Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2018 | May 10, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Moxian, Inc. | |
Entity Central Index Key | 1,516,805 | |
Trading Symbol | moxc | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 67,007,199 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2018 | Sep. 30, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 53,677 | $ 18,494 |
Restricted cash | 170,000 | |
Inventories | 3,130 | |
Prepayments, deposits and other receivables, net | 642,824 | 152,548 |
Total current assets | 866,501 | 174,172 |
Restricted cash, long-term | 500,000 | |
Property and equipment, net | 519,488 | 686,296 |
TOTAL ASSETS | 1,385,989 | 1,360,468 |
CURRENT LIABILITIES | ||
Accruals and other payables | 2,685,717 | 1,861,519 |
Loan payable - other | 1,415,098 | 1,347,035 |
Convertible debt - related party | 1,000,000 | |
Loans payable - related parties | 3,172,676 | 1,110,884 |
Total current liabilities | 8,273,491 | 4,319,438 |
Commitments and contingencies | ||
STOCKHOLDERS' DEFICIENCY | ||
Preferred stock, $0.001 par value, authorized: 100,000,000 shares. Nil shares issued and outstanding | ||
Common stock, $0.001 par value, authorized: 250,000,000 shares. 67,007,199 shares issued and outstanding as of March 31, 2018 and September 30, 2017 | 67,007 | 67,007 |
Additional paid-in capital | 35,475,722 | 35,475,722 |
Accumulated deficiency | (42,308,144) | (38,682,546) |
Accumulated other comprehensive income (loss) | (122,087) | 180,847 |
Total stockholders' deficiency | (6,887,502) | (2,958,970) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY | $ 1,385,989 | $ 1,360,468 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Mar. 31, 2018 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 67,007,199 | 67,007,199 |
Common stock, shares outstanding | 67,007,199 | 67,007,199 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||||
Revenues | $ 47,242 | $ 7,475 | $ 108,328 | $ 17,443 |
Cost of revenues | (1,217) | (389) | (11,284) | (1,391) |
Gross Profit | 46,025 | 7,086 | 97,044 | 16,052 |
Depreciation and amortization expenses | 179,212 | 344,849 | 379,584 | 694,123 |
Research and development | 147,075 | 654,418 | 410,629 | 1,351,858 |
Impairment charge on intangible assets | 2,985,181 | 2,985,181 | ||
Selling, general and administrative expenses | 1,441,003 | 1,983,534 | 2,923,845 | 3,749,633 |
Loss from operations | (1,721,265) | (5,960,896) | (3,617,014) | (8,764,743) |
Interest expenses | (25,940) | (1,893) | (25,940) | (1,123) |
Other income, net | 890 | 7,764 | 17,356 | 7,838 |
Loss before income tax | (1,746,315) | (5,955,025) | (3,625,598) | (8,758,028) |
Income tax expense | (95,420) | (95,420) | ||
Net loss | (1,746,315) | (6,050,445) | (3,625,598) | (8,853,448) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (213,624) | 276,959 | (302,934) | (54,629) |
Comprehensive loss | $ (1,959,939) | $ (5,773,486) | $ (3,928,532) | $ (8,908,077) |
Basic and diluted loss per common share (in dollars per share) | $ (0.03) | $ (0.09) | $ (0.05) | $ (0.13) |
Basic and diluted weighted average common shares outstanding (in shares) | 67,007,199 | 66,995,963 | 67,007,199 | 66,139,492 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (3,625,598) | $ (8,853,448) |
Adjustments to reconcile net loss to cash used in operating activities | ||
Depreciation and amortization | 379,584 | 694,123 |
Loss on disposition of property and equipment | 80 | 11,124 |
Impairment charge on intangible assets | 2,985,181 | |
Deferred tax expense | 95,420 | |
Changes in operating assets and liabilities: | ||
Restricted cash | 63,762 | |
Inventories | 3,127 | 4,107 |
Prepayments, deposits and other receivables | (428,558) | (116,173) |
Accruals and other payables | 711,045 | (273,082) |
Net cash used in operating activities | (2,960,320) | (5,388,986) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (3,998) | |
Payments on Construction in Progress | (178,579) | |
Purchase of intangible assets | (11,137) | |
Net cash used in investing activities | (178,579) | (15,135) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from related party loans | 3,005,224 | 3,195,296 |
Repayment of related party loans | (113,297) | (5,582,602) |
IPO proceeds (deposited in) released from an indemnification escrow, restricted cash | 330,000 | (500,000) |
Gross proceeds from Initial Public Offering - stock issuance | 10,005,000 | |
Direct costs disbursed from Initial Public Offering proceeds | (927,303) | |
Net cash provided by financing activities | 3,221,927 | 6,190,391 |
Effect of exchange rates on cash and cash equivalents | (47,845) | (2,960) |
Net increase in cash and cash equivalents | 35,183 | 783,310 |
Cash and cash equivalents, beginning of period | 18,494 | 76,580 |
Cash and cash equivalents, end of period | 53,677 | 859,890 |
Supplemental cash flow disclosures: | ||
Cash paid for interest expense | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
Non-cash investing and financing activities | ||
Issuance of shares for subscription payable | 2,000,000 | |
Reclassification of deferred Initial Public Offering costs to additional paid in capital | 290,234 | |
Warrants issued to placement agents in connection with the Company's Initial Public Offering | $ 280,042 | |
Converted loans payable-related party to convertible debt-related party | $ 1,000,000 |
Organization and nature of oper
Organization and nature of operations | 6 Months Ended |
Mar. 31, 2018 | |
Organization and Nature of Operations [Abstract] | |
Organization and nature of operations | 1. Organization and nature of operations Moxian, Inc. (“the Company”) was incorporated in the State of Nevada on October 12, 2010 and was formerly known as SECURE NetCheckIn Inc. The Company was in the business of offering a cloud-based scheduling and notification product for the medical industry. The Company changed its name to Moxian China, Inc. on December 13, 2013 and to Moxian, Inc. on July 19, 2015. The Company, through its subsidiaries and variable interest entity, engages in the business of operating a social network platform that integrates social media and business into one single platform. The Company is currently devoting its efforts to develop mobile applications on an online platform that facilitates the small to medium size businesses to attract more clients. The Company’s ability to generate sufficient funds to meet its working capital requirements is dependent upon its ability to develop additional sources of capital, develop apps and websites, generate servicing income, and ultimately, achieve profitable operations (see Note 2). Moxian HK was incorporated on January 18, 2013 and became Moxian BVI’s subsidiary on February 14, 2013. Moxian Shenzhen was incorporated on April 8, 2013 as a wholly-owned subsidiary of Moxian HK and is engaged in the business of internet technology, computer software, and commercial information consulting. Moxian Malaysia was incorporated on March 1, 2013 and became Moxian HK’s subsidiary on April 2, 2013. Shenzhen Moyi Technologies Co., Ltd. (“Moyi”) was incorporated on July 19, 2013 under the laws of the People’s Republic of China. 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 described below (the “Moyi Agreements”). On December 18, 2017, the Company entered into a Tripartite Agreement with the original shareholders of Moyi and the new shareholders of Moyi wherein the Company agrees to the transfer the equity interests of Moyi and all related rights, liabilities and obligations under the Moyi Agreements such that the new shareholders stand in place of the old shareholders in all aspects of the Moyi Agreements. Moyi, which is owned solely by Chinese shareholders, has been 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 License. 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"). Due to the transfer of interests from the Original Moyi Shareholders to the New Moyi Shareholders, the Company's Board of Directors determined that it was appropriate to terminate such Moyi Agreements and to execute substantially similar agreements with the New Moyi Shareholders. Because the Exclusive Business Cooperation Agreement did not include the Original Moyi Shareholders as a party, it has not been terminated. The Share Pledge Agreement, Power of Attorney and Exclusive Option Agreement were officially terminated as to the Original Moyi Shareholders as of January 8, 2018 and a new Share Pledge Agreement, Power of Attorney and Exclusive Option Agreement were entered into with the New Moyi Shareholders at the same date. The parties' intent throughout has been to maintain control of Moyi by Shenzhen Moxian and, by extension, the Company. Moxian Technologies (Beijing) Co., Ltd. (“Moxian Beijing”) was incorporated on December 10, 2015 under the laws of the People’s Republic of China as a wholly-owned subsidiary of Moxian Shenzhen. Moxian Beijing is engaged in the business of internet technology, computer software, and commercial information consulting. On November 14, 2016, the Company announced the completion of a public offering of 2,501,250 shares of its common stock at a public offering price of $4.00 per share. The net proceeds from the offering were approximately $8.5 million after deducting placement agents' commissions and other offering expenses. In connection with the offering, the Company's common stock began trading on the NASDAQ Capital Market on November 15, 2016 under the symbol "MOXC". On January 30, 2018, a wholly-owned subsidiary of Moxian Shenzhen, Moxian Information Technologies (Shanghai) Co. Ltd. (“Moxian Shanghai”) was incorporated under the laws of the People’s Republic of China. Moxian Shanghai will extend the business operations of the Company to Shanghai, China. As of March 31, 2018 only Moxian Shenzhen, Moyi and Moxian Beijing have business operations and the other companies are all dormant. |
Summary of principal accounting
Summary of principal accounting policies | 6 Months Ended |
Mar. 31, 2018 | |
