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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): February 13, 2019

 

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 February 13, 2019, Sino-Global Shipping America, Ltd. (the “Company”) issued a press release announcing certain financial results for the quarter ended December 31, 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 under Item 2.02 and 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.

 

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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: February 13, 2019 Sino-Global Shipping America, Ltd.
     
  By: /s/ Lei Cao
  Name:  Lei Cao
  Title: Chief Executive Officer

 

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EXHIBIT INDEX

 

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

 

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

Exhibit 99.1

 

Sino-Global Announces Fiscal 2019 Second Quarter Financial Results

Highlighted by 101.4% Increase to $10.5 Million in Total Revenues

 

Roslyn, New York, February 13, 2019 – 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, today announced its financial and operating results for the second quarter and six months ended December 31, 2018 (“Fiscal 2019”).

 

The Company has also provided an update on its Quarterly report on Form 10-Q filed with the U.S. Securities and Exchange Commission the same day. Management encourages investors to review this filing for more details of the Company’s financial results for the period.

 

Management Comments – Highlights in Second Quarter of Fiscal 2019

 

Mr. Lei Cao, Chairman and Chief Executive Officer of Sino-Global commented, “We delivered multiple shipments totaling approximately $0.89 million in revenue for the Company for November and December 2018 as part of our expanded shipping agency business and our freight logistics business generated revenue of approximately $8.98 million during the second quarter of 2019. The second quarter reflected the full impact of our costs associated with the transition to a shipping agency and logistics focus without the corresponding revenue, which we believe will be expressed in the second half of Fiscal 2019. The Company has signed multiple contracts over the past year with large import / export agencies throughout China and anticipates an increase in revenues in this business segment.”

 

Mr. Cao continued, “Our plan is to develop a shipping agency network in China and South East Asia for the next three years and to expand our shipping agency network worldwide. We plan to build the network through acquisitions or strategic partnership with other shipping agencies. Our shipping agency business will be mostly conducted through our subsidiaries in China, Hong Kong and Australia, where we have over 20 years of experience. Our initial strategy was to expand our partnerships gradually during 2018 with agencies that have a strong track-record throughout 2018 and then to increase sales and cash generation throughout 2019. We began seeing a considerable shift in sales in the fiscal 2019 second quarter and expect this to continue throughout the remainder of 2019.”

 

Fiscal 2019 Second Quarter and Subsequent Operating Highlights

 

On November 1, 2018, the Company signed a five-year strategic cooperation agreement with a Hong Kong listed Company, Sinco Pharmaceuticals Holdings Ltd (“Sinco”), pursuant to which both companies will contribute resources and expertise to develop cold chain logistics in China.

 

On January 1, 2019, the Company signed a shipment service agreement with Chongqing Iron and Steel Company (“Chongqing Iron and Steel”) which appointed the Company to ship 1 million tons of iron ore and coal to their designated port with service period from January 1, 2019 to December 31, 2019. The business relationship Sino-Global has with Chongqing Iron and Steel will further enhance and develop its freight logistics business.

 

During the three months ended December 31, 2018, the Company signed a shipping agency agreement with Y&D Marine Limited Co.. On January 30, 2019, Sino-Global signed an agency agreement with Zhejiang Baoming International Shipping Agency Co., Ltd. and assigned them as the port agent, due to the aforementioned shipping agency agreement with Y&D Marine Limited Co. We will cooperate with more port agents in the near future to further expand our shipping agency business.

 

 

 

  

Fiscal Year 2019 Second Quarter Financial Review

 

Total revenues increased by 101.4% to approximately $10.5 million for the three month period ended December 31, 2018, compared to approximately $5.2 million in the period ended December 31, 2017. This increase was due to the Company’s business development efforts in freight logistics. In addition, as the Company decided to transit back to the shipping agency business, we had generated approximately $0.9 million of revenue from providing shipping agency services in the second quarter of fiscal year 2019.

 

The Company’s gross profit for the three month period ended December 31, 2018 was approximately $1.96 million, compared to approximately $1.84 million for the same period in the prior year. Gross profit margin during the period was 18.6% compared to 35.3% for the same period last year.

 

Sino-Global’s selling, general and administrative expenses (SG&A expenses) were approximately $2.1 million for the three month period ended December 31, 2018, compared to approximately $1.9 million in the same period of the prior year. As a percentage of revenue, SG&A expenses decreased to 19.8% from 36.0% in the prior year period, largely due to greater efficiency on higher revenues.

 

The Company’s provision for doubtful accounts was $416,706 for the three months ended December 31, 2018, compared with a provision for doubtful accounts of $861,967 for the same period in 2017. The decrease was due to faster collections from customers. As the Company continues its business relationship with several large customers, it will continue to monitor the collection closely with respect to trade accounts receivable.

