30, 2014, Moxian Shenzhen received RMB 630,000 (approximately $102,942) and RMB 90,000 (approximately $14,486), respectively, as loans from MCL (“MCL Shenzhen Loans”). The term of such loans is twelve months and they bear no interest. On December 31, 2014, the Company, MCL and Moxian Shenzhen entered into a Loan Agreement, where the Company agreed to issue a convertible promissory note to MCL for the repayment of the MCL Shenzhen Loans.

 

On October 31, 2014 and November 30, 2014, Moxian Malaysia received a loan in the amount of RM 118,800 (approximately $34,032) and RM23,100 (approximately $6,605), respectively, from MCL (“MCL Malaysia Loans”). The term of such loans is twelve months and they bear no interest. On December 31, 2014, the Company, MCL and Moxian Malaysia entered into a Loan Agreement, where the Company agreed to issue a convertible promissory note to MCL for the repayment of the MCL Malaysia Loans.

 

On November 30, 2014, Moxian HK received HKD500,000 (approximately $64,437) as a loan from MCL (“MCL HK Loan”). The term of such loan is twelve months and it bears no interest. . On December 31, 2014, the Company, MCL and Moxian HK entered into a Loan Agreement, where the Company agreed to issue a convertible promissory note to MCL for the repayment of the MCL HK Loan.

 

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

 

Audit Fees

 

The following table sets forth the aggregate fees billed to the Company by its independent registered public accounting firm, Dominic K.F. Chan & Co., for the fiscal years indicated.

 

ACCOUNTING FEES AND SERVICES   2014     2013  
             
Audit fees   $ 35,000     $ 2,000  
Audit-related fees     -       -  
Tax fees   $ -     $ -  
All other fees     -       -  
                 
Total   $ 35,000     $ 2,000  

 

The category of  “Audit fees”  includes fees for our annual audit, quarterly reviews and services rendered in connection with regulatory filings with the SEC, such as the issuance of comfort letters and consents.

 

The category of  “Audit-related fees”  includes employee benefit plan audits, internal control reviews and accounting consultation.

 

All above audit services and audit-related services were pre-approved by the Board of Directors, which concluded that the provision of such services by Dominic K.F. Chan & Co. was compatible with the maintenance of the firm’s independence in the conduct of its audits.

 

26
 

 

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 

  (a) Financial Statements

 

The following are filed as part of this report:

 

Financial Statements

 

The following financial statements of Moxian China, Inc. and Report of Independent Registered Public Accounting Firm are presented in the “F” pages of this Report:

 

    Page
     
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   F – 2
     
CONSOLIDATED FINANCIAL STATEMENTS    
     
Consolidated Balance Sheets as of September 30, 2014 and September 30, 2013   F – 3
     
Consolidated Statements of Operations for the year ended September 30, 2014, for the Period from October 12, 2010 (inception) to September 30, 2013, and for the Period from October 12, 2010 (inception) to September 30, 2014   F – 4
     
Consolidated Statements of Changes in Stockholders’ Deficiency for the Period from October 12, 2010 (inception) to September 30, 2014   F – 5
     
Consolidated Statements of Cash Flows for the year ended September 30, 2013, for the Period from October 12,2010 (inception) to September 30, 2013, and for the Period from October 12, 2010 (inception) to September 30, 2014   F – 6
     
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   F- 7 to F - 22

 

  (b) Exhibits

 

The following exhibits are filed or “furnished” herewith:

 

Exhibit

Number

  Description
     
3.1   Articles of Incorporation of the Company filed on October 12, 2010 (incorporated by reference herein to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 30, 2011).
     
3.2   Restated Articles of Incorporation of the Company filed on May 2, 2011 (incorporated by reference herein to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on May 9, 2011).
     
3.3   Certificate of Amendment to the Company’s Articles of Incorporation filed on December 9, 2013 (incorporated by reference herein to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 19, 2013).
     
3.4   Bylaws (incorporated by reference herein to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 30, 2011).
     
4.1   Specimen Stock Certificate of Common Stock of Moxian China, Inc.*
     
4.2   Form of Convertible Promissory Note of Moxian China, Inc.*
     
10.1   License and Acquisition Agreement dated February 21, 2014 (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 25, 2014).
     
10.2   Form of Loan Agreement, dated September 28, 2014.*
     
10.3   Exclusive Business Cooperation Agreement, dated July 15, 2014.*
     
10.4   Loan Agreement, dated July 15, 2014*
     
10.5   Share Pledge Agreement, dated July 15, 2014*

 

27
 

 

10.6   Form of Power of Attorney*
     
10.7   Exclusive Option Agreement, dated July 15, 2014*
     
10.8   Loan Agreement, among the Company, Moxian Shenzhen and Moxian China Limited dated December 31, 2014*
     
10.9   Loan Agreement, among the Company, Moxian Malaysia and Moxian China Limited dated December 31, 2014*
     
10.10   Loan Agreement, among the Company, Moxian HK and Moxian China Limited dated December 31, 2014*
     
21.1   List of Subsidiaries. *
     
31.1   Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002;*
     
32.1   Certification of Chief Executive Officer and Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, as 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.

 

** Users of this data are advised pursuant to Rule 406T of Regulation S-X that this interactive data file is deemed not filed or part of a registration statement or prospectus for the purpose of section 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.  

 

28
 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) 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.

 

  MOXIAN CHINA, INC.
     
Date: December 31, 2014 By: /s/ Ng Kian Yong
    Ng Kian Yong
    Chief Executive Officer

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

/s/ Ng Kian Yong Date: December 31, 2014
Ng Kian Yong  
Chief Executive Officer and Director  
   
/s/ Qin Chang Jian Date: December 31, 2014
Qin Chang Jian  
Director  
   
/s/ James Mengdong Tan Date: December 31, 2014
James Mengdong Tan  
Director  

 

29
 

 

MOXIAN CHINA, INC.

(A CORPORATION IN THE DEVELOPMENT STAGE)

 

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED SEPTEMBER 30, 2014 AND 2013

 

(Stated in US Dollars)

 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 

  PAGES
   
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F- 1
   
CONSOLIDATED BALANCE SHEETS F- 2
   

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

F- 3
   
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY F-4
   
CONSOLIDATED STATEMENTS OF CASH FLOWS F- 5
   
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F- 6 – F-18

 

 
 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of

MOXIAN CHINA, INC.

 

We have audited the accompanying consolidated balance sheets of Moxian China, Inc. (the “Company”), a development stage company, as of September 30, 2014 and 2013 and the related consolidated statements of operations, shareholders’ equity and other comprehensive income, and cash flows, for the years ended September 30, 2014 and 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2014 and 2013 and the results of its operations and their cash flows for the years ended September 30, 2014 and 2013 in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company is in the development stage and has minimal operations. Its ability to continue as a going concern is dependent upon its ability to develop additional sources of capital, develop websites, generate advertising income, and ultimately, achieve profitable operations. These conditions raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Dominic K.F. Chan & Co

Certified Public Accountants

Hong Kong, December 31, 2014

 

F- 1
 

 

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

CONSOLIDATED BALANCE SHEETS

(Stated in US Dollars)

 

    As of  
    Sept 30, 2014     Sept 30, 2013  
ASSETS            
CURRENT ASSETS            
Cash and cash equivalents   $ 1,770,196     $ 28  
Prepayments, deposits and other receivables      741,645        -  
Total current assets      2,511,841        28  
Property and equipment, net (Note 3)      348,669        495  
TOTAL ASSETS   $ 2,860,510     $ 523  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
CURRENT LIABILITIES                
Accruals and other payables   $ 295,601     $ 12,047  
Payable for acquisition (Note 8)     1,000,000       -  
Loans from shareholders (Note 4)     6,151,932       -  
Total current liabilities      7,447,533        12,047  
Total liabilities   $ 7,447,533     $ 12,047  
                 
STOCKHOLDERS’ EQUITY                
Capital stock (Note 5)                
Preferred stock, $0.001 par value, authorized: 100,000,000 shares. Nil shares issued and outstanding as of September 30, 2014 and September 30, 2013     -       -  
Common stock*, $0.001 par value, authorized: 500,000,000 shares. 198,300,000 shares issued and outstanding as of September 30, 2014 and September 30, 2013     198,300       198,300  
Additional paid-in capital     162,914       -  
Deficit accumulated during the development stage     (5,001,166 )     (209,824 )
Accumulated other comprehensive income     52,929       -  
Total stockholders’ deficit     (4,587,023 )     (11,524 )
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 2,860,510     $ 523  

 

*The number of shares of common stock has been retroactively restated to reflect the 60-for-1 forward stock split effected on December 13, 2013.

 

See accompanying notes to consolidated financial statements

 

F- 2
 

 

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          

 

*The number of shares of common stock has been retroactively restated to reflect the 60-for-1 forward stock split effected on December 13, 2013.

 

See accompanying notes to consolidated financial statements

 

F- 3
 

 

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’EQUITY

(Stated in US Dollars)

 

                Accumulated     Accumulated        
          Additional     deficit     other        
    Common Stock*     paid-in     development     comprehensive        
    Shares     Amount     capital     stage     income     Total  
                                     
Balance at inception, October 12, 2010                                    
                                     
Common shares issued founder for property and equipment     186,000,000     $ 186,000     $ -     $ (182,900 )   $ -     $ 3,100  
Additional paid in capital by founder     -       -       -       169       -       169  
Net loss     -       -       -       (21 )     -       (21 )
                                                      
Balance, December 31, 2010     186,000,000     $ 186,000     $ -     $ (182,752 )   $ -     $ 3,248  
                                                 
Additional paid in capital by founder     -       -       -       2,146       -       2,146  
Issue of common stock     12,300,000       12,300       -       28,700       -       41,000  
Net loss     -       -       -       (12,606 )     -       (12,606 )
                                                      
Balance, December 31, 2011     198,300,000     $ 198,300     $ -     $ (164,512 )   $ -     $ 33,788  
                                                 
Net loss     -       -       -       (33,572 )     -       (33,572 )
                                                      
Balance, December 31, 2012     198,300,000     $ 198,300     $ -     $ (198,084 )   $ -     $ 216  
                                                 
Additional paid in capital by founder     -       -       -       2,950       -       2,950  
Net loss     -       -       -       (14,690 )     -       (14,690 )
                                                      
Balance, September 30, 2013     198,300,000     $ 198,300     $ -     $ (209,824 )   $ -     $ (11,524 )
                                                 
Inclusion of Moyi (See Note 1 )     -       -       162,914       -       -       162,914  
Net loss     -       -       -       (4,791,342 )     -       (4,791,342 )
Foreign currency adjustment     -       -       -       -       52,929       52,929  
                                                      
Balance, September 30, 2014     198,300,000     $ 198,300     $ 162,914     $ (5,001,166 )   $ 52,929     $ (4,587,023 )

 

*The number of shares of common stock has been retroactively restated to reflect the 60-for-1 forward stock split effected on December 13, 2013.

 

See accompanying notes to consolidated financial statements

 

F- 4
 

 

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(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  
OPERATING ACTIVITIES                  
Net loss   $ (4,791,342 )   $ (31,441 )   $ (5,001,166 )
Depreciation and amortization expense     78,571       -       78,571  
Impairment of goodwill     2,600,315       -       2,600,315  
Changes in operating assets and liabilities:                        
(Increase) decrease in deposits, prepayments and other receivables     (167,032 )     19,917       (185,339 )
Increase in accruals and other payables      173,159        12,047        244,429  
Net cash (used in) provided by operating activities      (2,106,329 )      523        (2,263,190 )
                         
INVESTING ACTIVITIES                        
Purchases of property, plant and equipment     (229,723 )     (495 )     (229,723 )
Net cash inflow on acquisition of subsidiaries (Note 8)      897,453        -        897,453  
Net cash provided by (used in) investing activities      667,730        (495 )      667,730  
                         
FINANCING ACTIVITIES                        
Loan borrowings     3,155,839       -       3,263,362  
Capital stock issued for cash      -        -        49,365  
Net cash provided by financing activities      3,155,839        -        3,312,727  
                         
Effect of foreign currency translation     52,929       -       52,929  
Net increase in cash and cash equivalents     1,770,168       28       1,770,196  
Cash and cash equivalents, beginning of year      28        -        -  
Cash and cash equivalents, end of year   $ 1,770,196     $ 28     $ 1,770,196  
                         
Supplemental cash flow disclosures:                        
Cash paid for interest expense   $ -     $ -     $ -  
Cash paid for income taxes   $ -     $ -     $ -  

 

See accompanying notes to consolidated financial statements

 

F- 5
 

 

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

  

1. Organization and nature of operations

 

Moxian China, Inc. (“the Company”), formerly SECURE NetCheckIn, Inc., was incorporated under the laws of the State of Nevada on October 12, 2010. Effective on December 13, 2013, the Company changed its name to “Moxian China, Inc.” with its trading symbol being “MOXC.” Also effective on December 13, 2013, the Company increased the number of shares that it is authorized to issue to a total of 600,000,0000 shares, including 500,000,000 shares of Common Stock and 100,000,000 shares of preferred stock, par value $.001 per share. In addition, also on December 13, 2013, the Company effectuated a 60-for-1 forward stock split of the Common Stock, without changing the par value or the number of authorized shares of the Common Stock (the “Forward Split”).

 

On February 17, 2014, the Company incorporated Moxian CN Group Limited (“Moxian CN Samoa”) under the laws of Independent State of Samoa.

 

On February 21, 2014, the Company completed the acquisition of Moxian Group Limited (“Moxian BVI”) and its subsidiaries from Moxian Group Holdings, Inc. pursuant to a License and Acquisition Agreement.

 

Moxian BVI was incorporated on July 3, 2012 under the laws of British Virgin Islands. Moxian Group Holdings, Inc. owned 100% equity interests of Moxian BVI prior to the closing of the License and Acquisition Agreement, among the Company, Moxian BVI and Moxian Group Holdings, Inc.

 

Moxian (Hong Kong) Limited (“Moxian HK”) was incorporated on January 18, 2013 and became Moxian BVI’s subsidiary since February 14, 2013. Moxian HK is currently engaged in the business of online social media. Moxian HK operates through two wholly-owned subsidiaries: Moxian Technologies (Shenzhen) Co., Ltd. (“Moxian Shenzhen”) and Moxian Malaysia SDN BHD (“Moxian Malaysia”).

 

Moxian Shenzhen was invested and wholly owned by Moxian HK. Moxian Shenzhen was incorporated on April 8, 2013 and was engaged in the business of internet technology, computer software, commercial information consulting, etc.

 

Moxian Malaysia was incorporated on March 1, 2013 and became Moxian HK’s subsidiary since April 2, 2013. Moxian Malaysia is conducting its business in IT services and media advertising industry.

 

Shenzhen Moyi Technologies Co., Ltd (“Moyi”) was incorporated on July 19, 2013 and became a variable interest entity of Moxian Shenzhen since July 15, 2014. Moxian Shenzhen controls, through arrangement that absorbs operations risk, as if Moyi were a wholly-owned subsidiary of Moxian Shenzhen.

 

The Company is in the development stage as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915. Among the disclosures required by FASB ASC 915 are that the Company’s consolidated financial statements be identified as those of a development stage company, and that the statements of earnings, retained earnings and stockholders’ equity and cash flows disclose activity since the date of the Company’s inception. The fiscal year end is September 30.

 

The Company's consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated significant revenue since inception and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. Since October 12, 2010 (inception), the Company has generated revenue of $56,122 and has incurred an accumulated deficit of $5,001,166.

 

F- 6
 

 

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

 

1. Organization and nature of operations (Continued)

 

The Company is currently devoting its efforts to develop social networking website and through which to generate servicing income.  The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital, develop websites, generate servicing income, and ultimately, achieve profitable operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

 

2. Summary of principal accounting policies

 

Basis of presentation

 

The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.

 

Revenue recognition

 

Revenue are recognized when persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price is fixed or determinable; and collectability is reasonably assured.

 

Use of estimates

 

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Income taxes

 

The Company utilizes FASB Accounting Standard Codification Topic 740 (“ASC 740”) “Income taxes” (formerly known as SFAS No. 109, "Accounting for Income Taxes"), which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

ASC 740 “Income taxes” (formerly known as Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of Statement of Financial Accounting Standards No. 109 (“FIN 48”)) clarifies the accounting for uncertainty in tax positions. This interpretation requires that an entity recognizes in the consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained upon examination, based on the technical merits of the position. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgement occurs. The Company has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of income tax expense in the statements of operations. The adoption of ASC 740 did not have a significant effect on the consolidated financial statements.

