Virginia
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11-3588546
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(State or other jurisdiction of
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(I.R.S. employer
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Incorporation or organization)
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identification number)
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Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer ¨ (Do not check if a smaller reporting company)
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Smaller reporting company x
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PART I. FINANCIAL INFORMATION
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1
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Item 1. Financial Statements
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1
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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1
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
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9
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Item 4/4T. Controls and Procedures
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9
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PART II. OTHER INFORMATION
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9
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Item 1. Legal Proceedings
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9
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Item 1A. Risk Factors
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10
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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10
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Item 3. Defaults upon Senior Securities
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10
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Item 4. Mine Safety Disclosures
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10
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Item 5. Other Information
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10
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Item 6. Exhibits
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10
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i | ||
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·
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the ability to timely and proper deliver shipping agency, shipping and chartering and inland transportation management services;
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·
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its dependence on a limited number of major customers and related parties;
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·
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political and economic factors in the Peoples’ Republic of China (“PRC”);
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·
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the Company’s ability to expand and grow its lines of business;
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·
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unanticipated changes in general market conditions or other factors, which may result in cancellations or reductions in the need for the Company’s services;
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·
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a weakening of economic conditions which would reduce demand for services provided by the Company and could adversely affect profitability;
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·
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the effect of terrorist acts, or the threat thereof, on consumer confidence and spending, or the production and distribution of product and raw materials which could, as a result, adversely affect the Company’s shipping agency services, operations and financial performance;
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·
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the acceptance in the marketplace of the Company’s new lines of services;
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·
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foreign currency exchange rate fluctuations;
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·
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hurricanes or other natural disasters;
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·
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the Company’s ability to identify and successfully execute cost control initiatives;
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·
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the impact of quotas, tariffs, or safeguards on the importation or exportation of the Company’s customer’s products; or
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·
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other risks outlined above and in the Company’s other filings made periodically by the Company.
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ii | ||
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·
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Sino-Global Shipping Australia: This entity serves the needs of customers shipping into and out of Western Australia. Through the Company’s relationship with Monson Agencies Australia (one of the largest shipping agency service providers in Australia), we are able to provide general shipping agency services to all ports in Australia.
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·
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Sino-Global Shipping Hong Kong: This is the Company’s control and management center for southern Chinese ports. It gives us the ability to offer comprehensive shipping agency services to vessels going to and from the PRC as well as customized shipping and chartering services. Through our relationship with Forbes & Company Limited (“Forbes”), a listed company on the Bombay Stock Exchange and one of the largest shipping and chartering service providers in India, we are able to provide general shipping agency services to all ports in India.
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·
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Sino-Global Shipping Canada: This entity provides services for ships loading commodities at Canadian ports and delivering them to the PRC. It currently provides shipping agency services to Baosteel’s vessels in Canada.
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·
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Sino-Global Shipping New York: This entity is established to facilitate the development of an integrated international and local shipping agency network and help generate new business referral activities.
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1 | ||
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Six Months Ended December 31,2013
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Six Months Ended December 31,2012
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||||||||||||||||||||
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Inland
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Inland
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|||
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Shipping and
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Transportation
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Shipping and
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Transportation
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Shipping
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Chartering
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Management
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Shipping
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Chartering
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Management
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||||||
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Agency Service
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Services
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Services
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Consolidated
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Agency Service
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Services
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Services
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Consolidated
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||||||||
Revenues
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$
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3,402,564
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$
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1,937,196
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$
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450,090
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$
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5,789,850
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$
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14,311,829
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$
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-
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$
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-
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$
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14,311,829
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Cost of revenues
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$
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2,773,460
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1,291,048
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$
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64,063
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$
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4,128,571
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$
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13,124,226
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$
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-
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$
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-
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$
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13,124,226
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Gross profit
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$
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629,104
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646,148
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$
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386,027
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$
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1,661,279
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$
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1,187,603
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$
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-
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$
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-
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$
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1,187,603
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Gross margin
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18.49
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%
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33.35
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%
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85.77
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%
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28.69
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%
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8.30
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%
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-
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-
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8.30
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%
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Three Months Ended December 31,2013
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Three Months Ended December 31,2012
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||||||||||||||||||||
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Inland
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Inland
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Shipping and
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Transportation
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Shipping and
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Transportation
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||||
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Shipping
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Chartering
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Management
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Shipping
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Chartering
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Management
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||||||
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Agency Service
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Services
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Services
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Consolidated
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Agency Service
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Service
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Services
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Consolidated
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||||||||
Revenues
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$
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1,971,903
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$
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50,196
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$
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450,090
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$
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2,472,189
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$
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6,429,761
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$
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-
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$
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-
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$
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6,429,761
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Cost of revenues
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$
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1,660,657
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$
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16,048
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$
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64,063
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$
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1,740,768
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$
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6,006,063
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$
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-
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$
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-
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$
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6,006,063
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Gross profit
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$
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311,246
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$
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34,148
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$
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386,027
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$
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731,421
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$
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423,698
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$
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-
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$
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-
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$
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423,698
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Gross margin
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15.78
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%
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68.03
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%
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85.77
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%
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29.59
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%
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6.59
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%
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-
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-
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6.59
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%
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¨
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the number of ships to which we provide port loading/discharging services;
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¨
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the size and types of ships we serve;
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¨
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the type of services we provide, for example loading/discharging, protective, owner’s affairs, shipping and chartering service;
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¨
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the rate of service fees we charge;
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¨
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the number of ports at which we provide services; and the number of customers we serve.
