Singularity Future Technology Ltd. 10-Q

10-Q 1 f10q1220_sinoglobal.htm QUARTERLY REPORT U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended December 31, 2020 ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ___________ to ___________. Commission File Number 001-34024 Sino-Global Shipping America, Ltd. (Exact name of registrant as specified in its charter) Virginia 11-3588546 (State or other jurisdiction of (I.R.S. employer Incorporation or organization) identification number) 1044 Northern Boulevard, Suite 305 Roslyn, New York 11576-1514 (Address of principal executive offices) (Zip Code) (718) 888-1814 (Registrant’s telephone number, including area code) Securities Registered Pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock SINO NASDAQ Capital Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ 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. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of February 11, 2021, the Company had 13,309,244 shares of common stock issued and outstanding. SINO-GLOBAL SHIPPING AMERICA, LTD . FORM 10-Q INDEX PART I. FINANCIAL INFORMATION 1 Item 1. Financial Statements 1 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 3. Quantitative and Qualitative Disclosures about Market Risk 39 Item 4. Controls and Procedures 39 PART II. OTHER INFORMATION 40 Item 1. Legal Proceedings 40 Item 1A. Risk Factors 40 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 40 Item 3. Defaults Upon Senior Securities 40 Item 4. Mine Safety Disclosures 40 Item 5. Other Information 40 Item 6. Exhibits 40 i SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This document contains certain statements of a forward-looking nature. Such forward-looking statements, including but not limited to projected growth, trends and strategies, future operating and financial results, financial expectations and current business indicators are based upon current information and expectations and are subject to change based on factors beyond our control. Forward-looking statements typically are identified by the use of terms such as “look”, “may”, “will”, “should”, “might”, “believe”, “plan”, “expect”, “anticipate”, “estimate” and similar words, although some forward-looking statements are expressed differently. The accuracy of such statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including but not limited to the following: ● Our ability to timely and properly deliver our services; ● Our dependence on a limited number of major customers and related parties; ● Political and economic factors in the People’s Republic of China (“PRC”); ● Our ability to expand and grow our lines of business; ● Unanticipated changes in general market conditions or other factors, which may result in cancellations or reductions in the need for our services; ● Economic conditions which would reduce demand for services provided by us and could adversely affect profitability; ● The effect of terrorist acts, or the threat thereof, on the demand for the shipping and logistic industry which could, adversely affect our operations and financial performance; ● The acceptance in the marketplace of our new lines of business; ● Foreign currency exchange rate fluctuations; ● Hurricanes, outbreak of contagious diseases or other natural disasters; and ● Our ability to attract, retain and motivate skilled personnel. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update this forward-looking information unless required by applicable law or regulations. ii PART I. FINANCIAL INFORMATION Item 1. Financial Statements SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) December 31, June 30, 2020 2020 Assets Current assets Cash $ 4,473,000 $ 131,182 Accounts receivable, net 1,262,138 1,155,948 Other receivables, net 583,916 51,034 Advances to suppliers - third parties 80,804 48,875 Prepaid expenses and other current assets 63,125 90,382 Due from related party, net 345,898 435,898 Total Current Assets 6,808,881 1,913,319 Property and equipment, net 424,326 523,290 Right-of-use assets 224,950 300,114 Intangible assets, net - 26,389 Other long-term assets - deposits 3,204,323 2,974,990 Total Assets $ 10,662,480 $ 5,738,102 Liabilities and Equity Current Liabilities Deferred revenue $ 470,996 $ 67,083 Accounts payable 564,495 487,692 Lease liabilities - current 166,572 204,391 Taxes payable 3,561,551 3,280,348 Accrued expenses and other current liabilities 855,188 1,643,319 Loan payable - current 132,468 126,032 Total current liabilities 5,751,270 5,808,865 Lease liabilities - noncurrent 78,660 132,699 Loan payable - noncurrent 148,002 154,438 Total liabilities 5,977,932 6,096,002 Commitments and Contingencies Equity (Deficiency) Preferred stock, 2,000,000 shares authorized, no par value, 860,000 and nil shares issued and outstanding as of December 31, 2020 and June 30, 2020, respectively 1,427,600 - Common stock, 50,000,000 shares authorized, no par value; 5,998,788 and 3,718,788 shares issued and outstanding as of December 31, 2020 and June 30, 2020, respectively* 33,788,522 28,414,992 Additional paid-in capital 2,334,962 2,334,962 Subscription receivable - (59,869 ) Accumulated deficit (25,258,304 ) (23,421,594 ) Accumulated other comprehensive loss (656,914 ) (1,084,030 ) Total Sino-Global Shipping America Ltd. Stockholders' Equity 11,635,866 6,184,461 Non-controlling Interest (6,951,318 ) (6,542,361 ) Total Equity (Deficiency) 4,684,548 (357,900 ) Total Liabilities and Equity (Deficiency) $ 10,662,480 $ 5,738,102 * Shares and per share data are presented on a retroactive basis to reflect the 1-for-5 reverse stock split on July 7, 2020. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 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, 2020 2019 2020 2019 Net revenues 1,884,440 2,021,124 $ 3,021,239 $ 3,807,350 Cost of revenues (1,688,464 ) (755,645 ) (2,783,690 ) (1,439,049 ) Gross profit 195,976 1,265,479 237,549 2,368,301 Selling expenses (73,462 ) (126,125 ) (142,392 ) (256,154 ) General and administrative expenses (1,314,235 ) (702,064 ) (2,017,669 ) (1,793,519 ) Impairment loss of fixed assets and intangible asset - - - (327,632 ) Provision for doubtful accounts, net of recovery 15,891 (278,676 ) (2,462 ) (1,167,754 ) Stock-based compensation - (491,609 ) - (906,317 ) Total operating expenses (1,371,806 ) (1,598,474 ) (2,162,523 ) (4,451,376 ) Operating loss (1,175,830 ) (332,995 ) (1,924,974 ) (2,083,075 ) Other income (loss), net 85,720 (15,613 ) 86,408 (14,157 ) Net loss before provision for income taxes (1,090,110 ) (348,608 ) (1,838,566 ) (2,097,232 ) Income tax expense (3,450 ) (14,747 ) (3,450 ) (14,747 ) Net loss (1,093,560 ) (363,355 ) (1,842,016 ) (2,111,979 ) Net income (loss) attributable to non-controlling interest 9,359 43,978 (5,306 ) (77,293 ) Net loss attributable to Sino-Global Shipping America, Ltd. $ (1,102,919 ) $ (407,333 ) $ (1,836,710 ) $ (2,034,686 ) Comprehensive loss Net loss $ (1,093,560 ) $ (363,355 ) $ (1,842,016 ) $ (2,111,979 ) Other comprehensive income (loss) - foreign currency 31,038 256,206 23,465 (247,461 ) Comprehensive loss (1,062,522 ) (107,149 ) (1,818,551 ) (2,359,440 ) Less: Comprehensive loss attributable to non-controlling interest (195,468 ) (49,831 ) (408,957 ) (28,558 ) Comprehensive loss attributable to Sino-Global Shipping America, Ltd. $ (867,054 ) $ (57,318 ) $ (1,409,594 ) $ (2,330,882 ) Loss per share Basic and diluted* $ (0.23 ) $ (0.12 ) $ (0.42 ) $ (0.62 ) Weighted average number of common shares used in computation Basic and diluted* 4,828,788 3,363,802 4,328,571 3,289,674 * Shares and per share data are presented on a retroactive basis to reflect the 1-for-5 reverse stock split on July 7, 2020. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIENCY) (UNAUDITED ) Preferred Stock Common Stock Additional paid-in Treasury Stock Subscription Accumulated Accumulated other comprehensive Noncontrolling Shares Amount Shares* Amount capital Shares* Amount receivable deficit loss interest Total BALANCE, June 30, 2019 - $ - 3,210,907 $ 26,523,830 $ 2,066,906 (35,099 ) $ (417,538 ) $ - $ (6,968,700 ) $ (671,106 ) $ (5,173,622 ) $ 15,359,770 Stock based compensation to employee - - 18,000 63,000 - - - - - - - 63,000 Stock based compensation to consultants - - 48,000 200,300 - - - - - - - 200,300 Amortization of shares issued to consultants - - - - 180,209 - - - - - - 180,209 Foreign currency translation - - - - - - - - - (646,211 ) 142,544 (503,667 ) Net loss - - - - - - - - (1,627,353 ) - (121,271 ) (1,748,624 ) BALANCE, September 30, 2019 - - 3,276,907 26,787,130 2,247,115 (35,099 ) (417,538 ) - (8,596,053 ) (1,317,317 ) (5,152,349 ) 13,550,988 Stock based compensation to employees - - 46,000 156,400 - - - - - - - 156,400 Stock based compensation to consultants - - 70,000 282,500 - - - - - - - 282,500 Amortization of shares issued to consultants - - - - 52,708 - - - - - - 52,708 Issuance of common stock to private investor - - 100,100 500,500 - - - - - - - 500,500 Cancellation of treasury stock - - (35,099 ) (417,538 ) - 35,099 417,538 - - - - - Foreign currency translation - - - - - - - - - 350,015 (93,809 ) 256,206 Net loss - - - - - - - - (407,333 ) - 43,978 (363,355 ) BALANCE, December 31, 2019 - $ - 3,457,908 $ 27,308,992 $ 2,299,823 - $ - $ - $ (9,003,386 ) $ (967,302 ) $ (5,202,180 ) $ 14,435,947 Preferred Stock Common Stock Additional paid-in Treasury Stock Subscription Accumulated Accumulated other comprehensive Noncontrolling Shares Amount Shares* Amount capital Shares Amount receivable deficit loss interest Total BALANCE, June 30, 2020 - $ - 3,718,788 $ 28,414,992 $ 2,334,962 - $ - $ (59,869 ) $ (23,421,594 ) $ (1,084,030 ) $ (6,542,361 ) $ (357,900 ) Issuance of common stock to private investor - - 720,000 1,051,200 - - - 59,869 - - - 1,111,069 Foreign currency translation - - - - - - - - - 191,251 (198,824 ) (7,573 ) Net loss - - - - - - - - (733,791 ) - (14,665 ) (748,456 ) BALANCE, September 30, 2020 - - 4,438,788 29,466,192 2,334,962 - - - (24,155,385 ) (892,779 ) (6,755,850 ) (2,860 ) Issuance of preferred stock to private investor 860,000 1,427,600 - - - - - - - - - 1,427,600 Issuance of common stock to private investor - - 1,560,000 4,322,330 - - - - - - - 4,322,330 Foreign currency translation - - - - - - - - - 235,865 (204,827 ) 31,038 Net loss - - - - - - - - (1,102,919 ) - 9,359 (1,093,560 ) BALANCE, December 31, 2020 860,000 $ 1,427,600 5,998,788 $ 33,788,522 $ 2,334,962 - $ - $ - $ (25,258,304 ) $ (656,914 ) $ (6,951,318 ) $ 4,684,548 * Shares and per share data are presented on a retroactive basis to reflect the 1-for-5 reverse stock split on July 7, 2020. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Six Months Ended December 31, 2020 2019 Operating Activities Net income (loss) $ (1,842,016 ) $ (2,111,979 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Stock-based compensation - 906,317 Depreciation and amortization 165,128 237,011 Non-cash lease expense 76,716 78,405 Provision for doubtful accounts, net of recovery 2,462 1,167,754 Impairment loss of fixed assets and intangible asset - 327,632 Changes in assets and liabilities Notes receivable - 386,233 Accounts receivable (190,033 ) 1,629,174 Other receivables (881,628 ) (5,855,492 ) Advances to suppliers - third parties (28,770 ) (66,691 ) Prepaid expenses and other current assets 27,277 160,497 Other long-term assets - deposits (100,746 ) 96,281 Due from related parties 86,000 413,408 Deferred revenue 401,966 - Advances from customers - 5,580 Accounts payable 57,265 (63,131 ) Taxes payable 140,633 (76,110 ) Lease liabilities (93,459 ) (77,118 ) Accrued expenses and other current liabilities (788,780 ) (233,414 ) Net cash used in operating activities (2,967,985 ) (3,075,643 ) Investing Activities Acquisition of property and equipment - (7,020 ) Net cash used in investing activities - (7,020 ) Financing Activities Proceeds from issuance of preferred stock 1,427,600 - Proceeds from issuance of common stock 5,433,399 500,500 Net cash provided by financing activities 6,860,999 500,500 Effect of exchange rate fluctuations on cash 448,804 (440,820 ) Net increase (decrease) in cash 4,341,818 (3,022,983 ) Cash at the beginning of period 131,182 3,142,650 Cash at the end of period $ 4,473,000 $ 119,667 Supplemental information Income taxes paid $ - $ 38,498 Non-cash transactions of operating and investing activities Transfer of prepayment to intangible asset $ - $ 218,678 Initial recognition of right-of-use assets and lease liabilities $ - $ 462,361 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 SINO-GLOBAL SHIPPING AMERICA, LTD. AND AFFILIATES NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1. ORGANIZATION AND NATURE OF BUSINESS Founded in the United States (the “U.S.”) in 2001, Sino-Global Shipping America, Ltd., a Virginia corporation (“Sino-Global” or the “Company”), is a global shipping and freight logistics integrated solution provider. The Company provides tailored solutions and value-added services to its customers to drive efficiency and control in related steps throughout the entire shipping and freight logistics chain. The Company conducts its business primarily through its wholly-owned subsidiaries in the People’s Republic of China (the “PRC” or “China”) (including Hong Kong) and the U.S. where a majority of the Company’s clients are located. The Company operates in three operating segments including (1) shipping agency and management services, which are operated by its subsidiary in the U.S.; (2) freight logistics services, which are operated by its subsidiary in the PRC; (3) container trucking services, which are operated by its subsidiary in the U.S. The outbreak of the novel coronavirus (COVID-19) starting from late January 2020 in the PRC has spread rapidly to many parts of the world. In March 2020, the World Health Organization declared the COVID-19 as a pandemic and has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities in China and the U.S. for the past few months. Given the rapidly expanding nature of the COVID-19 pandemic, and because substantially all of the Company’s business operations and its workforce are concentrated in China and the U.S., the Company’s business, results of operations, and financial condition have been adversely affected for the six months ended December 31, 2020. The situation remains highly uncertain for any further outbreak or resurgence of the COVID-19. It is therefore difficult for the Company to estimate the impact on the business or operating results that might be adversely affected by any further outbreak or resurgence of COVID-19. After the close of the stock market on July 7, 2020, the Company effected a l-for-5 reverse stock split of its common stock in order to satisfy continued listing requirements of its common stock on the NASDAQ Capital Market. The reverse stock split was approved by the Company’s board of directors and stockholders and was intended to allow the Company to meet the minimum share price requirement of $1.00 per share for continued listing on the NASDAQ Capital Market. As a result all common stock share amounts included in this filing have been retroactively reduced by a factor of five, and all common stock per share amounts have been increased by a factor of five. Amounts affected include common stock outstanding, including those that have resulted from the stock options, and warrants that convert to common stock. On December 14, 2020, the Company incorporated a new entity named “Blumargo IT Solution Ltd.” with 80% ownership in partner with Tianjin Anboweiye Technology Co. to build up hi-tech and information-based logistic services enhance to meet the higher and complicate demand of customers. Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited condensed consolidated financial statements include the accounts of the Company and include the assets, liabilities, revenues and expenses of the subsidiaries and VIEs. All intercompany transactions and balances have been eliminated in consolidation. 5 Sino-Global Shipping Agency Ltd., a PRC corporation (“Sino-China”), is considered a variable interest entity (“VIE”), with the Company as the primary beneficiary. The Company, through Trans Pacific Shipping Ltd., entered into certain agreements with Sino-China, pursuant to which the Company receives 90% of Sino-China’s net income. Sino-China was designed to operate in China for the benefit of the Company. The Company does not receive any payment from Sino-China unless Sino-China recognizes net income during its fiscal year. These agreements do not entitle the Company to any consideration if Sino-China incurs a net loss during its fiscal year. If Sino-China incurs a net loss during its fiscal year, the Company is not required to absorb such net loss. As a VIE, Sino-China’s revenues are included in the Company’s total revenues, and any income/loss from operations is consolidated with that of the Company. Because of contractual arrangements between the Company and Sino-China, the Company has a pecuniary interest in Sino-China that requires consolidation of the financial statements of the Company and Sino-China. The Company has consolidated Sino-China’s operating results in accordance with Accounting Standards Codification (“ASC”) 810-10, “Consolidation”. The agency relationship between the Company and Sino-China and its branches is governed by a series of contractual arrangements pursuant to which the Company has substantial control over Sino-China. Management makes ongoing reassessments of whether the Company remains the primary beneficiary of Sino-China. The carrying amount and classification of Sino-China’s assets and liabilities included in the Company’s unaudited condensed consolidated balance sheets were as follows: December 31, June 30, 2020 2020 Current assets: Cash $ 5,183 $ 5,022 Total current assets 5,183 5,022 Deposits 1,740 1,608 Property and equipment, net 37,241 41,171 Total assets $ 44,164 $ 47,801 Current liabilities: Other payables and accrued liabilities $ 43,406 $ 39,919 Total liabilities $ 43,406 $ 39,919 (b) Fair Value of Financial Instruments The Company follows the provisions of ASC 820, Fair Value Measurements and Disclosures, which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1 — Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2 — Inputs other than quoted prices that are observable for the asset or liability in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3 — Unobservable inputs that reflect management’s assumptions based on the best available information. The carrying value of accounts receivable, other receivables, other current assets, and current liabilities approximate their fair values because of the short-term nature of these instruments. 6 (c) Use of Estimates and Assumptions The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include revenue recognition, fair value of stock based compensation, cost of revenues, allowance for doubtful accounts, impairment loss, deferred income taxes, income tax expense and the useful lives of property and equipment. The inputs into the Company’s judgments and estimates consider the economic implications of COVID-19 on the Company’s critical and significant accounting estimates. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. (d) Translation of Foreign Currency The accounts of the Company and its subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The Company’s functional currency is the U.S. dollar (“USD”) while its subsidiaries in the PRC, including Sino-China, Trans Pacific Shipping Ltd. and Trans Pacific Logistic Shanghai Ltd. report their financial positions and results of operations in Renminbi (“RMB”), its subsidiary Sino-Global Shipping Australia Pty Ltd., reports its financial positions and results of operations in Australian dollar (“AUD”), its subsidiary Sino-Global Shipping Hong Kong reports its financial positions and results of operations in Hong Kong dollar (“HKD”) and its subsidiary Sino-Global Shipping Canada, Inc. reports its financial positions and results of operations in Canadian Dollar (“CAD”). The accompanying unaudited condensed consolidated financial statements are presented in USD. Foreign currency transactions are translated into USD using the fixed exchange rates in effect at the time of the transaction. Generally, foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the consolidated statements of operations. The Company translates the foreign currency financial statements in accordance with ASC 830-10, “Foreign Currency Matters”. Assets and liabilities are translated at current exchange rates quoted by the People’s Bank of China at the balance sheets’ dates and revenues and expenses are translated at average exchange rates in effect during the year. The resulting translation adjustments are recorded as other comprehensive loss and accumulated other comprehensive loss as a separate component of equity of the Company, and also included in non-controlling interests. The exchange rates as of December 31, 2020 and June 30, 2020 and for the three and six months ended December 31, 2020 and 2019 are as follows: December 31, 2020 June 30, 2020 Three months ended December 31, Six months ended December 31, Foreign currency Balance Sheet Balance Sheet 2020 Profits/Loss 2019 Profits/Loss 2020 Profits/Loss 2019 Profits/Loss RMB:1USD 6.5286 7.0651 6.6254 7.0446 6.7736 7.0296 AUD:1USD 1.2974 1.4514 1.3688 1.4630 1.3840 1.4611 HKD:1USD 7.7536 7.7505 7.7520 7.8256 7.7513 7.8278 CAD:1USD 1.2754 1.3617 1.3038 1.3200 1.3181 1.3200 (e) Cash Cash consists of cash on hand and cash in bank which are unrestricted as to withdrawal or use. The Company maintains cash with various financial institutions mainly in the PRC, Australia, Hong Kong, Canada and the U.S. As of December 31, 2020 and June 30, 2020, cash balances of $4,462,063 and $126,720, respectively, were maintained at financial institutions. In China, the deposit insurance system only insured each depositor at one bank for a maximum of approximately $70,000 (RMB 500,000). For the balance maintained at U.S. financial institutions, the Federal Deposit Insurance Corporation as it only insured deposits up to $250,000. The Hong Kong Deposit Protection Board pays compensation up to a limit of HKD 500,000 (approximately $64,000) if the bank with which an individual/a company holds its eligible deposit fails. As of December 31, 2020 and June 30, 2020, amount of deposits the Company had not covered by insurance amounted to $3,881,953 and $8,780, respectively. 7 (f) Receivables and Allowance for Doubtful Accounts Accounts receivable are presented at net realizable value. The Company maintains allowances for doubtful accounts and for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual receivable balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balances, customers’ historical payment history, their current credit-worthiness and current economic trends. Receivables are generally considered past due after 180 days. The Company reserves 25%-50% of the customers balance aged between 181 days to 1 year, 50%-100% of the customers balance over 1 year and 100% of the customers balance over 2 years. Accounts receivable are written off against the allowances only after exhaustive collection efforts. As the Company has focused its development in the shipping management segment, its customer base will be more from smaller privately owned companies that will pay more timely than state owned companies. The Company also considers the economic implications of COVID-19 on its estimates of the allowance and made additional $2,609 and $258,561 of allowance for doubtful accounts of accounts receivable for the three months ended December 31, 2020 and 2019, $33,418 and $1,282,492 of allowance for doubtful accounts of accounts receivable for the six months ended December 31, 2020 and 2019. The Company recovered nil and $22,869 of accounts receivable for the three months ended December 31, 2020 and 2019, respectively. The Company recovered $2,456 and $22,869 of accounts receivable for the six months ended December 31, 2020 and 2019, respectively. For the three and six months ended December 31, 2019 the Company wrote off nil and $99,366. There was no write off for the three and six months ended December 31, 2020. Other receivables represent mainly customer advances, prepaid employee insurance and welfare benefits, which will be subsequently deducted from the employee payroll, guarantee deposits on behalf of ship owners as well as office lease deposits. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Other receivables are written off against the allowances only after exhaustive collection efforts. The Company made $11,673 allowance for doubtful accounts of other receivables for the three and six months ended December 31, 2020. There was no allowance of other receivables for the three and six months ended December 31, 2019. For the three and six months ended December 31, 2020, $11,673 was written off against other receivables. For the three and six months ended December 31, 2019, nil and $1,763 was written off against other receivables, respectively. The Company recovered $30,173 of other receivables for the three and six months ended December 31, 2020. There was no recovery against other receivables for the three and six months ended December 31, 2019. (g) Property and Equipment, net Property and equipment are stated at historical cost less accumulated depreciation. Historical cost comprises its purchase price and any directly attributable costs of bringing the assets to its working condition and location for its intended use. Depreciation is calculated on a straight-line basis over the following estimated useful lives: Buildings 20 years Motor vehicles 3-10 years Computer and office equipment 1-5 years Furniture and fixtures 3-5 years System software 5 years Leasehold improvements Shorter of lease term or useful lives The carrying value of a long-lived asset is considered impaired by the Company when the anticipated undiscounted cash flows from such asset is less than its carrying value. If impairment is identified, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved or based on independent appraisals. There was no impairment for the three months ended December 31, 2020 and 2019. For the six months ended December 31, 2020 and 2019, an impairment of nil and $127,177 were recorded, respectively. 8 (h) Intangible Assets, net Intangible assets are recorded at cost less accumulated amortization. Amortization is calculated on a straight-line basis over the following estimated useful lives: Logistics platform 3 years The Company evaluates intangible assets for impairment whenever events or changes in circumstances indicate that the assets might be impaired. There was no impairment for the three months ended December 31, 2020 and 2019. For the six months ended December 31, 2020 and 2019, an impairment of nil and $200,455 were recorded, respectively. (i) Revenue Recognition The Company recognizes revenue which represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company identifies contractual performance obligations and determines whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are recognized at a point in time. The Company uses a five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company continues to derive its revenues from sales contracts with its customers with revenues being recognized upon performance of services. Persuasive evidence of an arrangement is demonstrated via sales contract and invoice; and the sales price to the customer is fixed upon acceptance of the sales contract and there is no separate sales rebate, discount, or other incentive. The Company’s revenues are recognized at a point in time after all performance obligations are satisfied. Contract balances The Company records receivables related to revenue when the Company has an unconditional right to invoice and receive payment. Deferred revenue consists primarily of customer billings made in advance of performance obligations being satisfied and revenue being recognized. The Company’s disaggregated revenue streams are described as follows: For the Three Months Ended For the Six Months Ended December 31, December 31, December 31, December 31, 2020 2019 2020 2019 Shipping and management agency services $ - $ 500,000 $ 206,845 $ 1,000,000 Freight logistics services 1,884,440 1,503,500 2,814,394 2,745,641 Container trucking services - 17,624 - 61,709 Total $ 1,884,440 $ 2,021,124 $ 3,021,239 $ 3,807,350 ● Revenues from shipping and management 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 deferred revenue. 9 ● Revenues from freight logistics services are recognized when the related contractual services are rendered. For certain freight logistics contracts that the Company entered into with customers starting in the first quarter of fiscal year 2020, the Company (i) acts as an agent in arranging the relationship between the customer and the third-party service provider and (ii) does not control the services rendered to the customers, revenues related to this contracts are presented net of related costs. For the three months ended December 31, 2019, gross revenue and gross cost of revenue related to these contracts not presented in the table above amounted to approximately $12.9 million and $12.0 million, respectively. For the six months ended December 31, 2019, gross revenue and gross cost of revenue related to these contracts amounted to approximately $22.0 million and $20.5 million, respectively. There was no such transaction for the three and six months ended December 31, 2020. ● Revenues from container trucking services are recognized when the related contractual services are rendered. Disaggregated information of revenues by geographic locations are as follows: For the Three Months Ended For the Six Months Ended December 31, December 31, December 31, December 31, 2020 2019 2020 2019 PRC $ 1,884,440 1,503,500 2,814,394 2,745,641 U.S. - 517,624 206,845 1,061,709 Total revenues $ 1,884,440 $ 2,021,124 $ 3,021,239 $ 3,807,350 (j) Taxation Because the Company and its subsidiaries and Sino-China were incorporated in different jurisdictions, they file separate income tax returns. The Company uses the asset and liability method of accounting for income taxes in accordance with U.S. GAAP. Deferred taxes, if any, are recognized for the future tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts in the unaudited condensed consolidated financial statements. A valuation allowance is provided against deferred tax assets if it is more likely than not that the asset will not be utilized in the future. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense. The Company had no uncertain tax positions as of December 31, 2020 and June 30, 2020. Income tax returns for the years prior to 2017 are no longer subject to examination by U.S. tax authorities. PRC Enterprise Income Tax PRC enterprise income tax is calculated based on taxable income determined under the PRC Generally Accepted Accounting Principles (“PRC GAAP”) at 25%. Sino-China and Trans Pacific are registered in PRC and governed by the Enterprise Income Tax Laws of the PRC. PRC Value Added Taxes and Surcharges The Company is subject to value added tax (“VAT”). Revenue from services provided by the Company’s PRC subsidiaries and affiliates, including Sino-China and Trans Pacific are subject to VAT at rates ranging from 9% to 13%. Entities that are VAT general taxpayers are allowed to offset qualified VAT paid to suppliers against their VAT liability. Net VAT liability is recorded in taxes payable on the unaudited condensed consolidated balance sheets. 