Summary of Principal Accounting Policies [Abstract] | |
Summary of principal accounting policies | 2. Summary of principal accounting policies Basis of presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and reflect the activities of the following subsidiaries and the VIE: Moxian CN Samoa, Moxian BVI, Moxian HK, Moxian Shenzhen, Moxian Malaysia, Moyi, Moxian Beijing, Moxian Shanghai and Moxian IP Samoa. All intercompany transactions and balances have been eliminated in the consolidation. The unaudited interim condensed consolidated financial information as of March 31, 2018 and for the three and six months ended March 31, 2018 and 2017 have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K for the fiscal year ended September 30, 2017, previously filed with the SEC on January 8, 2018. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s unaudited condensed consolidated financial position as of March 31, 2018 and its unaudited condensed consolidated results of operations for the three and six months ended March 31, 2018 and 2017, and its unaudited condensed consolidated cash flows for the six months ended March 31, 2018 and 2017, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the fiscal year or any future periods. The following assets and liabilities of the VIE are included in the accompanying unaudited condensed consolidated financial statements of the Company as of March 31, 2018 and September 30, 2017: March 31, 2018 September 30, 2017 Current assets $ 2,702 $ 3,082 Non-current assets - - Total assets $ 2,702 $ 3,082 Current liabilities $ 896,567 $ 732,910 Non-current liabilities - - Total liabilities $ 896,567 $ 732,910 Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. Going Concern In assessing the Company’s liquidity and its ability to continue as a going concern, the Company monitors and analyzes its cash and cash equivalents and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. As of March 31, 2018, the Company’s current liabilities exceeded the current assets by approximately $7.4 million, its accumulated deficit was approximately $42.3 million and the Company has incurred losses since inception. On November 14, 2016, the Company completed its initial public offering (“IPO”) with net proceeds of $8.5 million after deducting placement agents’ commission and other offering costs. However, as of the date of this report, the Company has utilized all of the IPO proceeds and is not generating sufficient revenue to support its operations. The Company hopes to fund its cash flow shortfalls as follows: · Financial support commitments from the Company’s major stockholders and a related party; and · Seeking additional public and/or private issuance of securities. On November 10, 2017, the Company and Ms. Liu Shu Juan, a director of the Company, entered into a loan agreement for a line of credit of $1,000,000 or the RMB equivalent. Pursuant to the loan agreement, the Company will issue an unsecured convertible promissory note, which bears an interest rate of 4.75% per annum and is due in one year. Ms. Liu Shu Jian has the right to convert all or any portion of the outstanding and unpaid principal and interest of the note into shares of the Company’s common stock at the conversion price set forth in the convertible debt agreement, as amended. On May 8, 2018, the Company received a notice of conversion from Ms. Liu to convert an outstanding amount of $1,008,068 comprising $1 million of principal and $8,068 of interest into 350,023 ordinary shares of common stock at a volume-weighted price of $2.88 per share. On May 11, 2018, the board of directors ratified a credit facility of US$4 million previously granted by Ms. Liu for the purpose of working capital for the Company bearing interest of 4.75% per annum on the amount outstanding at the end of each month. The facility is due to be repaid by May 11, 2020. As of March 31, 2018, the Company has drawn down approximately $2,000,073 which includes interest accrued of the facility. (See Note 8) If the Company is unable to obtain the necessary additional capital on a timely basis and on acceptable terms, it will be unable to implement its current plans for expansion, repay debt obligations or respond to competitive pressures. Any of these factors would have a material adverse effect on its business, prospects, financial condition and results of operations and raise substantial doubts about the ability of the Company to continue as a going concern. The unaudited condensed consolidated financial statements for the three and six months ended March 31, 2018 have been prepared on a going concern basis due to the Company’s expectation that it may be able to receive further financial support from its major stockholders and related parties. They do not include any adjustments to reflect the possible future effects on the recoverability and classifications of assets, or the amounts and classifications of liabilities that may result from the inability of the Company to continue as a going concern. Risks and Uncertainties The Company’s operations are substantially carried out in the People’s Republic of China (“PRC”). Accordingly, the Company’s business, financial condition and results of operations will be influenced by the political, economic and legal environments in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Fair value of financial instruments The Company follows the provisions of Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures.” ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1-Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2-Inputs other than quoted prices that are observable for the asset or liability in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3-Inputs are unobservable inputs which reflect management’s assumptions based on the best available information. The carrying value of cash and cash equivalents, restricted cash, prepayments, deposits and other receivables, accruals and other payables and, loans from related parties approximate their fair values because of the short-term nature of these instruments. Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP 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 accompanying unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates required to be made by management include but not limited to, useful lives of property and equipment, intangible assets valuation, inventory valuation and deferred tax assets. Actual results could differ from those estimates. Restricted cash Restricted cash represents cash held in an indemnification escrow account pursuant to the financing agreement signed with the placement agents. Under the terms of the placement agreement, $500,000 in cash funded an escrow account for a period of two years after the completion of the IPO; this amount was recorded as restricted cash, long-term as of September 30, 2017. On November 9, 2017, $330,000 was released from this escrow account with the approval of the placement agents and the escrow agents. Property and Equipment, net Property and equipment are recorded at cost less accumulated depreciation and impairment. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives as follows: Electronic equipment 3-6 years Furniture and fixtures 3-6 years Leasehold improvements Shorter of estimated useful life or term of lease Impairment of long-lived assets The Company classifies its long-lived assets into: (i) computer and office equipment; (ii) furniture and fixtures, (iii) leasehold improvements, and (iv) finite – lived intangible assets. Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be fully recoverable. It is possible that these assets could become impaired as a result of technology, economy or other industry changes. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, relief from royalty income approach, quoted market values and third-party independent appraisals, as considered necessary. The Company makes various assumptions and estimates regarding estimated future cash flows and other factors in determining the fair values of the respective assets. The assumptions and estimates used to determine future values and remaining useful lives of long-lived assets are complex and subjective. They can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as the Company’s business strategy and its forecasts for specific market expansion. Due to the continuing losses from operations with minimal revenues, the Company recorded a valuation reserve against its remaining intangible assets in 2017. Revenue recognition The Company currently recognizes revenue from the sale of merchandise through its online platforms. Revenue is 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. Revenue is recorded on a gross basis, net of surcharges and value added tax ("VAT"). The Company recorded revenue on a gross basis because the Company has the following indicators for gross reporting: it is the primary obligor of the sales arrangements, is subject to inventory risks of physical loss, has latitude in establishing prices, has discretion in suppliers' selection and assumes credit risks on receivables from customers. Revenue from advertising is recognized as advertisements are displayed. Revenue from software development services comprises revenue from time and material and fixed price contracts. Revenue from time and material contracts are recognized as related services are performed. Revenue on fixed price contracts is recognized in accordance with percentage of completion method of accounting. Income taxes The Company utilizes ASC Topic 740 (“ASC 740”) “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 unaudited condensed 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” clarifies the accounting for uncertainty in tax positions. This interpretation requires that an entity recognizes in the unaudited condensed 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 judgment 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 unaudited consolidated statements of