 

For the three months ended December 31, 2018, the Company reported a net loss attributable to the Company of approximately $1.5 million, or $(0.11) per diluted share based on weighted average diluted shares outstanding of 13,769,918, compared to a net income attributable to the Company of approximately $0.3 million, or $0.03 per diluted share based on weighted average diluted shares outstanding of 10,415,503, for the same period in the prior year.

 

The following tables present summary information by segments for the three months ended December 31, 2018 and 2017:

 

       For the three months ended December 31, 2018 
   Shipping
Agency Services
  

Inland

Transportation Management Services

   Freight
Logistics
Services
   Container Trucking Services   Total 
Revenues                    
- Related party  $-   $75,000   $-   $-   $75,000 
- Third parties  $889,070   $345,000   $8,978,923   $227,294   $10,440,287 
Total revenues  $889,070   $420,000   $8,978,923   $227,294   $10,515,287 
Cost of revenues  $809,040   $20,000   $7,497,666   $229,891   $8,556,597 
Gross profit  $80,030   $400,000   $1,481,256   $(2,596)  $1,958,690 
Depreciation and amortization  $-   $20,339   $475   $4,751   $25,565 
Total capital expenditures  $-   $-   $-   $8,534   $8,534 
Gross margin%   9.0%   95.2%   16.5%   (1.1%)   18.6%

 

   For the three months ended December 31, 2017 
   Shipping
Agency Services
  

Inland

Transportation Management Services

   Freight
Logistics
Services
   Container Trucking Services   Total 
Revenues                    
- Related party  $      -   $555,246   $-   $-   $555,246 
- Third parties  $-   $838,595   $3,699,775   $126,865   $4,665,235 
Total revenues  $-   $1,393,841   $3,699,775   $126,865   $5,220,481 
Cost of revenues  $-   $174,025   $3,152,005   $49,848   $3,375,878 
Gross profit  $-   $1,219,816   $547,770   $77,017   $1,844,603 
Depreciation and amortization  $-   $12,736   $476   $5,327   $18,539 
Total capital expenditures  $-   $-   $2,721   $42,480   $45,201 
Gross margin%   -    87.5%   14.8%   60.7%   35.3%

  

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Balance Sheet Information

 

As of December 31, 2018, the Company had approximately $2.5 million in cash, working capital of apporximately $12.5 million and stockholders’ equity of approximately $18.6 million.

 

The Company had no long-term debt as of December 31, 2018.

 

About Sino-Global Shipping America, Ltd.

 

Founded in the United States in 2001, Sino-Global Shipping America, Ltd. is a company engaged originally 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 shipping agency, 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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

 

   For the Three Months
Ended
   For the Six Months
Ended
 
   December 31,   December 31, 
   2018   2017   2018   2017 
                 
Net revenues - third parties  $10,440,287   $4,665,235   $16,617,820   $9,480,086 
Net revenues - related party   75,000    555,246    397,000    1,120,406 
Total revenues   10,515,287    5,220,481    17,014,820    10,600,492 
Cost of revenues   (8,556,597)   (3,375,878)   (13,640,429)   (7,041,796)
Gross profit   1,958,690    1,844,603    3,374,391    3,558,696 
                     
Selling expenses   (258,229)   (335,261)   (366,598)   (357,727)
General and administrative expenses   (1,831,746)   (1,546,305)   (3,676,579)   (2,247,289)
Stock-based compensation   (1,047,376)   (280,709)   (1,864,584)   (343,082)
Total operating expenses   (3,137,351)   (2,162,275)   (5,907,761)   (2,948,098)
                     
Operating income (loss)   (1,178,661)   (317,672)   (2,533,370)   610,598 
                     
Financial income, net   782    137,799    1,494    222,595 
                     
Net income (loss) before provision for income taxes   (1,177,879)   (179,873)   (2,531,876)   833,193 
                     
Income tax benefit (expense)   (244,979)   571,121    (178,513)   274,692 
                     
Net income (loss)   (1,422,858)   391,248    (2,710,389)   1,107,885 
                     
Net income attributable to non-controlling interest   51,114    93,545    80,345    192,993 
                     
Net income (loss) attributable to Sino-Global Shipping America, Ltd.  $(1,473,972)  $297,703   $(2,790,734)  $914,892 
                     
Comprehensive income (loss)                    
Net income (loss)  $(1,422,858)  $391,248   $(2,710,389)  $1,107,885 
Other comprehensive income (loss) - foreign currency   (106,762)   97,600    (568,924)   145,317 
Comprehensive income (loss)   (1,529,620)   488,848    (3,279,313)   1,253,202 
Less: Comprehensive income attributable to non-controlling interest   26,930    20,618    133,655    61,365 
Comprehensive income (loss) attributable to Sino-Global Shipping America Ltd.  $(1,556,550)  $468,230   $(3,412,968)  $1,191,837 
                     