10 In addition, under the PRC regulations, the Company’s PRC subsidiaries and affiliates are required to pay the city construction tax (7%) and education surcharges (3%) based on the net VAT payments. (k) Earnings (loss) per Share Basic earnings (loss) per share is computed by dividing net income (loss) attributable to holders of common stock of the Company by the weighted average number of shares of common stock of the Company outstanding during the applicable period. Diluted earnings (loss) per share reflect the potential dilution that could occur if securities or other contracts to issue common stock of the Company were exercised or converted into common stock of the Company. Common stock equivalents are excluded from the computation of diluted earnings per share if their effects would be anti-dilutive. For the three and six months ended December 31, 2020 and 2019, there was no dilutive effect of potential shares of common stock of the Company because the Company generated a net loss. (l) Comprehensive Income (Loss) The Company reports comprehensive income (loss) in accordance with the authoritative guidance issued by Financial Accounting Standards Board (the “FASB”) which establishes standards for reporting comprehensive income (loss) and its component in financial statements. Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under US GAAP are recorded as an element of Stockholders’ equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies. (m) Stock-based Compensation The Company accounts for stock-based compensation awards to employees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that stock-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period. The Company records stock-based compensation expense at fair value on the grant date and recognizes the expense over the employee’s requisite service period. The Company accounts for stock-based compensation awards to non-employees in accordance with FASB ASC Topic 718 amended by ASU 2018-07. Under FASB ASC Topic 718, stock compensation granted to non-employees has been determined as the fair value of the consideration received or the fair value of equity instrument issued, whichever is more reliably measured and is recognized as an expense as the goods or services are received. Valuations of stock based compensation are based upon highly subjective assumptions about the future, including stock price volatility and exercise patterns. The fair value of share-based payment awards was estimated using the Black-Scholes option pricing model. Expected volatilities are based on the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee terminations. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. (n) Risks and Uncertainties The Company’s business, financial position and results of operations may be influenced by the political, economic, health and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, health and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC, and by changes in governmental policies or interpretations with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. 11 In March 2020, the World Health Organization declared the COVID-19 as a pandemic. Given the rapidly expanding nature of the COVID-19 pandemic, and because substantially all of the Company’s business operations and the workforce are concentrated in China and United States, the Company’s business, results of operations, and financial condition have been adversely affected for the three months ended September 30, 2020. The situation remains highly uncertain for any further outbreak or resurgence of the COVID-19. It is therefore difficult for the Company to estimate the impact on the business or operating results that might be adversely affected by any further outbreak or resurgence of COVID-19. (o) Liquidity In assessing the Company’s liquidity, the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. As of December 31, 2020, the Company’s working capital was approximately $1.1 million and the Company had cash of approximately $4.5 million. The Company believes its revenues and operations will continue to grow and the current working capital is sufficient to support its operations and debt obligations as they become due one year through report date. The Company expects to realize the balance of its current assets within the normal operating cycle of a twelve month period. If the Company is unable to realize its current assets within the normal operating cycle of a twelve month period, the Company had considered supplementing its available sources of funds through the following sources: ● the Company will continuously seek equity financing to support its working capital. On January 27, 2021, the Company entered into a securities purchase agreement with the non-U.S. persons to purchase 1,086,956 shares at a per share purchase price of $3.68 for aggregate proceeds of approximately $4.0 million. The Company has received the full amount of payment in January 2021. On February 6, 2021, the Company entered into a securities purchase agreement with the investors to purchase an aggregate of 1,998,500 shares at a per share purchase price of $6.805 for aggregate net proceeds of approximately $12.3 million after deducting estimated offering expenses and placement agent fees. The Company has received the full amount of payment in February 2021. On February 9, 2021, the Company entered into a securities purchase agreement with the investors to purchase an aggregate of 3,655,000 shares at a per share purchase price of $7.80 for aggregate net proceeds of approximately $26.2 million after deducting estimated offering expenses and placement agent fees. The Company has received the full amount of payment in February 2021; ● other available sources of financing from PRC banks and other financial institutions; and ● financial support and credit guarantee commitments from the Company’s shareholders and directors. Based on the above considerations, the Company’s management is of the opinion that it has sufficient funds to meet the Company’s future liquidity requirements for at least twelve months from issuance of these unaudited condensed consolidated financial statements. (p) Recent Accounting Pronouncements Pronouncements adopted In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 removes, modifies and adds certain disclosure requirements in Topic 820 “Fair Value Measurement”. ASU 2018-13 eliminates certain disclosures related to transfers and the valuations process, modifies disclosures for investments that are valued based on net asset value, clarifies the measurement uncertainty disclosure, and requires additional disclosures for Level 3 fair value measurements. The Company adopted this ASU on July 1, 2020 and the adoption has no significant impact to the Company’s unaudited condensed consolidated financial statements as a whole. Pronouncements not yet adopted In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments— Credit Losses—Available-for-Sale Debt Securities. The amendments in this ASU address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses standard. The new effective date for these preparers is for fiscal years beginning after July 1, 2023, including interim periods within those fiscal years. The Company has not early adopted this update and it will become effective on July 1, 2023 assuming the Company will remain eligible to be smaller reporting company. The Company is currently evaluating the impact of this new standard on Company’s unaudited condensed consolidated financial statements and related disclosures. 12 In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. The amendments in this Update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for the Company for annual and interim reporting periods beginning July 1, 2021. Early adoption of the amendments is permitted, including adoption in any interim period for public business entities for periods for which financial statements have not yet been issued. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. The Company is currently evaluating the impact of this new standard on Company’s unaudited condensed consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”. The amendments in this Update to address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. ASU 2020-06 is effective for the Company for annual and interim reporting periods beginning July 1, 2022. Early adoption is permitted, but no earlier than fiscal years beginning after July 1, 2021, including interim periods within those fiscal years. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. The Company is currently evaluating the impact of this new standard on Company’s unaudited condensed consolidated financial statements and related disclosures. In October 2020, the FASB issued ASU 2020-08, “Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs”. The amendments in this Update represent changes to clarify the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. ASU 2020-08 is effective for the Company for annual and interim reporting periods beginning July 1, 2021. Early application is not permitted. All entities should apply the amendments in this Update on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities. These amendments do not change the effective dates for Update 2017-08. The Company is currently evaluating the impact of this new standard on Company’s unaudited condensed consolidated financial statements and related disclosures. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated financial statements. Note 3. ACCOUNTS RECEIVABLE, NET The Company’s net accounts receivable are as follows: December 31, June 30, 2020 2020 Trade accounts receivable $ 3,720,087 $ 3,453,439 Less: allowances for doubtful accounts (2,457,949 ) (2,297,491 ) Accounts receivable, net $ 1,262,138 $ 1,155,948 13 Movement of allowance for doubtful accounts are as follows: December 31, 2020 June 30, 2020 Beginning balance $ 2,297,491 $ 5,670,274 Provision for doubtful accounts, net of recovery 30,962 4,896,640 Less: write-off - (8,220,754 ) Exchange rate effect 129,496 (48,669 ) Ending balance $ 2,457,949 $ 2,297,491 For the three months ended December 31, 2020 and 2019, the provision for doubtful accounts was $2,609 and $258,561, respectively. For the six months ended December 31, 2020 and 2019, the provision for doubtful accounts was $33,418 and $1,282,492, respectively. The Company recovered $2,456 and $76,497 of accounts receivable for the six months ended December 31, 2020 and 2019, respectively. Note 4. OTHER RECEIVABLES, NET The Company’s other receivables are as follows: December 31, June 30, 2020 2020 Advances to customers* $ 11,375,759 $ 10,004,893 Employee business advances 4,241 51,334 Total 11,380,000 10,056,227 Less: allowances for doubtful accounts (10,796,084 ) (10,005,193 ) Other receivables, net $ 583,916 $ 51,034 * As of December 31, 2020 and June 30, 2020, the Company entered into certain contracts with customers (state-owned entities) where the Company’s services included freight costs and cost of commodities to be shipped to customers’ designated locations. The Company prepaid the costs of commodities and recognized as advance payments on behalf of its customers. These advance payments on behalf of the customers will be repaid to the Company when either the contract terms are expired or the contracts are terminated by the Company. As aforementioned customers were negatively impacted by the pandemic and required additional time to execute existing contracts, they required additional time to pay. Due to significant uncertainty on whether the delayed contracts will be executed timely. As such, the Company had provided an allowance due to contract delay and recorded allowances of approximately $11.0 million. On December 31, 2020, the Company entered another contract to advance $580,000 as deposit on behalf of customer and it will be repaid to the Company when the contract is fulfilled. Movement of allowance for doubtful accounts are as follows: December 31, 2020 June 30, 2020 Beginning balance $ 10,005,193 $ - Provision for doubtful accounts, net of recovery (18,500 ) 10,055,203 Less: write-off (11,673 ) (1,763 ) Exchange rate effect 821,064 (48,247 ) Ending balance $ 10,796,084 $ 10,005,193 For the three and six months ended December 31, 2020, the provision for doubtful accounts of other receivables was $11,673 with recovery of $30,173. There was no additional allowance or recovery of other receivables for the three and six months ended December 31, 2019. The Company wrote off $11,673 and nil of other receivables for the three months ended December 31, 2020 and 2019, respectively. The Company wrote off $11,673 and $1,763 of other receivables for the six months ended December 31, 2020 and 2019, respectively. 14 Note 5. ADVANCES TO SUPPLIERS The Company’s advances to suppliers – third parties are as follows: December 31, June 30, 2020 2020 Freight fees (1) $ 80,804 $ 48,875 (1) The advanced freight fee is the Company’s prepayment made for various shipping costs for shipments from January to March 2021. Note 6. PREPAID EXPENSES AND OTHER CURRENT ASSETS The Company’s prepaid expenses and other assets are as follows: December 31, June 30, 2020 2020 Prepaid income taxes $ 11,929 $ 48,924 Other (including prepaid professional fees, rent, listing fees) 51,196 41,458 Total $ 63,125 $ 90,382 Note 7. OTHER LONG-TERM ASSETS - DEPOSITS The Company’s other long-term assets – deposits are as follows: December 31, June 30, 2020 2020 Rental and utilities deposits $ 56,478 $ 64,663 Freight logistics deposits (1) 3,147,845 2,910,327 Total other long-term assets - deposits $ 3,204,323 $ 2,974,990 (1) Certain customers require the Company to pay certain deposits for the security of shipments and merchandise. These deposits are refundable at the end of their respective contract term. Approximately $3.1 million (RMB 20 million) of the balance was paid to BaoSteel Resources Co., Ltd. according to the agreement entered in March 2018. This refundable deposit is to cover any possible loss of merchandise, as well as any non-performance on the part of the Company and its vendors. The restricted deposit is expected be repaid to the Company when either the contract terms are expired by March 2023 or the contract is terminated by the Company. 