UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 
 
 FORM
10-Q
 
  x
              QUARTERLY REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For
the quarterly period ended September 30, 2009
  o
              TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the transition period from
______to______.
 
 WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (Exact
name of registrant as specified in Charter)
  TEXAS
                        
                        333-142908
                        
                        20-5933927(State
      or other jurisdiction of
                          incorporation
      or organization)
                        
                        (Commission
      File No.)
                        
                        (IRS
      Employee Identification
No.)
 
 305
Zhongshan Road, Shahekou District, Dalian, The People’s Republic of China
116021
 (Address
of Principal Executive Offices)
 
  86-411-39660000
 (Issuer
Telephone number)
  
 (Former
Name or Former Address if Changed Since Last Report)
 
 Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the issuer was required to file such reports), and (2)has been
subject to such filing requirements for the past 90 days. Yes x     Noo
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes oNo o
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company filer.
 See definition of “accelerated filer” and “large accelerated filer” in
Rule 12b-2 of the Exchange Act (Check one):
  Large
      Accelerated Filer o
                Accelerated
      Filer o
                Non-Accelerated
      Filer o
                Smaller
      Reporting Company x
 
 Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2
of the Exchange Act. Yes o     No x
 
 State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of November 11, 2009:  130,000,000 shares of common
stock.
  
  TABLE
OF CONTENTS
 
 PART
      I FINANCIAL INFORMATION
                    3ITEM
      1.
                    FINANCIAL
      STATEMENTS
                    3ITEM
      2.
                    MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                    4ITEM
      3.
                    QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                    18ITEM
      4T.
                    CONTROLS
      AND PROCEDURES
                    18PART
      II OTHER INFORMATION
                    19ITEM
      1.
                    LEGAL
      PROCEEDINGS
                    19ITEM
      1A.
                    RISK
      FACTORS
                    19ITEM
      2.
                    UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
                    19ITEM
      3.
                    DEFAULTS
      UPON SENIOR SECURITIES
                    19ITEM
      4.
                    SUBMISSION
      OF MATTERS TO A VOTE OF SECURITYHOLDERS
                    19ITEM
      5.
                    OTHER
      INFORMATION
                    19ITEM
      6.
                    EXHIBITS
                    20SIGNATURES
                    25
  - 2 -
  PART
I
 FINANCIAL
INFORMATION
 
 ITEM
1. FINANCIAL STATEMENTS
 
 WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 
 FINANCIAL
STATEMENTS
 TABLE
OF CONTENTS
 
 PageCONDENSED
      CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2009 (UNAUDITED) AND
      DECEMBER 31, 2008
                    
                    F-2CONDENSED
      CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
      FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
      (UNAUDITED)
                    
                    F-4CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER
      30, 2009 AND 2008 (UNAUDITED)
                    
                    F-6NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE
      MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (UNAUDITED)
                    
                    F-8
  F-1
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 CONDENSED CONSOLIDATED
BALANCE SHEETS
 
 ASSETSSeptember
      30, 2009
                          
                          
                          December
      31, 2008(Unaudited)CURRENT
      ASSETSCash
      and cash equivalents
                          
                          $
                          2,350,240
                          
                          
                          $
                          8,233,588Accounts
      receivable
                          
                          
                          1,943,962
                          
                          
                          
                          1,719,599Inventories
                          
                          
                          2,322,210
                          
                          
                          
                          2,560,644Prepayments
                          
                          
                          876,913
                          
                          
                          
                          763,931Other
      receivables and other assets
                          
                          
                          721,612
                          
                          
                          
                          56,902Deferred
      tax assets
                          
                          
                          -
                          
                          
                          
                          5,427Due
      from related parties
                          
                          
                          4,761,251
                          
                          
                          
                          760,256Other
      assets of discontinued operation
                          
                          
                          -
                          
                          
                          
                          2,305Total
      current assets
                          
                          
                          12,976,188
                          
                          
                          
                          14,102,652Vessels,
      net
                          
                          
                          43,595,882
                          
                          
                          
                          25,087,795Fixed
      assets, net
                          
                          
                          177,601
                          
                          
                          
                          236,194Deferred
      dry dock fees, net
                          
                          
                          9,862,221
                          
                          
                          
                          11,034,686Other
      intangible assets
                          
                          
                          3,657
                          
                          
                          
                          3,647Long-term
      assets of discontinued operation
                          
                          
                          -
                          
                          
                          
                          1,324,112Total
      long-term assets
                          
                          
                          53,639,361
                          
                          
                          
                          37,686,434TOTAL
      ASSETS
                          
                          $
                          66,615,549
                          
                          
                          $
                          51,789,086
  See
accompanying notes to the condensed consolidated financial
statements.
  F-2
 
 WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 CONDENSED CONSOLIDATED
BALANCE SHEETS
 
 LIABILITIES AND SHAREHOLDERS’
      EQUITYSeptember
      30, 2009
                        
                        
                        December
      31, 2008(Unaudited)CURRENT
      LIABILITIESAccounts
      payable
                        
                        $
                        5,634,815
                        
                        
                        $
                        5,026,648Short-term
      bank loan
                        
                        
                        1,170,001
                        
                        
                        
                        -Current
      portion of long-term loans
                        
                        
                        4,128,908
                        
                        
                        
                        2,811,672Current
      portion of long-term notes payable, net of discount of $649,123 at
      September 30, 2009
                        
                        
                        3,366,950
                        
                        
                        
                        273,469Advances
      from customers
                        
                        
                        910,344
                        
                        
                        
                        629,594Accrued
      expenses
                        
                        
                        876,757
                        
                        
                        
                        1,145,872Due
      to related parties
                        
                        
                        3,921,031
                        
                        
                        
                        768,586Taxes
      payable
                        
                        
                        8,647
                        
                        
                        
                        9,707Deferred
      tax liabilities
                        
                        
                        9,309
                        
                        
                        
                        -Deferred
      revenue
                        
                        
                        131,828
                        
                        
                        
                        97,506Other
      current liabilities
                        
                        
                        1,759,237
                        
                        
                        
                        1,536,850Other
      liabilities of discontinued operation
                        
                        
                        -
                        
                        
                        
                        125,479Total
      current liabilities
                        
                        
                        21,917,827
                        
                        
                        
                        12,425,383LONG-TERM
      LIABILITIESLong-term
      portion of loans
                        
                        
                        16,391,772
                        
                        
                        
                        5,327,762Long-term
      portion of notes payable, net of discount of $1,579,962 at September 30,
      2009
                        
                        
                        2,594,615
                        
                        
                        
                        2,954,393Deferred
      tax liabilities
                        
                        
                        3,250
                        
                        
                        
                        5,231Total
      long-term liabilities
                        
                        
                        18,989,637
                        
                        
                        
                        8,287,386TOTAL
      LIABILITIES
                        
                        
                        40,907,464
                        
                        
                        
                        20,712,769COMMITMENTS
      AND CONTINGENCIESSHAREHOLDERS’
      EQUITYCommon
      stock, $0.001 per share; 200,000,000 shares authorized, 130,000,000 shares
      issued and outstanding at September 30, 2009 and December 31, 2008,
      respectively
                        
                        
                        130,000
                        
                        
                        
                        130,000Additional
      paid-in capital
                        
                        
                        3,322,966
                        
                        
                        
                        3,322,966Accumulated
      other comprehensive income
                        
                        
                        716,876
                        
                        
                        
                        758,511Retained
      earnings
                        
                        
                        21,538,243
                        
                        
                        
                        26,864,840Total
      Shareholders’ Equity
                        
                        
                        25,708,085
                        
                        
                        
                        31,076,317TOTAL
      LIABILITIES AND SHAREHOLDERS’ EQUITY
                        
                        $
                        66,615,549
                        
                        
                        $
                        51,789,086
  See
accompanying notes to the condensed consolidated financial
statements.
 F-3
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF
 (LOSS) INCOME AND
COMPREHENSIVE (LOSS) INCOME
 (UNAUDITED)
 
 Three
      Months Ended September 30,
                    
                    
                    Nine
      Months Ended September 30,2009
                    
                    
                    2008
                    
                    
                    2009
                    
                    
                    2008REVENUES
                    
                    $
                    11,841,798
                    
                    
                    $
                    22,302,487
                    
                    
                    $
                    36,368,521
                    
                    
                    $
                    70,552,447COSTS
      AND EXPENSESVessel
      operating expenses
                    
                    
                    9,586,920
                    
                    
                    
                    11,277,732
                    
                    
                    
                    30,757,559
                    
                    
                    
                    39,994,317Service
      costs
                    
                    
                    505,173
                    
                    
                    
                    1,418,584
                    
                    
                    
                    2,488,842
                    
                    
                    
                    4,012,632Depreciation
      and amortization
                    
                    
                    1,770,878
                    
                    
                    
                    1,856,199
                    
                    
                    
                    5,513,270
                    
                    
                    
                    5,563,243General
      and administrative expenses
                    
                    
                    748,348
                    
                    
                    
                    1,702,528
                    
                    
                    
                    2,057,126
                    
                    
                    
                    2,492,468Selling
      expenses
                    
                    
                    88,907
                    
                    
                    
                    -
                    
                    
                    
                    253,064
                    
                    
                    
                    -TOTAL
      COSTS AND EXPENSES
                    
                    
                    12,700,226
                    
                    
                    
                    16,255,043
                    
                    
                    
                    41,069,861
                    
                    
                    
                    52,062,660OTHER
      EXPENSESInterest
      expense, net
                    
                    
                    (43,478
                    )
                    
                    
                    (266,404
                    )
                    
                    
                    (131,978
                    )
                    
                    
                    (540,129
                    )Other
      expense, net
                    
                    
                    (149,229
                    )
                    
                    
                    (505,366
                    )
                    
                    
                    (218,667
                    )
                    
                    
                    (468,069
                    )(LOSS)
      INCOME FROM CONTINUING OPERATIONS   BEFORE INCOME
      TAXES
                    
                    
                    (1,051,135
                    )
                    
                    
                    5,275,674
                    
                    
                    
                    (5,051,985
                    )
                    
                    
                    17,481,589INCOME
      TAX EXPENSE
                    
                    
                    (16,049
                    )
                    
                    
                    (37,902
                    )
                    
                    
                    (49,060
                    )
                    
                    
                    (133,954
                    )(LOSS)
      INCOME FROM CONTINUING OPERATIONS
                    
                    
                    (1,067,184
                    )
                    
                    
                    5,237,772
                    
                    
                    
                    (5,101,045
                    )
                    
                    
                    17,347,635DISCONTINUED
      OPERATIONGain
      from disposition of discontinued operation
                    
                    
                    5,195
                    
                    
                    
                    -
                    
                    
                    
                    5,195
                    
                    
                    
                    -(Loss)
      income from discontinued operation
                    
                    
                    (108,004
                    )
                    
                    
                    60,704
                    
                    
                    
                    (230,747
                    )
                    
                    
                    74,556NET
      (LOSS) GAIN FROM DISCONTINUED OPERATION
                    
                    
                    (102,809
                    )
                    
                    
                    60,704
                    
                    
                    
                    (225,552
                    )
                    
                    
                    74,556NET
      (LOSS) INCOME
                    
                    
                    (1,169,993
                    )
                    
                    
                    5,298,476
                    
                    
                    
                    (5,326,597
                    )
                    
                    
                    17,422,191OTHER
      COMPREHENSIVE INCOMEForeign
      currency translation gain (loss)
                    
                    
                    3,863
                    
                    
                    
                    89,589
                    
                    
                    
                    (41,635
                    )
                    
                    
                    268,768COMPREHENSIVE
      (LOSS) INCOME
                    
                    $
                    (1,166,130
                    )
                    
                    $
                    5,388,065
                    
                    
                    $
                    (5,368,232
                    )
                    
                    $
                    17,690,959
    F-4
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF
 (LOSS) INCOME AND
COMPREHENSIVE (LOSS) INCOME
 (UNAUDITED)
 
 Three
      Months Ended September 30,
                    
                    
                    Nine
      Months Ended September 30,2009
                    
                    
                    2008
                    
                    
                    2009
                    
                    
                    2008Weighted
      average shares outstanding-
      Basic
                    
                    
                    130,000,000
                    
                    
                    
                    119,465,761
                    
                    
                    
                    130,000,000
                    
                    
                    
                    111,135,766-
      Diluted
                    
                    
                    130,000,000
                    
                    
                    
                    119,465,761
                    
                    
                    
