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|
Filed pursuant to Rule 424(b)(5)
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Registration No. 333-194211
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Prospectus Supplement
(To Prospectus Dated March 17, 2014)
SINO-GLOBAL SHIPPING AMERICA, LTD.
1,500,000 Shares of Common Stock
Pursuant to this prospectus
supplement and the accompanying prospectus, we are offering up to 1,500,000 shares of common stock directly to selected investors.
For a more detailed
description of the shares of common stock, see the section entitled “Description of Our Securities We Are Offering”
beginning on page S-7.
Our shares of common
stock are currently traded on the NASDAQ Capital Market under the symbol “SINO.” On February 14, 2017, the closing
sale price of our shares of common stock was $4.41 per share.
As of the date of
this prospectus supplement, the aggregate market value of our outstanding shares of common stock held by non-affiliates was approximately
$18,899,033 based on 8,355,535 outstanding shares of common stock, of which 4,285,495 shares are held by non-affiliates, and a
per share price of $4.41, which was the last reported price on the NASDAQ Capital Market of our common stock on February 14, 2017.
We have not offered any securities pursuant to General Instruction I.B.6. of Form S-3 during the prior 12 calendar month period
that ends on and includes the date of this prospectus supplement.
We have retained FT
Global Capital, Inc., as our exclusive placement agent. The placement agent has no obligation to buy any of the securities from
us or to arrange for the purchase or sale of any specific number or dollar amount of securities. See “Plan of Distribution”
beginning on page S-9 of this prospectus supplement for more information regarding these arrangements.
Investing in our
securities involves a high degree of risk. You should purchase our securities only if you can afford a complete loss of your investment.
See “
Risk Factors
” beginning on page S-5 of this prospectus supplement. Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy
of this prospectus. Any representation to the contrary is a criminal offense.
|
|
|
Per Common
Share
|
|
|
Total
|
|
|
Public Offering Price
|
|
$
|
3.18
|
|
|
|
4,770,000
|
|
|
Placement Agent Fees
|
|
$
|
.25
|
|
|
|
381,600
|
|
|
Proceeds, before expenses, to us
|
|
$
|
2.93
|
|
|
|
4,388,400
|
|
The date of this prospectus supplement
is February 15, 2017
TABLE OF CONTENTS
Prospectus Supplement
Prospectus
You should rely
only on the information contained in this prospectus supplement and the accompanying prospectus. We have not authorized anyone
else to provide you with additional or different information. We are offering to sell, and seeking offers to buy, shares of common
stock only in jurisdictions where offers and sales are permitted. You should not assume that the information in this prospectus
supplement or the accompanying prospectus is accurate as of any date other than the date on the front of those documents or that
any document incorporated by reference is accurate as of any date other than its filing date.
No action is being
taken in any jurisdiction outside the United States to permit a public offering of the shares of common stock or possession or
distribution of this prospectus supplement or the accompanying prospectus in that jurisdiction. Persons who come into possession
of this prospectus supplement or the accompanying prospectus in jurisdictions outside the United States are required to inform
themselves about and to observe any restrictions as to this offering and the distribution of this prospectus supplement and the
accompanying prospectus applicable to that jurisdiction.
ABOUT THIS PROSPECTUS SUPPLEMENT
On March 17, 2014,
we filed with the SEC a registration statement on Form S-3 (File No. 333-194211) utilizing a shelf registration process relating
to the securities described in this prospectus supplement, which registration statement was declared effective on April 15, 2014.
Under this shelf registration process, we may, from time to time, sell up to $10 million in the aggregate of shares of common stock,
share purchase contracts, share purchase units, warrants, rights and units, of which approximately $4,072,272 will remain available
for sale following the offering and as of the date of this prospectus supplement.
This document is in
two parts. The first part is this prospectus supplement, which describes the specific terms of this common stock offering and also
adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference into the prospectus.
The second part, the accompanying prospectus, gives more general information, some of which does not apply to this offering. You
should read this entire prospectus supplement as well as the accompanying prospectus and the documents incorporated by reference
that are described under “Where You Can Find More Information” in this prospectus supplement and the accompanying prospectus.
If the description
of the offering varies between this prospectus supplement and the accompanying prospectus, you should rely on the information contained
in this prospectus supplement. However, if any statement in one of these documents is inconsistent with a statement in another
document having a later date— for example, a document incorporated by reference in this prospectus supplement and the accompanying
prospectus— the statement in the document having the later date modifies or supersedes the earlier statement. Except as specifically
stated, we are not incorporating by reference any information submitted under Item 2.02 or Item 7.01 of any Current Report on Form
8-K into any filing under the Securities Act or the Exchange Act or into this prospectus supplement or the accompanying prospectus.
Any statement contained
in a document incorporated by reference, or deemed to be incorporated by reference, into this prospectus supplement or the accompanying
prospectus will be deemed to be modified or superseded for purposes of this prospectus supplement or the accompanying prospectus
to the extent that a statement contained herein, therein or in any other subsequently filed document which also is incorporated
by reference in this prospectus supplement or the accompanying prospectus modifies or supersedes that statement. Any such statement
so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus supplement
or the accompanying prospectus.
We further note that
the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated
by reference in this prospectus supplement and the accompanying prospectus were made solely for the benefit of the parties to such
agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be
deemed to be a representation, warranty or covenant to you unless you are a party to such agreement. Moreover, such representations,
warranties or covenants were accurate only as of the date when made or expressly referenced therein. Accordingly, such representations,
warranties and covenants should not be relied on as accurately representing the current state of our affairs unless you are a party
to such agreement.
Unless we have indicated
otherwise, or the context otherwise requires, references in this prospectus supplement and the accompanying prospectus to “SINO,”
the “Company,” “we,” “us” and “our” or similar terms refer to refer to Sino-Global
Shipping America, Ltd., a Virginia corporation and its consolidated subsidiaries.
CAUTIONARY NOTE ON FORWARD LOOKING STATEMENTS
Certain statements
contained or incorporated by reference in this prospectus, including the documents referred to or incorporated by reference in
this prospectus or statements of our management referring to our summarizing the contents of this prospectus supplement, include
“forward-looking statements”. We have based these forward-looking statements on our current expectations and projections
about future events. Our actual results may differ materially or perhaps significantly from those discussed herein, or implied
by, these forward-looking statements. Forward-looking statements are identified by words such as “believe,” “expect,”
“anticipate,” “intend,” “estimate,” “plan,” “project” and other similar
expressions. In addition, any statements that refer to expectations or other characterizations of future events or circumstances
are forward-looking statements. Forward-looking statements included or incorporated by reference in this prospectus or our other
filings with the Securities and Exchange Commission, or the SEC include, but are not necessarily limited to, those relating to:
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·
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risks and uncertainties associated with the integration of the assets and operations we have acquired and may acquire in the future;
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·
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our possible inability to raise or generate additional funds that will be necessary to continue and expand our operations;
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·
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our potential lack of revenue growth;
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·
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our potential inability to add new products and services that will be necessary to generate increased sales;
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·
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our potential lack of cash flows;
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·
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our potential loss of key personnel;
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·
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the availability of qualified personnel;
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·
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international, national regional and local economic political changes;
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·
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general economic and market conditions;
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·
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increases in operating expenses associated with the growth of our operations;
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·
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the potential for increased competition; and
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·
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other unanticipated factors.
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The foregoing does
not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors
that we are faced with that may cause our actual results to differ from those anticipate in our forward-looking statements. Please
see “Risk Factors” in our reports filed with the SEC or in this prospectus supplement and the accompanying prospectus
for additional risks which could adversely impact our business and financial performance.
Moreover, new risks
regularly emerge and it is not possible for our management to predict or articulate all risks we face, nor can we assess the impact
of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from
those contained in any forward-looking statements. All forward-looking statements included in this prospectus are based on information
available to us on the date of this prospectus. Except to the extent required by applicable laws or rules, we undertake no obligation
to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified
in their entirety by the cautionary statements contained above and throughout (or incorporated by reference in) this prospectus.
PROSPECTUS SUPPLEMENT SUMMARY
The following summary
highlights selected information contained or incorporated by reference in this prospectus supplement. This summary does not contain
all of the information you should consider before investing in the securities. Before making an investment decision, you should
read the entire prospectus and any supplement hereto carefully, including the risk factors section as well as the financial statements
and the notes to the financial statements incorporated herein by reference.
In this prospectus
and any amendment or supplement hereto, unless otherwise indicated, the terms “Sino-Global Shipping America, Ltd.”,
“SINO”, the “Company”, “we”, “us”, and “our” refer and relate to Sino-Global
Shipping America, Ltd. and its consolidated subsidiaries.
Our Company
Sino-Global Shipping
America, Ltd. (“Sino”), a Virginia corporation, was founded in the United States (“US”) in 2001. Sino is
a non-asset based global shipping and freight logistic integrated solution provider. Sino provides tailored solutions and value
added services to its customers to drive effectiveness and control in related aspects throughout the entire shipping and freight
logistic chain. Our current service offerings consist of shipping agency services and inland transportation management services.
We temporarily suspended our ship management services from the beginning of the fiscal year 2016, primarily due to changes in market
condition. We also temporarily suspended our shipping and chartering services primarily as a result of the termination of vessel
acquisition in December 2015.
The Company conducts
its business primarily through its wholly-owned subsidiaries in the U.S., China (including Hong Kong), Australia and Canada. Currently,
a significant portion of our business is generated from the clients located in the People’s Republic of China (the “PRC”),
and our operations are currently primarily conducted in the PRC.
The Company’s
subsidiary in China, Trans Pacific Shipping Limited (“Trans Pacific Beijing”), a wholly owned foreign enterprise, invested
in one 90%-owned subsidiary, Trans Pacific Logistics Shanghai Limited (“Trans Pacific Shanghai”. Trans Pacific Beijing
and Trans Pacific Shanghai are referred to collectively as “Trans Pacific”). As PRC laws and regulations restrict foreign
ownership of local shipping agency service businesses, the Company provided its shipping agency services in the PRC through Sino-Global
Shipping Agency Ltd. (“Sino-China” or “VIE”), a Chinese legal entity, which holds the licenses and permits
necessary to operate local shipping agency services in the PRC. Trans Pacific Beijing and Sino-China do not have a parent-subsidiary
relationship. Trans Pacific Beijing has contractual arrangements with Sino-China and its shareholders that enable the Company to
substantially control Sino-China. Through Sino-China, the Company was able to provide local shipping agency services in all commercial
ports in the PRC. In light of the Company’s decision not to pursue the local shipping agency business, the Company temporarily
suspended its shipping agency services through its VIE and has not undertaken any business through or with Sino-China since June
2014. Nevertheless, the Company continues to maintain its contractual relationship with the VIE because Sino-China is one of the
committee members of China Association of Shipping Agencies & Non-Vessel-Operating Common Carriers (“CASA”). CASA
was approved to form by China Ministry of Communications. Sino-China is also our only entity that is qualified to do shipping agency
business in China. We keep the VIE to prepare ourselves for the market to turn around.
The Company’s
shipping agency business was operated by its subsidiaries in Hong Kong and China. The Company’s ship management services
were originally operated by its subsidiary in Hong Kong. Due to changes in market condition, the Company temporarily suspended
the ship management services from fiscal year 2016. The Company’s shipping and chartering services are operated by its offices
in the US and subsidiaries in Hong Kong. The Company also temporarily suspended its shipping and chartering services primarily
as a result of the termination of vessel acquisition in December 2015. Currently, the Company’s inland transportation management
services are operated by its subsidiaries in China (including Hong Kong) and the US.
In January 2016, the
Company formed a subsidiary, Sino-Global Shipping LA Inc., a California corporation (“Sino LA”), for the purpose of
expanding its business to provide freight logistic services to importers who ship goods into the U.S. The Company expects to generate
increased revenue from this new service platform in the coming fiscal year.
As of December 31,
2016, the Company’s service offerings consist of inland transportation management service, freight logistic services and
container trucking services.
The following table breaks sown the revenues
for our business segments for the fiscal years ended June 30, 2016 and 2015.
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|
|
Fiscal Year 2016
|
|
|
Fiscal Year 2015
|
|
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Key Services
|
|
Revenues
|
|
|
%
|
|
|
GM
|
|
|
Revenues
|
|
|
%
|
|
|
GM
|
|
|
Shipping Agency & Ship Management
|
|
$
|
2,507,800
|
|
|
|
34.3
|
%
|
|
|
13.3
|
%
|
|
$
|
6,185,653
|
|
|
|
54.6
|
%
|
|
|
19.2
|
%
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|
Shipping & Chartering
|
|
$
|
462,218
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|
|
|
6.3
|
%
|
|
|
54.0
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%
|
|
$
|
349,125
|
|
|
|
3.1
|
%
|
|
|
47.7
|
%
|
|
Inland Transportation Management
|
|
$
|
4,340,522
|
|
|
|
59.4
|
%
|
|
|
68.9
|
%
|
|
$
|
4,785,850
|
|
|
|
42.3
|
%
|
|
|
84.2
|
%
|
|
|
|
$
|
7,310,540
|
|
|
|
100.0
|
%
|
|
|
48.9
|
%
|
|
$
|
11,320,628
|
|
|
|
100.0
|
%
|
|
|
47.6
|
%
|
In August 2016, the
Company’s Board of Directors (the “Board”) authorized management to move forward with the development of a mobile
application that will provide a full-service logistics platform between the U.S. and the PRC for short-haul trucking in the U.S.
The Board’s decision followed an extensive review by the Company's management team and the Board in identifying Sino-Global's
key competitive advantages as an expert in global logistics between the U.S. and the PRC, and then leveraging that experience to
both address the needs of its customer base and to provide new solutions to contemporary issues affecting the logistics and supply
chain. The Company completed a market analysis and feasibility study related to building a mobile based logistics application for
short-haul trucking in U.S. ports to better manage the over 25 million containers, or “TEU”, moving between the PRC
and the U.S. each year.