 

F- 7
 

  

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

 

2. Summary of principal accounting policies (Continued)

 

Cash and cash equivalents

 

The Company considers all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less to be cash equivalents.

 

Fair value of financial instruments

 

The carrying values of the Company’s financial instruments, including cash and cash equivalents, trade and other receivables, deposits, trade and other payables approximate their fair values due to the short-term maturity of such instruments. The carrying amounts of borrowings approximate their fair values because the applicable interest rates approximate current market rates.

 

Earnings per share

 

Basic earnings per share is based on the weighted average number of common shares outstanding during the period while the effects of potential common shares outstanding during the period are included in diluted earnings per share.  The average market price during the year is used to compute equivalent shares.

 

FASB Accounting Standard Codification Topic 260 (“ASC 260”), “Earnings Per Share,” requires that employee equity share options, non-vested shares and similar equity instruments granted to employees be treated as potential common shares in computing diluted earnings per share. Diluted earnings per share should be based on the actual number of options or shares granted and not yet forfeited, unless doing so would be anti-dilutive. The Company uses the “treasury stock” method for equity instruments granted in share-based payment transactions provided in ASC 260 to determine diluted earnings per share.

 

Website development costs

 

The Company recognized the costs associated with developing a website in accordance with ASC 350-50 “Website Development Cost” that codified the American Institute of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) NO. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”. Relating to website development costs the Company follows the guidance pursuant to the Emerging Issues Task Force (EITF) NO. 00-2, “Accounting for Website Development Costs”. The website development costs are divided into three stages, planning, development and production. The development stage can further be classified as application and infrastructure development, graphics development and content development. In short, website development cost for internal use should be capitalized except content input and data conversion costs in content development stage.

 

Costs associated with the website consist primarily of website development costs paid to third parties. These capitalized costs will be amortized based on their estimated useful life over three years upon the website becoming operational. Internal costs related to the development of website content will be charged to operations as incurred. Web-site development costs related to the customers are charged to cost of sales.

 

F- 8
 

 

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

 

2. Summary of principal accounting policies (continued)

 

Plant and Equipment

 

Plant and equipment are recorded at cost. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives as follows:

 

  Computers     3 years  
  Office equipment     3 years  
  Furniture and fixtures     3 years  
  Leasehold improvements     Shorter of estimated useful life or term of lease  

 

Goodwill

 

Goodwill represents the excess of purchase price over fair value of net assets acquired. Under ASC 350, Intangibles — Goodwill and Other, goodwill is not amortized but evaluated for impairment annually or whenever events or changes in circumstances indicate that the value may not be recoverable.

 

The Company performed an annual impairment test as of the end of each fiscal year, and determined that an impairment loss in the amount of $2,600,315 and nil were recorded for the years ended September 30, 2014 and 2013 respectively.

 

Comprehensive income

 

The Company has adopted FASB Accounting Standard Codification Topic 220 (“ASC 220”) “Comprehensive income” (formerly known as SFAS No. 130, “Reporting Comprehensive Income”), which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments of the Company.

 

Recently issued accounting pronouncements

 

The FASB has issued Accounting Standards Update (ASU) No. 2014-06, Technical Corrections and Improvements Related to Glossary Terms. The amendments in this ASU relate to glossary terms and cover a wide range of Topics in the FASB’s Accounting Standards Codification™ (Codification). These amendments are presented in four sections:

 

1. Deletion of Master Glossary Terms (Section A) arising because of terms that were carried forward from source literature (e.g., FASB Statements, EITF Issues, and so forth) to the Codification but were not utilized in the Codification.

 

2. Addition of Master Glossary Term Links (Section B) arising from Master Glossary terms whose links did not carry forward to the Codification.

 

F- 9
 

 

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

 

2. Summary of principal accounting policies (Continued)

 

Recently issued accounting pronouncements (Continued)

 

3. Duplicate Master Glossary Terms (Section C) arising from Master Glossary terms that appear multiple times in the Master Glossary with similar, but not identical, definitions.

 

4. Other Technical Corrections Related to Glossary Terms (Section D) arising from miscellaneous changes to update Master Glossary terms.

 

The amendments do not have transition guidance and are effective upon issuance for both public entities and nonpublic entities.

 

The FASB has issued Accounting Standards Update (ASU) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP.

 

Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment.

 

In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations.

 

The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. This disclosure will provide users with information about the ongoing trends in a reporting organization’s results from continuing operations.

 

The amendments in this ASU enhance convergence between U.S. GAAP and International Financial Reporting Standards (IFRS). Part of the new definition of discontinued operation is based on elements of the definition of discontinued operations in IFRS 5, Non-Current Assets Held for Sale and Discontinued Operations.

 

The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. For most nonpublic organizations, it is effective for annual financial statements with fiscal years beginning on or after December 15, 2014. Early adoption is permitted.

 

The FASB has issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The issue is the result of a consensus of the FASB Emerging Issues Task Force.

  

F- 10
 

  

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

 

2. Summary of principal accounting policies (Continued)

 

Recently issued accounting pronouncements (Continued)

 

The amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation – Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved.

 

The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The effective date is the same for both public business entities and all other entities.

 

Entities may apply the amendments in this ASU either: (a) prospectively to all awards granted or modified after the effective date; or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this ASU as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. In addition, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost.

 

The FASB has issued Accounting Standards Update (ASU) No. 2014-13, Consolidation (Topic 810): Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity. The amendments in this ASU will apply to a reporting entity that is required to consolidate a collateralized financing entity under the Variable Interest Entities guidance when: (1) the reporting entity measures all of the financial assets and the financial liabilities of that consolidated collateralized financing entity at fair value in the consolidated financial statements based on other Codification Topics; and (2) the changes in the fair values of those financial assets and financial liabilities are reflected in earnings.

 

The amendments in this ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. For entities other than public business entities, the amendments are effective for annual periods ending after December 15, 2016, and interim periods beginning after December 15, 2016. Early adoption is permitted as of the beginning of an annual period.

 

The fair value of the financial assets of a collateralized financing entity, as determined under GAAP, may differ from the fair value of its financial liabilities even when the financial liabilities have recourse only to the financial assets. Before this ASU, there was no specific guidance in GAAP on how a reporting entity should account for that difference.

  

F- 11
 

 

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

 

2. Summary of principal accounting policies (Continued)

 

Recently issued accounting pronouncements (Continued)

 

The amendments in this ASU provide an alternative to Topic 820 Fair Value Measurement for measuring the financial assets and the financial liabilities of a consolidated collateralized financing entity to eliminate that difference. When the measurement alternative is not elected for a consolidated collateralized financing entity within the scope of this ASU, the amendments clarify that: (1) the fair value of the financial assets and the fair value of the financial liabilities of the consolidated collateralized financing entity should be measured using the requirements of Topic 820; and (2) any differences in the fair value of the financial assets and the fair value of the financial liabilities of that consolidated collateralized financing entity should be reflected in earnings and attributed to the reporting entity in the consolidated statement of income (loss).

 

The Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.

 

Under Generally Accepted Accounting Principles (GAAP), financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. Financial reporting under this presumption is commonly referred to as the going concern basis of accounting. The going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities.

 

Currently, GAAP lacks guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures.

 

This ASU provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes.

 

The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued.

 

F- 12
 

 

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

 

3. Property and equipment, net

 

      As of  
      Sept 30, 2014     Sept 30, 2013  
               
  Computers   $ 194,029     $ -  
  Office equipment     62,335       495  
  Furniture and fixtures     29,078       -  
  Leasehold improvements     141,798       -  
  Total property and equipment     427,240       495  
  Less:  accumulated depreciation and amortization     78,571       -  
  Total property and equipment, net   $ 348,669     $ 495  

 

The depreciation expenses for the years ended September 30, 2014 and 2013 were $78,571 and nil, respectively.

 

4. Loans from shareholders

 

The loans are made to Moxian Hong Kong, Moxian Shenzhen, and Moxian Malaysia and are unsecured, interest free and will be due and payable in 12 months. Details of the loans are analyzed as follows:

 

      As of  
  Repayable     Sep 30, 2014     Sep 30, 2013  
               
  Within 1 month   $ -     $ -  
  1 to 3 months     -       -  
  More than 3 months but less than 12 months     6,151,932       -  
      $ 6,151,932     $ -  

 

F- 13
 

 

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

 

5. Shareholders’ equity

 

Prior to November 14, 2013, the authorized capital stock of the Company consisted of 425,000,000 shares of Common Stock with a par value of $0.001. The Company issued *186,000,000 shares of our Common Stock to Brandi DeFoor (“DeFoor”), our former CEO and former Director, on October 2010 (inception) for cash in the amount of $100 and property valued at $3,169. During the year ended December 31, 2011, the Company’s founder contributed $2,146 in additional capital.

 

In August 2011, the Company issued *12,300,000 shares of common stock to investors for the value of $41,000, in exchange for subscription receivables.

 

During the year ended September 30, 2013, the Company’s founder contributed $2,950 in additional capital.

 

On November 14, 2013, DeFoor, entered into a Securities Purchase Agreement with three investors (the “Purchasers”), pursuant to which DeFoor sold to the Purchasers her 186,000,000 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 transaction, the Purchasers aggregately own approximately 93.8% of the total outstanding shares of the Company’s Common Stock on a fully-diluted basis.

 

Effective December 13, 2013, the Company amended its Articles of Incorporation to: (i) change the Company’s name from “SECURE NetCheckIn, Inc.” to “Moxian China, Inc.” (the “Name Change”), and (ii) implement a 60-for-1 forward stock split of its issued and outstanding common stock, par value $.001 per share (the “Forward Split”).

 

In addition, as a result of the Name Change, the trading symbol of the Company changed to a new symbol “MOXC”. As a result of the Forward Split, the common stock issued and outstanding increased to 198,300,000 shares.

 

Also effective on December 13, 2013, the Company increased the number of shares that it is authorized to issue to a total of 600,000,0000 shares, including 500,000,000 shares of Common Stock and 100,000,000 shares of preferred stock, par value $.001 per share.

 

There are no warrants or options outstanding to acquire any additional shares of common stock of the Company.

 

*The number of shares of common stock has been retroactively restated to reflect the 60-for-1 forward stock split effected on December 13, 2013.

 

F- 14
 

  

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

 

6. Earnings per share

 

      For the year ended  September 30,  
      2014     2013  
               
  Net loss attributable to ordinary shareholders for computing basic net loss per ordinary share   $ (4,791,342 )   $ (31,441 )
                   
  Weighted-average shares of common stock outstanding in computing net loss per common stock*                
  Basic     198,300,000       198,300,000  
  Dilutive shares     -       -  
  Diluted     198,300,000       198,300,000  
                   
  Basic loss per share   $ (0.02 )   $ (0.00 )
  Diluted loss per share   $ (0.02 )   $ (0.00 )

 

*The number of shares of common stock has been retroactively restated to reflect the 60-for-1 forward stock split effected on December 13, 2013.

 

7. Income taxes

 

The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the periods presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses and other temporary differences, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not. For the period October 12, 2010 (date of inception) through September 30, 2014, the Company incurred losses, resulting from operating activities, which result in deferred tax assets at the effective statutory rates. The deferred tax asset has been off-set by an equal valuation allowance.

 

Moxian BVI is incorporated in the British Virgin Islands. Moxian BVI did not generate taxable income in the British Virgin Islands for the period from July 3, 2012 (date of inception) to September 30, 2014.

 

Moxian HK was incorporated in Hong Kong and is subject to Hong Kong profits tax at 16.5%. No provision for Hong Kong income or profit tax has been made as the Company has no assessable profit for the period from January 18, 2013 (date of inception) to September 30, 2014. The cumulative tax losses will represent a deferred tax asset.

 

F- 15
 

 

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

 

7. Income taxes (Continued)

 

Moxian Shenzhen was incorporated in the People’s Republic of China. Moxian Shenzhen did not generate taxable income in the People’s Republic of China for the period from April 8, 2013 (date of inception) to September 30, 2014.

 

Moxian Malaysia was incorporated in Malaysia. Moxian Malaysia did not generate taxable income in Malaysia for the period from March 1, 2013 (date of inception) to September 30, 2014.

 

The Company will provide a valuation allowance for all of its subsidiaries in full amount of the deferred tax asset since there is no assurance of future taxable income.

 

8. Acquisition

 

On February 21, 2014, the Company entered into a License and Acquisition Agreement with Moxian Group Holdings, Inc. (“MOXG”) (the “License and Acquisition Agreement”), whereby the Company (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.

 

A summary of changes in the Company’s goodwill is as follows:

 

      As of  
      Sept 30, 2014     Sept 30, 2013  
               
  Goodwill   $ 2,600,315     $ -  
  Accumulated impairment charges     (2,600,315 )     -  
      $ -     $ -  

 

An impairment loss in the amount of $2,600,315 and nil were recorded for the years ended September 30, 2014 and 2013 respectively.

 

F- 16
 

  

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

 

8. Acquisition (Continued)

 

  Assets acquired and liabilities assumed at the date of acquisition:
         
  Current assets      
  Cash  and bank balances   $ 897,453  
  Prepayments, deposits and other receivables     264,729  
  Inventory     1,129  
           
  Non-current assets        
  Property and equipment, net     176,116  
           
  Current liabilities        
  Other payables and accruals     (51,172 )
  Loans     (2,888,570 )
           
      $ (1,600,315 )
           
  Goodwill arising on acquisition:        
           
  Consideration transferred   $ 1,000,000  
  Less: fair value of identifiable net assets acquired     (1,600,315 )
           
      $ 2,600,315  
           
  Net cash inflow on acquisition of subsidiaries:        
  Consideration paid in cash   $ -  
  Less: cash and cash equivalent balances acquired     897,453  
           
      $ 897,453  

 

F- 17
 

 

MOXIAN CHINA, INC.

(A DEVELOPMENT STAGE COMPANY)

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

 

9. Commitments and contingencies

 

Operating Lease

 

The Company leases a number of properties under operating leases. Rental expenses under operating leases for the years ended September 30, 2014 and 2013 were $134,436 and nil respectively.

 

As of September 30, 2014, the Company was obligated under non-cancellable operating leases minimum rentals as follows:

 

  Twelve months ended September 30,      
  2015   $ 242,590  
  2016     122,769  
  2017     75,148  
  Thereafter     -  
  Total minimum lease payments   $ 440,507  

 

Legal Proceeding

 

There has been no legal proceeding in which the Company is a party for the year ended September 30, 2014.  

 

10. Subsequent Events

 

On October 31, 2014 and November 30, 2014, Moxian Shenzhen received RMB 630,000 (approximately $102,942) and RMB 90,000 (approximately $14,486), respectively, as loans (the “MCL Shenzhen Loans”) from Moxian China Limited (“MCL”), a shareholder of Moxian, which owns 33.8% of total outstanding shares of Moxian and 100% owned by its Director, Mr. Ng Ka Lam. The term of such loans is twelve months and they bear no interest. On December 31, 2014, the Company, MCL and Moxian Shenzhen entered into a Loan Agreement, where the Company agreed to issue a convertible promissory note (the “Note”) to MCL for the repayment of the MCL Shenzhen Loans.

 

On October 31, 2014 and November 30, 2014, Moxian Malaysia received a loan in the amount of RM 118,800 (approximately $34,032) and RM 23,100 (approximately $6,605), respectively, from MCL (the “MCL Malaysia Loans”). The term of such loans is twelve months and they bear no interest. On December 31, 2014, the Company, MCL and Moxian Malaysia entered into a Loan Agreement, where the Company agreed to issue a Note to MCL for the repayment of the MCL Malaysia Loans.

 

On November 30, 2014, Moxian HK received HKD $500,000 (approximately $64,437) as a loan from MCL (the “MCL HK Loan”). The term of such loan is twelve months and it bears no interest. On December 31, 2014, the Company, MCL and Moxian HK entered into a Loan Agreement, where the Company agreed to issue a Note to MCL for the repayment of the MCL HK Loan.