Earnings (loss) per share                    
Basic  $(0.11)  $0.03   $(0.21)  $0.09 
Diluted  $(0.11)  $0.03   $(0.21)  $0.09 
                     
Weighted average number of common shares used in computation                    
Basic   13,769,918    10,367,492    13,457,726    10,236,513 
Diluted   13,769,918    10,415,503    13,457,726    10,286,683 

  

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SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

   December 31,   June 30, 
   2018   2018 
         
Assets        
Current assets        
Cash  $2,454,226   $7,098,259 
Accounts receivable, less allowance for doubtful accounts of $3,080,328 and $1,682,228 as of December 31, 2018 and June 30, 2018, respectively   12,148,934    8,428,853 
Other receivables, less allowance for doubtful accounts of $145,186 and $145,176 as of December 31, 2018 and June 30, 2018, respectively   35,040    69,239 
Advances to suppliers-third parties   934,824    704,878 
Advances to suppliers-related party   -    3,414,619 
Prepaid expense and other current assets   354,969    588,439 
Due from related party   1,105,775    2,087,994 
Total Current Assets   17,033,768    22,392,281 
           
Property and equipment, net   900,455    956,429 
Intangible assets, net   121,389    153,056 
Prepaid expenses   1,267,005    1,878,258 
Other long-term assets - deposits   3,048,586    143,303 
Deferred tax assets, net   755,000    634,500 
Total Assets  $23,126,203   $26,157,827 
           
Liabilities and Equity          
           
Current Liabilities          
Advances from customers  $126,395   $415,385 
Accounts payable   770,077    3,225,661 
Taxes payable   3,015,104    2,700,619 
Accrued expenses and other current liabilities   594,082    280,888 
Total current liabilities   4,505,658    6,622,553 
           
Total liabilities   4,505,658    6,622,553 
           
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; 15,421,200 and 13,271,032 shares issued as of December 31, 2018 and June 30, 2018, respectively; 15,245,703 and 13,095,535 outstanding as of December 31, 2018 and June 30, 2018, respectively   25,791,830    23,717,330 
Additional paid-in capital   2,045,657    1,755,573 
Treasury stock, at cost, 175,497 shares  as of December 31, 2018 and June 30, 2018   (417,538)   (417,538)
Accumulated deficit   (3,225,590)   (434,856)
Accumulated other comprehensive loss   (894,641)   (272,407)
Total Sino-Global Shipping America Ltd. Stockholders' Equity   23,299,718    24,348,102 
           
Non-controlling Interest   (4,679,173)   (4,812,828)
           
Total Equity   18,620,545    19,535,274 
           
Total Liabilities and Equity  $23,126,203   $26,157,827 

  

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SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (UNAUDITED)

 

   For the Six Months Ended 
   December 31, 
   2018   2017 
         
Operating Activities        
Net income (loss)  $(2,710,389)  $1,107,885 
Adjustments to reconcile net income (loss) to net cash used in operating activities:          
Stock-based compensation   1,864,584    343,082 
Depreciation and amortization   51,280    31,742 
Provision for doubtful accounts   1,287,787    837,431 
Deferred tax benefit   (120,500)   (1,073,700)
Changes in assets and liabilities          
Accounts receivable   (5,044,123)   (2,210,485)
Other receivables   79,773    (234,751)
Advances to suppliers-third parties   (220,166)   50,465 
Advances to suppliers-related party   3,294,701    - 
Prepaid expenses and other current assets   408,642    80,952 
Other long-term assets - deposits   (2,489,067)   - 
Due from related parties   1,091,355    (921,532)
Advances from customers   (295,619)   (23,001)
Accounts payable   (2,508,225)   288,283 
Taxes payable   305,603    731,456 
Due to related parties   -    (206,323)
Accrued expenses and other current liabilities   286,613    (61,218)
Net cash used in operating activities   (4,717,751)   (1,259,714)
           
Investing Activities          
Acquisition of property and equipment   (9,357)   (50,278)
Acquisition of intangible assets   -    (190,000)
Prepayment for acquisition of intangible assets   -    (10,000)
Net cash used in investing activities   (9,357)   (250,278)
           
Financing Activities          
Proceeds from issuance of common stock   500,000    - 
Net cash provided financing activities   500,000    - 
           
Effect of exchange rate fluctuations on cash   (416,925)   (3,902)
           
Net decrease in cash   (4,644,033)   (1,513,894)
           
Cash at beginning of period   7,098,259    8,733,742 
           
Cash at end of period  $2,454,226   $7,219,848 
           
Supplemental information          
Income taxes paid  $16,536   $60,162 

 

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