Sino-Global completed
development of a full-service logistics platform as of December 2016. Upon the completion of the platform, the Company signed
two significant agreements with COSCO Beijing International Freight Co., Ltd. (“COSFRE Beijing”) and Sinotrans Guangxi
in December 2016. Pursuant to the agreement with COSFRE Beijing, the Company will receive a percentage of the total amount of
each transportation fee for the arrangement of inland transportation services for COFRE Beijing’s container shipments into
U.S. ports. For the strategic cooperation framework agreement with Sinotrans Guangxi, which is a subsidiary of Sinotrans Limited,
the Company expects to utilize both parties’ existing resources and establish an integrated logistics plan to provides an
end-to-end supply chain solution for customers shipping soybeans and sulfur products from the U.S. to the southern PRC via container.
Corporate Information
Our principal executive
offices are located at 1044 Northern Boulevard, Suite 305, Roslyn, New York 11576-1514. Our telephone number at this address is
(718) 888-1814. Our shares of common stock are traded on the NASDAQ Capital Market under the symbol “SINO.”
Our Internet website,
www.sino-global.com, provides a variety of information about our Company. We do not incorporate by reference into this prospectus
the information on, or accessible through, our website, and you should not consider it as part of this prospectus. Our annual
reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K filed with the United States Securities and
Exchange Commission (the “SEC”) are available, as soon as practicable after filing, at the investors’ page on
our corporate website, or by a direct link to its filings on the SEC’s free website.
THE OFFERING
|
Issuer:
|
|
Sino-Global Shipping America,
Ltd.
|
|
|
|
|
|
Shares of
common stock offered by us pursuant to this prospectus supplement:
|
|
1,500,000
|
|
|
|
|
|
Shares of
common stock to be outstanding after this offering (assumes all shares of common stock offered in this offering are sold):
|
|
9,855,535
|
|
|
|
|
|
Use of proceeds:
|
|
We intend to use the net proceeds
from this offering for working capital and other general corporate purposes. See “Use of Proceeds” on page S-8 of
this prospectus supplement.
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|
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|
|
|
Risk factors:
|
|
Investing in our securities involves
a high degree of risk. For a discussion of factors you should consider carefully before deciding to invest in our shares of common
stock, see the information contained in or incorporated by reference under the heading “Risk Factors” beginning on
page S-5 of this prospectus supplement, on page 3 of the accompanying prospectus, in our Annual Report on Form 10-K for the fiscal
year ended June 30, 2016 and in the other documents incorporated by reference into this prospectus supplement.
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|
|
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|
Market for the shares of common stock:
|
|
Our shares of common stock are quoted and traded on the NASDAQ Capital Market under the symbol “SINO.”
|
RISK FACTORS
Before you make a decision to invest
in our securities, you should consider carefully the risks described below, together with other information in this prospectus
supplement, the accompanying prospectus and the information incorporated by reference herein and therein. If any of the following
events actually occur, our business, operating results, prospects or financial condition could be materially and adversely affected.
This could cause the trading price of our common stock to decline and you may lose all or part of your investment. The risks described
below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also
significantly impair our business operations and could result in a complete loss of your investment.
RISKS RELATED TO THIS OFFERING
Since we have some discretion in how we use the proceeds
from this offering, we may use the proceeds in ways with which you disagree.
We have not allocated specific amounts
of the net proceeds from this offering for any specific purpose. Accordingly, our management will have some flexibility in applying
the net proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds,
and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately.
It is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us. The failure
of our management to use such funds effectively could have a material adverse effect on our business, financial condition, operating
results and cash flow.
You will experience immediate dilution in the book value
per share of the common stock you purchase.
Because the price per share of our common
stock being offered is substantially higher than the book value per share of our common stock, you will suffer substantial dilution
in the net tangible book value of the common stock you purchase in this offering. After giving effect to the sale by us of 1,500,000
shares of common stock in this offering, and based on a public offering price of $3.18 per share and a net tangible book value
per share of our common stock of $1.33 as of February 14, 2017, if you purchase securities in this offering, you will suffer immediate
and substantial dilution of $1.85 per share in the net tangible book value of the common stock purchased.
Because we are a small company, the
requirements of being a public company, including compliance with the reporting requirements of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) and the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, may strain
our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or
cost-effective manner.
As a public company with listed equity
securities, we must comply with the federal securities laws, rules and regulations, including certain corporate governance provisions
of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the Dodd-Frank Act, related rules and regulations
of the SEC and the NASDAQ, with which a private company is not required to comply. Complying with these laws, rules and regulations
will occupy a significant amount of time of our Board of Directors and management and will significantly increase our costs and
expenses, which we cannot estimate accurately at this time. Among other things, we must:
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|
·
|
maintain a system of internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board;
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|
|
·
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comply with rules and regulations promulgated by the NASDAQ;
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|
|
·
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prepare and distribute periodic public reports in compliance with our obligations under the federal securities laws;
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|
|
·
|
maintain various internal compliance and disclosures policies, such as those relating to disclosure controls and procedures and insider trading in our common stock;
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|
·
|
involve and retain to a greater degree outside counsel and accountants in the above activities;
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|
|
·
|
maintain a comprehensive internal audit function; and
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|
|
·
|
maintain an investor relations function.
|
Future sales of our common stock could cause our stock price to decline.
If our shareholders sell substantial amounts
of our common stock in the public market, the market price of our common stock could decrease significantly. The perception in
the public market that our shareholders might sell shares of our common stock could also depress the market price of our common
stock. We have registered $10,000,000 in total aggregate value of securities pursuant to a Form S-3 filing (which includes the
securities being offered herein), which will be eligible for sale in the public markets from time to time, when sold and issued
by us. Additionally, if our existing shareholders sell, or indicate an intent to sell, substantial amounts of our common stock
in the public market, the trading price of our common stock could decline significantly. The market price for shares of our common
stock may drop significantly when such securities are sold in the public markets. A decline in the price of shares of our common
stock might impede our ability to raise capital through the issuance of additional shares of our common stock or other equity
securities.
Securities analysts may not cover our
common stock and this may have a negative impact on our common stock’s market price.
The trading market for our common stock
will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do
not have any control over independent analysts (provided that we have engaged various non-independent analysts). We do not currently
have and may never obtain research coverage by independent securities and industry analysts. If no independent securities or industry
analysts commence coverage of us, the trading price for our common stock would be negatively impacted. If we obtain independent
securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our common stock, changes their
opinion of our shares or publishes inaccurate or unfavorable research about our business, our stock price would likely decline.
If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock
could decrease and we could lose visibility in the financial markets, which could cause our stock price and trading volume to decline.
You may experience future dilution as
a result of future equity offerings or other equity issuances.
We may in the future issue additional shares
of our common stock or other securities convertible into or exchangeable for our common stock. We cannot assure you that we will
be able to sell shares or other securities in any other offering or other transactions at a price per share that is equal to or
greater than the price per share paid by investors in this offering. The price per share at which we sell additional shares of
our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher
or lower than the price per share in this offering.
USE OF PROCEEDS
We intend to use the
net proceeds from this offering for working capital and other general corporate purposes; provided, however, that none of such
proceeds will be used, directly or indirectly, (i) for the satisfaction of any of our debt (other than (I) payment of trade payables
in our ordinary course of business and consistent with prior practices and (II) the purchase of any of the securities sold in this
offering, (ii) for the redemption of any of our securities; or (iii) with respect to any litigation involving us (including, without
limitation, (x) any settlement thereof or (y) the payment of any costs or expenses related thereto).
DESCRIPTION OF OUR SECURITIES WE ARE
OFFERING
Shares of common stock
For a description of
the Shares of common stock being offered hereby, please see “Description of Share Capital” in the accompanying prospectus.
PLAN OF DISTRIBUTION
Engagement Agreement
We have entered into
an engagement agreement (the “Engagement Agreement”), dated February 14, 2017, with FT Global Capital, Inc. (“FT
Global”), pursuant to which FT Global agreed to act as our exclusive placement agent in connection with this offering. The
Engagement Agreement is attached as an exhibit to our Current Report on Form 8-K filed with the SEC in connection with this offering.
The placement agent
is not purchasing or selling any shares of common stock offered by this prospectus supplement, nor is it required to arrange the
purchase or sale of any specific number or dollar amount of securities, but the placement agent has agreed to use its best efforts
to arrange for the direct sale of all of the securities in this offering pursuant to this prospectus supplement and the accompanying
prospectus. There is no requirement that any minimum number of securities or dollar amount of securities be sold in this offering
and there can be no assurance that we will sell all or any of the securities being offered. We will enter into a purchase agreement
directly with each investor in connection with this offering and we may not sell the entire amount of securities offered pursuant
to this prospectus supplement. We have agreed to indemnify the placement agent and purchasers against liabilities under the Securities
Act and to contribute to payments that the placement agent may be required to make in respect of such liabilities.
We will enter into
a Securities Purchase Agreement with the purchasers purchasing the securities being issued pursuant to this offering. The form
of the Securities Purchase Agreement is attached as an exhibit to our Current Report on Form 8-K filed with the SEC in connection
with this offering. The closing of this offering will take place on or before February 21, 2017, and the following will occur:
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●
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we will receive funds in the amount of the aggregate purchase price;
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●
|
the placement agent will receive the placement agent fees in accordance with the terms of the Engagement Agreement; and
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●
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we will deliver the Shares.
|
Under the Securities
Purchase Agreement, we will be precluded from engaging in equity or equity-linked securities offerings for a period of 15 days
from closing of the offering, subject to certain exceptions.
In addition, we will
agree with the purchasers that until the one year anniversary from closing of the offering, we will not effect or enter into an
agreement to effect a “Variable Rate Transaction” as defined in the Securities Purchase Agreement.
With certain exceptions,
we will also agree with the purchasers that, subject to certain exceptions, if we issue securities within one-year following the
closing of this offering, the purchasers shall have the right to purchase 40% of the securities on the same terms, conditions
and price provided for in the proposed issuance of securities. However, the Company is required to permit the purchasers from
purchasing any offered securities pursuant to this participation right clause to the extent that doing so would require the Company
to obtain shareholder approval of such purchases.
We will agree to indemnify
the purchasers against certain losses resulting from our breach of any of our representations, warranties, or covenants under agreements
with the purchasers as well as under certain other circumstances described in the Securities Purchase Agreement.
In connection with
this offering, the placement agent may distribute this prospectus supplement and the accompanying prospectus electronically.
The placement agent
may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any fees or commissions received
by it and any profit realized on the resale of securities sold by it while acting as principal might be deemed to be underwriting
discounts or commissions under the Securities Act. As an underwriter, the placement agent would be required to comply with the
requirements of the Securities Act and the Exchange Act, including, without limitation, Rule 415(a)(4) under the Securities Act
and Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales
of shares of common stock and warrants by the placement agent. Under these rules and regulations, the placement agent: (i) may
not engage in any stabilization activity in connection with our securities; and (ii) may not bid for or purchase any of our securities
or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has
completed its participation in the distribution.
Fees
In exchange for these
placement agent services, we have agreed to pay the placement agent upon the closing of this offering a cash fee equal to 8% of
the aggregate purchase price of the Shares sold under this prospectus supplement. The Placement Agent is entitled to the reimbursement
of its out-of-pocket expenses not to exceed $10,000.
The placement agent
is also entitled to the foregoing compensation for any financings consummated within the 18-month period following termination
of the Engagement Agreement to the extent that such financing is provided to us by investors that the placement agent had introduced
to us.
Offer Restrictions Outside the
United States
Other than in the United
States, no action has been taken by us or the placement agent that would permit a public offering of the securities offered by
this prospectus supplement in any jurisdiction where action for that purpose is required. The securities offered by this prospectus
supplement may not be offered or sold, directly or indirectly, nor may this prospectus supplement or any other offering material
or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction,
except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons
into whose possession this prospectus supplement comes are advised to inform themselves about and to observe any restrictions relating
to the offering and the distribution of this prospectus supplement. This prospectus supplement does not constitute an offer to
sell or a solicitation of an offer to buy any securities offered by this prospectus supplement in any jurisdiction in which such
an offer or a solicitation is unlawful.
Delivery of Shares of common stock
Delivery of our shares
of common stock issued and sold in this offering will occur on or before February 21, 2017.
Transfer Agent and Registrar
The transfer agent
and registrar for our shares of common stock is Computershare Inc. located in Meidinger Tower, 462 S. 4th Street, Louisville, KY
40202 U.S. Our transfer agent’s phone number is 502 301 6108 and facsimile number is 886 519 2854.
Listing
Our shares of common
stock are quoted on the NASDAQ Capital Market under the trading symbol “SINO”.
LEGAL MATTERS
Selected legal matters
with respect to the validity of the securities offered by this prospectus supplement will be passed upon for us by Woods Rogers
Edmunds & Williams PLC. Certain legal matters will be passed upon for the placement agent by Schiff Hardin LLP, Washington,
DC.
EXPERTS
The consolidated financial
statements of our Company appearing in our annual report on Form 10-K for the fiscal years ended June 30, 2016 and 2015 have been
audited by Friedman LLP, independent registered public accounting firm, as set forth in the reports thereon included therein and
incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon
such reports given on the authority of such firms as experts in accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE
All documents filed
by the registrant after the date of filing the initial registration statement on Form S-3 of which this prospectus forms a part
and prior to the effectiveness of such registration statement pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 shall be deemed to be incorporated by reference into this prospectus and to be part hereof from the date of
filing of such documents. In addition, the documents we are incorporating by reference as of the date hereof are as follows:
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our Quarterly Reports on Form 10-Q filed on February 13, 2017, November 14, 2016;
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our Annual Report on Form 10-K for the year ended June 30, 2016, filed on September 19, 2016; and
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the description of the common stock, without par value per share, contained in our registration statement on Form S-1 filed with the Commission on May 12, 2008 (File Number 333-150858) pursuant to Section 12(b) of the Exchange Act, which incorporates by reference the description of the common stock, without par value per share, contained in the registration statement on Form S-1 filed with the Commission on January 11, 2008 (File Number 333-148611), and declared effective by the Commission on April 18, 2008, and any amendment or report filed with the Commission for purposes of updating such description.
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Any statement contained
in a document we incorporate by reference will be modified or superseded for all purposes to the extent that a statement contained
in this prospectus (or in any other document that is subsequently filed with the Securities and Exchange Commission and incorporated
by reference herein prior to the termination of this offering) modifies or is contrary to that previous statement. Any statement
so modified or superseded will not be deemed a part of this prospectus except as so modified or superseded.
You may obtain a copy of these filings,
without charge, by writing or calling us at:
Sino-Global Shipping America, Ltd.
