SINO SHIPPING HOLDINGS INC. - FORM 10-Q

Attached files

file	filename
EX-31.1 - SINO SHIPPING HOLDINGS INC.	c59481_ex31-1.htm
EX-31.2 - SINO SHIPPING HOLDINGS INC.	c59481_ex31-2.htm
EX-32.1 - SINO SHIPPING HOLDINGS INC.	c59481_ex32-1.htm
EX-32.2 - SINO SHIPPING HOLDINGS INC.	c59481_ex32-2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


(Mark One)
þ	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended		September 30, 2009

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 0-9064


	Sino Shipping Holdings Inc.
(Exact name of registrant as specified in its charter)


Delaware		84-0789885
(State or Other Jurisdiction of Incorporation)		(IRS Employer Identification No.)


No. 950 Dalian Road, Hi-Shanghai 8^th Building, 4^th Floor, Shanghai, China 200092
(Address of principal executive offices)


	86-21-5595-5927
(Registrant’s telephone number, including area code)



(Former name or former address, if changed since last report)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 x No o

Indicate by check mark wither the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large Accelerated filer o		Accelerated filer o

Non-accelerated filer o (Do not check if smaller reporting company)		Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

There were 24,827,932 shares of the registrant’s common stock outstanding as of November 20, 2009.

SINO SHIPPING HOLDINGS INC.

INDEX TO FORM 10-Q

PART I. FINANCIAL INFORMATION


		Page No.

Item 1.	Consolidated Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and
	Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4.	Controls and Procedures	26

PART II. OTHER INFORMATION

Item 6.	Exhibits	27

Signatures		28

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

The condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. The condensed consolidated financial statements are expressed in U.S. dollars. In this report, references to “dollars,” “U.S. $” or “$” are to United States dollars.

SINO SHIPPING HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


	September 30,
	2009 (Unaudited)		December 31, 2008
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	11,547	$	111,750
Prepaid expenses		306,250		437,500
Prepayment of vessel components		1,692,822		1,692,822
Total current assets		2,010,619		2,242,072
NONCURRENT ASSETS:
Property, plant and equipment, net		15,694		19,899
Vessels, net		11,778,997		21,396,533
Other receivable		7,851,292		—
Security deposits		—		14,061
TOTAL ASSETS	$	21,656,602	$	23,672,565


LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accrued expenses and other payables	$	61,028	$	104,035
Current portion of long-term bank loan		—		309,000
Total current liabilities		61,028		413,035

TOTAL LIABILITIES		61,028		413,035

SHAREHOLDERS’ EQUITY:
Preferred stock, $0.0001 par value per share, 10,000,000 shares authorized, none issued or outstanding at September 30, 2009 and December 31, 2008		—		—
Common stock, $0.0001 par value per share, 100,000,000 shares authorized, 24,827,932 shares issued and outstanding at September 30, 2009 and December 31, 2008		2,482		2,482
Additional paid-in capital		15,124,002		15,124,002
Retained earnings		6,469,090		8,133,046
TOTAL SHAREHOLDERS’ EQUITY		21,595,574		23,259,530
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	21,656,602	$	23,672,565

See notes to consolidated financial statements.

SINO SHIPPING HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)


	For the Three Months Ended					For the Nine Months Ended
	September 30, 2009			September 30, 2008		September 30, 2009			September 30, 2008

REVENUES:	$	1,502,310		$	7,706,906	$	3,567,353		$	20,851,970
OPERATING EXPENSES:
Vessels operating expenses		1,173,581			5,543,383		3,163,576			14,649,281
Depreciation		107,247			198,496		471,628			594,050
General and administrative expenses		136,260			262,885		489,135			309,881
TOTAL OPERATING EXPENSES		1,417,088			6,004,764		4,124,339			15,553,212

OPERATING (LOSS) INCOME		85,222			1,702,142		(556,986	)		5,298,758

OTHER INCOME AND EXPENSE:
Loss from sale of vessel		1,098,822			—		1,098,822			—
Interest expense		914			7,235		6,813			26,907
Bank charges		547			810		1,335			1,577
NET OTHER INCOME AND EXPENSE		1,100,283			8,045		1,106,970			28,484

NET (LOSS) INCOME	$	(1,015,061	)	$	1,694,097	$	(1,663,956	)	$	5,270,274

(Loss) earnings per common stock, basic	$	(0.04	)	$	0.07	$	(0.07	)	$	0.21
(Loss) earnings per common stock, diluted	$	(0.04	)	$	0.07	$	(0.07	)	$	0.21
Weighted average shares outstanding, basic		24,827,932			24,734,289		24,827,932			24,631,929
Weighted average shares outstanding, diluted		25,194,730			25,070,520		25,194,730			24,857,720

See notes to consolidated financial statements.

SINO SHIPPING HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009


			Additional
	Common		Paid-in		Retained
	Stock		Capital		Earnings			Total

Balance as of January 1, 2009	$	2,482	$	15,124,002	$	8,133,046		$	23,259,530
Net (loss)		—		—		(1,663,956	)		(1,663,956	)
Balance as of September 30, 2009	$	2,482	$	15,124,002	$	6,469,090		$	21,595,574

See notes to consolidated financial statements.

SINO SHIPPING HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)


	For the Nine Months Ended
	September 30, 2009			September 30, 2008
OPERATING ACTIVITIES:
Net (loss) income	$	(1,663,956	)	$	5,270,274
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		471,628			594,050
Loss from sale of vessel		1,098,822			—
Non-cash compensation		131,250			43,750
CHANGE IN OPERATING ASSETS AND LIABILITIES:
Due from charterers		—			(1,623,445	)
Other receivables		—			(14,062	)
Prepayment		—			(57,242	)
Security deposits		14,061			—
Accrued expenses and other payable		(43,008	)		(39,535	)
Net cash (used in) provided by operating activities		8,797			4,173,790

FINANCING ACTIVITIES:
Principal payments on bank loan		(309,000	)		(297,000	)
Net cash provided by (used in) financing activities		(309,000	)		(297,000	)

INVESTING ACTIVITIES:
Proceeds from sale of vessel		200,000			—
Purchase of vessel components		—			(2,002,988	)
Prepayment of vessel components		—			(1,692,821	)
Purchase of property, plant and equipment		—			(21,440	)
Net cash provided by (used in) investing activities		200,000			(3,717,249	)

Net (decrease) increase in cash		(100,203	)		159,541
Cash and cash equivalents, beginning of year		111,750			116,411
Cash and cash equivalents, end of year	$	11,547		$	275,952

Supplemental disclosure of cash flow information – cash paid for interest	$	6,813		$	26,907

Supplemental disclosure of non-cash investing and financing activities:
Vessel sold in exchange for note receivable		7,851,292			—

See notes to consolidated financial statements.