 

The Notes issued to MCL by the Company in consideration of the MCL Shenzhen Loans, the MCL Malaysia Loans and the MCL HK Loan are of substantially similar terms. The Notes will be due and payable in one year and bears no interest. Upon consummation of a financing that generates at least $5,000,000 by the Company (“Qualified Financing”), the Notes shall automatically convert into shares of the Company’s Common Stock at a conversion price equal to the price of the Company’s securities sold in the Qualified Financing. If no Qualified Financing is consummated prior to the maturity date of Notes and as long as there remains any outstanding principal or interest of the Notes, holders of the Notes shall have the option to convert the Notes within 30 days after the maturity date at a conversion price that is equal to the volume weighted average price of Common Stock during a 20-day trading period prior to the conversion of the Notes.

 

There were no events or transactions other than those disclosed in this report, if any, that would require recognition or disclosure in our Financial Statements for the year ended September 30, 2014.

 

 

F-18


Exhibit 4.1

 

Exhibit 4.2

 

NEITHER THIS NOTE NOR THE SECURITIES THAT ARE ISSUABLE UPON CONVERSION HEREOF OR UPON EXCHANGE HEREUNDER (COLLECTIVELY, THE “SECURITIES”) HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED: (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS; OR (II) IN THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT OR; (III) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.

 

CONVERTIBLE PROMISSORY NOTE

 

Note No. ____

 

Issuance Date:  ______________   US $_______

 

FOR VALUE RECEIVED, MOXIAN CHINA, INC. , a Nevada Corporation (the “ Company ”) located at Room 2313-2315, Block B, Zhongshen Garden, Caitian South Road, Futian District, Shenzhen, Guangdong Province, China 518101 hereby promises to pay to the order of MOXIAN CHINA LIMITED located at Offshore Chambers, P.O. Box 217, Apia, Samoa or its successors or assigns (the “ Holder ”), the principal amount of __________ United States Dollars (US$_________) on or prior to one (1) year after the issuance of this Note (the Maturity Date ), in accordance with the terms hereof. This Convertible Promissory Note (this note, and all notifications, extensions, future advances, supplements, and renewals thereof, and any substitutions therefor, hereinafter referred to as the Note together with other notes that are issued pursuant to the Loan Agreement, the “ Notes ”) was issued pursuant to the Loan Agreement, dated as of the even date hereof (the “ Loan Agreement ”), entered into by and between the Company and the Holder. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement.

 

1.         Payments of Principal and Interest .

 

(a)       Payment of Principal . The principal amount of this Note shall be paid to the Holder on or prior to the Maturity Date.

 

(b)      Payment of Interest . This Note shall be interest free and shall not accrue any interest. Upon the occurrence of an Event of Default, the Note shall bear interest at the lesser of (i) the compounded rate of five (5%) percent per year until such Event of Default is cured or (ii) the maximum permitted under applicable law.

 

(c)       General Payment Provisions . So long as a Holder or any of its nominees shall be the holder of any Note, and notwithstanding anything contained elsewhere in this Note to the contrary, all sums of principal, interest or otherwise becoming due on this Note shall be made in lawful money of the United States of America by certified bank check or wire transfer to such account as the Holder may designate by written notice to the Company no later than 4:00 p.m. New York time, on the date such payment is due, without the presentation or surrender of such Note or the making of any notation thereon. Any payment made after 4:00 p.m. New York time, on a Business Day will be deemed made on the next following Business Day. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding Business Day, and interest shall be payable on any principal so extended for the period of such extension. All amounts payable under this Note shall be paid free and clear of, and without reduction by reason of, any deduction, set-off or counterclaim. The Company will afford the benefits of this Section to the Holder and to each other Person holding this Note. For purposes of this Note, “Business Day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the State of New York are authorized or required by law or executive order to remain closed.

 

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(d)      Optional Prepayment . At any time prior to the Maturity Date, the Company may pre-pay this Note without penalty and, upon such prepayment in full, the Holder shall have no further rights under this Note, including no rights of conversion .

 

2.        Conversion of Note.

 

(a)      Mandatory Conversion. On the date when the Company consummates a Qualified Financing (as defined below), all or any portion of the outstanding and unpaid principal and interest of this Note shall automatically convert into fully paid and non- assessable shares of the Company’s $.001 par value per share common stock (the “ Common Stock ”) at a conversion price equal to the per share price of the Qualified Securities (as defined below), subject to adjustment to reflect forward or reverse stock splits, recapitalizations, stock dividends as set forth herein (the “ Mandatory Conversion Price ”). The number of shares of Common Stock to be issued as a result of the automatic conversion of the Note (the “ Conversion Shares ”) shall be calculated by dividing: (x) all or any portion of the outstanding and unpaid principal and interest of this Note, by (y) the Mandatory Conversion Price. For the purpose of this Note, the term “ Qualified Financing ” is defined as the sale for cash by the Company of any equity or convertible securities (“ Qualified Securities ”) generating aggregate gross proceeds of at least $5,000,000.

 

(b)      Optional Conversion . If no Qualified Financing is consummated prior to the Maturity Date (as extended by the Holder from time to time) and as long as there remains outstanding principal or interest of this Note, the Holder shall have the right, within 30 days after the Maturity Date (as extended by the Holder from time to time) of this Note, to convert all or any portion of the outstanding and unpaid principal and interest of this Note into Conversion Shares at the volume weighted average price (“ VWAP ”) of the Company’s Common Stock as reported by Bloomberg for a period of twenty (20) trading days immediately prior to the date of conversion (“ Optional Conversion Price ”). The number of Conversion Shares to be issued as a result of the optional conversion of the Note shall be calculated by dividing: (x) all or any portion of the outstanding and unpaid principal and interest of this Note, by (y) the Optional Conversion Price.

 

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(c)      Mechanics of Holders Conversion . The conversion of this Note shall be conducted in the following manner:

 

(i)       Subject to Section 2(b) hereof, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issuance Date, by (A) submitting to the Company a Notice of Conversion in the form of Exhibit A (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) surrendering this Note at the principal office of the Company. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless the entire unpaid principal amount of this Note is so converted.  The Holder and the Company shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon each such conversion.  In the event of any dispute or discrepancy, such records of the Company shall,  prima   facie,  be controlling and determinative in the absence of manifest error.  Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this Note.  The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal and interest of this Note represented by this Note may be less than the amount stated on the face hereof. At such time as such conversion has been effected, the rights of the Holder of this Note as the Holder of such Note shall cease (with respect to the amount so converted), and the Person or Persons in whose name or names any certificate or certificates for the Common Stock are to be issued upon such conversion shall be deemed to have become the holder or holders of record of the Common Stock represented thereby.

 

(ii)      As soon as possible after the conversion has been effected, the Company or acquirer shall deliver to the converting holder a certificate or certificates representing the Conversion Shares issuable by reason of such conversion in such name or names and such denomination or denominations as the converting holder has specified.

 

(iii)     No fraction of shares or scrip representing fractions of shares will be issued on conversion. Upon any conversion of the entire outstanding principal of and interest on this Note, the number of shares or other securities issuable shall be rounded up to the nearest whole number.

 

(iv)     The issuance of certificates for Conversion Shares upon conversion of this Note shall be made without charge to the holder hereof in respect thereof or other cost incurred by the Company or acquirer in connection with such conversion and the related issuance of Conversion Shares.

 

(v)      Neither the Company nor acquirer shall close its books against the transfer of this Note in any manner which interferes with the timely conversion of this Note. The Company shall assist and cooperate with any holder of this Note required to make any governmental filings or obtain any governmental approval prior to or in connection with the conversion of this Note (including, without limitation, making any filings required to be made by the Company).

 

(vi)     The Company or its acquirer shall at all times reserve and keep available out of its authorized but unissued shares of the common stock, solely for the purpose of issuance upon conversion hereunder, such number of shares of other type of capital securities of the Company or its acquirer issuable upon conversion. All Conversion Shares which are so issuable shall, when issued, be duly authorized and validly issued, fully paid and nonassessable and free from all taxes, liens and charges. The Company or its acquirer shall take all such actions as may be necessary to assure that all such Conversion Shares may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which such shares of capital stock are quoted.

 

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3.        Adjustment to the Conversion Price.

 

(a)       Adjustment Due to Merger, Consolidation, Etc . At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Company, the effectuation by the Company of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Company with or into any other Person or Persons when the Company is not the survivor shall be treated pursuant to Section 3(b) hereof. “ Person ” shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

 

(b)       Adjustment Due to Merger, Consolidation, Etc . If, at any time when this Note is issued and outstanding, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Company shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Company or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Company other than in connection with a plan of complete liquidation of the Company, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares of Conversion Shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof.

 

(c)       Purchase Rights . If, at any time when the Note is issued and outstanding, the Company issues any convertible securities or rights to purchase stock, warrants, securities or other property (the “ Purchase Rights ”) pro rata to the record holders of any class of Common Stock, then the Holder of this Debenture will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of units of Conversion Shares acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

4.         Transfer, Exchange and Replacement.

 

(a)       Transfer . This Note has not been and is not being registered under the provisions of the Act or any state securities laws and this Note may not be transferred prior to the end of the holding period applicable to sales under Rule 144 unless in accordance with applicable law and unless (1) the transferee is an “accredited investor” (as defined in Regulation D under the Securities Act) and (2) the holder shall have delivered to the Company an opinion of counsel, reasonably satisfactory in form, scope and substance to the Company, to the effect that this Note may be sold or transferred without registration under the Act. Prior to any such transfer, such transferee shall have represented in writing to the Company that such transferee has requested and received from the Company all information relating to the business, properties, operations, condition (financial or other), results of operations or prospects of the Company deemed relevant by such transferee, and that such transferee has been afforded the opportunity to ask questions of the Company concerning the foregoing. Upon surrender of any Note for registration of transfer or for exchange to the Company at its principal office, the Company at its sole expense will execute and deliver in exchange therefor a new Note or Notes, as the case may be, as requested by the holder or transferee, which aggregate principal amount is equal the unpaid principal amount of such Note, registered as such holder or transferee may request, dated so that there will be no loss of interest on the Note and otherwise of like tenor; provided that this Note may not be transferred by Holder to any Person other than Holder’s affiliates without the prior written consent of the Company (which consent shall not be unreasonably withheld or delayed). The issuance of new Notes shall be made without charge to the holder(s) of the surrendered Note for any issuance tax in respect thereof or other cost incurred by the Company in connection with such issuance, provided that each holder of the Note shall pay any transfer taxes associated therewith. The Company shall be entitled to regard the registered holder of this Note as the holder of the Note so registered for all purposes until the Company or its agent, as applicable, is required to record a transfer of this Note on its register.

 

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(b)      Replacement . Upon notice to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking by the Holder to the Company in a form reasonably acceptable to the Company and, in the case of mutilation, upon surrender and cancellation of the Note, the Company shall execute and deliver a new Note of like tenor and date and in substantially the same form as this Note; provided, however , the Company shall not be obligated to re-issue a Note if the Holder contemporaneously requests the Company to convert such remaining principal amount and interest into Common Stock.

 

5.        Defaults and Remedies.

 

(a)       Events of Default . An “ Event of Default means any of the following events which is not cured within 10 business days (the “ Cure Period ”) provided however that such Cure Period is not applicable to paragraph (i) below:

 

(i)      failure by the Company to pay any principal amount or interest due hereunder within thirty (30) Business Days of the date such payment is due;

 

(ii)       the Company shall:

 

 (1) make a general assignment for the benefit of its creditors;

 

 (2) apply for or consent to the appointment of a receiver, trustee, assignee, custodian, sequestrator, liquidator or similar official for itself or any of its assets and properties;

 

 (3) commence a voluntary case for relief as a debtor under the United States Bankruptcy Code;

 

 (4) file with or otherwise submit to any governmental authority any petition, answer or other document seeking: (A) reorganization, (B) an arrangement with creditors or (C) to take advantage of any other present or future applicable law respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief of debtors, dissolution or liquidation;

 

 (5) file or otherwise submit any answer or other document admitting or failing to contest the material allegations of a petition or other document filed or otherwise submitted against it in any proceeding under any such applicable law, or

 

 (6) be adjudicated a bankrupt or insolvent by a court of competent jurisdiction;

 

(iii)      any receiver, trustee, assignee, custodian, sequestrator, liquidator or other official shall be appointed with respect to the Company, or shall be appointed to take or shall otherwise acquire possession or control of all or a substantial part of the assets and properties of the Company, and any of the foregoing shall continue unstayed and in effect for any period of sixty (60) days;

 

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(iv)     any material breach by the Company of any of its representations or warranties under the Loan Agreement; or

 

(v)      any default, whether in whole or in part, shall occur in the due observance or performance of any obligations or other covenants, terms or provisions to be performed under this Note or the Loan Agreement which is not cured by the Company within the Cure Period after receipt of written notice thereof.

 

(b)      Remedies . Holder of the Note at its option may declare all principal and accrued and unpaid interest thereon and all other amounts payable under this Note immediately due and payable; provided, however , that this Note shall automatically become due and payable without any declaration in the case of an Event of Default specified in clause (ii) of Section 6(a) above.

 

6.        Amendment and Waiver . The provisions of this Note may not be modified, amended or waived, without a written amendment executed by the Company and holders of the Notes consisting of a majority of the outstanding principal amount.

 

7.        Voting Rights . Upon Conversion into the Common Stock the Holder shall have the voting rights applicable to the Common Stock consistent with the Company’s Articles of Incorporation and By-laws.

 

8.        Investment Representations . This Note has been issued subject to certain investment representations of the original Holder set forth in the Loan Agreement and may be transferred or exchanged only in compliance with the Loan Agreement and applicable federal and state securities laws and regulations.

 

9.        Cancellation . After all principal owed on this Note has been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be re-issued.

 

10.      Waiver of Notice . To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note.

 

11.      Governing Law . This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the laws of the State of Nevada, without giving effect to provisions thereof regarding conflict of laws. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting in the State of Florida for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by sending by certified mail or overnight courier a copy thereof to such party at the address indicated in the preamble hereto and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

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12.       Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief.

 

The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, at law or in equity.

 

13.       Specific Shall Not Limit General; Construction . No specific provision contained in this Note shall limit or modify any more general provision contained herein. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any person as the drafter hereof.

 

14.       Failure or Indulgence Not Waiver . No failure or delay on the part of this Note in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

 

15.       Assignments . The Holder may assign, participate, transfer or otherwise convey this Note and any of its rights or obligations hereunder or interest herein, in whole or part, to any other Person and this Note shall inure to the benefit of the Payee’s successors and assigns. The Company shall not assign or delegate this Note or any of its liabilities or obligations hereunder without the prior written consent from the Holder.

 

16.       Notice . Notice shall be given to each party at the address indicated in the preamble hereto or at such other address as provided to the other party in writing.

 

[-Signature Page Follows-]

 

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IN WITNESS WHEREOF, the Company has caused this Note to be executed on and as of the Issuance Date.

 

  Moxian China, Inc.
     
  By:    
  Name: Ng Kian Yong
  Title: Chief Executive Officer

 

[-Signature Page to Convertible Promissory Note-]

 

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EXHIBIT A

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert $_____________ amount of the Note (defined below) into that number of shares of Common Stock (“Common Stock”) to be issued pursuant to the conversion of the Note as set forth below, of Moxian China, Inc., a Nevada corporation (the “Company”) according to the conditions of the convertible promissory note of the Company dated as of __________ (the “Note”), as of the date written below.  No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

 

The undersigned hereby requests that the Company issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

 

___________________________

___________________________

___________________________

  Date of Conversion:    
  Applicable Conversion Price:    
  Number of Shares of Common Stock to be issued pursuant to Conversion of the Note:    
  Amount of Principal due remaining under the Note after this conversion:    

 

HOLDER

 

By:_____________________________

Name:

Title:

Date:  __________________________

 

 

 


 

Exhibit 10.2

 

THIS LOAN AGREEMENT (executed as a deed) is made on 28 th September 2014

 

BETWEEN

 

(1) Ace Keen Limited, a Company incorporated in Samoa, with address Unit 2805-07, Paul Y. Center, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong (hereinafter referred to as "the Lender" )

 

and

 

(2) Moxian (Hong Kong) Limited, a company incorporated in Hong Kong, with office address Rm 2807,28/F, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong . (hereinafter referred to as "the Borrower" ).

 

(hereinafter together referred to as "the Parties" )

 

1. RECITALS

 

1.1 The Lender lent the Borrower the Loan in various tranches over the course from January 2014 to September 2014 in contemplation of and upon prior agreement to the terms and conditions contained in this Agreement and at the express request of the Borrower.