1044 Northern Boulevard, Suite 305
Roslyn, New York 11576-1514
(718) 888-1814
Attn: Investor Relations
You should rely only
on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. You should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front page of those documents.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration
statement with the Securities and Exchange Commission under the Securities Act of 1933, as amended, with respect to the shares
of common stock offered by this prospectus. This prospectus is part of that registration statement and does not contain all the
information included in the registration statement.
For further information
with respect to our shares of common stock and us, you should refer to the registration statement, its exhibits and the material
incorporated by reference therein. Portions of the exhibits have been omitted as permitted by the rules and regulations of the
Securities and Exchange Commission. Statements made in this prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete. In each instance, we refer you to the copy of the contracts or other documents filed
as an exhibit to the registration statement, and these statements are hereby qualified in their entirety by reference to the contract
or document.
The registration statement
may be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission at Room 1024,
Judiciary Plaza, 100 F Street, N.E., Washington, D.C. 20549 and the Regional Offices at the Commission located in the Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and at 233 Broadway, New York, New York 10279. Copies of
those filings can be obtained from the Commission’s Public Reference Section, Judiciary Plaza, 100 F Fifth Street, N.E.,
Washington, D.C. 20549 at prescribed rates and may also be obtained from the web site that the Securities and Exchange Commission
maintains at http://www.sec.gov. You may also call the Commission at 1-800-SEC-0330 for more information. We file annual, quarterly
and current reports and other information with the Securities and Exchange Commission. You may read and copy any reports, statements
or other information on file at the Commission’s public reference room in Washington, D.C. You can request copies of those
documents upon payment of a duplicating fee, by writing to the Securities and Exchange Commission.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES LAW VIOLATIONS
Section 13.1-697 of
the Virginia Stock Corporation Act permits corporations to indemnify an individual made a party to a proceeding because he is or
was a director against liability incurred in the proceeding if the director:
1. Conducted himself
in good faith; and
2. Believed:
a. In the case of conduct
in his official capacity with the corporation, that his conduct was in its best interests; and
b. In all other cases,
that his conduct was at least not opposed to its best interests; and
3. In the case of any
criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.
Our First Amended and
Restated Articles of Incorporation contain the following provision relating to indemnification of our officers and directors:
The Corporation shall
indemnify (a) any person who was, is or may become a party to any proceeding, including a proceeding brought by a shareholder in
the right of the Corporation or brought by or on behalf of shareholders of the Corporation, by reason of the fact that he is or
was a director or officer of the Corporation, or (b) any director or officer who is or was serving at the request of the Corporation
as a director, trustee, partner or officer of another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, against any liability incurred by him in connection with such proceeding unless he engaged in willful misconduct
or a knowing violation of criminal law. A person is considered to be serving an employee benefit plan at the Corporation’s
request if his duties to the Corporation also impose duties on, or otherwise involve securities by, him to the plan or to participants
in or beneficiaries of the plan. The Board of Directors is hereby empowered, by a majority vote of a quorum of disinterested Directors,
to enter into a contract to indemnify any Director or officer in respect of any proceedings arising from any act or omission, whether
occurring before or after the execution of such contract.
Expenses incurred by
a person who is otherwise entitled to be indemnified by us in defending or investigating a threatened or pending action, suit or
proceeding shall be paid by us in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking
by or on behalf of such person to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified
by us.
Our Bylaws provide
that we may indemnify every person who was or is a party or is or was threatened to be made a party to any action, suit, or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was our employee or agent
or, while our employee or agent, is or was serving at our request as an employee or agent or trustee or another corporation, partnership,
limited liability company, joint venture, trust, employee benefit plan or other enterprise, against expenses (including counsel
fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action,
suit or proceeding, to the extent permitted by applicable law.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, we have
been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
Subject to Completion,
dated March 17, 2014
PROSPECTUS
$10,000,000
SINO-GLOBAL SHIPPING AMERICA, LTD.
Common Stock, Share Purchase Contracts,
Share Purchase Units, Debt Securities, Warrants, Rights, Units
We may offer and sell, from time to time in one or more offerings,
any combination of debt securities, shares of common stock, warrants, rights, share purchase contracts, share purchase units or
units having an aggregate initial offering price not exceeding $10,000,000 (or its equivalent in foreign or composite currencies)
on terms to be determined at the time of offering.
We will provide the specific terms of these securities in supplements
to this prospectus. The prospectus supplement may also add, update or change information in this prospectus. Before you invest,
we urge you to read carefully this prospectus and any prospectus supplement, as well as the documents incorporated by reference
or deemed to be incorporated by reference into this prospectus.
We may sell these securities directly, through agents, dealers
or underwriters as designated from time to time, or through a combination of these methods. See “Plan of Distribution”
in this prospectus. We reserve the sole right to accept, and together with our agents, dealers and underwriters reserve the right
to reject, in whole or in part any proposed purchase of securities to be made directly or through agents, underwriters or dealers.
If our agents or any dealers or underwriters are involved in the sale of the securities, the applicable prospectus supplement will
set forth the names and the nature of our arrangements with them, including any applicable commissions or discounts.
The mailing address of our principal executive offices is 136-56
39th Avenue, Room #305, Flushing, New York 11354, and our telephone number is (718) 888-1814. Our common stock quoted on the NASDAQ
Capital Market under the symbol “SINO.” On February 27, 2014, the closing price per share of our common stock was $2.70.
Each prospectus supplement will indicate if the securities offered thereby will be listed on the NASDAQ Capital Market or any other
securities exchange. Other than our common stock, there is no market for the securities that we may offer. The aggregate market
value of our outstanding common stock held by non-affiliates is $4,103,462.70, based on 4,703,841 shares of outstanding common
stock, of which 1,519,801 shares are held by non-affiliates, and a per share price of $2.70 based on the closing sale price of
our common stock as reported by the NASDAQ Capital Market on February 27, 2014. We have not offered any securities pursuant to
General Instruction I.B.6 of Form S-3 during the prior 12 calendar month period that ends on and includes the date of this prospectus.
This prospectus may not be used to offer or sell our securities
unless accompanied by a prospectus supplement. The information contained or incorporated in this prospectus or in any prospectus
supplement is accurate only as of the date of this prospectus, or such prospectus supplement, as applicable, regardless of the
time of delivery of this prospectus or any sale of our securities.
Investing
in our securities being offered pursuant to this prospectus involves a high degree of risk. You should carefully read and consider
the risk factors beginning on page
3 of this prospectus,
as well as those included in the periodic and other reports we file with the Securities and Exchange Commission before you make
your investment decision.
Neither the Securities and Exchange Commission, any United
States state securities commission, nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is ,
2014
TABLE OF CONTENTS
You should rely only on the information contained or incorporated
by reference in this prospectus or any prospectus supplement. We have not authorized any person to provide you with different or
additional information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus
is not an offer to sell securities, and it is not soliciting an offer to buy securities in any jurisdiction where the offer or
sale is not permitted. You should assume that the information appearing in this prospectus or any prospectus supplement, as well
as information we have previously filed with the SEC and incorporated by reference, is accurate as of the date on the front of
those documents only. Our business, financial condition, results of operations and prospects may have changed since those dates.
Prospectus
Summary
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission (SEC) using a “shelf” registration process. Under this shelf registration
process, we may offer from time to time, in one or more offerings, securities having an aggregate initial offering price of up
to $10,000,000 (or its equivalent in foreign or composite currencies). This prospectus provides you with a general description
of the securities that may be offered. Each time we offer securities under this shelf registration statement, we will provide you
with a prospectus supplement that describes the specific amounts, prices and terms of the securities being offered. The prospectus
supplement also may add, update or change information contained in this prospectus. You should read carefully both this prospectus
and any prospectus supplement together with additional information described below under the caption “Where You Can Find
More Information,” before making an investment decision. We have incorporated exhibits into this registration statement.
You should read the exhibits carefully for provisions that may be important to you.
You should rely only on the information contained or incorporated
by reference in this prospectus or any prospectus supplement. We have not authorized any person to provide you with different or
additional information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus
is not an offer to sell securities, and it is not soliciting an offer to buy securities in any jurisdiction where the offer or
sale is not permitted. You should assume that the information appearing in this prospectus or any prospectus supplement, as well
as information we have previously filed with the SEC and incorporated by reference, is accurate as of the date on the front of
those documents only. Our business, financial condition, results of operations and prospects may have changed since those dates.
We may sell securities through underwriters or dealers, through
agents, directly to purchasers or through a combination of these methods. We and our agents reserve the sole right to accept or
reject, in whole or in part, any proposed purchase of securities. The prospectus supplement, which we will provide to you each
time we offer securities, will set forth the names of any underwriters, agents or others involved in the sale of securities and
any applicable fee, commission or discount arrangements with them. See the information described below under the heading “Plan
of Distribution.”
Except where the context otherwise requires and for purposes
of this prospectus only:
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“we,” “us,” “our” and “our company” refer to Sino-Global Shipping America, Ltd. and, except where the context otherwise requires, its affiliates and subsidiaries;
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“Shares” and “common stock” refer to our common stock, without par value per share.
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“China” and “PRC” refer to the People’s Republic of China.
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all references to “RMB” and “¥” are to the legal currency of China and all references to “USD,” “U.S. dollars,” “dollars” and “$” are to the legal currency of the United States.
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Our Company
We are a Virginia corporation with our primary US operations
in New York. We provide our customers with comprehensive yet customized shipping agency, shipping and chartering, and inland transportation
management services. As a general agent, we serve ships coming to and departing from a number of countries and regions, including
China, Australia, South Africa, Brazil, Hong Kong, Canada and the US.
Our principal geographic market has historically been the People’s
Republic of China (“PRC”). As PRC laws and regulations 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 founded by our Chief Executive Officer, Mr. Lei Cao, who is a PRC citizen. Sino-China holds the licenses and permits necessary
to provide shipping services in the PRC. Sino-China is headquartered in Beijing and has branches in Qingdao, Xiamen and Fangchenggang.
Through Sino-China, we provide general shipping agency services in all commercial ports in the PRC.
Our wholly-owned subsidiary, Trans Pacific Shipping Limited
(“Trans Pacific Beijing”), a wholly foreign-owned enterprise, is invested in one 90%-owned subsidiary, Trans Pacific
Logistics Shanghai Limited (“Trans Pacific Shanghai”. Trans Pacific Beijing and Trans Pacific Shanghai are referred
to collectively as “Trans Pacific”). Trans Pacific Beijing and Sino-China do not have a parent-subsidiary relationship.
Trans Pacific Beijing has contractual arrangements with Sino-China and its shareholders that enable us to substantially control
Sino-China. Operationally, Trans Pacific Beijing is set up to deliver inland transportation management services for the Company.
To support the Company’s integrated international and
domestic shipping agency network and broaden our service platform into other related businesses, we have established the following
wholly-owned subsidiaries:
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Sino-Global Shipping Australia
: This entity serves the needs of customers shipping into and out of Western Australia. Through our relationship with Monson Agencies Australia (one of the largest shipping agency service providers in Australia), we are able to provide general shipping agency services to all ports in Australia.
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Sino-Global Shipping Hong Kong
: This is our control and management center for southern Chinese ports. It gives us the ability to offer comprehensive shipping agency services to vessels going to and from the PRC as well as customized shipping and chartering services. Through our relationship with Forbes & Company Limited (“Forbes”), a listed company on the Bombay Stock Exchange and one of the largest shipping and chartering service providers in India, we are able to provide general shipping agency services to all ports in India.
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Sino-Global Shipping Canada
: This entity provides services for ships loading commodities at Canadian ports and delivering them to the PRC. It currently provides shipping agency services to Baosteel’s vessels in Canada.
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Sino-Global Shipping New York
: This entity is established to facilitate the development of an integrated international and local shipping agency network and help generate new business referral activities.
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Our corporate structure is as set forth below:
We have designed our services to simplify the shipping process
for our clients and to keep our clients fully informed about the status of their shipments. To that end, we analyze the information
about prospective shipments provided by our clients to determine the most economical and efficient transportation solutions. We
are engaged in the delivery of the following services: shipping agency services, shipping and chartering services, and inland transportation
management services. Historically, we have been in the business of providing shipping agency services, but during fiscal 2014 (and
with the support of our largest shareholder), we have expanded our service delivery platform to include shipping and chartering
services (launched during the quarter ended September 30, 2013) and inland transportation management services (launched during
the quarter ended December 31, 2013). These new services are part of our strategic initiative to diversify our service offering,
broaden our service platform, and improve our operating profit.
Our principal executive offices are located at 136-56 39th Avenue,
Room #305, Flushing, New York 11354. Our telephone number at this address is (718) 888-1814. Our common stock is traded on the
NASDAQ Capital Market under the symbol “SINO.”
Our Internet website, www.sino-global.com, provides a variety
of information about our Company. We do not incorporate by reference into this prospectus the information on, or accessible through,
our website, and you should not consider it as part of this prospectus. Our annual reports on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K filed with the United States Securities and Exchange Commission (the “SEC”) are
available, as soon as practicable after filing, at the investors’ page on our corporate website, or by a direct link to its
filings on the SEC’s free website.
General Description
of the Securities We May Offer
We may offer shares of our common stock, share purchase contracts,
share purchase units, debt securities, warrants, rights or units, with a total value of up to $10,000,000 from time to time under
this prospectus at prices and on terms to be determined by our board of directors and based on market conditions at the time of
any offering. This prospectus provides you with a general description of the securities we may offer. Each time we offer a type
or series of securities under this prospectus, we will provide a prospectus supplement that will describe the specific amounts,
prices and other important terms of the securities, including, to the extent applicable:
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Designation or classification;
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Aggregate offering price;
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Rates and times of payment of dividends, if any;
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Redemption, conversion, exercise and exchange terms, if any;
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Restrictive covenants, if any;
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Voting or other rights, if any;
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Conversion prices, if any; and
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Material U.S. federal income tax considerations.
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The prospectus supplement and any related free writing prospectus
that we may authorize to be provided to you may also add, update or change information contained in this prospectus or in documents
we have incorporated by reference. However, no prospectus supplement or free writing prospectus will offer a security that is not
registered and described in this prospectus at the time of the effectiveness of the registration statement of which this prospectus
is a part.