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2 | ||
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For the six months ended December 31,
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For the three months ended December 31,
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||||||||||||||||||||
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2013
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2012
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Change
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%
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2013
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2012
|
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Change
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%
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|
||||||||
Number of ships served
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|
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|
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|
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Loading/discharging
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40
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132
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(92)
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(69.7)
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26
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59
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(33)
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(55.9)
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Protective
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120
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91
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29
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31.9
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70
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40
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30
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75.0
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Total
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|
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160
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223
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(63)
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(28.3)
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96
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99
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(3)
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(3.0)
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3 | ||
|
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For the six months ended December, 31
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||||||||||||||||||
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2013
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2012
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Change
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|
||||||||||||
|
|
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US$
|
|
|
%
|
|
|
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US$
|
|
|
%
|
|
|
|
US$
|
|
|
%
|
|
|
|
|
|
|
|
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Revenues
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5,789,850
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|
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100.0
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%
|
|
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14,311,829
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100.0
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%
|
|
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(8,521,979)
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-59.5
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%
|
Cost of revenues
|
|
|
4,128,571
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|
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71.3
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%
|
|
|
13,124,226
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91.7
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%
|
|
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(8,995,655)
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|
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-68.5
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%
|
Gross margin
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|
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28.7
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%
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|
|
|
|
|
8.3
|
%
|
|
|
|
|
|
20.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
|
1,495,842
|
|
|
25.8
|
%
|
|
|
2,004,611
|
|
|
14.0
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%
|
|
|
(508,769)
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|
|
-25.4
|
%
|
Selling expenses
|
|
|
128,525
|
|
|
2.2
|
%
|
|
|
183,426
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|
|
1.3
|
%
|
|
|
(54,901)
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|
|
-29.9
|
%
|
Total Costs and Expenses
|
|
|
5,752,938
|
|
|
99.3
|
%
|
|
|
15,312,263
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|
|
107.0
|
%
|
|
|
(9,559,325)
|
|
|
-62.4
|
%
|
|
|
For the three months ended December, 31
|
|
|||||||||||||||
|
|
2013
|
|
|
2012
|
|
|
Change
|
|
|||||||||
|
|
US$
|
|
|
%
|
|
|
US$
|
|
|
%
|
|
|
US$
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
2,472,189
|
|
|
100.0
|
%
|
|
6,429,761
|
|
|
100.0
|
%
|
|
(3,957,572)
|
|
|
-61.6
|
%
|
Cost of revenues
|
|
1,740,768
|
|
|
70.4
|
%
|
|
6,006,063
|
|
|
93.4
|
%
|
|
(4,265,295)
|
|
|
-71.0
|
%
|
Gross margin
|
|
29.6
|
%
|
|
|
|
|
6.6
|
%
|
|
|
|
|
23.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
599,678
|
|
|
24.3
|
%
|
|
1,008,338
|
|
|
15.7
|
%
|
|
(408,660)
|
|
|
-40.5
|
%
|
Selling expenses
|
|
77,437
|
|
|
3.1
|
%
|
|
96,918
|
|
|
1.5
|
%
|
|
(19,481)
|
|
|
-20.1
|
%
|
Total Costs and Expenses
|
|
2,417,883
|
|
|
97.8
|
%
|
|
7,111,319
|
|
|
110.6
|
%
|
|
(4,693,436)
|
|
|
-66.0
|
%
|
4 | ||
|
·
|
diversified our business and expanded our service platform to include the following services: shipping and chartering services, and inland transportation management services;
|
|
|
|
|
·
|
monetized our business relationship with Zhiyuan and executed our first shipping and chartering service agreement during the fiscal first quarter and launched our inland transportation management service during the fiscal second quarter;
|
|
|
|
|
·
|
reduced our general and administrative expenses; and
|
|
|
|
|
·
|
increased our gross margin and operating profit.
|
|
·
|
$1.94 million from our shipping and chartering business; and
|
|
·
|
$450,000 from our inland transportation management business.
|
|
·
|
Cost of Revenues. Our cost of revenues decreased by 68.5% from $13,124,226 for the six months ended December 31, 2012 to $4,128,571 for the six months ended December 31, 2013. The decline was primarily driven by lower cost generated from the shipping agency business, partially offset by the launch of the shipping and chartering services in the first quarter and inland transportation management services in the second quarter.
|
5 | ||
|
·
|
General and Administrative Expenses. Our general and administrative expenses decreased by $508,769 or 25.4% from $2,004,611 for the six months ended December 31, 2012 to $1,495,842 for the six months ended December 31, 2013. This decrease was driven mainly by a reduction in salaries and benefits of approximately $292,000, reduction in professional service fees of approximately $131,000 and a decrease in the conference fees of approximately $66,000.
|
|
|
|
|
·
|
Selling Expenses. Our selling expenses decreased by $54,901 or 29.9% from $183,426 for the six months ended December 31, 2012 to $128,525 for the six months ended December 31, 2013, mainly due to lower commission payments related to the decline in revenues.
|
|
·
|
Cost of Revenues. Our cost of revenues decreased by $4,265,295 or 71.0% from $6,006,063 for the three months ended December 31, 2012 to $1,740,768 for the three months ended December 31, 2013. The decline was primarily driven by lower cost generated from the shipping agency business, partially offset by the launch of the inland transportation management services in the fiscal second quarter.
|
|
|
|
|
·
|
General and Administrative Expenses. Our general and administrative expenses decreased by $408,660 or 40.5% from $1,008,338 for the three months ended December 31, 2012 to $599,678 for the three months ended December 31, 2013. This decrease was mainly due to (1) decreased salaries and benefits for our staff of $110,322, (2) a decrease of $65,647 in entertainment fees (3) decreased meeting expense of $64,741.
|
6 | ||
|
·
|
Selling Expenses. Our selling expenses decreased by $19,481 or 20.10% from $96,918 for the three months ended December 31, 2012 to $77,437 for the three months ended December 31, 2013, mainly due to lower commission payments related to the sales decrease.
|
|
|
For the six months ended December31,
|
|
||||
|
|
2013
|
|
2012
|
|
||
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
$
|
(342,535)
|
|
$
|
(3,492,864)
|
|
Net cash used in investing activities
|
|
$
|
(193,369)
|
|
$
|
(50,066)
|
|
Net cash used in financing activities
|
|
$
|
-
|
|
$
|
(4,776)
|
|
Net decrease in cash and cash equivalents
|
|
$
|
(583,489)
|
|
$
|
(3,547,527)
|
|
Cash and cash equivalents at the beginning of Period
|
|
$
|
3,048,831
|
|
$
|
4,433,333
|
|
Cash and cash equivalents at the end of Period
|
|
$
|
2,465,342
|
|
$
|
885,806
|
|
|
|
December 31,
2013 |
|
June 30, 2013
|
|
Diff.
|
|
%
|
|
|||
Total Current Assets
|
|
$
|
3,983,395
|
|
$
|
7,145,165
|
|
$
|
(3,161,770)
|
|
-44.25
|
%
|
Total Current Liabilities
|
|
$
|
1,311,694
|
|
$
|
4,404,905
|
|
$
|
(3,093,211)
|
|
-70.22
|
%
|
Working Capital
|
|
$
|
2,671,701
|
|
$
|
2,740,260
|
|
$
|
(68,559)
|
|
-2.50
|
%
|
Current Ratio
|
|
|
3.04
|
|
|
1.62
|
|
|
1.42
|
|
87.65
|
%
|
7 | ||
|
|
Payment Due by Period
|
|
||||||||||
|
|
Total
|
|
Less than 1
year |
|
1 to 2 years
|
|
More than 2
years |
|
||||
Contractual Obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating leases
|
|
$
|
180,635
|
|
$
|
140,167
|
|
$
|
40,468
|
|
$
|
|
|
8 | ||
9 | ||
(a)
|
None.
