Baoshinn Corp (OTC BB:BHNN)

 The accumulative loss has raised substantial doubt about our ability to continue as a going concern. These doubts were outlined in our independent auditor’s report on our consolidated financial statements for the year ended December 31, 2010, which are included in our annual report on Form 10-K/A. Although our consolidated financial statements raise substantial doubt about our ability to continue as a going concern, they did not include any adjustments relating to recoverability and classification of recorded assets, or the amounts or classifications of liabilities that might be necessary in the event we cannot continue as a going concern. Certain of our shareholders have verbally agreed to provide continuing financial support to us for future losses we may incur.

Baoshinn CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Stated in US Dollars)

 

Financing Our Capital Expenditures

During the next 12 months, the Company anticipates that it will implement its business plan for expanding into the China market. The initial investment is expected to be approximately US$1,200,000. These funds will be used for setting up a China flagship company in Shanghai. Expenses are expected to include obtaining travel licenses, office renovation, purchase of communication equipment, purchase of computers and office equipment. An additional investment of US$1,500,000 may be required as the working capital for the Shanghai office.

Our primary source of capital has been from sales and issuances of equity securities. Our primary use of capital has been for the expansion and development of our business, and the associated need for increased working capital. Our working capital requirements are expected to increase in line with the growth of our business. We have no lines of credit or other bank financing arrangements. We expect that working capital requirements will be funded through a combination of our existing funds, cash flow from operations, private loans, and issuance of equity and debt securities.

BAOSHINN CORPORATION

CONSOLIDATED STATEMENT OF OPERATIONS

(Stated in US Dollars)

	For Year Ended  31 Dec, 2010		For Year Ended 31 Dec, 2009		For 9 Months Ended  31 Dec, 2008
	$		$		$
Retail and Corporate revenue	30,161,944		23,912,150		24,704,983
Commission from travel booking services	117,873		156,544		113,117
Incentive commissions	320,610		239,045		304,787
Net sales	30,600,427		24,307,739		25,122,887
Cost of sales	(29,252,793)		(23,008,756)		(24,076,245)
Gross profit	1,347,634		1,298,983		1,046,642
Other operating income – Note 5	59,226		54,984		57,725
Depreciation	(21,601)		(27,821)		(28,866)
Administrative and other operating expenses	(1,285,542)		(1,298,752)		(1,224,028)
Income/(Loss) from operations	99,717		27,394		(148,527)
Other non-operating income - Note 6	4,917		1,149		10,266
Interest expenses – Note 7	(736)		(1,230)		(8,083)
Income/(Loss) before income taxes	103,898		27,313		(146,344)
Income taxes - Note 8	(24,433)		(6,176)		-
Net Income/(Loss)	79,465		21,137		(146,344)
Non-controlling interest	(53,711)		(15,978)		2,171
Net Income/(Loss)	25,754		5,159		(144,173)
Earning/(Loss) per share of common stock – Note 4
- Basic	0.12 cents		0.02 cents		(0.67) cents
- Diluted	0.12 cents		0.02 cents		(0.67) cents
Weighted average number of common stock – Note 4
- Basic	21,400,000		21,400,000		21,400,000
- Diluted	21,688,504		21,623,860		21,400,000

GeoTeam Note: Fourth Quarter 2010 vs. 2009 EPS was $(0.09) vs. nil.

For the year ended December 31, 2010, the Company has experienced an increase in sales revenues, and the Company was recognized by Eva Airline as its top selling agent in Hong Kong. Eva Airlines operates both short haul routes within South East Asia and long haul routes including North America and Europe. The company has also been appointed as a first tier agent for two additional airlines, i.e., HongKong Airlines & HongKong Express. Hong Kong Airlines mainly operates flights originating from Hong Kong to destinations in Asian cities, including Bangkok, Kuala Lumpur, Manila, and major cities in Japan. HongKong express mainly operates flights originating from Hong Kong to mainland China, second tier cities, including Changsha, Fuzhou, Hangzhou, Hefei, Guiyang etc.

Risk Factors section was omitted from the 2010 10K.