SINO SHIPPING HOLDINGS INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. GENERAL

Sino Shipping Holdings Inc. (the “Company”) was incorporated on February 5, 1979 under the laws of the State of Colorado as Applied Medical Devices, Inc. to engage in the development and sale of medical devices and medical technology. In July 1986, the Company discontinued its business operations and commenced disposing of its business assets. On February 11, 2008, the Company merged with Dalkeith Investments, Inc., a Delaware corporation which was specifically formed for the purpose of accomplishing a reincorporation merger with Applied Medical Devices, Inc. On February 11, 2008, the name of the Company was changed from Applied Medical Devices, Inc. to Dalkeith Investments, Inc.

On March 31, 2008, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Fountainhead Capital Partners Limited (“FHCP”), an entity registered in Jersey (C.I.), Yongchen International Shipping Limited, a company incorporated in Hong Kong (“Yongchen”), Hengzhou International Shipping Limited, a company incorporated in Hong Kong (“Hengzhou”), Yongzheng International Marine Holdings Co., Ltd., a British Virgin Islands company (“Yongzheng”), and each of the other shareholders of Hengzhou (the “Other Shareholders”). Pursuant to the Share Exchange Agreement, Yongzheng transferred all of the issued and outstanding shares of Yongchen capital stock to the Company, and Yongzheng and the Other Shareholders transferred all of the issued and outstanding shares of Hengzhou capital stock to the Company, in exchange for 24,525,994 shares of the Company’s common stock (the “Share Exchange”). As a result of the Share Exchange, Yongchen and Hengzhou became the Company’s wholly-owned subsidiaries, and Yongzheng and the Other Shareholders acquired approximately 95% of the Company’s common stock.

On March 31, 2008, the Share Exchange was completed, Yongchen and Hengzhou became the Company’s wholly-owned subsidiaries, and the businesses of Yongchen and Hengzhou were adopted as the Company’s business. Following the Share Exchange, the Company filed a Certificate of Ownership and Merger (the “Certificate”) with the Delaware Secretary of State pursuant to which Sino Shipping Holdings Inc., a Delaware corporation and the Company’s wholly-owned subsidiary, was merged into the Company. As a result of the filing of the Certificate, the Company’s name was changed from “Dalkeith Investments, Inc.” to “Sino Shipping Holdings Inc.” effective March 31, 2008.

Below is the list of the Company’s wholly-owned subsidiaries and related vessel information as of September 30, 2009:


Wholly Owned	Vessels Acquired/		Year	Deadweight
Subsidiaries	In-chartered	Flag	Built	Tons
Nanjing Maritime Limited	Nan Jing (a)	Sierra Leone	1984	7,500
Yongchen International Shipping Limited	Heng Shun (b) Agios Spyridon (c) Qiao Yin	Panama Sierra Leone Panama	1981 1984 1991	44,363 7,500 2,850
Hengzhou International Shipping Limited	Rong Sheng (d) Rong Da (d)	Marshall Islands Hong Kong	Under construction Under construction	12,800 12,800
Rong Yang International Shipping Limited	— (e)	—	—	—
Rongzhong Enterprise Management Consulting (Shanghai) Co., Ltd.	— (f)	—	—	—


	(a) Formerly known as Long Xin. In 2008, Long Xin was transferred by Yongchen to a newly-formed


	Hong Kong subsidiary, Nanjing Maritime Limited, and the vessel was re-named “Nan Jing.” Nan Jing was suspended from operations in the first quarter of the year. Operations resumed in the second quarter.

	(b) On January 4, 2008, Yongchen entered into a time charter contract to in-charter Heng Shun for a period of three years for $28,000 per day. On January 9, 2009, the contract was terminated without penalty.

	(c) On January 1, 2008, Yongchen entered into a time charter contract to in-charter Hui Ming for a period of three years for $6,000 per day. On July 25, 2008, Huiming International Shipping Limited sold the vessel Hui Ming to Krikor Maritime S.A. (“Krikor”) and the vessel Hui Ming was renamed “Agios Spyridon.” The contract with Huiming International Shipping Limited was terminated effective July 26, 2008. On August 1, 2008, Yongchen entered into a time charter contract with Krikor to in-charter Agios Spyridon for a period of one year at a rate of $4,500 per day, with a renewal option to extend the term of the charter for two additional one-year periods at a rate of $4,500 per day. The renewal option for an additional year was exercised in July, 2009.

	(d) Hengzhou has entered into agreements to acquire Rong Sheng and Rong Da in exchange for shares of common stock with a fair market value equal to the purchase price, which is defined as the lower of the build cost or the vessel’s net realizable value as determined by an independent appraiser. Construction of Rong Sheng is ongoing. Construction of Rong Da has ceased, and we cannot assure you that construction will resume.

	(e) On February 6, 2009, Rong Yang International Shipping Limited changed its name to Rong Shun International Shipping Limited (“Rong Shun”). Rong Shun currently has no vessels.

	(f) Rongzhong Enterprise Management Consulting (Shanghai) Co., Ltd. (“Rongzhong”) was incorporated as a wholly foreign invested entity on October 14, 2008 under the law of the People’s Republic of China.

2. CHANGE OF FINANCIAL YEAR END DATE

On March 31, 2008, in connection with the Share Exchange, the Company changed its fiscal year end date from April 30 to December 31.

3. ACCOUNTING POLICIES

Basis of accounting and presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of Sino Shipping Holdings Inc. and its wholly-owned subsidiaries, Nanjing Maritime Limited, Yongchen International Shipping Limited, Hengzhou International Shipping Limited, Rong Shun International Shipping Limited and Rongzhong Enterprise Management Consulting (Shanghai) Co., Ltd. All significant intercompany balances and transactions were eliminated upon consolidation.

On March 31, 2008, the Company entered into the Share Exchange Agreement pursuant to which it issued 24,525,994 shares of its common stock in exchange for all of the capital stock of Yongchen and Hengzhou. On March 31, 2008, the share exchange transaction was completed and it constituted a reverse takeover transaction. Accordingly, the purchase method under reverse takeover accounting is adopted for the preparation of consolidated financial statements. As a result, the consolidated financial statements are issued

under the name of Sino Shipping (the legal acquirer), but are a continuation of the consolidated financial statements of Yongchen and Hengzhou (the accounting acquirers).

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, and the rules and regulations of the SEC (“Securities and Exchange Commission”) which apply to interim financial statements. Accordingly, they do not include all of the information and footnotes normally included in consolidated financial statements prepared in conformity with generally accepted accounting principles in the United States. They should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2008 Annual Report on Form 10-K.

The accompanying unaudited consolidated financial statements include all adjustments that management considers necessary for a fair presentation of its consolidated financial position and results of operations for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the entire year.

Revenue and expense recognition

Since the Company’s inception, revenues have been generated from time charter agreements and voyage charter agreements. Voyage charter revenue from cargo freight billings are recognized in full as of the date on which the vessels complete their voyages. A voyage is deemed to commence upon the completion of discharge of the vessel’s previous cargo and is deemed to end upon the complete discharge of the current cargo. A time charter involves placing a vessel at the charterer’s disposal for a set period of time during which the charterer may use the vessel in return for the payment by the charterer of a specified daily hire rate. In time charters, operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel and specified voyage costs such as fuel and port charges are paid by the charterer. There are certain other non-specified voyage expenses such as commissions which are borne by the Company.