Risk Factors
Before making an investment decision, you should carefully
consider the risks described under “Risk Factors” in the applicable prospectus supplement and (to the extent we are
required or elect to discuss risk factors in such filings) in our then most recent Annual Report on Form 10−K, and in our
updates to those risk factors in our Quarterly Reports on Form 10−Q, together with all of the other information appearing
in this prospectus or incorporated by reference into this prospectus and any applicable prospectus supplement, in light of your
particular investment objectives and financial circumstances. Please see “Where You Can Find More Information” on how
you can view our SEC reports and other filings. Our business, financial condition or results of operations could be materially
adversely affected by any of these risks. The trading price of our securities could decline due to any of these risks, and you
may lose all or part of your investment.
Risks Related to Our Business
We are substantially reliant on a single customer
for a majority of our business.
In prior years, we have relied heavily on Beijing Shou-Rong
Forwarding Service Co., Ltd. (“Shourong”), an affiliate of Capital Steel, a steel company in China, for a substantial
percentage of our agency fees. We have not provided any new services to Shourong in fiscal 2014 and could not determine the extent
of services we would deliver to Shourong in the near future. More recently, we have begun to provide services to companies controlled
by one of our affiliates. In April 2013, our shareholders approved the issuance of 1,800,000 shares of common stock to Mr. Zhong
Zhang. At the same time, Mr. Zhang agreed to cause companies he controls, TEWOO Chemical & Light Industry Zhiyuan Trade Co.,
Ltd and TianJin Zhi Yuan Investment Group Co., Ltd (together “Zhiyuan”) to direct such shipping needs as they may have
to our company to perform.
During the first half of fiscal 2014, a majority of our overall
revenues came from shipping and chartering services as well as inland transportation management services provided to Zhiyuan. Moreover,
all of our shipping and chartering and inland transportation management services were from Zhiyuan. If we ceased to provide services
to Zhiyuan, our business could be materially harmed. We cannot guarantee that we would be able to replace this customer with one
or more new customers of equal size.
We have recently entered the shipping and chartering
services and the inland transportation management services businesses and cannot guarantee that we will be able to compete effectively
in these business areas.
Our company has provided shipping agency services since 2001,
but we have only provided (i) shipping and chartering services since the first quarter of fiscal 2014 ended September 30, 2013
and (ii) inland transportation management services since the second quarter of fiscal 2014 ended December 31, 2013. As we are a
new entrant into these two business segments, we do not have a significant market presence. Indeed, as described in the prior risk
factor, we currently serve only one customer, Zhiyuan, in both market segments. We cannot guarantee that we would have been successful
in providing services to Zhiyuan in the absence of the investment by Mr. Zhang, and we cannot guarantee that we will be successful
in locating and securing ship chartering services and inland transportation management to other customers on acceptable terms,
if at all.
We operate in a very competitive industry and may
not be able to maintain our revenues and profitability.
Since
2003, China has qualified over 1,400 shipping agencies. Our potential competitors include three major shipping agencies, which
together account for approximately 85% of China’s shipping agency revenues. These competitors have significantly greater
financial and marketing resources and name recognition than we have.
In
addition, our competitors may introduce new business models, and if these new business models are more attractive to customers
than the business models we currently use, our customers may switch to our competitors’ services, and we may lose market
share. We believe that competition in China’s shipping agency industry may become more intense as more shipping agencies,
including Chinese/foreign joint ventures, are qualified to conduct business. We cannot assure you that we will be able to compete
successfully against any new or existing competitors, or against any new business models our competitors may implement. In addition,
the increased competition we anticipate in the shipping agent industry may also reduce the number of vessels for which we are able
to provide shipping agency services, or cause us to reduce agency fees in order to attract or retain customers. All of these competitive
factors could have a material adverse effect on our revenues and profitability.
The PRC owns part of our three largest competitors.
The Chinese government’s ownership of our three largest
competitors disadvantages our company in a number of ways.
First, the Chinese government prevents direct foreign investment
in certain industries, such as telecommunication services, online commerce and advertising. In fact, when the PRC government founded
Penavico, it closed the shipping agency industry to a number of foreign shipping agents that had provided services in China prior
to that time. Although the PRC has removed these restrictions in our industry in recent years, there can be no guarantee that the
PRC will not re-nationalize the shipping agency industry in the future, especially since approximately 85% of the shipping agency
industry in China is already owned, in part, by the Chinese government. See “Risk Factors – The Chinese government
could change its policies toward private enterprise or even nationalize or expropriate private enterprises, which could result
in the total loss of our investment in that country.”
Second, because our three largest competitors, Penavico, China
Shipping and Sinoagent, are state-owned, they may have advantages over our company in dealing with local government officials and
leverage over local companies that we, as a wholly privately-owned company, do not have. These relationships may limit our ability
to compete with Penavico, China Shipping and Sinoagent.
Third, due to their relationship with the Chinese government,
our largest competitors may have access to funding that is not available to us. This access may allow them to grow their businesses
at a rate we are not able to match. If we are unable to expand at a comparable rate with these competitors, we may lose market
share or be unable to generate profits.
Our customers are companies engaged in the shipping industry,
and, consequently, our financial performance is dependent upon the economic conditions of that industry.
We have derived most of our revenues to date from providing
(a) shipping agency services to Chinese and international shipping companies that seek to ship materials to and from China; and
(b) shipping and chartering as well as inland transportation management services to Zhiyuan. Our customers’ success is intrinsically
linked to economic conditions in the shipping industry in general and trade with China in particular. The shipping industry, in
turn, is subject to intense competitive pressures and is affected by overall economic conditions. Although we believe our services
can assist shipping companies in a competitive environment, demand for our services could be harmed by instability or downturns
in the shipping industry, which may cause customers to forego shipping agency services by attempting to provide such services in-house.
There can be no assurance that we will be able to continue our historical revenue growth or sustain our profitability on a quarterly
or annual basis or that our results of operations will not be adversely affected by continuing or future downturns in the shipping
industry.
We may be required to assume liabilities for our clients
in the future.
An increasing number of companies that require shipping agency
services have pressured shipping agents to guarantee their principals’ liabilities. Some companies have required shipping
agents, as a condition of doing business, to pay directly for tariffs, port charges, and other fees, to be reimbursed at a later
date by the companies. Other companies have sought to include agents as parties in voyage charter agreements, leading to potential
liability for shipping agents in the event of a breach by another party. We expect that these pressures on shipping agents to accept
more liability will increase as competition among shipping agencies intensifies. While we do not currently pay these liabilities
and have no present intention to begin doing so in the future, the assumption of any of these or other new liabilities could have
a material adverse effect on our operations.
We are heavily dependent upon the services of experienced
personnel who possess skills that are valuable in our industry, and we may have to actively compete for their services.
Our company is much smaller than Penavico, China Shipping and
Sinoagent, and we compete in large part on the basis of the quality of services we are able to provide our clients. As a result,
we are heavily dependent upon our ability to attract, retain and motivate skilled personnel to serve our clients. Many of our personnel
possess skills that would be valuable to all companies engaged in the shipping agency industry. Consequently, we expect that we
will have to actively compete with other Chinese shipping agencies for these employees. Some of our competitors may be able to
pay our employees more than we are able to pay to retain them. Our ability to profitably operate is substantially dependent upon
our ability to locate, hire, train and retain our personnel. Although we have not experienced difficulty locating, hiring, training
or retaining our employees to date, there can be no assurance that we will be able to retain our current personnel, or that we
will be able to attract, assimilate other personnel in the future. If we are unable to effectively obtain and maintain skilled
personnel, the quality of our shipping agency services could be materially impaired.
We are substantially dependent upon our key personnel,
particularly Mr. Lei Cao, our Chief Executive Officer.
Our performance is substantially dependent on the performance
of our executive officers and key employees. In particular, the services of:
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Mr. Lei Cao, Chief Executive Officer;
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Mr. Anthony S. Chan, Acting Chief Financial Officer;
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Mr. Zhikang Huang, Chief Operating Officer;
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would be difficult to replace. We do not have in place “key
person” life insurance policies on any of our employees. The loss of the services of any of our executive officers or other
key employees could substantially impair our ability to successfully implement our existing supply chain management software and
develop new programs and enhancements.
We may not pay dividends.
We have not previously paid any cash dividends, and we do not
anticipate paying any dividends on our common stock. We cannot assure you that our operations will continue to result in sufficient
revenues to enable us to operate at profitable levels or to generate positive cash flows. Furthermore, there is no assurance our
Board of Directors will declare dividends even if we are profitable. Dividend policy is subject to the discretion of our Board
of Directors and will depend on, among other things, our earnings, financial condition, capital requirements and other factors.
If we determine to pay dividends on any of our common stock in the future, we will be dependent, in large part, on receipt of funds
from Trans Pacific and Sino-China.
We are obligated to develop and maintain proper
and effective internal control over financial reporting. We may not complete our analysis of our internal control over financial
reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor
confidence in our company and, as a result, the value of our common stock.
Each year we are required, pursuant to Section 404 of the Sarbanes-Oxley
Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting.
This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control
over financial reporting and, if we cease to be a “smaller reporting company,” a statement that our independent registered
public accounting firm has issued an opinion on our internal control over financial reporting.
We may not be able to complete our evaluation, testing and any
required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses
in our internal control over financial reporting, we will be unable to assert that our internal controls are effective.
If we are unable to assert that our internal control over financial
reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which would
cause the price of our common stock to decline.
To comply with the requirements of being a public company, we
may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal
audit staff.
Foreign Operational Risks
We do not have business interruption, litigation or natural
disaster insurance.
The insurance industry in China is still at an early state of
development. In particular PRC insurance companies offer limited business products. As a result, we do not have any business liability
or disruption insurance coverage for our operations in China. Any business interruption, litigation or natural disaster may result
in our business incurring substantial costs and the diversion of resources.
Negative perceptions about the quality of Chinese goods
could reduce demand for Chinese exports and our shipping agency services.
Recent news of concerns about imported products from China,
including such items as pet food, toys, toothpaste and cell phone batteries, may have harmed public perception of the general quality
of goods produced by Chinese manufacturers. Whether or not concerns about the quality of Chinese products are justified, continued
perception of problems with Chinese products could cause importers and consumers to seek similar products from other countries
and could harm China’s shipping industry. A weakened shipping industry would in turn also harm China’s shipping agency
industry and negatively impact our company.
Trans Pacific’s contractual arrangements with Sino-China
may result in adverse tax consequences to us.
As a result of our corporate structure and contractual arrangements
between Trans Pacific and Sino-China, both revenues generated by Sino-China’s operations in China and revenues derived from
Trans Pacific ’s contractual arrangements with Sino-China shall be subject to PRC tax. Moreover, we could face material and
adverse tax consequences if the PRC tax authorities determine that Trans Pacific’s contractual arrangements with Sino-China
were not made on an arm’s length basis and adjust our income and expenses for PRC tax purposes in the form of a transfer
pricing adjustment. A transfer pricing adjustment could result in a reduction, for PRC tax purposes, of adjustments recorded by
Sino-China, which could adversely affect us by increasing Sino-China’s tax liability without reducing Trans Pacific’s
tax liability, which could further result in late payment fees and other penalties to Sino-China for underpaid taxes.
Trans Pacific’s contractual arrangements with Sino-China
may not be as effective in providing control over Sino-China as direct ownership of Sino-China.
We conduct substantially all of our operations, and generate
substantially all of our revenues, through contractual arrangements with Sino-China that provide us, through our ownership of Trans
Pacific, with effective control over Sino-China. We depend on Sino-China to hold and maintain contracts for shipping agency services
with our customers. Sino-China also owns substantially all of our intellectual property, facilities and other assets relating to
the operation of our business, and employs the personnel for substantially all of our business. Neither our company nor Trans Pacific
has any ownership interest in Sino-China. Although we have been advised by Beijing Jintai (Tianjin) Law Firm, our PRC legal counsel,
that each contract under Trans Pacific’s contractual arrangements with Sino-China is valid, binding and enforceable under
current PRC laws and regulations, there are substantial uncertainties regarding the interpretation and application of PRC laws
and regulations governing the enforcement and performance of such contractual control over Sino-China. If the PRC government determines
that these contractual arrangements as a whole do not comply with applicable regulations, our business could be substantially adversely
affected. In addition, these contractual arrangements may not be as effective in providing us with control over Sino-China as direct
ownership of Sino-China. Furthermore, Sino-China may breach the contractual arrangements. For example, Sino-China may decide not
to pay consulting or marketing fees to Trans Pacific, and consequently to our company, in accordance with the existing contractual
arrangements. In event of any such breach, we would have to rely on legal remedies under PRC law. These remedies may not always
be effective, particularly in light of uncertainties in the PRC legal system.
Uncertainties with respect to the PRC legal system could
adversely affect us.
There are substantial uncertainties regarding the interpretation
and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing our business, or
the enforcement and performance of our contractual arrangements with Sino-China and its shareholders.
We conduct our business primarily through Trans Pacific and
Sino-China. These entities are generally subject to laws and regulations applicable to foreign investment in China and, in particular,
laws applicable to wholly foreign-owned enterprises. We and Trans Pacific are considered foreign persons or foreign invested enterprises
under PRC law. As a result, we and Trans Pacific
are subject to PRC law limitations on foreign ownership of Chinese companies.
These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcement may
involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in
detrimental reliance by foreign investors. New laws and regulations that affect existing and proposed future businesses may also
be applied retroactively.
In addition, we depend on Sino-China to honor its agreements
with Trans Pacific. Almost all of these agreements are governed by PRC law. The PRC legal system is based on written statutes.
Prior court decisions may be cited for reference but have limited precedential value. Since 1979, PRC legislation and regulations
have significantly enhanced the protections afforded to various forms of foreign investments in China. However, since the PRC legal
system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement
of these laws, regulations and rules involve uncertainties, which may limit legal protections available to us. In addition, any
litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.
The PRC government has broad discretion in dealing with violations
of laws and regulations, including levying fines, revoking business and other licenses and requiring actions necessary for compliance.
In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a later time by higher
regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses.
We cannot assure you that our current ownership and operating structure would not be found in violation of any current or future
PRC laws or regulations. As a result, we may be subject to sanctions, including fines, and could be required to restructure our
operations or cease to provide certain services. Any of these or similar actions could significantly disrupt our business operations
or restrict us from conducting a substantial portion of our business operations, which could materially and adversely
affect
our business, financial condition and results of operations.