|
|
|
(b)
|
None.
|
|
|
(c)
|
None.
|
Number
|
|
Exhibit
|
3.1
|
|
Articles of Incorporation of Sino-Global Shipping America, Ltd.(1)
|
3.2
|
|
Bylaws of Sino-Global Shipping America, Ltd. (1)
|
4.1
|
|
Specimen Certificate for Common Stock (1)
|
10.1
|
|
Exclusive Management Consulting and Technical Services Agreement by and between Trans Pacific and Sino-China. (1)
|
10.2
|
|
Exclusive Marketing Agreement by and between Trans Pacific and Sino-China. (1)
|
10.3
|
|
Proxy Agreement by and among Cao Lei, Zhang Mingwei, the Company and Sino-China. (1)
|
10.4
|
|
Equity Interest Pledge Agreement by and among Trans Pacific, Cao Lei and Zhang Mingwei. (1)
|
10.5
|
|
Exclusive Equity Interest Purchase Agreement by and among the Company, Cao Lei, Zhang Mingwei and Sino-China. (1)
|
10.6
|
|
First Amended and Restated Exclusive Management Consulting and Technical Services Agreement by and between Trans Pacific and Sino-China. (1)
|
10.7
|
|
First Amended and Restated Exclusive Marketing Agreement by and between Trans Pacific and Sino-China. (1)
|
14.1
|
|
Code of Ethics of the Company.(2)
|
21.1
|
|
List of subsidiaries of the Company.(3)
|
31.1
|
|
Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(4)
|
31.2
|
|
Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(4)
|
32.1
|
|
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(4)
|
32.2
|
|
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(4)
|
99.1
|
|
Press release dated February 11, 2014 titled “Sino-Global Announces Fiscal 2014 Second Quarter Financial Results.”(4)
|
|
EX-101.INS
|
|
XBRL Instance Document. (8)
|
|
EX-101.SCH
|
|
XBRL Taxonomy Extension Schema Document. (8)
|
|
EX-101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document. (8)
|
|
EX-101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document. (8)
|
|
EX-101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document. (8)
|
|
EX-101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document. (8)
|
(1)
|
Incorporated by reference to the Company’s Registration Statement on Form S-1, Registration Nos. 333-150858 and 333-148611.
|
(2)
|
Incorporated by reference to the Company’s Form 10-KSB filed on September 29, 2008, File No. 001-34024.
|
(3)
|
Incorporated by reference to the Company’s Form 10-Q filed on November 13, 2013, File No. 001-34024.
|
(4)
|
Filed herewith.
|
10 | ||
|
SINO-GLOBAL SHIPPING AMERICA, LTD.
|
|
|
|
|
|
|
February 11, 2014
|
By:
|
/s/ Anthony S. Chan
|
|
|
|
Anthony S. Chan
|
|
|
|
Acting Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
11 | ||
|
PAGE
|
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
|
|
|
|
Condensed Consolidated Balance Sheets as of December 31, 2013 and June 30, 2013
|
F-1
|
|
|
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the six and three months ended December 31, 2013 and 2012
|
F-2
|
|
|
Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2013 and 2012
|
F-3
|
|
|
Notes to the Unaudited Condensed Consolidated Financial Statements
|
F-4
|
|
|
December 31,
|
|
June 30,
|
|
||
|
|
2013
|
|
2013
|
|
||
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,465,342
|
|
$
|
3,048,831
|
|
Advances to suppliers
|
|
|
4,864
|
|
|
231,772
|
|
Accounts receivable, less allowance for doubtful accounts of $636,028
and $690,065 as of December 31, 2013 and June 30, 2013, respectively |
|
|
541,105
|
|
|
3,142,203
|
|
Other receivables, less allowance for doubtful accounts of $236,394 and
$233,950 as of December 31, 2013 and June 30, 2013, respectively |
|
|
291,580
|
|
|
142,206
|
|
Other current assets
|
|
|
16,493
|
|
|
12,488
|
|
Prepaid taxes
|
|
|
26,189
|
|
|
26,288
|
|
Due from related parties
|
|
|
637,822
|
|
|
541,377
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
3,983,395
|
|
|
7,145,165
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
395,205
|
|
|
267,662
|
|
Other long-term assets
|
|
|
16,938
|
|
|
18,278
|
|
Deferred tax assets
|
|
|
118,800
|
|
|
105,100
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
4,514,338
|
|
$
|
7,536,205
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Advances from customers
|
|
$
|
146,536
|
|
$
|
710,172
|
|
Accounts payable
|
|
|
731,635
|
|
|
3,219,240
|
|
Accrued expenses
|
|
|
62,567
|
|
|
51,352
|
|
Other current liabilities
|
|
|
370,956
|
|
|
424,141
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
1,311,694
|
|
|
4,404,905
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
1,311,694
|
|
|
4,404,905
|
|
|
|
|
|
|
|
|
|
Commitments and Contingency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Preferred stock, 1,000,000 shares authorized, no par value, none issued.
