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

We are a shipping agency service provider for foreign ships coming to Chinese ports. Our company, previously known as Sino-Global-Shipping (America) Ltd., was incorporated in New York in February 2001. On September 18, 2007, we amended the Article of Incorporation and Bylaws to merge into a new corporation with the current name of Sino-Global Shipping America, Ltd., in Virginia.

Our principal geographic market is in the PRC. As PRC laws and regulations prohibit or restrict foreign ownership of shipping agency service businesses, we operate our business in the PRC through Sino-Global Shipping Agency, Ltd. ("Sino-China"), a PRC limited liability company wholly owned by our founder and Chief Executive Officer, Cao Lei, and Chief Financial Officer, Zhang Mingwei, both of whom are PRC citizens. Sino-China holds the licenses and permits necessary to provide shipping services in the PRC. Headquartered in Beijing with six branches in Ningbo, Qingdao, Tianjin, Qinhuangdao, Fangchenggang and Zhoushan, Sino-China provides general shipping agency services in 76 ports in China and serves as a local shipping agent in each of these six port cities. For the ports where it does not have a local license, Sino-China appoints a local agent for its local shipping agency service businesses.

On November 13, 2007, we formed our wholly foreign-owned enterprise, Trans Pacific, in Beijing. Trans Pacific and Sino-China do not have a parent-subsidiary relationship. Instead, each of Trans Pacific and us has contractual arrangements with Sino-China and its shareholders that enable us to substantially control Sino-China. See "Our Corporate Structure - Contractual Arrangements with Sino-China and its Shareholders."

On May 20, 2008, we completed an initial public offering of 1,229,032 ordinary shares at $7.75 offering price. Our shares started trading on the NASDAQ Capital Market the next day.

We formed a wholly-owned subsidiary, Sino-Global Shipping Australia Pty Ltd. ("Sino-Global AUS") in Perth, Australia on July 3, 2008 in order to serve the needs of customers shipping into and out of Western Australia. We established another wholly-owned subsidiary, Sino-Global Shipping (HK) Limited ("Sino-Global HK") on September 22, 2008. We expect that Sino-Global HK will become our control and management center for southern Chinese ports and will enable our company to extend its offering of comprehensive shipping agency services to vessels going to and from one of the world's busiest ports. On August 28, 2008, we also established a new branch in Zhoushan, Jiangsu province, China.

Revenues

For the three months ended September 30, 2007 and 2008, our total revenues amounted to approximately $3.99 million and $5.10 million, respectively. Our total revenues are net of PRC business taxes and related surcharges. Sino-China's revenues are subject to a 5% business tax as well as an additional 0.5% surcharge after deducting the costs of services. We deduct these amounts from our gross revenues to arrive at our total revenues.

We charge the shipping agency fees in two ways: (1) the fixed fees are predetermined with a customer, and (2) the cost-plus fees are calculated based on the actual costs incurred plus a mark up. We generally require payments in advance from customers and bill them the balances within 30 days after the transactions are completed.

We believe the most significant factors that directly or indirectly affect our shipping agency service revenues are:

• the number of ships to which we provide port loading/discharging services;
• the size and types of ships we serve;
• the rate of service fees we charge;
• the number of ports at which we provide services; and
• the number of customers we serve.

Historically, our services have primarily been driven by the increase in the number of ships and customers, provided that the rate of service fees is determined by market competition. We believe that an increase in the number of ports served generally leads to an increase in the number of ships and customers. We expect that we will continue to earn a substantial majority of our revenues from our shipping agency services. As a result, we plan to continue to focus most of our resources on expanding our business covering more ports in the PRC. In addition, we will allocate our resources in marketing our brand to customers, including ship owners and charters, that transport goods from all ports around the world to China.

Operating Costs and Expenses

Our operating costs and expenses consist of cost of services, general and administrative expenses, selling expenses and other expenses. Our company's total operating costs and expenses increased as a percentage of total revenues for three months ended September 30, 2008 mainly due to increases in cost of services because of the increased value of the Chinese RMB against the U.S. dollar. The general and administrative expenses also increased significantly during the three months ended September 30, 2008, as our company incurred expenses as a public company and in preparation for business expansion. The following table sets forth the components of our company's costs and expenses for the periods indicated.

For the three months ended September 30, 2008 2007 Change US$ % US$ % US$ %

Revenues                       5,098,677      100.00     3,987,945      100.00     1,110,732        27.85

Costs and expenses
Costs of services              4,506,565       88.39     3,247,231       81.43     1,259,334        38.78
General and administrative     1,017,750       19.96       345,527        8.66       672,223       194.55
Selling                           95,028        1.86        49,151        1.23        45,877        93.34
Other                              2,997        0.06            69        0.00         2,928     4,243.48
Total costs and expenses       5,622,340      110.27     3,641,978       91.32     1,980,362        54.38

Costs of Services. Costs of services represent the expenses incurred in the periods when a ship docks in a harbor to load and unload cargo. We typically pay the costs of services on behalf of our customers. We receive revenues from our clients in U.S. dollars and pay the costs of services to the Chinese local port agents in RMB. Our costs of services could also increase if the ports were to raise their charges.