 

1.2 The Borrower has agreed to repay the Loan and interest accrued on the Loan in accordance with the terms of this Agreement.

 

1.3 In consideration of the Lender continuing to make the Loan available to the Borrower, the mutual covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto hereby agree to the terms and conditions set out in this Agreement.

 

2. DEFINITIONS

 

The following words shall have the meanings set opposite them, except where the context otherwise requires:

 

"Default Interest"   fixed interest rate of 0% per month from the date of the occurrence of an Event of Default.
     
"Event of Default"  

any of the events referred to in paragraph 5

     
"Interest Sum"  

fixed interest rate on the Loan at the rate of 0% per month from the date of this Agreement until repayment

     
"Loan"   the aggregate sum of Hong Kong Dollars 4,742,258.00 lent to the Borrower by the Lender
     
"Maturity Date"  

6 months from the date of this Agreement

 

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3. THE LOAN AND PROFIT SHARE

 

Loan Payment

 

3.1 The Lender lent the Loan to the Borrower and the Borrower acknowledges receipt of the same.

 

Repayment of the Loan

 

3.2 The Borrower shall repay the Loan to the Lender in full together with the Interest Sum accrued on or before the Maturity Date.

 

3.3 The Borrower is entitled to make repayment of the Loan before the Maturity Date.

 

3.4 The Parties may by mutual consent in writing extend the Maturity Date.

 

3.5 All payments by the Borrower under this Agreement shall so far as the law permits be made in full without any deduction or withholding (whether in respect of a set off, counterclaim, duties, tax, charges, levies or otherwise howsoever).

 

4. EVENTS OF DEFAULT

 

4.1 The Loan shall be immediately due and repayable to the Lender by the Borrower together with the Interest Sum accrued and any other liabilities, and Default Interest shall be payable on the same by the Borrower from the date of occurrence of any of the events of default as described below:

 

a. if the Borrower shall fail to pay on the due date any amount due hereunder;

 

b. if the Borrower shall fail to observe or comply with any of the covenants, conditions, obligations, agreements and stipulations herein contained;

 

c. if the Borrower shall become bankrupt or enter or seek to enter in any other form of composition or arrangement with its creditors whether in whole or in part; or

 

d. a petition is presented for bankruptcy of the Borrower.

 

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5 . REPRESENTATIONS, WARRANTIES AND UNDERTAKING

 

5.1 The Borrower represents, warrants and undertakes to the Lender that:

 

(a) he is an individual and is not involved in any court and bankruptcy proceedings as of the date of this Agreement; and

 

(b) this Agreement constitutes legal, valid and binding obligations which shall be enforceable to the maximum extent permitted by the law.

 

6. NO JOINT VENTURE OR PARTNERSHIP

 

6.1 Nothing in this Agreement shall create a partnership or joint venture between the Parties hereto and save as expressly provided in this Agreement neither party shall enter into or have authority to enter into any engagement or make any representation or warranty on behalf of or pledge the credit of or otherwise bind or oblige the other party hereto.

 

7. MISCELLANEOUS

 

7.1 No waiver, alteration, variation or addition to this Agreement shall be effective unless made in writing on or after the date of signature of this Agreement by the Parties and accepted by an authorised signatory of the Parties.

 

7.2 All notices, documents, consents, approvals or other communications (a 'Notice') to be given hereunder shall be in writing and shall be transmitted by registered or recorded delivery mail or courier or personal delivery to the party being served at the relevant address for that party shown at the head of this Agreement. Any Notice sent by mail or courier shall be deemed to have been duly served three working days after the date of posting or dispatch.

 

7.3 The headings in this Agreement shall not affect its interpretation.

 

7.4 Throughout this Agreement, whenever required by the context, the use of the singular number shall be construed to include the plural, and the use of the plural the singular, and the use of any gender shall include all genders.

 

7.5 Reference in this Agreement to a clause or Schedule is to a clause or Schedule of this Agreement.

 

7.6 If any term or provision in this Agreement shall be held to be illegal or unenforceable, in whole or in part, under any enactment or rule of law, such term or provision or part shall to that extent be deemed not to form part of this Agreement but the validity and enforceability of the remainder of this Agreement shall not be affected.

 

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7.7 The waiver or forbearance or failure of a party in insisting in any one or more instances upon the performance of any provisions of this Agreement shall not be construed as a waiver or relinquishment of that party's rights to future performance of such provision and the other party's obligations in respect of such future performance shall continue in full force and effect.

 

7.8 This Agreement constitutes the entire agreement between the Parties relating to the subject matter hereof, and except as stated herein or in the instruments and documents to be executed and delivered pursuant hereto, contains all the representations and warranties of the Parties relating to the subject matter hereof.

 

7.9 The Borrower hereby acknowledges that he has obtained independent legal advice on all and every aspect of this Agreement.

 

7.10 Time shall be of the essence of this Agreement.

 

8. APPLICABLE LAW

 

8.1 This Agreement shall be governed by and construed in accordance with the laws of the Hong Kong Special Administrative Region.

 

8.2 Any disputes arising from this Agreement shall be determined according to the exclusive jurisdiction of the Hong Kong Courts.

 

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IN WITNESS WHEREOF the parties hereto have signed, sealed, delivered and executed this Agreement to a Deed of the date first written above.

 

 

  

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Exhibit 10.3

 

Exclusive Business Cooperation Agreement

 

Party A: Shenzhen Moxian Technologies Co. Ltd, a Wholly Foreign Owned Enterprise, organized and existing under the laws of the PRC, with its address at Room 2313-2315 , Block B, Zhongshen Garden, Caitian South Road, Futian District, Shenzhen, Guangdong Province, China

 

Party B: Shenzhen Moyi Technologies Co. Ltd, a limited liability company organized and existing under the laws of the PRC, with its address at Unit2001, Tower B, Kingkey 100 Building, No.5016 Shennan East Road, Luohu District, Shenzhen, PRC.

 

Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as the “Parties” collectively.

 

Whereas,

 

1. Party A is a wholly-foreign-owned enterprise established in China, and has the necessary resources to provide technical and consulting services;

 

2. Party B is a company with exclusively domestic capital registered in China and may engage in the business of social media services and internet protocol development and software development as approved by the relevant governmental authorities in China (collectively, the “Principal Business”);

 

3. Party A is willing to provide Party B with technical support, consulting services and other commercial services on exclusive basis in relation to the Principal Business during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B is willing to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.

 

Now, therefore, through mutual discussion, the Parties have reached the following agreements:

 

1. Services Provided by Party A

 

1.1 Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business support and related consulting services during the term of this Agreement, in accordance with the terms and conditions of this Agreement, which may include all necessary services within the scope of the Principal Business as may be determined from time to time by Party A, such as but not limited to technical services, business consultations, equipment or property leasing, marketing consultancy, system integration, product research and development, and system maintenance.

 

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1.2 Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior written consent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or services provided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by this Agreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party B with the consultations and/or services under this Agreement.

 

1.3 Service Providing Methodology

 

1.3.1 Party A and Party B agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements or consulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner, personnel, and fees for the specific technical services and consulting services.

 

1.3.2 To fulfill this Agreement, Party A and Party B agree that during the term of this Agreement, where necessary, Party B may enter into equipment or property leases with Party A or any other party designated by Party A which shall permit Party B to use Party A's relevant equipment or property based on the needs of the business of Party B.

 

1.3.3 Party B hereby grants to Party A an irrevocable and exclusive option to purchase from Party B, at Party A’s sole discretion, any or all of the assets of Party B, to the extent permitted under the PRC laws, at the lowest purchase price permitted by the PRC laws. In this case, the Parties shall enter into a separate assets transfer agreement, specifying the terms and conditions of the transfer of the assets.

 

2. The Calculation and Payment of the Service Fees

 

Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”) equal to 100% of the net income of Party B. The Service Fees shall be due and payable on a monthly basis; upon the prior written consent by Party A, the rate of Service Fees may be adjusted pursuant to the operational needs of Party B. Within 30 days after the end of each month, Party B shall (a) deliver to Party A the management accounts and operating statistics of Party B for such month, including the net income of Party B during such month (the “Monthly Net Income”), and (b) pay 100% of such Monthly Net Income to Party A (each such payment, a “Monthly Payment”). Within ninety (90) days after the end of each fiscal year, Party B shall (a) deliver to Party A audited financial statements of Party B for such fiscal year, which shall be audited and certified by an independent certified public accountant approved by Party A, and (b) pay an amount to Party A equal to the shortfall, if any, of the aggregate net income of Party B for such fiscal year, as shown in such audited financial statements, as compared to the aggregate amount of the Monthly Payments paid by Party B to Party A in such fiscal year.

 

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3. Intellectual Property Rights and Confidentiality Clauses

 

3.1 Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patent applications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions, submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary as deemed by Party A in its sole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfecting the protections for any such intellectual property rights in Party A.

 

3.2 The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.

 

3.3 The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.

 

4. Representations and Warranties

 

4.1 Party A hereby represents and warrants as follows:

 

4.1.1 Party A is a wholly owned foreign enterprise legally registered and validly existing in accordance with the laws of China.

 

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4.1.2 Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third parties and government agencies (if any) for the execution, delivery and performance of this Agreement. Party A’s execution, delivery and performance of this Agreement do not violate any explicit requirements under any law or regulation binding on Party A.

 

4.1.3 This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.

 

4.2 Party B hereby represents and warrants as follows:

 

4.2.1 Party B is a company legally registered and validly existing in accordance with the laws of China and has obtained the relevant permit and license for engaging in the Principal Business in a timely manner;

 

4.2.2 Party B has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third parties and government agencies (if any) for the execution, delivery and performance of this Agreement. Party B’s execution, delivery and performance of this Agreement do not violate any explicit requirements under any law or regulation binding on Party A.

 

4.2.3 This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.

 

5. Effectiveness and Term

 

5.1 This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with the provisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 10 years. After the execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement the provisions in this Agreement based on the actual circumstances at that time.

 

5.2 The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall be determined by Party A, and Party B shall accept such extended term unconditionally.

 

6. Termination

 

6.1 Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.

 

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6.2 During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate this Agreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior written notice to Party B at any time.

 

6.3 The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.

 

7. Governing Law and Resolution of Disputes

 

7.1 The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shall be governed by the laws of China.

 

7.2 In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute through friendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Shenzhen, and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.

 

7.3 Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.

 

8. Indemnification

 

Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demands against Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where such losses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.

 

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9. Notices

 

9.1 All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. A confirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:

 

9.1.1 Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date of delivery or refusal at the address specified for notices.

 

9.1.2 Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by an automatically generated confirmation of transmission).

 

9.2 For the purpose of notices, the addresses of the Parties are as follows:

 

  Party A: Shenzhen Moxian Technologies Co. Ltd

  Address: Room 2313-2315 , Block B, Zhongshen Garden,
Caitian South Road, Futian District, Shenzhen,
Guangdong Province, China

Attn: Sun Dan Dan
Phone: 0755 - 6681 3984

 

  Party B:

Shenzhen Moyi Technologies Co. Ltd

  Address: Unit2001, Tower B, Kingkey 100 Building, No.5016
Shennan East Road, Luohu District, Shenzhen, PRC.

Attn: Zhang Guo Hui

 

9.3 Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.

 

10. Assignment

 

10.1 Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.

 

10.2 Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party B but without the consent of Party B.

 

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11. Severability

 

In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.

 

12. Amendments and Supplements

 

Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have been signed by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.

 

13. Language and Counterparts

 

This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.

 

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IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of the date first above written.

 

Party A: Shenzhen Moxian Technologies Co. Ltd

 

By: /s/ Sun Dan Dan  
Name: Sun Dan Dan  
Title: Legal Representative  

 

Party B: Shenzhen Moyi Technologies Co. Ltd

 

By: /s/ Zhang Guo Hui  
Name: Zhang Guo Hui  
Title: Legal Representative   

 

 

8


 

Exhibit 10.4

 

Loan Agreement

 

This Loan Agreement (this "Agreement") is made and entered into by and between the Parties below as of the 15day of July, 2014 in Shenzhen City, China:

 

(1) Shenzhen Moxian Technologies Co. Ltd, a Wholly Foreign Owned Enterprise, organized and existing under the laws of the PRC, with its address at Room 2313-2315 , Block B, Zhongshen Garden, Caitian South Road, Futian District, Shenzhen, Guangdong Province, China (‘Lender’)

 

(2) Zhang Guo Hui, a citizen of the PRC with Chinese Identification No.: XXXXXXXXXX and Guan Fen Sheng, a Chinese citizen with Chinese Identification No.: XXXXXXXXXX (“Borrower”)

 

Each of the Lender and the Borrower shall be hereinafter referred to as a "Party" respectively, and as the "Parties" collectively.

 

Whereas:

 

1. Borrower holds 70% of equity interests ("Borrower Equity Interest") in Shenzhen Moyi Technologies Co. Ltd ("Borrower Company"), which is a limited company duly registered in Shenzhen, China with its registered capital of RMB 1,000,000;

 

2. Lender intends to provide Borrower with a loan to be used for the purposes set forth under this Agreement.

 

After friendly consultation, the Parties agree as follows:

 

1. Loan

 

1.1 In accordance with the terms and conditions of this Agreement, Lender agrees to provide an interest-free loan in the amount of RMB 100,000 (the "Loan") to Borrower. The term of the Loan shall be 10 years from the date of this Agreement, which may be extended upon mutual written consent of the Parties. During the term of the Loan or the extended term of the Loan, Borrower shall immediately repay the full amount of the Loan in the event any one or more of the following circumstances occur:

 

1.1.1 30 days elapse after Borrower receives a written notice from Lender requesting repayment of the Loan;

 

1.1.2 Borrower's death, lack or limitation of civil capacity;

 

1.1.3 Borrower ceases (for any reason) to be an Shareholder of Borrower Company or their affiliates;

 

[Signature Page to Loan Agreement – Li Shanyou]

 

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1.1.4 Borrower engages in criminal act or is involved in criminal activities;

 

1.1.5 Any third party filed a claim against Borrower that exceeds RMB 500,000; or

 

1.1.6 According to the applicable laws of China, foreign investors are permitted to invest in the value-added telecommunication business and/or other business of Borrower Company in China with a controlling stake or in the form of wholly-foreign-owned enterprises, the relevant competent authorities of China begin to approve such investments, and Lender exercises the exclusive option under the Exclusive Option Agreement (the "Exclusive Option Agreement") described in this Agreement.

 

1.2 Lender agrees to remit the total amount of the Loan to the account designated by Borrower within 20 days after receiving a written notification from the Borrower regarding the same, provided that all the conditions precedent in Section 2 are fulfilled. Borrower shall provide Lender with a written receipt for the Loan upon receiving the Loan. The Loan provided by Lender under this Agreement shall inure to Borrower's benefit only and not to Borrower's successors or assigns.

 

1.3 Borrower agrees to accept the aforementioned Loan provided by Lender, and hereby agrees and warrants using the Loan to provide capital for Borrower Company to develop the business of Borrower Company. Without Lender's prior written consent, Borrower shall not use the Loan for any purpose other than as set forth herein.

 

1.4 Lender and Borrower hereby agree and acknowledge that Borrower's method of repayment shall be at the sole discretion of Lender, and may at Lender's option take the form of Borrower's transferring the Borrower Equity Interest in whole to Lender or Lender's designated persons (legal or natural persons) pursuant to the Lender's exercise of its right to acquire the Borrower Equity Interest under the Exclusive Option Agreement.

 

1.5 Lender and Borrower hereby agree and acknowledge that any proceeds from the transfer of the Borrower Equity Interest (to the extent permissible) shall be used to repay the Loan to Lender, in accordance with this Agreement and in the manner designated by Lender.

 

1.6 Lender and Borrower hereby agree and acknowledge that to the extent permitted by applicable laws, Lender shall have the right but not the obligation to purchase or designate other persons (legal or natural persons) to purchase Borrower Equity Interest in part or in whole at any time, at the price stipulated in the Exclusive Option Agreement.

 

1.7 Borrower also undertakes to execute an irrevocable Power of Attorney (the "Power of Attorney"), which authorizes Lender or a legal or natural person designated by Lender to exercise all of Borrower's rights as a shareholder of Borrower Company.