The Company records time charter revenues over the term of the charter as service is provided. Revenues are recognized on a straight-line basis as the average revenue over the term of the respective time charter agreement. The Company recognizes vessel operating expenses, which include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, and other miscellaneous expenses, when incurred.

Cash and cash equivalents

The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less as of the date of purchase to be cash equivalents. The carrying value of cash and cash equivalents approximates its fair value.

Prepayment of vessel components

Prepayments at September 30, 2009 and December 31, 2008 represent advances made under contract for purchases of vessel components, which upon receipt of delivery are reclassified as vessel components.

Vessels

Each vessel is recorded at its cost, which consists of the vessel deposits, purchase price, acquisition and delivery costs. Deposits, installment payments, interest, financing costs, construction design, supervision costs and other pre-delivery costs incurred during the construction period for a vessel under construction are recorded as vessel deposits. Depreciation is provided on straight-line basis over the estimated useful life of each vessel,

which is approximately 30 years.

Vessel component inventories are stated at cost. Vessel component costs include the cost of major components which are usually replaced or renewed in connection with a drydocking when a vessel is delivered. The vessel component costs are depreciated over the estimated period to the next drydocking. The Company subsequently capitalizes drydocking costs as they are incurred and amortizes these costs over their estimated useful lives. There were no material capitalized drydocking costs at September 30, 2009 and December 31, 2008.

The carrying value of the vessel is evaluated when events or circumstances indicate that there has been a possible impairment in value, which would occur in the fiscal period when the net carrying value was no longer expected to be recovered from future estimated cash flows. Such evaluations include a comparison of current and anticipated operating cash flows, an assessment of future operations and other relevant factors. To the extent that the carrying value of the vessel exceeds its undiscounted estimated future cash flows, the vessel would be written down to its fair value.

For the year ended December 31, 2008, impairment charges of $2,624,628 were recorded, based on the evaluation described above.

Property, plant and equipment

Property, plant and equipment are recorded at cost, less accumulated depreciation and amortization. Costs include the prices paid to acquire or construct the assets, including capitalized interest during the construction period, and any expenditures that substantially extend the useful life of an existing asset.

Depreciation is provided on straight-line basis over the estimated useful lives of property, plant and equipment, which are approximately 3 to 5 years.

Leasehold improvements are amortized over the lesser of their estimated useful lives or the term of the lease. Capitalized costs related to assets under construction are not depreciated until construction is complete and the asset is ready for its intended use. Repairs and maintenance are expensed as incurred.

Impairment of long-lived assets

Long-lived assets, such as property and equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the estimated undiscounted future cash flows expected to be generated from the use and ultimate disposition of the assets. If the carrying amount of the assets exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of would be reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held for sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet.

Drydocking provisions

In order to preserve the quality of the Company’s vessels, and to comply with international shipping standards and environmental laws and regulations, management believes it is necessary to adhere to a maintenance program of regularly scheduled dry-docking of the vessels. Each vessel will undergo a dry-docking at least two times every five years. During the nine months ended September 30, 2009 and year ended

December 31, 2008, no vessels in the fleet underwent a dry-docking period.

Segment reporting

The Company reports financial information and evaluates its operations by charter revenues. Each of the Company’s vessels serve the same type of customer, have similar operations and maintenance requirements, operate in the same regulatory environment, and are subject to similar economic characteristics. Based on this, the Company has determined that it operates in one reportable segment, the transportation of various cargoes with its fleet of vessels.

Income taxes

The Company does not accrue United States income tax since it has no significant operating income in the United States. Its wholly-owned operating subsidiaries are incorporated in Hong Kong. Pursuant to the income tax laws of Hong Kong, the Company is not subject to tax on non Hong Kong source income. Accordingly, no provision for income taxes is included in the consolidated financial statements.

Effective January 1, 2007, the Company adopted a new Financial Accounting Standards Board (“FASB”) guidance, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under the new FASB guidance, the Company may recognize 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 tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The new FASB guidance also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

The implementation of the new FASB guidance resulted in no material liability for unrecognized tax benefits and no material change to the beginning retained earnings of the Company.

Fair Value Measurement

Accounting principles generally accepted in the United States define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Additionally, the inputs used to measure fair value are prioritized based on a three-level hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable input. The following summarizes the fair value hierarchy:

Level 1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.

Level 2 Inputs – Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements.

The use of observable market data, when available, in making fair value measurements is required. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

The Company did not identify any assets and liabilities that are required to be presented on the balance sheet at fair value on a recurring basis.

Functional currency

The consolidated results of operations and financial position of the Company are determined using United States dollars as the functional currency.

Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States 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 date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates reflected in the Company’s consolidated financial statements include impairment charge for long-lived assets, useful lives of vessels, and useful lives of property and equipment. Actual results could differ from such estimates.

Earnings per share

Earnings per share are based on the weighted average number of shares of common stock outstanding for the period presented. At March 31, 2008, the Company issued a warrant that represented the right to purchase 366,798 shares of common stock at an exercise price of $0.25 per share.

Basic earnings per share is calculated by dividing net earnings available to common stock by the weighted average common stock outstanding. Diluted earnings per share is calculated similarly, except that it includes the incremental shares issuable upon the assumed exercise of the common stock warrant on March 31, 2008.

Distributions to shareholders

The Company does not intend to pay cash dividends. The payment of dividends, if any, would be contingent upon the Company’s revenues and earnings, if any, capital requirements, and general financial condition. The payment of any dividends is within the discretion of the Company’s Board of Directors. The Company presently intends to retain any earnings to provide funds for the operation and expansion of the Company’s business. Accordingly, the Company does not anticipate the declaration of any dividends in the foreseeable future.

4. RECENTLY ISSUED ACCOUNTING STANDARDS

In December 2007, the FASB amended its guidance on accounting for business combinations. The objective of the new accounting guidance is to improve the relevance, representational faithfulness and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. To accomplish this, the new accounting guidance establishes principles and requirements for how the acquirer (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree, (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain price, and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This new guidance is effective for fiscal years beginning on or after December 15,

2008. As the provisions of the new guidance are applied prospectively, the impact to the Company cannot be determined until any such transactions occur.

In December 2007, the FASB issued a new accounting and disclosure guidance related to non-controlling (or minority) interest in subsidiaries. The new guidance requires that non-controlling interests in subsidiaries be reported in the equity section of the company’s balance sheet, rather than in a mezzanine section of the balance sheet between liabilities and equity. It also changes the manner in which the net income of the subsidiary is reported and disclosed in the controlling company’s income statement and also establishes guidelines for accounting for changes in ownership percentages and for deconsolidation. This new guidance is effective for financial statements for fiscal years beginning on or after December 15, 2008 and interim periods within those years. The Company’s adoption of this guidance did not to have a material impact on its consolidated financial statements.