The shareholders of Sino-China have potential conflicts
of interest with us, which may adversely affect our business.
Neither we nor Trans Pacific owns any portion of the equity
interests of Sino-China. Instead, we and Trans Pacific rely on contractual obligations to enforce our interest in receiving payments
from Sino-China. Conflicts of interest may arise between Sino-China’s shareholders and our company if, for example, their
interests in receiving dividends from Sino-China were to conflict with our interest requiring Sino-China to make contractually-obligated
payments to Trans Pacific. As a result, we have required Sino-China and each of its shareholders to execute irrevocable powers
of attorney to appoint the individual designated by us to be his attorney-in-fact to vote on their behalf on all matters requiring
shareholder approval by Sino-China and to require Sino-China’s compliance with the terms of its contractual obligations.
We cannot assure you, however, that when conflicts of interest arise, Sino-China’s shareholders will act completely in our
interests or that conflicts of interests will be resolved in our favor. In addition, Sino-China’s shareholders could violate
their agreements with us by diverting business opportunities from us to others. If we cannot resolve any conflicts of interest
between us and Sino-China’s shareholders, we would have to rely on legal proceedings, which could result in the disruption
of our business. In addition, these contractual relationships are governed by PRC law, which may result in uncertainty as to application
and enforcement.
We rely on dividends paid by our subsidiary for our cash
needs.
Although our company generates some revenues from operations
in the United States, we also rely on dividends paid by Trans Pacific for our cash needs, including the funds necessary to pay
dividends and other cash distributions, if any, to our shareholders, to service any debt we may incur and to pay our operating
expenses. The payment of dividends by entities organized in China is subject to limitations. Regulations in the PRC currently permit
payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China.
Our subsidiary in China is also required to set aside a portion of their after-tax profits according to PRC accounting standards
and regulations to reserve fund and other funds required by PRC law.
The PRC government also
imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of China. We may experience
difficulties in completing the administrative procedures necessary to obtain and remit foreign currency.
Pursuant to the PRC enterprise income tax law and its implementation
rules that were effective on January 1, 2008, dividends payable by a foreign investment entity to its foreign investors are subject
to a withholding tax of up to 10%. Meanwhile, the United States and China are signatories to the 1984 People’s Republic of
China-United States Income Tax Agreement, which would allow our company to claim a deemed-paid credit, which is an indirect tax
credit, on any taxes paid to China by Trans Pacific. To the extent we were not eligible to receive or were unable to use the credit,
this tax could have an adverse effect on our company.
Governmental control of currency conversion may affect
the value of your investment.
The PRC government imposes controls on the convertibility of
the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive the majority of
our revenues in Renminbi. Under our current corporate structure, our income is derived from dividend payments from Trans Pacific
and income from our activities in the United States. Shortages in the availability of foreign currency may restrict the ability
of Trans Pacific to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign
currency denominated obligations. Under existing PRC foreign exchange regulations, payments of current account items, including
profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without
prior approval from the PRC State Administration of Foreign Exchange by complying with certain procedural requirements. However,
approval from appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted
out of China to pay capital expenses such as the repayment of bank loans denominated in foreign currencies. The PRC government
may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign
exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able
to pay dividends, if any, in foreign currencies to our shareholders.
Fluctuation in the value of the Renminbi may have a material
adverse effect on your investment.
The value of the Renminbi against the U.S. dollar and other
currencies may fluctuate and is affected by, among other things, changes in political and economic conditions. On July 21,
2005, the PRC government changed its decade-old policy of pegging the value of the Renminbi to the U.S. dollar. Under the new policy,
the Renminbi is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change
in policy has resulted in an appreciation of the Renminbi against the U.S. dollar. While the international reaction to the Renminbi
revaluation has generally been positive, there remains significant international pressure on the PRC government to adopt an even
more flexible currency policy, which could result in a further and more significant appreciation of the Renminbi against the U.S.
dollar. We rely largely on payments from Trans Pacific and Sino-China. While we charge our fees in U.S. dollars, Sino-China and
Trans Pacific nevertheless operate within China and will rely heavily on Renminbi in their operations. Any significant revaluation
of Renminbi may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, and
any dividends payable on, our common stock in U.S. dollars. For example, an appreciation of Renminbi against the U.S. dollar would
make any new Renminbi denominated investments or expenditures more costly to us, to the extent that we need to convert U.S. dollars
into Renminbi for such purposes.
Changes in China’s political and economic policies
could harm our business.
China’s economy has historically been a planned economy
subject to governmental plans and quotas and has, in certain aspects, been transitioning to a more market-oriented economy. Although
we believe that the economic reform and the macroeconomic measures adopted by the Chinese government have had a positive effect
on the economic development of China, we cannot predict the future direction of these economic reforms or the effects these measures
may have on our business, financial position or results of operations. In addition, the Chinese economy differs from the economies
of most countries belonging to the Organization for Economic Cooperation and Development, or OECD. These differences include:
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level of government involvement in the economy;
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level of capital reinvestment;
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control of foreign exchange;
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methods of allocating resources; and
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balance of payments position.
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As a result of these differences, our business may not develop
in the same way or at the same rate as might be expected if the Chinese economy were similar to those of the OECD member countries.
Since 1979, the Chinese government has promulgated many new
laws and regulations covering general economic matters. Despite this activity to develop a legal system, China’s system of
laws is not yet complete. Even where adequate law exists in China, enforcement of existing laws or contracts based on existing
law may be uncertain or sporadic, and it may be difficult to obtain swift and equitable enforcement or to obtain enforcement of
a judgment by a court of another jurisdiction. The relative inexperience of China’s judiciary, in many cases, creates additional
uncertainty as to the outcome of any litigation. In addition, interpretation of statutes and regulations may be subject to government
policies reflecting domestic political changes. Our activities in China will also be subject to administration review and approval
by various national and local agencies of China’s government. Because of the changes occurring in China’s legal and
regulatory structure, we may not be able to secure the requisite governmental approval for our activities. Although we have obtained
all required governmental approval to operate our business as currently conducted, to the extent we are unable to obtain or maintain
required governmental approvals, the Chinese government may, in its sole discretion, prohibit us from conducting our business.
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The Chinese government could change its policies toward
private enterprise or even nationalize or expropriate private enterprises, which could result in the total loss of our investment
in that country.
Our business is subject to significant political and economic
uncertainties and may be adversely affected by political, economic and social developments in China. Over the past several years,
the Chinese government has pursued economic reform policies including the encouragement of private economic activity and greater
economic decentralization. The Chinese government may not continue to pursue these policies or may significantly alter them to
our detriment from time to time with little, if any, prior notice.
Changes in policies, laws and regulations or in their interpretation
or the imposition of confiscatory taxation, restrictions on currency conversion, restrictions or prohibitions on dividend payments
to shareholders, devaluations of currency or the nationalization or other expropriation of private enterprises could have a material
adverse effect on our business. Nationalization or expropriation could even result in the total loss of our investment in China
and in the total loss of your investment in us.
As most of our officers, directors and assets are outside
the United States, it will be extremely difficult to acquire jurisdiction and enforce liabilities against us and our officers,
directors and assets based in China.
Most of our directors and officers reside outside the United
States. In addition, many of our assets will be located outside the United States. As a result, it may be difficult or impossible
to effect service of process within the United States upon our directors or officers and our subsidiaries, or enforce against any
of them court judgments obtained in United States courts, including judgments relating to United States federal securities laws.
Furthermore, because the majority of our assets are located in China
and PRC does not have
treaties with the United States or many other countries providing for the reciprocal recognition and enforcement of judgment of
courts., it would also be extremely difficult to access those assets to satisfy an award entered against us in United States court.
Our international operations require us to comply with
a number of U.S. regulations.
In addition the Chinese laws and regulations with which we must
comply, we must also comply with the Foreign Corrupt Practices Act (“FCPA”), which prohibits U.S. companies or their
agents and employees from providing anything of value to a foreign official for the purposes of influencing any act or decision
of these individuals in their official capacity to help obtain or retain business, direct business to any person or corporate entity
or obtain any unfair advantage. Any failure by us to adopt appropriate compliance procedures and ensure that our employees and
agents comply with the FCPA and applicable laws and regulations in foreign jurisdictions could result in substantial penalties
and/or restrictions in our ability to conduct business in certain foreign jurisdictions. The U.S. Department of the Treasury’s
Office of Foreign Asset Control (“OFAC”) administers and enforces economic and trade sanctions against targeted foreign
countries, entities and individuals based on U.S. foreign policy and national security goals. As a result, we are restricted from
entering into transactions with certain targeted foreign countries, entities, and individuals except as permitted by OFAC, which
may reduce our future growth.
Risks Associated with this Offering
The market price for our common stock may be volatile,
which could result in substantial losses to investors.
The market price for our common stock is likely to be volatile
and subject to wide fluctuations in response to factors including the following:
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actual or anticipated fluctuations in our quarterly
operating results;
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changes in the Chinese shipping industry or shipping
agency industry;
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changes in the Chinese economy;
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changes in political relationships, both within China
and between China and other countries;
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announcements by our competitors of significant acquisitions,
strategic partnerships, joint ventures or capital commitments;
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additions or departures of key personnel;
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fluctuation of the Renminbi against the U.S. Dollar
and other currencies; or
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In addition, the securities markets have from time to time experienced
significant price and volume fluctuations that are not related to the operating performance of particular companies. As a result,
to the extent shareholders sell our shares in negative market fluctuation, they may not receive a price per share that is based
solely upon our business performance. We cannot guarantee that shareholders will not lose some of their entire investment in our
common stock.
If our financial condition deteriorates, we could be delisted
by the NASDAQ Capital Market and our shareholders could find it difficult to sell our shares.
The NASDAQ Capital Market requires companies to fulfill specific
requirements in order for their shares to continue to be listed. In order to qualify for continued listing on the NASDAQ Capital
Market, we must meet the following criteria:
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(i) Our shareholders’ equity must be at
least $2,500,000; OR (ii) the market value of our listed securities must be at least $10,000,000; OR (iii) our net income
from continuing operations in our last fiscal year (or two of the last three fiscal years) must have been at least $500,000;
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The market value of our shares held by non-affiliates
must be at least $500,000;
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The market value of our shares must be at least $1,000,000;
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The minimum bid price for our shares must be at least
$1.00 per share;
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We must have at least 300 shareholders;
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We must have at least 2 market makers; and
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We must have adopted NASDAQ-mandated corporate governance
measures, including a Board of Directors comprised of a majority of independent directors, an Audit Committee comprised solely
of independent directors and the adoption of a code of ethics among other items.
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If our shares are delisted from the NASDAQ Capital Market in
the future, our shareholders could find it difficult to sell our shares. Indeed, in 2013, we failed to meet the requirement that
our shareholders’ equity be at least $2,500,000 and were at risk of being delisted from the NASDAQ Capital Market. Although
we were able to return to compliance with this requirement, we cannot guarantee that we will remain in compliance with this standard
in the future.
If our common stock is delisted from the NASDAQ Capital Market
at some later date, we may apply to have our common stock quoted on the Bulletin Board maintained by NASDAQ or in the “pink
sheets” maintained by the National Quotation Bureau, Inc. The Bulletin Board and the “pink sheets” are generally
considered to be less efficient markets than the NASDAQ Capital Market. In addition, if our common stock is not so listed or is
delisted at some later date, our common stock may be subject to the “penny stock” regulations. These rules impose additional
sales practice requirements on broker-dealers that sell low-priced securities to persons other than established customers and institutional
accredited investors and require the delivery of a disclosure schedule explaining the nature and risks of the penny stock market.
As a result, the ability or willingness of broker-dealers to sell or make a market in our common stock might decline. If our common
stock is not so listed or is delisted from the NASDAQ Capital Market at some later date or were to become subject to the penny
stock regulations, it is likely that the price of our shares would decline and that our shareholders would find it difficult to
sell their shares.
Our classified board structure may prevent a change in
our control.
Our board of directors is divided into three classes of directors.
The current terms of the directors expire in 2015, 2016 and 2017. Directors of each class are chosen for three-year terms upon
the expiration of their current terms, and the shareholders elect one class of directors each year. The staggered terms of our
directors may reduce the possibility of a tender offer or an attempt at a change in control, even though a tender offer or change
in control might be in the best interest of our shareholders
Future sales of equity securities may depress our
share price.
The market price of our common stock could decline as a result
of sales of substantial amounts of our common stock or other equity securities convertible into common stock in the public market,
or the perception that these sales could occur. In addition, these factors could make it more difficult for us to raise funds through
future offerings of common stock.
Special Note Regarding Forward-Looking Statements
This prospectus, each prospectus supplement and the information
incorporated by reference in this prospectus and each prospectus supplement contain certain statements that constitute “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. The words “anticipate,” “expect,” “believe,” “goal,” “plan,”
“intend,” “estimate,” “may,” “will,” and similar expressions and variations thereof
are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Those statements
appear in this prospectus, any accompanying prospectus supplement and the documents incorporated herein and therein by reference,
particularly in the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” and “Our Company,” and include statements regarding
the intent, belief or current expectations of the Company and management that are subject to known and unknown risks, uncertainties
and assumptions.
This prospectus, any prospectus supplement and the information
incorporated by reference in this prospectus and any prospectus supplement also contain statements that are based on the current
expectations of our Company and management. You are cautioned that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking
statements as a result of various factors.
Because forward-looking statements are inherently subject to
risks and uncertainties, some of which cannot be predicted or quantified, you should not rely upon forward-looking statements as
predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur
and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable
law, including the securities laws of the United States and the rules and regulations of the SEC, we do not plan to publicly update
or revise any forward-looking statements contained herein after we distribute this prospectus, whether as a result of any new information,
future events or otherwise.
Use of Proceeds
Except as otherwise provided in a prospectus supplement, we
expect to use the net proceeds from the sale of securities offered pursuant to this prospectus for general corporate purposes,
including possible acquisitions of complementary assets or businesses. When a particular series of securities is offered, the prospectus
supplement relating to that offering will set forth our intended use of the net proceeds received from the sale of those securities.