operations and comprehensive losses. The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of March 31, 2018 and September 30, 2017, the Company did not have any unrecognized tax benefits. The Company does not anticipate any significant increase to its liability for unrecognized tax benefit within the next 12 months. As of March 31, 2018, the tax years ended December 31, 2012 through December 31, 2017 for the Company’s PRC entities remain open for statutory examination by the PRC tax authorities. Foreign currency transactions and translation The reporting currency of the Company is United States Dollars (the “USD”) and the functional currency of Moxian Shenzhen, Moyi and Moxian Beijing is Renminbi (the “RMB”) as China is the primary economic environment in which they operate, the functional currency of Moxian HK is Hong Kong Dollar (the “HKD”), and the functional currency of Moxian Malaysia is Malaysia Ringgit (the “RM”). Foreign currency transactions and translation (continued) For financial reporting purposes, the financial statements of Moxian Shenzhen, Moyi, Moxian Beijing, Moxian HK and Moxian Malaysia, which are prepared using their respective functional currencies, are translated into the reporting currency, USD, so to be consolidated with the Company’s. Monetary assets and liabilities denominated in currencies other than the reporting currency are translated into the reporting currency at the rates of exchange ruling at the balance sheet date. Revenues and expenses are translated using average rates prevailing during the reporting period. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income (loss) in stockholders’ equity (deficiency). Transaction gains and losses are recognized in the unaudited consolidated condensed statements of operations and comprehensive loss. The exchange rates applied are as follows: Balance sheet items, except for equity accounts March 31, 2018 September 30, 2017 RMB:USD 6.2807 6.6549 HKD:USD 7.8491 7.8116 RM:USD 3.8635 4.2225 Items in the unaudited condensed consolidated statements of operations and comprehensive loss, and unaudited condensed consolidated statements of cash flows Six Months Ended March 31, 2018 2017 RMB:USD 6.4872 6.8614 HKD:USD 7.8177 7.7590 RM:USD 4.0431 4.3860 Research and Development Research and development expenses include payroll, employee benefits, stock-based compensation expense, and other related expenses associated with product development. Research and development expenses also include third-party development, programming costs, and localization costs incurred to translate software for local markets. Such costs related to software development are included in research and development expense until the point that technological feasibility is reached. Once technological feasibility is reached, such costs are capitalized and amortized as part of the cost of revenue over the estimated lives of the product. Recent accounting pronouncements On October 2, 2017, The FASB has issued Accounting Standards Update (ASU) No. 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” The ASU adds SEC paragraphs to the new revenue and leases sections of the Codification on the announcement the SEC Observer made at the 20 July 2017 Emerging Issues Task Force (EITF) meeting. The SEC Observer said that the SEC staff would not object if entities that are considered public business entities only because their financial statements or financial information is required to be included in another entity’s SEC filing use the effective dates for private companies when they adopt ASC 606, Revenue from Contracts with Customers, and ASC 842, Leases. This would include entities whose financial statements are included in another entity’s SEC filing because they are significant acquirees under Rule 3-05 of Regulation S-X, significant equity method investees under Rule 3-09 of Regulation S-X and equity method investees whose summarized financial information is included in a registrant’s financial statement notes under Rule 4-08(g) of Regulation S-X. The ASU also supersedes certain SEC paragraphs in the Codification related to previous SEC staff announcements and moves other paragraphs, upon adoption of ASC 606 or ASC 842. The Company does not expect that the adoption of this guidance will have a material impact on its unaudited condensed consolidated financial statements. On November 22, 2017, the FASB ASU No. 2017-14, “Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606): Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 116 and SEC Release 33-10403.” The ASU amends various paragraphs in ASC 220, Income Statement — Reporting Comprehensive Income; ASC 605, Revenue Recognition; and ASC 606, Revenue From Contracts With Customers, that contain SEC guidance. The amendments include superseding ASC 605-10-S25-1 (SAB Topic 13) as a result of SEC Staff Accounting Bulletin No. 116 and adding ASC 606-10-S25-1 as a result of SEC Release No. 33-10403. The Company does not expect that the adoption of this guidance will have a material impact on its unaudited condensed consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income.” The ASU amends ASC 220, Income Statement — Reporting Comprehensive Income In March 2018, the FASB issued ASU 2018-05 — Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”), which amends the FASB Accounting Standards Codification and XBRL Taxonomy based on the Tax Cuts and Jobs Act (the “Act”) that was signed into law on December 22, 2017 and Staff Accounting Bulletin No. 118 (“SAB 118”) that was released by the Securities and Exchange Commission. The Act changes numerous provisions that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits and may additionally have international tax consequences for many companies that operate internationally. The Company does not believe this guidance will have a material impact on its unaudited condensed consolidated financial statements. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the unaudited condensed consolidated financial position, statements of operations and cash flows. |
Prepayments, deposits and other
Prepayments, deposits and other receivables, net | 6 Months Ended |
Mar. 31, 2018 | |
Prepayments Deposits And Other Receivables Abstract | |
Prepayments, deposits and other receivables, net | 3. Prepayments, deposits and other receivables, net March 31, September 30, Prepayments to suppliers $ 296,777 $ 57,551 Rental and other deposits 170,039 107,040 Employee advances, and others 211,661 21,393 Sub total 678,477 185,984 Less: allowance for doubtful accounts (35,653 ) (33,436 ) Prepayments, deposits and other receivables, net $ 642,824 $ 152,548 No provision was recorded for the three and six months ended March 31, 2018 and 2017, respectively. |
Property and equipment, net
Property and equipment, net | 6 Months Ended |
Mar. 31, 2018 | |
Property and Equipment, Net [Abstract] | |
Property and equipment, net | 4. Property and equipment, net March 31, September 30, Electronic equipment $ 2,443,835 $ 2,333,401 Furniture and fixtures 74,377 80,780 Leasehold improvements 383,084 361,544 Construction in progress 184,450 - Total property and equipment 3,085,746 2,775,725 Less: Accumulated depreciation and amortization (2,566,258 ) (2,089,429 ) Total property and equipment, net $ 519,488 $ 686,296 Depreciation and amortization expense for the three and six months ended March 31, 2018 were $179,212 and $379,584, respectively. Depreciation and amortization expense for the three and six months ended March 31, 2017 were $206,633 and $417,421, respectively. |
Intangible assets
Intangible assets | 6 Months Ended |
Mar. 31, 2018 | |
Intangible Assets, Net [Abstract] | |
Intangible assets | 5. Intangible assets March 31, September 30, IP rights $ 1,410,335 $ 1,410,335 Other intangible assets 394,883 394,883 1,805,218 $ 1,805,218 Less: accumulated amortization (1,805,218 ) (1,805,218 ) Net intangible assets $ - $ - Due to continuing losses from operations, the Company impaired the remaining intangible assets in 2017. Amortization expense for the three and six months ended March 31, 2018 was $Nil. During the six months ended March 31, 2017, the Company recognized an impairment loss of $2,985,181 for the IP rights and other intangible assets. Amortization expense for the three and six months ended March 31, 2017 was $138,216 and $276,702, respectively. |
Accruals and other payables
Accruals and other payables | 6 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accruals and other payables | 6. Accruals and other payables March 31, September 30, Salary payable $ 308,921 $ 379,902 Advances from customers 43,723 61,078 Other tax payable 7,007 28,625 Accrued expenses 1,760,002 1,275,466 Other payables 566,064 116,448 Total $ 2,685,717 $ 1,861,519 |
Loan payable, other
Loan payable, other | 6 Months Ended |
Mar. 31, 2018 | |
Loans Payable [Abstract] | |
Loan payable, other | 7. Loan payable, other On May 15, 2017, the Company and Shenzhen Bayi Consulting Co. Ltd. (“Bayi”) entered into a line of credit agreement. Pursuant to the agreement, Bayi agreed to provide a line of credit in the maximum amount of $3 million to the Company on an as needed basis to support the Company’s working capital needs. Any withdrawal from this line is non-interest bearing and shall be repaid on the maturity date of the line of credit. The maturity date of the unsecured line of credit is May 15, 2018. The Company is in the process of negotiating with Bayi on an extension of this loan. As of March 31, 2018 and September 30, 2017, the loan payable balance to Bayi was $1,415,098 and 1,347,035, respectively. When the line of credit agreement was entered and funded, Bayi was a related party of the Company. Bayi is no longer a related party to the Company as of September 30, 2017. |
Related party transactions and
Related party transactions and balances | 6 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions and Balances [Abstract] | |