                    130,000,000
                    
                    
                    
                    111,135,766(Loss)
      income from continuing operations per share-
      Basic
                    
                    $
                    (0.01
                    )
                    
                    $
                    0.04
                    
                    
                    $
                    (0.04
                    )
                    
                    $
                    0.16-
      Diluted
                    
                    $
                    (0.01
                    )
                    
                    $
                    0.04
                    
                    
                    $
                    (0.04
                    )
                    
                    $
                    0.16Gain
      from disposition of discontinued operation per share-
      Basic
                    
                    $
                    0.00
                    
                    
                    $
                    -
                    
                    
                    $
                    0.00
                    
                    
                    $
                    --
      Diluted
                    
                    $
                    0.00
                    
                    
                    $
                    -
                    
                    
                    $
                    0.00
                    
                    
                    $
                    -Income
      (loss) from discontinued operation per share-
      Basic
                    
                    $
                    (0.00
                    )
                    
                    $
                    0.00
                    
                    
                    $
                    (0.00
                    )
                    
                    $
                    0.00-
      Diluted
                    
                    $
                    (0.00
                    )
                    
                    $
                    0.00
                    
                    
                    $
                    (0.00
                    )
                    
                    $
                    0.00Net
      (loss) income per share-
      Basic
                    
                    $
                    (0.01
                    )
                    
                    $
                    0.04
                    
                    
                    $
                    (0.04
                    )
                    
                    $
                    0.16-
      Diluted
                    
                    $
                    (0.01
                    )
                    
                    $
                    0.04
                    
                    
                    $
                    (0.04
                    )
                    
                    $
                    0.16
  
 F-5
 
 WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 
 Nine
      Months Ended September 30,2009
                          
                          
                          2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      (loss) income
                          
                          $
                          (5,326,597
                          )
                          
                          $
                          17,422,191Net
      loss (gain) from discontinued operation
                          
                          
                          225,552
                          
                          
                          
                          (74,556
                          )(Loss)
      income from continuing operations
                          
                          
                          (5,101,045
                          )
                          
                          
                          17,347,635Adjustments
      to reconcile net (loss) income to net cash (used in) provided by operating
      activities:Depreciation
                          
                          
                          2,446,262
                          
                          
                          
                          2,694,711Amortization
      of deferred dry dock fees
                          
                          
                          3,067,008
                          
                          
                          
                          2,868,532Discount
      on long-term notes payable
                          
                          
                          13,345
                          
                          
                          
                          33,334Amortization
      of capital lease obligations
                          
                          
                          -
                          
                          
                          
                          53,592Deferred
      taxes
                          
                          
                          12,754
                          
                          
                          
                          127,547Changes
      in operating assets and liabilities:(Increase)
      Decrease In:Accounts
      receivable
                          
                          
                          (224,363
                          )
                          
                          
                          (479,510
                          )Inventories
                          
                          
                          238,433
                          
                          
                          
                          635,722Prepayments
                          
                          
                          (110,677
                          )
                          
                          
                          (514,266
                          )Other
      receivables and other assets
                          
                          
                          (665,107
                          )
                          
                          
                          2,646,288Deferred
      revenue
                          
                          
                          34,323
                          
                          
                          
                          -Deferred
      dry dock fees
                          
                          
                          (1,977,352
                          )
                          
                          
                          (1,350,228
                          )Increase
      (Decrease) In:Accounts
      payable
                          
                          
                          509,288
                          
                          
                          
                          (1,589,793
                          )Advance
      from customers
                          
                          
                          280,750
                          
                          
                          
                          (1,340,952
                          )Accrued
      expenses
                          
                          
                          (295,714
                          )
                          
                          
                          (276,619
                          )Taxes
      payable
                          
                          
                          (1,060
                          )
                          
                          
                          (41,659
                          )Other
      current liabilities
                          
                          
                          222,386
                          
                          
                          
                          710,733Net
      cash (used in) provided by continuing operations
                          
                          
                          (1,550,769
                          )
                          
                          
                          21,525,067Net
      cash provided by discontinued operation
                          
                          
                          1,170,483
                          
                          
                          
                          399,479Net
      cash (used in) provided by operating activities
                          
                          
                          (380,286
                          )
                          
                          
                          21,924,546CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of a vessel
                          
                          
                          (20,881,125
                          )
                          
                          
                          -Purchases
      of fixed assets
                          
                          
                          (3,744
                          )
                          
                          
                          (105,981
                          )Proceeds
      from disposition of discontinued operation, net
                          
                          
                          1,272,685
                          
                          
                          
                          -Net
      cash used in investing activities
                          
                          
                          (19,612,184
                          )
                          
                          
                          (105,981
                          )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from/(repayments of) short-term loans
                          
                          
                          1,170,001
                          
                          
                          
                          (1,000,000
                          )Repayments
      of  long-term loans
                          
                          
                          (2,108,754
                          )
                          
                          
                          (2,108,754
                          )Proceeds
      from long-term loans
                          
                          
                          14,490,000
                          
                          
                          
                          -Proceeds
      from/(repayments of)  long-term notes payable
                          
                          
                          2,720,359
                          
                          
                          
                          (580,239
                          )Repayments
      of capital lease obligations
                          
                          
                          -
                          
                          
                          
                          (1,401,400
                          )Repayments
      to related parties
                          
                          
                          (5,273,294
                          )
                          
                          
                          (3,279,382
                          )Proceeds
      from related parties
                          
                          
                          3,152,445
                          
                          
                          
                          37,370,259Payment
      of dividends
                          
                          
                          -
                          
                          
                          
                          (48,213,871
                          )Net
      cash provided by (used in) financing activities
                          
                          
                          14,150,757
                          
                          
                          
                          (19,213,387
                          )
  See
accompanying notes to the unaudited condensed consolidated financial
statements.
 F-6
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 
 Nine
      Months Ended September 30,2009
                            
                            
                            2008NET
      (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
                            
                            
                            (5,841,713
                            )
                            
                            
                            2,605,178Effect
      of exchange rate changes on cash
                            
                            
                            (41,635
                            )
                            
                            
                            278,307Cash
      and cash equivalents at beginning of period
                            
                            
                            8,233,588
                            
                            
                            
                            2,673,258CASH AND CASH EQUIVALENTS AT END OF
      YEAR
                            
                            $
                            2,350,240
                            
                            
                            $
                            5,556,743SUPPLEMENTARY CASH FLOW
      INFORMATION:Interest
      paid
                            
                            $
                            242,902
                            
                            
                            $
                            401,175Income
      taxes paid
                            
                            $
                            36,597
                            
                            
                            $
                            53,859
 
  F-7
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 1.
                ORGANIZATION
      AND PRINCIPAL ACTIVITIES
 
 Winland
Online Shipping Holdings Co. (Formerly Trip Tech, Inc.) was incorporated under
the laws of Texas on November 17, 2006. On September 23, 2008, Trip Tech, Inc.
changed its name to Winland Online Shipping Holdings Corporation
(“WLOL”).
 
 On August
12, 2008, Trip Tech, Inc. (“Trip Tech”) entered into a share exchange agreement
with SkyAce Group Limited (“SkyAce”) and Pioneer Creation Holdings Limited
(“PCH”). PCH is the sole shareholder of SkyAce. As a result of the share
exchange, Trip Tech acquired all of the issued and outstanding securities of
SkyAce from PCH in exchange for 76,925,000 newly-issued shares of Trip Tech’s
common stock, par value $0.001 per share and 1,000,000 shares of Series A
Preferred Stock, which such Preferred Shares would be converted into 30,000,000
shares of Common upon Trip Tech amending its Articles of Incorporation to
sufficiently increase the number of authorized shares of Common Stock in order
to effect such issuance. SkyAce became a wholly-owned subsidiary of WLOL. At the
time of the merger, WLOL had 23,075,000 shares of common stock. On September 23,
2008, the authorized shares were increased to 200,000,000 shares. On Octobers
23, 2008, 1,000,000 shares of preferred stock, par value of $0.001 were
converted into 30,000,000 shares of common stock. As a result, the total
outstanding shares of common stock increased to 130,000,000, and PCH owned
82.25% of the voting capital stock of WLOL.
 
 The
exchange transaction was accounted for as a reverse acquisition in accordance
with Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) 805 (formerly Statement of Financial Accounting Standards
(“SFAS”) No. 141, BusinessCombinations). The
acquisition was accounted for as the recapitalization of SkyAce. Accordingly,
the condensed consolidated and combined statements of income include the results
of operations of SkyAce from January 1, 2008, and the results of operations of
WLOL from the acquisition date through September 30, 2009.
 
 SkyAce
declared a dividend of $48,213,871 on December 31, 2007 and paid it on March 31,
2008.
 
 WLOL and
subsidiaries (the “Company”) is mainly engaged in a comprehensive range of
online and off-line international shipping services such as dry bulk shipping,
chartering, shipping agency, and international logistics.
 
 2.
                LIQUIDITY
  The
Company incurred a net loss of $5,326,597, and cash used in operations was
$380,286 for the nine months ended September 30, 2009. The Company also had a
working capital deficit of $8,941,639 at September 30, 2009. This was
principally due to the Company using cash to purchase a new vessel, and to pay
long-term loans. To improve liquidity, the Company changed the registrations of
the flags of two of its vessels. With new registrations, the Company believes
dry dock fees will continue to decrease while such vessels keep meeting the
standards of certification and inspection. To increase its cash resources, the
Company obtained a short-term bank loan of $1,170,001 (See Note 8), a long-term
loan of $14,490,000 (see Note 9), and a long-term note of $3,000,000 (see Note
10). The long-term debts principally were used to purchase a new
vessel.
  F-8
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 3.
                  SUMMARY
      OF SIGNIFICANT ACCOUNTING
POLICIES
 
 (a)
                Basis
      of Presentation
 
 The
unaudited condensed consolidated financial statements of Winland Online Shipping
Holdings Corporation have been prepared in accordance with U.S. generally
accepted accounting principles for interim financial information and pursuant to
the requirements for reporting on Form 10-Q, Accordingly, they do not include
all the information and footnotes required by accounting principles generally
accepted in the United States of America for annual financial statements.
However, the information included in these interim financial statements reflects
all adjustments (consisting solely of normal recurring adjustments) which are,
in the opinion of management, necessary for the fair presentation of the
consolidated financial position and the consolidated results of operations.
Results shown for interim periods are not necessarily indicative of the results
to be obtained for a full year. The condensed consolidated balance sheet
information as of December 31, 2008 was derived from the audited consolidated
financial statements included in the Company’s Annual Report on Form 10-K. These
interim financial statements should be read in conjunction with that
report.
 
 On July
1, 2009, the Company adopted Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) 105-10 (formerly Statement of
Financial Accounting Standards (“SFAS”) No. 168, The FASB Accounting Standards
Codification and Hierarchy of Generally Accepted Accounting Principles, a
replacement of FASB Statement No. 162). ASC 105-10 establishes the FASB ASC as
the source of authoritative accounting principles recognized by the FASB to be
applied in preparation of financial statements in conformity with generally
accepted accounting principles in the United States of America. The adoption of
this standard had no impact on the Company’s consolidated financial
statements.
 
 (b)
                Principles
      of Consolidation
 
 The
consolidated financial statements include the accounts of WLOL and its
subsidiaries and variable interest entities (“VIEs”) (the “Company”) as
follows:
 
 I.
Subsidiaries and Holding Companies:
 
 a)
                SkyAce
      is wholly-owned subsidiary of WLOL and incorporated under the law of
      British Virgin islands (“BVI”).
 
 b)
                Plentimillion
      Group Limited (“PGL”) is a wholly-owned subsidiary of SkyAce and
      incorporated in BVI.
 
 c)
                Best
      Summit Enterprise Limited (“BSL”) is a wholly-owned subsidiary of SkyAce
      and incorporated in BVI.
 
 d)
                Hong
      Kong Wallis Development Limited (“Wallis”) is registered in Hong Kong and
      is a
      wholly-owned        subsidiary of
      BSL.
 
 e)
                Beijing
      Huate Xingye Technology Limited (“Huate”) was registered in the People’s
      Republic of China (“PRC”) on March 18, 2008 and is a wholly-owned
      subsidiary of Wallis.
 
