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Section 1: 8-K (CURRENT REPORT)

 

 

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): September 28, 2018

 

Sino-Global Shipping America, Ltd.

(Exact name of Registrant as specified in charter)

 

Virginia   001- 34024   11-3588546
(State or other jurisdiction
of Incorporation)
  (Commission File No.)   (IRS Employer
Identification No.)

 

1044 Northern Boulevard, Suite 305

Roslyn, New York 11576-1514

(Address of principal executive offices) (Zip Code)

 

Registrant's telephone number, including area code: (718) 888-1814

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17CFR230.425)

 

Soliciting material pursuant to Rule14a-12 under the Exchange Act (17CFR240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

Item 2.02.Results of Operations and Financial Condition.

 

On September 28, 2018, Sino-Global Shipping America, Ltd. (the “Company”) issued a press release announcing certain financial results for the fourth quarter of fiscal year 2018 and for the fiscal year ended June 30, 2018. A copy of the press release is attached hereto as Exhibit 99.1.

 

The information provided in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01.Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Description
     
99.1   Press release of Sino-Global Shipping America, Ltd.

 

 1 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: September 28, 2018

 

  Sino-Global Shipping America, Ltd.
     
  By: /s/ Lei Cao
  Name:  Lei Cao
  Title: Chief Executive Officer

 

 2 

 

 

EXHIBIT INDEX

 

Exhibit No.   Description
     
99.1   Press release of Sino-Global Shipping America, Ltd.

 

 3 

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Section 2: EX-99.1 (PRESS RELEASE OF SINO-GLOBAL SHIPPING AMERICA, LTD.)

Exhibit 99.1

 

 

Sino-Global Announces 2018 Year End Financial Results

Highlighted by Progress in New Business Initiatives and Reinvestment

 

Roslyn, New York, September 28, 2018 – Sino-Global Shipping America, Ltd. (NASDAQ: SINO) (“Sino-Global”, the “Company”, “our”, “we” or “us”), a logistics integrated solutions provider engaged in non-asset based global shipping, freight logistics, and inland transportation management and related services, announced its financial and operating results for the fourth quarter of the fiscal year 2018 and year ended June 30, 2018. The Company has also provided extensive information on its annual report on Form 10-K filed this morning with the U.S. Securities and Exchange Commission. Management encourages investors to review this filing for more details of the Company’s financial results for the fiscal year 2018, background on Sino-Global’s business and history, as well as Company strategy for the coming fiscal year.

 

Management Comments – Highlights in Fiscal 2018

Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented, “We made tremendous progress this year in our freight logistics, bulk cargo container and container trucking services while spending much of this year investing in our business. These highlights include:

 

Reinvesting in our Business: Since our change in business focus to a asset-light online logistics platform we have made great strides towards integrating our business relationships in China with opportunities in the United States, with revenues increasing substantially since this change in model. Going forward, we know that in order to maintain an advantage we needed to expand our technical capabilities. We invested in an upgraded IT facility in Shanghai that will help facilitate a larger base of revenues.

 

Broadening our Global Base of Customers and Shipments: In fiscal 2018, we coordinated the shipment of a vast array of materials from China to ports in Australia and the United States by utilizing our long-term relationships to connect shippers to our online platform. This included an increase in sales to major customers shipping minerals and coals between Australia and China.

 

New Joint Venture Agreement: In September 2018, we entered into a co-operation agreement with Ningbo Far-East Universal Shipping Agency Co., Ltd (“Ningbo Far-East”) to set up a joint venture in Hong Kong to engage in worldwide shipping agency and management business. The Company shall have 51% ownership in the joint venture. Ningbo Far-East is one of the top ranking shipping agencies for private enterprises in the Ningbo and Zhoushan ports. We are very pleased with the potential of this joint venture, as it provides further diversification in our customer base without any significant overlap. We are one of the few shipping agents specialized in providing a full range of general shipping agency services in China and the only shipping agency company listed on a major stock exchange in the U.S. compared to the other, much smaller, shipping agencies in China. The setup of Sino Ningbo allows us to use our resources such as our customer base, our IT infrastructure currently under development and our business insight to build a global network of shipping agencies.

 

Development of Online Platform: In fiscal 2018, we continued to further the development of our online platform, which helps to bridge the gap between global shippers from China and other countries such as Australia and the United States. With the signing of a strategic cooperation agreement with COSCO Beijing, we are able to take advantage of the low container rate to jointly promote bulk cargo container transportation.