Related party transactions and balances | 8. Related party transactions and balances The table below sets forth related parties having transactions during the six months ended March 31, 2018 and balances as of March 31, 2018 and September 30, 2017, respectively. Name Relationship with the Company Moxian China Limited A below 5% shareholder of the Company Beijing Xinhua Huifeng Equity Investment Center (“Xinhua”) A Shareholder of the Company Zhongtou Huifeng Investment Management (Beijing) Co. Ltd (“Zhongtou”) Affiliated company of Xinhua Vertical Venture Capital Group Limited A below 1% shareholder of the Company Zhang Ying A below 1% shareholder of the Company as of September 30, 2017. Not a shareholder as of March 31, 2018 Liu Shu Juan A director of the Company and legal representative of Shanghai Shewn Wine Co. Ltd. On January 3, 2017, the Company issued 500,000 shares of its common stock to Shenzhen Bayi Consulting Co. Ltd. (“Bayi”) and Moxian China Limited at a price of $4.00 per share in full settlement of stock subscription payable in accordance to the note conversion agreements signed on September 7, 2016. As of September 30, 2017, Bayi was no longer a related party of the Company. Details of loans payable (receivable) – related parties are as follows: Nature and Company March 31,2018 September 30, 2017 Loan payable – related parties Vertical Venture Capital Group Limited $ 1,197,378 $ 1,133,228 Xinhua (25,475 ) (24,042 ) Liu Shu Juan 2,000,773 - Zhang Ying - 1,698 $ 3,172,676 $ 1,110,884 For the six months ended March 31, 2018, the Company obtained additional borrowings, net of repayments, aggregating $2,891,927 from related parties. For the six months period ended March 31, 2017, the Company repaid the loans, net of additional borrowings, aggregating $2,387,305 from related parties, respectively. The loans and advances made by the related parties to Moxian HK, Moxian Shenzhen, Moyi, Moxian Beijing and Moxian Malaysia and are unsecured, interest free and due on various dates specified on the loan agreements except for the loans from Liu Shu Juan. Convertible Debt - Liu Shu Juan On November 10, 2017, the Company and Ms. Liu Shu Juan, a director of the Company, entered into a convertible loan agreement for a line of credit of $1,000,000 or the RMB equivalent. Pursuant to the loan agreement, the Company will issue an unsecured convertible promissory note, which bears an interest rate of 4.75% per annum and is due in one year. Ms. Liu Shu Jian has the right to convert all or any portion of the outstanding and unpaid principal and interest of the note into shares of the Company's common stock at the conversion price set forth in the convertible debt agreement, as amended. As of March 31, 2018, the Company had drawn down $2,000,773 of the facility from the new credit facility line in the amount of $4 million granted by Ms. Liu (see detail at Note 2). The Company recorded $26,841 as the interest expense for this loan as of March 31, 2018. On May 8, 2018, the Company received a notice from Ms. Liu to convert the total sum outstanding of US$1,000,000 in principal and interest of $8,068 into 350,023 ordinary shares of common stock at a conversion price of $2.88 per share. |
Capital stock
Capital stock | 6 Months Ended |
Mar. 31, 2018 | |
Capital Stock [Abstract] | |
Capital stock | 9. Capital stock Public Offering Warrants In connection with and upon closing of the Public Offering on November 14, 2016, the Company issued warrants (the “Public Offering Warrants”) equal to four percent (4%) of the shares issued in the Public Offering, totaling 100,050 units, to the placement agents for the offering. The warrants carry a term of five years, and shall not be exercisable for a period of nine months from the closing of the Public Offering and shall be exercisable at a price equal to $4.60 per share. Management determined that these warrants meet the definition of a derivative under ASC 815-40, however, they fall under the scope exception which states that contracts issued that are both a) indexed to its own stock; and b) classified in stockholders' equity are not considered derivatives. The warrants were recorded at their fair value on the date of grant as a component of additional paid-in capital. The aggregated fair value of the Public Offering Warrants on November 14, 2016 was $280,042. The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying stock of $4.09; risk free rate of 1.66%; expected term of 5 years; exercise price of the warrants of $4.60; volatility of 90.7%; and expected future dividends of Nil. As of March 31, 2018, 100,050 shares of warrants were issued and outstanding; and none of the warrants has been exercised. |
Income taxes
Income taxes | 6 Months Ended |
Mar. 31, 2018 | |
Income Taxes [Abstract] | |
Income taxes | 10. Income taxes The Company and its subsidiaries file separate income tax returns. The United States of America Moxian is incorporated in the State of Nevada in the U.S. and is subject to U.S. federal corporate income taxes. The State of Nevada does not impose any state corporate income tax. As of March 31, 2018, future net operation losses of approximately $8.8 million are available to offset future operating income through 2036. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a U.S. corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. As the Company has a September 30 fiscal year-end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of approximately 24.5% for our fiscal year ending September 30, 2018, and 21% for subsequent fiscal years. Accordingly, we have to remeasure our deferred tax assets on net operating loss carryforward in the U.S at the lower enacted cooperated tax rate of 21%. However, this re-measurement has no effect on the Company’s income tax expenses as the Company has provided a 100% valuation allowance on its deferred tax assets previously. Additionally, the Tax Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The change in rate has caused us to remeasure all U.S. deferred income tax assets and liabilities for temporary differences and NOL carryforwards and recorded one time income tax payable to be paid in 8 years. However, this one-time transition tax has no effect on the Company’s income tax expenses as the Company has no undistributed foreign earnings prior to March 31, 2018, as the Company has cumulative foreign losses as of March 31, 2018. British Virgin Islands Moxian BVI is incorporated in the British Virgin Islands. Under the current laws of the British Virgin Islands, Moxian BVI is not subject to tax on income or capital gains. In addition, upon payments of dividends by Moxian BVI, no British Virgin Islands withholding tax is imposed. Hong Kong Moxian HK is incorporated in Hong Kong and Hong Kong’s profits tax rate is 16.5%. Moxian HK did not earn any income that was derived in Hong Kong for the three and six months ended March 31, 2018 and 2017, and therefore, Moxian HK was not subject to Hong Kong Profits Tax. Malaysia Moxian Malaysia did not have taxable income for the three and six months ended March 31, 2018 and 2017. Management estimated that Moxian Malaysia will not generate any taxable income in the future. PRC Effective from January 1, 2008, the PRC’s statutory income tax rate is 25%. The Company’s PRC subsidiaries are subject to an income tax rate of 25%, unless otherwise specified. As of March 31, 2018, the Company had net operating loss carry forwards of approximately $23.0 million in PRC tax jurisdiction, which expires in the years 2018 through 2022. 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 March 31, 2018. Management estimated that Moxian Shenzhen will not generate any taxable income in the future. Moyi was incorporated in the People’s Republic of China. Moyi did not generate taxable income in the People’s Republic of China for the period from July 19, 2013 (date of inception) to March 31, 2018. Moxian Beijing was incorporated in the People’s Republic of China. Moxian Beijing did not generate taxable income in the People’s Republic of China for the period from December 10, 2015 (date of inception) to March 31, 2018. The Company’s effective income tax rates were 0% and 0.7% for the six months ended March 31, 2018 and for the year ended September 30, 2017, respectively. Income tax mainly consists of foreign income tax at statutory rates and the effects of permanent and temporary differences. March 31, September 30, U.S. statutory rate 24.5 % 34.0 % Foreign income not registered in the U.S. (24.5 )% (34.0 )% PRC statutory rate 25.0 % 25.0 % Changes in valuation allowance and others (25.0 )% (24.3 )% Effective tax rate 0 % 0.7 % Because of the uncertainty regarding the Company’s ability to realize its deferred tax assets, a 100% valuation allowance has been established as of March 31, 2018 and September 30, 2017, respectively. As of March 31, 2018 and September 30, 2017, the valuation allowance was approximately $9.0 million and $9.0 million, respectively. For the three and six months ended March 31, 2018, there was a decrease of $0.6 million and a decrease of $0.04 million in the valuation allowance. For the three and six months ended March 31, 2017, the increase in valuation allowance was approximately $0.8 million and $1.4 million, respectively March 31, 2018 September 30, 2017 Deferred tax asset from net operating loss and carry-forwards $ 8,990,329 $ 9,032,129 Valuation allowance (8,990,329 ) (9,032,129 ) Deferred tax asset, net $ - $ - |
Commitments and contingencies