15 Note 8. PROPERTY AND EQUIPMENT, NET The Company’s net property and equipment as follows: December 31, June 30, 2020 2020 Buildings $ 206,174 $ 190,518 Motor vehicles* 561,462 516,999 Computer equipment* 104,638 97,172 Office equipment* 47,169 43,587 Furniture and fixtures* 77,589 71,697 System software* 116,778 107,911 Leasehold improvements 851,398 786,745 Total 1,965,208 1,814,629 Less: Accumulated depreciation and amortization (1,540,882 ) (1,291,339 ) Property and equipment, net $ 424,326 $ 523,290 Depreciation and amortization expenses for the three months ended December 31, 2020 and 2019 were $70,853 and $66,601, respectively. Depreciation and amortization expenses for the six months ended December 31, 2020 and 2019 were $138,739 and $187,121, respectively. * For the three and six months ended December 31, 2019, an impairment of $127,177 was recorded due to continued decrease in revenues from the inland transportation management segment, no impairment was recorded for same period 2020. Note 9. INTANGIBLE ASSETS, NET Net intangible assets consisted of the following: December 31, June 30, 2020 2020 Full service logistics platforms $ 190,000 $ 190,000 Less: Accumulated amortization (190,000 ) (163,611 ) Intangible assets, net $ - $ 26,389 The full service logistics platform was placed in services in December 2017. The platforms are being amortized over three years. Amortization expenses amounted to $10,556 and $15,833 for the three months ended December 31, 2020 and 2019, respectively. Amortization expenses amounted to $26,389 and $49,890 for the six months ended December 31, 2020 and 2019, respectively. In addition, first phase of the ERP system was placed in use in July 2019 and is being amortized over three years. However, due to the continued decrease in revenues from the inland transportation management segment, the Company recorded an impairment of $200,455 for the three and six months ended December 31, 2019. No impairment was recorded for same period 2020. Note 10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES December 31, June 30, 2020 2020 Salary and reimbursement payable $ 504,022 $ 795,855 Professional fees payable 345,631 629,524 Credit card payable 5,535 217,940 Total $ 855,188 $ 1,643,319 16 Note 11. LOANS PAYABLE On May 11, 2020, the Company received loan proceeds in the amount of approximately $124,570 under the U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after eight weeks (or an extended 24-week covered period) as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The loan forgiveness amount will be reduced for any Economic Injury Disaster Loan (“EIDL”) advance that the Company receives. The amount of loan forgiveness will be further reduced if the borrower terminates employees or reduces salaries during the eight-week period. The Company intends to use the proceeds for purposes consistent with the PPP. While the Company currently believes that its use of the loan proceeds will meet the conditions for forgiveness of the loan and intends to file for loan forgiveness in fiscal year of 2021, there can be no assurance that the full amount of the loan will be forgiven. As of December 31, 2020, $124,570 of loan payable remains outstanding. On May 26, 2020, the Company received an advance in the amount of $155,900 from under the SBA EIDL program administered by the SBA pursuant to the CARES Act. Such advance amount will reduce the Company’s PPP loan forgiveness amount described above. In accordance with the requirements of the CARES Act, the Company will use proceeds from the SBA loans primarily for working capital to alleviate economic injury caused by disaster occurring in the month of January 31, 2020 and continuing thereafter. The SBA loans are scheduled to mature on May 22, 2050 and have a 3.75% interest rate and are subject to the terms and conditions applicable to loans administered by the SBA under the CARES Act. The monthly payable including principal and interest, of $731 commencing on May 22, 2021. The balance of principal and interest will be payable 30 years from the date of May 22, 2020. $5,900 of the loan will be forgiven. As of December 31, 2020, $155,900 of loan payable remains outstanding. Interest expense for the three and six months ended December 31, 2020 for this loan was $1,418 and $2,820, respectively. Loan repayment schedule for the EIDL loans is as follows: Twelve Months Ending December 31, Loan Amount 2021 $ 7,898 2022 3,092 2023 3,210 2024 3,332 2025 3,460 Thereafter 134,908 Total loan payments $ 155,900 Note 12. LEASES The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which result in an economic penalty. All of the Company’s leases are classified as operating leases. The Company has several vehicle lease agreements and office lease agreements with lease terms ranging from two to three years. Upon adoption of ASU 2016-02, the Company recognized lease liabilities of approximately $0.2 million, with corresponding ROU assets of approximately the same amount based on the present value of the future minimum rental payments of leases, using a weighted average discount rate of approximately 9.38%. As of December 31, 2020, ROU assets and lease liabilities amounted to $224,950 and $245,232 (including $166,572 from lease liabilities current portion and $78,660 from lease liabilities noncurrent portion), respectively. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The leases generally do not contain options to extend at the time of expiration and the weighted average remaining lease terms are 1.49 years. 17 For the three months ended December 31, 2020 and 2019, rent expense amounted to approximately $81,000 and $80,000, respectively. For the six months ended December 31, 2020 and 2019, rent expense amounted to approximately $157,000 and $160,000, respectively. The three-year maturity of the Company’s lease obligations is presented below: Twelve Months Ending December 31, Operating Lease Amount 2021 $ 181,667 2022 81,596 Total lease payments 263,263 Less: Interest (18,031 ) Present value of lease liabilities $ 245,232 Note 13. EQUITY Stock issuance: On September 17, 2020, the Company entered into certain securities purchase agreement with certain “non-U.S. Persons” as defined in Regulation S of the Securities Act of 1933, as amended, pursuant to which the Company agreed to sell an aggregate of 720,000 shares of the Company’s common stock, no par value, and warrants to purchase 720,000 Shares at a per share purchase price of $1.46. The net proceeds to the Company from such Offering were approximately $1.05 million. The warrants will be exercisable on March 16, 2021 at an exercise price of $1.825 for cash. The warrants may also be exercised cashlessly if at any time after March 16, 2021, there is no effective registration statement registering, or no current prospectus available for, the resale of the warrant shares. The warrants will expire on March 16, 2026. The warrants are subject to anti-dilution provisions to reflect stock dividends and splits or other similar transactions. The warrants contain a mandatory exercise right for the Company to force exercise the warrants if the Company’s common stock trades at or above $4.38 for 20 consecutive trading days, provided, among other things, that the shares issuable upon exercise of the are registered or may be sold pursuant to Rule 144 and the daily trading volume exceeds 60,000 shares of common stock per trading day on each trading day in a period of 20 consecutive trading days prior to the applicable date. On November 2 and November 3, 2020, the Company issued an aggregate of 860,000 shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”), each convertible into one share of common stock, no par value, of Company, upon the terms and subject to the limitations and considerations set forth in the Certificate of Designation of the Series A Preferred Stock, and warrants to purchase up to 1,032,000 shares of common stock. The purchase price for each share of Series A Preferred Stock and accompanying warrants is $1.66. The net proceeds to the Company from this offering was approximately $1.43 million, not including any proceeds that may be received upon cash exercise of the warrants. The warrants will be exercisable six (6) months following the date of issuance at an exercise price of $1.99 for cash. The warrants may also be exercised cashlessly if at any time after the six-month anniversary of the issuance date, there is no effective registration statement registering, or no current prospectus available for, the resale of the warrant Shares. The warrants will expire five and a half (5.5) years from the date of issuance. The warrants are subject to anti-dilution provisions to reflect stock dividends and splits or other similar transactions. The warrants contain a mandatory exercise right for the Company to force exercise of the warrants if the closing price of the common stock equals or exceeds $5.97 for twenty (20) consecutive trading days, provided, among other things, that the shares issuable upon exercise of the warrants are registered or may be sold pursuant to Rule 144 and the daily trading volume exceeds 60,000 shares of common stock per trading day on each trading day in a period of 20 consecutive trading days prior to the applicable date. As of December 31, 2020, the Series A Preferred Stock have not been converted to common stock of the Company. 18 On December 8, 2020, the Company entered into a securities purchase agreement with the investors specified on the signature page thereto pursuant to which the Company agreed to sell to the investors, and the investors agreed to purchase from the Company, in a registered direct offering, an aggregate of 1,560,000 shares of the common stock of the Company, no par value per share, at a purchase price of $3.10 per share, for aggregate gross proceeds to the Company of $4,836,000. The Company also agreed to sell to the Investors warrants to purchase up to an aggregate of 1,170,000 shares of common stock at an exercise price of $3.10 per share. The warrants shall be initially exercisable beginning on December 11, 2020 and expire three and a half (3.5) years from the date of issuance. The exercise price and the number of shares of common stock issuable upon exercise of the warrants are subject to adjustment in the event of stock splits or dividends, or other similar transactions, but not as a result of future securities offerings at lower prices. The Company’s outstanding warrants are classified as equity since they qualify for exception from derivative accounting as they are considered to be indexed to the Company’s own stock and require net share settlement. The fair value of the warrants were recorded as additional paid-in capital from common stock Following is a summary of the status of warrants outstanding and exercisable as of December 31, 2020: Warrants Weighted Average Exercise Price Warrants outstanding, as of June 30, 2020 400,000 $ 8.75 Issued 2,922,000 2.39 Exercised - - Expired - - 　 　 Warrants outstanding, as of December 31, 2020 3,322,000 $ 3.16 　 　 Warrants exercisable, as of December 31, 2020 3,322,000 $ 3.16 Warrants Outstanding Warrants Exercisable Weighted Average Exercise Price Average Remaining Contractual Life 2018 Series A, 400,000 400,000 $ 8.75 2.70 years 2020 warrants, 720,000 720,000 $ 1.825 5.21 years 2020 warrants, 1,032,000 1,032,000 $ 1.99 5.34 years 2020 warrants, 1,170,000 1,170,000 $ 3.10 3.44 years On December 9, 2019, the Company authorized the cancellation of the 35,099 of the Company’s treasury shares. The shares were cancelled as of June 30, 2020. The cancellation has no effect on the Company’s total shareholders’ equity and earnings per share. After the close of the stock market on July 7, 2020, the Company effected a l-for-5 reverse stock split of its common stock in order to satisfy continued listing requirements of its common stock on the NASDAQ Capital Market. The reverse stock split was approved by the Company’s board of directors and stockholders and was intended to allow the company to meet the minimum share price requirement of $1.00 per share for continued listing on the NASDAQ Capital Market. As a result all common stock share amounts included in this filing have been retroactively reduced by a factor of five, and all common stock per share amounts have been increased by a factor of five. Amounts affected include common stock outstanding, including those that have resulted from the stock options, and warrants that convert to common stock. 19 Stock based compensation: In March 2017, the Company entered into a consulting and advisory services agreement with a consulting entity, which provides management consulting services that include marketing program design and implementation and cooperative partner selection and management. The service period began in March 2017 and will end in February 2020. The Company issued 50,000 shares of common stock as remuneration for the services, which were issued as restricted shares at $12.65 per share on March 22, 2017 to the consultant. These shares were valued at $632,500 and the consulting expense was $52,709 and $105,417 for the three and six months ended December 31, 2019, respectively. On June 7, 2018, the Company issued 80,000 shares of common stock with a fair value of $508,000 to a consulting entity pursuant to a service agreement. The scope of services primarily covers legal consultation in PRC during the two-year service period from July 2018 to June 2020. The consulting entity is entitled to be granted the common stock on a quarterly basis in eight equal installments. The Company recorded legal expense of $63,500 and $127,000 for the three and six months ended December 31, 2019, respectively. On April 8, 2019, the Company entered into a consulting services agreement with a consulting entity, which provides management consulting and advisory services. The scope of services primarily covered advising on business development, strategic planning and compliance during the six months service period from April 8, 2019 to October 7, 2019. The Company issued 60,000 shares of common stock as remuneration for the services, which were issued as restricted shares at $4.25 per share on April 16, 2019 to the consulting entity. These shares were valued at $255,000. The Company recorded compensation expense of $0 and $127,500 for the three and six months ended December 31, 2019, respectively. On July 1, 2019, the Company issued 120,000 restricted shares of common stock with a fair value of $432,000 to a China-based company that specializes in the port agency business and/or its designees pursuant to a consulting service agreement. The scope of services primarily covers business consultation for one year from July 1, 2019 to June 30, 2020. The Company can terminate the agreement if they are not satisfy with the performance of the consulting firm and the consulting firm should return all the issued shares. The Company recorded compensation expense of $108,000 and $216,000 for the three and six months ended December 31, 2019, respectively. Included in a Board resolution dated January 30, 2016, the Company’s CEO is authorized to grant to the employees up to one million shares under the Plan. On July 22, 2019, the Company granted 18,000 shares of restricted common stock valued at $3.50 per share on the grant date with an aggregated fair value of $63,000 under the Plan to one employee, vesting immediately. The Company recorded compensation expense of $0 and $63,000 for the three and six months ended December 31, 2019, respectively. On October 3, 2019, the Company issued 230,000 shares of common stock valued at $0.68 per share on the grant date with an aggregated fair value of $156,400 under the Plan to one employee, vesting immediately. The Company recorded compensation expense of $156,400 for the three and six months ended December 31, 2019. On October 14, 2019, the Company entered into a consulting services agreement with a consulting entity, which provides management consulting and advisory services. The scope of services primarily covered advising on business development, strategic planning and compliance during the six months service period from October 14, 2019 to April 13, 2020. The Company issued 300,000 shares of common stock valued at $222,000 as remuneration for the services. The shares bear a standard restrictive legend under the Securities Act of 1933, as amended. The Company recorded compensation expense of $111,000 for the three and six months ended December 31, 2019. During the three months ended December 31, 2020 and 2019, nil and $491,609 were recorded as stock-based compensation expense, respectively. During the six months ended December 31, 2020 and 2019, nil and $906,317 were recorded as stock-based compensation expense, respectively. 