Yes! It’s time for New Year’s resolutions, and the folks at Moxian have just made theirs. Moxian, Inc (OTCQB: MOXC) recently filed its Annual Report (10-K) for the financial year ending September 30, 2015, and that report revealed a lot of goodies for the festive season. Moxian has set out to serve China’s huge Online-to-Offline (O2O) market. The company has built an online platform for small- and medium-sized enterprises (SMEs) that already operate brick-and-mortar establishments to extend their marketing reach, and it has strengthened the effectiveness of that online presence by making the Moxian platform not only a marketplace where merchant clients and shoppers meet but a social media outlet where shoppers can discuss, recommend and chat. The Moxian platform is a powerful combination of online shopping bazaar and social medium. It also offers merchant clients powerful data analytics on buying patterns and other customer demographics that allow the direction of targeted advertising campaigns and promotions.
Although Moxian is a development stage company, it has been generating revenue since the latter half of 2014. The company has high operating leverage: a large proportion of costs are fixed and the variable cost of adding new customers is minimal. Consequently, most of new revenue improves the contribution margin. Management estimates that operating breakeven will be achieved with 25,000 paying merchants. At an average of $1,200 per annum in merchant fees, a merchant client base of 25,000 would deliver $30 million in annual sales.
Moxian’s game plan is to quickly add merchant clients with subscription accounts. It expects that as the number of merchant clients increases so will the base of shoppers (Users), until a critical mass is reached. At this point, the Moxian+ platform will develop an ongoing momentum. This marketing strategy has had initial success. The company was able to sign up 30,000 merchants in Shenzhen, China, for beta testing of the earlier Moxian platform, Moxian 1.0. Feedback about functionality and user experience from this trial has resulted in the development of the current platform, Moxian+. That database of 30,000 merchants is currently being targeted for conversion to paying subscriptions in the new Moxian+ platform. The prospects look good. The company was able to sign up those 30,000 merchants in Shenzhen with a sales force of 20. Now, it plans to have a sales force of 80 people by the end of 2016 in its recently opened office in Beijing. Moxian is also currently scheduling sales events in Shenzhen for the Chinese New Year season, as it did for the Christmas season, to promote its products and services to merchants. During 2016, the company plans to utilize third party distributors with an existing base of merchants to market its products.
Moxian’s balance sheet shows the company’s improving position. Net tangible assets more than doubled from $2,860,510 at 30-Sep-14 to $6,421,312 at 30-Sep-15. Cash and cash equivalents rose from $1,770,196 in 2014 to $2,398,713 in 2015. In addition, the company has been buttressed by substantial capital infusions amounting to $16,187,663, and further improvement to its capital stock is imminent. Under a subscription agreement with Beijing Xinhua Huifeng Equity Investment Centre, the company has received a deposit of $5,505,915, part payment in an agreement to sell an aggregate of 8,169,000 shares of its common stock at $1.00 per share to Xinhua Huifeng. Xinhua Huifeng was expected to exercise its rights under the agreement by December 31, 2015.
Moxian’s investor metrics support its promise. It does well in a peer comparison of development stage companies. Take 3TL Technologies Corp (OTCQB: TTMZF); this outfit operates in the consumer internet advertising sector and is a provider of social media engagement and data mining solutions. 3TL Technologies’ earnings per share (EPS) at June 30, 2015, were $(0.01), while its market capitalization was $5.3 million. Then there’s SpendSmart Networks, Inc (OTCQB: SSPC) which focuses on connecting merchants and consumers through its suite of services that includes digital engagement and mobile marketing. SpendSmart (DBA SMS Masterminds) has an EPS of $(0.15) and a market cap of $30 million. And then there’s Keek, Inc (OTCQX: KEEKF); Keek is a leading mobile video social network with more than 71 million members worldwide. Its network is accessed by the Keek app, which is available in over 190 countries across 6 global regions and in 36 languages. Keek has an EPS of $(0.22) and a market cap of $2.9 million. Compared to these tech startups, Moxian is a Jupiter among lesser planets. Even though its EPS is $(0.02), its market cap, reflecting the company’s huge potential, is over $1 billion. Moxian’s trajectory seems headed into orbit. Could it be the next Tencent Holdings?
For more information, visit the company’s website at http://ir.moxian.com/html-en/
Let us hear your thoughts: Moxian, Inc. Message Board