Commitments and contingencies | 6 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and contingencies | 11. Commitments and contingencies Operating Lease The Company leases a number of properties under operating leases. Rental expenses under operating leases for the three and six months ended March 31, 2018 were $160,143 and $321,707, respectively. Rental expenses under operating leases for the three and six months ended March 31, 2017 were $159,575 and $328,405 respectively. On January 12, 2018, Moxian Shenzhen signed a 5 year lease agreement to rent office buildings located in Pudong New District, Shanghai, China, as the research and development centre for the Company’s newly incorporated subsidiary, Moxian Information Technologies (Shanghai) Co. Ltd. (“Moxian Shanghai”). The average annual rent is approximately $696,812 (RMB4.52 million). As of March 31, 2018, the Company was obligated under non-cancellable operating leases for minimum rentals as follows: For the Twelve Months Ending March 31, 2019 $ 775,976 2020 774,894 2021 670,674 2022 704,569 2023 and thereafter 1,007,295 Total minimum lease payments $ 3,933,408 Arrangement with Xinhua New Media Co., Ltd The Company entered into an exclusive advertising agency agreement and sponsor agreement with Xinhua New Media Co., Ltd (“Xinhua New Media”). Pursuant to the agreements, the Company, as an exclusive agent, is authorized to operate and sell advertisements in the gaming channel of Xinhua New Media’s mobile application and sponsor related advertising events. The exclusive advertising agency agreement and sponsor agreement expired on December 31, 2020 and December 31, 2017, respectively. The Company entered into amendments with Xinhua News Media for both the agency agreement and sponsor agreement during the six months period ended March 31, 2017. The fees payable under the amended exclusive advertising agency agreement and sponsor agreement have been reduced. The amended payment schedule as of March 31, 2018 for the exclusive agency agreement and sponsor agreement is listed below: For the Twelve Months Ended March 31, 2019 $ 1,164,217 March 31, 2020 1,541,497 March 31, 2021 1,541,497 Total agency payments $ 4,247,211 For the six months ended March 31, 2018 and 2017, the Company incurred $765,993 and $120,994 advertising agent fee expense, respectively. For the three months ended March 31, 2018 and 2017, the Company incurred $392,633 and $365,287 advertising agent fee expense, respectively. For the six months ended March 31, 2018 and 2017, the Company incurred $109,068 and $45,831 sponsor expense, respectively. For the three months ended March 31, 2018 and 2017, the Company incurred $2,080 and $95,064 sponsor expense, respectively. These expenses were included in the selling, general and administrative expense. Legal Proceeding As of March 31, 2018, the Company is not aware of any material outstanding claim and litigation against them. |
Summary of principal accounti17
Summary of principal accounting policies (Policies) | 6 Months Ended |
Mar. 31, 2018 | |
Summary of Principal Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and reflect the activities of the following subsidiaries and the VIE: Moxian CN Samoa, Moxian BVI, Moxian HK, Moxian Shenzhen, Moxian Malaysia, Moyi, Moxian Beijing, Moxian Shanghai and Moxian IP Samoa. All intercompany transactions and balances have been eliminated in the consolidation. The unaudited interim condensed consolidated financial information as of March 31, 2018 and for the three and six months ended March 31, 2018 and 2017 have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K for the fiscal year ended September 30, 2017, previously filed with the SEC on January 8, 2018. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s unaudited condensed consolidated financial position as of March 31, 2018 and its unaudited condensed consolidated results of operations for the three and six months ended March 31, 2018 and 2017, and its unaudited condensed consolidated cash flows for the six months ended March 31, 2018 and 2017, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the fiscal year or any future periods. The following assets and liabilities of the VIE are included in the accompanying unaudited condensed consolidated financial statements of the Company as of March 31, 2018 and September 30, 2017: March 31, 2018 September 30, 2017 Current assets $ 2,702 $ 3,082 Non-current assets - - Total assets $ 2,702 $ 3,082 Current liabilities $ 896,567 $ 732,910 Non-current liabilities - - Total liabilities $ 896,567 $ 732,910 |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. |
Going Concern | Going Concern In assessing the Company’s liquidity and its ability to continue as a going concern, the Company monitors and analyzes its cash and cash equivalents and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. As of March 31, 2018, the Company’s current liabilities exceeded the current assets by approximately $7.4 million, its accumulated deficit was approximately $42.3 million and the Company has incurred losses since inception. On November 14, 2016, the Company completed its initial public offering (“IPO”) with net proceeds of $8.5 million after deducting placement agents’ commission and other offering costs. However, as of the date of this report, the Company has utilized all of the IPO proceeds and is not generating sufficient revenue to support its operations. The Company hopes to fund its cash flow shortfalls as follows: · Financial support commitments from the Company’s major stockholders and a related party; and · Seeking additional public and/or private issuance of securities. On November 10, 2017, the Company and Ms. Liu Shu Juan, a director of the Company, entered into a loan agreement for a line of credit of $1,000,000 or the RMB equivalent. Pursuant to the loan agreement, the Company will issue an unsecured convertible promissory note, which bears an interest rate of 4.75% per annum and is due in one year. Ms. Liu Shu Jian has the right to convert all or any portion of the outstanding and unpaid principal and interest of the note into shares of the Company’s common stock at the conversion price set forth in the convertible debt agreement, as amended. On May 8, 2018, the Company received a notice of conversion from Ms. Liu to convert an outstanding amount of $1,008,068 comprising $1 million of principal and $8,068 of interest into 350,023 ordinary shares of common stock at a volume-weighted price of $2.88 per share. On May 11, 2018, the board of directors ratified a credit facility of US$4 million previously granted by Ms. Liu for the purpose of working capital for the Company bearing interest of 4.75% per annum on the amount outstanding at the end of each month. The facility is due to be repaid by May 11, 2020. As of March 31, 2018, the Company has drawn down approximately $2,000,073 which includes interest accrued of the facility. (See Note 8) If the Company is unable to obtain the necessary additional capital on a timely basis and on acceptable terms, it will be unable to implement its current plans for expansion, repay debt obligations or respond to competitive pressures. Any of these factors would have a material adverse effect on its business, prospects, financial condition and results of operations and raise substantial doubts about the ability of the Company to continue as a going concern. The unaudited condensed consolidated financial statements for the three and six months ended March 31, 2018 have been prepared on a going concern basis due to the Company’s expectation that it may be able to receive further financial support from its major stockholders and related parties. They do not include any adjustments to reflect the possible future effects on the recoverability and classifications of assets, or the amounts and classifications of liabilities that may result from the inability of the Company to continue as a going concern. |
Risks and Uncertainties | Risks and Uncertainties The Company’s operations are substantially carried out in the People’s Republic of China (“PRC”). Accordingly, the Company’s business, financial condition and results of operations will be influenced by the political, economic and legal environments in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. |
Fair value of financial instruments | Fair value of financial instruments The Company follows the provisions of Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures.” ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1-Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2-Inputs other than quoted prices that are observable for the asset or liability in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3-Inputs are unobservable inputs which reflect management’s assumptions based on the best available information. The carrying value of cash and cash equivalents, restricted cash, prepayments, deposits and other receivables, accruals and other payables and, loans from related parties approximate their fair values because of the short-term nature of these instruments. |
Use of estimates | Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP 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 accompanying unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates required to be made by management include but not limited to, useful lives of property and equipment, intangible assets valuation, inventory valuation and deferred tax assets. Actual results could differ from those estimates. |
Restricted cash | Restricted cash Restricted cash represents cash held in an indemnification escrow account pursuant to the financing agreement signed with the placement agents. Under the terms of the placement agreement, $500,000 in cash funded an escrow account for a period of two years after the completion of the IPO; this amount was recorded as restricted cash, long-term as of September 30, 2017. On November 9, 2017, $330,000 was released from this escrow account with the approval of the placement agents and the escrow agents. |
Property and Equipment, net | Property and Equipment, net Property and equipment are recorded at cost less accumulated depreciation and impairment. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives as follows: Electronic equipment 3-6 years Furniture and fixtures 3-6 years Leasehold improvements Shorter of estimated useful life or term of lease |