 

Seeking “Reverse” Logistics Opportunities from the U.S. to China: We also are continuing to take advantage of export opportunities, as we shipped 140 containers totaling 18 tons per container of sulfur from Long Beach, CA in the U.S. to our customers in China. With these shipments we coordinated with the customers to sign the purchase contract with sulfur suppliers in the United States; organized the container shipping, obtained customs clearance, and arranged for the product to be shipped to the customer’s designated port.

 

Overall, we feel that the Company has properly positioned itself to take advantage of a growing revenue opportunity. As we move forward into fiscal 2019, we are focused on leveraging our growing infrastructure to improve operating margins and the bottom line. We expect to provide an updated shareholder letter at the end of November to outline our growth strategy in calendar 2019.”

 

 

 

 

Fiscal Year 2018 Fourth Quarter Financial Review

Total revenues increased by 57.1% to approximately $7.3 million for the three month period ending June 30, 2018, which compared to $4.6 million in the year ending June 30, 2017. This increase was due to the Company’s business development efforts in freight logistics, container trucking and inland transportation management segments.

 

The Company’s gross profit for the period was $2.1 million, compared to $1.4 million in the prior year period. Gross profit margin during the period was 29.2% which remain consistent compared to 31.0% for the same period last year.

 

The operating loss for the three months ended June 30, 2018 was $0.7 million, compared to an operating income of $0.47 million for the year ended June 30, 2017. The decrease in operating income was mainly due to increases in selling, general and administrative expenses (SG&A), largely due to stock compensation being awarded in the fourth quarter of 2018.

 

For the three months ended June 30, 2018, the Company reported a net loss of $0.8 million, or $(0.06) per diluted share based on weighted average shares outstanding of 12,864,913, compared to a net income of $0.8 million, or $0.07 per diluted share based on weighted average shares outstanding of 10,152,685, for the same period in prior year. The decrease was largely due to a $1.1 million income tax expense during the period compared to a $0.3 million income tax benefit in the prior year period.

 

Fiscal Year 2018 Financial Review

Total revenues increased by approximately 101.5% to $23.1 million during the year, compared to $11.4 million in the prior fiscal year. This increase was due to the Company’s efforts to diversify its business resulting in a significant increase in revenues from the freight logistic services.

 

The Company’s gross profit for the 2018 fiscal year was $7.5 million, compared to $6.5 million in the prior fiscal year. Gross profit margin during the year decreased to 32.4% from 56.5%, which was largely attributed to a greater portion of revenues coming from the rapidly growing freight logistic services segment. For the fiscal year ended June 30, 2018, the Company performed logistics services for one customer on a fragmented scope, as compared to the full range of services (with a corresponding higher margin) that it expects in the future.

 

The following tables present summary information by segment for the years ended June 30, 2018 and 2017:

 

   For the year ended June 30, 2018 
   Inland
Transportation
Management
Services
   Freight
Logistics
Services
   Container
Trucking
Services
   Bulk Cargo
Container
Services
   Total 
Revenues                    
- Related party  $2,059,406   $-   $-   $-   $2,059,406 
- Third parties  $3,441,001   $15,829,444   $1,096,485   $638,227   $21,005,157 
Total  $5,500,407   $15,829,444   $1,096,485   $638,227   $23,064,563 
Cost of revenues  $874,760   $13,519,486   $696,998   $494,449   $15,585,693 
Gross profit  $4,625,647   $2,309,958   $399,487   $143,778   $7,478,870 
Depreciation and amortization  $72,954   $1,902   $20,063   $-   $94,919 
Total capital expenditures  $-   $778,182   $44,595   $-   $822,777 
                          
Gross profit margin   84.1%   14.6%   36.4%   22.5%   32.4%

 

   For the year ended June 30, 2017 
   Inland
Transportation
Management
Services
   Freight
Logistics
Services
   Container
Trucking
Services
   Bulk Cargo
Container
Services
   Total 
Revenues                    
- Related party  $2,746,423   $-   $-   $          -   $2,746,423 
- Third parties  $3,012,177   $4,815,450   $871,563   $-   $8,699,190 
Total revenues  $5,758,600   $4,815,450   $871,563   $-   $11,445,613 
Cost of revenues  $620,259   $3,710,364   $649,968   $-   $4,980,591 
Gross profit  $5,138,341   $1,105,086   $221,595   $-   $6,465,022 
Depreciation and amortization  $27,857   $21,510   $-   $-   $49,367 
Total capital expenditures  $61,359   $1,053   $-   $-   $62,412 
                          
Gross profit margin   89.2%   22.9%   25.4%   -    56.5%

 

 -2- 

 

 

Operating income for the year ended June 30, 2018 was approximately $0.8 million, compared to an operating income of $3.1 million in the prior year. As discussed above, the decrease was mainly due to increased costs of revenue and selling, general and administrative expenses. General and administrative expenses as a percentage of revenue remained consistent at 26.9% and 27.5% for the years ended June 30, 2018 and 2017, respectively.