20 Stock Options: A summary of the outstanding options is presented in the table below: Options Weighted Average Exercise Price Options outstanding, as of June 30, 2020 17,000 $ 6.05 Granted - - Exercised - - Cancelled, forfeited or expired - - 　 　 Options outstanding, as of December 31, 2020 17,000 $ 6.05 　 　 Options exercisable, as of December 31, 2020 17,000 $ 6.05 Following is a summary of the status of options outstanding and exercisable at December 31, 2020: Outstanding Options Exercisable Options Exercise Price Number Average Remaining Contractual Life Average Exercise Price Number Average Remaining Contractual Life $ 10.05 2,000 2.08 years $ 10.05 2,000 2.08 years $ 5.50 15,000 0.56 years $ 5.50 15,000 0.56 years 17,000 17,000 Note 14. NON-CONTROLLING INTEREST The Company’s non-controlling interest consists of the following: December 31, June 30, 2020 2020 Sino-China: Original paid-in capital $ 356,400 $ 356,400 Additional paid-in capital 1,044 1,044 Accumulated other comprehensive income 61,176 376,398 Accumulated deficit (6,206,533 ) (6,199,188 ) (5,787,913 ) (5,465,346 ) Trans Pacific Logistics Shanghai Ltd. (1,163,405 ) (1,077,015 ) Total $ (6,951,318 ) $ (6,542,361 ) Note 15. COMMITMENTS AND CONTINGENCIES Contingencies The Labor Contract Law of the PRC requires employers to insure the liability of the severance payments for terminated employees that have worked for the employers for at least two years prior to January 1, 2008. The employers will be liable for one month for severance pay for each year of the service provided by the employees. As of December 31, 2020 and June 30, 2020, the Company has estimated its severance payments of approximately $101,000 and $84,000, respectively, which have not been reflected in its unaudited condensed consolidated financial statements, because management cannot predict what the actual payment, if any, will be in the future. 21 Sino-Global has employment agreements with each of Mr. Lei Cao, Ms. Tuo Pan and Mr. Zhikang Huang. These employment agreements provide for five-year terms that extend automatically in the absence of termination notice provided at least 60 days prior to the anniversary date of the agreement. If the Company fails to provide this notice or if the Company wishes to terminate an employment agreement in the absence of cause, then the Company is obligated to provide at least 30 days’ prior notice. In such case during the initial term of the agreement, the Company would need to pay such executive (i) the remaining salary through the date of December 31, 2023, (ii) two times of the then applicable annual salary if there has been no change in control, as defined in the employment agreements or three-and-half times of the then applicable annual salary if there is a change in control. Note 16. INCOME TAXES On March 27, 2020, the CARES Act was enacted and signed into law and includes, among other things, refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods and alternative minimum tax credit refunds. The Company does not at present expect the provisions of the CARES Act to have a material impact on its tax provision given the amount of net operating losses currently available. The Company’s income tax expenses for the three and six months ended December 31, 2020 and 2019 are as follows: For the three months Ended December 31 For the six months Ended December 31 2020 2019 2020 2019 Current U.S. $ (3,450 ) $ - $ (3,450 ) $ - PRC - (14,747 ) - (14,747 ) Total income tax expenses (3,450 ) (14,747 ) (3,450 ) (14,747 ) The Company’s deferred tax assets are comprised of the following: December 31, 2020 June 30, 2020 Allowance for doubtful accounts U.S. $ 1,332,000 $ 1,329,000 PRC 3,118,000 2,888,000 Net operating loss U.S. 2,220,000 1,756,000 PRC 1,492,000 1,490,000 Total deferred tax assets 8,162,000 7,463,000 Valuation allowance (8,162,000 ) (7,463,000 ) Deferred tax assets, net - long-term $ - $ - The Company’s operations in the U.S. incurred a cumulative U.S. federal net operating loss (“NOL”) of approximately $6,456,000 as of June 30, 2020 which may reduce future federal taxable income. During the three and six months ended December 31, 2020, approximately $1,147,000 and $1,696,000 of additional NOL was generated and the tax benefit derived from such NOL was approximately $241,000 and $356,000, respectively. As of December 31, 2020, the Company’s cumulative NOL amounted to approximately $8,152,000 which may reduce future federal taxable income, of which approximately $1,400,000 will expire in 2037 and the remaining balance carried forward indefinitely. The Company’s operations in China incurred a cumulative NOL of approximately $5,961,000 as of June 30, 2020 which may reduce future taxable income. During the three and six months ended December 31, 2020, approximately $4,000 and $7,000 of additional NOL was generated and the tax benefit derived from such NOL was approximately $1,000 and $2,000, respectively. As of December 31, 2020, the Company’s cumulative NOL amounted to approximately $5,968,000 which may reduce future taxable income, of which approximately $677,000 start expiring from 2023 and the remaining balance of NOL will be expired by 2026. 22 The Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Management considers new evidence, both positive and negative, that could affect the Company’s future realization of deferred tax assets including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes and other relevant factors. The Company determined that it is more likely than not its deferred tax assets could not be realized due to uncertainty on future earnings as a result of the deterioration of trade negotiation between US and China and the outbreak of COVID-19 in 2020. The Company provided a 100% allowance for its DTA as of December 31, 2020. The net increase in valuation for the three and six months ended December 31, 2020 amounted to approximately $429,000 and $699,000, respectively based on management’s reassessment of the amount of the Company’s deferred tax assets that are more likely than not to be realized. The Company’s taxes payable consists of the following: December 31, June 30, 2020 2020 VAT tax payable $ 1,139,486 $ 1,037,620 Corporate income tax payable 2,353,113 2,180,727 Others 68,952 62,001 Total $ 3,561,551 $ 3,280,348 Note 17. CONCENTRATIONS Major Customers For the three months ended December 31, 2020, one customer accounted for approximately 99.9% of the Company’s revenues. As of December 31, 2020, two customers accounted for approximately 79.2% and 20.7% of the Company’s accounts receivable, net. For the three months ended December 31, 2019, three customers accounted for approximately 39.0%, 33.6% and 24.7% of the Company’s revenues, respectively. As of December 31, 2019, three customers accounted for approximately 93.1% of the Company’s gross accounts receivable. For six months ended December 31, 2020, one customer accounted for approximately 92.9% of the Company’s revenues. As of December 31, 2020, two customers accounted for approximately 79.2% and 20.7% of the Company’s accounts receivable, net. For the six months ended December 31, 2019, three customers accounted for approximately 38.3%, 32.0% and 26.2% of the Company’s revenues, respectively. As of December 31, 2019, three customers accounted for approximately 93.1% of the Company’s gross accounts receivable. Major Suppliers For the three months ended December 31, 2020, two suppliers accounted for approximately 44.3% and 42.1% of the total costs of revenue, respectively. For the three months ended December 31, 2019, four suppliers accounted for approximately 27.0%, 23.0%, 15.8% and 13.0% of the total cost of revenues, respectively. For the six months ended December 31, 2019, two suppliers accounted for approximately 46.3% and 37.4% of the total cost of revenues. For the six months ended December 31, 2019, five suppliers accounted for approximately 39.9%, 14.2%, 12.1%, 11.3% and 11.1% of the total cost of revenues, respectively 23 Note 18. SEGMENT REPORTING ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in unaudited condensed consolidated financial statements for detailing the Company’s business segments. The Company’s chief operating decision maker is the Chief Executive Officer, who reviews the financial information of the separate operating segments when making decisions about allocating resources and assessing the performance of the group. The Company has determined that it has three operating segments: (1) shipping agency and management services; (2) freight logistics services and (3) container trucking services. The following tables present summary information by segment for the three and six months ended December 31, 2020 and 2019, respectively: For the Three Months Ended December 31, 2020 Shipping Agency and Management Services Freight Logistics Services Container Trucking Services Total Net revenues $ - $ 1,884,440 $ - $ 1,884,440 Cost of revenues $ - $ 1,688,464 $ - $ 1,688,464 Gross profit $ - $ 195,976 $ - $ 195,976 Depreciation and amortization $ 77,809 $ 3,600 $ - $ 81,409 Total capital expenditures $ - $ - $ - $ - Gross margin% - % 10.4 % - % 10.4 % For the Three Months Ended December 31, 2019 Shipping Agency and Management Services Freight Logistics Services Container Trucking Services Total Net revenues $ 500,000 $ 1,503,500 * $ 17,624 $ 2,021,124 Cost of revenues $ 66,584 $ 673,646 * $ 15,415 $ 755,645 Gross profit $ 433,416 $ 829,854 $ 2,209 $ 1,265,479 Depreciation and amortization $ 79,144 $ - $ 3,389 $ 82,533 Total capital expenditures $ 2,482 $ - $ - $ 2,482 Gross margin% 86.7 % 55.2 % 12.5 % 62.6 % * For certain freight logistics contracts that the Company entered into with customers starting from first quarter of fiscal year 2020, the Company (i) acts as an agent in arranging the relationship between the customer and the third-party service provider and (ii) does not control the services rendered to the customers, revenues related to these contracts are presented net of related costs. For the three months ended December 31, 2019, gross revenues and gross cost of revenues related to these contracts amounted to approximately $12.9 million and $12.0 million, respectively. There was no such transaction for the three months ended December 31, 2020. 24 For the six Months Ended December 31, 2020 Shipping Agency and Management Services Freight Logistics Services Container Trucking Services Total Net revenues $ 206,845 $ 2,814,394 $ - $ 3,021,239 Cost of revenues $ 176,968 $ 2,606,722 $ - $ 2,783,690 Gross profit $ 29,877 $ 207,672 $ - $ 237,549 Depreciation and amortization $ 158,078 $ 7,050 $ - $ 165,128 Total capital expenditures $ - $ - $ - $ - Gross margin% 14.4 % 7.4 % - % 7.9 % For the Six Months Ended December 31, 2019 Shipping Agency and Management Services Freight Logistics Services Container Trucking Services Total Net revenues $ 1,000,000 $ 2,745,641 * $ 61,709 $ 3,807,350 Cost of revenues $ 162,406 $ 1,221,329 * $ 55,314 $ 1,439,049 Gross profit $ 837,594 $ 1,524,312 $ 6,395 $ 2,368,301 Depreciation and amortization $ 181,918 $ 7,686 $ 47,407 $ 237,011 Total capital expenditures $ 7,020 $ - $ - $ 7,020 Gross margin% 83.8 % 55.5 % 10.4 % 62.2 % * For certain freight logistics contracts that the Company entered into with customers starting from first quarter of fiscal year 2020, the Company (i) acts as an agent in arranging the relationship between the customer and the third-party service provider and (ii) does not control the services rendered to the customers, revenues related to these contracts are presented net of related costs. For the six months ended December 31, 2019, gross revenues and gross cost of revenues related to these contracts amounted to approximately $22.0 million and $20.5 million, respectively. There was no such transaction for the six months ended December 31, 2020. Total assets as of: December 31, June 30, 2020 2020 Shipping Agency and Management Services $ 6,809,748 $ 2,531,074 Freight Logistic Services 3,830,485 3,176,165 Container Trucking Services 22,247 30,863 Total Assets $ 10,662,480 $ 5,738,102 The Company’s operations are primarily based in the PRC and U.S, where the Company derives all of their revenues. Management also review unaudited condensed consolidated financial results by business locations. Disaggregated information of revenues by geographic locations are as follows: For the Three Months Ended For the Six Months Ended December 31, December 31, December 31, December 31, 2020 2019 2020 2019 PRC $ 1,884,440 1,503,500 2,814,394 2,745,641 U.S. - 517,624 206,845 1,061,709 Total revenues $ 1,884,440 $ 2,021,124 $ 3,021,239 $ 3,807,350 25 Note 19. RELATED PARTY TRANSACTIONS As of December 31, 2020 and 2019, the outstanding amounts due from related parties consist of the following: December 31, June 30, 2020 2020 Tianjin Zhiyuan Investment Group Co., Ltd. $ 384,331 $ 484,331 Less: allowance for doubtful accounts (38,433 ) (48,433 ) Total $ 345,898 $ 435,898 In June 2013, the Company signed a five-year global logistic service agreement with Tianjin Zhiyuan Investment Group Co., Ltd. (the “Zhiyuan Investment Group”) and TEWOO Chemical & Light Industry Zhiyuan Trade Co., Ltd. (together with Zhiyuan Investment Group, “Zhiyuan”). Zhiyuan Investment Group is owned by Mr. Zhang, the largest shareholder of the Company. In September 2013, the Company executed an inland transportation management service contract with the Zhiyuan Investment Group whereby it would provide certain advisory services and help control potential commodities loss during the transportation process. The amount due from Zhiyuan Investment Group as of December 31, 2020 was $384,331 and the Company provided a 10% allowance for doubtful accounts of the amount due from Zhiyuan. For the three months ended December 31, 2020 and 2019, the Company recovered nil and $4,091, respectively, of allowance for doubtful accounts of the amount due from Zhiyuan. For the six months ended December 31, 2020 and 2019, the Company recovered $10,000 and $41,341, respectively, of allowance for doubtful accounts of the amount due from Zhiyuan. As of December 31, 2020, the Company had payable to the Acting CFO of $2,132 which was included in other payable. As of June 30, 2020, the Company had payable to the CEO of $6,279 and to the Acting CFO of $26,570 which were included in other payable. These payments were made on behalf of the Company for the daily business operational activities. Note 20. SUBSEQUENT EVENTS On January 27, 2021, the Company entered into a securities purchase agreement with the non-U.S. investors specified on the signature page thereto pursuant to which the Company agreed to sell to the investors, and the Investors agreed to purchase from the Company, an aggregate of 1,086,956 shares of common stock, no par value, and warrants to purchase 5,434,780 shares, for aggregate gross proceeds to the Company of approximately $4.0 million. The purchase price for each share of common stock and five warrants is $3.68, and the exercise price per warrant is $5.00. The Company has received the full amount of payment in January 2021. On February 6, 2021, the