 II.
Subsidiaries of PGL - Businesses in transportation and chartering:
 
 f)
                Winland
      Shipping Co., Limited, is registered in Hong
  Kong.
 
 g)
                Win
      Star Shipping Co., Limited, is incorporated and registered in St. Vincent
      and the Grenadines (“S.V.G.”).
 
 h)
                Bodar
      Shipping Co., Limited, is incorporated and registered in
      S.V.G.
 
 i)
                Winland
      Dalian Shipping S.A. is incorporated in Panama and registered in Hong
      Kong,
 
 j)
                Treasure
      Way Shipping Limited is incorporated and registered in Hong
      Kong.
  F-9
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 3.
                SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
 
 (b)
                Principles
      of Consolidation (Continued)
 
 k)
                Win
      Eagle Shipping Co., Limited, is incorporated and registered in Valletta,
      Malta.
 
 l)
                Win
      Ever Shipping Co., Limited, is incorporated and registered in Valletta,
      Malta.
 
 m)
                Win
      Bright Shipping Co., Limited, is incorporated and registered in Valletta,
      Malta.
 
 n)
                Kinki
      International Industrial Limited is registered in Hong Kong, managing
      chartering business of vessels.
 
 o)
                Bestline
      Shipping Limited is registered in Hong Kong, managing chartering business
      of vessels.
 
 p)
                Lancrusier
      Development Co., Limited is registered in Hong Kong, management and
      accounting of the above companies.
 
 q)
                Win
      Glory S.A. is incorporated in Panama, registered in Hong
    Kong.
 
 r)
                Win
      Grace Shipping Co., Limited is incorporated and registered in
      Malta.
 
 s)
                Win
      Hope Shipping Co., Limited is incorporated and registered in
      Malta.
 
 t)
                Win
      Moony Shipping Co., Limited is incorporated and registered in
      Malta.
 
 u)
                Bodar
      Shipping S.A. is incorporated and registered in
  Panama.
 
 v)
                  Win
      Moony Shipping S.A. is incorporated and registered in
    Panama.
 
 w)
                Bao
      Shun Shipping S.A. is incorporated and registered in
    Panama.
 
 x)
                  Winland
      International Shipping Co., Limited is incorporated and registered in Hong
      Kong.
 
 III. VIEs
- Businesses in Shipping Agency, Freight Forwarding and Online
Services:
 
 To comply
with the People’s Republic of China (“PRC”) laws and regulations, the Company
provides substantially all its shipping agency and freight forwarding services
and online services in China via its VIEs. These VIEs are wholly-owned by
certain related parties or directors of the Company.
 
 The
following is a summary of the VIEs of the Company:
 
 w)
                  Dalian
      Winland International Shipping Agency Co. Ltd. (“DWIS”) is incorporated
      under the laws of the PRC. The principal activity of DWIS is shipping
      agency services.
 
 x)
                  Dalian
      Winland International Logistic Co. Ltd. (“DWIL”) is incorporated under the
      laws of PRC. The principal activity of DWIL is freight forwarding
      services.
 
 y)
                Dalian
      Shipping Online Network Co. Ltd. (“DSON” or “Shipping Online”) is
      incorporated under the laws of PRC. The principal activities of DSON are
      providing online service for the
members.
  F-10
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 3.
                SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
 
 (b)
                Principles
      of Consolidation (Continued)
 
 On March
31, 2008, the Company entered into exclusive technical service agreements with
DWIS, DWIL and DSON under which the Company provides technical and other
services to DWIS, DWIL and DSON in exchange for substantially all net income of
DWIS, DWIL and DSON. All voting rights of DWIS, DWIL and DSON are assigned to
the Company, and the Company has the right to appoint all directors and senior
management personnel of DWIS, DWIL and DSON. In addition, shareholders of DWIS,
DWIL and DSON have pledged their equity interests in DWIS, DWIL and DSON as
collateral to the Company for the non-payment of the fees for technical and
other services due to the Company.
 
 The
Company applied the provision of ASC 810 (formerly SFAS No. 46R, Consolidation of Variable Interest
Entities), a variable interest entity (“VIE”) to be consolidated by a
company if that company is subject to a majority of the risk of loss for the
VIEs or is entitled to receive a majority of  the VIEs’ residual
returns. As a result, DWIS, DWIL and DSON became the Company’s VIEs since
January 1, 2008.
 
 The
Company adopted ASC 805 (formerly SFAS No. 141), which requires the consolidated
financial statements for the periods ended September 30, 2009 and 2008 be
presented as though the transfer of net assets or exchange of VIEs’ interests
had occurred at the beginning of the period. Financial statements of all VIEs
have been included in the Company’s consolidated financial statements as of
September 30, 2009 and December 31, 2008 and for the three and nine months ended
September 30, 2009 and 2008.
 
 Inter-company
accounts and transactions have been eliminated in consolidation.
 
 (c)
                Concentrations
 
 The
Company’s major customers who accounted for the following percentages of total
revenue and accounts receivable are as follows:
  Sales
                        
                        
                        Accounts ReceivableMajor
                          Customers
                        
                        For The Nine
                          Months Ended
                          September 30, 2009
                        
                        
                        For The Nine
                          Months Ended
                          September 30, 2008
                        
                        
                        September 30,
                          2009
                        
                        
                        December 31,
                          2008(Unaudited)
                        
                        
                        (Unaudited)
                        
                        
                        (Unaudited)Company
      A
                        
                        
                        8.06
                        %
                        
                        
                        0.38
                        %
                        
                        
                        6.89
                        %
                        
                        
                        -Company
      B
                        
                        
                        7.04
                        %
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Company
      C
                        
                        
                        3.51
                        %
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Company
      D
                        
                        
                        1.76
                        %
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Company
      E
                        
                        
                        -
                        
                        
                        
                        8.05
                        %
                        
                        
                        -
                        
                        
                        
                        0.47
                        %Company
      F
                        
                        
                        -
                        
                        
                        
                        6.24
                        %
                        
                        
                        -
                        
                        
                        
                        -Company
      G
                        
                        
                        -
                        
                        
                        
                        4.41
                        %
                        
                        
                        -
                        
                        
                        
                        -
  F-11
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 3.
                SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
 
 (c)
                Concentrations
      (Continued)
 
 The
Company’s major oil suppliers who accounted for the following percentages of
total oil purchases and total accounts payable are as follows:
  Oil Purchases
                        
                        
                        Accounts PayableMajor
                          Suppliers
                        
                        For The Nine
                          Months Ended
                          September 30, 2009
                        
                        
                        For The Nine
                          Months Ended
                          September 30, 2008
                        
                        
                        September 30,
                          2009
                        
                        
                        December 31,
                          2008(Unaudited)
                        
                        
                        (Unaudited)
                        
                        
                        (Unaudited)Company
      H
                        
                        
                        19.77
                        %
                        
                        
                        26.34
                        %
                        
                        
                        2.87
                        %
                        
                        
                        2.08
                        %Company
      I
                        
                        
                        18.63
                        %
                        
                        
                        11.37
                        %
                        
                        
                        -
                        
                        
                        
                        6.57
                        %Company
      J
                        
                        
                        10.64
                        %
                        
                        
                        31.00
                        %
                        
                        
                        2.57
                        %
                        
                        
                        -Company
      K
                        
                        
                        10.32
                        %
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Company
      L
                        
                        
                        9.86
                        %
                        
                        
                        -
                        
                        
                        
                        0.51
                        %
                        
                        
                        -Company
      M
                        
                        
                        -
                        
                        
                        
                        10.78
                        %
                        
                        
                        -
                        
                        
                        
                        -Company
      N
                        
                        
                        -
                        
                        
                        
                        7.14
                        %
                        
                        
                        -
                        
                        
                        
                        -
 
 (d)
                Use
      of Estimates
 
 The
preparation of the consolidated financial statements in conformity with
generally accepted accounting principles in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting periods.
Management makes these estimates using the best information available at the
time the estimates are made. Actual results could differ materially from those
estimates.
 
  F-12
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 3.
                SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
 
 (e)
                  Fair
      Value of Financial
Instruments
  Fair Value of Financial Instruments-  ASC 820-10 (formerly SFAS 157) establishes a three-tier fair
value hierarchy, which prioritizes the inputs used in measuring fair value. The
hierarchy prioritizes the inputs into three levels based on the extent to which
inputs used in measuring fair value are observable in the market.
  These
tiers include:
  (I)
                Level 1—defined
      as observable inputs such as quoted prices in active
    markets;
 (II)
                Level 2—defined
      as inputs other than quoted prices in active markets that are either
      directly or indirectly observable;
and
 (III)
                Level 3—defined
      as unobservable inputs in which little or no market data exists, therefore
      requiring an entity to develop its own
  assumptions.
 
 The
assets measured at fair value on a recurring basis subject to the disclosure
requirements of ASC 820-10 as of September 30, 2009 are as follows:
 
 Fair Value Measurements at Reporting Date UsingCarrying
                      Value as of
                      September 30,
                      2009
                    
                    
                    Quoted Prices in
                      Active Markets for
                      Identical Assets
                      (Level 1)
                    
                    
                    Significant
                      Other
                      Observable
                      Inputs
                      (Level 2)
                    
                    
                    Significant
                      Unobservable
                      Inputs
                      (Level 3)Cash
      and cash equivalents
                    
                    $
                    2,350,240
                    
                    
                    $
                    2,350,240
                    
                    
                    $
                    -
                    
                    
                    $
                    -
 
 Cash and
cash equivalents consist primarily of highly rated money market funds at a
variety of well-known institutions with original maturities of three months or
less. The original cost of these assets approximates fair value due to their
short term maturity.
 
 (f)
                  Revenue
      Recognition
 
 Revenue
is recognized based on the following four criteria:
 
 (I)
                The
      amount of revenue can be measured
reliably;
 
 (II)
                It
      is probable that the economic benefits will flow to the
      Company;
 
 (III)
                The
      stage of completion at the balance sheet date can be measured
      reliably;
 
 (IV)
                The
      costs incurred, or to be incurred can be measured
  reliably.
 
 For dry
bulk shipping service, the allocation of revenue between reporting periods is
based on relative transit time in each reporting period with expenses recognized
as incurred.
 
 For
chartering brokerage services, sales are recognized when the ship leaves
port.
 
 For
shipping agency and freight forwarding services, sales are recognized when the
ship leaves port.
 
 For
online services, sales are recognized according to the stage of completion in
accordance with the service period defined in executed
contracts.
  F-13
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 3.
                SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
 
 (g)
                  Income
      Tax
 
 Deferred
tax assets and liabilities are recognized for the future tax consequence
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to be
applied to taxable income in the years in which those temporary differences are
expected to reverse. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the statement of income in the period that
includes the enactment date. A valuation allowance is provided for deferred tax
assets if it is more likely than not these items will either expire before the
Company is able to realize their benefits, or that future deductibility is
uncertain. Also see Note 12.
 
 (h)
                  Earnings
      (Loss) Per Share
 
 Basic
earnings (loss) per share are computed by dividing income (loss) available to
common shareholders by the weighted-average number of common shares outstanding
during the period. Diluted earnings (loss) per share is computed similar to
basic earnings (loss) per share except that the denominator is increased to
include the number of additional common shares that would have been outstanding
if the potential common shares had been issued and if the additional common
shares were dilutive. The Company does not have dilutive securities for the
three and nine months ended September 30, 2009 and 2008.
 
 (i)
                  Foreign
      Currency Translation
 
 Assets
and liabilities of foreign subsidiaries are translated into United States
dollars at currency exchange rates in effect at period-end and revenues and
expenses are translated at average exchange rates in effect for the period.
Gains and losses resulting from foreign currency transactions are included in
results of operations. Gains and losses resulting from translation of foreign
subsidiaries balance sheets are included as a separate component of
shareholders’ equity.
  September 30,
                      2009
                    
                    
                    December 31,
                      2008
                    
                    
                    September 30,
                      2008(Unaudited)
                    
                    
                    (Audited)
                    
                    
                    (Unaudited)Period
      end RMB: US$ exchange rate
                    
                    
                    6.8376
                    
                    
                    
                    6.8542
                    
                    
                    
                    6.8551Average
      period RMB: US$ exchange rate
                    
                    
                    6.8455
                    
                    
                    
                    7.0842
                    
                    
                    
                    7.0846
 
 (j)
                  Comprehensive
      Income (Loss)
 
 Comprehensive
income (loss) is defined to include all changes in equity except those resulting
from investments by owners and distributions to owners. Among other disclosures,
all items that are required to be recognized under current accounting standards
as components of comprehensive income (loss) should be reported in a financial
statement that is presented with the same prominence as other financial
statements. The Company’s only current component of comprehensive income (loss)
is the foreign currency translation adjustment.
 