In March 2008, the FASB amended its guidance on the disclosures about derivative instruments and hedging activities. The new guidance will change the disclosure requirements for derivative instruments and hedging activities. Entities will be required to provide enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under previous guidance and its related interpretations, and how derivative instruments and related hedged items affect an entity’s financial position, earnings, and cash flows. The Company has adopted the new guidance effective January 1, 2009. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements.

In April 2009, the FASB amended its guidance regarding the interim disclosure about the fair value of financial instruments. The guidance requires disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. It also requires those disclosures in summarized financial information at interim reporting periods. This new guidance is effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The guidance does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, this guidance requires comparative disclosures only for periods ending after initial adoption. The Company does not expect the changes associated with adoption of this guidance will have a material effect on the determination or reporting of its consolidated financial results.

In April 2009, the FASB issued new accounting guidance regarding recognition and presentation of other-than-temporary impairments. This new guidance provides additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities. The new guidance is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements.

In April 2009, the FASB issued new accounting guidance regarding the determination of fair value when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly. The new guidance provides additional guidance in determining whether the market for a financial asset is not active and a transaction is not distressed for fair value measurement purposes. This guidance is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. The Company has already adopted the guidance prospectively beginning with the second quarter 2009, and its adoption did not have a material effect on its consolidated financial statements.

5. VESSELS, NET


Vessels and vessel components consist of the following:	September 30, 2009			December 31, 2008

Vessels
Cost	$	6,420,364		$	17,920,364
Accumulated depreciation		(1,650,757	)		(1,695,736	)
		4,769,607			16,224,628
Impairment loss		(787,143	)		(2,624,628	)
Net book value		3,982,464			13,600,000
Vessel components		7,796,533			7,796,533
Vessels, net	$	11,778,997		$	21,396,533

6. PROPERTY, PLANT AND EQUIPMENT, NET


Property, plant and equipment consist of the following:	September 30, 2009			December 31, 2008

Property, plant and equipment
Cost	$	22,007		$	22,007
Accumulated depreciation		(6,313	)		(2,108	)
Property, plant and equipment, net	$	15,694		$	19,899

7. OTHER RECEIVABLE:

Other receivable at September 30, 2008 represents the balance due to the Company from sale of the vessel Heng Zhou, to be received in three installments as follows: $3,000,000 on October 20, 2009, $4,000,000 on December 31, 2009, and $851,292 on March 31, 2010.

8. ACCRUED EXPENSES AND OTHER PAYABLES



Accrued expenses and other payables consist of the following:	September 30, 2009		December 31, 2008

Professional fees, including legal, audit and tax services fees	$	61,028	$	102,753
Other payables		—		1,282
Total	$	61,028	$	104,035

9. LONG-TERM BANK LOAN


Long-term bank loan consists of the following:	September 30, 2009		December 31, 2008

$1,200,000 principal bank loan	$	—	$	309,000
Current portion		—		(309,000	)
	$	—	$	—

The bank loan of $1,200,000 was raised by Yongchen on September 6, 2006. Repayments commenced from October 31, 2006 and ended on September 30, 2009. The loan bears interest at the rate of 7.25% per annum.

The above term loan is secured by the following:


(a)	First priority ship mortgages over the Company’s vessel, “Qiao Yin,” with carrying amount of approximately $1,983,719;

(b)	First priority assignments of earnings, requisition compensation and insurance of the above vessel;

(c)	Corporate guarantee by Huiming International Shipping Co., Ltd. and Huisheng International Shipping Limited, which are subsidiaries of Yongzheng; and

(d)	Personal guarantee by the Chief Executive Officer of the Company, Mr. Xinyu Zhang.

The term loan agreement provides that if at any time the aggregate fair value of the Company’s vessel that secures the obligations under the loan agreement is less than 130% of the outstanding loan amount, the Company must either provide additional security or prepay a portion of the loan to reinstate such percentage.

10. SHARE CAPITAL


	No. of shares		Amount

Authorized:
Common stock at $0.0001 par value per share		100,000,000	$	10,000
Preferred stock at $0.0001 par value per share		10,000,000		1,000
At September 30, 2009		110,000,000	$	11,000
Issued and outstanding:
At January 1, 2009		24,827,932	$	2,482
At September30, 2009		24,827,932	$	2,482

11. NON-CASH COMPENSATION

On July 31, 2008, the Company issued 150,000 shares of its common stock to a consultant pursuant to a three-year consulting agreement dated July 1, 2008. The fair value of the stock at the issuance date is equal to the closing stock price on that date which amounted to $525,000. For nine months ended September 30, 2009 and the year ended December 31, 2008, $131,250 and $87,500 were recorded as non-cash compensation expenses and the remaining balance of $306,250 and $437,500 as prepaid expenses, respectively.

12. COMMITMENTS

(a) On June 30, 2009, Yongchen entered into a charter party agreement with Zhejiang Jiao Long Maritime Engineering Co., Ltd. to supply the vessel, Qiao Yin, on a full-time basis for a fixed daily charter rate. The charter party agreement obligates Yongchen to certain performance criteria over the terms of the agreement.

(b) On November 15, 2007, Hengzhou was committed under charter party agreement with Pesco Oil Storage Corp. to supply the vessel Heng Zhou for a period of five years at a rate of $7,500 per day. On March 28, 2009, the parties terminated the charter party agreement, and entered into a new charter party agreement pursuant to which Hengzhou committed to supply the vessel Heng Zhou for a period of three years at a rate of $5,000 per day. On June 1, 2009, the new charter party agreement was terminated without penalty by mutual agreement of the parties. On June 28, 2009, Hengzhou entered into an agreement pursuant to which it agreed to sell the vessel Heng Zhou to an unrelated third party. The vessel was delivered pursuant to such agreement on July 18, 2009.

As of September 30, 2009, based on 100% utilization, the minimum future revenues to be received on committed time charter party agreements were approximately:


Year		Amount

	2009	$	198,000
	2010		536,800
	Thereafter		—
		$	734,800

(c) On January 4, 2008, Yongchen entered into a time charter contract with Yong Heng Shipping Limited to in-charter Heng Shun for a period of three years at a rate of $28,000 per day. The time charter contract was terminated early by mutual agreement in January 2009, without penalty.

On August 1, 2008, Yongchen entered into a time charter contract with KriKor Maritime S.A. to in-charter the vessel Agios Spyridon (formerly known as Hui Ming) for a period of one year at a rate of $4,500 per day and was granted by KriKor Maritime S.A. a renewal option to extend the term of the charter for two additional one-year periods at a rate of $4,500 per day. The renewal option for an additional year was exercised in July, 2009.

As of September 30, 2009, based on 100% utilization, the minimum future charter hire expenses to be payable on committed time charter party agreement were approximately:


Year		Amount

	2009	$	405,000
	2010		945,000
	Thereafter		—
		$	1,350,000

(d) On March 31, 2008, Hengzhou and the Company entered into Ship Contribution Agreements pursuant to which Hengzhou will acquire two vessels - Rong Sheng and Rong Da. See Note 13 “Related Party Transactions.”