Company entered into a Securities Purchase Agreement with the investors pursuant to which the Company agreed to sell to the Investors, and the investors agreed to purchase from the Company, in a registered direct offering, an aggregate of 1,998,500 shares of the common stock of the Company, no par value per share, at a purchase price of $6.805 per share, for aggregate gross proceeds to the Company of approximately $13.6 million. The Company also agreed to sell to the investors warrants to purchase up to an aggregate of 1,998,500 shares of common stock at an exercise price of $6.805 per share. The warrants shall be initially exercisable upon issuance and expire five and a half (5.5) years from the date of issuance. The exercise price and the number of shares of common stock issuable upon exercise of the warrants are subject to adjustment in the event of stock splits or dividends, or other similar transactions, but not as a result of future securities offerings at lower prices. Net proceeds to the Company from the sale of the shares and the warrants, after deducting estimated offering expenses and placement agent fees, are approximately $12.3 million. The offering is closed on February 10, 2021. The Company has received the full amount of payment in February 2021. On February 9, 2021, the Company entered into a securities purchase agreement with the investors pursuant to which the Company agreed to sell to the investors, and the Investors agreed to purchase from the Company, in a registered direct offering, an aggregate of 3,655,000 shares of the common stock of the Company, no par value per share, at a purchase price of $7.80 per share, for aggregate gross proceeds to the Company of $28,509,000. The Company also agreed to sell to the Investors warrants to purchase up to an aggregate of 3,655,000 shares of common stock at an exercise price of $7.80 per share. The warrants shall be initially exercisable upon issuance and expire five and a half (5.5) years from the date of issuance. The exercise price and the number of shares of common stock issuable upon exercise of the warrants are subject to adjustment in the event of stock splits or dividends, or other similar transactions, but not as a result of future securities offerings at lower prices. Net proceeds to the Company from the sale of the shares and the warrants, after deducting estimated offering expenses and placement agent fees, are approximately $26.2 million. The offering is closed on February 11, 2021. The Company has received the full amount of payment in February 2021. 26 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our company’s financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in the report. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors. Overview Sino-Global has focused on providing customers with customized shipping agency and freight logistic services but has since begun looking aggressively at diversifying its revenue and service mix by seeking new growth opportunities to expand its business due to increased margin compression. These opportunities have ranged from complementary businesses to other service and product initiatives. In fiscal year of 2021, while we continue to provide our current traditional logistics business, we will integrate the traditional business with modern technology to develop a brand-new business model. In addition, we plan to pursue the development of Bitcoin mining with newly appointed leadership team members who have experience in information technology, including in particular blockchain and cryptocurrency expertise, which we plan to leverage these and other innovative technologies in our business platform. These types of technology may be helpful in expanding our traditional logistics service expertise. The outbreak of the novel coronavirus (“COVID-19”) starting from late January 2020 in the PRC has spread rapidly to many parts of the world. In March 2020, the World Health Organization declared the COVID-19 as a pandemic. Given the continually expanding of the COVID-19 pandemic in China and United States, our business, results of operations, and financial condition are still adversely affected. The situation remains highly uncertain for any further outbreak or resurgence of the COVID-19. It is therefore difficult for us to estimate the impact on our business or operating results that might be adversely affected by any further outbreak or resurgence of COVID-19. The impacts of COVID-19 on our business, financial condition, and results of operations include but are not limited to, the following: ● Due to the recent surge of COVID-19 cases, our U.S. office remains closed since March 2020 and our employees have been working remotely from home. Our office closure and limited activity had led to a slower growth for our operations. ● Our customers have been negatively impacted by the pandemic, which continue to reduce demand for the shipping agency and management as well as freight logistics services in fiscal year 2021. As a result, our revenue, gross profit and net income have been continually impacted in fiscal year 2021. Our revenue and gross profit for the three months ended December 31, 2020 were down by approximately $0.1 million, or 6.8%, and $1.1 million, or 84.5%, respectively. For the six months ended December 31, 2020, revenue and gross profit were down by approximately $0.8 million, or 20.6% and $2.1 million, or 90.0%, respectively. ● Our suppliers have been and could continue to be negatively impacted by the COVID-19 outbreak, which may continually impact our cost of freight, or result in higher cost of revenue, which may in turn materially adversely affect our financial condition and operating results in coming months. Company Structure We, founded in 2001, are a non-asset based global shipping and freight logistics integrated solutions provider. We provide tailored solutions and value-added services for our customers to drive efficiency and control in related steps throughout the entire shipping and freight logistics chain. We conduct our business primarily through our wholly-owned subsidiaries in the People’s Republic of China (the “PRC” or “China”) (including Hong Kong) and the U.S., where a majority of our clients are located. We operate in three operating segments, including (1) shipping agency and management services, operated by our subsidiary in the U.S.; (2) freight logistics services, operated by our subsidiaries in the PRC; and (3) container trucking services, operated by our subsidiaries in the U.S. 27 Our corporate structure diagram as of the date of this report is as below: Results of Operations Comparison of the Three Months ended December 31, 2020 and 2019 Revenues Revenues decreased by $136,684, or approximately 6.8% from $2,021,124 for the three months ended December 31, 2019 to $1,884,440 for the same period in 2020. The decrease was primarily due to the loss of revenue from our shipping management services and container trucking services during the period as a result of the stalled trade negotiations between the U.S. and China and continuing impact of COVID-19. For the freight logistics services, we executed some existing contracts that were recognized in the prior period. This segment continues operating as our main revenue source for the fiscal year of 2021. The following tables present summary information by segments mainly regarding the top-line financial results for the three months ended December 31, 2020 and 2019: For the Three Months Ended December 31, 2020 Shipping Agency and Management Services Freight Logistics Services Container Trucking Services Total Net revenues $ - $ 1,884,440 $ - $ 1,884,440 Cost of revenues $ - $ 1,688,464 $ - $ 1,688,464 Gross profit $ - $ 195,976 $ - $ 195,976 Depreciation and amortization $ 77,809 $ 3,600 $ - $ 81,409 Total capital expenditures $ - $ - $ - $ - Gross margin% - % 10.4 % - % 10.4 % For the Three Months Ended December 31, 2019 Shipping Agency and Management Services Freight Logistics Services Container Trucking Services Total Net revenues $ 500,000 $ 1,503,500 * $ 17,624 $ 2,021,124 Cost of revenues $ 66,584 $ 673,646 * $ 15,415 $ 755,645 Gross profit $ 433,416 $ 829,854 $ 2,209 $ 1,265,479 Depreciation and amortization $ 79,144 $ - $ 3,389 $ 82,533 Total capital expenditures $ 2,482 $ - $ - $ 2,482 Gross margin% 86.7 % 55.2 % 12.5 % 62.6 % * For the three months ended December 31, 2019, gross revenues and gross cost of revenues related to these contracts amounted to approximately $12.9 million and $12.0 million, respectively. There was no such transaction for the three months ended December 31, 2020. 28 % Changes For the Three Months Ended December 31, 2020 to 2019 Shipping Agency and Management Services Freight Logistics Services Container Trucking Services Total Net revenues (100.0 )% 25.3 % (100.0 )% (6.8 )% Cost of revenues (100.0 )% 150.6 % (100.0 )% 123.4 % Gross profit (100.0 )% (76.4 )% (100.0 )% (84.5 )% Depreciation and amortization (1.7 )% 100.0 % (100.0 )% (1.4 )% Total capital expenditures (100.0 )% - % - % (100.0 )% Gross margin% (86.7 )% (44.8 )% (12.5 )% (52.2 )% Disaggregated information of revenues by geographic locations are as follows: December 31, December 31, 2020 2019 PRC $ 1,884,440 $ 1,503,500 U.S. - 517,624 Total revenues $ 1,884,440 $ 2,021,124 Revenues (1) Shipping Agency and Management Services For the three months ended December 31, 2020 and 2019, shipping agency and management services generated revenues of nil and $500,000, respectively, representing an approximately 100% decrease in revenues. We had the decrease in this segment because the shipping management services agreement we entered into with our customer starting in the first quarter of fiscal year 2020 expired on June 30, 2020 and was not renewed due to the uncertainty of the shipping management market which has been negatively impacted by the COVID-19 pandemic. We are in progress to finalize an agreement with customers to resume our shipping agency and management service in the coming months. (2) Revenues from Freight Logistics Services Freight logistics services primarily consist of cargo forwarding, brokerage and other freight services. During the three months ended December 31, 2020, revenues increased by $380,940 or approximately 25.3%. The increase was primarily due to the execution of some freight logistics contracts that were delayed in the prior months due to impact of COVID-19. For the three months ended September 30, 2019, we acted as an agent in arranging the relationship between the customer and the third-party service provider and did not control the services rendered to the customer and our revenues on freight logistics contacts were accounted for on a net basis. For all the freight logistics services that we provided to our clients for the three months ended December 31, 2020, we acted as principal and controlled the freight logistics services which we can recognize our revenue much faster in comparison with the same period in 2019. 29 (3) Revenues from Container Trucking Services For the three months ended December 31, 2020 and 2019, revenues generated from container trucking services were nil and $17,624, respectively. Overall revenues from this segment decreased by $17,624 or 100.0%. The decrease in revenues from this segment was primarily due to expiration of container trucking services contracts with our customers as the pending trade negotiations between the U.S. and China. The related gross profit decreased by $2,209 from $2,209 gross profit for the three months ended December 31, 2019 to nil for the same period in 2020. We do not expect an increase in revenue from this segment in the foreseeable future due to the current U.S.-China trade dynamics. However, we plan to continue to provide services on an as needed basis on short-term contracts. Operating Costs and Expenses Operating costs and expenses increased by $706,151 or approximately 30.0%, from $2,354,119 for the three months ended December 31, 2019 to $3,060,270 for the three months ended December 31, 2020. This increase was mainly due to the increase in cost of revenues and general and administrative expenses, offset by provision for doubtful accounts and stock-based compensation as discussed below. The following table sets forth the components of our costs and expenses for the periods indicated: For the Three Months Ended December 31, 2020 2019 Change US$ % US$ % US$ % Revenues 1,884,440 100.0 % 2,021,124 100.0 % (136,684 ) (6.8 )% Cost of revenues 1,688,464 89.6 % 755,645 37.4 % 932,819 123.4 % Gross margin 10.4 % N/A 62.6 % N/A (52.2 )% N/A Selling expenses 73,462 3.9 % 126,125 6.2 % (52,663 ) (41.8 )% General and administrative expenses 1,314,235 69.7 % 702,064 34.7 % 612,171 87.2 % Provision for doubtful accounts, net of recovery (15,891 ) (0.8 )% 278,676 13.8 % (294,567 ) (105.7 )% Stock-based compensation - - 491,609 24.3 % (491,609 ) (100 )% Total costs and expenses 3,060,270 162.4 % 2,354,119 116.4 % 706,151 30.0 % Cost of Revenues Cost of revenues consisted primarily of freight costs to various freight carriers, cost of labor, other overhead and sundry costs. Cost of revenues was $1,688,464 for the three months ended December 31, 2020, an increase of $932,819, or approximately 123.4%, as compared to $755,645 for the same period in 2019. The overall cost of revenues as a percentage of our revenues increased from approximately 37.4% for the three months ended December 31, 2019, to approximately 89.6% for the same period in 2020. The increase of costs was mainly due to the fact that we started to act as principal and controlled our freight logistics services, and the costs for shipping agency which included service fees from subcontractors were higher in 2020 than that in 2019 in which we provided shipping management service utilizing our operational staffs. In addition, the costs of our PRC domestic and export services to our freight carriers were higher for the three months ended December 31, 2020 compared to the same period in 2019 as our freight carriers have been negatively impacted by the COVID-19 pandemic so the unit price our freight carriers charged us for domestic logistics services was increased. As a result, our gross profit margin decreased by approximately 52.2% from approximately 62.6% for the three months ended December 31, 2019 to approximately 10.4% for the same period in 2020. Selling Expenses Our selling expenses consisted primarily of salaries and travel expenses for our sales representatives. For the three months ended December 31, 2020, we had $73,462 of selling expenses, as compared to $126,125 for the same period in 2019, which represents a decrease of $52,663 or approximately 41.8%. The decrease was mainly due to approximately $50,000 decrease in salaries and travel expenses as we have less employees and limited activities for our selling team under COVID-19 comparing to the same period of 2019. 