Description
of Share Capital
Our authorized capital stock consists of 50,000,000 shares of
common stock, without par value per share and 2,000,000 shares of preferred stock, without par value per share. As of the date
of this prospectus, 4,703,841 shares of common stock are issued and outstanding, and no shares of preferred stock have been issued.
The following summary description relating to our capital stock does not purport to be complete and is qualified in its entirety
by our First Amended and Restated Articles of Incorporation and Bylaws.
Common Stock
Holders of common stock are entitled to cast one vote for each
share on all matters submitted to a vote of shareholders, including the election of directors. The holders of common stock are
entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available
therefor and subject to any preference of any then authorized and issued preferred stock. Such holders do not have any preemptive
or other rights to subscribe for additional shares. All holders of common stock are entitled to share ratably in any assets for
distribution to shareholders upon the liquidation, dissolution or winding up of our company, subject to any preference of any then
authorized and issued preferred stock. There are no conversion, redemption or sinking fund provisions applicable to the common
stock. All outstanding shares are fully paid and nonassessable.
Authorization of Blank Check Preferred Stock
Although we are not offering any preferred stock in this offering,
our First Amended and Restated Articles of Incorporation and Bylaws provide that upon completion of our initial public offering,
our board of directors are authorized to issue, without shareholder approval, blank check preferred stock. Blank check preferred
stock can operate as a defensive measure known as a “poison pill” by diluting the stock ownership of a potential hostile
acquirer to prevent an acquisition that is not approved by our board of directors.
Limitations on the Right to Own Shares
There are no limitations on the right to own our shares.
Disclosure of Shareholder Ownership
There are no provisions in our First Amended and Restated Articles
of Incorporation and Bylaws governing the ownership threshold above which shareholder ownership must be disclosed.
Changes in Capital
We may from time to time by ordinary resolution increase the
share capital by such sum, to be divided into shares of such amount, as the resolution shall prescribe. The new shares shall be
subject to the same provisions with reference to the payment of calls, lien, transfer, transmission, forfeiture and otherwise as
the shares in the original share capital. We may by ordinary resolution:
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consolidate and divide all or any of our share capital
into shares of larger amount than our existing shares;
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convert all or any of our paid up shares into stock
and reconvert that stock into paid up shares of any denomination;
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in many circumstances, sub-divide our existing shares,
or any of them, into shares of smaller amount provided that in the subdivision the proportion between the amount paid and the
amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share form which the reduced share
is derived; and
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cancel any shares which, at the date of the passing
of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the
amount of the shares so cancelled.
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We may by special resolution reduce our share capital and any
capital redemption reserve fund in any manner authorized by law.
Incentive Plan
In connection with our initial public offering, we established
a pool for incentive equity security grants to our employees, officers, directors and consultants. This pool contains 302,903 of
our equity securities, including options, shares and securities exercisable for or convertible into our common stock. The options
will vest at a rate of 20% per year for five years and have an exercise price of the market price of our shares on the date the
options are granted. We currently have options to purchase 102,000 shares of common stock outstanding.
Listing
Our common stock is listed on the NASDAQ Capital Market under
the trading symbol “SINO”.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Computershare
Inc. located in 250 Royal Street Canton, MA 02021 U.S. Our transfer agent’s phone number is 001-781-575-2643 and facsimile
number is 001-781-575-3255.
Description of Debt Securities
As used in this prospectus, debt securities means the debentures,
notes, bonds and other evidences of indebtedness that we may issue from time to time. The debt securities may be either secured
or unsecured and will either be senior debt securities or subordinated debt securities. The debt securities will be issued under
one or more separate indentures between us and a trustee to be specified in an accompanying prospectus supplement. Senior debt
securities will be issued under a new senior indenture. Subordinated debt securities will be issued under a subordinated indenture.
Together, the senior indentures and the subordinated indentures are sometimes referred to in this prospectus as the indentures.
This prospectus, together with the applicable prospectus supplement, will describe the terms of a particular series of debt securities.
The statements and descriptions in this prospectus or in any
prospectus supplement regarding provisions of the indentures and debt securities are summaries thereof, do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all of the provisions of the indentures (and any amendments
or supplements we may enter into from time to time which are permitted under each indenture) and the debt securities, including
the definitions therein of certain terms.
General
Unless otherwise specified in a prospectus supplement, the debt
securities will be direct unsecured obligations of Sino-Global Shipping America, Ltd. The senior debt securities will rank equally
with any of our other senior and unsubordinated debt. The subordinated debt securities will be subordinate and junior in right
of payment to any senior indebtedness.
Unless otherwise specified in a prospectus supplement, the indentures
do not limit the aggregate principal amount of debt securities that we may issue and provide that we may issue debt securities
from time to time at par or at a discount, and in the case of the new indentures, if any, in one or more series, with the same
or various maturities. Unless indicated in a prospectus supplement, we may issue additional debt securities of a particular series
without the consent of the holders of the debt securities of such series outstanding at the time of the issuance. Any such additional
debt securities, together with all other outstanding debt securities of that series, will constitute a single series of debt securities
under the applicable indenture.
Each prospectus supplement will describe the terms relating
to the specific series of debt securities being offered. These terms will include some or all of the following:
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the title of the debt securities and whether they are subordinated debt securities or senior debt securities;
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any limit on the aggregate principal amount of the debt securities;
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the ability to issue additional debt securities of the same series;
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the price or prices at which we will sell the debt securities;
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the maturity date or dates of the debt securities on which principal will be payable;
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the rate or rates of interest, if any, which may be fixed or variable, at which the debt securities will bear interest, or the method of determining such rate or rates, if any;
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the date or dates from which any interest will accrue or the method by which such date or dates will be determined;
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the right, if any, to extend the interest payment periods and the duration of any such deferral period, including the maximum consecutive period during which interest payment periods may be extended;
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whether the amount of payments of principal of (and premium, if any) or interest on the debt securities may be determined with reference to any index, formula or other method, such as one or more
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currencies, commodities, equity indices or other indices, and the manner of determining the amount of such payments;
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the dates on which we will pay interest on the debt securities and the regular record date for determining who is entitled to the interest payable on any interest payment date;
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the place or places where the principal of (and premium, if any) and interest on the debt securities will be payable, where any securities may be surrendered for registration of transfer, exchange or conversion, as applicable, and notices and demands may be delivered to or upon us pursuant to the indenture;
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if we possess the option to do so, the periods within which and the prices at which we may redeem the debt securities, in whole or in part, pursuant to optional redemption provisions, and the other terms and conditions of any such provisions;
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our obligation, if any, to redeem, repay or purchase debt securities by making periodic payments to a sinking fund or through an analogous provision or at the option of holders of the debt securities, and the period or periods within which and the price or prices at which we will redeem, repay or purchase the debt securities, in whole or in part, pursuant to such obligation, and the other terms and conditions of such obligation;
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the denominations in which the debt securities will be issued, if other than denominations of $1,000 and integral multiples of $1,000;
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the portion, or methods of determining the portion, of the principal amount of the debt securities which we must pay upon the acceleration of the maturity of the debt securities in connection with an event of default (as described below), if other than the full principal amount;
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the currency, currencies or currency unit in which we will pay the principal of (and premium, if any) or interest, if any, on the debt securities, if not United States dollars;
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provisions, if any, granting special rights to holders of the debt securities upon the occurrence of specified events;
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any deletions from, modifications of or additions to the events of default or our covenants with respect to the applicable series of debt securities, and whether or not such events of default or covenants are consistent with those contained in the applicable indenture;
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any limitation on our ability to incur debt, redeem shares, sell our assets or other restrictions;
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the application, if any, of the terms of the indenture relating to defeasance and covenant defeasance (which terms are described below) to the debt securities;
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whether the subordination provisions summarized below or different subordination provisions will apply to the debt securities;
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the terms, if any, upon which the holders may convert or exchange the debt securities into or for our common stock or other securities or property;
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whether any of the debt securities will be issued in global form and, if so, the terms and conditions upon which global debt securities may be exchanged for certificated debt securities;
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any change in the right of the trustee or the requisite holders of debt securities to declare the principal amount thereof due and payable because of an event of default;
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the depository for global or certificated debt securities;
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any special tax implications of the debt securities;
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any tax consequences applicable to the debt securities, including any debt securities denominated and made payable, as described in the prospectus supplements, in foreign currencies, or units based on or related to foreign currencies;
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any trustees, authenticating or paying agents, transfer agents or registrars, or other agents with respect to the debt securities;
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any other terms of the debt securities not inconsistent with the provisions of the indentures, as amended or supplemented;
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to whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered, on the record date for such interest, the extent to which, or the manner in which, any interest payable on a temporary global debt security will be paid if other than in the manner provided in the applicable indenture;
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if the principal of or any premium or interest on any debt securities of the series is to be payable in one or more currencies or currency units other than as stated, the currency, currencies or currency units in which it shall be paid and the periods within and terms and conditions upon which such election is to be made and the amounts payable (or the manner in which such amount shall be determined);
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the portion of the principal amount of any securities of the series which shall be payable upon declaration of acceleration of the maturity of the debt securities pursuant to the applicable indenture if other than the entire principal amount; and
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if the principal amount payable at the stated maturity of any debt security of the series will not be determinable as of any one or more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such securities as of any such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity other than the stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined).
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Unless otherwise specified in the applicable prospectus supplement,
the debt securities will not be listed on any securities exchange and will be issued in fully-registered form without coupons.
Debt securities may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which at the time of issuance is below market rates. The
applicable prospectus supplement will describe the federal income tax consequences and special considerations applicable to any
such debt securities. The debt securities may also be issued as indexed securities or securities denominated in foreign currencies,
currency units or composite currencies, as described in more detail in the prospectus supplement relating to any of the particular
debt securities. The prospectus supplement relating to specific debt securities will also describe any special considerations and
certain additional tax considerations applicable to such debt securities.
Subordination
The prospectus supplement relating to any offering of subordinated
debt securities will describe the specific subordination provisions. However, unless otherwise noted in the prospectus supplement,
subordinated debt securities will be subordinate and junior in right of payment to any existing senior indebtedness.
Unless otherwise specified in the applicable prospectus supplement,
under the subordinated indenture, “senior indebtedness” means all amounts due on obligations in connection with any
of the following, whether outstanding at the date of execution of the subordinated indenture, or thereafter incurred or created:
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the principal of (and premium, if any) and interest due on our indebtedness for borrowed money and indebtedness evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
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all of our capital lease obligations or attributable debt (as defined in the indentures) in respect of sale and leaseback transactions;
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all obligations representing the balance deferred and unpaid of the purchase price of any property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto, except any such balance that constitutes an accrued expense or trade payable or any similar obligation to trade creditors;
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all of our obligations in respect of interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements; other agreements or arrangements designed to manage interest rates or interest rate risk; and other agreements or arrangements designed to protect against fluctuations in currency exchange rates or commodity prices;
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all obligations of the types referred to above of other persons for the payment of which we are responsible or liable as obligor, guarantor or otherwise; and
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all obligations of the types referred to above of other persons secured by any lien on any property or asset of ours (whether or not such obligation is assumed by us).
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However, senior indebtedness does not include:
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any indebtedness which expressly provides that such indebtedness shall not be senior in right of payment to the subordinated debt securities, or that such indebtedness shall be subordinated to any other of our indebtedness, unless such indebtedness expressly provides that such indebtedness shall be senior in right of payment to the subordinated debt securities;
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any of our obligations to our subsidiaries or of a subsidiary guarantor to us or any other of our other subsidiaries;
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any liability for federal, state, local or other taxes owed or owing by us or any subsidiary guarantor,
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any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities);
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any obligations with respect to any capital stock;
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any indebtedness incurred in violation of the indenture, provided that indebtedness under our credit facilities will not cease to be senior indebtedness under this bullet point if the lenders of such indebtedness obtained an officer’s certificate as of the date of incurrence of such indebtedness to the effect that such indebtedness was permitted to be incurred by the indenture; and
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any of our indebtedness in respect of the subordinated debt securities.
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Senior indebtedness shall continue to be senior indebtedness
and be entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any term
of such senior indebtedness.
Unless otherwise noted in an accompanying prospectus supplement,
if we default in the payment of any principal of (or premium, if any) or interest on any senior indebtedness when it becomes due
and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise, then, unless and until such
default is cured or waived or ceases to exist, we will make no direct or indirect payment (in cash, property, securities, by set-off
or otherwise) in respect of the principal of or interest on the subordinated debt securities or in respect of any redemption, retirement,
purchase or other requisition of any of the subordinated debt securities.
In the event of the acceleration of the maturity of any subordinated
debt securities, the holders of all senior debt securities outstanding at the time of such acceleration, subject to any security
interest, will first be entitled to receive payment in full of all amounts due on the senior debt securities before the holders
of the subordinated debt securities will be entitled to receive any payment of principal (and premium, if any) or interest on the
subordinated debt securities.
If any of the following events occurs, we will pay in full all
senior indebtedness before we make any payment or distribution under the subordinated debt securities, whether in cash, securities
or other property, to any holder of subordinated debt securities:
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any dissolution or winding-up or liquidation or reorganization of Sino-Global Shipping America, Ltd, whether voluntary or involuntary or in bankruptcy,
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insolvency or receivership;
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any general assignment by us for the benefit of creditors; or
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any other marshaling of our assets or liabilities.
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In such event, any payment or distribution under the subordinated
debt securities, whether in cash, securities or other property, which would otherwise (but for the subordination provisions) be
payable or deliverable in respect of the subordinated debt securities, will be paid or delivered directly to the holders of senior
indebtedness in accordance with the priorities then existing among such holders until all senior indebtedness has been paid in
full. If any payment or distribution under the subordinated debt securities is received by the trustee of any subordinated debt
securities in contravention of any of the terms of the subordinated indenture and before all the senior indebtedness has been paid
in full, such payment or distribution will be received in trust for the benefit of, and paid over or delivered and transferred
to, the holders of the senior indebtedness at the time outstanding in accordance with the priorities then existing among such holders
for application to the payment of all senior indebtedness remaining unpaid to the extent necessary to pay all such senior indebtedness
in full.
The subordinated indenture does not limit the issuance of additional
senior indebtedness.