 (k)
                  Reporting
      Segments
 
 Accounting
standards require public business enterprises to report information about each
of their operating business segments that exceed certain quantitative threshold
or meet certain other reporting requirements. Operating business segments have
been defined as a component of an enterprise about which separate financial
information is available and is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. The Company has determined that there are three reportable
segments: (1) Dry bulk shipping, (2) Chartering brokerage, and (3) Other
activities segment.
  F-14
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 3.
                SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
 
 (k)
                Reporting
      Segments (Continued)
 
 Dry Bulk
Shipping Service – Dry bulk shipping service operates a fleet of thirteen
vessels that provides marine shipping services for dry and liquid bulk cargo
shipping. The segment contributed 47% and 67% of combined operating revenues for
the nine months ended September 30, 2009 and 2008, respectively.
 
 Chartering
Brokerage Service -Chartering
brokerage service provides ship chartering services for unrelated shipping
companies and shippers. The segment contributed 44% and 26% of consolidated
operating revenues for the nine months ended September 30, 2009 and 2008,
respectively.
 
 Other
activities - Other activities segment comprises shipping agency and freight
forwarding services, and online services. Shipping agency and freight forwarding
service provides transportation and logistic services to shippers in the PRC.
Online services provide internet services for members. The segment contributed
9% and 5% of consolidated operating revenues for the nine months ended September
30, 2009 and 2008, respectively.
 
 These
operating segments were not separately reported as they do not meet any of the
quantitative thresholds under  ASC 280-10 (formerly SFAS No. 131,
Disclosures about Segments of
an Enterprise and Related Information). Also see Note 14.
 
 (l)
                  Recent
      Accounting Pronouncements
 
 Effective
January 1, 2009, the Company adopted ASC 805 (formerly SFAS No. 141 (R),
Business Combinations).
ASC 805 requires an acquirer to measure the identifiable assets acquired,
the liabilities assumed, and any noncontrolling interest in the acquiree at
their fair values on the acquisition date, with goodwill being the excess value
over the net identifiable assets acquired. The adoption of ASC 805 did not have
any effect on the Company’s condensed consolidated financial statements as of
September 30, 2009.
 
 Effective
January 1, 2009, the Company adopted ASC 810-10 (formerly SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements). This Statement establishes accounting
and reporting standards that require the ownership interests in subsidiaries’
non-parent owners be clearly presented in the equity section of the balance
sheet; requires the amount of consolidated net income attributable to the parent
and to the noncontrolling interest be clearly identified and presented on the
face of the consolidated statement of income; requires that changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently; requires that when a
subsidiary is deconsolidated, any retained noncontrolling equity investment in
the former subsidiary be initially measured at fair value and the gain or loss
on the deconsolidation of the subsidiary be measured using the fair value of any
noncontrolling equity; requires that entities provide disclosures that clearly
identify the interests of the parent and the interests of the noncontrolling
owners. The adoption of ASC 810-10 did not have a significant effect on the
Company’s condensed consolidated financial statements as of September 30,
2009.
 
 Effective
January 1, 2009, the Company adopted ASC 815-10 (formerly SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities), which amends SFAS No. 133 and
expands disclosures to include information about the fair value of derivatives,
related credit risks and a company's strategies and objectives for using
derivatives. The adoption of ASC 815-10 did not have a material effect on the
condensed consolidated financial statements as of September 30,
2009.
  F-15
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 3.
                SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
 
 (l)
                  Recent
      Accounting Pronouncements
(Continued)
 
 Effective
January 1, 2009, the Company adopted ASC 815-40 (formerly Emerging Issues Task
Force (“EITF”) Issue No. 07-05, Determining Whether an Instrument
(or Embedded Feature) Is Indexed to an Entity’s Own Stock(“EITF
07-05”). ASC 815-40
addresses the determination of whether an instrument (or an embedded feature) is
indexed to an entity's own stock, which is the first part of the scope exception
in paragraph 11(a) of FASB SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities(“SFAS 133”). If an instrument (or an
embedded feature) that has the characteristics of a derivative instrument under
paragraphs 6–9 of SFAS 133 is indexed to an entity's own stock, it is still
necessary to evaluate whether it is classified in stockholders' equity (or would
be classified in stockholders' equity if it were a freestanding instrument).
Other applicable authoritative accounting literature, including Issues EITF
00-19, Accounting for
Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company Own Stock, and EITF 05-2, The Meaning of “Conventional Debt
Instrument” in Issue No. 00-19, provides guidance for determining whether
an instrument (or an embedded feature) is classified in stockholders' equity (or
would be classified in stockholders' equity if it were a freestanding
instrument). ASC 815-40 does not address that second part of the scope exception
in paragraph 11(a) of SFAS 133. The adoption of ASC 815-40 did not have a
material effect on the condensed consolidated financial statements as of
September 30, 2009.
 
 On
April 1, 2009, the FASB approved ASC 805 (formerly FSP FAS 141(R)-1, Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from
Contingencies),which amends Statement 141(R) and eliminates the distinction between
contractual and non-contractual contingencies. Under ASC 805, an acquirer is
required to recognize at fair value an asset acquired or liability assumed in a
business combination that arises from a contingency if the acquisition-date fair
value of that asset or liability can be determined during the measurement
period. If the acquisition-date fair value cannot be determined, the acquirer
applies the recognition criteria in SFAS No. 5, Accounting for Contingencies and
Interpretation 14, “Reasonable Estimation of the Amount of a Loss – and
interpretation of FASB Statement No. 5,” to determine whether the
contingency should be recognized as of the acquisition date or after it. The
Company is currently evaluating the potential impact of adopting this
statement.
 
 ASC
320-10 (formerly FSP FAS 115-2 and FAS 124-2) amends the other-than-temporary
impairment guidance in U.S. GAAP for debt securities to make the guidance more
operational and to improve the presentation and disclosure of
other-than-temporary impairments on debt and equity securities in the financial
statements. It did not amend existing recognition and measurement guidance
related to other-than-temporary impairments of equity securities. We are
required to adopt ASC 320-10 for our interim and annual reporting periods ending
after June 15, 2009. ASC 320-10 does not require disclosures for periods
presented for comparative purposes at initial adoption. ASC 320-10 requires
comparative disclosures only for periods ending after initial adoption. The
Company is currently evaluating the potential impact of adopting this
statement.
 
 On
April 9, 2009, the FASB also approved ASC 825-10 (formerly FSP FAS 107-1
and APB 28-1, Interim
Disclosures about Fair Value of Financial Instruments)to require disclosures
about fair value of financial instruments in interim period financial statements
of publicly traded companies and in summarized financial information required by
APB Opinion No. 28, Interim Financial Reporting.
We are required to adopt ASC 825-10 for our interim and annual reporting periods
ending after June 15, 2009. ASC 825-10 does not require disclosures for
periods presented for comparative purposes at initial adoption. ASC 825-10
requires comparative disclosures only for periods ending after initial adoption.
The Company is currently evaluating the potential impact of adopting this
statement.
  F-16
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 3.
                SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
 
 (l)
                  Recent
      Accounting Pronouncements
(Continued)
 
 In June
2009, the FASB SFAS No. 167, Amendments to FASB Interpretation No. 46(R),requires an enterprise to perform an analysis and ongoing reassessments
to determine whether the enterprises variable interest or interests give it a
controlling financial interest in a variable interest entity and amends certain
guidance for determining whether an entity is a variable interest entity. It
also requires enhanced disclosures that will provide users of financial
statements with more transparent information about an enterprises involvement in
a variable interest entity.  SFAS 167 is effective as of the beginning of
each reporting entity’s first annual reporting period that begins after November
15, 2009 and for all interim reporting periods after that.  The Company is
currently evaluating the impact of the adoption of SFAS 167. This recently
issued but not yet enacted accounting standard has not yet been codified by the
FASB. See Note 3 (a).
 4.
                VESSELS
 
 The
Company’s current fleet consists of thirteen vessels as bulk carriers as of
September 30, 2009 and December 31, 2008. Among the thirteen vessels, two of
them denoted (a) were acquired by syndicated loans and are still under pledge;
nine vessels denoted (b) were acquired through capital leases; two vessels
denoted (c) were acquired through the long-term notes payable from related
parties, also see Note 10; and one remaining vessel denoted (d) was acquired
through the long-term loan, also see Note 9, and long-term notes payable, also
see Note 10.
 
 The
vessels of the Company consist of the following:
 
 September 30, 2009
                          
                          
                          December 31, 2008(Unaudited)At
      cost:Win
      Hope
                          (b)
                          
                          $
                          2,679,285
                          
                          
                          $
                          2,679,285Win
      Ever
                          (b)
                          
                          
                          1,737,966
                          
                          
                          
                          1,737,966Win
      Bright
                          (b)
                          
                          
                          1,739,258
                          
                          
                          
                          1,739,258Win
      Eagle
                          (b)
                          
                          
                          3,560,852
                          
                          
                          
                          3,560,852Win
      Glory
                          (b)
                          
                          
                          2,503,697
                          
                          
                          
                          2,503,697Win
      Grace
                          (b)
                          
                          
                          3,677,861
                          
                          
                          
                          3,677,861Win
      Moony
                          (b)
                          
                          
                          3,682,178
                          
                          
                          
                          3,682,178Win
      Star
                          (b)
                          
                          
                          3,336,600
                          
                          
                          
                          3,336,600Winland
      Dalian
                          (a)
                          
                          
                          18,243,139
                          
                          
                          
                          18,243,139Win
      Honey
                          (a)
                          
                          
                          4,500,000
                          
                          
                          
                          4,500,000Bodar
                          (b)
                          
                          
                          4,985,441
                          
                          
                          
                          4,985,441Andong
                          (c)
                          
                          
                          2,961,565
                          
                          
                          
                          2,954,393Baoshun
                          (d)
                          
                          
                          20,881,125
                          
                          
                          
                          -$
                          74,488,967
                          
                          
                          $
                          53,600,670
  F-17
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 4.
                VESSELS
      (CONTINUED)
  Less:  Accumulated
      depreciationWin
      Hope
                        (b)
                        
                        
                        1,949,179
                        
                        
                        
                        1,768,328Win
      Ever
                        (b)
                        
                        
                        1,564,169
                        
                        
                        
                        1,564,169Win
      Bright
                        (b)
                        
                        
                        1,565,332
                        
                        
                        
                        1,565,332Win
      Eagle
                        (b)
                        
                        
                        3,204,767
                        
                        
                        
                        3,204,767Win
      Glory
                        (b)
                        
                        
                        2,038,725
                        
                        
                        
                        1,797,297Win
      Grace
                        (b)
                        
                        
                        3,218,128
                        
                        
                        
                        2,804,369Win
      Moony
                        (b)
                        
                        
                        3,175,879
                        
                        
                        
                        2,761,634Win
      Star
                        (b)
                        
                        
                        3,002,940
                        
                        
                        
                        3,002,940Winland
      Dalian
                        (a)
                        
                        
                        4,469,569
                        
                        
                        
                        3,648,628Win
      Honey
                        (a)
                        
                        
                        1,459,688
                        
                        
                        
                        1,269,844Bodar
                        (b)
                        
                        
                        4,486,897
                        
                        
                        
                        4,486,897Andong
                        (c)
                        
                        
                        757,812
                        
                        
                        
                        638,670$
                        30,893,085
                        
                        
                        $
                        28,512,875Vessels,
      net
                        
                        
                        $
                        43,595,882
                        
                        
                        $
                        25,087,795
 
 Vessel
depreciation expense for the nine months ended September 30, 2009 and 2008 was
$2,378,661 and $2,620,916 respectively.
 
 Vessels
collateralizing loans are as follow. Also see Note 9.
 