|
|
|
-
|
|
|
-
|
|
Common stock, 10,000,000 shares authorized, no par value; 4,829,032
shares issued as of December 31, 2013 and June 30, 2013; 4,703,841 outstanding as of December 31, 2013 and June 30, 2013 |
|
|
10,750,157
|
|
|
10,750,157
|
|
Additional paid-in capital
|
|
|
1,144,842
|
|
|
1,144,842
|
|
Treasury stock, at cost - 125,191 shares
|
|
|
(372,527)
|
|
|
(372,527)
|
|
Accumulated deficit
|
|
|
(4,082,097)
|
|
|
(4,856,613)
|
|
Accumulated other comprehensive income
|
|
|
62,212
|
|
|
54,791
|
|
Unearned Stock-based Compensation
|
|
|
(15,520)
|
|
|
(15,520)
|
|
|
|
|
|
|
|
|
|
Total Sino-Global Shipping America Ltd. Stockholders' equity
|
|
|
7,487,067
|
|
|
6,705,130
|
|
|
|
|
|
|
|
|
|
Non-Controlling interest
|
|
|
(4,284,423)
|
|
|
(3,573,830)
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
3,202,644
|
|
|
3,131,300
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity
|
|
$
|
4,514,338
|
|
$
|
7,536,205
|
|
F-1 | ||
|
|
For the six months ended
December 31, |
|
For the three months ended
December 31, |
|
||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
5,789,850
|
|
$
|
14,311,829
|
|
$
|
2,472,189
|
|
$
|
6,429,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
(4,128,571)
|
|
|
(13,124,226)
|
|
|
(1,740,768)
|
|
|
(6,006,063)
|
|
Gross profit
|
|
|
1,661,279
|
|
|
1,187,603
|
|
|
731,421
|
|
|
423,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
|
(1,495,842)
|
|
|
(2,004,611)
|
|
|
(599,678)
|
|
|
(1,008,338)
|
|
Selling expenses
|
|
|
(128,525)
|
|
|
(183,426)
|
|
|
(77,437)
|
|
|
(96,918)
|
|
|
|
|
(1,624,367)
|
|
|
(2,188,037)
|
|
|
(677,115)
|
|
|
(1,105,256)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (loss)
|
|
|
36,912
|
|
|
(1,000,434)
|
|
|
54,306
|
|
|
(681,558)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income, net
|
|
|
39,722
|
|
|
29,734
|
|
|
15,855
|
|
|
32,302
|
|
Other income, net
|
|
|
30,372
|
|
|
41,789
|
|
|
30,372
|
|
|
5,302
|
|
|
|
|
70,094
|
|
|
71,523
|
|
|
46,227
|
|
|
37,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before provision for income taxes
|
|
|
107,006
|
|
|
(928,911)
|
|
|
100,533
|
|
|
(643,954)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense)
|
|
|
4,733
|
|
|
(79,100)
|
|
|
(17,767)
|
|
|
78,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
111,739
|
|
|
(1,008,011)
|
|
|
82,766
|
|
|
(565,854)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to non-controlling interest
|
|
|
(662,778)
|
|
|
(526,192)
|
|
|
(416,356)
|
|
|
(274,268)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Sino-Global Shipping America, Ltd.
|
|
$
|
774,517
|
|
$
|
(481,819)
|
|
$
|
499,122
|
|
$
|
(291,586)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
111,739
|
|
$
|
(1,008,011)
|
|
$
|
82,766
|
|
$
|
(565,854)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
(40,394)
|
|
|
(16,923)
|
|
|
(14,757)
|
|
|
(11,104)
|
|
Comprehensive income (loss)
|
|
|
71,345
|
|
|
(1,024,934)
|
|
|
68,009
|
|
|
(576,958)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Comprehensive loss attributable to non-controlling interest
|
|
|
(710,592)
|
|
|
(540,667)
|
|
|
(450,419)
|
|
|
(291,707)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to Sino-Global Shipping America Ltd.
|
|
$
|
781,937
|
|
$
|
(484,267)
|
|
$
|
518,428
|
|
$
|
(285,251)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Basic and diluted
|
|
$
|
0.16
|
|
$
|
(0.17)
|
|
$
|
0.11
|
|
$
|
(0.10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares used in computation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Basic and diluted
|
|
|
4,703,841
|
|
|
2,903,841
|
|
|
4,703,841
|
|
|
2,903,841
|
|
F-2 | ||
|
|
For the six months ended
December 31, |
|
||||
|
|
2013
|
|
2012
|
|
||
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
111,739
|
|
$
|
(1,008,011)
|
|
Adjustment to reconcile net income (loss) to net cash used in operating activities
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
73,632
|
|
|
93,096
|
|
Recovery of doubtful accounts
|
|
|
(54,037)
|
|
|
|
|
Deferred tax (benefit) expense
|
|
|
(13,700)
|
|
|
55,000
|
|
Gain on disposition of property and equipment
|
|
|
(612)
|
|
|
(3,389)
|
|
Changes in assets and liabilities
|
|
|
|
|
|
|
|
Decrease (increase) in advances to suppliers
|
|
|
226,908
|
|
|
(43,672)
|
|
Decrease (increase) in accounts receivable
|
|
|
371,494
|
|
|
(2,045,593)
|
|
(Increase) decrease in other receivables
|
|
|
(149,373)
|
|
|
31,590
|
|
(Increase) decrease in other current assets and prepaid taxes
|
|
|
(9,246)
|
|
|
59,982
|
|
Decrease in employee loan receivables
|
|
|
5,338
|
|
|
|
|
Decrease in security deposits
|
|
|
1,339
|
|
|
10,743
|
|
Increase in due from related parties
|
|
|
(96,445)
|
|
|
|
|
(Decrease) increase in advances from customers
|
|
|
(563,637)
|
|
|
646,819
|
|
Decrease in accounts payable
|
|
|
(203,964)
|
|
|
(1,366,222)
|
|
Increase (decrease) in accrued expenses
|
|
|
11,215
|
|
|
(9,123)
|
|
(Decrease) increase in other current liabilities
|
|
|
(53,186)
|
|
|
85,916
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
(342,535)
|
|
|
(3,492,864)
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
Acquisitions of property and equipment
|
|
|
(193,369)
|
|
|
(50,066)
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(193,369)
|
|
|
(50,066)
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
Increase in noncontrolling interest in majority-owned subsidiary
|
|
|
-
|
|
|
(4,776)
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
-
|
|
|
(4,776)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate fluctuations on cash and cash equivalents
|
|
|
(47,585)
|
|
|
179
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
|
(583,489)
|
|
|
(3,547,527)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
3,048,831
|
|
|
4,433,333
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
2,465,342
|
|
$
|
885,806
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
Income taxes paid
|
|
$
|
4,855
|
|
$
|
13,200
|
|
Non-cash transactions of operating activities:
|
|
|
|
|
|
|
|
Settlement of related accounts receivable and payable
|
|
$
|
2,283,641
|
|
$
|
-
|
|
F-3 | ||
F-4 | ||
|
(a)
|
Basis of presentation
|
|
(b)
|
Basis of consolidation
|
F-5 | ||
|
|
December 31,
|
|
June 30,
|
|
||
|
|
2013
|
|
2013
|
|
||
|
|
|
|
|
|
|
|
Total current asstes
|
|
$
|
245,321
|
|
$
|
145,307
|
|
Total assets
|
|
|
571,360
|
|
|
326,480
|
|
Total current liabilities
|
|
|
318,252
|
|
|
324,334
|
|
Total liabilities
|
|
|
318,252
|
|
|
324,334
|
|
|
(c)
|
Revenue Recognize Policy
|
⋅
|
Revenues from shipping agency services are recognized upon completion of services, which coincides with the date of departure of the relevant vessel from port. Advance payments and deposits received from customers prior to the provision of services and recognition of the related revenues are presented as advances from customers.