Events of Default, Notice and Waiver
Unless an accompanying prospectus supplement states otherwise,
the following shall constitute “events of default” under the indentures with respect to each series of debt securities:
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we default for 30 consecutive days in the payment when due of interest on the debt securities;
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we default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on the debt securities;
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our failure to observe or perform any other of our covenants or agreements with respect to such debt securities for 60 days after we receive notice of such failure;
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certain events of bankruptcy, insolvency or reorganization of the Sino-Global Shipping America, Ltd.; or
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any other event of default provided with respect to securities of that series.
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Unless an accompanying prospectus supplement states otherwise,
if an event of default with respect to any debt securities of any series outstanding under either of the indentures shall occur
and be continuing, the trustee under such indenture or the holders of at least 25% (or at least 10%, in respect of a remedy (other
than acceleration) for certain events of default relating to the payment of dividends) in aggregate principal amount of the debt
securities of that series outstanding may declare, by notice as provided in the applicable indenture, the principal amount (or
such lesser amount as may be provided for in the debt securities of that series) of all the debt securities of that series outstanding
to be due and payable immediately; provided that, in the case of an event of default involving certain events in bankruptcy, insolvency
or reorganization, acceleration is automatic; and, provided further, that after such acceleration, but before a judgment or decree
based on acceleration, the holders of a majority in aggregate principal amount of the outstanding debt securities of that series
may, under certain circumstances, rescind and annul such acceleration if all events of default, other than the nonpayment of accelerated
principal, have been cured or waived. Upon the acceleration of the maturity of original issue discount securities, an amount less
than the principal amount thereof will become due and payable. Reference is made to the prospectus supplement relating to any original
issue discount securities for the particular provisions relating to acceleration of maturity thereof.
Any past default under either indenture with respect to debt
securities of any series, and any event of default arising therefrom, may be waived by the holders of a majority in principal amount
of all debt securities of such series outstanding under such indenture, except in the case of (1) default in the payment of
the principal of (or premium, if any) or interest on any debt securities of such series or (2) certain events of default relating
to the payment of dividends.
The trustee is required within 90 days after the occurrence
of a default (which is known to the trustee and is continuing), with respect to the debt securities of any series (without regard
to any grace period or notice requirements), to give to the holders of the debt securities of such series notice of such default.
The trustee, subject to its duties during default to act with
the required standard of care, may require indemnification by the holders of the debt securities of any series with respect to
which a default has occurred before proceeding to exercise any right or power under the indentures at the request of the holders
of the debt securities of such series. Subject to such right of indemnification and to certain other limitations, the holders of
a majority in principal amount of the outstanding debt securities of any series under either indenture may direct the time, method
and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the
trustee with respect to the debt securities of such series, provided that such direction shall not be in conflict with any rule
of law or with the applicable indenture and the trustee may take any other action deemed proper by the trustee which is not inconsistent
with such direction.
No holder of a debt security of any series may institute any
action against us under either of the indentures (except actions for payment of overdue principal of (and premium, if any) or interest
on such debt security or for the conversion or exchange of such debt security in accordance with its terms) unless (1) the
holder has given to the trustee written notice of an event of default and of the continuance thereof with respect to the debt securities
of such series specifying an event of default, as required under the applicable indenture, (2) the holders of at least 25%
in aggregate principal amount of the debt securities of that series then outstanding under such indenture shall have requested
the trustee to institute such action and offered to the trustee indemnity reasonably satisfactory to it against the costs, expenses
and liabilities to be incurred in compliance with such request; (3) the trustee shall not have instituted such action within
60 days of such request and (4) no direction inconsistent with such written request has been given to the trustee during such
60-day period by the holders of a majority in principal amount of the debt securities of that series. We are required to furnish
annually to the trustee statements as to our compliance with all conditions and covenants under each indenture.
Discharge, Defeasance and Covenant Defeasance
We may discharge or defease our obligations under the indenture
as set forth below, unless otherwise indicated in the applicable prospectus supplement.
We may discharge certain obligations to holders of any series
of debt securities issued under either the senior indenture or the subordinated indenture which have not already been delivered
to the trustee for cancellation by irrevocably depositing with the trustee money in an amount sufficient to pay and discharge the
entire indebtedness on such debt securities not previously delivered to the trustee for cancellation, for principal and any premium
and interest to the date of such deposit (in the case of debt securities which have become due and payable) or to the stated maturity
or redemption date, as the case may be, and we or, if applicable, any guarantor, have paid all other sums payable under the applicable
indenture.
If indicated in the applicable prospectus supplement, we may
elect either (1) to defease and be discharged from any and all obligations with respect to the debt securities of or within
any series (except in all cases as otherwise provided in the relevant indenture) (“legal defeasance”) or (2) to
be released from our obligations with respect to certain covenants applicable to the debt securities of or within any series (“covenant
defeasance”), upon the deposit with the relevant indenture trustee, in trust for such purpose, of money and/or government
obligations which through the payment of principal and interest in accordance with their terms will provide money in an amount
sufficient to pay the principal of (and premium, if any) or interest on such debt securities to maturity or redemption, as the
case may be, and any mandatory sinking fund or analogous payments thereon. As a condition to legal defeasance or covenant defeasance,
we must deliver to the trustee an opinion of counsel to the effect that the holders of such debt securities will not recognize
income, gain or loss for federal income tax purposes as a result of such legal defeasance or covenant defeasance and will be subject
to federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such legal
defeasance or covenant defeasance had not occurred. Such opinion of counsel, in the case of legal defeasance under clause (i) above,
must refer to and be based upon a ruling of the Internal Revenue Service or a change in applicable federal income tax law occurring
after the date of the relevant indenture. In addition, in the case of either legal defeasance or covenant defeasance, we shall
have delivered to the trustee (1) if applicable, an officer’s certificate to the effect that the relevant debt securities
exchange(s) have informed us that neither such debt securities nor any other debt securities of the same series, if then listed
on any securities exchange, will be delisted as a result of such deposit and (2) an officer’s certificate and an opinion
of counsel, each stating that all conditions precedent with respect to such legal defeasance or covenant defeasance have been complied
with.
We may exercise our defeasance option with respect to such debt
securities notwithstanding our prior exercise of our covenant defeasance option.
Modification and Waiver
Under the indentures, unless an accompanying prospectus supplement
states otherwise, we and the applicable trustee may supplement the indentures for certain purposes which would not materially adversely
affect the interests or rights of the holders of debt securities of a series without the consent of those holders. We and the applicable
trustee may also modify the indentures or any supplemental indenture in a manner that affects the interests or rights of the holders
of debt securities with the consent of the holders of at least a majority in aggregate principal amount of the outstanding debt
securities of each affected series issued under the indenture. However, the indentures require the consent of each holder of debt
securities that would be affected by any modification which would:
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reduce the principal amount of debt securities whose holders must consent to an amendment, supplement or waiver;
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reduce the principal of or change the fixed maturity of any debt security or, except as provided in any prospectus supplement, alter or waive any of the provisions with respect to the redemption of the debt securities;
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reduce the rate of or change the time for payment of interest, including default interest, on any debt security;
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waive a default or event of default in the payment of principal of or interest or premium, if any, on, the debt securities (except a rescission of acceleration of the debt securities by the holders of at least a majority in aggregate principal amount of the then outstanding debt securities and a waiver of the payment default that resulted from such acceleration);
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make any debt security payable in money other than that stated in the debt securities;
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make any change in the provisions of the applicable indenture relating to waivers of past defaults or the rights of holders of the debt securities to receive payments of principal of, or interest or premium, if any, on, the debt securities;
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waive a redemption payment with respect to any debt security (except as otherwise provided in the applicable prospectus supplement);
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except in connection with an offer by us to purchase all debt securities, (1) waive certain events of default relating to the payment of dividends or (2) amend certain covenants relating to the payment of dividends and the purchase or redemption of certain equity interests;
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make any change to the subordination or ranking provisions of the indenture or the related definitions that adversely affect the rights of any holder; or
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make any change in the preceding amendment and waiver provisions.
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The indentures permit the holders of at least a majority in
aggregate principal amount of the outstanding debt securities of any series issued under the indenture which is affected by the
modification or amendment to waive our compliance with certain covenants contained in the indentures.
Payment and Paying Agents
Unless otherwise indicated in the applicable prospectus supplement,
payment of interest on a debt security on any interest payment date will be made to the person in whose name a debt security is
registered at the close of business on the record date for the interest.
Unless otherwise indicated in the applicable prospectus supplement,
principal, interest and premium on the debt securities of a particular series will be payable at the office of such paying agent
or paying agents as we may designate for such purpose from time to time. Notwithstanding the foregoing, at our option, payment
of any interest may be made by check mailed to the address of the person entitled thereto as such address appears in the security
register.
Unless otherwise indicated in the applicable prospectus supplement,
a paying agent designated by us will act as paying agent for payments with respect to debt securities of each series. All paying
agents initially designated by us for the debt securities of a particular series will be named in the applicable prospectus supplement.
We may at any time designate additional paying agents or rescind the designation of any paying agent or approve a change in the
office through which any paying agent acts, except that we will be required to maintain a paying agent in each place of payment
for the debt securities of a particular series.
All moneys paid by us to a paying agent for the payment of the
principal, interest or premium on any debt security which remain unclaimed at the end of two years after such principal, interest
or premium has become due and payable will be repaid to us upon request, and the holder of such debt security thereafter may look
only to us for payment thereof.
Denominations, Registrations and Transfer
Unless an accompanying prospectus supplement states otherwise,
debt securities will be represented by one or more global certificates registered in the name of a nominee for The Depository Trust
Company, or DTC. In such case, each holder’s beneficial interest in the global securities will be shown on the records of
DTC and transfers of beneficial interests will only be effected through DTC’s records.
A holder of debt securities may only exchange a beneficial interest
in a global security for certificated securities registered in the holder’s name if:
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we deliver to the trustee notice from DTC that it is unwilling or unable to continue to act as depository or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor depositary is not appointed by us within 120 days after the date of such notice from DTC;
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we in our sole discretion determine that the debt securities (in whole but not in part) should be exchanged for definitive debt securities and deliver a written notice to such effect to the trustee; or
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there has occurred and is continuing a default or event of default with respect to the debt securities.
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If debt securities are issued in certificated form, they will
only be issued in the minimum denomination specified in the accompanying prospectus supplement and integral multiples of such denomination.
Transfers and exchanges of such debt securities will only be permitted in such minimum denomination. Transfers of debt securities
in certificated form may be registered at the trustee’s corporate office or at the offices of any paying agent or trustee
appointed by us under the indentures. Exchanges of debt securities for an equal aggregate principal amount of debt securities in
different denominations may also be made at such locations.
Governing Law
Unless otherwise state in an amendment or supplement to this
registration statement, the indentures and debt securities will be governed by, and construed in accordance with, the laws of the
State of New York, without regard to its principles of conflicts of laws, except to the extent the Trust Indenture Act is applicable.
Trustee
The trustee or trustees under the indentures will be named in
any applicable prospectus supplement.
Conversion or Exchange Rights
The prospectus supplement will describe the terms, if any, on
which a series of debt securities may be convertible into or exchangeable for our common stock or other debt securities. These
terms will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option.
These provisions may allow or require the number of shares of our common stock or other securities to be received by the holders
of such series of debt securities to be adjusted. Any such conversion or exchange will comply with applicable law and our First
Amended and Restated Articles of Incorporation.
Description of Warrants
The following description, together with the additional information
we may include in any applicable prospectus supplements, summarizes the material terms and provisions of the warrants that we may
offer under this prospectus and the related warrant agreements and warrant certificates. While the terms summarized below will
apply generally to any warrants that we may offer under this prospectus, we will describe the particular terms of any series of
warrants that we may offer in more detail in the applicable prospectus supplement. If we indicate in the prospectus supplement,
the terms of any warrants offered under that prospectus supplement may differ from the terms described below. However, no prospectus
supplement shall fundamentally change the terms that are set forth in this prospectus or offer a security that is not registered
and described in this prospectus at the time of its effectiveness. Specific warrant agreements will contain additional important
terms and provisions and will be incorporated by reference as an exhibit to the registration statement that includes this prospectus
or as an exhibit to a report filed under the Exchange Act.
General
We may issue warrants that entitle the holder to purchase our
debt securities, common stock or any combination thereof. We may issue warrants independently or together with common stock, debt
securities or any combination thereof, and the warrants may be attached to or separate from such securities.
We will describe in the applicable prospectus supplement the
terms of the series of warrants, including:
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the offering price and aggregate number of warrants offered;
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the currency for which the warrants may be purchased, if not United States dollars;
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if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security;
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if applicable, the date on and after which the warrants and the related securities will be separately transferable;
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in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at, and currency, if not United States dollars, in which, this principal amount of debt securities may be purchased upon such exercise;
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in the case of warrants to purchase common stock, the number of shares of common stock purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise;
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the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants;
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the terms of any rights to redeem or call the warrants;
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any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants;
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the dates on which the right to exercise the warrants will commence and expire;
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the manner in which the warrant agreement and warrants may be modified;
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federal income tax consequences of holding or exercising the warrants;
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the terms of the securities issuable upon exercise of the warrants; and
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any other specific terms, preferences, rights or limitations of or restrictions on the warrants.
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Before exercising their warrants, holders of warrants will not
have any of the rights of holders of the securities purchasable upon such exercise, including:
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in the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture; or
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in the case of warrants to purchase common stock, the right to receive dividends, if any, or, payments upon our liquidation, dissolution or winding up or to exercise voting rights, if any.
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Exercise of Warrants
Each warrant will entitle the holder to purchase the securities
that we specify in the applicable prospectus supplement at the exercise price that we describe in the applicable prospectus supplement.
Unless we otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants at any time
up to the specified time on the expiration date that we set forth in the applicable prospectus supplement. After the close of business
on the expiration date, unexercised warrants will become void.
Holders of the warrants may exercise the warrants by delivering
the warrant certificate representing the warrants to be exercised together with specified information, and paying the required
amount to the warrant agent in immediately available funds, as provided in the applicable prospectus supplement. We will set forth
on the reverse side of the warrant certificate and in the applicable prospectus supplement the information that the holder of the
warrant will be required to deliver to the warrant agent.
Upon receipt of the required payment and the warrant certificate
properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable
prospectus supplement, we will issue and deliver the securities purchasable upon such exercise. If fewer than all of the warrants
represented by the warrant certificate are exercised, then we will issue a new warrant certificate for the remaining amount of
warrants. If we so indicate in the applicable prospectus supplement, holders of the warrants may surrender securities as all or
part of the exercise price for warrants.