Impairment of long-lived assets | Impairment of long-lived assets The Company classifies its long-lived assets into: (i) computer and office equipment; (ii) furniture and fixtures, (iii) leasehold improvements, and (iv) finite – lived intangible assets. Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be fully recoverable. It is possible that these assets could become impaired as a result of technology, economy or other industry changes. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, relief from royalty income approach, quoted market values and third-party independent appraisals, as considered necessary. The Company makes various assumptions and estimates regarding estimated future cash flows and other factors in determining the fair values of the respective assets. The assumptions and estimates used to determine future values and remaining useful lives of long-lived assets are complex and subjective. They can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as the Company’s business strategy and its forecasts for specific market expansion. Due to the continuing losses from operations with minimal revenues, the Company recorded a valuation reserve against its remaining intangible assets in 2017. |
Revenue recognition | Revenue recognition The Company currently recognizes revenue from the sale of merchandise through its online platforms. Revenue is 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. Revenue is recorded on a gross basis, net of surcharges and value added tax ("VAT"). The Company recorded revenue on a gross basis because the Company has the following indicators for gross reporting: it is the primary obligor of the sales arrangements, is subject to inventory risks of physical loss, has latitude in establishing prices, has discretion in suppliers' selection and assumes credit risks on receivables from customers. Revenue from advertising is recognized as advertisements are displayed. Revenue from software development services comprises revenue from time and material and fixed price contracts. Revenue from time and material contracts are recognized as related services are performed. Revenue on fixed price contracts is recognized in accordance with percentage of completion method of accounting. |
Income taxes | Income taxes The Company utilizes ASC Topic 740 (“ASC 740”) “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 unaudited condensed 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” clarifies the accounting for uncertainty in tax positions. This interpretation requires that an entity recognizes in the unaudited condensed 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 judgment 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 unaudited consolidated statements of operations and comprehensive losses. The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of March 31, 2018 and September 30, 2017, the Company did not have any unrecognized tax benefits. The Company does not anticipate any significant increase to its liability for unrecognized tax benefit within the next 12 months. As of March 31, 2018, the tax years ended December 31, 2012 through December 31, 2017 for the Company’s PRC entities remain open for statutory examination by the PRC tax authorities. |
Foreign currency transactions and translation | Foreign currency transactions and translation The reporting currency of the Company is United States Dollars (the “USD”) and the functional currency of Moxian Shenzhen, Moyi and Moxian Beijing is Renminbi (the “RMB”) as China is the primary economic environment in which they operate, the functional currency of Moxian HK is Hong Kong Dollar (the “HKD”), and the functional currency of Moxian Malaysia is Malaysia Ringgit (the “RM”). For financial reporting purposes, the financial statements of Moxian Shenzhen, Moyi, Moxian Beijing, Moxian HK and Moxian Malaysia, which are prepared using their respective functional currencies, are translated into the reporting currency, USD, so to be consolidated with the Company’s. Monetary assets and liabilities denominated in currencies other than the reporting currency are translated into the reporting currency at the rates of exchange ruling at the balance sheet date. Revenues and expenses are translated using average rates prevailing during the reporting period. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income (loss) in stockholders’ equity (deficiency). Transaction gains and losses are recognized in the unaudited consolidated condensed statements of operations and comprehensive loss. The exchange rates applied are as follows: Balance sheet items, except for equity accounts March 31, 2018 September 30, 2017 RMB:USD 6.2807 6.6549 HKD:USD 7.8491 7.8116 RM:USD 3.8635 4.2225 Items in the unaudited condensed consolidated statements of operations and comprehensive loss, and unaudited condensed consolidated statements of cash flows Six Months Ended March 31, 2018 2017 RMB:USD 6.4872 6.8614 HKD:USD 7.8177 7.7590 RM:USD 4.0431 4.3860 |
Research and Development | Research and Development Research and development expenses include payroll, employee benefits, stock-based compensation expense, and other related expenses associated with product development. Research and development expenses also include third-party development, programming costs, and localization costs incurred to translate software for local markets. Such costs related to software development are included in research and development expense until the point that technological feasibility is reached. Once technological feasibility is reached, such costs are capitalized and amortized as part of the cost of revenue over the estimated lives of the product. |
Recent accounting pronouncements | Recent accounting pronouncements On October 2, 2017, The FASB has issued Accounting Standards Update (ASU) No. 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” The ASU adds SEC paragraphs to the new revenue and leases sections of the Codification on the announcement the SEC Observer made at the 20 July 2017 Emerging Issues Task Force (EITF) meeting. The SEC Observer said that the SEC staff would not object if entities that are considered public business entities only because their financial statements or financial information is required to be included in another entity’s SEC filing use the effective dates for private companies when they adopt ASC 606, Revenue from Contracts with Customers, and ASC 842, Leases. This would include entities whose financial statements are included in another entity’s SEC filing because they are significant acquirees under Rule 3-05 of Regulation S-X, significant equity method investees under Rule 3-09 of Regulation S-X and equity method investees whose summarized financial information is included in a registrant’s financial statement notes under Rule 4-08(g) of Regulation S-X. The ASU also supersedes certain SEC paragraphs in the Codification related to previous SEC staff announcements and moves other paragraphs, upon adoption of ASC 606 or ASC 842. The Company does not expect that the adoption of this guidance will have a material impact on its unaudited condensed consolidated financial statements. On November 22, 2017, the FASB ASU No. 2017-14, “Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606): Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 116 and SEC Release 33-10403.” The ASU amends various paragraphs in ASC 220, Income Statement — Reporting Comprehensive Income; ASC 605, Revenue Recognition; and ASC 606, Revenue From Contracts With Customers, that contain SEC guidance. The amendments include superseding ASC 605-10-S25-1 (SAB Topic 13) as a result of SEC Staff Accounting Bulletin No. 116 and adding ASC 606-10-S25-1 as a result of SEC Release No. 33-10403. The Company does not expect that the adoption of this guidance will have a material impact on its unaudited condensed consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income.” The ASU amends ASC 220, Income Statement — Reporting Comprehensive Income In March 2018, the FASB issued ASU 2018-05 — Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”), which amends the FASB Accounting Standards Codification and XBRL Taxonomy based on the Tax Cuts and Jobs Act (the “Act”) that was signed into law on December 22, 2017 and Staff Accounting Bulletin No. 118 (“SAB 118”) that was released by the Securities and Exchange Commission. The Act changes numerous provisions that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits and may additionally have international tax consequences for many companies that operate internationally. The Company does not believe this guidance will have a material impact on its unaudited condensed consolidated financial statements. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the unaudited condensed consolidated financial position, statements of operations and cash flows. |
Summary of principal accounti18
Summary of principal accounting policies (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Summary of Principal Accounting Policies [Abstract] | |
Schedule of assets and liabilities of VIE included in consolidated financial statements | March 31, 2018 September 30, 2017 Current assets $ 2,702 $ 3,082 Non-current assets - - Total assets $ 2,702 $ 3,082 Current liabilities $ 896,567 $ 732,910 Non-current liabilities - - Total liabilities $ 896,567 $ 732,910 |
Schedule of depreciation and amortization over the estimated useful lives | Electronic equipment 3-6 years Furniture and fixtures 3-6 years Leasehold improvements Shorter of estimated useful life or term of lease |
Schedule of exchange rates of balance sheet items, except for equity accounts | Balance sheet items, except for equity accounts March 31, 2018 September 30, 2017 RMB:USD 6.2807 6.6549 HKD:USD 7.8491 7.8116 RM:USD 3.8635 4.2225 |
Schedule of items in condensed consolidated statements of operations and comprehensive loss, and condensed consolidated statements of cash flows | Six Months Ended March 31, 2018 2017 RMB:USD 6.4872 6.8614 HKD:USD 7.8177 7.7590 RM:USD 4.0431 4.3860 |
Prepayments, deposits and oth19