 September 30, 2009
                          
                          
                          December 31, 2008(Unaudited)Net Book ValueWinland
      Dalian
                          
                          $
                          13,773,570
                          
                          
                          $
                          14,594,511Win
      Honey
                          
                          
                          3,040,312
                          
                          
                          
                          3,230,156Baoshun
                          
                          
                          20,881,125
                          
                          
                          
                          -Total
                          
                          $
                          37,695,007
                          
                          
                          $
                          17,824,667
 
 5.
                FIXED
      ASSETS
 
 Fixed
assets consist of the following:
 
 September 30, 2009
                        
                        
                        December 31, 2008(Unaudited)At
      cost:Motor
      vehicles
                        
                        $
                        244,598
                        
                        
                        $
                        244,005Office
      equipment
                        
                        
                        199,306
                        
                        
                        
                        369,607Leasehold
      improvement
                        
                        
                        181,660
                        
                        
                        
                        -625,564
                        
                        
                        
                        613,612Less:  Accumulated
      depreciationMotor
      vehicles
                        
                        
                        135,152
                        
                        
                        
                        117,516Office
      equipment
                        
                        
                        176,400
                        
                        
                        
                        259,902Leasehold
      improvement
                        
                        
                        136,411
                        
                        
                        
                        -447,963
                        
                        
                        
                        377,418Fixed
      assets, net
                        
                        $
                        177,601
                        
                        
                        $
                        236,194
 
 Depreciation
expense for the nine months ended September 30, 2009 and 2008 was $67,601 and
$73,795, respectively.
  F-18
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 6.
                DEFERRED
      DRY DOCK FEES
 
 Deferred
dry dock feesconsist of the
following:
 
 September 30, 2009
                      
                      
                      December 31, 2008(Unaudited)Cost
                      
                      $
                      18,174,587
                      
                      
                      $
                      21,594,143Less:
      Accumulated amortization
                      
                      
                      8,312,366
                      
                      
                      
                      10,559,457Deferred
      dry dock fees, net
                      
                      $
                      9,862,221
                      
                      
                      $
                      11,034,686
 
 Amortization
expense for the nine months ended September 30, 2009 and 2008 was $3,067,008 and
$2,868,532, respectively.
 
 Amortization
expense for the next five years and thereafter is as follows:
 
 Period Ended September 30,
                            
                            Amount2010
                            
                            $
                            3,397,8462011
                            
                            
                            2,624,4172012
                            
                            
                            2,206,2052013
                            
                            
                            1,344,6392014
                            
                            
                            289,114Total
                            
                            $
                            9,862,221
 
 7.
                DUE
      TO/FROM RELATED PARTIES
 
 Due
to/from related parties consist of the following:
 
 (I)   Due From Related Parties
                            
                            
                            
                            
                            September 30, 2009
                            
                            
                            December 31, 2008(Unaudited)Winland
      Container Lines Ltd.
                            
                            
                            a
                            )
                            
                            $
                            4,556,082
                            
                            
                            $
                            759,042Dalian
      Winland Shipping Co., Ltd
                            
                            
                            b
                            )
                            
                            
                            203,569
                            
                            
                            
                            -Due
      from employees
                            
                            
                            c
                            )
                            
                            
                            1,600
                            
                            
                            
                            1,214Total
      due from related parties
                            
                            
                            
                            
                            
                            $
                            4,761,251
                            
                            
                            $
                            760,256
 
 (II)   Due To Related Parties
                              
                              
                              
                              
                              September 30, 2009
                              
                              
                              December 31, 2008(Unaudited)Dalian
      Winland Group Co., Ltd
                              
                              
                              d
                              )
                              
                              $
                              3,669,185
                              
                              
                              $
                              526,885Dalian
      Winland Shipping Co., Ltd
                              
                              
                              b
                              )
                              
                              
                              -
                              
                              
                              
                              120,664Dalian
      Master Well Ship Management Co., Ltd
                              
                              
                              e
                              )
                              
                              
                              196,185
                              
                              
                              
                              48,614Winland
      Shipping Japan Co., Ltd
                              
                              
                              f
                              )
                              
                              
                              55,661
                              
                              
                              
                              72,423Total
      due to related parties
                              
                              
                              
                              
                              
                              $
                              3,921,031
                              
                              
                              $
                              768,586
 
 a)
                Winland
      Container Lines Ltd. is controlled by the Chairman and Chief Executive
      Officer of the Company. The Company provided shipping agency and freight
      forwarding services to Winland Container Lines Ltd. For the nine months
      ended September 30, 2009 and 2008, the Company recognized relevant service
      revenue of $1,045,131 and $446,421. For the nine months ended September
      30, 2009 and 2008, the Company paid $3,175,312 and $629,334 of expenses to
      related ports and received $425,797 and $446,422 of payments from related
      ports on behalf of Winland Container Lines Ltd. The outstanding balances
      at September 30, 2009 and December 31, 2008 are interest-free, unsecured
      and have no fixed repayment
term.
  F-19
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
   7.
                  DUE
      TO/FROM RELATED PARTIES (CONTINUED)b)
                  Dalian
      Winland Shipping Co., Ltd (“DWSC”) is controlled by the Chairman and Chief
      Executive Officer of the Company. It operates as a vessel management
      company for the Company. The vessel management fee for the two vessels was
      $25,500 and $27,000 for the nine months ended September 30, 2009 and 2008,
      respectively. The Company recognized relevant service revenue of
      $1,285,516 and $0 for the nine months ended September 30, 2009 and 2008,
      respectively. For the nine months ended September 30, 2009 and 2008, on
      behalf of DWSC, the Company paid $104,703 and $3,572,251 of ocean fees;
      and received $997,736 and $0 of ocean fees, respectively. The Company
      recognized interest expense of $43,000 and $100,136 for the nine months
      ended June 30, 2009 and 2008, respectively. Also see Note 10. The Company
      disposed of vessl Haoyue to DWSC. Also see Note 13. The outstanding
      balances at September 30, 2009 and December 31, 2008 are interest-free,
      unsecured, and have no fixed repayment term.c)
                  Due
      from/to employees are interest-free, unsecured and have no fixed
      repayment. The amounts due from/to employees primarily represent advances
      to sales personnel or prepaid by sales personnel of the Company for
      business and travelling related expenses.d)
                  Dalian
      Winland Group Co., Ltd (“DWIG”) is controlled by the Chairman and Chief
      Executive Officer of the Company. The Company paid $19,896,581 and $0 of
      expenses on behalf of DWIG for the nine months ended September 30, 2009
      and 2008, respectively.  The Company collected $22,976,257 and
      $36,424,947 on behalf of DWIG for the nine months ended September 30, 2009
      and 2008, respectively. For the nine months ended September 30, 2009 and
      2008, the Company recognized interest expense of $67,924 and $65,635,
      respectively. Also see Note 10. The outstanding balances at September 30,
      2009 and December 31, 2008 are interest-free, unsecured and have no fixed
      repayment term.e)
                  Dalian
      Master Well Ship Management Co., Ltd is controlled by the Chairman and
      Chief Executive Officer of the Company. It operates as the vessel
      management company for the Company. The vessel management fees for 12 and
      11 vessels in the nine months ended September 30, 2009 and 2008 was
      $194,400 and $17,672, respectively. The Company paid $117,379 and $309,364
      on behalf of Dalian Master Well Ship Management Co., Ltd, in the nine
      months ended September 30, 2009 and 2008, respectively. The Company
      collected $70,549 and $62,185 on behalf of Dalian Master Well Ship
      Management Co., Ltd, in the nine months ended September 30, 2009 and 2008,
      respectively. The outstanding balances at September 30, 2009 and December
      31, 2008 are interest-free, unsecured, and have no fixed repayment
      term.f)
                  Winland
      Shipping Japan Co., Ltd is controlled by the Chairman and Chief Executive
      Officer of the Company. The Company recognized relevant agency service
      fees of $353,695 and $9,927 in the nine months ended September 30, 2009
      and 2008, respectively. The Company paid $370,483 and $0 on behalf of
      Winland Shipping Japan Co., Ltd, in the nine months ended September 30,
      2009 and 2008, respectively. The outstanding balances at September 30,
      2009 and December 31, 2008 are interest-free, unsecured and have no fixed
      repayment term.8.
                  SHORT-TERM
      BANK LOANThe Company obtained a short-term bank loan from Shanghai Pudong
      Development Bank for $1,170,001 on July 10, 2009. The loan principal will
      be due on July 6, 2010. The interest payment is due quarterly with the
      annual interest rate of 5.31%. The interest expense was $13,962 for the
      nine months ended September 30, 2009. See Note
2.
  F-20
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 9.    LONG-TERM
LOANS
 
 Long-term
loans consist of the following:
 September
      30, 2009
                        
                        
                        December
      31, 2008(Unaudited)Loans
      from Dialease Maritime S.A.:Due
      on August 1, 2011, monthly interest payment is 1-month LIBOR plus 1.75%
      per annum, and the actual rate at September 30, 2009 is 0.33%, secured by
      the vessel Winland Dalian (also see Note 4), assignment of insurance of
      the vessel, and guaranteed by the Chairman of the Company. Principal is
      repaid every month in 72 equal installments from September
      2005.
                        
                        $
                        4,047,372
                        
                        
                        $
                        5,631,120Due
      on July 21, 2012, monthly interest payment is 1-month LIBOR plus 1.75% per
      annum, and the actual rate at September 30, 2009 is 0.33%, secured by the
      vessel Win Honey (also see Note 4), assignment of insurance of the vessel,
      and guaranteed by the Chairman of the Company. Principal is repaid every
      month in 72 equal installments from August 2006.
                        
                        
                        1,983,308
                        
                        
                        
                        2,508,314Loan
      from Mitsubishi UFJ Lease & Finance Co., Ltd.:
                          Term
      of the loan is 7 years with interest 1-month LIBOR plus 2.3% per annum,
      monthly payment composed of principle and interest is fixed at $109,773,
      initial payment is due on October 24, 2009, secured by the vessel Baoshun
      (also see Notes 2 and 4).
                        
                        
                        14,490,000
                        
                        
                        
                        -Total
      long-term loans
                        
                        
                        20,520,680
                        
                        
                        
                        8,139,434Less:
      Current portion
                        
                        
                        4,128,908
                        
                        
                        
                        2,811,672Long-term
      portion
                        
                        $
                        16,391,772
                        
                        
                        $
                        5,327,762
 
 Interest
expense for the nine months ended September 30, 2009 and 2008 was $118,633 and
$346,772, respectively.
 
 The
repayment schedule for the principal amount of long-term loans is as
follows:
 
 Period Ended September 30,
                        
                        Amount2010
                        
                        $
                        4,128,9082011
                        
                        
                        4,128,9082012
                        
                        
                        1,427,0492013
                        
                        
                        1,317,2762014
                        
                        
                        1,317,276Thereafter
                        
                        
                        8,201,263Total
                        
                        $
                        20,520,680
  F-21
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 10.
                LONG-TERM
      NOTES PAYABLE
 
 Long-term
notes payable consists of the following:
 September 30, 2009
                      
                      
                      December 31, 2008(Unaudited)Notes
      payable to unrelated party:Win
      Grand Shipping Limited, net of discount of $0 and $13,345 at September 30,
      2009 and December 31, 2008, respectively, paid off September 17,
      2009
                      
                      
                      
                      
                      $
                      -
                      
                      
                      $
                      273,469Sea
      Carrier Shipping Co., Ltd., net of discount of $2,229,085, expire at
      September 25, 2014, fixed repayment of $2,897 per day, monthly payment due
      one month in advance. (See Note 2).
                      
                      
                      a
                      )
                      
                      
                      3,000,000
                      
                      
                      
                      -Subtotal
                      
                      
                      
                      
                      
                      
                      3,000,000
                      
                      
                      
                      273,469Notes
      payable to related companies:Dalian
      Winland Shipping Co. , Ltd. due July 19, 2010, at an interest rate of 5%
      per annum
                      
                      
                      b
                      )
                      
                      
                      1,148,063
                      
                      
                      
                      1,145,283Dalian
      Winland Group Co., Ltd. due July 19, 2010, at an interest rate of 5% per
      annum
                      
                      
                      c
                      )
                      
                      
                      1,813,502
                      
                      
                      
                      1,809,110Subtotal
                      
                      
                      
                      
                      
                      
                      2,961,565
                      
                      
                      
                      2,954,393Total
      long-term notes payable
                      
                      
                      
                      
                      
                      
                      5,961,565
                      
                      
                      
                      3,227,862Less:
      Current portion
                      
                      
                      
                      
                      
                      
                      3,366,950
                      
                      
                      
                      273,469Long-term
      portion
                      
                      
                      
                      
                      
                      $
                      2,594,615
                      
                      
                      $
                      2,954,393
 
 The
amortization of discounts on notes payable for the nine months ended September
30, 2009 and 2008 was $13,345 and $33,334, respectively.
 
 The
long-term note denoted a) was used to purchase the vessel Baoshun. Also see Note
4.
 
 The
long-term notes obtained from DWSC and DWIG, two related parties, denoted b) and
c) were both used to purchase the vessel Andong. Also see Notes 4 and
7.
 