 

[Signature Page to Loan Agreement – Li Shanyou]

 

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2. Conditions Precedent

 

The obligation of Lender to provide the Loan to Borrower contemplated in Section 1.1 shall be subject to the satisfaction of the following conditions, unless waived in writing by Lender.

 

2.1 Lender receives the written notification for drawdown under the Loan sent by Borrower according to Section 1.2.

 

2.2 Borrower Company and Lender or other person (legal or natural person) designated by Lender have officially executed an Exclusive Business Cooperation Agreement ("Exclusive Business Cooperation Agreement"), under which Lender or other person designated by Lender, as an exclusive service provider, will provide Borrower Company with technical service and business consulting service.

 

2.3 Borrower, Borrower Company and Lender or other person (legal or natural person) designated by Lender have executed a Share Pledge Agreement ("Share Pledge Agreement"), the contents of which have been confirmed, and according to the Share Pledge Agreement, Borrower agrees to pledge Borrower Equity Interest to Lender or other person designated by Lender.

 

2.4 Borrower, Lender and Borrower Company have officially executed an Exclusive Option Agreement, the contents of which have been confirmed, and under which Borrower shall irrevocably grant Lender an exclusive option to purchase all of the Borrower Equity Interest.

 

2.5 Borrower has executed an irrevocable Power of Attorney ("Power of Attorney"), which authorizes Lender or other person (legal or natural person) designated by Lender to exercise all of Borrower's rights as a shareholder in Borrower Company.

 

2.6 The aforementioned Share Pledge Agreement, Power of Attorney, Exclusive Option Agreement and Exclusive Business Cooperation Agreement have been entered into before or on the date of execution of this Agreement and shall have full legal validity without any default or encumbrance related to these agreements or contracts, and all the related filing procedures, approvals, authorization, registrations and government procedures have been completed (as applicable). The Parties have completed all the necessary government approvals and registrations for the Loan under this Agreement according to the relevant laws and regulations of the PRC.

 

2.7 All the representations and warranties by Borrower in Section 3.2 are true, complete, correct and not misleading.

 

2.8 Borrower has not violated the covenants in Section 4 of this Agreement, and no event which may affect Borrower's performance of its obligations under this Agreement has occurred or is expected to occur.

 

[Signature Page to Loan Agreement – Li Shanyou]

 

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3. Representations and Warranties

 

3.1 Between the date of this Agreement and the date of termination of this Agreement, Lender hereby makes the following representations and warranties to Borrower:

 

3.1.1 Lender is a corporation duly organized and legally existing in accordance with the laws of Hong Kong;

 

3.1.2 Lender has the legal capacity to execute and perform this Agreement. The execution and performance by Lender of this Agreement is consistent with Lender's scope of business and the provisions of Lender's corporate bylaws and other organizational documents, and Lender has obtained all necessary and proper approvals and authorizations for the execution and performance of this Agreement; and

 

3.1.3 This Agreement constitutes Lender's legal, valid and binding obligations enforceable in accordance with its terms.

 

3.2 Between the date of this Agreement and the date of termination of this Agreement, Borrower hereby makes the following representations and warranties:

 

3.2.1 Borrower has the legal capacity to execute and perform this Agreement. Borrower has obtained all necessary and proper approvals and authorizations for the execution and performance of this Agreement;

 

3.2.2 This Agreement constitutes Borrower's legal, valid and binding obligations enforceable in accordance with its terms; and

 

3.2.3 There are no disputes, litigations, arbitrations, administrative proceedings or any other legal proceedings relating to Borrower, nor are there any potential disputes, litigations, arbitrations, administrative proceedings or any other legal proceedings relating to Borrower.

 

4. Borrower's Covenants

 

4.1 As and when he becomes, and for so long as he remains a shareholder of Borrower Company, Borrower covenants irrevocably that during the term of this Agreement, Borrower shall cause Borrower Company:

 

4.1.1 to strictly abide by the provisions of the Exclusive Option Agreement and the Exclusive Business Cooperation Agreement, and to refrain from any action/omission that may affect the effectiveness and enforceability of the Exclusive Option Agreement and the Exclusive Business Cooperation Agreement;

 

[Signature Page to Loan Agreement – Li Shanyou]

 

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4.1.2 at the request of Lender (or a party designated by Lender), to execute contracts/agreements on business cooperation with Lender (or a party designated by Lender), and to strictly abide by such contracts/agreements;

 

4.1.3 to provide Lender with all of the information on Borrower Company's business operations and financial condition at Lender's request;

 

4.1.4 to immediately notify Lender of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedings relating to Borrower Company's assets, business or income;

 

4.1.5 at the request of Lender, to appoint any persons designated by Lender as directors of Borrower Company;

 

4.2 Borrower covenants that during the term of this Agreement, he shall:

 

4.2.1 endeavor to keep Borrower Company to engage in its current value-added telecommunication businesses;

 

4.2.2 abide by the provisions of this Agreement, the Power of Attorney, the Share Pledge Agreement and the Exclusive Option Agreement, perform his obligations under this Agreement, the Power of Attorney, the Share Pledge Agreement and the Exclusive Option Agreement, and refrain from any action/omission that may affect the effectiveness and enforceability of this Agreement, the Power of Attorney, the Share Pledge Agreement and the Exclusive Option Agreement;

 

4.2.3 not sell, transfer, mortgage or dispose of in any other manner the legal or beneficial interest in Borrower Equity Interest, or allow the encumbrance thereon of any security interest or the encumbrance, except in accordance with the Share Pledge Agreement;

 

4.2.4 cause any shareholders' meeting and/or the board of directors of Borrower Company not to approve the sale, transfer, mortgage or disposition in any other manner of any legal or beneficial interest in Borrower Equity Interest, or allow the encumbrance thereon of any security interest, except to Lender or Lender's designated person;

 

4.2.5 cause any shareholders' meeting and/or the board of directors of the Borrower Company not to approve the merger or consolidation of Borrower Company with any person, or its acquisition of or investment in any person, without the prior written consent of Lender;

 

[Signature Page to Loan Agreement – Li Shanyou]

 

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4.2.6 immediately notify Lender of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedings relating to Borrower Equity Interest;

 

4.2.7 to the extent necessary to maintain his ownership of the Borrower Equity Interest, execute all necessary or appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defense against all claims;

 

4.2.8 without the prior written consent of Lender, refrain from any action / omission that may have a material impact on the assets, business and liabilities of Borrower Company;

 

4.2.9 appoint any designee of Lender as director of Borrower Company, at the request of Lender;

 

4.2.10 to the extent permitted by the laws of China, at the request of Lender at any time, promptly and unconditionally transfer all of Borrower Equity Interest to Lender or Lender's designated representative(s) at any time, and cause the other shareholders of Borrower Company to waive their right of first refusal with respect to the share transfer described in this Section;

 

4.2.11 to the extent permitted by the laws of China, at the request of Lender at any time, cause the other shareholders of Borrower Company to promptly and unconditionally transfer all of their equity interests to Lender or Lender's designated representative(s) at any time, and Borrower hereby waives his right of first refusal (if any) with respect to the share transfer described in this Section;

 

4.2.12 in the event that Lender purchases Borrower Equity Interest from Borrower in accordance with the provisions of the Exclusive Option Agreement, use such purchase price obtained thereby to repay the Loan to Lender; and

 

4.2.13 without the prior written consent of Lender, not to cause Borrower Company to supplement, change, or amend its articles of association in any manner, increase or decreases its registered capital or change its share capital structure in any manner.

 

[Signature Page to Loan Agreement – Li Shanyou]

 

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5. Liability for Default

 

5.1 In the event either Party breaches this Agreement or otherwise causes the non-performance of this Agreement in part or in whole, the Party shall be liable for such breach and shall compensate all damages (including litigation and attorneys fees) resulting therefrom. In the event that both Parties breach this Agreement, each Party shall be liable for its respective breach.

 

5.2 In the event that Borrower fails to perform the repayment obligations set forth in this Agreement, Borrower shall pay overdue interest of 0.01% per day for the outstanding payment, until the day Borrower repays the full principal of the Loan, overdue interests and other payable amounts.

 

6. Notices

 

6.1 All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. A confirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:

 

6.1.1 Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date of delivery.

 

6.1.2 Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by an automatically generated confirmation of transmission).

 

6.2 For the purpose of notices, the addresses of the Parties are as follows:

 

Party A: Shenzhen Moxian Technologies Co Ltd

Address: Room 2313-2315 , Block B, Zhongshen Garden, Caitian South Road,
Futian District, Shenzhen, Guangdong Province, China
Attn: Sun Dan Dan

 

Borrower: Zhang Guo Hui and Guan Fen Sheng
Address: Unit2001, Tower B, Kingkey 100 Building, No.5016
Shennan East Road, Luohu District, Shenzhen, PRC.

 

6.3 Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.

 

[Signature Page to Loan Agreement – Li Shanyou]

 

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7. Confidentiality

 

The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.

 

8. Governing Law and Resolution of Disputes

 

8.1 The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes shall be governed by the laws of China.

 

8.2 In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute through friendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Party for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Shenzhen, and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.

 

8.3 Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and perform their respective obligations under this Agreement.

 

[Signature Page to Loan Agreement – Li Shanyou]

 

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9. Miscellaneous

 

9.1 This Agreement shall become effective on the date thereof, and shall expire upon the date of full performance by the Parties of their respective obligations under this Agreement.

 

9.2 This Agreement shall be written in both Chinese and English language in two copies, each Party having one copy with equal legal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.

 

9.3 This Agreement may be amended or supplemented through written agreement by and between Lender and Borrower. Such written amendment agreement and/or supplementary agreement executed by and between Lender and Borrower are an integral part of this Agreement, and shall have the same legal validity as this Agreement.

 

9.4 In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.

 

9.5 The attachments (if any) to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.

 

[Signature Page to Loan Agreement – Li Shanyou]

 

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IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Loan Agreement as of the date first above written.

 

Lender: Shenzhen Moxian Technologies Co. Ltd

 

By: /s/ Sun Dan Dan  
Name: Sun Dan Dan  
Title: Legal Representative  

 

Borrower: Zhang Guo Hui and Guan Fen Sheng

 

By: /s/ Zhang Guo Hui  
     
  /s/ Guan Fen Sheng  

 

 

 

 

 

 

 

[Signature Page to Loan Agreement – Li Shanyou]

 

 

10


 

Exhibit 10.5

 

Stock Pledge Agreement

 

Party A (Pledgor):

 

1) Zhang Guo Hui, Male, National ID xxxxxxx.
2) Guan Fen Sheng, Male, National ID xxxxxxxx.

 

From Shenzhen City Moyi Technology Co Ltd (Hereafter “Moyi”) and shareholder with percentage of 70% and 30% respectively.

 

Part B (Pledgee):

 

Moxian Technologies Shenzhen Co Ltd, from Shenzhen City, Futian District Registrar of Companies, Company Registration ID xxxxxxxxxxxx.

 

This stock pledge agreement is signed on 15 th July 2014 at Shenzhen City Futian District.

 

Signed:

 

1 Party B and Moyi signed a exclusive cooperation agreement. To protect its interest, Party A agree to pledge 100% of its holdings in Moyi to Party B

 

2 Party B agree to accept such stock pledge from Party A

 

In accordance to the Peoples Republic China relevant laws and regulations, the principle of equality and mutual benefit parties to the agreement, reached through friendly consultations are provided for abide by the following terms:

 

Clause 1: Warranty Obligations

 

The pledge of stock shall ensure Moyi (and or its shareholder) to fulfill its obligations to cooperate with the Party B exclusive business agreement and related agreements under. In the breach of agreement, Party B has the right to take ownership of the pledged shares or any other rights derived from law.

 

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Clause 2 Pledge

 

The property being pledged refers to the 100% stake that both Party A jointly hold in Moyi.

 

Clause 3 Scope of guarantee

 

This agreement shall only be read together with all the other agreements signed between the Parties, including but not excluding, the exclusive cooperation agreement and interest conferred to Party B

 

Clause 4 Pledgor Representation

 

1) The pledger is a legitimate holder of the shares and has the right to confer such pledge
     
2) Before signing this contract, the pledgor represents that he did not pledge the pledged property to any third party and this property has not been frozen by a court of law nor does it have any conditions that might cause an adverse effect to the pledge;
     
3) Unless with the written prior concert of the pledgee, the pledgor shall not transfer or take any action that will affect his ownership in the pledged stock.
     

Clause 5 Pledge Process and Registration

 

Five days within the execution of this agreement, the parties shall go to the Shenzhen City of Companies Registrar Department to process the stock pledge in accordance to the laws of People Republic of China.

 

Clause 6 Pledged Stock and Transfer

 

Without the written consent from Party B, Party A is not allowed to transfer the stock to a third party.

 

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Clause 7. This agreement shall be signed by each party, and shall take effect after the signatory and registration of pledge with the registrar.

 

Clause 8 Applicable Law

 

The effectiveness, validity, interpretation and performance of this agreement and any dispute arising from this agreement shall be governed by the laws of the People Republic of China.;

 

Clause 9 Breach of Agreement

 

After the commencement of this agreement, the parties shall implement the obligations stipulated under this agreement. Failure to do so would be deemed a breach, whether from an individual or as a whole, should be regarded as breach of contract, the breaching party shall compensate to the non-breaching party any loss arising from the breach.

 

Clause 10 Dispute Resolution

 

For any dispute arising in this contract shall be resolved through friendly consultations first, unsuccessful negotiations, either party shall have the right to submit the dispute to the South China International Economic and Trade Arbitration Commission ruled that the place of arbitration is in Shenzhen. The arbitral award is final and binding on the parties.

 

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Clause 11 Others

 

This agreement shall be executed in five. Both Party A and B shall keep a copy, Moyi shall keep a copy and the other copy shall be used at Company Registrar for the registration of the pledge.

 

(There is no text below)

 

Signature

 

Party A

 

/s/ Zhang Guo Hui  

/s/ Guan Fen Sheng

 

Party B

 

/s/ Moxian Technologies Shenzhen Co Ltd

 

 

 

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Exhibit 10.6

 

Power of Attorney

 

I, Zhang Guo Hui, a Chinese citizen with Chinese Identification Card No.: XXXXXXXXXX, and a holder of 70% of the entire registered capital in Shenzhen Moyi Technologies Co. Ltd, ("Shenzhen Moyi Technologies Co. Ltd") ("My Shareholding"), hereby irrevocably authorize Shenzhen Moxian Technologies Co. Ltd ("WOFE") to exercise the following rights relating to My Shareholding during the term of this Power of Attorney:

 

WOFE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, including without limitation to: 1) attend shareholders' meetings of Ming Lang ; 2) exercise all the shareholder's rights and shareholder's voting rights I am entitled to under the laws of China and Ming Lang 's Articles of Association, including but not limited to the sale or transfer or pledge or disposition of My Shareholding in part or in whole; and 3) designate and appoint on behalf of myself the legal representative (chairperson), the director, supervisor, the chief executive officer and other senior management members of Ming Lang.

 

Without limiting the generality of the powers granted hereunder, WOFE shall have the power and authority under this Power of Attorney to execute the Transfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share Pledge Agreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.

 

All the actions associated with My Shareholding conducted by WOFE shall be deemed as my own actions, and all the documents related to My Shareholding executed by WOFE shall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by WOFE.

 

WOFE is entitled to re-authorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving prior notice to me or obtaining my consent.

 

This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, so long as I am a shareholder of Ming Lang.

 

During the term of this Power of Attorney, I hereby waive all the rights associated with My Shareholding, which have been authorized to WOFE through this Power of Attorney, and shall not exercise such rights by myself.

 

This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.

 

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  Zhang Guo Hui
     
  By: /s/ Zhang Guo Hui
    July 15, 2014

 

Witness: _________________    
 
Name:    
 
________, 2014    

 

 

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Exhibit 10.7

 

Exclusive Option Agreement

 

This Exclusive Option Agreement (this "Agreement") is executed by and among the following Parties as of the 15 day of July , 2014 in Shenzhen City , the People’s Republic of China (“China” or the “PRC”):

 

Party A: Shenzhen Moxian Technologies Co. Ltd , a Wholly Foreign Owned Enterprise, organized and existing under the laws of the PRC, with its address at Room 2313-2315 , Block B, Zhongshen Garden, Caitian South Road, Futian District, Shenzhen, Guangdong Province, China

 

Party B: Zhang Guo Hui , a Chinese citizen with Chinese Identification No.: XXXXXXXXXX ; and Guan Fen Sheng, a Chinese citizen with Chinese Identification No. XXXXXXXXXX

 

PartyC: Shenzhen Moyi Technologies Co. Ltd , a limited liability company organized and existing under the laws of the PRC, with its address at Unit2001, Tower B, Kingkey 100 Building, No.5016 Shennan East Road, Luohu District, Shenzhen, PRC .