|
|
|
⋅
|
Revenues from shipping and chartering services are recognized upon performance of services as stipulated in the underlying contract.
|
|
|
⋅
|
Revenues from inland transportation management services are recognized when commodities are being released from the customer’s warehouse.
|
|
(d)
|
Translation of Foreign Currency
|
|
|
December 31,
|
|
June 30,
|
|
Six months ended
December 31, |
|
Three months ended December
31, |
|
||||
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Foreign currency
|
|
BS
|
|
BS
|
|
PL
|
|
PL
|
|
PL
|
|
PL
|
|
RMB:1USD
|
|
6.0540
|
|
6.1787
|
|
6.1087
|
|
6.3009
|
|
6.0907
|
|
6.3009
|
|
AUD:1USD
|
|
1.1201
|
|
1.0937
|
|
1.0859
|
|
0.9626
|
|
1.0794
|
|
0.9626
|
|
HKD:1USD
|
|
7.7539
|
|
7.7580
|
|
7.7545
|
|
7.7533
|
|
7.7534
|
|
7.7519
|
|
CAD:1USD
|
|
1.0632
|
|
1.0520
|
|
1.0443
|
|
0.9932
|
|
1.0496
|
|
0.9932
|
|
F-6 | ||
|
(e)
|
Accounts receivable
|
|
(f)
|
Earnings (loss) per share (“EPS”)
|
|
(g)
|
Risks and Uncertainties
|
|
(h)
|
Recent Accounting Pronouncements
|
|
|
December 31,
|
|
June 30,
|
|
||
|
|
2013
|
|
2013
|
|
||
|
|
|
|
|
|
|
|
Land and building
|
|
$
|
222,338
|
|
$
|
80,461
|
|
Motor vehicles
|
|
|
728,378
|
|
|
731,372
|
|
Computer equipment
|
|
|
139,401
|
|
|
122,002
|
|
Office equipment
|
|
|
45,943
|
|
|
46,319
|
|
Furniture and fixtures
|
|
|
94,877
|
|
|
52,687
|
|
System software
|
|
|
125,932
|
|
|
123,391
|
|
Leasehold improvement
|
|
|
70,402
|
|
|
68,981
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,427,271
|
|
|
1,225,213
|
|
|
|
|
|
|
|
|
|
Less : Accumulated depreciation and amortization
|
|
|
1,032,066
|
|
|
957,551
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
$
|
395,205
|
|
$
|
267,662
|
|
F-7 | ||
|
|
December 31,
|
|
June 30,
|
|
||
|
|
2013
|
|
2013
|
|
||
|
|
|
|
|
|
|
|
Sino-China:
|
|
|
|
|
|
|
|
Original paid-in capital
|
|
$
|
356,400
|
|
$
|
356,400
|
|
Additional paid-in capital
|
|
|
1,044
|
|
|
1,044
|
|
Accumulated other comprehensive Loss
|
|
|
(135,870)
|
|
|
(85,653)
|
|
Accumulated deficit
|
|
|
(4,515,135)
|
|
|
(3,849,640)
|
|
|
|
|
(4,293,561)
|
|
|
(3,577,849)
|
|
Trans Pacific Logistics Shanghai Ltd.
|
|
|
9,138
|
|
|
4,019
|
|
Total
|
|
$
|
(4,284,423)
|
|
$
|
(3,573,830)
|
|
|
|
Amount
|
|
|
|
|
|
|
|
Twevle months ending December 31,
|
|
|
|
|
|
|
|
|
|
2014
|
|
$
|
140,167
|
|
2015
|
|
|
40,468
|
|
|
|
$
|
180,635
|
|
F-8 | ||
|
|
For the six months ended December 31,
|
|
For the three months ended December 31,
|
|
||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
$
|
-
|
|
$
|
(24,100)
|
|
$
|
-
|
|
$
|
100
|
|
China
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
(24,100)
|
|
|
-
|
|
|
100
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
|
4,733
|
|
|
(55,000)
|
|
|
(17,767)
|
|
|
78,000
|
|
China
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
4,733
|
|
|
(55,000)
|
|
|
(17,767)
|
|
|
78,000
|
|
Total
|
|
$
|
4,733
|
|
$
|
(79,100)
|
|
$
|
(17,767)
|
|
$
|
78,100
|
|
|
|
December 31,
|
|
June 30,
|
|
||
|
|
2013
|
|
2013
|
|
||
|
|
|
|
|
|
|
|
Allowance for doubtful accounts (A)
|
|
$
|
301,000
|
|
$
|
301,000
|
|
Stock-based compensation
|
|
|
307,000
|
|
|
307,000
|
|
Net operating loss
|
|
|
580,000
|
|
|
443,000
|
|
Total deferred tax assets
|
|
|
1,188,000
|
|
|
1,051,000
|
|
Valuation allowance (A)
|
|
|
(1,069,200)
|
|
|
(945,900)
|
|
Deferred tax assets, net - long-term (A)
|
|
$
|
118,800
|
|
$
|
105,100
|
|
F-9 | ||
F-10 | ||
|
|
For the Six Months Ended December 31, 2013
|
|
||||||||||
|
|
Shipping Agency
Service |
|
Shipping & Chartering
Services |
|
Inland Transportation
Management Services |
|
Total
|
|
||||
Revenues
|
|
$
|
3,402,564
|
|
$
|
1,937,196
|
|
$
|
450,090
|
|
$
|
5,789,850
|
|
Cost of revenues
|
|
$
|
2,773,460
|
|
$
|
1,291,048
|
|
$
|
64,063
|
|
$
|
4,128,571
|
|
Gross profit
|
|
$
|
629,104
|
|
$
|
646,148
|
|
$
|
386,027
|
|
$
|
1,661,279
|
|
Depreciation and amortization
|
|
$
|
54,673
|
|
$
|
466
|
|
$
|
18,493
|
|
$
|
73,632
|
|
Total capital expenditures
|
|
$
|
191,529
|
|
$
|
-
|
|
$
|
1,840
|
|
$
|
193,369
|
|
Total assets
|
|
$
|
3,218,494
|
|
$
|
484,741
|
|
$
|
811,103
|
|
$
|
4,514,338
|
|
|
|
For the Six Months Ended December 31, 2012
|
|
||||||||||
|
|
Shipping Agency
Service |
|
Shipping & Chartering
Services |
|
Inland Transportation
Management Services |
|
Total
|
|
||||
Revenues
|
|
$
|
14,311,829
|
|
$
|
-
|
|
$
|
-
|
|
$
|
14,311,829
|
|
Cost of revenues
|
|
$
|
13,124,226
|
|
$
|
-
|
|
$
|
-
|
|
$
|
13,124,226
|
|
Gross profit
|
|
$
|
1,187,603
|
|
$
|
-
|
|
$
|
-
|
|
$
|
1,187,603
|
|
Depreciation and amortization
|
|
$
|
93,096
|
|
$
|
-
|
|
$
|
-
|
|
$
|
93,096
|
|
Total capital expenditures
|
|
$
|
50,066
|
|
$
|
-
|
|
$
|
-
|
|
$
|
50,066
|
|
Total assets
|
|
$
|
8,894,510
|
|
$
|
-
|
|
$
|
-
|
|
$
|
8,894,510
|
|
|
|
For the Three Months Ended December 31, 2013
|
|
||||||||||
|
|
Shipping Agency