30 General and Administrative Expenses Our general and administrative expenses consist primarily of salaries and benefits, travel expenses for administration department, office expenses, regulatory filing and professional service fees including audit, legal and IT consulting. For the three months ended December 31, 2020, we had $1,314,235 of general and administrative expenses, as compared to $702,064 for the same period in 2019, representing an increase of $612,171, or approximately 87.2%. The increase was mainly due to the increase in professional expenses as we spend more resources on business development to expand our business, such expenses includes due diligence and professional fees for seeking potential acquisition target, and consulting expenses for new business development. Provision for Doubtful Accounts, net of recovery We made $14,282 provision for doubtful accounts and offset by the recoveries of other receivable of $30,173 for the three months ended December 31, 2020 compared to $278,676 provision for doubtful accounts for the same period in 2019, a decrease of $294,567, or approximately 105.7%. This decrease of provision for doubtful accounts was mainly due to the decrease in revenue and collections of prior outstanding account and other receivables. Stock-based Compensation Stock-based compensation was nil for the three months ended December 31, 2020, a decrease of $491,609 or 100.0%, as compared to $491,609 for the same period in 2019. Stock-based compensation decreased significantly from the three months ended December 31, 2019 to the same period in 2020 due to no stock award was granted as a result of the decline in revenue. Operating loss We had an operating loss of $1,175,830 for the three months ended December 31, 2020, compared to $332,995 for the same period in 2019. Such change was the result of the combination of the changes discussed above. Taxation We recorded income tax expense $3,450 and $14,747 for three months ended December 31, 2020 and 2019, respectively. We have incurred a cumulative U.S. federal net operating loss (“NOL”) of approximately $6,456,000 as of June 30, 2020, which may reduce future federal taxable income. The NOL generated prior to the year ended June 30, 2017 amounted to approximately $1,400,000 will expire in 2037 and the remaining balance carried forward indefinitely. During the three months ended December 31, 2020, approximately $1,147,000 of additional NOL was generated and the tax benefit derived from such NOL was approximately $241,000. Our operations in China have incurred a cumulative a cumulative NOL of approximately $5,961,000 as of June 30, 2020, which may reduce future taxable income. The NOL amounted to approximately $677,000 start expiring from 2023 and the remaining balance of NOL will be expired by 2026. During the three months ended December 31, 2020, approximately $4,000 of additional NOL was generated and the tax benefit derived from such NOL was approximately $1,000. We periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Management considers new evidence, both positive and negative, that could affect our future realization of deferred tax assets including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes and other relevant factors. We determined that it is more likely than not our deferred tax assets could not be realized due to uncertainty on future earnings as a result of the deterioration of trade negotiation between the U.S. and China. We provided a 100% allowance for its deferred tax assets as of December 31, 2020. The net increase in valuation for the three months ended December 31, 2020 amounted to approximately $429,000 based on management’s reassessment of the amount of our deferred tax assets that are more likely than not to be realized. 31 Net loss As a result of the foregoing, we had a net loss of $1,093,560 for the three months ended December 31, 2020, compared to $363,355 for the same period in 2019. After the deduction of non-controlling interest, net loss attributable to us was $1,102,919 for the three months ended December 31, 2020, compared to $407,333 for the same period in 2019. Comprehensive loss attributable to us was $867,054 for the three months ended December 31, 2020, compared to $57,318 for the same period in 2019. Comparison of the Six Months ended December 31, 2020 and 2019 Revenues Revenues decreased by $786,111, or approximately 20.6%, from $3,807,350 for the six months ended December 31, 2019 to $3,021,239 for the same period in 2020. The decrease was primarily due to the loss of revenue from several customer contracts for our shipping management services and no revenue generated from our container trucking services during the period. One of our shipping management services contracts we entered into with customers starting in the first quarter of fiscal year 2020 expired during the quarter. The decrease was also due to the decrease in revenues from container trucking services as our service contracts with customers had expired and there was no new business for this segment partly because of the stalled trade negotiations between the U.S. and China. As some of our existing freight logistics services contacts has been executed during the six months ended December 31, 2020, this segment was our main revenue source for the six months ended December 31, 2020. The following tables present summary information by segments mainly regarding the top-line financial results for the six months ended December 31, 2020 and 2019: For the Six Months Ended December 31, 2020 Shipping Agency and Management Services Freight Logistics Services Container Trucking Services Total Net revenues $ 206,845 $ 2,814,394 $ - $ 3,021,239 Cost of revenues $ 176,968 $ 2,606,722 $ - $ 2,783,690 Gross profit $ 29,877 $ 207,672 $ - $ 237,549 Depreciation and amortization $ 158,078 $ 7,050 $ - $ 165,128 Total capital expenditures $ - $ - $ - $ - Gross margin% 14.4 % 7.4 % - % 7.9 % For the Six Months Ended December 31, 2019 Shipping Agency and Management Services Freight Logistics Services Container Trucking Services Total Net revenues $ 1,000,000 $ 2,745,641 * $ 61,709 $ 3,807,350 Cost of revenues $ 162,406 $ 1,221,329 * $ 55,314 $ 1,439,049 Gross profit $ 837,594 $ 1,524,312 $ 6,395 $ 2,368,301 Depreciation and amortization $ 181,918 $ 7,686 $ 47,407 $ 237,011 Total capital expenditures $ 7,020 $ - $ - $ 7,020 Gross margin% 83.8 % 55.5 % 10.4 % 62.2 % * For the six months ended December 31, 2019, gross revenues and gross cost of revenues related to these contracts amounted to approximately $22.0 million and $20.5 million, respectively. There was no such transaction for the six months ended December 31, 2020. 32 % Changes For the Six Months Ended December 31, 2020 to 2019 Shipping Agency and Management Services Freight Logistics Services Container Trucking Services Total Net revenues (79.3 )% 2.5 % (100.0 )% (20.6 )% Cost of revenues 9.0 % 113.4 % (100.0 )% 93.4 % Gross profit (96.4 )% (86.4 )% (100.0 )% (90.0 )% Depreciation and amortization (13.1 )% (8.3 )% (100.0 )% (30.3 )% Total capital expenditures (100.0 )% - % - % (100.0 )% Gross margin% (69.4 )% (48.1 )% (10.4 )% (54.3 )% Disaggregated information of revenues by geographic locations are as follows: December 31, December 31, 2020 2019 PRC $ 2,814,394 $ 2,745,641 U.S. 206,845 1,061,709 Total revenues $ 3,021,239 $ 3,807,350 Revenues (1) Shipping Agency and Management Services For the six months ended December 31, 2020 and 2019, shipping agency and management services generated revenues of $206,845 and $1,000,000, respectively, representing an approximately 79.3% decrease in revenues. The decrease in this segment was because the shipping agency and management services agreements we entered in fiscal year 2020 have expired and were not renewed due to the uncertainty of the shipping management market which has been negatively impacted by the COVID-19 pandemic. We are in progress to finalize an agreement with customers to resume our shipping agency and management service in the coming months. (2) Revenues from Freight Logistics Services Freight logistics services primarily consist of cargo forwarding, brokerage and other freight services. During the six months ended December 31, 2020, revenues were comparable to the same period 2019. For the six months ended December 31, 2019, we acted as an agent in arranging the relationship between the customer and the third-party service provider and did not control the services rendered to the customer and our revenues on freight logistics contacts were accounted for on a net basis. For all the freight logistics services that we provided to our clients for the six months ended December 31, 2020, we acted as principal and controlled the freight logistics services which we can recognize our revenue much faster in comparison with the same period in 2019. (3) Revenues from Container Trucking Services For the six months ended December 31, 2020 and 2019, revenues generated from container trucking services were nil and $61,709, respectively. Overall revenues from this segment decreased by $61,709 or 100.0%. The decrease in revenues from this segment was primarily due to expiration of container trucking services contracts with our customers as the pending trade negotiations between the U.S. and China. The related gross profit decreased by $6,395 from $6,395 gross profit for the six months ended December 31, 2019 to nil for the same period in 2020. We do not expect an increase in revenue from this segment in the foreseeable future due to the current U.S.-China trade dynamics. However, we plan to continue to provide services on an as needed basis on short-term contracts. 33 Operating Costs and Expenses Operating costs and expenses decreased by $944,212 or approximately 16.0%, from $5,890,425 for the six months ended December 31, 2019 to $4,946,213 for the six months ended December 31, 2020. This decrease was mainly due to the decrease in cost of revenues and general and administrative expenses, offset by selling expenses, impairment loss of fixed assets and intangible asset, provision for doubtful accounts and stock-based compensation as discussed below. The following table sets forth the components of our costs and expenses for the periods indicated: For the Six Months Ended December 31, 2020 2019 Change US$ % US$ % US$ % Revenues 3,021,239 100.0 % 3,807,350 100.0 % (786,111 ) (20.6 )% Cost of revenues 2,783,690 92.1 % 1,439,049 37.8 % 1,344,641 93.4 % Gross margin 7.9 % N/A 62.2 % N/A (54.3 )% N/A Selling expenses 142,392 4.7 % 256,154 6.7 % (113,762 ) (44.4 )% General and administrative expenses 2,017,669 66.8 % 1,793,519 47.1 % 224,150 (12.5 )% Impairment loss of fixed assets and intangible asset - - 327,632 8.6 % (327,632 ) (100.0 )% Provision for doubtful accounts, net of recovery 2,462 0.1 % 1,167,754 30.7 % (1,165,292 ) (99.8 )% Stock-based compensation - - 906,317 23.8 % (906,317 ) (100.0 )% Total costs and expenses 4,946,213 163.7 % 5,890,425 154.7 % (944,212 ) (16.0 )% Cost of Revenues Cost of revenues consisted primarily of freight costs to various freight carriers, cost of labor, other overhead and sundry costs. Cost of revenues was $2,783,690 for the six months ended December 31, 2020, an increase of $1,344,641, or approximately 93.4%, as compared to $1,439,049 for the same period in 2019. The overall cost of revenues as a percentage of our revenues increased from approximately 37.8% for the six months ended December 31, 2019, to approximately 92.1% for the same period in 2020. The increase of costs was mainly due to the fact that the costs of our PRC domestic and export services to our freight carriers were higher for the six months ended December 31, 2020 compared to the same period in 2019 as our freight carriers have been negatively impacted by the COVID-19 pandemic so the unit price our freight carriers charged us for domestic logistics services was increased. In addition, for certain export contracts that were delayed by the pandemic in fiscal year 2020, we incurred higher costs to reschedule and fulfil those orders in the first quarter of 2021. Starting in the fourth quarter of fiscal year of 2020, we began to provide shipping agency service agreement for Mandarine Bulk as the sole general shipping agency. The increase of costs was also because we just started shipping agency service, and the costs for shipping agency which included service fees from subcontractors were higher in 2020 than that in 2019 in which we provided shipping management service utilizing our operational staffs. As a result, our gross profit margin decreased by approximately 54.3% from approximately 62.2% for the six months ended December 31, 2019 to approximately 7.9% for the same period in 2020. Selling Expenses Our selling expenses consisted primarily of salaries and travel expenses for our sales representatives. For the six months ended December 31, 2020, we had $142,392 of selling expenses, as compared to $256,154 for the same period in 2019, which represents a decrease of $113,762 or approximately 44.4%. The decrease was mainly due to approximately $101,000 decrease in salaries and travel expenses as we have less employees and limited activities for our selling team under COVID-19 comparing to the same period of 2019. 34 General and Administrative Expenses Our general and administrative expenses consist primarily of salaries and benefits, travel expenses for administration department, office expenses, regulatory filing and professional service fees including audit, legal and IT consulting. For the six months ended December 31, 2020, we had $2,017,669 of general and administrative expenses, as compared to $1,793,519 for the same period in 2019, representing an increase of $224,150, or approximately 12.5%. The increase was mainly due to the increase in professional expenses of $606,000 as we spend more resources on business development to expand our business, such expenses includes due diligence and professional fees for seeking potential acquisition target, and consulting expenses for new business development, offset by the decrease in IT expense of approximately $97,000, the decrease in depreciation expenses of approximately $79,000 as some of our fixed assets have been fully depreciated and the decrease in salaries and travel expenses of approximately $206,000 due to we have less employees and limited activity under COVID-19 comparing to the same period of 2019. Impairment loss of fixed assets and intangible asset For the six months ended December 31, 2019, we recorded $327,632 of impairment loss of fixed assets and intangible asset due to the continued decrease in revenues generated from the freight logistics services, inland transportation management services and container trucking services segments. There was no such transaction for the six months ended December 31, 2020. Provision for Doubtful Accounts, net of recovery We made $45,091 provision for doubtful accounts and offset by the recoveries of accounts receivable of $2,456, the recoveries of other receivable of $30,173 and other receivable - related party of $10,000 for the six months ended December 31, 2020 compared to $1,285,592 provision for doubtful accounts and offset by the recoveries of accounts receivable of $76,497 and other receivable - related party of $41,341 for the same period in 2019, an decrease of $1,165,292, or approximately 99.8%. This decrease of provision for doubtful accounts was mainly due to the decrease in revenue and collections of prior outstanding account receivables. Stock-based Compensation Stock-based compensation was nil for the six months ended December 31, 2020, a decrease of $906,317 or 100.0%, as compared to $906,317 for the same period in 2019. Stock-based compensation decreased significantly from the six months ended December 31, 2019 to the same period in 2020 due to no stock award was granted as a result of the decline in revenue. Operating loss We had an operating loss of $1,924,974 for the six months ended December 31, 2020, compared to $2,083,075 for the same period in 2019. Such change was the result of the combination of the changes discussed above. Taxation We recorded income tax expense $3,450 and $14,747 for the six months ended December 31, 2020 and 2019, respectively. We have incurred a cumulative U.S. federal NOL of approximately $6,456,000 as of June 30, 2020, which may reduce future federal taxable income. The NOL generated prior to the year ended June 30, 2017 amounted to approximately $1,400,000 will expire in 2037 and the remaining balance carried forward indefinitely. During the six months ended December 31, 2020, approximately $1,696,000 of additional NOL was generated and the tax benefit derived from such NOL was approximately $356,000. Our operations in China have incurred a cumulative a cumulative NOL of approximately $5,961,000 as of June 30, 2020, which may reduce future taxable income. The NOL amounted to approximately $677,000 start expiring from 2023 and the remaining balance of NOL will be expired by 2026. During the six months ended December 31, 2020, approximately $7,000 of additional NOL was generated and the tax benefit derived from such NOL was approximately $2,000. 