13. RELATED PARTY TRANSACTIONS

On February 1, 2007, the Company entered into a services agreement with FHCP pursuant to which FHCP would provide strategic advisory services to the Company in exchange for a quarterly fee of $10,000. The agreement was terminated effective March 31, 2008.

On January 1, 2008, Yongchen entered into a time charter contract with Huiming International Shipping Co., Ltd., a subsidiary of Yongzheng, to in-charter the vessel Hui Ming for a period of three years at a rate of US $6,000 per day. The contract was terminated effective July 26, 2008.

On March 31, 2008, the Company entered into a Ship Contribution Agreement with Hengzhou and Yongzheng International Shipping Limited (“YISL”), a subsidiary of Yongzheng, pursuant to which YISL will contribute the vessel “Rong Da” to Hengzhou in exchange for that number of shares of the Company’s common stock with a Fair Market Value (as defined in the agreement) equal to the vessel purchase price. On March 31, 2008, the Company entered into a Ship Contribution Agreement with Hengzhou and Huisheng International Shipping Limited, a subsidiary of Yongzheng, pursuant to which Huisheng will contribute the vessel “Rong Sheng” to Hengzhou in exchange for that number of shares of the Company’s common stock with a Fair Market Value (as defined in the agreement) equal to the vessel purchase price. Under both agreements, the vessel’s

purchase price equals the vessel’s net realizable value at the date the vessel is accepted for delivery by Hengzhou, as determined by an independent appraiser chosen by the Company’s non-employee directors (or as otherwise agreed by FHCP and the Company), or its total build cost, whichever is lower. Construction of Rong Sheng is ongoing. Construction of Rong Da has ceased, and we cannot assure you that construction will resume.

Shanghai Rongyu International Consulting, Ltd., a subsidiary of Yongzheng, provided labor services and motor vehicle services to the Company and charged the Company labor cost of $64,778 and motor vehicle expenses of $26,346 for the nine months ended September 30, 2009.

The Company’s executive offices located at Hi-Shanghai 8th Building in Shanghai, China. Shanghai Yongzheng Marine Co., Ltd., a subsidiary of Yongzheng, provided the office space to the Company. The Company paid $56,791 to Shanghai Yongzheng Marine Co., Ltd. for the office space for the nine months ended September 30, 2009.

Yongchen is a party to a loan agreement with Xiamen International Bank pursuant to which it borrowed $1,200,000. The loan was secured by the vessel Qiao Yin, and was guaranteed by Huiming International Shipping Co., Ltd. and Huisheng International Shipping Limited, subsidiaries of Yongzheng, and by Mr. Xinyu Zhang. Mr. Zhang is a director of the Company, the Company’s Chief Executive Officer and President, and the sole shareholder of Yongzheng. As of September 17, 2009, the loan was repaid in full.

During the nine months ended September 30, 2009, the Company received $1,460,446 short term non-interest bearing advances and loans from its affiliate, Yongzheng. As of September 30, 2009, all such amounts were repaid in full.

14. CONTINGENCIES AND SUBSEQUENT EVENTS

The Company received a third notice from State of Delaware for $295,374 in outstanding franchise taxes, interests and penalties. The calculation of this franchise tax assessment was based on the Authorized Shares method, a default method used by the State of Delaware applicable to corporations having no par value stock. In May 2009, the Company filed its Annual Franchise Tax Report using Assumed Par Value Capital method, under which $16,377 of franchise taxes would be due. Such amount was paid on August 31, 2009. The Company believes that the State of Delaware franchise tax assessment has been resolved and does not expect that this matter will have a material effect on the Company’s consolidated financial statements.

15. CONCENTRATION OF CREDIT RISK

Substantially all of the Company’s bank accounts are in banks located in People’s Republic of China and are not covered by protection similar to that provided by the FDIC on funds held in United States banks.

The following table represents certain information about the Company’s charterers which individually accounted for more than 10% of the Company’s gross time charter revenue during the periods indicated:


	% of Consolidated Time Charter Revenue
	For the Nine Months Ended
	September 30,
Charterer		2009		2008
Borion Enterprise Limited		0.00	%	3.46	%
Great Morning Shipping Co.Lltd		26.24	%	11.45	%
Joinocean Logistics Inc		0.00	%	28.50	%
Link Chance International Limited		42.39	%	16.83	%
Pesco Oil Storage Corp.		14.72	%	9.71	%
Qingdao Wintime Iinternational Transportation.,Co Ltd		0.00	%	27.20	%
Zhejiang Jiao Long Maritime Engineering Co., Ltd.		16.65	%	2.85	%

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the financial statements and the notes to those statements included in this Form 10-Q. This discussion contains, in addition to historical information, “forward-looking statements” that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by our management. Words such as “believes,” “anticipates,” “expects,” “intends,” “may,” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements are not guarantees of future performance. There are a number of factors, risks and uncertainties that could cause actual results to differ from the expectations reflected in these forward-looking statements, including changes in production of, or demand for, minor bulk commodities, either globally or in particular regions; greater than anticipated levels of vessel newbuilding orders or less than anticipated rates of scrapping of older vessels; changes in trading patterns for particular commodities significantly impacting overall tonnage requirements; changes in the rates of growth of the world and various regional economies; risks incident to vessel operation, including discharge of pollutants; unanticipated changes in laws and regulations; increases in costs of operation; the availability to us of suitable vessels for acquisition or chartering-in on terms we deem favorable; our ability to attract and retain customers; and the risks described under “Risk Factors” in our Annual Report Form 10-K for the year ended December 31, 2008, or in other documents which we file with the Securities and Exchange Commission (“SEC”). We assume no obligation to update or revise any forward-looking statements.

Background

On March 31, 2008, we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Fountainhead Capital Partners Limited, an entity registered in Jersey (C.I.) (“FHCP”), Yongchen International Shipping Limited, a company incorporated in Hong Kong (“Yongchen”), Hengzhou International Shipping Limited, a company incorporated in Hong Kong (“Hengzhou”), Yongzheng International Marine Holdings Co., Ltd., a British Virgin Islands company (“Yongzheng”), and each of the other shareholders of Hengzhou (the “Other Shareholders”). Prior to the consummation of the transactions under the Share Exchange Agreement, FHCP owned 60,498 shares (approximately 56%) of our common stock, Yongchen was wholly-owned by Yongzheng, and Hengzhou was approximately 70%-owned by Yongzheng.

Pursuant to the Share Exchange Agreement, Yongzheng transferred all of the issued and outstanding shares of Yongchen capital stock to us, and Yongzheng and the Other Shareholders transferred all of the issued and outstanding shares of Hengzhou capital stock to us, in exchange for 24,525,994 shares of our common stock (the “Share Exchange”). As a result of the Share Exchange, Yongchen and Hengzhou became our wholly-owned subsidiaries, and Yongzheng and the Other Shareholders acquired approximately 95% of our common stock.