Service |
|
Shipping & Chartering
Services |
|
Inland Transportation
Management Services |
|
Total
|
|
||||
Revenues
|
|
$
|
1,971,903
|
|
$
|
50,196
|
|
$
|
450,090
|
|
$
|
2,472,189
|
|
Cost of revenues
|
|
$
|
1,660,657
|
|
$
|
16,048
|
|
$
|
64,063
|
|
$
|
1,740,768
|
|
Gross profit
|
|
$
|
311,246
|
|
$
|
34,148
|
|
$
|
386,027
|
|
$
|
731,421
|
|
Depreciation and amortization
|
|
$
|
36,577
|
|
$
|
233
|
|
$
|
9,246
|
|
$
|
46,057
|
|
Total capital expenditures
|
|
$
|
189,970
|
|
$
|
-
|
|
$
|
-
|
|
$
|
189,970
|
|
Total assets
|
|
$
|
3,624,045
|
|
$
|
484,741
|
|
$
|
405,552
|
|
$
|
4,514,338
|
|
|
|
For Three Months Ended December 30, 2012
|
|
||||||||||
|
|
Shipping Agency
Service |
|
Shipping & Chartering
Services |
|
Inland Transportation
Management Services |
|
Total
|
|
||||
Revenues
|
|
$
|
6,429,761
|
|
$
|
-
|
|
$
|
-
|
|
$
|
6,429,761
|
|
Cost of revenues
|
|
$
|
6,006,063
|
|
$
|
-
|
|
$
|
-
|
|
$
|
6,006,063
|
|
Gross profit
|
|
$
|
423,698
|
|
$
|
-
|
|
$
|
-
|
|
$
|
423,698
|
|
Depreciation and amortization
|
|
$
|
53,424
|
|
$
|
-
|
|
$
|
-
|
|
$
|
53,424
|
|
Total capital expenditures
|
|
$
|
144,248
|
|
$
|
-
|
|
$
|
-
|
|
$
|
144,248
|
|
Total assets
|
|
$
|
8,894,510
|
|
$
|
-
|
|
$
|
-
|
|
$
|
8,894,510
|
|
F-11 | ||
|
12.
|
SUBSEQUENT EVENT
|
F-12 | ||
Exhibit 31.1
Certification of Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
and Securities and Exchange Commission Release 34-46427
I, Lei Cao, certify that:
(1) I have reviewed this Form 10-Q of Sino-Global Shipping America, Ltd.;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4) The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
(5) The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 11, 2014 | /s/ Lei Cao | |
Lei Cao | ||
Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
Certification of Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
and Securities and Exchange Commission Release 34-46427
I, Anthony S. Chan, certify that:
(1) I have reviewed this Form 10-Q of Sino-Global Shipping America, Ltd.;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4) The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
(5) The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 11, 2014 | /s/ Anthony S. Chan | |
Anthony S. Chan | ||
Acting Chief Financial Officer (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Form 10-Q report of Sino-Global Shipping America, Ltd. for the period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof and pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Lei Cao, certify that:
(1) This report containing the financial statements fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the this period report fairly presents, in all material respects, the financial condition and results of operations of Sino-Global Shipping America, Ltd..
Date: February 11, 2014 | /s/ Lei Cao | |
Lei Cao | ||
Chief Executive Officer (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Form 10-Q report of Sino-Global Shipping America, Ltd. for the period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof and pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Anthony S. Chan, certify that:
(1) This report containing the financial statements fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the this period report fairly presents, in all material respects, the financial condition and results of operations of Sino-Global Shipping America, Ltd..
Date: February 11, 2014 | /s/ Anthony S. Chan | |
Anthony S. Chan | ||
Acting Chief Financial Officer (Principal Financial Officer) |
Sino-Global Announces Fiscal 2014 Second Quarter Financial Results
Company reports second consecutive profitable quarter with EPS of $0.11
NEW YORK, February 11, 2014 /PRNewswire/ -- Sino-Global Shipping America, Ltd. (NasdaqCM: SINO) (“Sino-Global” or the “Company”), an international shipping agency and logistic services provider, today announced its financial results for the fiscal 2014 second quarter ended December 31, 2013.
Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented: “We are pleased to announce another solid quarter, with continued progress in our cost-reduction efforts, improvement in margins and profitability on both a quarterly and year-over-year basis, and further expansion of our service platform. Looking ahead, we are excited about opportunities offered by our new operating segments, which we believe offer us growth opportunities.”
Financial Highlights for Q2 FY2014 Ended December 31, 2013
Mr. Cao introduced the Company’s quarterly results, saying, “We have continued to improve our margin from the Shipping Agency business. Although we reduced revenue by nearly 70% in this segment, doing so allowed us to improve our overall gross margin to almost 30% as we expanded our service platform to include Shipping and Chartering Services and Inland Transportation Management Services.”