35 We periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Management considers new evidence, both positive and negative, that could affect our future realization of deferred tax assets including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes and other relevant factors. We determined that it is more likely than not our deferred tax assets could not be realized due to uncertainty on future earnings as a result of the deterioration of trade negotiation between the U.S. and China. We provided a 100% allowance for its deferred tax assets as of December 31, 2020. The net increase in valuation for the six months ended December 31, 2020 amounted to approximately $699,000 based on management’s reassessment of the amount of our deferred tax assets that are more likely than not to be realized. Net loss As a result of the foregoing, we had a net loss of $1,842,016 for the six months ended December 31, 2020, compared to $2,111,979 for the same period in 2019. After the deduction of non-controlling interest, net loss attributable to us was $1,836,710 for the six months ended December 31, 2020, compared to $2,034,686 for the same period in 2019. Comprehensive loss attributable to us was $1,409,594 for the six months ended December 31, 2020, compared to $2,330,882 for the same period in 2019. Liquidity and Capital Resources Cash Flows and Working Capital As of December 31, 2020, we had $4,473,000 in cash (cash on hand and cash in bank). We held approximately 92.9% of our cash in banks located in the U.S., Australia and Hong Kong and held approximately 7.1% of our cash in banks located in the PRC. As of December 31, 2020, we had the following loans outstanding: Loans Maturities Interest rate December 31, 2020 Small business administration loan May 2050 3.75 % $ 155,900 Paycheck protection program loan - - $ 124,570 The following table sets forth a summary of our cash flows for the periods as indicated: For the Six Months Ended December 31, 2020 2019 Net cash used in operating activities $ (2,967,985 ) $ (3,075,643 ) Net cash used in investing activities $ - $ (7,020 ) Net cash provided by financing activities $ 6,860,999 $ 500,500 Effect of exchange rate fluctuations on cash $ 448,804 $ (440,820 ) Net increase (decrease) in cash $ 4,341,818 $ (3,022,983 ) Cash at the beginning of period $ 131,182 $ 3,142,650 Cash at the end of period $ 4,473,000 $ 119,667 The following table sets forth a summary of our working capital: December 31, June 30, 2020 2020 Variation % Total Current Assets $ 6,808,881 $ 1,913,319 $ 4,895,562 255.9 % Total Current Liabilities $ 5,751,270 $ 5,808,865 $ (57,595 ) (1.0 )% Working Capital (Deficit) $ 1,057,611 $ (3,895,546 ) $ 4,953,157 (127.1 )% Current Ratio 1.18 0.33 0.85 259.4 % 36 In assessing the liquidity, we monitor and analyze our cash on-hand and our operating and capital expenditure commitments. Our liquidity needs are to meet our working capital requirements, operating expenses and capital expenditure obligations. As of December 31, 2020, our working capital was approximately $1.1 million and we had cash of approximately $4.5 million. We believe our revenues and operations will continue to grow and the current working capital is sufficient to support our operations and debt obligations as they become due one year through report date. We expect to realize the balance of our current assets within the normal operating cycle of a twelve month period. If we are unable to realize its current assets within the normal operating cycle of a twelve month period, we had considered supplementing our available sources of funds through the following sources: ● we will continuously seek equity financing to support its working capital. On January 27, 2021, we entered into a securities purchase agreement with the non-U.S. persons to purchase 1,086,956 shares at a per share purchase price of $3.68 for aggregate proceeds of approximately $4.0 million. We have received the full amount of payment in January 2021. On February 6, 2021, we entered into a securities purchase agreement with the investors to purchase an aggregate of 1,998,500 shares at a per share purchase price of $6.805 for aggregate net proceeds of approximately $12.3 million after deducting estimated offering expenses and placement agent fees. The Company has received the full amount of payment in February 2021. On February 9, 2021, the Company entered into a securities purchase agreement with the investors to purchase an aggregate of 3,655,000 shares at a per share purchase price of $7.80 for aggregate net proceeds of approximately $26.2 million after deducting estimated offering expenses and placement agent fees. The Company has received the full amount of payment in February 2021; ● other available sources of financing from PRC banks and other financial institutions; and ● financial support and credit guarantee commitments from our shareholders and directors. Based on the above considerations, our management is of the opinion that we have sufficient funds to meet the future liquidity requirements for at least twelve months from issuance of these unaudited condensed consolidated financial statements. Operating Activities Our net cash used in operating activities was approximately $3.0 million for the six months ended December 31, 2020. The operating cash outflow for the six months ended December 31, 2020 was primarily attributable to our net loss of $1.8 million, adjusted by non-cash items of approximately $0.2 million of depreciation and amortization expenses of fixed assets and intangible asset. We had an increase in accounts receivables of approximately $0.2 million, an increase in other receivables of approximately $0.9 million, an increase in other long-term assets – deposits of approximately $0.1 million, and a decrease in accrued expenses and other current liabilities of approximately $0.8 million offset by an increase of approximately $0.4 million in deferred revenue s as we signed an agreement with a new client, an increase in taxes payable of approximately $0.1 million and a decrease approximately $0.1 million of due from related parties as a result of collections made during the year. Our net cash used in operating activities was approximately $3.1 million for the six months ended December 31, 2019 compared to net cash used in operating activities of approximately $4.7 million for the same period in 2018. The operating cash outflow for the six months ended December 31, 2019 was primarily attributable to our net loss of approximately $2.1 million, of which approximately $0.9 million of stock compensation expense, approximately $0.3 million of impairment loss of fixed assets and intangible asset and approximately $1.2 million for provision of doubtful accounts were non-cash expenses. We had an increase in other receivables of approximately $5.9 million as we prepaid certain costs of commodities on behalf of our customers offset by a decrease of approximately $1.6 million in accounts receivable as a result of collections made during the six months. Investing Activities We did not have any investing activities for the six months ended December 31, 2020. Net cash used in investing activities was $7,020 for the six months ended December 31, 2019, mainly for the purchase of computer equipment and making office leasehold improvement. 37 Financing Activities Net cash provided by financing activities was approximately $6.9 million for the six months ended December 31, 2020 due to cash proceeds received from issuance of common stock to private investors for approximately $5.5 million and cash proceeds received from issuance of preferred stock to a private investor for approximately $1.4 million. Net cash provided by financing activities was $500,500 for the six months ended December 31, 2019 due to cash proceeds received from issuance of common stock to a private investor. Critical Accounting Policies We prepare our unaudited condensed consolidated financial statements in accordance with U.S. GAAP. These accounting principles require us to make judgments, estimates and assumptions on the reported amounts of assets and liabilities at the end of each fiscal period, and the reported amounts of revenues and expenses during each fiscal period. We continually evaluate these judgments and estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and assumptions that we believe to be reasonable. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 removes, modifies and adds certain disclosure requirements in Topic 820 “Fair Value Measurement”. ASU 2018-13 eliminates certain disclosures related to transfers and the valuations process, modifies disclosures for investments that are valued based on net asset value, clarifies the measurement uncertainty disclosure, and requires additional disclosures for Level 3 fair value measurements. We adopted this ASU on July 1, 2020 and the adoption has no significant impact to our unaudited condensed consolidated financial statements as a whole. There have been no other material changes during the six months ended December 31, 2020 in our significant accounting policies from those previously disclosed in our annual report for the fiscal year ended June 30, 2020. The discussion of our critical accounting policies are contained in Note 2 to our unaudited condensed consolidated financial statements in this report, “Summary of our Significant Accounting Policies”. 38 Item 3. Quantitative and Qualitative Disclosures about Market Risk This Item is not applicable because we are a smaller reporting company. Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain controls and procedures designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. As of December 31, 2020, we carried out an evaluation, under the supervision of and with the participation of its management, including our Chief Executive Officer and Acting Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing evaluation, Chief Executive Officer and Acting Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) were not effective and adequately designed to ensure that the information required to be disclosed by us in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that such information was accumulated and communicated to the management, including Chief Executive Officer and Acting Chief Financial Officer, in a manner that allowed for timely decisions regarding required disclosure. The assessment stemmed from the following material weaknesses – ● Lack of segregation of duties for accounting personnel who prepared and reviewed the journal entries; and ● Lack of a full time U.S. GAAP personnel in the accounting department to monitor the recording of the transactions. Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the three months ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 39 PART II. OTHER INFORMATION Item 1. Legal Proceedings None. Item 1A. Risk Factors This item is not applicable to a smaller reporting company such as us. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. Except as previously reported in our Current Reports on Form 8-K, we have not sold any equity securities during the quarter ended December 31, 2020 that were not registered under the Securities Act of 1933, as amended. Item 3. Defaults Upon Senior Securities. None. Item 4. Mine Safety Disclosures Not applicable. Item 5. Other Information. None. Item 6. Exhibits The following exhibits are filed herewith: Number Exhibit 4.1 Form of Certificate of Designation of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on November 4, 2020) 4.2 Form of Warrant (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on November 4, 2020) 4.3 Form of Warrant to Purchase Common Stock (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on December 9, 2020) 4.4 Form of Warrant (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on January 28, 2021) 4.5 Form of Warrant (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on February 8, 2021) 4.6 Form of Warrant (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on February 10, 2021) 10.1 Offer Letter between Sino-Global Shipping America, Ltd. and Xiaohuan Huang (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on October 23, 2020) 10.2 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on November 4, 2020) 10.3 Securities Purchase Agreement dated December 8, 2020 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on December 9, 2020) 10.4 Placement Agreement dated November 13, 2020 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on December 9, 2020) 10.5 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on January 28, 2020) 10.6 Employment Agreement by and between Mr. Lei Nie and Sino-Global Shipping America, Ltd., dated as of January 28, 2021 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on January 29, 2021) 10.7 Employment Agreement by and between Mr. Xintang You and Sino-Global Shipping America, Ltd., dated as of January 28, 2021 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on January 29, 2021) 40 10.8 Securities Purchase Agreement dated February 6, 2021 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February 8, 2021) 10.9 Placement Agreement dated February 5, 2021 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on February 8, 2021) 10.10 Securities Purchase Agreement dated February 9, 2021 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February 10, 2021) 16.1 Letter from Friedman LLP dated October 28, 2020 (incorporated by reference to Exhibit 16.1 to our Current Report on Form 8-K filed on October 28, 2020) 31.1 Certification of the Principal Executive Officer 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. 31.2 Certification of the Principal Financial Officer 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. 32.1 Certifications of the Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.1 Nasdaq Compliance Letter Dated December 16, 2020 (incorporated by reference to Exhibit 16.1 to our Current Report on Form 8-K filed on December 16, 2020) EX-101.INS XBRL Instance Document. EX-101.SCH XBRL Taxonomy Extension Schema Document. EX-101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. EX-101.DEF XBRL Taxonomy Extension Definition Linkbase Document. EX-101.LAB XBRL Taxonomy Extension Label Linkbase Document. EX-101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. 41 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SINO-GLOBAL SHIPPING AMERICA, LTD. February 12, 2021 By: /s/ Lei Cao Lei Cao Chief Executive Officer (Principal Executive Officer) February 12, 2021 By: /s/ Tuo Pan Tuo Pan Acting Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) 42