 

In this Agreement, each of Party A, Party B and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the "Parties".

 

Whereas: Party B holds 100 % of the equity interest in Party C.

 

Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:

  

1. Sale and Purchase of Equity Interest

 

1.1 Option Granted

 

In consideration of the payment of RMB 100,000 by Party A, the receipt and adequacy of which is hereby acknowledged by Party B, Party B hereby irrevocably grants Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a "Designee") to purchase the equity interests in Party C then held by Party B once or at multiple times at any time in part or in whole at Party A's sole and absolute discretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the "Equity Interest Purchase Option"). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights with respect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. The term "person" as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or non-corporate organizations.

 

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1.2 Steps for Exercise of Equity Interest Purchase Option

 

Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a written notice to Party B (the "Equity Interest Purchase Option Notice"), specifying: (a) Party A's decision to exercise the Equity Interest Purchase Option; (b) the portion of equity interests to be purchased from Party B (the "Optioned Interests"); and (c) the date for purchasing the Optioned Interests and/or the date for transfer of the Optioned Interests.

 

1.3 Equity Interest Purchase Price

 

The purchase price of the Optioned Interests (the "Base Price") shall be RMB 10. If appraisal is required by the laws of China at the time when Party A exercises the Equity Interest Purchase Option, the Parties shall negotiate in good faith and based on the appraisal result make necessary adjustment to the Equity Interest Purchase Price so that it complies with any and all then applicable laws of China (collectively, the "Equity Interest Purchase Price").

 

1.4 Transfer of Optioned Interests

 

For each exercise of the Equity Interest Purchase Option:

 

1.4.1 Party B shall cause Party C to promptly convene a shareholders’ meeting, at which a resolution shall be adopted approving Party B's transfer of the Optioned Interests to Party A and/or the Designee(s);

 

1.4.2 Party B shall obtain written statements from the other shareholders of Party C giving consent to the transfer of the equity interest to Party A and/or the Designee(s) and waiving any right of first refusal related thereto.

 

1.4.3 Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable), in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;

 

1.4.4 The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses and permits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s), unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the Optioned Interests. For the purpose of this Section and this Agreement, "security interests" shall include securities, mortgages, third party's rights or interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements, but shall be deemed to exclude any security interest created by this Agreement and Party B's Share Pledge Agreement. "Party B's Share Pledge Agreement" as used in this Section and this Agreement shall refer to the Share Pledge Agreement ("Share Pledge Agreement") executed by and among Party A, Party B and Party C as of the date hereof, whereby Party B pledges all of its equity interests in Party C to Party A, in order to guarantee Party C's performance of its obligations under the Exclusive Business Corporation Agreement executed by and between Party C and Party A.

 

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2. Covenants

 

2.1 Covenants regarding Party C

 

Party B (as the shareholders of Party C) and Party C hereby covenant as follows:

 

2.1.1 Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association and bylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;

 

2.1.2 They shall maintain Party C's corporate existence in accordance with good financial and business standards and practices by prudently and effectively operating its business and handling its affairs;

 

2.1.3 Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of in any manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereon of any security interest;

 

2.1.4 Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i) debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A's written consent has been obtained;

 

2.1.5 They shall always operate all of Party C's businesses during the ordinary course of business to maintain the asset value of Party C and refrain from any action/omission that may affect Party C's operating status and asset value;

 

2.1.6 Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in the ordinary course of business (for purpose of this subsection, a contract with a price exceeding RMB500,000 shall be deemed a major contract);

 

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2.1.7 Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;

 

2.1.8 They shall provide Party A with information on Party C's business operations and financial condition at Party A's request;

 

2.1.9 If requested by Party A, they shall procure and maintain insurance in respect of Party C's assets and business from an insurance carrier acceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;

 

2.1.10 Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in any person;

 

2.1.11 They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedings relating to Party C's assets, business or revenue;

 

2.1.12 To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;

 

2.1.13 Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to its shareholders, provided that upon Party A's written request, Party C shall immediately distribute all distributable profits to its shareholders; and

 

2.1.14 At the request of Party A, they shall appoint any persons designated by Party A as directors of Party C.

 

2.2 Covenants of Party B

 

Party B hereby covenants as follows:

 

2.2.1 Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except for the pledge placed on these equity interests in accordance with Party B's Share Pledge Agreement;

 

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2.2.2 Party B shall cause the shareholders' meeting and/or the board of directors of Party C not to approve the sale, transfer, mortgage or disposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equity interests in accordance with Party B's Share Pledge Agreement;

 

2.2.3 Party B shall cause the shareholders' meeting or the board of directors of Party C not to approve the merger or consolidation with any person, or the acquisition of or investment in any person, without the prior written consent of Party A;

 

2.2.4 Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedings relating to the equity interests in Party C held by Party B;

 

2.2.5 Party B shall cause the shareholders' meeting or the board of directors of Party C to vote their approval of the transfer of the Optioned Interests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;

 

2.2.6 To the extent necessary to maintain Party B's ownership in Party C, Party B shall execute all necessary or appropriate documents, take all necessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;

 

2.2.7 Party B shall appoint any designee of Party A as director of Party C, at the request of Party A;

 

2.2.8 At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A's Designee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of first refusal to the respective share transfer by the other existing shareholder of Party C (if any); and

 

2.2.9 Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B, Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect the effectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject to this Agreement hereunder or under the Share Pledge Agreement among the same parties hereto or under the Power of Attorney granted in favor of Party A, Party B shall not exercise such rights except in accordance with the written instructions of Party A.

 

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3. Representations and Warranties

 

Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of the Optioned Interests, that:

 

3.1 They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are parties concerning the Optioned Interests to be transferred thereunder (each, a "Transfer Contract"), and to perform their obligations under this Agreement and any Transfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exercise of the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are parties constitute or will constitute their legal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;

 

3.2 The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shall not: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizational documents of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, or constitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of any condition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension or revocation of or imposition of additional conditions to any licenses or permits issued to either of them;

 

3.3 Party B has a good and merchantable title to the equity interests in Party C he holds. Except for Party B's Share Pledge Agreement, Party B has not placed any security interest on such equity interests;

 

3.4 Party C has a good and merchantable title to all of its assets, and has not placed any security interest on the aforementioned assets;

 

3.5 Party C does not have any outstanding debts, except for (i) debt incurred in the ordinary course of business; and (ii) debts disclosed to Party A for which Party A's written consent has been obtained.

 

3.6 Party C has complied with all laws and regulations of China applicable to asset acquisitions; and

 

3.7 There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party C or Party C.

 

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4. Effective Date

 

This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed at Party A's election.

 

5. Governing Law and Resolution of Disputes

 

5.1 Governing law

 

The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publicly available laws of China shall be governed by international legal principles and practices.

 

5.2 Methods of Resolution of Disputes

 

In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute through friendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in ShenZhen, and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.

 

6. Taxes and Fees

 

Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China in connection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactions contemplated under this Agreement and the Transfer Contracts.

 

7. Notices

 

7.1 All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. A confirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:

 

7.1.1 Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date of delivery or refusal at the address specified for notices.

 

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7.1.2 Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by an automatically generated confirmation of transmission).

 

7.2 For the purpose of notices, the addresses of the Parties are as follows:

 

  Party A: Shenzhen Moxian Technologies Co. Ltd
  Address: Room 2313-2315 , Block B, Zhongshen Garden,
Caitian South Road, Futian District, Shenzhen,
Guangdong Province, China
Attn: Sun Dan Dan
Phone: 0755 - 6681 3984

 

  Party B: Zhang Guo Hui and Guan Fen Sheng
  Address: Unit 2001, Tower B, Kingkey 100 Building, No.5016
Shennan East Road, Luohu District, Shenzhen, PRC .
     
  Party C: Shenzhen Moyi Technologies Co. Ltd
  Address: Unit 2001, Tower B, Kingkey 100 Building, No.5016
Shennan East Road, Luohu District, Shenzhen, PRC .
Attn: Zhang Guo Hui

 

7.3 Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.

 

8. Confidentiality

 

The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.

 

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9. Further Warranties

 

The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes of this Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of this Agreement.

 

10. Miscellaneous

 

10.1 Amendment, change and supplement

 

Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.

 

10.2 Entire agreement

 

Except for the amendments, supplements or changes in writing executed after the execution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to the subject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to the subject matter of this Agreement.

 

10.3 Headings

 

The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of the provisions of this Agreement.

 

10.4 Language

 

This Agreement is written in both Chinese and English language in three copies, each Party having one copy with equal legal validity; in case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.

 

10.5 Severability

 

In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.

 

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10.6 Successors

 

This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of such Parties.

 

10.8 Survival

 

10.8.1 Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shall survive the expiration or early termination thereof.

 

10.8.2 The provisions of Sections 5, 7, 8 and this Section 10.8 shall survive the termination of this Agreement.

 

10.9 Waivers

 

Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require the signatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver by such a Party with respect to any similar breach in other circumstances.

 

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IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Option Agreement as of the date first above written.  

 

Party A: Shenzhen Moxian Technologies Co. Ltd

 

By: /s/ Sun Dan Dan  
Name: Sun Dan Dan  
Title: Legal Representative  

  

Party B: Zhang Guo Hui and Guan Fen Sheng

 

By: /s/ Zhang Guo Hui  
     
  /s/ Guan Fen Sheng  

  

Party C: Shenzhen Moyi Technologies Co. Ltd

 

By: /s/ Zhang Guo Hui  
Name: Zhang Guo Hui  
Title: Legal Representative  

 

 

 

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Exhibit 10.8

 

THIS LOAN AGREEMENT is made on December 31, 2014

 

BETWEEN

 

(1) Moxian China Limited at Room 2807, 28/F., Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong (hereinafter referred to as “ the Lender ”)

 

(2)

Moxian Technologies (Shenzhen) Co., Ltd. at Room 2313-2315 , Block B, Zhongshen Garden, Caitian South Road, Futian District, Shenzhen, Guangdong Province, China (hereinafter referred to as “ the Borrower ”).

 

(2) Moxian China, Inc. at Room 2313-2315, Block B, Zhongshen Garden, Caitian South Road, Futian District, Shenzhen, Guangdong Province, China 518101, which owns 100% equity interests of the Borrower (hereinafter referred to as “ MOXC ”).

 

(hereinafter together referred to as “ the Parties ”)

 

1. RECITALS

 

1.1

The Lender lent the Borrower an aggregate of RMB720,000 (approximately U.S. $117,428), with RMB 630,000 ( approximately U.S. $102,942) borrowed on October 31, 2014 and RMB 90,000 (approximately U.S. $14,486) borrowed on November 30, 2014, respectively (collectively, the “ Loan ”) in contemplation of and upon prior agreement to the terms and conditions contained in this Agreement and at the express request of the Borrower.

 

1.3 MOXC has agreed to repay the Loan and interest accrued on the Loan in accordance with the terms of this Agreement.

 

1.4 In consideration of the Lender continuing to make the Loan available to the Borrower, the mutual covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto hereby agree to the terms and conditions set out in this Agreement.

 

2. THE LOAN

 

2.1 The Lender lent the Loan to the Borrower and the Borrower acknowledges receipt of the same.

 

2.2 In consideration of the Loan made to the Borrower, MOXC hereby agrees to issue to the Lender an unsecured Convertible Promissory Note in substantially the form attached hereto as Exhibit A (the “ Note ”), and MOXC hereby agrees to repay the Note to the Lender in full on or before the Maturity Date. The Note shall be due and payable on the first anniversary from the issuance date of the Note (the “ Maturity Date ”) and it shall be interest free. Upon the consummation of a Qualified Financing (as defined below), the Note shall automatically convert into shares of common stock, par value $.001 of MOXC (“ Common Stock ” and such shares of Common Stock issuable upon conversion shall be referred to as the “ Conversion Shares ”) at a conversion price (the “ Mandatory Conversion Price ”) which is equal to the per share price of the Qualified Securities (as defined below) if a Qualified Financing. If no Qualified Financing is consummated prior to the Maturity Date, then within 30 days after the Maturity Date (as extended by the Lender from time to time) as long as any of the principal or interest of the Note is still outstanding, the Lender shall have the option to convert the Note into Conversion Shares at the volume weighted average price of the Common Stock as reported by Bloomberg for a period of twenty trading days immediately prior to the conversion (the “ Optional Conversion Price ”). For the purpose of this Agreement, the term “ Qualified Financing ” is defined as the sale for cash by the Company of any equity or convertible securities (“ Qualified Securities ”) generating aggregate gross proceeds of at least $5,000,000.

 

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2.3 Prepayment of the Note before the Maturity Date may be made to the Lender without any penalty.

 

2.4 The Parties may by written consent extend the Maturity Date.

 

2.5 The Lender may assign the Note to a third party with a notice to MOXC of such assignment. MOXC shall not assign the Note without prior written consent by the Lender.

 

2.6 All payments by the Borrower under this Agreement shall so far as the law permits be made in full without any deduction or withholding (whether in respect of a set off, counterclaim, duties, tax, charges, levies or otherwise howsoever).

 

5 REPRESENTATIONS, WARRANTIES AND UNDERTAKING

 

5.1          Each of MOXC and the Borrower represents, warrants and undertakes to the Lender that:

 

(a)     it is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has the requisite corporate power to own its properties and to carry on its business as now being conducted; and

 

(b)     This Agreement has been duly authorized, executed and delivered by it, and is the valid and binding, enforceable in accordance with their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, or principles of equity. It has full corporate power and authority necessary to enter into and deliver this Agreement and to perform its obligations thereunder.

 

(c)     The execution, delivery and performance of this Agreement will not: (i) result in a violation of its Articles of Incorporation and Bylaws (or equivalent constitutive document) (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the is a party, or result in a violation of any law, rule, regulation, order, judgment or decree applicable to the Borrower or MOXC or by which any of its property or asset or affected except for those which could not reasonably be expected to have a material adverse effect on its assets, business, condition (financial or otherwise), results of operations or its future prospects taken as a whole.

 

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5.2          The Lender hereby represents, warrants and undertakes to the Borrower and Moxian:

 

(a)     The Lender is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation. And the Lender has the requisite power and authority to enter into and perform this Agreement and to purchase the Note. The execution, delivery and performance of this Agreement by the Lender and the consummation by Lender of the transactions contemplated hereby have been duly authorized by all necessary company action. This Agreement has been duly authorized, executed and delivered by Lender and constitutes, or shall constitute when executed and delivered, a valid and binding obligation of Lender, enforceable against Lender in accordance with the terms thereof.

 

(b)     The execution, delivery and performance of this Agreement and the consummation by Lender of the transactions contemplated hereby do not and will not result in a violation of Lender’s charter documents, bylaws or other organizational documents, as applicable.

 

(c)     The Lender hereby acknowledges:

 

(i)     that it was not, a “U.S. Person” (as defined below) at the time the Lender was offered the Note and as of the date hereof:

 

(A)     Any natural person resident in the United States;

 

(B)     Any partnership or corporation organized or incorporated under the laws of the United States;

 

(C)     Any estate of which any executor or administrator is a U.S. person;

 

(D)     Any trust of which any trustee is a U.S. person;

 

(E)     Any agency or branch of a foreign entity located in the United States;

 

(F)     Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person;

 

(G)     Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident of the United States; and

 

(H)     Any partnership or corporation if (i) organized or incorporated under the laws of any foreign jurisdiction and (ii) formed by a U.S. person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by accredited RHL Stockholders (as defined in Rule 501(a) of Regulation D promulgated under the 1933 Act) who are not natural persons, estates or trusts.

 

3
 

 

For the purpose of this section, “ United States ” or “ U.S. ” means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.