General and Administrative Expenses. Our general and administrative expenses primarily consist of salaries and benefits for our staff, both operating and administrative personnel, depreciation expenses, office renting expenses and expenses for legal, accounting and other professional services. The general and administrative expenses increased significantly in the first quarter of our year due to our public listing, including expenses spent on setting up Trans Pacific, Sino-Global HK and a new branch in Zhoushan for Sino-China, recruiting more quality personnel, spending on traveling and publicity. We have incurred additional general and administrative expenses as we have expanded our operations and operate as a publicly listed company in the United States.

Selling Expenses. Our selling expenses primarily consist of commissions and traveling expenses for our operating staff to the ports at which we provide services. Our selling expenses increased in absolute amount and as a percentage of our total net revenues for the three months ended September 30, 2008, due to the increase in the number of ships to be served and competition in shipping service charges.

Taxation

Because we and Sino-China are incorporated in different jurisdictions, we file separate income tax returns. We are subject to income and capital gains taxes in the United States. Additionally, dividend payments made by our company are subject to withholding tax in the United States.

PRC Enterprise Income Tax

PRC enterprise income tax is calculated based on taxable income determined under PRC GAAP. Sino-China is registered as a PRC domestic company and governed by the Enterprise Income Tax Laws of the PRC. Its taxable incomes are subject to an enterprise income tax rate of 33%. The 5th Session of the 10th National People's Congress amended the Enterprise Income Tax Law of PRC that became effective on January 1, 2008. The newly amended Enterprise Income Tax Law introduces a wide range of changes which include, but are not limited to, the unification of the income tax rate for domestic-invested and foreign-invested enterprises at 25%. This change has reduced our income tax rate from 33% to 25% since January 1, 2008. In addition, according to the amended detailed implementation and administrative rules, the new income tax law broadens the tax reductions in terms of categories and extents for the domestic companies. We expect the new income tax law will bring with it a positive impact on our company's net profit in 2009 and onwards.

PRC Business Tax

Revenues from services provided by Sino-China are subject to PRC business tax of 5% and additional surcharges of 0.5%. We pay business tax on gross revenues generated from our shipping agency services minus the costs of services, which are paid on behalf of our customers.

Critical Accounting Policies

We receive revenues from our clients in U.S. dollars and pay these costs to the Chinese local port agents in RMB. Our costs of services increased from 81.43% for the three months ended September 30, 2007 to 88.39% for the three months ended September 30, 2008 as a percentage of our total revenues, in line with the devaluation of U.S. dollars against Chinese RMB in the same periods. We prepare the condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("US 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.

The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our condensed consolidated financial statements.

Revenue Recognition

Revenue comprises the value of charges for the services in the ordinary course of our company's activities and disbursements made on behalf of customers. Revenues are recognized from shipping agency services upon completion of services, which generally 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 current liabilities.

Some contracts are signed with a term that revenues are recognized as a mark up of actual expenses incurred. In a situation where the services are completed but the information on the actual expenses is not available at the end of the fiscal period, we estimate revenues and expenses based on our previous experience of the revenues of the same kind of vessels, port charges on the vessel's particulars/movement and costs rate of the port. See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Accounts Receivable."

Fair Value of Financial Instruments. The carrying amounts reported in the condensed consolidated financial statements for current assets and current liabilities approximate fair value due to the short-term nature of these financial instruments. The carrying value of the long-term debt approximates fair value based on market rates and terms currently available to our company.

We decided not to elect the fair value option permitted by Statement of Financial Accounting Standards ("SFAS") No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities-Including an Amendment of FASB Statement No. 115", for our financial assets and liabilities not already reported at fair value. We elected the one year deferral allowed for adopting SFAS 157, "Fair Value Measurements," for non-financial assets and liabilities.

Consolidation of Variable Interest Entities

Sino-China is considered to be a VIE and we are the primary beneficiary. On November 14, 2007, our company entered into agreements with Sino-China, pursuant to which we receive 90% of Sino-China's net income. We do not receive any payment from Sino-China unless Sino-China recognizes net income during its fiscal year. These agreements do not entitle us to any consideration if Sino-China incurs a net loss during its fiscal year. In accordance with the agreements, Sino-China pays consulting and marketing fees equal to 85% and 5%, respectively, of its net income to our new wholly foreign-owned subsidiary, Trans Pacific, and Trans Pacific supplies the technology and personnel needed to service Sino-China. Sino-China was designed to operate in China for the benefit of our company.