 Interest
expense for the nine months ended September 30, 2009 and 2008 was $110,924 and
$206,379, respectively.
 
 The
repayment schedule for long-term notes payable is as follows:
 
 Period Ended September 30,
                      
                      Amount2010
                      
                      $
                      3,366,9502011
                      
                      
                      445,0942012
                      
                      
                      576,1982013
                      
                      
                      738,6882014
                      
                      
                      834,635Total
                      
                      $
                      5,961,565
  F-22
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 11.
                COMMITMENTS
 
 The
Company leases office space under operating leases. Lease expense was $87,426
and $101,380 for the nine months ended September 30, 2009 and 2008,
respectively.
 
 As of
September 30, 2009, future minimum payments required under non-cancelable leases
are:
 
 Period Ended September 30,
                      
                      Amount2010
                      
                      
                      69,2542011
                      
                      
                      8,390Total
                      
                      $
                      77,644
 
 12.
                INCOME
      TAX
 
 Winland
Shipping Co., Limited, Treasure Way Shipping Limited, Kinki International
Industrial Limited, Bestline Shipping Limited, Lancrusier Development Co.,
Limited, and Winland International Shipping Co., Limited are incorporated and
registered in Hong Kong and are free of income tax as long as they do not
operate in Hong Kong under the local tax law. Since these companies do not have
operations in Hong Kong, they did not have any income tax expense for the nine
months ended September 30, 2009 and 2008.
 
 Win Star
Shipping Co., Limited and Bodar Shipping Co., Limited are incorporated and
registered in St. Vincent and Grenadines. Winland Dalian Shipping S.A. and Win
Glory S.A. are incorporated in Panama and registered in HongKong. Win Eagle
Shipping Co., Limited, Win Ever Shipping Co., Limited, Win Bright Shipping Co.,
Limited, Win Grace Shipping Co., Limited, Win Hope Shipping Co., Limited, Win
Moony Shipping Co., Limited are incorporated and registered in Valletta, Malta.
Bodar Shipping S.A. is incorporated and registered in Panama. Since these
companies obtained a tax exemption from the local government, they did not have
any tax expense for the nine months ended September 30, 2009 and
2008.
 
 Effective
January 1, 2007, the Company adopted ASC 740-10 (formerly FASB Interpretation
No. 48, Accounting for
Uncertainty in Income Taxes, an interpretation of FASB statement No.109,
Accounting for Income
Taxes). ASC 740-10 addresses the determination of whether tax benefits
claimed or expected to be claimed on a tax return should be recorded in the
financial statements. Under ASC 740-10, we may recognize the tax benefit from an
uncertainty tax position only if it is more likely than not that the tax
position will be sustained on examination by the taxing authorities, based on
the technical merits of the position. The tax benefits recognized in the
financial statements from such a position should be measured based on the
largest benefit that has a greater than fifty percent likelihood of being
realized upon ultimate settlement. ASC 740-10 also provides guidance on
de-recognition, classification, interest and penalties on income taxes,
accounting in interim periods and requires increased disclosures.
 
 Income
tax expense for the nine months ended September 30, 2009 and 2008 is summarized
as follows:
 
 For The Nine Months Ended September 30,2009
                        
                        
                        2008(Unaudited)
                        
                        
                        (Unaudited)Current
                        
                        $
                        (36,306
                        )
                        
                        $
                        (6,407
                        )Deferred
                        
                        
                        (12,754
                        )
                        
                        
                        (127,547
                        )Income
      tax expense
                        
                        $
                        (49,060
                        )
                        
                        $
                        (133,954
                        )
  F-23
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 12.
                INCOME
      TAX (CONTINUED)
 
 The
Company’s income tax expense differs from the “expected” tax expense for the
nine months ended September 30, 2009 and 2008 (computed by applying the Hong
Kong CIT rate of 17.5 to income before income taxes) as follows:
 
 For The Nine Months Ended September 30,2009
                      
                      
                      2008(Unaudited)
                      
                      
                      (Unaudited)Computed
      “expected” benefit (expense)
                      
                      $
                      898,164
                      
                      
                      $
                      (4,389,036
                      )Favorable
      tax rates
                      
                      
                      (947,224
                      )
                      
                      
                      4,255,082Income
      tax expense
                      
                      $
                      (49,060
                      )
                      
                      $
                      (133,954
                      )
 
 The tax
effects of temporary differences that give rise to the Company’s net deferred
tax assets and liabilities as of September 30, 2009 and December 31, 2008 are as
follows:
 
 September 30, 2009
                        
                        
                        December 31, 2008(Unaudited)Deferred
      tax assets (liabilities):Current
      portion:General
      and administrative expenses
                        
                        $
                        7,723
                        
                        
                        $
                        6,718Service
      revenue and commissions
                        
                        
                        (460
                        )
                        
                        
                        (631
                        )Valuation
      allowance-short term
                        
                        
                        (2,373
                        )
                        
                        
                        (660
                        )Other
      income
                        
                        
                        (14,199
                        )
                        
                        
                        -Subtotal
                        
                        
                        (9,309
                        )
                        
                        
                        5,427Non-current
      portion:Depreciation
      expense
                        
                        
                        (27,642
                        )
                        
                        
                        (9,276
                        )Net
      operating loss
                        
                        
                        206,156
                        
                        
                        
                        97,740Valuation
      allowance
                        
                        
                        (181,764
                        )
                        
                        
                        (93,695
                        )Subtotal
                        
                        
                        (3,250
                        )
                        
                        
                        (5,231
                        )Net
      deferred tax (liabilities) assets
                        
                        $
                        (12,559
                        )
                        
                        $
                        196
 
 (b)
                Tax
      Holiday Effect
 
 For 2009
and 2008 the Hong Kong corporate income tax rate was 17.5%. Certain subsidiaries
of the Company which were registered in Hong Kong are entitled to tax exemptions
as long as they do not operate in Hong Kong under the local tax law. Since these
companies do not have operations in Hong Kong, they did not have any income tax
expense for the nine months ended September 30, 2009 and 2008.
 
 The
combined effects of the income tax expense exemptions and reductions available
to the Company for the nine months ended September 30, 2009 and 2008 is as
follows:
 
 2009
                      
                      
                      2008(Unaudited)
                      
                      
                      (Unaudited)Tax
      holiday (expense) benefit
                      
                      $
                      (947,224
                      )
                      
                      $
                      4,255,082Basic
      net (loss) income per share  excluding tax holiday
    effect
                      
                      $
                      (0.03
                      )
                      
                      $
                      0.12
  F-24
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 13.
                DISCONTINUED
      OPERATION
 
 On August
18, 2009, the Company disposed of the Haoyue vessel to a related party, Dalian
Winland Shipping Co., Ltd. The net cash proceeds were $1,272,685, after
deducting tax expenses of $28,350 from the gross proceeds of $1,301,035. Also
see Note 7.
 The
following represents the vessel at the date of disposal:
 
 August
      18, 2009Vessel,
      net
                      
                      $
                      1,267,490Net
      asset
                      
                      
                      1,267,490Gross
      proceeds from disposition
                      
                      
                      1,301,035Less:
      Tax expenses
                      
                      
                      (28,350
                      )Net
      proceeds
                      
                      
                      1,272,685Gain
      from disposition of discontinued operation
                      
                      $
                      5,195
 
 In
accordance with ASC 205-20 (formerly SFAS 144, Accounting for the Impairment or
Disposal of Long-lived Assets), the results of operations of Haoyue was
presented separately as discontinued operation in the condensed consolidated
statement of loss and assets or liabilities of discontinued operation in the
condensed consolidated balance sheet at December 31, 2008. The losses from the
discontinued operation of $108,004 and $230,746 were reflected in the Company’s
condensed consolidated statements of income (loss) and comprehensive income
(loss) for the three and nine months ended September 30, 2009,
respectively.
 
 The
following is the unaudited pro forma net income of the Company for the nine
months ended September 30, 2009 assuming the disposition of Haoyue was completed
on January 1, 2009 and 2008.
 
 For The Nine Months Ended September 30,2009
                        
                        
                        2008(Unaudited)
                        
                        
                        (Unaudited)Net
      (loss) income
                        
                        $
                        (5,095,515
                        )
                        
                        $
                        17,347,635Weighted
      average shares, basic and diluted
                        
                        
                        130,000,000
                        
                        
                        
                        111,135,766Net
      (loss) income per share, basic and diluted
                        
                        $
                        (0.04
                        )
                        
                        $
                        0.16
  F-25
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 14.
                SEGMENT
      INFORMATION
 
 The
Company has determined that there are three reportable segments: (1) Dry bulk
shipping, (2) Chartering brokerage, and (3) Other activities segment. The other
activities segment comprises shipping agency and freight forwarding services,
and online services. These operating segments were not separately reported as
they do not meet any of the quantitative thresholds under Financial Accounting
Standards Board Statement No. 131 (Disclosures about Segments of an Enterprise
and Related Information).
 
 The
Company's segment information for the three and nine months ended September 30,
2009 and 2008 are as follows:
 
 Nine Months Ended
                      September 30, 2009
                      (Unaudited)
                    
                    Dry Bulk
                      Shipping
                    
                    
                    Chartering
                      Brokerage
                    
                    
                    Other
                      Activities
                    
                    
                    Corporate
                      and
                      Eliminations
                    
                    
                    ConsolidatedSales
      to unaffiliated customers
                    
                    $
                    17,023,160
                    
                    
                    $
                    16,060,356
                    
                    
                    $
                    3,285,005
                    
                    
                    $
                    -
                    
                    
                    $
                    36,368,521Intersegment
      sales
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    103,173
                    
                    
                    
                    (103,173
                    )
                    
                    
                    -Net
      sales
                    
                    
                    17,023,160
                    
                    
                    
                    16,060,356
                    
                    
                    
                    3,388,178
                    
                    
                    
                    (103,173
                    )
                    
                    
                    36,368,521Costs
                    
                    
                    17,132,616
                    
                    
                    
                    13,913,211
                    
                    
                    
                    2,303,747
                    
                    
                    
                    (103,173
                    )
                    
                    
                    33,246,401Depreciation
      and amortization
                    
                    
                    5,328,175
                    
                    
                    
                    -
                    
                    
                    
                    185,095
                    
                    
                    
                    -
                    
                    
                    
                    5,513,270Other
      operating expenses
                    
                    
                    1,241,642
                    
                    
                    
                    207,769
                    
                    
                    
                    1,170,138
                    
                    
                    
                    90,346
                    
                    
                    
                    2,709,895Gain
      from disposition of
      discontinued         operation
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    5,195
                    
                    
                    
                    -
                    
                    
                    
                    5,195(Loss)
      income from discontinued operation
                    
                    
                    (231,065
                    )
                    
                    
                    -
                    
                    
                    
                    318
                    
                    
                    
                    -
                    
                    
                    
                    (230,747
                    )Net
      (loss) income
                    
                    $
                    (6,910,338
                    )
                    
                    $
                    1,939,376
                    
                    
                    $
                    (265,289
                    )
                    
                    $
                    (90,346
                    )
                    
                    $
                    (5,326,597
                    )September
      30, 2009
                      (Unaudited)Identifiable
      assets
                    
                    $
                    43,737,994
                    
                    
                    $
                    9,576,286
                    
                    
                    $
                    13,300,443
                    
                    
                    $
                    826
                    
                    
                    $
                    66,615,549
 
 Nine Months Ended
                              September 30, 2008
                              (Unaudited)
                            
                            Dry Bulk
                              Shipping
                            
                            
                            Chartering
                              Brokerage
                            
                            
                            Other
                              Activities
                            
                            
                            Corporate
                              and
                              Eliminations
                            
                            
                            ConsolidatedSales
      to unaffiliated customers
                            
                            $
                            48,510,653
                            
                            
                            $
                            18,604,227
                            
                            
                            $
                            3,437,567
                            
                            
                            $
                            -
                            
                            
                            $
                            70,552,447Intersegment
      sales
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            398,857
                            
                            
                            
                            (398,857
                            )
                            
                            
                            -Net
      sales
                            
                            
                            48,510,653
                            
                            
                            
                            18,604,227
                            
                            
                            
                            3,836,424
                            
                            
                            
                            (398,857
                            )
                            
                            
                            70,552,447Costs
                            
                            
                            24,222,337
                            
                            
                            
                            16,170,837
                            
                            
                            
                            4,012,632
                            
                            
                            
                            (398,857
                            )
                            