Prepayments, deposits and other receivables, net (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Prepayments Deposits And Other Receivables Abstract | |
Schedule on prepayments deposits and other receivable | March 31, September 30, Prepayments to suppliers $ 296,777 $ 57,551 Rental and other deposits 170,039 107,040 Employee advances, and others 211,661 21,393 Sub total 678,477 185,984 Less: allowance for doubtful accounts (35,653 ) (33,436 ) Prepayments, deposits and other receivables, net $ 642,824 $ 152,548 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Property and Equipment, Net [Abstract] | |
Schedule of property and equipment, net | March 31, September 30, Electronic equipment $ 2,443,835 $ 2,333,401 Furniture and fixtures 74,377 80,780 Leasehold improvements 383,084 361,544 Construction in progress 184,450 - Total property and equipment 3,085,746 2,775,725 Less: Accumulated depreciation and amortization (2,566,258 ) (2,089,429 ) Total property and equipment, net $ 519,488 $ 686,296 |
Intangible assets (Tables)
Intangible assets (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Intangible Assets, Net [Abstract] | |
Schedule of intangible assets | March 31, September 30, IP rights $ 1,410,335 $ 1,410,335 Other intangible assets 394,883 394,883 1,805,218 $ 1,805,218 Less: accumulated amortization (1,805,218 ) (1,805,218 ) Net intangible assets $ - $ - |
Accruals and other payables (Ta
Accruals and other payables (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accruals and other payables | March 31, September 30, Salary payable $ 308,921 $ 379,902 Advances from customers 43,723 61,078 Other tax payable 7,007 28,625 Accrued expenses 1,760,002 1,275,466 Other payables 566,064 116,448 Total $ 2,685,717 $ 1,861,519 |
Related party transactions an23
Related party transactions and balances (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions and Balances [Abstract] | |
Schedule of relationship of related party transactions | Name Relationship with the Company Moxian China Limited A below 5% shareholder of the Company Beijing Xinhua Huifeng Equity Investment Center (“Xinhua”) A Shareholder of the Company Zhongtou Huifeng Investment Management (Beijing) Co. Ltd (“Zhongtou”) Affiliated company of Xinhua Vertical Venture Capital Group Limited A below 1% shareholder of the Company Zhang Ying A below 1% shareholder of the Company as of September 30, 2017. Not a shareholder as of March 31, 2018 Liu Shu Juan A director of the Company and legal representative of Shanghai Shewn Wine Co. Ltd. |
Schedule of loans payable (receivable) - related parties | Nature and Company March 31,2018 September 30, 2017 Loan payable – related parties Vertical Venture Capital Group Limited $ 1,197,378 $ 1,133,228 Xinhua (25,475 ) (24,042 ) Liu Shu Juan 2,000,773 - Zhang Ying - 1,698 $ 3,172,676 $ 1,110,884 |
Income taxes (Tables)
Income taxes (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Income Taxes [Abstract] | |
Schedule of foreign income tax at statutory rates and the effects of permanent and temporary differences | March 31, September 30, U.S. statutory rate 24.5 % 34.0 % Foreign income not registered in the U.S. (24.5 )% (34.0 )% PRC statutory rate 25.0 % 25.0 % Changes in valuation allowance and others (25.0 )% (24.3 )% Effective tax rate 0 % 0.7 % |
Schedule of deferred tax assets | March 31, 2018 September 30, 2017 Deferred tax asset from net operating loss and carry-forwards $ 8,990,329 $ 9,032,129 Valuation allowance (8,990,329 ) (9,032,129 ) Deferred tax asset, net $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Schedule of non-cancellable operating leases for minimum rentals | For the Twelve Months Ending March 31, 2019 $ 775,976 2020 774,894 2021 670,674 2022 704,569 2023 and thereafter 1,007,295 Total minimum lease payments $ 3,933,408 |
Schedule of payments for agency agreement and sponsor agreement | For the Twelve Months Ended March 31, 2019 $ 1,164,217 March 31, 2020 1,541,497 March 31, 2021 1,541,497 Total agency payments $ 4,247,211 |
Organization and nature of op26
Organization and nature of operations (Detail Textuals) - IPO $ / shares in Units, $ in Millions | Nov. 14, 2016USD ($)$ / sharesshares |
Organization and Nature of Operations [Line Items] | |
Issue of common stock, shares | shares | 2,501,250 |
Price per share | $ / shares | $ 4 |
Net proceeds from offering | $ | $ 8.5 |
Summary of principal accounti27
Summary of principal accounting policies (Details) - USD ($) | Mar. 31, 2018 | Sep. 30, 2017 |
Summary of Principal Accounting Policies [Abstract] | ||
Current assets | $ 2,702 | $ 3,082 |
Non-current assets | 0 | 0 |
Total assets | 2,702 | 3,082 |
Current liabilities | 896,567 | 732,910 |
Non-current liabilities | 0 | 0 |
Total liabilities | $ 896,567 | $ 732,910 |
Summary of principal accounti28
Summary of principal accounting policies (Details 1) | 6 Months Ended |
Mar. 31, 2018 | |
Electronic equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Electronic equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 6 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 6 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, description | Shorter of estimated useful life or term of lease |
Summary of principal accounti29
Summary of principal accounting policies (Details 2) | Mar. 31, 2018¥ / shares | Mar. 31, 2018$ / shares | Mar. 31, 2018RM / shares | Sep. 30, 2017¥ / shares | Sep. 30, 2017$ / shares | Sep. 30, 2017RM / shares |
Summary of Principal Accounting Policies [Abstract] | ||||||
Balance sheet items, except for equity accounts | (per share) | ¥ 6.2807 | $ 7.8491 | RM 3.8635 | ¥ 6.6549 | $ 7.8116 | RM 4.2225 |
Summary of principal accounti30
Summary of principal accounting policies (Details 3) | 6 Months Ended | |||||
Mar. 31, 2018¥ / shares | Mar. 31, 2018$ / shares | Mar. 31, 2018RM / shares | Mar. 31, 2017¥ / shares | Mar. 31, 2017$ / shares | Mar. 31, 2017RM / shares | |
Summary of Principal Accounting Policies [Abstract] | ||||||
Items in statements of operations and comprehensive loss and statements cash flows | (per share) | ¥ 6.4872 | $ 7.8177 | RM 4.0431 | ¥ 6.8614 | $ 7.7590 | RM 4.3860 |
Summary of principal accounti31
Summary of principal accounting policies (Detail Textuals) - USD ($) | Nov. 10, 2017 | Nov. 09, 2017 | Nov. 14, 2016 | May 08, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | May 11, 2018 |
Summary Of Principal Accounting Policies [Line Items] | ||||||||
Current liabilities exceeded current assets | $ (7,400,000) | |||||||
Accumulated deficit | $ (38,682,546) | (42,308,144) | ||||||
Restricted cash, long-term under placement agreement | $ 500,000 | |||||||
Lock-in period for escrow account | 2 years | |||||||
IPO proceeds released from escrow account | $ 330,000 | (330,000) | $ 500,000 | |||||
IPO | ||||||||
Summary Of Principal Accounting Policies [Line Items] | ||||||||
Net proceeds from offering | $ 8,500,000 | |||||||
Ms. Liu Shu Juan | ||||||||
Summary Of Principal Accounting Policies [Line Items] | ||||||||
Line of credit | $ 2,000,073 | |||||||
Ms. Liu Shu Juan | Subsequent event | ||||||||
Summary Of Principal Accounting Policies [Line Items] | ||||||||
Convertible note interest rate | 4.75% | |||||||
Line of credit | $ 4,000,000 | |||||||
Convertible loan agreement | Ms. Liu Shu Juan | ||||||||
Summary Of Principal Accounting Policies [Line Items] | ||||||||
Maximum borrowing capacity under line of credit facility | $ 1,000,000 | |||||||
Convertible note interest rate | 4.75% | |||||||
Convertible note, term | 1 year | |||||||
Convertible loan agreement | Ms. Liu Shu Juan | Subsequent event | ||||||||
Summary Of Principal Accounting Policies [Line Items] | ||||||||
Line of credit | $ 1,000,000 | |||||||
Amount of interest | 8,068 | |||||||
Value of share issued for conversion of debt | $ 1,008,068 | |||||||
Share issued for conversion of debt (in shares) | 350,023 | |||||||
Conversion price per share for conversion of debt | $ 2.88 |
Prepayments, deposits and oth32
Prepayments, deposits and other receivables, net (Details) - USD ($) | Mar. 31, 2018 | Sep. 30, 2017 |
Prepayments Deposits And Other Receivables Abstract | ||
Prepayments to suppliers | $ 296,777 | $ 57,551 |
Rental and other deposits | 170,039 | 107,040 |
Employee advances, and others | 211,661 | 21,393 |
Sub total | 678,477 | 185,984 |
Less: allowance for doubtful accounts | (35,653) | (33,436) |
Prepayments, deposits and other receivables, net | $ 642,824 | $ 152,548 |
Property and equipment, net (De
Property and equipment, net (Details) - USD ($) | Mar. 31, 2018 | Sep. 30, 2017 |
Summary of Property and equipment | ||
Total property and equipment | $ 3,085,746 | $ 2,775,725 |
Less: Accumulated depreciation and amortization | (2,566,258) | (2,089,429) |
Total property and equipment, net | 519,488 | 686,296 |
Electronic equipment | ||
Summary of Property and equipment | ||
Total property and equipment | 2,443,835 | 2,333,401 |
Furniture and fixtures | ||
Summary of Property and equipment | ||
Total property and equipment | 74,377 | 80,780 |
Leasehold improvements | ||
Summary of Property and equipment | ||
Total property and equipment | 383,084 | $ 361,544 |
Construction in progress | ||
Summary of Property and equipment | ||
Total property and equipment | $ 184,450 |
Property and equipment, net (34
Property and equipment, net (Detail Textuals) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Property and Equipment, Net [Abstract] | ||||
Depreciation and amortization | $ 179,212 | $ 206,633 | $ 379,584 | $ 417,421 |
Intangible assets (Details)
Intangible assets (Details) - USD ($) | Mar. 31, 2018 | Sep. 30, 2017 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 1,805,218 | $ 1,805,218 |
Less: accumulated amortization | (1,805,218) | (1,805,218) |
Net intangible assets | 0 | 0 |
IP rights | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 1,410,335 | 1,410,335 |
Other intangible assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 394,883 | $ 394,883 |
Intangible assets (Detail Textu