The accounts of Sino-China are consolidated in the accompanying condensed consolidated financial statements pursuant to Financial Accounting Standards Board Interpretation No. 46 (Revised), "Consolidation of Variable Interest Entities - an Interpretation of ARB No. 51". As a VIE, Sino-China's sales are included in our total sales, its income from operations is consolidated with our company's, and our net income from continuing operations before non-controlling interest in income includes all of Sino-China's net income. Our non-controlling interest in its income is then subtracted in calculating the net income attributable to our company. Because of the contractual arrangements, our company had a pecuniary interest in Sino-China that requires consolidation of our and Sino-China's financial statements.

Mr. Cao Lei owned more than 70% of both Sino-China and our company before completion of the offering and was able to cause our company and Sino-China to enter into the 2007 agreements at any point in time. Accordingly, for all periods presented, our company has consolidated Sino-China's income because the entities are under common control in accordance with SFAS 141, "Business Combinations". For this reason, we have included 90% of Sino-China's net income in our net income as discussed above as though the 2007 agreements were in effect from the inception of Sino-China, and only the 10% of Sino-China's net income not paid to our company represents the non-controlling interest in Sino-China's income.

Accounts Receivable

Accounts receivable are recognized initially at fair value less allowances for doubtful accounts. We maintain allowances for doubtful accounts for estimated losses resulting from the failure of customers to make required payments in the relevant time period. We review the accounts receivable on a periodic basis and record general and specific allowances when there is doubt as to the collectibility of individual balances. In evaluating the collectibility of individual receivable balances, we consider many factors, including the age of the balance, customer's historical payment history, its current credit-worthiness and current economic trends. Receivables are considered past due after 365 days. The amount of the provision, if any, is recognized in the condensed consolidated statement of operations within "General and administrative expenses". We have determined that an allowance of $2,896 was required at September 30, 2008. Accounts are written off after exhaustive efforts at collection. For the three months ended September 30, 2008, the management wrote off uncollected accounts of $45,813.

When a client requests our shipping agency services, we communicate with port officials and our service partners rely on our prior experience for similar vessels with similar needs in the same ports to obtain an estimate for the cost of services. We then calculate our shipping agency fees in two ways: (1) the fixed fees are predetermined with a customer, and (2) the cost-plus fees are calculated based on the actual costs incurred plus a mark up.

We generally obtain advance payment of our shipping agency fees prior to undertaking to provide service to our clients. This significantly reduces the amount of accounts receivable when the shipping agency fees are recognized. To the extent our estimates are insufficient, we bill our clients for the balance to be paid within 30 days.

We use advance payments to pay a number of fees on behalf of our clients before their ships arrive in port, including harbor, berthing, mooring/unmooring, tonnage, immigration, quarantine and tug hire fees. We record the amounts we receive as Advances from Customers and the amounts we pay as Advances to Suppliers. We recognize revenues and expenses once the client's ship leaves the harbor and the client pays any outstanding amounts. In some cases, a delay in receiving bills will require us to estimate the Service Revenues and Costs of Services in accordance with the rate and formulas approved by the Ministry of Communications. When this happens, we record the difference between Service Revenues (as so recognized) and Advances from Customers as Accounts Receivable and the difference between Cost of Services and Advances to Suppliers as Accounts Payable. To the extent we recognize revenues and costs in this way, our Accounts Receivable and Accounts Payable will reflect this estimation until we receive the bills and information we require to adjust revenues and expenses to reflect our actual Service Revenues and Cost of Services. Any adjustment to actual from the estimated Revenues and Cost of Services recorded has been and is expected to be immaterial.

Property and Equipment

We state property and equipment at historical cost less accumulated depreciation and amortization. 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. We provide for depreciation and amortization in amounts sufficient to expense the related cost of depreciable assets for operations over their estimated useful lives. Depreciation and amortization are calculated on a straight-line basis to write off the cost of assets to their residual values over their estimated useful lives as follows:

                  Buildings                          20 years
                  Motor vehicles                     5-10 years
                  Furniture and office equipment     3-5 years

We calculate gains and losses on disposals by comparing proceeds with carrying amounts of the related assets and include these gains and losses in the consolidated statements of operations. We consider the carrying value of a long-lived asset to be impaired 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 market value of the long-lived asset. We have determined that there were no impairments for the three months ended September 30, 2008. Had we early adopted SFAS 157, "Fair Value Measurements," for our company's property and equipment, the result of our assessment of the impairment of these assets may have been different.