 

For the fiscal year ended June 30, 2018, the Company reported a net income of $0.5 million, or $0.04 per diluted share based on 12.0 million weighted average shares outstanding, compared to net income of $3.6 million, or $0.41 per diluted share based on 8.9 million weighted average shares outstanding, for the prior year.

 

Balance Sheet Information

As of June 30, 2018, the Company had $7.1 million in cash and cash equivalents, working capital of $17.2 million and shareholder equity of $24.3 million; compared to $8.7 million, $13.7 million, and $19.5 million, respectively, as of June 30, 2017.

 

The Company’s allowance for doubtful accounts was $1.7 million in 2018 compared with an allowance of doubtful accounts of $185,821 in 2017. As we continue to maintain long-standing relationships with our customers, we are continuing to monitor their payments closely and do not believe there are any significant collection issues with respect to our trade accounts receivable.

 

The Company holds no long-term debt.

 

About Sino-Global Shipping America, Ltd.

Founded in the United States in 2001, Sino-Global Shipping America, Ltd. is a company engaged in shipping, chartering, logistics and related business services. Headquartered in New York, Sino-Global has offices in mainland China, Australia, Canada and Hong Kong. The Company’s current service offerings consist of inland transportation management, freight logistics and container trucking services. Additional information about Sino-Global can be found on the Company’s corporate website at www.sino-global.com. The Company routinely posts important information on its website.

 

Forward Looking Statements

No statement made in this press release should be interpreted as an offer to sell or a solicitation of 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 U.S. 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 of 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 unless required by applicable law or regulations.

 

Contact Information

The Equity Group Inc.

Adam Prior

Senior Vice-President

(212)-836-9606 / aprior@equityny.com

 

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SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

 

   For the Three Months Ended
June 30,
   For the Year Ended
June 30,
 
   2018   2017   2018   2017 
Net revenues - third parties  $6,825,901   $4,107,809   $21,005,157   $8,699,190 
Net revenues - related party   438,000    517,243    2,059,406    2,746,423 
Total revenues   7,263,901    4,625,052    23,064,563    11,445,613 
Cost of revenues   (5,138,462)   (3,191,243)   (15,585,693)   (4,980,591)
Gross profit   2,125,439    1,433,809    7,478,870    6,465,022 
                     
General and administrative expenses   (2,134,670)   (903,697)   (6,202,555)   (3,152,336)
Selling expenses   (65,076)   (58,075)   (458,166)   (211,504)
Total operating expenses   (2,199,746)   (961,772)   (6,660,721)   (3,363,840)
                     
Operating income   (74,307)   472,037    818,149    3,101,182 
                     
Financial income, net   (313,227)   88,015    79,502    30,278 
Other income, net   575,115         575,115    - 
Total other income   261,888    88,015    654,617    30,278 
                     
Net income  before provision for income taxes   187,581    560,052    1,472,766    3,131,460 
                     
Income tax benefit (expense)   (1,008,256)   313,900    (949,659)   472,084 
                     
Net income (loss)   (820,675)   873,952    523,107    3,603,544 
                     
Net income (loss) attributable to non-controlling interest   (279,880)   82,735    64,056    (21,348)
                     
Net income (loss) attributable to Sino-Global Shipping America, Ltd.  $(540,795)  $791,217   $459,051   $3,624,892 
                     
Comprehensive income (loss)                    
Net income  $(820,675)  $873,952   $523,107   $3,603,544 
Foreign currency translation income (loss)   (243,782)   40,270    65,981    (73,741)
Comprehensive income   (1,064,457)   914,222    589,088    3,529,803 
Less: Comprehensive income (loss) attributable to non-controlling interest   (104,270)   (33,866)   (12,120)   38,568 
                     
Comprehensive income (loss) attributable to Sino-Global Shipping America Ltd.  $(960,187)  $880,356   $601,208   $3,491,235 
                     
Earnings per share                    
-Basic  $(0.06)  $0.07   $0.04   $0.41 
-Diluted  $(0.06)  $0.07   $0.04   $0.41 
                     
Weighted average number of common shares used in computation                    
-Basic   12,856,194    10,105,535    11,037,343    8,911,494 
-Diluted   12,864,913    10,152,685    12,023,036    8,949,960 

 

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SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

CONSOLIDATED BALANCE SHEETS

 