Intangible assets (Detail Textuals) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Intangible Assets, Net [Abstract] | ||||
Amortization expense | $ 138,216 | $ 276,702 | ||
Impairment loss on IP rights and other intangible assets | $ 2,985,181 |
Accruals and other payables (De
Accruals and other payables (Details) - USD ($) | Mar. 31, 2018 | Sep. 30, 2017 |
Payables and Accruals [Abstract] | ||
Salary payable | $ 308,921 | $ 379,902 |
Advances from customers | 43,723 | 61,078 |
Other tax payable | 7,007 | 28,625 |
Accrued expenses | 1,760,002 | 1,275,466 |
Other payables | 566,064 | 116,448 |
Total | $ 2,685,717 | $ 1,861,519 |
Loan payable, other (Detail Tex
Loan payable, other (Detail Textuals) - USD ($) | Mar. 31, 2018 | Sep. 30, 2017 | May 15, 2017 |
Loans Payable [Line Items] | |||
Amount of loan payable | $ 3,172,676 | $ 1,110,884 | |
Shenzhen Bayi Consulting Co. Ltd. ("Bayi") | |||
Loans Payable [Line Items] | |||
Maximum borrowing capacity under line of credit facility | $ 3,000,000 | ||
Amount of loan payable | $ 1,415,098 | $ 1,347,035 |
Related party transactions an39
Related party transactions and balances (Details) | 6 Months Ended |
Mar. 31, 2018 | |
Moxian China Limited | |
Related Party Transaction [Line Items] | |
Related party transaction relationship, Description | A below 5% shareholder of the Company |
Beijing Xinhua Huifeng Equity Investment Center ("Xinhua") | |
Related Party Transaction [Line Items] | |
Related party transaction relationship, Description | A Shareholder of the Company |
Zhongtou Huifeng Investment Management (Beijing) Co. Ltd ("Zhongtou") | |
Related Party Transaction [Line Items] | |
Related party transaction relationship, Description | Affiliated company of Xinhua |
Vertical Venture Capital Group Limited | |
Related Party Transaction [Line Items] | |
Related party transaction relationship, Description | A below 1% shareholder of the Company |
Zhang Ying | |
Related Party Transaction [Line Items] | |
Related party transaction relationship, Description | A below 1% shareholder of the Company as of September 30, 2017. Not a shareholder as of March 31, 2018 |
Liu Shu Juan | |
Related Party Transaction [Line Items] | |
Related party transaction relationship, Description | A director of the Company and legal representative of Shanghai Shewn Wine Co. Ltd. |
Related party transactions an40
Related party transactions and balances (Details 1) - USD ($) | Mar. 31, 2018 | Sep. 30, 2017 |
Related Party Transaction [Line Items] | ||
Loans payable (receivable) - related parties | $ 3,172,676 | $ 1,110,884 |
Vertical Venture Capital Group Limited | ||
Related Party Transaction [Line Items] | ||
Loans payable (receivable) - related parties | 1,197,378 | 1,133,228 |
Xinhua | ||
Related Party Transaction [Line Items] | ||
Loans payable (receivable) - related parties | (25,475) | (24,042) |
Liu Shu Juan | ||
Related Party Transaction [Line Items] | ||
Loans payable (receivable) - related parties | 2,000,773 | 0 |
Zhang Ying | ||
Related Party Transaction [Line Items] | ||
Loans payable (receivable) - related parties | $ 0 | $ 1,698 |
Related party transactions an41
Related party transactions and balances (Detail Textuals) | Nov. 10, 2017USD ($)Day | Jan. 03, 2017$ / sharesshares | May 08, 2018USD ($)$ / sharesshares | Mar. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | May 11, 2018USD ($) | Sep. 30, 2017USD ($) |
Related Party Transaction [Line Items] | ||||||||
Line of credit | $ 1,415,098 | $ 1,415,098 | $ 1,347,035 | |||||
Loans payable (receivable) - related parties | 3,172,676 | 3,172,676 | 1,110,884 | |||||
Bayi and Moxian China Limited | ||||||||
Related Party Transaction [Line Items] | ||||||||
Shares to be issued as stock subscription payable | shares | 500,000 | |||||||
Price per share | $ / shares | $ 4 | |||||||
Ms. Liu Shu Juan | ||||||||
Related Party Transaction [Line Items] | ||||||||
Line of credit | 2,000,773 | 2,000,773 | ||||||
Loans payable (receivable) - related parties | 2,000,773 | 2,000,773 | $ 0 | |||||
Interest expenses | 26,841 | |||||||
Ms. Liu Shu Juan | Subsequent event | ||||||||
Related Party Transaction [Line Items] | ||||||||
Interest rate | 4.75% | |||||||
Line of credit | $ 4,000,000 | |||||||
Ms. Liu Shu Juan | Line of credit | ||||||||
Related Party Transaction [Line Items] | ||||||||
Maximum borrowing capacity under line of credit facility | $ 4,000,000 | 4,000,000 | ||||||
Related parties | ||||||||
Related Party Transaction [Line Items] | ||||||||
Additional borrowings, net of repayment | $ 2,891,927 | |||||||
Vertical Venture, Moxian China Limited, Xinhua and other related parties | ||||||||
Related Party Transaction [Line Items] | ||||||||
Repayment of loan, net of borrowings | $ 2,387,305 | |||||||
Convertible loan agreement | Ms. Liu Shu Juan | ||||||||
Related Party Transaction [Line Items] | ||||||||
Maximum borrowing capacity under line of credit facility | $ 1,000,000 | |||||||
Interest rate | 4.75% | |||||||
Convertible note, term | 1 year | |||||||
Consecutive business days | Day | 20 | |||||||
Convertible loan agreement | Ms. Liu Shu Juan | Subsequent event | ||||||||
Related Party Transaction [Line Items] | ||||||||
Line of credit | $ 1,000,000 | |||||||
Value of share issued for conversion of debt | 1,008,068 | |||||||
Amount of interest | $ 8,068 | |||||||
Share issued for conversion of debt (in shares) | shares | 350,023 | |||||||
Conversion price per share for conversion of debt | $ / shares | $ 2.88 |
Capital stock (Detail Textuals)
Capital stock (Detail Textuals) - Warrant | Nov. 14, 2016USD ($)$ / sharesshares |
Capital Unit [Line Items] | |
Percentage of warrants issued equal to shares | 4.00% |
Warrants issued | shares | 100,050 |
Term of warrant | 5 years |
Exercise price of warrants | $ 4.60 |
Fair value of warrants | $ | $ 280,042 |
Valuation technique | Black-Scholes pricing model |
Market value of underlying stock | $ 4.09 |
Risk free rate | 1.66% |
Expected term | 5 years |
Volatility | 90.70% |
Expected future dividends |
Income taxes (Details)
Income taxes (Details) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Sep. 30, 2017 | |
Income Taxes [Abstract] | ||
U.S. statutory rate | 24.50% | 34.00% |
Foreign income not registered in the U.S. | (24.50%) | (34.00%) |
PRC statutory rate | 25.00% | 25.00% |
Changes in valuation allowance and others | (25.00%) | (24.30%) |
Effective tax rate | 0.00% | 0.70% |
Income taxes (Details 1)
Income taxes (Details 1) - USD ($) | Mar. 31, 2018 | Sep. 30, 2017 |
Income Taxes [Abstract] | ||
Deferred tax asset from net operating loss and carry-forwards | $ 8,990,329 | $ 9,032,129 |
Valuation allowance | (8,990,329) | (9,032,129) |
Deferred tax asset, net | $ 0 | $ 0 |
Income taxes (Detail Textuals)
Income taxes (Detail Textuals) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Taxes [Line Items] | ||||||
Corporate tax rate | 24.50% | 34.00% | ||||
Operating loss carryforwards | $ 8,800,000 | $ 8,800,000 | ||||
Operating loss carryforwards, description | Future net operation losses of approximately $8.8 million are available to offset future operating income through 2036. | |||||
Income tax payable in years | 8 years | |||||
Effective tax rate | 0.00% | 0.70% | ||||
Deferred tax assets, valuation allowance percent | 100.00% | 100.00% | 100.00% | |||
Valuation allowance | $ 8,990,329 | $ 8,990,329 | $ 9,032,129 | |||
Increase (decrease) in valuation allowance | (600,000) | $ 800,000 | $ (40,000) | $ 1,400,000 | ||
Tax Year 2017 | ||||||
Income Taxes [Line Items] | ||||||
Corporate tax rate | 35.00% | |||||
Tax Year 2018 | ||||||
Income Taxes [Line Items] | ||||||
Corporate tax rate | 21.00% | |||||
Fiscal Year 2018 | ||||||
Income Taxes [Line Items] | ||||||
Corporate tax rate | 24.50% | |||||
Fiscal year 2019 and beyond | ||||||
Income Taxes [Line Items] | ||||||
Corporate tax rate | 21.00% | |||||
Hong Kong | ||||||
Income Taxes [Line Items] | ||||||
Effective tax rate | 16.50% | 16.50% | ||||
Income earned | $ 0 | $ 0 | ||||
PRC | ||||||
Income Taxes [Line Items] | ||||||
Corporate tax rate | 25.00% | |||||
Operating loss carryforwards | $ 23,000,000 | $ 23,000,000 | ||||
PRC | Minimum | ||||||
Income Taxes [Line Items] | ||||||
Operating loss carry forwards expiration date | Dec. 31, 2018 | |||||
PRC | Maximum | ||||||
Income Taxes [Line Items] | ||||||
Operating loss carry forwards expiration date | Dec. 31, 2022 | |||||
Malaysia | ||||||
Income Taxes [Line Items] | ||||||
Income earned | $ 0 | $ 0 |
Commitments and contingencies46
Commitments and contingencies (Details) | Mar. 31, 2018USD ($) |
For the Twelve Months Ending March 31, | |
2,019 | $ 775,976 |
2,020 | 774,894 |
2,021 | 670,674 |
2,022 | 704,569 |
2023 and thereafter | 1,007,295 |
Total minimum lease payments | $ 3,933,408 |
Commitments and contingencies47
Commitments and contingencies (Details 1) | Mar. 31, 2018USD ($) |
For the Twelve Months Ended | |
March 31, 2019 | $ 1,164,217 |
March 31, 2020 | 1,541,497 |
March 31, 2021 | 1,541,497 |
Total agency payments | $ 4,247,211 |
Commitments and contingencies48
Commitments and contingencies (Detail Textuals) ¥ in Thousands | Jan. 12, 2018USD ($) | Jan. 12, 2018CNY (¥) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) |
Loss Contingencies [Line Items] | ||||||||
Rental expenses under operating leases | $ 160,143 | $ 159,575 | $ 321,707 | $ 328,405 | ||||
Advertising agent fee expense | $ 392,633 | $ 365,287 | 765,993 | 120,994 | ||||
Sponsor expense | $ 2,080 | $ 95,064 | $ 109,068 | $ 45,831 | ||||
Lease agreement | ||||||||
Loss Contingencies [Line Items] | ||||||||
Number of year lease agreement | 5 years | 5 years | ||||||
Average annual rent | $ 696,812 | ¥ 4,520 | ||||||
Xinhua New Media Co. Ltd | Advertising agency agreement | ||||||||
Loss Contingencies [Line Items] | ||||||||
Expiration date of agreement | Dec. 31, 2020 | |||||||
Xinhua New Media Co. Ltd | Sponsor Agreement | ||||||||
Loss Contingencies [Line Items] | ||||||||
Expiration date of agreement | Dec. 31, 2017 |