For The Three Months Ended December 31, | ||||||||||||
2013 | 2012 | % Change | ||||||||||
Revenues | $ | 2,472,189 | $ | 6,429,761 | -61.6 | % | ||||||
Shipping Agency Services | $ | 1,971,903 | $ | 6,429,761 | -69.3 | % | ||||||
Shipping and Chartering Services | $ | 50,196 | - | NM | ||||||||
Inland Transportation Management Services | $ | 450,090 | - | NM | ||||||||
Gross margin | 29.6 | % | 6.6 | % | 23.0 | % | ||||||
Operating margin | 2.2 | % | -10.6 | % | NM | |||||||
Net income (loss) attributable to Sino-Global | $ | 499,122 | ($ | 291,586 | ) | NM | ||||||
Diluted earnings per share | $ | 0.11 | ($ | 0.10 | ) | NM |
l | Two consecutive quarters of net profit with diluted earnings per share of $0.11 and $0.16 for the three and six months ended December 31, 2013, respectively. |
l | Expansion of our service platform to include Shipping and Chartering Services and Inland Transportation Management Services that collectively contributed revenues of $0.50 million and $2.39 million for the three and six months ended December 31, 2013, respectively. |
l | Improved gross margin to 29.6% for the three months ended December 31, 2013 from 6.6% for the same period of 2012. This quarter also marks the first quarterly operating profit for the Company since IPO in 2008. |
Q2 FY2014 Financial Results
For the Three Months Ended December 31, | ||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
Revenues | Cost of revenues | Gross profit | Revenues | Cost of revenues | Gross profit | |||||||||||||||||||
Shipping Agency Services | $ | 1,971,903 | $ | 1,660,657 | $ | 311,246 | $ | 6,429,761 | $ | 6,006,063 | $ | 423,698 | ||||||||||||
Shipping and Chartering Services | 50,196 | 16,048 | 34,148 | - | - | - | ||||||||||||||||||
Inland Transportation Management Services | 450,090 | 64,063 | 386,027 | - | - | - | ||||||||||||||||||
Consolidated | 2,472,189 | 1,740,768 | 731,421 | 6,429,761 | 6,006,063 | 423,698 |
Total revenues decreased by 61.6% to $2,472,189 for the three months ended December 31, 2013 from $6,429,761 for the same period of 2012. The decline in total revenues was due to continued weakness in the Shipping Agency business, partially offset by our newly developed Shipping and Chartering Services business and Inland Transportation Management Services business. Our Shipping Agency business continued to be negatively impacted by the softening of the Chinese economy and its import of iron ore and decreased 69.3% to $1,971,903 for the three months ended December 31, 2013 from $6,429,761 for the same period of 2012. The Shipping and Chartering Services business, which we launched in the first quarter, generated revenues of $50,196 in the second quarter. We also launched Inland Transportation Management Services business in the second quarter that generated revenues of $450,090 in that quarter. Revenues from both the Shipping and Chartering Services and Inland Transportation Management Services businesses were related to the delivery of services to Tianjin Zhi Yuan Investment Group Co., Ltd. (“Zhiyuan”), a company that is owned by Mr. Zhang, the largest shareholder of our Company.
Cost of revenues decreased by 71.0% to $1,740,768 for the three months ended December 31, 2013 from $6,006,063 for the same period of 2012. Gross margin of 29.6% for the three months ended December 31, 2013 increased significantly from 6.6% for the same period of 2012, mainly because our new services lines featured higher margins than our Shipping Agency business. Cost of revenues for Shipping Agency, Shipping and Chartering Services and Inland Transportation Management Services were $1,660,657, $16,048, and $64,063, leading to gross margins of 15.8%, 68.0% and 85.8%, respectively, for the three months ended December 31, 2013.
General and administrative expenses decreased by 40.5% to $599,678 for the three months ended December 31, 2013 from $1,008,338 for the same period of 2012. This decrease was mainly due to (1) decreased salaries and benefits for our staff of $110,322, (2) a decrease of $65,647 in entertainment fees (3) decreased meeting expense of $64,741. Selling expenses decreased by 20.1% to $77,437 for the three months ended December 31, 2013 from $96,918 for the same period of 2012, mainly due to lower commission payments related to the decline in the Shipping Agency business.
Operating profit of $54,306 for the three months ended December 31, 2013 compared to operating loss of $681,558 for the same period of 2012. This marks our first quarterly operating profit since our IPO in 2008, showing that our continued efforts to streamline our operations and diversify our revenue streams are starting to bear fruit. Operating profit margin of 2.2% for the three months ended December 31, 2013 compared to operating loss margin of 10.6% for the same period of 2012.
As a result of the foregoing, we reported net income of $82,766 for the three months ended December 31, 2013, compared to net loss of $565,854 for the same period of 2012. After deduction of non-controlling interest, net profit attributable to Sino-Global was $499,122, or $0.11 per diluted share, for the three months ended December 31, 2013, compared to net loss attributable to Sino-Global of $291,586, or net loss of $0.10 per diluted share, for the same period of 2012.
Year-to-Date FY2014 Financial Results
For the Six Months Ended December 31, | ||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
Revenues | Cost of revenues | Gross profit | Revenues | Cost of revenues | Gross profit | |||||||||||||||||||
Shipping Agency Services | $ | 3,402,564 | $ | 2,773,460 | $ | 629,104 | $ | 14,311,829 | $ | 13,124,226 | $ | 1,187,603 | ||||||||||||
Shipping and Chartering Services | 1,937,196 | 1,291,048 | 646,148 | - | - | - | ||||||||||||||||||
Inland Transportation Management Services | 450,090 | 64,063 | 386,027 | - | - | - | ||||||||||||||||||
Consolidated | 5,789,850 | 4,128,571 | 1,661,279 | 14,311,829 | 13,124,226 | 1,187,603 |
Total revenues decreased by 59.5% to $5,789,850 for the six months ended December 31, 2013 from $14,311,829 for the same period of 2012. The decline in total revenues was due to weakness in the Shipping Agency business, partially offset by our newly developed Shipping and Chartering Services business and Inland Transportation Management Services business. As a result of the softening of the Chinese economy and its import of iron ore, our Shipping Agency business decreased 76.2% to $3,402,564 for the six months ended December 31, 2013 from $14,311,829 for the same period of 2012. The Shipping and Chartering Services business, which we launched in the first quarter of fiscal 2014, generated revenues of $1,937,196 for the six months ended December 31, 2013. We also launched Inland Transportation Management Services business in the December quarter that generated revenues of $450,090 for December quarter. Revenues from both the Shipping and Chartering Services and Inland Transportation Management Services businesses were related to the execution of services agreement with Zhiyuan.
Cost of revenues decreased by 68.5% to $4,128,571 for the six months ended December 31, 2013 from $13,124,226 for the same period of 2012. Gross margin was 28.7% for the six months ended December 31, 2013, compared to 8.3% for the same period of 2012 mainly due to the ramp of higher-margin new lines of services. Cost of revenues for Shipping Agency, Shipping and Chartering Services and Inland Transportation Management Services were $2,773,460, $1,291,048, and $64,063, leading to gross margins of 18.5%, 33.4% and 85.8%, respectively, for the six months ended December 31, 2013.