   June 30,   June 30, 
   2018   2017 
Assets        
Current assets        
Cash and cash equivalents  $7,098,259   $8,733,742 
Accounts receivable, less allowance for doubtful accounts of $1,682,228 and $185,821 as of June 30, 2018 and  2017, respectively   8,428,853    2,569,141 
Other receivables, less allowance for doubtful accounts of $145,176 and $145,244 as of June 30, 2018 and 2017, respectively   69,239    37,811 
Advances to suppliers-third parties   2,144,985    54,890 
Advances to suppliers-related party   3,414,619    3,333,038 
Prepaid expense and other current assets   588,439    311,136 
Due from related party   2,087,994    1,715,130 
           
Total Current Assets   23,832,388    16,754,888 
           
Property and equipment, net   956,429    187,373 
Intangible assets, net   153,056    - 
Prepaid expenses   438,151    6,882 
Other long-term assets - deposits   143,303    117,478 
Deferred tax assets, net   634,500    749,400 
           
Total Assets  $26,157,827   $17,816,021 
           
Liabilities and Equity          
           
Current Liabilities          
Advances from customers  $415,385   $369,717 
Accounts payable   3,225,661    206,211 
Taxes payable   2,700,619    1,886,216 
Due to related parties   -    206,323 
Accrued expenses and other current liabilities   280,888    418,029 
           
Total Current Liabilities   6,622,553    3,086,496 
           
Total Liabilities   6,622,553    3,086,496 
           
Commitments and Contingencies          
           
Equity          
Preferred stock, 2,000,000 shares authorized, no par value, none issued.   -    - 
Common stock, 50,000,000 shares authorized, no par value; 13,271,032 and 10,281,032 shares issued as of June 30, 2018 and 2017, respectively; 13,095,535 and 10,105,535 outstanding as of June 30, 2018 and 2017, respectively   23,717,330    20,535,379 
Additional paid-in capital   1,755,573    688,934 
Treasury stock, at cost, 175,497 shares  as of June 30, 2018 and  2017   (417,538)   (417,538)
Accumulated deficit   (434,856)   (893,907)
Accumulated other comprehensive loss   (272,407)   (414,564)
           
Total Sino-Global Shipping America Ltd. Stockholders' Equity   24,348,102    19,498,304 
           
Non-controlling Interest   (4,812,828)   (4,768,779)
           
Total Equity   19,535,274    14,729,525 
           
Total Liabilities and Equity  $26,157,827   $17,816,021 
 -5- 

 

 

SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

   For the Years Ended
June 30,
 
   2018   2017 
Operating Activities        
Net income  $523,107   $3,603,544 
Adjustment to reconcile net income to net cash provided by (used in) operating activities:          
Stock-based compensation – employees, management and directors   1,032,000    - 
Amortization of stock-based compensation - consultants   621,834    599,846 
Amortization of stock option expense   9,665    110,195 
Depreciation and amortization   94,919    49,367 
Provision for (recovery of) doubtful accounts   1,726,599    (18,912)
Deferred tax provision (benefit)   114,900    (749,400)
Changes in assets and liabilities          
Increase in accounts receivable   (7,421,179)   (260,165)
Decrease (increase) in other receivables   (31,328)   249,768 
Decrease  (increase) in advances to suppliers-third parties   (662,144)   2,085,281 
Increase in advances to suppliers-related party   -    (3,317,382)
Decrease (increase) in prepaid expenses   (280,627)   143,796 
Increase in other long-term assets   (470,319)   (70,806)
Increase in due from related parties   (604,863)   (117,772)
Increase  in advances from customers   38,174    343,790 
Increase (decrease) in accounts payable   3,064,257    (272,474)
Increase in taxes payable   754,512    278,288 
Increase (decrease) in due to related parties   (206,323)   206,323 
Increase (decrease) in accrued expenses and other current liabilities   (110,836)   131,483 
           
Net cash provided by (used in) operating activities   (1,807,652)   2,994,770 
           
Investing Activities          
Acquisition of property and equipment   (822,777)   (62,412)
Acquisition of intangible assets   (190,000)   - 
Prepayment for acquisition of intangible assets   (1,440,107)   - 
           
Net cash used in investing activities   (2,452,884)   (62,412)
           
Financing Activities          
Proceeds from issuance of common stock, net   2,585,091    4,319,988 
Proceeds from exercise of stock options   -    82,500 
           
Net cash provided by financing activities   2,585,091    4,402,488 
           
Effect of exchange rate fluctuations on cash and cash equivalents   39,962    12,902 
           
Net increase (decrease) in cash and cash equivalents   (1,635,483)   7,347,748 
           
Cash and cash equivalents at beginning of year   8,733,742    1,385,994 
           
Cash and cash equivalents at end of year  $7,098,259   $8,733,742 
           
Supplemental information          
Income taxes paid  $68,268   $89,324 

 

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