Enforceability of Rights by Holders of Warrants
Each warrant agent will act solely as our agent under the applicable
warrant agreement and will not assume any obligation or relationship of agency or trust with any holder of any warrant. A single
bank or trust company may act as warrant agent for more than one issue of warrants. A warrant agent will have no duty or responsibility
in case of any default by us under the applicable warrant agreement or warrant, including any duty or responsibility to initiate
any proceedings at law or otherwise, or to make any demand upon us. Any holder of a warrant may, without the consent of the related
warrant agent or the holder of any other warrant, enforce by appropriate legal action its right to exercise, and receive the securities
purchasable upon exercise of, its warrants.
Modification of the Warrant Agreement
The warrant agreements may permit us and the warrant agent,
if any, without the consent of the warrant holders, to supplement or amend the agreement in the following circumstances:
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to cure any ambiguity;
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to correct or supplement any provision which may be defective or inconsistent with any other provisions; or
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to add new provisions regarding matters or questions that we and the warrant agent may deem necessary or desirable and which do not adversely affect the interests of the warrant holders.
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Description
of Units
We may issue units comprised of one or more of the other securities
described in this prospectus in any combination. Each unit will be issued so that the holder of the unit is also the holder of
each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included
security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held
or transferred separately, at any time or at any time before a specified date or occurrence.
The applicable prospectus supplement may describe:
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the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
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any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and
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whether the units will be issued in fully registered or global form.
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The applicable prospectus supplement will describe the terms
of any units. The preceding description and any description of units in the applicable prospectus supplement does not purport to
be complete and is subject to and is qualified in its entirety by reference to the unit agreement and, if applicable, collateral
arrangements and depository arrangements relating to such units.
Description
of Share Purchase Contracts and Share Purchase Units
We may issue share purchase contracts, including contracts obligating
holders to purchase from us, and obligating us to sell to the holders, a specified number of shares of common stock or other securities
registered hereunder at a future date or dates, which we refer to in this prospectus as “share purchase contracts.”
The price per share of the securities and the number of shares of the securities may be fixed at the time the share purchase contracts
are issued or may be determined by reference to a specific formula set forth in the share purchase contracts.
The share purchase contracts may be issued separately or as
part of units consisting of a share purchase contract and debt securities, warrants, other securities registered hereunder or debt
obligations of third parties, including U.S. treasury securities, securing the holders’ obligations to purchase the securities
under the share purchase contracts, which we refer to herein as “share purchase units.” The share purchase contracts
may require holders to secure their obligations under the share purchase contracts in a specified manner. The share purchase contracts
also may require us to make periodic payments to the holders of the share purchase units or vice versa, and those payments may
be unsecured or refunded on some basis.
The share purchase contracts, and, if applicable, collateral
or depositary arrangements, relating to the share purchase contracts or share purchase units, will be filed with the SEC in connection
with the offering of share purchase contracts or share purchase units. The prospectus supplement relating to a particular issue
of share purchase contracts or share purchase units will describe the terms of those share purchase contracts or share purchase
units, including the following:
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if applicable, a discussion of material tax considerations; and
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any other information we think is important about the share purchase contracts or the share purchase units.
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Description
of Rights
We may issue rights to purchase common stock or debt securities
that we may offer to our securityholders. The rights may or may not be transferable by the persons purchasing or receiving the
rights. In connection with any rights offering, we may enter into a standby underwriting or other arrangement with one or more
underwriters or other persons pursuant to which such underwriters or other persons would purchase any offered securities remaining
unsubscribed for after such rights offering. Each series of rights will be issued under a separate rights agent agreement to be
entered into between us and a bank or trust company, as rights agent, that we will name in the applicable prospectus supplement.
The rights agent will act solely as our agent in connection with the rights and will not assume any obligation or relationship
of agency or trust for or with any holders of rights certificates or beneficial owners of rights.
The prospectus supplement relating to any rights that we offer
will include specific terms relating to the offering, including, among other matters:
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the date of determining the securityholders entitled to the rights distribution;
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the aggregate number of rights issued and the aggregate number of shares of common stock or aggregate principal amount of debt securities purchasable upon exercise of the rights;
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the exercise price;
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the conditions to completion of the rights offering;
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the date on which the right to exercise the rights will commence and the date on which the rights will expire; and
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applicable tax considerations.
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Each right would entitle the holder of the rights to purchase
for cash the principal amount of shares of common stock or debt securities at the exercise price set forth in the applicable prospectus
supplement. Rights may be exercised at any time up to the close of business on the expiration date for the rights provided in the
applicable prospectus supplement. After the close of business on the expiration date, all unexercised rights will become void.
If less than all of the rights issued in any rights offering
are exercised, we may offer any unsubscribed securities directly to persons other than our security holders, to or through agents,
underwriters or dealers or through a combination of such methods, including pursuant to standby arrangements, as described in the
applicable prospectus supplement.
Plan of Distribution
We may sell the securities described in this prospectus through
underwriters or dealers, through agents, or directly to one or more purchasers or through a combination of these methods. The applicable
prospectus supplement will describe the terms of the offering of the securities, including:
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the name or names of any underwriters, if any, and if required, any dealers or agents, and the amount of securities underwritten or purchased by each of them, if any;
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the public offering price or purchase price of the securities from us and the net proceeds to us from the sale of the securities;
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any underwriting discounts and other items constituting underwriters’ compensation;
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any discounts or concessions allowed or re-allowed or paid to dealers; and
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any securities exchange or market on which the securities may be listed.
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We may distribute the securities from time to time in one or
more transactions at:
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a fixed price or prices, which may be changed;
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market prices prevailing at the time of sale;
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varying prices determined at the time of sale related to such prevailing market prices; or
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negotiated prices.
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Only underwriters named in the prospectus supplement will be
underwriters of the securities offered by the prospectus supplement.
If we use underwriters in the sale, the underwriters will either
acquire the securities for their own account and may resell the securities from time to time in one or more transactions at a fixed
public offering price or at varying prices determined at the time of sale, or sell the Shares on a “best efforts, minimum/maximum
basis” when the underwriters agree to do their best to sell the securities to the public. We may offer the securities to
the public through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. Any public
offering price and any discounts or concessions allowed or re-allowed or paid to dealers may change from time to time.
If we use a dealer in the sale of the securities being offered
pursuant to this prospectus or any prospectus supplement, the securities will be sold directly to the dealer, as principal. The
dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.
Shares of our common stock are quoted on the NASDAQ Capital
Market. Unless otherwise specified in the related prospectus supplement, all securities we offer, other than common stock, will
be new issues of securities with no established trading market. Any underwriter may make a market in these securities, but will
not be obligated to do so and may discontinue any market making at any time without notice. We may apply to list any series of
warrants or other securities that we offer on an exchange, but we are not obligated to do so. Therefore, there may not be liquidity
or a trading market for any series of securities.
We may sell the securities directly or through agents we designate
from time to time. We will name any agent involved in the offering and sale of securities and we will describe any commissions
we may pay the agent in the applicable prospectus supplement.
We may authorize agents or underwriters to solicit offers by
institutional investors to purchase securities from us at the public offering price set forth in the prospectus supplement pursuant
to delayed delivery contracts providing for payment and delivery on a specified date in the future. We will describe the conditions
to these contracts and the commissions we must pay for solicitation of these contracts in the applicable prospectus supplement.
In connection with the sale of the securities, underwriters,
dealers or agents may receive compensation from us or from purchasers of the securities for whom they act as agents in the form
of discounts, concessions or commissions. Underwriters may sell the securities to or through dealers, and those dealers may receive
compensation in the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of the securities, and any institutional
investors or others that purchase securities directly and then resell the securities, may be deemed to be underwriters, and any
discounts or commissions received by them from us and any profit on the resale of the securities by them may be deemed to be underwriting
discounts and commissions under the Securities Act.
We may provide agents and underwriters with indemnification
against particular civil liabilities, including liabilities under the Securities Act, or contribution with respect to payments
that the agents or underwriters may make with respect to such liabilities. Agents and underwriters may engage in transactions with,
or perform services for, us in the ordinary course of business.
In addition, we may enter into derivative transactions with
third parties (including the writing of options), or sell securities not covered by this prospectus to third parties in privately
negotiated transactions. If the applicable prospectus supplement indicates, in connection with such a transaction, the third parties
may, pursuant to this prospectus and the applicable prospectus supplement, sell securities covered by this prospectus and the applicable
prospectus supplement. If so, the third party may use securities borrowed from us or others to settle such sales and may use securities
received from us to close out any related short positions. We may also loan or pledge securities covered by this prospectus and
the applicable prospectus supplement to third parties, who may sell the loaned securities or, in an event of default in the case
of a pledge, sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement. The third party
in such sale transactions will be an underwriter and will be identified in the applicable prospectus supplement or in a post-effective
amendment.
To facilitate an offering of a series of securities, persons
participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the market price of the
securities. This may include over-allotments or short sales of the securities, which involves the sale by persons participating
in the offering of more securities than have been sold to them by us. In those circumstances, such persons would cover such over-allotments
or short positions by purchasing in the open market or by exercising the over-allotment option granted to those persons. In addition,
those persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market
or by imposing penalty bids, whereby selling concessions allowed to underwriters or dealers participating in any such offering
may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these
transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail
in the open market. Such transactions, if commenced, may be discontinued at any time. We make no representation or prediction as
to the direction or magnitude of any effect that the transactions described above, if implemented, may have on the price of our
securities.
Ratio of Earnings
to Fixed Charges
Our ratio of earnings to fixed charges for each of the five
(5) most recently completed fiscal years and any required interim periods will each be specified in a prospectus supplement or
in a document we file with the SEC and incorporate by reference pertaining to the issuance, if any, by us of debt securities in
the future.
Legal Matters
Kaufman & Canoles, P.C., Richmond, Virginia, will pass upon
the validity of the securities offered in this offering. The address of Kaufman & Canoles, P.C. is Two James Center, 14th Floor,
1021 E. Cary St., Richmond, VA 23219. Certain legal matters relating to the offering as to Chinese law will be passed upon for
us by Beijing Jintai (Tianjin) Law Firm, 1006 Junyue Building Tower B, No.18 Guizhou Road, Heping District, Tianjin 300051, People’s
Republic of China. Additional legal matters may be passed on for us, or any underwriters, dealers or agents, by counsel that we
will name in the applicable prospectus supplement.
Experts
The consolidated financial statements of our Company appearing
in our annual report on Form 10-K for the fiscal years ended June 30, 2013 and 2012 have been audited by Friedman LLP, independent
registered public accounting firm, as set forth in the reports thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of
such firm as experts in accounting and auditing.
Enforceability
of Civil Liabilities Under United States Federal Securities Laws and Other Matters
Although we are incorporated as a stock corporation under the
laws of Virginia, some of our directors and officers reside outside the United States, and a substantial portion of their assets
and our assets are or may be located in jurisdictions outside the United States. Therefore, it may be difficult for investors to
effect service of process within the United States upon our non-U.S. directors and officers or to recover against our company,
or our non-U.S. directors and officers on judgments of U.S. courts, including judgments predicated upon the civil liability provisions
of the U.S. federal securities laws. However, we may be served with process in the United States with respect to actions against
us arising out of or in connection with violations of U.S. federal securities laws relating to transactions covered by this prospectus
by serving CT Corporation, our U.S. agent irrevocably appointed for that purpose.
Where You Can Find More Information
We are a reporting company and file annual, quarterly and current
reports, proxy statements and other information with the SEC. This prospectus does not contain all of the information set forth
in the registration statement or the exhibits that are a part of the registration statement. You may read and copy the registration
statement and any document we file with the SEC at the public reference room maintained by the SEC at 100 F Street, N.E., Washington,
D.C. 20549. You may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. Our
filings with the SEC are also available to the public through the SEC’s Internet site at
http://www.sec.gov
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Information
Incorporated by Reference
The SEC allows us to “incorporate by reference”
into this prospectus the information we file with them. The information we incorporate by reference into this prospectus is an
important part of this prospectus. Any statement in a document we have filed with the SEC prior to the date of this prospectus
and which is incorporated by reference into this prospectus will be considered to be modified or superseded to the extent a statement
contained in this prospectus or any other subsequently filed document that is incorporated by reference into this prospectus modifies
or supersedes that statement. The modified or superseded statement will not be considered to be a part of this prospectus, except
as modified or superseded.
We incorporate by reference into this prospectus the information
contained in the following documents that we have filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), which is considered to be a part of this prospectus:
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our Annual Report on Form 10-K for the year ended June 30, 2013, filed on September 27, 2013;
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our Quarterly Reports on Form 10-Q for the quarters ended
September 30, 2013, filed on November 13, 2013, and December 31, 2013, filed on February 11, 2014;
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our Current Report on Form 8-K filed with the SEC on November 1, 2013, January 27, 2014 and February 3, 2014; and
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the description of the common stock, without par value per share, contained in the Registrant’s registration statement on Form S-1 filed with the Commission on May 12, 2008 (File Number 333-150858) pursuant to Section 12(b) of the Exchange Act, which incorporates by reference the description of the common stock, without par value per share, contained in the registration statement on Form S-1 filed with the Commission on January 11, 2008 (File Number 333-148611), and declared effective by the Commission on April 18, 2008, and any amendment or report filed with the Commission for purposes of updating such description.
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We also incorporate by reference all additional documents that
we file with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act that are filed after the effective date
of the registration statement of which this prospectus is a part and prior to the termination of the offering of securities offered
pursuant to this prospectus. We also incorporate by reference all additional documents that we file with the SEC pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act that are filed after the filing date of the registration statement of which this
prospectus is a part and prior to effectiveness of that registration statement. We are not, however, incorporating, in each case,
any documents or information that we are deemed to “furnish” and not file in accordance with SEC rules.
You may obtain a copy of these filings, without charge, by writing
or calling us at:
Sino-Global Shipping America, Ltd.
36-56 39th Avenue, Suite 305
Flushing, New York 11354
(718) 888-1814
Attn: Investor Relations
1,500,000 Shares of Common Stock
SINO-GLOBAL SHIPPING AMERICA, LTD.
Prospectus
Supplement
February 15, 2017
$10,000,000
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