General and administrative expenses decreased by 25.4% to $1,495,842 for the six months ended December 31, 2013 from $2,004,611 for the same period of 2012, mainly driven by a reduction in salaries and benefits of approximately $292,000, reduction in professional service fees of approximately $131,000 and a decrease in conference fees of approximately $66,000. Selling expenses decreased by 29.9% to $128,525 for the six months ended December 31, 2013 from $183,426 for the same period of 2012, primarily due to lower commission payments related to the decline in the Shipping Agency business.
Operating profit of $36,912 for the six months ended December 31, 2013 compared to operating loss of $1,000,434 for the same period of 2012, primarily driven by our continued cost-reduction effort and the ramp of higher-margin new services lines in 2013. Operating profit margin of 0.6% for the six months ended December 31, 2013 compared to operating loss margin of 7.0% for the same period of 2012.
As a result of the foregoing, we reported net income of $111,739 for the six months ended December 31, 2013, compared to net loss of $1,008,011 for the same period of 2012. After deduction of non-controlling interest, net profit attributable to Sino-Global was $774,517, or $0.16 per diluted share, for the six months ended December 31, 2013, compared to net loss attributable to Sino-Global of $481,819, or net loss of $0.17 per diluted share, for the same period of 2012.
Financial Condition
As of December 31, 2013, the Company had cash and cash equivalents of $2,465,342 and working capital of $2,671,701, compared to $3,048,831 and $2,740,260, respectively, at the end of fiscal year 2013 ended June 30, 2013. Net cash used in operating activities was $342,535 for the six months ended December 31, 2013, as compared to $3,492,864 for the same period of 2012. Net cash used in investing activities was $193,369 for the six months ended December 31, 2013, as compared to $50,066 for the same period of 2012.
Recent Developments
On December 19, 2013, the Company announced that it had signed a one-year strategic agreement (the “Lianyungang Agreement”) with Jiangsu Lianyungang Port Logistics Holding Co., Ltd. (“Lianyungang Port Logistics”), to jointly develop and promote each other’s shipping agency and logistic service businesses both in China and overseas. Under the terms of the Lianyungang Agreement, each party will promote the other party’s services to its existing customers and will share profits generated from such cross-referral activities on a contract-by-contract basis.
On January 6, 2014, the Company announced that it had signed a three-year strategic partnership agreement (the “Tally Agreement”) with the Dalian subsidiary of a Chinese state-owned enterprise, China United Tally Co., Ltd. (“China Tally Dalian”) to jointly develop third-party verification services at key ports across China. Under the terms of the Tally Agreement, China Tally Dalian will be Sino-Global’s exclusive partner in the development and deployment of third-party verification services for the Company’s customers at key ports across China.
About Sino-Global Shipping America, Ltd.
Founded in the United States of America (“US”) in 2001, Sino-Global Shipping America, Ltd. is a Virginia corporation with its primary US operations in New York. We provide our customers with comprehensive yet customized shipping agency, shipping and chartering, and inland transportation management services. As a general agent, the Company serves ships coming to and departing from a number of countries and regions, including China, Australia, South Africa, Brazil, Hong Kong, Canada and the US. For more information, please visit: www.sino-global.com.
Forward Looking Statements
No statement made in this press release should be interpreted as an offer to purchase any security. Such an offer can only be made in accordance with the Securities Act of 1933, as amended, and applicable state securities laws. Any statements contained in this release that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties as identified in Sino-Global’s filings with the Securities and Exchange Commission. Actual results, events or performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as the date hereof. Sino-Global undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
For more information, please contact:
Mr. Anthony S. Chan, CPA
Acting CFO & EVP
+1 718-888-1814
In China:
Mr. Zhikang Huang
Chief Operating Officer
+86 139-1139-9217
SEGMENT REPORTING (Details) (USD $)
|
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2013
|
Dec. 31, 2012
|
Dec. 31, 2013
|
Dec. 31, 2012
|
Jun. 30, 2013
|
|
Segment Reporting Information [Line Items] | |||||
Revenues | $ 2,472,189 | $ 6,429,761 | $ 5,789,850 | $ 14,311,829 | |
Cost of revenues | 1,740,768 | 6,006,063 | 4,128,571 | 13,124,226 | |
Gross profit | 731,421 | 423,698 | 1,661,279 | 1,187,603 | |
Depreciation and amortization | 46,057 | 53,424 | 73,632 | 93,096 | |
Total capital expenditures | 193,369 | 50,066 | 193,369 | 50,066 | |
Total assets | 4,514,338 | 8,894,510 | 4,514,338 | 8,894,510 | 7,536,205 |
Shipping Agency Services [Member]
|
|||||
Segment Reporting Information [Line Items] | |||||
Revenues | 1,971,903 | 6,429,761 | 3,402,564 | 14,311,829 | |
Cost of revenues | 1,660,657 | 6,006,063 | 2,773,460 | 13,124,226 | |
Gross profit | 311,246 | 423,698 | 629,104 | 1,187,603 | |
Depreciation and amortization | 36,577 | 53,424 | 54,673 | 93,096 | |
Total capital expenditures | 191,529 | 50,066 | 191,529 | 50,066 | |
Total assets | 3,218,494 | 8,894,510 | 3,218,494 | 8,894,510 | |
Shipping And Chartering Services [Member]
|
|||||
Segment Reporting Information [Line Items] | |||||
Revenues | 50,196 | 0 | 1,937,196 | 0 | |
Cost of revenues | 16,048 | 0 | 1,291,048 | 0 | |
Gross profit | 34,148 | 0 | 646,148 | 0 | |
Depreciation and amortization | 233 | 0 | 466 | 0 | |
Total capital expenditures | 0 | 0 | 0 | 0 | |
Total assets | 484,741 | 0 | 484,741 | 0 | |
Inland Transportation Management Services [Member]
|
|||||
Segment Reporting Information [Line Items] | |||||
Revenues | 450,090 | 0 | 450,090 | 0 | |
Cost of revenues | 64,063 | 0 | 64,063 | 0 | |
Gross profit | 386,027 | 0 | 386,027 | 0 | |
Depreciation and amortization | 9,246 | 0 | 18,493 | 0 | |
Total capital expenditures | 1,840 | 0 | 1,840 | 0 | |
Total assets | $ 811,103 | $ 0 | $ 811,103 | $ 0 |
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