                            
                            44,006,949Depreciation
      and amortization
                            
                            
                            5,397,025
                            
                            
                            
                            -
                            
                            
                            
                            166,218
                            
                            
                            
                            -
                            
                            
                            
                            5,563,243Other
      operating expenses
                            
                            
                            1,683,612
                            
                            
                            
                            518,614
                            
                            
                            
                            1,311,950
                            
                            
                            
                            120,444
                            
                            
                            
                            3,634,620(Loss)
      income from discontinued operation
                            
                            
                            (8,970
                            )
                            
                            
                            -
                            
                            
                            
                            83,526
                            
                            
                            
                            -
                            
                            
                            
                            74,556Net
      income (loss)
                            
                            $
                            17,198,709
                            
                            
                            $
                            1,914,776
                            
                            
                            $
                            (1,570,850
                            )
                            
                            $
                            (120,444
                            )
                            
                            $
                            17,422,191December
      31, 2008Identifiable
      assets
                            
                            $
                            25,514,626
                            
                            
                            $
                            19,129,175
                            
                            
                            $
                            9,701,281
                            
                            
                            $
                            (2,555,996
                            )
                            
                            $
                            51,789,086
  F-26
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 14.
                SEGMENT
      INFORMATION (CONTINUED)
 
 Three  Months Ended
                      September 30, 2009
                      (Unaudited)
                    
                    Dry Bulk
                      Shipping
                    
                    
                    Chartering
                      Brokerage
                    
                    
                    Other
                      Activities
                    
                    
                    Corporate
                      and
                      Eliminations
                    
                    
                    ConsolidatedSales
      to unaffiliated customers
                    
                    $
                    6,691,944
                    
                    
                    $
                    4,292,554
                    
                    
                    $
                    857,300
                    
                    
                    $
                    -
                    
                    
                    $
                    11,841,798Intersegment
      sales
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    33,687
                    
                    
                    
                    (33,687
                    )
                    
                    
                    -Net
      sales
                    
                    
                    6,691,944
                    
                    
                    
                    4,292,554
                    
                    
                    
                    890,987
                    
                    
                    
                    (33,687
                    )
                    
                    
                    11,841,798Costs
                    
                    
                    5,960,658
                    
                    
                    
                    3,724,279
                    
                    
                    
                    440,843
                    
                    
                    
                    (33,687
                    )
                    
                    
                    10,092,093Depreciation
      and amortization
                    
                    
                    1,706,548
                    
                    
                    
                    -
                    
                    
                    
                    64,330
                    
                    
                    
                    -
                    
                    
                    
                    1,770,878Other
      operating expenses
                    
                    
                    480,189
                    
                    
                    
                    80,742
                    
                    
                    
                    479,550
                    
                    
                    
                    5,530
                    
                    
                    
                    1,046,011Gain
      from disposition of
      discontinued    operation
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    5,195
                    
                    
                    
                    -
                    
                    
                    
                    5,195(Loss)
      income from discontinued operation
                    
                    
                    (108,512
                    )
                    
                    
                    -
                    
                    
                    
                    508
                    
                    
                    
                    -
                    
                    
                    
                    (108,004
                    )Net
      (loss) income
                    
                    $
                    (1,563,963
                    )
                    
                    $
                    487,533
                    
                    
                    $
                    (88,033
                    )
                    
                    $
                    (5,530
                    )
                    
                    $
                    (1,169,993
                    )
 
 Three Months Ended
                      September 30, 2008
                      (Unaudited)
                    
                    Dry Bulk
                      Shipping
                    
                    
                    Chartering
                      Brokerage
                    
                    
                    Other
                      Activities
                    
                    
                    Corporate
                      and
                      Eliminations
                    
                    
                    ConsolidatedSales
      to unaffiliated customers
                    
                    $
                    17,843,844
                    
                    
                    $
                    2,781,624
                    
                    
                    $
                    1,677,019
                    
                    
                    $
                    -
                    
                    
                    $
                    22,302,487Intersegment
      sales
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    132,952
                    
                    
                    
                    (132,952
                    )
                    
                    
                    -Net
      sales
                    
                    
                    17,843,844
                    
                    
                    
                    2,781,624
                    
                    
                    
                    1,809,971
                    
                    
                    
                    (132,952
                    )
                    
                    
                    22,302,487Costs
                    
                    
                    9,221,230
                    
                    
                    
                    2,189,454
                    
                    
                    
                    1,418,584
                    
                    
                    
                    (132,952
                    )
                    
                    
                    12,696,316Depreciation
      and amortization
                    
                    
                    1,799,008
                    
                    
                    
                    -
                    
                    
                    
                    57,191
                    
                    
                    
                    -
                    
                    
                    
                    1,856,199Other
      operating expenses
                    
                    
                    1,547,929
                    
                    
                    
                    509,390
                    
                    
                    
                    422,127
                    
                    
                    
                    32,754
                    
                    
                    
                    2,512,200Income
      from discontinued operation
                    
                    
                    33,661
                    
                    
                    
                    -
                    
                    
                    
                    27,043
                    
                    
                    
                    -
                    
                    
                    
                    60,704Net
      income (loss)
                    
                    $
                    5,309,338
                    
                    
                    $
                    82,780
                    
                    
                    $
                    (60,888
                    )
                    
                    $
                    (32,754
                    )
                    
                    $
                    5,298,476
 
 Information
for Company’s sales by geographical area for the three and nine months ended
September 30, 2009 and 2008 are as follows:
 
 For The Three Months Ended
                        September 30,
                      
                      
                      For The Nine Months Ended
                        September 30,2009
                      
                      
                      2008
                      
                      
                      2009
                      
                      
                      2008(Unaudited)
                      
                      
                      (Unaudited)
                      
                      
                      (Unaudited)
                      
                      
                      (Unaudited)Sales
      to unaffiliated customers:Japan,
      Korea and Russia
                      
                      $
                      8,289,258
                      
                      
                      $
                      8,920,995
                      
                      
                      $
                      20,380,965
                      
                      
                      $
                      28,220,979PRC
                      
                      
                      1,184,180
                      
                      
                      
                      5,575,622
                      
                      
                      
                      9,888,692
                      
                      
                      
                      17,638,112Southern
      and Eastern Asia
                      
                      
                      2,368,360
                      
                      
                      
                      4,460,497
                      
                      
                      
                      5,601,464
                      
                      
                      
                      14,110,489Mediterranean
      and Red Sea
                      
                      
                      -
                      
                      
                      
                      2,230,249
                      
                      
                      
                      -
                      
                      
                      
                      7,055,245Other
                      
                      
                      -
                      
                      
                      
                      1,115,124
                      
                      
                      
                      497,400
                      
                      
                      
                      3,527,622Total
                      
                      $
                      11,841,798
                      
                      
                      $
                      22,302,487
                      
                      
                      $
                      36,368,521
                      
                      
                      $
                      70,552,447
  F-27
  WINLAND
ONLINE SHIPPING HOLDINGS CORPORATION
 (FORMERLY
TRIP TECH, INC.) AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMEENTS
 FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 (UNAUDITED)
 
 15.
                CONTINGENCIES
 
 The
Company signed a voyage charter contract with Sinoriches Global Ltd. on
June 11, 2007. The Company canceled the contract on June 18, 2007.
Sinoriches Global Ltd. filed an arbitration claim of $501,640 including interest
for the dispute. As of September 30, 2009, the case is in the process of
exchanging documents and evidence for arbitration. The Company does not believe
the case will result in a significant unfavorable outcome.
 
 16.
                  SUBSEQUENT
      EVENT
 
 In
preparing the unaudited condensed consolidated financial statements, the Company
has evaluated all subsequent events and transactions for potential recognition
or disclosure through November 13, 2009, the date the unaudited condensed
financial statements were issued.
  F-28
  ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 Forward
Looking Statements
 
 The
following is management’s discussion and analysis of certain significant factors
which have affected the financial position and operating results of Winland
Online Shipping Holdings Corporation (formerly Trip Tech, Inc. and hereinafter,
“Winland” or
“WLOL” and
together with its subsidiaries and its variable interest entities, the “Company”) during the
periods included in the accompanying consolidated and combinedfinancial
statements, as well as information relating to the plans of our current
management. This report includes forward-looking statements. Generally, the
words “believes” “anticipates”, “may”, “will”, “should”, “expect”, “intend”,
“estimate”, “continue” and similar expressions or the negative thereof or
comparable terminology are intended to identify forward-looking statements. Such
statements are subject to certain risks and uncertainties, including the matters
set forth in this report or other reports or documents we file with the U.S.
Securities and Exchange Commission (the “SEC”) from time to
time, which could cause actual results or outcomes to differ materially from
those projected. Undue reliance should not be placed on these forward-looking
statements which speak only as of the date hereof. We undertake no obligation to
update these forward-looking statements.
 
 The
following discussion and analysis should be read in conjunction with our
consolidated and combined financial statements and the related notes thereto and
other financial information contained elsewhere in this report.
 
 Acquisition
of SkyAce Group Limited
 
 On August 12, 2008, Trip Tech, Inc.
(n/k/a WLOL and sometimes referred to herein as “Trip Tech” when
referring to the operations of the Company prior to the Exchange, as defined
below) entered into a Share Exchange Agreement with SkyAce Group Limited (“SkyAce”), a British
Virgin Islands company and Pioneer Creation Holdings Limited (“PCH”), a British
Virgin Islands company and the sole stockholder of SkyAce. As a result of the
share exchange, the Company acquired all of the issued and outstanding
securities of SkyAce from PCH in exchange for 76,925,000 newly-issued shares of
the Company’s common stock, par value $0.001 per share and 1,000,000 shares of
the Company’s Series A Preferred Stock which such preferred shares were
convertible into (and subsequently did convert into) 30,000,000 shares of common
stock (the “Exchange”).  On
August 12, 2008, PCH beneficially owned 82.25% of the voting capital stock of
the Company. As a result of the Exchange, SkyAce became a wholly-owned
subsidiary of WLOL.  On October 23, 2008, PCH converted its 1,000,000
shares of Series A Preferred Stock into 30,000,000 shares of common stock. As a
result, the total outstanding shares of common stock increased to 130,000,000,
and PCH now directly owns 82.25% of the voting capital stock of
WLOL.
 
 The following is disclosure regarding
WLOL, SkyAce and SkyAce’s two wholly-owned subsidiaries: (a) Plentimillion Group
Limited (“PGL”), a British Virgin Islands holding company, the principal
business activities of which are (through its wholly-owned subsidiaries) ocean
transportation and chartering brokerage and (b) Best Summit Enterprise Limited
(“BSL” and
together with PGL, the “SkyAce Group”), a
British Virgin Islands holding company which controls (as is more fully
described below) (i) Dalian Winland International Shipping Agency Co. Ltd., a
company organized under the laws of the People’s Republic of China (“PRC”), the principal
activities of which include shipping agency services, booking cargo space,
storage of goods and customs declaration (“DWIS”), (ii) Dalian
Winland International Logistics Co. Ltd., a company organized under the laws of
the People’s Republic of China (“PRC”), the principal
activities of which include freight forwarding services and logistics shipping
agency services (“DWIL”) and (iii)
Dalian Shipping Online Network Co. Ltd., a company organized under the laws of
the PRC, the principal activities of which include online services for its
members (“DSON” or “Shipping Online”, and
together with DWIS and DWIL, the “Winland International
Group”).
 
 SkyAce
declared a dividend of $48,213,871 to its shareholders on December 31, 2007 and
paid it on March 31, 2008.
  - 3
-
  Prior
Operations of Trip Tech
 
 Trip Tech was incorporated in Texas on
November 17, 2006 to enter the online travel industry and to establish a large
scale, full service online travel company. Immediately prior to the Exchange,
Trip Tech was a development stage internet-based travel company operating with a
functional “branded” travel website. Since Trip Tech’s inception, Trip Tech
established its corporate existence as a publicly held corporation, raised
founder capital, and designed and installed a functional “branded” travel
website. As of the date immediately prior to the Exchange, Trip Tech had not
been able to raise additional funds through either debt or equity offerings. As
a result of the foregoing, Trip Tech began to explore its options regarding the
development of a new business plan and direction. On August 12, 2008, Trip Tech
consummated the Exchange with SkyAce and the Pioneer Creation Holdings
Limited.
 
 Our
common stock is currently traded on the Over-The-Counter Bulletin Board under
the symbol “WLOL”. Immediately prior to the Exchange, Trip Tech was considered a
“blank check” company with US$40,963 in assets and a net loss of US$34,965 for
the fiscal year ending February 29, 2008.  On the date of the closing of
the Exchange, the Company did not have any liabilities.
 