 

(ii)     it understands that no action has been or will be taken in any jurisdiction by MOXC that would permit a public offering of the Note or the Conversion Shares in any country or jurisdiction where action for that purpose is required;

 

(iii)     as of the execution date of this Agreement, it is not located within the United States, and it is not purchasing the Note or the Conversion Shares for the account or benefit of any U.S. Person, except in accordance with one or more available exemptions from the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”) or in a transaction not subject thereto;

 

(iv)     it will not resell the Note or the Conversion Shares except in accordance with the provisions of Regulation S (Rule 901 through 905 and Preliminary Notes thereto), pursuant to a registration statement under the 1933 Act, or pursuant to an available exemption from registration; and agrees not to engage in hedging transactions with regard to such securities unless in compliance with the 1933 Act;

 

(v)     it will not engage in hedging transactions with regard to shares of MOXC prior to the expiration of the distribution compliance period specified in Category 2 or 3 (paragraph (b)(2) or (b)(3)) in Rule 903 of Regulation S, as applicable, unless in compliance with the 1933 Act; and as applicable, shall include statements to the effect that the securities have not been registered under the 1933 Act and may not be offered or sold in the United States or to U.S. persons (other than distributors) unless the securities are registered under the 1933 Act, or an exemption from the registration requirements of the 1933 Act is available;

 

(vi)     No form of “directed selling efforts” (as defined in Rule 902 of Regulation S under the 1933 Act), general solicitation or general advertising in violation of the 1933 Act has been or will be used nor will any offers by means of any directed selling efforts in the United States be made by the Lender or any of its representatives in connection with the offer and sale of the Note or the Conversion Shares.

 

(d)     The Lender understands and agrees that the Note and the Conversion Shares are “ restricted securities ” and have not been registered under the 1933 Act or any applicable state securities laws by reason of their issuance in a transaction that does not require registration under the 1933 Act, and that such Note and Conversion Shares must be held indefinitely unless a subsequent disposition is registered under the 1933 Act or any applicable state securities laws or is exempt from such registration. The Lender understands that it is not anticipated that there will any market for the resale of the Note or the Conversion shares.

 

(e)     The Notes and the Conversion Shares shall bear the following or similar legend:

 

THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (REASONABLY ACCEPTABLE TO THE COMPANY), IN AN ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.

 

4
 

 

(f)     Except as set forth on Schedule 5.2 (f) , the Lender is not any of the followings:

 

(i)     an affiliate (as defined under the 1933 Act) of the Borrower or MOXC;

 

(ii)    a director or an officer of the Borrower or MOXC;

 

(iii)   a promoter (as defined under Rule 405 of the Securities Act of 1933, as amended) for the Borrower or MOXC; or

 

(iv)   a shareholder who owns more than 5% of the securities of the Borrower or MOXC.

 

6 NO JOINT VENTURE OR PARTNERSHIP

 

6.1 Nothing in this Agreement shall create a partnership or joint venture between the Parties hereto and save as expressly provided in this Agreement neither party shall enter into or have authority to enter into any engagement or make any representation or warranty on behalf of or pledge the credit of or otherwise bind or oblige the other party hereto.

 

7 MISCELLANEOUS

 

7.1 No waiver, alteration, variation or addition to this Agreement shall be effective unless made in writing on or after the date of signature of this Agreement by the Parties and accepted by an authorised signatory of the Parties.

 

7.2 All notices, documents, consents, approvals or other communications (a ‘Notice’) to be given hereunder shall be in writing and shall be transmitted by registered or recorded delivery mail or courier or personal delivery to the party being served at the relevant address for that party shown at the head of this Agreement. Any Notice sent by mail or courier shall be deemed to have been duly served three working days after the date of posting or dispatch.

 

7.3 The headings in this Agreement shall not affect its interpretation.

 

7.4 Throughout this Agreement, whenever required by the context, the use of the singular number shall be construed to include the plural, and the use of the plural the singular, and the use of any gender shall include all genders.

 

7.5 Reference in this Agreement to a clause or Schedule is to a clause or Schedule of this Agreement.

 

7.6 If any term or provision in this Agreement shall be held to be illegal or unenforceable, in whole or in part, under any enactment or rule of law, such term or provision or part shall to that extent be deemed not to form part of this Agreement but the validity and enforceability of the remainder of this Agreement shall not be affected.

 

5
 

 

7.7 The waiver or forbearance or failure of a party in insisting in any one or more instances upon the performance of any provisions of this Agreement shall not be construed as a waiver or relinquishment of that party’s rights to future performance of such provision and the other party’s obligations in respect of such future performance shall continue in full force and effect.

 

7.8 This Agreement constitutes the entire agreement between the Parties relating to the subject matter hereof, and except as stated herein or in the instruments and documents to be executed and delivered pursuant hereto, contains all the representations and warranties of the Parties relating to the subject matter hereof.

 

7.9 The Borrower hereby acknowledges that he has obtained independent legal advice on all and every aspect of this Agreement.

 

7.10 This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party hereto against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Nevada or in the federal courts located in the State of Nevada. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens . The parties hereto agree to submit to the in personam jurisdiction of such courts and hereby irrevocably waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs.

 

7.11 This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by both parties hereto. None of the parties hereof has relied on any representations not contained or referred to in this Agreement and the documents delivered herewith.

 

7.12 The Lender may assign or otherwise convey this Agreement and any of its rights or obligations hereunder or interest herein, in whole or part, to any other person with a written notice to the Borrower and MOXC of such assignment. MOXC or the Borrower shall not assign their respective rights or obligations under this Agreement to any other party unless approved by the Lender or its successors or assigns.

 

6
 

  

IN WITNESS WHEREOF the parties hereto have signed, sealed, delivered and executed this Agreement as a Deed of the date first written above.

 

MOXIAN CHINA LIMITED  
   
/s/ Ng Ka Lam    
Name: Ng Ka Lam  
Title: Director  
   

MOXIAN TECHNOLOGIES

(SHENZHEN) CO., LTD.

 
   
/s/ Sun Dan Dan    

Name: Sun Dan Dan

 

Title: Legal Representative

 
   
MOXIAN CHINA, INC.  
   
/s/ Ng Kian Yong    
Name: Ng Kian Yong  
Title: Chief Executive Officer  

 

 

7
 

   

Schedule 5.2(f)

Affiliation

 

As of the date of this Agreement, the Lender owned 33.8% of the total outstanding shares of Common Stock of MOXC.

 

 

 

 

 

 

 

EXHIBIT A

 

CONVERTIBLE PROMISSORY NOTE

 

Incorporated by reference herein Exhibit 4.2 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 31, 2014.

 

 

 

 

 


Exhibit 10.9

 

THIS LOAN AGREEMENT is made on December 31, 2014

 

BETWEEN

 

(1) Moxian China Limited at Room 2807, 28/F., Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong (hereinafter referred to as “ the Lender ”)

 

(2) Moxian Malaysia SDN BHD at Suite 13.02 Centrepoint South. Mid Valley City.Lingkaran Syed Putra.59200 Kuala Lumpur, Malaysia. (hereinafter referred to as “ the Borrower ”).

 

(2) Moxian China, Inc. at Room 2313-2315, Block B, Zhongshen Garden, Caitian South Road, Futian District, Shenzhen, Guangdong Province, China 518101, which owns 100% equity interests of the Borrower (hereinafter referred to as “ MOXC ”).

 

(hereinafter together referred to as “ the Parties ”)

 

1. RECITALS

 

1.1 The Lender lent the Borrower an aggregate of RM 141,900 (approximately U.S. $40,637), with RM 118,800 (approximately U.S. $34,032) borrowed on October 31, 2014 and RM 23,100 (approximately U.S. $6,605) borrowed on November 30, 2014, respectively (collectively, the “ Loan ”) in contemplation of and upon prior agreement to the terms and conditions contained in this Agreement and at the express request of the Borrower.

 

1.3 MOXC has agreed to repay the Loan and interest accrued on the Loan in accordance with the terms of this Agreement.

 

1.4 In consideration of the Lender continuing to make the Loan available to the Borrower, the mutual covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto hereby agree to the terms and conditions set out in this Agreement.

 

2. THE LOAN

 

2.1 The Lender lent the Loan to the Borrower and the Borrower acknowledges receipt of the same.

 

2.2 In consideration of the Loan made to the Borrower, MOXC hereby agrees to issue to the Lender an unsecured Convertible Promissory Note in substantially the form attached hereto as Exhibit A (the “ Note ”), and MOXC hereby agrees to repay the Note to the Lender in full on or before the Maturity Date. The Note shall be due and payable on the first anniversary from the issuance date of the Note (the “ Maturity Date ”) and it shall be interest free. Upon the consummation of a Qualified Financing (as defined below), the Note shall automatically convert into shares of common stock, par value $.001 of MOXC (“ Common Stock ” and such shares of Common Stock issuable upon conversion shall be referred to as the “ Conversion Shares ”) at a conversion price (the “ Mandatory Conversion Price ”) which is equal to the per share price of the Qualified Securities (as defined below) if a Qualified Financing. If no Qualified Financing is consummated prior to the Maturity Date, then within 30 days after the Maturity Date (as extended by the Lender from time to time) as long as any of the principal or interest of the Note is still outstanding, the Lender shall have the option to convert the Note into Conversion Shares at the volume weighted average price of the Common Stock as reported by Bloomberg for a period of twenty trading days immediately prior to the conversion (the “ Optional Conversion Price ”). For the purpose of this Agreement, the term “ Qualified Financing ” is defined as the sale for cash by the Company of any equity or convertible securities (“ Qualified Securities ”) generating aggregate gross proceeds of at least $5,000,000.

 

1
 

 

 

2.3 Prepayment of the Note before the Maturity Date may be made to the Lender without any penalty.

 

2.4 The Parties may by written consent extend the Maturity Date.

 

2.5 The Lender may assign the Note to a third party with a notice to MOXC of such assignment. MOXC shall not assign the Note without prior written consent by the Lender.

 

2.6 All payments by the Borrower under this Agreement shall so far as the law permits be made in full without any deduction or withholding (whether in respect of a set off, counterclaim, duties, tax, charges, levies or otherwise howsoever).

 

5 REPRESENTATIONS, WARRANTIES AND UNDERTAKING

 

5.1          Each of MOXC and the Borrower represents, warrants and undertakes to the Lender that:

 

(a)     it is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has the requisite corporate power to own its properties and to carry on its business as now being conducted; and

 

(b)     This Agreement has been duly authorized, executed and delivered by it, and is the valid and binding, enforceable in accordance with their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, or principles of equity. It has full corporate power and authority necessary to enter into and deliver this Agreement and to perform its obligations thereunder.

 

(c)     The execution, delivery and performance of this Agreement will not: (i) result in a violation of its Articles of Incorporation and Bylaws (or equivalent constitutive document) (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the is a party, or result in a violation of any law, rule, regulation, order, judgment or decree applicable to the Borrower or MOXC or by which any of its property or asset or affected except for those which could not reasonably be expected to have a material adverse effect on its assets, business, condition (financial or otherwise), results of operations or its future prospects taken as a whole.

 

2
 

 

5.2          The Lender hereby represents, warrants and undertakes to the Borrower and Moxian:

 

(a)     The Lender is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation. And the Lender has the requisite power and authority to enter into and perform this Agreement and to purchase the Note. The execution, delivery and performance of this Agreement by the Lender and the consummation by Lender of the transactions contemplated hereby have been duly authorized by all necessary company action. This Agreement has been duly authorized, executed and delivered by Lender and constitutes, or shall constitute when executed and delivered, a valid and binding obligation of Lender, enforceable against Lender in accordance with the terms thereof.

 

(b)     The execution, delivery and performance of this Agreement and the consummation by Lender of the transactions contemplated hereby do not and will not result in a violation of Lender’s charter documents, bylaws or other organizational documents, as applicable.

 

(c)     The Lender hereby acknowledges:

 

(i)     that it was not, a “U.S. Person” (as defined below) at the time the Lender was offered the Note and as of the date hereof:

 

(A)     Any natural person resident in the United States;

 

(B)     Any partnership or corporation organized or incorporated under the laws of the United States;

 

(C)     Any estate of which any executor or administrator is a U.S. person;

 

(D)     Any trust of which any trustee is a U.S. person;

 

(E)     Any agency or branch of a foreign entity located in the United States;

 

(F)     Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person;

 

(G)     Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident of the United States; and

 

(H)     Any partnership or corporation if (i) organized or incorporated under the laws of any foreign jurisdiction and (ii) formed by a U.S. person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by accredited RHL Stockholders (as defined in Rule 501(a) of Regulation D promulgated under the 1933 Act) who are not natural persons, estates or trusts.

 

3
 

 

For the purpose of this section, “ United States ” or “ U.S. ” means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.

 

(ii)     it understands that no action has been or will be taken in any jurisdiction by MOXC that would permit a public offering of the Note or the Conversion Shares in any country or jurisdiction where action for that purpose is required;

 

(iii)     as of the execution date of this Agreement, it is not located within the United States, and it is not purchasing the Note or the Conversion Shares for the account or benefit of any U.S. Person, except in accordance with one or more available exemptions from the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”) or in a transaction not subject thereto;

 

(iv)     it will not resell the Note or the Conversion Shares except in accordance with the provisions of Regulation S (Rule 901 through 905 and Preliminary Notes thereto), pursuant to a registration statement under the 1933 Act, or pursuant to an available exemption from registration; and agrees not to engage in hedging transactions with regard to such securities unless in compliance with the 1933 Act;

 

(v)     it will not engage in hedging transactions with regard to shares of MOXC prior to the expiration of the distribution compliance period specified in Category 2 or 3 (paragraph (b)(2) or (b)(3)) in Rule 903 of Regulation S, as applicable, unless in compliance with the 1933 Act; and as applicable, shall include statements to the effect that the securities have not been registered under the 1933 Act and may not be offered or sold in the United States or to U.S. persons (other than distributors) unless the securities are registered under the 1933 Act, or an exemption from the registration requirements of the 1933 Act is available;

 

(vi)     No form of “directed selling efforts” (as defined in Rule 902 of Regulation S under the 1933 Act), general solicitation or general advertising in violation of the 1933 Act has been or will be used nor will any offers by means of any directed selling efforts in the United States be made by the Lender or any of its representatives in connection with the offer and sale of the Note or the Conversion Shares.

 

(d)     The Lender understands and agrees that the Note and the Conversion Shares are “ restricted securities ” and have not been registered under the 1933 Act or any applicable state securities laws by reason of their issuance in a transaction that does not require registration under the 1933 Act, and that such Note and Conversion Shares must be held indefinitely unless a subsequent disposition is registered under the 1933 Act or any applicable state securities laws or is exempt from such registration. The Lender understands that it is not anticipated that there will any market for the resale of the Note or the Conversion shares.

 

(e)     The Notes and the Conversion Shares shall bear the following or similar legend:

 

THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (REASONABLY ACCEPTABLE TO THE COMPANY), IN AN ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.

 

4
 

 

(f)     Except as set forth on Schedule 5.2 (f) , the Lender is not any of the followings:

 

(i)     an affiliate (as defined under the 1933 Act) of the Borrower or MOXC;

 

(ii)    a director or an officer of the Borrower or MOXC;

 

(iii)   a promoter (as defined under Rule 405 of the Securities Act of 1933, as amended) for the Borrower or MOXC; or

 

(iv)   a shareholder who owns more than 5% of the securities of the Borrower or MOXC.

 

6 NO JOINT VENTURE OR PARTNERSHIP

 

6.1 Nothing in this Agreement shall create a partnership or joint venture between the Parties hereto and save as expressly provided in this Agreement neither party shall enter into or have authority to enter into any engagement or make any representation or warranty on behalf of or pledge the credit of or otherwise bind or oblige the other party hereto.

 

7 MISCELLANEOUS

 

7.1 No waiver, alteration, variation or addition to this Agreement shall be effective unless made in writing on or after the date of signature of this Agreement by the Parties and accepted by an authorised signatory of the Parties.

 

7.2 All notices, documents, consents, approvals or other communications (a ‘Notice’) to be given hereunder shall be in writing and shall be transmitted by registered or recorded delivery mail or courier or personal delivery to the party being served at the relevant address for that party shown at the head of this Agreement. Any Notice sent by mail or courier shall be deemed to have been duly served three working days after the date of posting or dispatch.

 

7.3 The headings in this Agreement shall not affect its interpretation.

 

7.4 Throughout this Agreement, whenever required by the context, the use of the singular number shall be construed to include the plural, and the use of the plural the singular, and the use of any gender shall include all genders.

 

7.5 Reference in this Agreement to a clause or Schedule is to a clause or Schedule of this Agreement.

 

7.6 If any term or provision in this Agreement shall be held to be illegal or unenforceable, in whole or in part, under any enactment or rule of law, such term or provision or part shall to that extent be deemed not to form part of this Agreement but the validity and enforceability of the remainder of this Agreement shall not be affected.