In connection with the Share Exchange, we entered into a Ship Contribution Agreement, dated March 31, 2008, with Hengzhou and Yongzheng International Shipping Limited (“YISL”), a wholly-owned subsidiary of Yongzheng, pursuant to which YISL will contribute the vessel “Rong Da” to Hengzhou in exchange for that number of shares of our common stock with a Fair Market Value (as defined in the agreement) equal to the vessel purchase price. We also entered into a Ship Contribution Agreement, dated March 31, 2008, with Hengzhou and Huisheng International Shipping Limited, a wholly-owned subsidiary of Yongzheng, pursuant to which Huisheng will contribute the vessel “Rong Sheng” to Hengzhou in exchange for that number of shares of our common stock with a Fair Market Value (as defined in the agreement) equal to the vessel purchase price. Under both agreements, the vessel purchase price equals the vessel’s net realizable value as of the date the vessel is accepted for delivery by Hengzhou, as determined by an independent appraiser chosen by our non-employee directors (or as otherwise agreed by FHCP and us), or its total build cost, whichever is lower.

Construction of Rong Sheng is ongoing.

Following the Share Exchange, we filed a Certificate of Ownership and Merger (the “Certificate”) with the Delaware Secretary of State pursuant to which Sino Shipping Holdings Inc., a Delaware corporation and our wholly-owned subsidiary, was merged into our company. As a result of the filing of the Certificate, our corporate name was changed from “Dalkeith Investments, Inc.” to “Sino Shipping Holdings Inc.” effective March 31, 2008.

On March 31, 2008, the Share Exchange was completed, Yongchen and Hengzhou became our wholly-owned subsidiaries, and the businesses of Yongchen and Hengzhou were adopted as our business. As such, the following discussion is focused on the current and historical operations of Yongchen and Hengzhou (and our other subsidiaries), and excludes the prior operations of Sino Shipping Holdings Inc.

Overview

Through our wholly-owned subsidiaries, we provide maritime transportation services through the commercial operation of our fleet of owned and in-chartered vessels. We specialize in transporting minor bulk commodities including log and forest products, iron and steel products, fertilizer, agricultural products, cement and palm oil in China and Southeast Asia.

Our fleet currently consists of three shallow-draft bulk carriers. We have agreed to acquire two chemical tankers that have yet to be constructed.

Ship Name

Flag

Year built

Type

Owned by

In-chartered

Deadweight

Tons

General

Agios Spyridon¹

Sierra Leone

1984

cargo

Yongchen

7,500

General

Nanjing

Nan Jing²

Sierra Leone

1984

cargo

Shipping

—

7,500

Limited²

General

Qiao Yin

Panama

1991

cargo

Yongchen

—

2,850

Chemical

Rong Sheng³

Marshal Islands

—³

tanker

Hengzhou

—

12,800

Chemical

Rong Da³

Hong Kong

—³

tanker

Hengzhou

—

12,800


¹	Formerly known as Hui Ming. On January 1, 2008, Yongchen entered into a time charter contract with Hui Ming International Shipping Limited, a subsidiary of Yongzheng, to in-charter the vessel Hui Ming for a period of three years at a rate of US $6,000 per day. On July 25, 2008, Hui Ming International Shipping Limited sold the vessel Hui Ming to KriKor Maritime S.A. (“Krikor”) and the vessel Hui Ming was renamed “Agios Spyridon”. The contract with Huiming International Shipping Limited was terminated effective July 26, 2008. On August 1, 2008, Yongchen entered into a time charter contract with KriKor to in-charter Agios Spyridon for a period of one year at a rate of US $4,500 per day, with a renewal option to extend the term of the charter for two additional one-year periods at a rate of US $4,500 per day. The renewal option for an additional year was exercised in July, 2009.

²	Formerly known as Long Xin. In 2008, Long Xin was transferred by Yongchen to our newly-formed Hong Kong subsidiary, Nanjing Shipping Limited, and the vessel was re-named “Nan Jing”. Nan Jing was suspended from operations in the first quarter of 2009 due to reduced demand. Nan Jing resumed operations in the second quarter.


³	Hengzhou entered into Ship Contribution Agreements pursuant to which it will acquire Rong Sheng and Rong Da in exchange for shares of common stock. Construction of Rong Sheng is ongoing. Construction of Rong Da has ceased, and we cannot assure you that construction will resume.

Our vessels are required to be dry-docked two times every five years, with a maximum of 36 months between inspections, for inspection of the underwater parts and for repairs related to inspections. The anticipated dry-docking schedule for our current operational fleet is as follows:



	Year	Owned	In-chartered	Last	Next Scheduled
Ship Name	built	by	by	Dry-docked	Dry-docking
Agios	1984	—	Yongchen	November, 2005	*
Spyridon
Nan Jing	1984	Nanjing	—	May, 2007	May 3, 2010
Qiao Yin	1991	Yongchen	—	November, 2005	—

* The vessel owner has not advised us of the dry-docking schedule.

Our transportation services generally are provided under two basic types of contractual relationships: time charters and voyage charters. A time charter involves the hiring of a vessel from its owner for a period of time pursuant to a contract under which the vessel owner places its ship (including its crew and equipment) at the service of the charterer. Under a voyage charter, the owner of a vessel provides the vessel for the transport of goods between specific ports in return for the payment of an agreed-upon freight per ton of cargo or, alternatively, a specified total amount.

Results of Operations

The following table sets forth our results of operations for the periods indicated (in US dollars):



	Nine months ended			Nine months ended		Three months ended			Three months ended
	September 30, 2009			September 30, 2008		September 30, 2009			September 30, 2008
	(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)
Revenue		3,567,353			20,851,970		1,502,310			7,706,906
Operating expenses		4,124,339			15,553,212		1,417,088			6,004,764
Operating earnings		(556,986	)		5,298,758		85,222			1,702,142
Other expenses		8,149			28,484		1,460			8,045
Net loss of disposal vessel		1,098,822					1,098,822
Net income		(1,663,957	)		5,270,274		(1,015,060	)		1,694,097

Revenue. Our revenue was $3,567,353 for the nine months ended September 30, 2009 compared to $20,851,970 for the nine months ended September 30, 2008, a decrease of $17,284,617or 82.89%. This decrease in revenue was mainly attributable to (i) the termination of the Heng Shun time charter on January 9, 2009, (ii) the decline in tons carried by the vessels Nan Jing and Agios Spyridon, coupled with a decrease in freight rates, (iii) our waiver of the time charter payments for February and March 2009 from the charterer of the vessel Heng Zhou due to the unemployment of the vessel during such months, (iv) the reduced charter rate under the new Heng Zhou charter agreement entered into in March 2009, and the subsequent termination of that charter agreement on June 1, 2009, and (v) the disposal of the vessel Heng Zhou on July 18, 2009.

