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MOXIAN GROUP HOLDINGS, INC. - 10-Q - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION(Edgar Glimpses Via Acquire Media NewsEdge) 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 Group Holdings, Inc., a Florida corporation,(ii) Moxian Group Limited, a British Virgin Islands company ("Moxian BVI"),(iii) Moxian (Hong Kong) Limited, a limited liability company incorporated under the laws of Hong Kong ("Moxian HK"), (iii) Moxian Technologies (Shenzhen) Co., Ltd. ("Moxian Shenzhen"), and (iv) Moxian Malaysia SDN BHD ("Moxian Malaysia"). Overview The Company 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 are currently at development stage. Our primary activities have been the designing and developing our products and services, negotiating strategic alliances and other agreements, and raising capital. As of September 30, 2013 and December 31, 2013, our accumulated deficits were $790,343 and $1,288,947, respectively. Our stockholders' equity (deficiency) was ($735,279) and ($1,246,352), respectively. We have so far generated $145,405 in revenue. Our losses have principally been attributed to operating expenses, administrative and other operating expenses. Results of Operations Three months ended December 31, 2013 compared with three months ended December 31, 2012 Gross Revenues The Company made sales revenues of $48,472 in the three months ended December 31, 2013 compared to nil being generated in the three months ended December 31, 2012 The Company sales revenue of $48,472 in the three months ended December 31, 2013 comes from customers who subscribed our merchant packages. In our efforts to acquire these subscribers, the costs of $2,549 consist of mainly domain name registration fees and acquiring window and car stickers for advertising purposes. Operating Expenses Operating expenses for the three months ended December 31, 2013 and the three months ended December 31, 2012, were $544,574 and $2,340 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 three months ended December 31, 2013 and the three months ended December 31, 2012 were $498,604 and $2,340, respectively. Basic and diluted net loss per share amounted to ($0.00) for the three months ended December 31, 2013 and the three months ended December 31, 2012. -14- --------------------------------------------------------------------------------Liquidity and Capital Resources On December 31, 2013 we had working capital of $1,126,985, consisting of cash on hand of $880,619, compared to working capital of $828,278 with cash on hand of $753,098 as of September 30, 2013. Net cash used in operating activities for the three months ended December 31, 2013 was $578,804 as compared to $3,740 for the three months ended December 31, 2012. The cash used in operating activities are mainly for filing fees, professional fees, payroll and benefits and general expenses. Currently, we have limited operating capital. We expect 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. 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. 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. Off-Balance Sheet Arrangements As of December 31, 2013, we did not have any off-balance sheet arrangements. |