 

5
 

 

7.7 The waiver or forbearance or failure of a party in insisting in any one or more instances upon the performance of any provisions of this Agreement shall not be construed as a waiver or relinquishment of that party’s rights to future performance of such provision and the other party’s obligations in respect of such future performance shall continue in full force and effect.

 

7.8 This Agreement constitutes the entire agreement between the Parties relating to the subject matter hereof, and except as stated herein or in the instruments and documents to be executed and delivered pursuant hereto, contains all the representations and warranties of the Parties relating to the subject matter hereof.

 

7.9 The Borrower hereby acknowledges that he has obtained independent legal advice on all and every aspect of this Agreement.

 

7.10 This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party hereto against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Nevada or in the federal courts located in the State of Nevada. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens . The parties hereto agree to submit to the in personam jurisdiction of such courts and hereby irrevocably waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs.

 

7.11 This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by both parties hereto. None of the parties hereof has relied on any representations not contained or referred to in this Agreement and the documents delivered herewith.

 

7.12 The Lender may assign or otherwise convey this Agreement and any of its rights or obligations hereunder or interest herein, in whole or part, to any other person with a written notice to the Borrower and MOXC of such assignment. MOXC or the Borrower shall not assign their respective rights or obligations under this Agreement to any other party unless approved by the Lender or its successors or assigns.

 

6
 

  

IN WITNESS WHEREOF the parties hereto have signed, sealed, delivered and executed this Agreement as a Deed of the date first written above.

 

MOXIAN CHINA LIMITED  
   
/s/ Ng Ka Lam  
Name: Ng Ka Lam  
Title: Director  
   
MOXIAN MALAYSIA SDN BHD  
   
/s/ Chan Foo Weng  

Name: Chan Foo Weng

 

Title: Director

 
   
MOXIAN CHINA, INC.  
   
/s/ Ng Kian Yong  
Name: Ng Kian Yong  
Title: Chief Executive Officer  

 

 

7
 

   

Schedule 5.2(f)

Affiliation

 

As of the date of this Agreement, the Lender owned 33.8% of the total outstanding shares of Common Stock of MOXC.

 

 

 

 

 

 

 

EXHIBIT A

 

CONVERTIBLE PROMISSORY NOTE

 

Incorporated by reference herein Exhibit 4.2 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 31, 2014.

 

 

 

 

 


Exhibit 10.10

 

THIS LOAN AGREEMENT is made on December 31, 2014

 

BETWEEN

 

(1) Moxian China Limited at Room 2807, 28/F., Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong (hereinafter referred to as “ the Lender ”)

 

(2) Moxian (Hong Kong) Limited at Room 1301, 13/F., Wing Tuck Commercial Centre, 177-183 Wing Lok Street, Sheung Wan, Hong Kong (hereinafter referred to as “the Borrower”).

 

(2) Moxian China, Inc. at Room 2313-2315, Block B, Zhongshen Garden, Caitian South Road, Futian District, Shenzhen, Guangdong Province, China 518101, which owns 100% equity interests of the Borrower (hereinafter referred to as “ MOXC ”).

 

(hereinafter together referred to as “ the Parties ”)

 

1. RECITALS

 

1.1

The Lender lent the Borrower an aggregate of HKD $500,000 ( approximately U.S. $64,437) (the “ Loan ”) on November 30, 2014 in contemplation of and upon prior agreement to the terms and conditions contained in this Agreement and at the express request of the Borrower.

 

1.3 MOXC has agreed to repay the Loan and interest accrued on the Loan in accordance with the terms of this Agreement.

 

1.4 In consideration of the Lender continuing to make the Loan available to the Borrower, the mutual covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto hereby agree to the terms and conditions set out in this Agreement.

 

2. THE LOAN

 

2.1 The Lender lent the Loan to the Borrower and the Borrower acknowledges receipt of the same.

 

2.2 In consideration of the Loan made to the Borrower, MOXC hereby agrees to issue to the Lender an unsecured Convertible Promissory Note in substantially the form attached hereto as Exhibit A (the “ Note ”), and MOXC hereby agrees to repay the Note to the Lender in full on or before the Maturity Date. The Note shall be due and payable on the first anniversary from the issuance date of the Note (the “ Maturity Date ”) and it shall be interest free. Upon the consummation of a Qualified Financing (as defined below), the Note shall automatically convert into shares of common stock, par value $.001 of MOXC (“ Common Stock ” and such shares of Common Stock issuable upon conversion shall be referred to as the “ Conversion Shares ”) at a conversion price (the “ Mandatory Conversion Price ”) which is equal to the per share price of the Qualified Securities (as defined below) if a Qualified Financing. If no Qualified Financing is consummated prior to the Maturity Date, then within 30 days after the Maturity Date (as extended by the Lender from time to time) as long as any of the principal or interest of the Note is still outstanding, the Lender shall have the option to convert the Note into Conversion Shares at the volume weighted average price of the Common Stock as reported by Bloomberg for a period of twenty trading days immediately prior to the conversion (the “ Optional Conversion Price ”). For the purpose of this Agreement, the term “ Qualified Financing ” is defined as the sale for cash by the Company of any equity or convertible securities (“ Qualified Securities ”) generating aggregate gross proceeds of at least $5,000,000.

 

1
 

 

 

2.3 Prepayment of the Note before the Maturity Date may be made to the Lender without any penalty.

 

2.4 The Parties may by written consent extend the Maturity Date.

 

2.5 The Lender may assign the Note to a third party with a notice to MOXC of such assignment. MOXC shall not assign the Note without prior written consent by the Lender.

 

2.6 All payments by the Borrower under this Agreement shall so far as the law permits be made in full without any deduction or withholding (whether in respect of a set off, counterclaim, duties, tax, charges, levies or otherwise howsoever).

 

5 REPRESENTATIONS, WARRANTIES AND UNDERTAKING

 

5.1          Each of MOXC and the Borrower represents, warrants and undertakes to the Lender that:

 

(a)     it is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has the requisite corporate power to own its properties and to carry on its business as now being conducted; and

 

(b)     This Agreement has been duly authorized, executed and delivered by it, and is the valid and binding, enforceable in accordance with their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, or principles of equity. It has full corporate power and authority necessary to enter into and deliver this Agreement and to perform its obligations thereunder.

 

(c)     The execution, delivery and performance of this Agreement will not: (i) result in a violation of its Articles of Incorporation and Bylaws (or equivalent constitutive document) (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the is a party, or result in a violation of any law, rule, regulation, order, judgment or decree applicable to the Borrower or MOXC or by which any of its property or asset or affected except for those which could not reasonably be expected to have a material adverse effect on its assets, business, condition (financial or otherwise), results of operations or its future prospects taken as a whole.

 

2
 

 

5.2          The Lender hereby represents, warrants and undertakes to the Borrower and Moxian:

 

(a)     The Lender is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation. And the Lender has the requisite power and authority to enter into and perform this Agreement and to purchase the Note. The execution, delivery and performance of this Agreement by the Lender and the consummation by Lender of the transactions contemplated hereby have been duly authorized by all necessary company action. This Agreement has been duly authorized, executed and delivered by Lender and constitutes, or shall constitute when executed and delivered, a valid and binding obligation of Lender, enforceable against Lender in accordance with the terms thereof.

 

(b)     The execution, delivery and performance of this Agreement and the consummation by Lender of the transactions contemplated hereby do not and will not result in a violation of Lender’s charter documents, bylaws or other organizational documents, as applicable.

 

(c)     The Lender hereby acknowledges:

 

(i)     that it was not, a “U.S. Person” (as defined below) at the time the Lender was offered the Note and as of the date hereof:

 

(A)     Any natural person resident in the United States;

 

(B)     Any partnership or corporation organized or incorporated under the laws of the United States;

 

(C)     Any estate of which any executor or administrator is a U.S. person;

 

(D)     Any trust of which any trustee is a U.S. person;

 

(E)     Any agency or branch of a foreign entity located in the United States;

 

(F)     Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person;

 

(G)     Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident of the United States; and

 

(H)     Any partnership or corporation if (i) organized or incorporated under the laws of any foreign jurisdiction and (ii) formed by a U.S. person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by accredited RHL Stockholders (as defined in Rule 501(a) of Regulation D promulgated under the 1933 Act) who are not natural persons, estates or trusts.

 

3
 

 

For the purpose of this section, “ United States ” or “ U.S. ” means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.

 

(ii)     it understands that no action has been or will be taken in any jurisdiction by MOXC that would permit a public offering of the Note or the Conversion Shares in any country or jurisdiction where action for that purpose is required;

 

(iii)     as of the execution date of this Agreement, it is not located within the United States, and it is not purchasing the Note or the Conversion Shares for the account or benefit of any U.S. Person, except in accordance with one or more available exemptions from the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”) or in a transaction not subject thereto;

 

(iv)     it will not resell the Note or the Conversion Shares except in accordance with the provisions of Regulation S (Rule 901 through 905 and Preliminary Notes thereto), pursuant to a registration statement under the 1933 Act, or pursuant to an available exemption from registration; and agrees not to engage in hedging transactions with regard to such securities unless in compliance with the 1933 Act;

 

(v)     it will not engage in hedging transactions with regard to shares of MOXC prior to the expiration of the distribution compliance period specified in Category 2 or 3 (paragraph (b)(2) or (b)(3)) in Rule 903 of Regulation S, as applicable, unless in compliance with the 1933 Act; and as applicable, shall include statements to the effect that the securities have not been registered under the 1933 Act and may not be offered or sold in the United States or to U.S. persons (other than distributors) unless the securities are registered under the 1933 Act, or an exemption from the registration requirements of the 1933 Act is available;

 

(vi)     No form of “directed selling efforts” (as defined in Rule 902 of Regulation S under the 1933 Act), general solicitation or general advertising in violation of the 1933 Act has been or will be used nor will any offers by means of any directed selling efforts in the United States be made by the Lender or any of its representatives in connection with the offer and sale of the Note or the Conversion Shares.

 

(d)     The Lender understands and agrees that the Note and the Conversion Shares are “ restricted securities ” and have not been registered under the 1933 Act or any applicable state securities laws by reason of their issuance in a transaction that does not require registration under the 1933 Act, and that such Note and Conversion Shares must be held indefinitely unless a subsequent disposition is registered under the 1933 Act or any applicable state securities laws or is exempt from such registration. The Lender understands that it is not anticipated that there will any market for the resale of the Note or the Conversion shares.

 

(e)     The Notes and the Conversion Shares shall bear the following or similar legend:

 

THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (REASONABLY ACCEPTABLE TO THE COMPANY), IN AN ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.

 

4
 

 

(f)     Except as set forth on Schedule 5.2 (f) , the Lender is not any of the followings:

 

(i)     an affiliate (as defined under the 1933 Act) of the Borrower or MOXC;

 

(ii)   a director or an officer of the Borrower or MOXC;

 

(iii)   a promoter (as defined under Rule 405 of the Securities Act of 1933, as amended) for the Borrower or MOXC; or

 

(iv)   a shareholder who owns more than 5% of the securities of the Borrower or MOXC.

 

6 NO JOINT VENTURE OR PARTNERSHIP

 

6.1 Nothing in this Agreement shall create a partnership or joint venture between the Parties hereto and save as expressly provided in this Agreement neither party shall enter into or have authority to enter into any engagement or make any representation or warranty on behalf of or pledge the credit of or otherwise bind or oblige the other party hereto.

 

7 MISCELLANEOUS

 

7.1 No waiver, alteration, variation or addition to this Agreement shall be effective unless made in writing on or after the date of signature of this Agreement by the Parties and accepted by an authorised signatory of the Parties.

 

7.2 All notices, documents, consents, approvals or other communications (a ‘Notice’) to be given hereunder shall be in writing and shall be transmitted by registered or recorded delivery mail or courier or personal delivery to the party being served at the relevant address for that party shown at the head of this Agreement. Any Notice sent by mail or courier shall be deemed to have been duly served three working days after the date of posting or dispatch.

 

7.3 The headings in this Agreement shall not affect its interpretation.

 

7.4 Throughout this Agreement, whenever required by the context, the use of the singular number shall be construed to include the plural, and the use of the plural the singular, and the use of any gender shall include all genders.

 

7.5 Reference in this Agreement to a clause or Schedule is to a clause or Schedule of this Agreement.

 

7.6 If any term or provision in this Agreement shall be held to be illegal or unenforceable, in whole or in part, under any enactment or rule of law, such term or provision or part shall to that extent be deemed not to form part of this Agreement but the validity and enforceability of the remainder of this Agreement shall not be affected.

 

5
 

 

7.7 The waiver or forbearance or failure of a party in insisting in any one or more instances upon the performance of any provisions of this Agreement shall not be construed as a waiver or relinquishment of that party’s rights to future performance of such provision and the other party’s obligations in respect of such future performance shall continue in full force and effect.

 

7.8 This Agreement constitutes the entire agreement between the Parties relating to the subject matter hereof, and except as stated herein or in the instruments and documents to be executed and delivered pursuant hereto, contains all the representations and warranties of the Parties relating to the subject matter hereof.

 

7.9 The Borrower hereby acknowledges that he has obtained independent legal advice on all and every aspect of this Agreement.

 

7.10 This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party hereto against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Nevada or in the federal courts located in the State of Nevada. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens . The parties hereto agree to submit to the in personam jurisdiction of such courts and hereby irrevocably waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs.

 

7.11 This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by both parties hereto. None of the parties hereof has relied on any representations not contained or referred to in this Agreement and the documents delivered herewith.

 

7.12 The Lender may assign or otherwise convey this Agreement and any of its rights or obligations hereunder or interest herein, in whole or part, to any other person with a written notice to the Borrower and MOXC of such assignment. MOXC or the Borrower shall not assign their respective rights or obligations under this Agreement to any other party unless approved by the Lender or its successors or assigns.

 

6
 

  

IN WITNESS WHEREOF the parties hereto have signed, sealed, delivered and executed this Agreement as a Deed of the date first written above.

 

MOXIAN CHINA LIMITED  
   
/s/ Ng Ka Lam    
Name: Ng Ka Lam  
Title: Director  
   

MOXIAN (HONG KONG) LIMITED

 
   
/s/ Ng Kian Yong    

Name: Ng Kian Yong

 
Title: Director  
   
MOXIAN CHINA, INC.  
   
/s/ Ng Kian Yong    
Name: Ng Kian Yong  
Title: Chief Executive Officer  

 

 

7
 

   

Schedule 5.2(f)

Affiliation

 

As of the date of this Agreement, the Lender owned 33.8% of the total outstanding shares of Common Stock of MOXC.

 

 

 

 

 

 

EXHIBIT A

 

CONVERTIBLE PROMISSORY NOTE

 

Incorporated by reference herein Exhibit 4.2 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 31, 2014.

 

 

 

 

 


Exhibit 21.1

 

List of Subsidiaries

 

M
Name   Jurisdiction  

Equity Owners and Percentage

of Equity Securities Held

         
Moxian CN Group Limited   Samoa   100% owned by Moxian China, Inc.
         
Moxian Group Limited   British Virgin Islands   100% owned by the Moxian CN Group Limited
         
Moxian (Hong Kong) Limited   Hong Kong   100% owned by Moxian Group Limited
         
Moxian Technologies (Shenzhen) Co., Ltd.   PRC   100% owned by Moxian (Hong Kong) Limited
         
Moxian Malaysia SDN BHD   Malaysia   100% owned by Moxian (Hong Kong) Limited

 

Exhibit 31.1

 

CERTIFICATION

 

I, Ng Kian Yong, hereby certify that:

 

  1.

I have reviewed this Annual Report on Form 10-K for the year ended September 30, 2014 of Moxian China, Inc.;

 

  2. Based on my knowledge, 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;

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

  4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)           Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

 

d)           Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

  5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

 

a)           all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

b)           any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting

 

Date: December 31, 2014

 

/s/ Ng Kian Yong  
Ng Kian Yong  
President and Chief Executive Officer  
(principal executive and financial officer)  

 

Exhibit 32.1

  

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of Moxian China, Inc. (the “Company”) on Form 10-K for the year ending September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), The undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

 

(1)        The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)        The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

/s/ Ng Kian Yong  
By: Ng Kian Yong  
President and Chief Executive Officer  

 

Dated: December 31, 2014

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.