The breakdown between voyage and time charter revenues for each vessel is as follows:


Nine months ended	Voyage Charter	Time Charter
September 30,
2008	Nan Jing: $3,285,351	Qiao Yin: $594,000
	Agois Spyridon (formerly known	Heng Zhou¹: $2,025,000
	as Hui Ming): $3,333,773
	Heng Shun: $11,613,846
2009	Nan Jing: $1,223,280	Qiao Yin: $594,000
	Agois Spyridon (formerly known as	Heng Zhou¹: $525,000
	Hui Ming): $1,225,072

On November 15, 2007, Hengzhou entered into a charter party agreement with Pesco Oil Storage Corp. pursuant to which Hengzhou committed to supply the vessel Heng Zhou for a period of five years at a rate of $7,500 per day. On March 28, 2009, the parties terminated the charter party agreement, and entered into a new charter party agreement pursuant to which Hengzhou committed to supply the vessel Heng Zhou for a period of three years at a rate of $5,000 per day. On June 1, 2009, the new charter party agreement was terminated without penalty by mutual agreement of the parties. On June 28, 2009, Hengzhou entered into an agreement pursuant to which it agreed to sell the vessel Heng Zhou to an unrelated third party. The vessel was delivered pursuant to such agreement on July 18, 2009.

Our revenue was $1,502,310 for the three months ended September 30, 2009 compared to $7,706,907 for the three months ended September 30, 2008, a decrease of $6,204,597 or 80.51%. This decrease in revenue was mainly attributable to (i) the termination of the Heng Shun time charter on January 9, 2009, (ii) our waiver of the time charter payments for February and March 2009 from the charterer of the vessel Heng Zhou due to the unemployment of the vessel during such months, (iii) the reduced charter rate under the new Heng Zhou charter agreement entered into in March 2009, and the subsequent termination of that charter agreement on June 1, 2009, and (iv) the disposal of the vessel Heng Zhou on July 18, 2009.

The breakdown between voyage and time charter revenues for each vessel is as follows:


Three months ended	Voyage Charter	Time Charter
September 30,
2008	Nan Jing: $1,097,692	Qiao Yin: $198,000
	Agois Spyridon (formerly known as	Heng Zhou¹: $675,000
	Hui Ming): $1,073,150
	Heng Shun: $4,663,064
2009	Nan Jing: $653,574
	Agois Spyridon (formerly known as	Qiao Yin: $198,000
	Hui Ming): $650,736


¹	See footnote 1 to the chart above.

Operating expenses and operating earnings. Our operating expenses were $4,124,339 for the nine months ended September 30, 2009 compared to $15,553,212 for the nine months ended September 30, 2008, a decrease of $11,428,873 or 73.48%. This decrease in operating expenses was mainly attributable to (i) the termination of the Heng Shun time charter on January 9, 2009, (ii) the decline in the number of voyages that employed the vessels Nan Jing, Agios Spyridon and Heng Zhou, and (iii) the disposal of the vessel Heng Zhou on July 18, 2009.

Operating earnings decreased from $5,298,758 for the nine months ended September 30, 2008 to an operating loss of $556,986 for the nine months ended September 30, 2009, a decline of $5,855,744 or 110.51%. The decrease in operating earnings was primarily attributable to (i) the termination of the Heng Shun time charter on January 9, 2009, (ii) the decline in tons carried by the vessels Nan Jing and Agios Spyridon, coupled with a decrease in freight rates, (iii) our waiver of the time charter payments for February and March 2009 from

the charterer of the vessel Heng Zhou due to the unemployment of the vessel during such months, (iv) the reduced charter rate under the new Heng Zhou charter agreement entered into in March 2009, the subsequent termination of that charter agreement on June 1, 2009, and (v) the disposal of the Heng Zhou vessel on July 18, 2009.

The breakdown between voyage and time charter expenses for each vessel are as follows:


Nine months ended	Voyage Charter	Time Charter
September 30,
2008	Nan Jing: $1,899,441	Qiao Yin: $350,168
	Agois Spyridon (formerly known as Hui	Heng Zhou¹: $661,444
	Ming): $2,407,782
	Heng Shun: $9,981,649
2009	Nan Jing: $1,165,257	Qiao Yin: $316,787
	Agios Spyridon (formerly known as Hui	Heng Zhou¹: $295,441
	Ming): $1,853,513


¹	See footnote 1 to the chart above.

Our operating expenses were $1,417,088 for the three months ended September 30, 2009 compared to $6,004,764 for the three months ended September 30, 2008, a decrease of $4,587,676 or 76.40%. This decrease in operating expenses was mainly attributable to the termination of the Heng Shun time charter on January 9, 2009, and the decline in the number of voyages for our vessels Nan Jing, Agios Spyridon and Heng Zhou, and the disposal of the Heng Zhou vessel on July 18, 2009.

Operating earnings decreased from $1,702,142 for the three months ended September 30, 2008 to $85,222 for the three months ended September 30, 2009, a decline of $1,616,921 or 95%. The decrease in operating earnings was primarily attributable to (i) the termination of the Heng Shun time charter on January 9, 2009, (ii) the decline in tons carried by the vessels Nan Jing and Agios Spyridon, coupled with a decrease in freight rates, (iii) our waiver of the time charter payments for February and March 2009 from the charterer of the vessel Heng Zhou due to the unemployment of the vessel during such months, (iv) the reduced charter rate under the new Heng Zhou charter agreement entered into in March 2009, and the subsequent termination of that charter agreement on June 1, 2009, and (v) the disposal of the vessel Heng Zhou on July 18, 2009.

The breakdown between voyage and time charter expenses for each vessel are as follows:


Three months ended	Voyage Charter	Time Charter
September 30,
2008	Nan Jing: $669,881	Qiao Yin: $137,208
	Agois Spyridon (formerly known as Hui	Heng Zhou¹: $214,523
	Ming): $779,661
	Heng Shun: $3,960,763
2009	Nan Jing: $495,793
	Agios Spyridon (formerly known as Hui	Qiao Yin: $107,292
	Ming): $676,342


¹	See footnote 1 to the chart above.

Operating earnings as a percent of revenue decreased from 25.41% for the nine months ended September 30, 2008 to a 15.61% operating loss as percent of revenue for the nine months ended September 30, 2009. Operating earnings as a percent of revenue decreased from 22.09% for the three months ended September 30, 2008 to 5.67% for the three months ended September 30, 2009. The decrease was due to the significant decrease in our revenue coupled with no or small changes in our fixed expenses, general and administrative expenses, and depreciation expenses.

The expenses for maintenance, repairs and parts to our owned vessels were as follows:


	Nine months ended	Nine months ended
Vessel	September 30, 2009	September 30, 2008
Qiao Yin	$—	$—
Nan Jing	$25,353	$84,907
Heng Zhou	$—	$—

Other expenses. Other expenses are comprised principally of interest expense, which primarily reflects the finance cost of Yongchen’s bank loan. Other expenses were $8,149 for the nine months ended September 30, 2009 and $28,484 for the nine months ended September 30, 2008. As a percentage of revenue, our other expenses increased from 0.14% for the nine months ended September 30, 2008 to 0.23% for the nine months ended September 30, 2009. Other expenses were $1,460 for the three months ended September 30, 2009 and $8,045 for the three months ended September 30, 2008. As a percentage of revenue, our other expenses decreased from 0.1044% for the three months ended September 30, 2008 to 0.0972% for the three months ended September 30, 2009.