Translation of Foreign Currency

The accounts of our company and Sino-China and each of its branches are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). Our functional currency is the U.S. dollar, while Sino-China reports its financial position and results of operations in Renminbi. The accompanying condensed consolidated financial statements are presented in U.S. dollars. Foreign currency transactions are translated into U.S. dollars 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. We translate foreign currency financial statements of Sino-China, Trans Pacific and Sino-Global AUS in accordance with Statement SFAS No. 52, "Foreign Currency Translation". Assets and liabilities are translated at current exchange rates quoted by the People's Bank of China at the balance sheet dates and revenues and expenses are translated at average exchange rates in effect during the periods. Resulting translation adjustments are recorded as other comprehensive income (loss) and accumulated as a separate component of equity included in Non-controlling interest.

2009 Growth

In our 2008 Annual Report, we predicted that our 2009 revenues would increase about 50% to 65% from the 2008 fiscal year, reaching total revenues ranging from $22.64 million to $24.89 million in 2009 fiscal year. For the first three months ended September 30, 2008, we achieved total revenues of $5.1 million, about 20% of our 2009 target, or about 2% lower than our prorated prediction for the quarter. However, as our Australian office started operating in October 2008, we expect that our growth rate for the remaining months of the year will remain in line with our predictions. The financial crisis has brought with it negative impact to the world economy in general and to the PRC's economy in particular. We anticipate our growth will slow down considering the down trend in economic environments. Nevertheless, we maintain our growth target based on our strategic business development plan. We recently formed wholly owned subsidiaries in Australia and Hong Kong and a branch office in Zhoushan, PRC. We are in the process of establishing several more branches in China and offices internationally. We believe that the current financial crisis may provide some opportunities in business expansion. If the financial crisis becomes manageable in the short period or if we are able to capitalize on opportunities that are presented to us, we believe we may achieve our 2009 growth objective.

Results of Operations

The following table sets forth a summary of our consolidated results of operations for the periods indicated. Our business has evolved rapidly since we commenced operations in 2001. Our limited operating history makes it difficult to predict future operating results. We believe that period-to-period comparisons of operating results should not be relied upon as indicative of future performance.

                                                             For the three months
                                                              ended September30,
                                                              2008          2007
                                                               US$           US$
Revenues                                                     5,098,677     3,987,945

Costs and expenses
Costs of services                                            4,506,565     3,247,231
General and administrative                                   1,017,750       345,527
Selling                                                         95,028        49,151
Other                                                            2,997            69
Total costs and expenses                                     5,622,340     3,641,978

Operating income (loss)                                       (523,663 )     345,967

Financial income (expense), net                                 15,759       (24,077 )
                                                                15,759       (24,077 )
Net income (loss) before income taxes and
non-controlling interest in income                            (507,904 )     321,890
Income taxes                                                    72,630       119,388
Income (loss) before non-controlling interest in income       (580,534 )     202,502
Non-controlling interest in income                            (150,301 )      11,784
Net income (loss)                                             (430,233 )     190,718

Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007

Revenues. Our total revenues increased by 27.85% from $3,987,945 in the three months ended September 30, 2007 to $5,098,677 in the comparable three months in 2008. The number of ships that generated revenues for us decreased from 79 to 61, representing a decrease of 22.78% for the comparable three months in 2007 and 2008, respectively. We provided repair services for some ships and other owners' affairs. Of the 79 ships for which we provided services in the first quarter in 2007, there were 28 small ships (Handysize) that generated lower revenues compared to the large ships (Capesize). For the first quarter in 2008, we serviced one Handysize and 60 Capesizes.

Total Operating Costs and Expenses. Our total operating costs and expenses increased by 54.38% from $3,641,978 in the three months ended September 30, 2007 to $5,622,340 in the three months ended September 30, 2008. This increase was primarily due to increases in our costs of services and in our general and administrative expenses.

Ÿ Cost of Services. Our cost of services increased by 38.78% from $3,247,231 in the three months ended September 30, 2007 to $4,506,565 in the three months ended September 30, 2008. Costs of services increased faster than revenues, resulting in the 6.51% decrease in gross margin from 18.12% down to 11.61% for the three months comparative periods ended September 30, 2007 and 2008, respectively. This is largely due to the revaluation of Chinese currency against the U.S. dollar. The average foreign exchange rate increased by approximately 7.85%, from RMB7.5108 to $1.00 for the three months ended September 30, 2007 to RMB6.8183 to $1.00 for the three months ended September 30, 2008.

Ÿ General and Administrative Expenses. Our general and administrative expenses increased by 194.55% from $345,527 in the three months ended September 30, 2007 to $1,017,750 in the comparable three months in 2008. This change was primarily due to (1) increase of $194,954 in salaries and human resource expenses for high quality staff, (2) increase of $189,796 spent on legal fees, audit fees, investor relations and other expenses for our company's public listing, (3) increase of $70,135 in renting more office space, (4) increase of $62,491 in travel for business development, (5) writing off bad debts of $45,825, and (6) the expenses in Trans Pacific and newly established Australian office.

. . .