Net loss from disposal of vessel. The vessel Heng Zhou was disposed of on July 18, 2009, generating a net loss of $1,098,822.

Net loss. Net loss for the nine months ended September 30, 2009 was $1,663,957, or 46.64% of revenue, compared to net income of $5,270,274, or 25.27% of revenue, for the nine months ended September 30, 2008. The decrease in net income was attributable to (i) the termination of the Heng Shun time charter on January 9, 2009, (ii) the decline in tons carried by the vessels Nan Jing and Agios Spyridon, coupled with a decrease in freight rates, (iii) our waiver of the time charter payments for February and March 2009 from the charterer of the vessel Heng Zhou due to the unemployment of the vessel during such months, (iv) the reduced charter rate under the new Heng Zhou charter agreement entered into in March 2009, and the subsequent termination of that charter agreement on June 1, 2009, and (v) the disposal of the vessel Heng Zhou on July 18, 2009.

Net loss for the three months ended September 30, 2009 was $1,015,060, or 67.57% of revenue, compared to net income of $1,694,097, or 21.98% of revenue, for the three months ended September 30, 2008. The decrease in net income was attributable to (i) the termination of the Heng Shun time charter on January 9, 2009, (ii) the decrease in freight rates with the vessels Nan Jing and Agios Spyridon, (iii) the reduced charter rate under the new Heng Zhou charter agreement entered into in March 2009, the subsequent termination of that charter agreement on June 1, 2009, and (iv) the disposal of the Heng Zhou vessel on July 18, 2009.

Liquidity and Capital Resources

At September 30, 2009, we had cash and cash equivalents of $11,547. We did not engage in any hedging activities relating to foreign exchange, interest rates or other risks for the nine months ended September 30, 2009.

At September 30, 2009, our current assets were $9,861,910 and current liabilities were $61,028, resulting in a current ratio of approximately 161.60 to 1. At December 31, 2008, our current assets and current liabilities were $2,242,072 and $413,035, respectively, resulting in a current ratio of approximately 5.43 to 1.

Net cash from operating activities was $8,797 for the nine months ended September 30, 2009 compared to $4,173,790 for the nine months ended September 30, 2008. This decrease of net operating cash inflow was mainly attributable to a decrease in net income.

Net cash used in financing activities was $309,000 for the nine months ended September 30, 2009, and net cash used in financing activities was $297,000 for the nine months ended September 30, 2008. This increase of net cash used in financing activities was attributable to principal payments on our bank loan.

Net cash from investing activities was $200,000 for the nine months ended September 30, 2009 and net cash used in investing activities was $3,717,249 for the nine months ended September 30, 2008. This increase of net cash from investing activities was mainly attributable to the sale of the vessel Heng Zhou and the reduction in the purchase of vessel components.

Our capital expenditures for 2009 are anticipated to be approximately $1 million. The capital for these expenditures is expected to be financed by our operating income and financing activities.

Critical Accounting Policies and Estimates

This management’s discussion and analysis of financial condition and results of operations is based upon or derived from our unaudited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. We have identified the accounting policies below as critical to our business operations and the understanding of our results of operations. The preparation of such financial statements and the application of such accounting policies may require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosure of contingent liabilities. We base these estimates on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances, and these estimates form the basis for our judgments concerning the carrying values of assets and liabilities that are not readily apparent from other sources. We periodically re-evaluate these estimates and judgments based on available information and experience. Actual results could differ from our estimates under different assumptions and conditions. If actual results significantly differ from our estimates, our financial condition and results of operations could be materially impacted.

Revenue and expense recognition. Since our inception, revenues have been generated from time charter agreements and voyage charter agreements. Voyage charter revenue from cargo freight billings are recognized in full as of the date on which the vessels complete their voyages. A voyage is deemed to commence upon the completion of the discharge of the vessel’s previous cargo, and is deemed to end upon the complete discharge of the current cargo. A time charter involves placing a vessel at the charterer’s disposal for a set period of time during which the charterer may use the vessel in return for the payment by the charterer of a specified daily hire rate. Under a time charter, operating costs including crew, maintenance and insurance are typically paid by the owner of the vessel, and specified voyage costs such as fuel and port charges are paid by the charterer. There are certain other non-specified voyage expenses such as commissions which are borne by our company.

We record time charter revenues over the term of the charter as service is provided. Revenues are recognized on a straight-line basis as the average revenue over the term of the respective time charter agreement. We recognize vessel operating expenses, which include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, and other miscellaneous expenses, when incurred.

Vessels. Each vessel is recorded at its cost, which consists of the vessel deposits, purchase price, acquisition and delivery costs. Deposits, installment payments, interest, financing costs, construction design, supervision costs and other pre-delivery costs incurred during the construction period for a vessel under construction are recorded as vessel deposits. Depreciation is provided on straight-line basis over the estimated useful life of each vessel, which is approximately 30 years.

Vessel component inventories are stated at cost. Vessel component costs include the cost of major components which are usually replaced or renewed in connection with a drydocking when a vessel is delivered. The vessel component costs are depreciated over the estimated period to the next drydocking. We subsequently capitalize drydocking costs as they are incurred and amortize these costs over their estimated useful lives. There were no material capitalized drydocking costs at September 30, 2009 and December 31, 2008.

Off-Balance Sheet Arrangements. We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on us.

Recently Issued Accounting Pronouncements. In December 2007, the FASB amended its guidance on accounting for business combinations. The objective of the new accounting guidance is to improve the relevance, representational faithfulness and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. To accomplish this, the new accounting guidance establishes principles and requirements for how the acquirer (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree, (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain price, and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This new guidance is effective for fiscal years beginning on or after December 15, 2008. As the provisions of the new guidance are applied prospectively, the impact to the Company cannot be determined until any such transactions occur.

March 15, 2009. The guidance does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, this guidance requires comparative disclosures only for periods ending after initial adoption. The Company does not expect the changes associated with adoption of this guidance will have a material effect on the determination or reporting of its consolidated financial results.

We do not anticipate that the adoption of this standard will have a material impact on our results of operations or financial position.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was performed, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of September 30, 2009. Based upon that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Changes in internal controls

There have been no changes in our internal control over financial reporting or in other factors identified in connection with this evaluation that occurred during the three months ended September 30, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 6.	Exhibits


	31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
		Act of 2002

	31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
		Act of 2002

	32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
		Act of 2002

	32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
		Act of 2002

SIGNATURES

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

		Sino Shipping Holdings Inc.


Date: November 23, 2009	By:	/s/ Xinyu Zhang
		Name:	Xinyu Zhang
		Title:	Chief Executive Officer and President
		(Principal Executive Officer)


Date: November 23, 2009		By:/s/ Haiying Qin
		Name:	Haiying Qin
		Title:	Chief Financial Officer
		(Principal Financial Officer)

EXHIBIT INDEX

Exhibit Number		Description
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
		Act of 2002

31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-
		Oxley Act of 2002

32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
		Act of 2002

32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
		Act of 2002

SINO SHIPPING HOLDINGS INC. - FORM 10-Q - November 23, 2009

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