 Current
Operations of the Company (General Development of Business)
 
 SkyAce
 
 SkyAce is a holding company founded in
the British Virgin Islands on September 22, 2006with no significant
operations. SkyAce was formed solely for the purpose of acquiring PGL
and BSL from Mr. Li Honglin and Ms. Xue Ying, each of whom had owned fifty
percent (50%) of both PGL and BSL and each of whom now own fifty
percent (50%) of SkyAce. SkyAce has authorized capital of US$50,000 consisting
of 50,000 ordinary shares authorized, two (2) of which are currently issued and
outstanding and held by Trip Tech as a result of the Exchange. Li Honglin, a
Director and the President of Winland, serves as a Director of SkyAce. Xue Ying,
a Director, the Chief Executive Officer and the Secretary of Winland, also
serves as a Director of SkyAce.
 
 PGL
 
 PGL is a holding company founded
in the British Virgin Islands on July 5, 2006. PGL was formed solely for
the purpose of acquiring each of the following wholly-owned subsidiaries from Li
Honglin and Xue Ying (both of whom previously owned fifty percent (50%) of each
of the following entities), which such transfers occurred between January 1,
2008 and March 31, 2008:
 
 (a)
              Winland Shipping Co., Ltd., a
      company organized under the laws of Hong Kong on August 11, 2000
      (“Winland
      Shipping”);
 
 (b)
              Kinki International Industrial
      Limited, a company organized under the laws of Hong Kong on May 2, 2006
      (“Kinki”);
 
 (c)
              Bestline Shipping Limited, a
      company organized under the laws of Hong Kong on January 27, 1994
      (“Bestline”);
 
 (d)
              Lancrusier Development Co.,
      Limited, a company organized under the laws of Hong Kong on July 11, 1995
      (“Lancrusier”);
 
 (e)
              Win Star Shipping Co., Ltd., a
      company organized under the laws of St. Vincent and the Grenadines (“SVG”)
      on June 21, 2000 (“Win
      Star”);
 
 (f)
              Bodar Shipping Co., Ltd., a
      company organized under the laws of SVG on January 7, 2004 (“Bodar”);
 
 (g)
              Winland Dalian Shipping S.A., a
      company organized under the laws of Panama on June 8, 2005 (“Winland
      Dalian”);
 
 (h)
              Treasure Way Shipping Limited, a
      company organized under the laws of Hong Kong on May 27, 2002
      (“Treasure
      Way”).
 
 PGL acquired the following
additional entities in 2008:
  - 4
-
  (i)
              Win Eagle Shipping Co., Ltd., a
      company organized under the laws of Malta on July 29, 2002 (“Win
      Eagle”);
 
 (j)
              Win Bright Shipping Co., Ltd. a
      company organized under the laws of Malta on February 8, 2002
      (“Win
      Bright”);
 
 (k)
              Win Ever Shipping Co., Ltd., a
      company organized under the laws of Malta on February 8, 2002
      (“Win
      Ever”).
 
 (l)
              Win Glory S.A., a company
      organized under the laws of Panama on April 2, 2003 (“Win
      Glory”).
 
 (m)
              Win Moony Shipping Co., Ltd., a
      company organized under the laws of Malta on September 26, 2003
      (“Win
      Moony”).
 
 PGL acquired
      the following entities in 2009:
 
 (n)
              Win Grace Shipping Co., Ltd., a
      company organized under the laws of Malta on September 4, 2003
      (“Win
      Grace”).
 
 (o)
              Win Hope Shipping Co., Ltd., a
      company organized under the laws of Malta on June 14, 2001 (“Win
      Hope”).
 
 PGL established
      the following entities in 2009:
 
 (p)
              Bodar Shipping S.A. is
      incorporated and registered in Panama on February 12, 2009 (“Bodar
      Shipping”).
 
 (q)
              Win Moony Shipping S.A. was
      incorporated and registered in Panama on April 30, 2009 (“Win
      Shipping”).
 
 (r)
              Bao Shun Shipping S.A. was
      incorporated and registered in Panama on June 10, 2009 (“Bao
      Shun”).
 
 (s)
              Winland
      International Shipping Co., Limited is incorporated and registered in Hong
      Kong on August 27, 2009 ("Winland
      International").
  PGL and
each of its wholly-owned subsidiaries set forth above (collectively, the “PGL Group”) are
engaged in ocean transportation of dry bulk cargoes worldwide through the
ownership and operation of dry bulk vessels. The principal business activities
of the PGL Group are ocean transportation and chartering. The operations of
each of the Company’s vessels are managed by Winland Shipping, while the
chartering businesses are managed by Kinki and Bestline. Winland International's
primary business is to develop and expand the global shipping
market. Lancrusier’s primary business is management and accounting, while
Win Star, Bodar, Winland Dalian, Treasure Way, Win Eagle, Win Bright, Win Ever,
Win Glory, Win Moony, Win Grace, Win Hope and Bao Shun collectively own 12 of
the Company’s vessels.
 
 BSL
 
 SkyAce’s
wholly-owned subsidiary BSL was incorporated in the British Virgin Islands
on November 30, 2006. BSL sole business is to act as a holding company for
its wholly-owned subsidiary, Wallis Development Limited, a company organized
under the laws of Hong Kong on December 9, 2006 (“Wallis”). The sole
business of Wallis is to act as a holding company for its wholly-owned
subsidiary, Beijing Huate Xingye Keji Co., Ltd., a company organized under the
laws of the PRC on March 18, 2008 (“Beijing Huate”).
Beijing Huate was formed with the purpose of producing IT software, developing
new products and adopting advanced and applicable technology and scientific
management methods to create economic benefits for its stockholders. It does
this by controlling, through Exclusive Technical Consulting and Service
Agreements and related transaction documents dated as of March 31, 2008
(collectively, the “Service Agreements”,
each of which are referenced as Exhibits herein), DWIS, DWIL and
DSON.
  - 5
-
  In
compliance with the PRC’s foreign investment restrictions on internet
information services and other laws and regulations, the Company conducts all of
its internet information and media services and advertising in China through
DWIS, DWIL and Shipping Online, each a domestic variable interest entity
(also referred to in this Quarterly Report as a “VIE”). In accordance
with FASB Interpretation No. 46R “Consolidation of Variable Interest Entities”,
an Interpretation of Accounting Research Bulletin No. 51, a VIE is to be
consolidated by a company if that company is subject to a majority of the risk
of loss for the VIE or is entitled to receive a majority of the VIE’s residual
returns. Upon executing the Service Agreements, DWIS, DWIL and Shipping
Online (collectively also known as the “VIEs”) are all
considered VIEs and the Company, through its ownership and control of SkyAce,
BSL, Wallis and Beijing Huate, their primary beneficiary.
 
 Pursuant
to the Service Agreements, Beijing Huate provides on-going technical services
and other services to the VIEs in exchange for substantially all net income of
the VIEs. In addition, the stockholders of the VIEs have pledged all of their
shares in the VIEs to Beijing Huate, representing one hundred percent (100%) of
the total issued and outstanding capital stock of the VIEs, as collateral for
non-payment under the Service Agreements or for fees on technical and other
services due thereunder. Beijing Huate also has the power to appoint all
directors and senior management personnel of the VIEs.
  DWIS
  Dalian Winland International Shipping
Agency Co., Ltd. (“DWIS”) was
incorporated under the laws of the PRC on December 5, 2002 by three (3)
investors, namely, Dalian Winland Industry Group Co., Ltd. (“DWIG”), Dalian
Winland Shipping Co., Ltd. (“DWSC”) and Dalian
Weihang Freight Forwarding Co., Ltd. (“DWFF”). At
establishment, the percentage of each party’s equity interest was 51%, 41.5% and
7.5%, respectively. DWIG was incorporated by Li Honglin and Xue Ying having a
60% and 40% interest, respectively. DWSC was incorporated by DWIG and Xue Ying
having a 60% and 40% interest, respectively. DWFF was incorporated by Li Honglin
and Xue Ying having a 66.7% and 33.3% interest, respectively. Thus, Li Honglin
and Xue Ying had owned a 50.5425% and 49.4575% of Winland International
indirectly at inception. According to a share trust instrument agreement
executed in February 2005, Li Honglin transferred 0.5425% of his interest in
Winland International to Xue Ying. Thereafter, Li Honglin and Xue Ying own 50%
each of Winland International as at December 31, 2007 and 2006. The principal
activities of Winland International include shipping agency services, booking
cargo space, storage of goods, and declaration of customs. On August 18, 2009,
the Company disposed of the Haoyue vessel to a related party, Dalian Winland
Shipping Co., Ltd. The net cash proceeds were $1,272,685, after deducting tax
expenses of $28,350 from the gross proceeds of $1,301,035.
 
 DWIL
  Dalian Winland International Logistics
Co., Ltd. (“DWIL”) was
incorporated under the laws of the PRC on July 28, 2003 by three (3) investors,
namely, DWIG, DWSC and Winland International. At establishment, the percentage
of each party’s equity interest was 51%, 47.6% and 1.4%, respectively, and Li
Honglin and Xue Ying owned 48.4436% and 51.5564% of DWIL indirectly at
inception, respectively. According to a share trust instrument agreement
executed in February 2005, Xue Ying transferred 1.5564% of her interest in
Winland Logistics to Li Honglin. Thereafter, Li Honglin and Xue Ying each owned
50% of Winland Logistics as of December 31, 2007 and 2006. The principal
activities of Winland Logistics are freight forwarding services logistics
shipping agency services. DWIL owns one of the Company’s vessels.
 
 Shipping
Online
  Dalian Shipping Online Network Co.,
Ltd. (“DSON” or
“Shipping
Online”) was incorporated under the laws of the PRC on February 20, 2003
by two (2) investors, namely, Li Honglin and Xue Ying. At establishment, the
percentage of each party’s equity interest was 80% and 20%, respectively.
According to a share trust instrument executed in February 2005, Li Honglin
transferred 30% of his interest of Shipping Online to Xue Ying. Thereafter, Li
Honglin and Xue Ying each owned 50% of Shipping Online as at December 31, 2006
and 2007. The principal activities of Shipping Online are providing online
services to its members.
  - 6
-
  Summary
of Current Business of the Company
 
 The Company is a comprehensive, modern
international shipping company with its world headquarters based in China. The
Company is mainly engaged in a comprehensive range of international shipping and
logistics services such as bulk cargo transportation, chartering, shipping
agents, logistics, ship trading, spare parts supplies, crew recruitment and
shipping porter operation, as well as relevant industry news and data analysis
and advertising.
 
 The Company's core business is
international bulk cargo transportation. It has an ocean shipping fleet of 13
vessels, with a self-owned carrying capacity of nearly 200,000
tons.  Through monthly voyage charters and time charters, the Company
can provide carrying capacity of about 1,000,000 tons with shipping lines to
major ports around the world.
 
 In addition, the Company owns and
operates an industrial online portal called “Shipping Online” which is accessed
on the internet at http://www.sol.com.cn.
This website functions as a business platform, providing on-line and off-line
integrated international shipping and logistics services, such as bulk cargo
chartering, container booking, shipping agents, ship trading and building, spare
parts supplies, crew recruitment, as well as shipping news and data analysis;
the off-line operating team is made up of industrial elites and a logistics
network with branches in Beijing, Tianjin, Dalian, Yingkou, Qingdao,
Zhangjiagang, Lianyungang and Shanghai. These branches collectively provide a
full service system with a combination of integrated group and localized
branches.
  Providing comprehensive shipping and
logistics services through the internet is not only the innovation and creation
of the Company, but is also the basis of the transition for the entire shipping
industry from a traditional business model to a modern business model. The
Company believes it will create a broad space for development and lead the
accelerated development of the entire shipping industry.
 
 Our operating revenue in 2006 reached
US$59.2 million, of which the net profit was nearly US$7.4 million; as the
global shipping market experienced a breakthrough in development, the Company
has achieved annual operating revenues of US$70.3 million in 2007, net income of
US$21.4 million, enjoying approximately 200% growth as compared with 2006. The
operating revenue of 2008 reached $85.6 million, net income of $19.0 million.
However, the operating revenue and net income for the nine months ended
September 30, 2009 dropped to $36.4and a resulted net loss
of $5.3, compared with $70.6 and net income of $17.4 for the corresponding
period of 2008, respectively.
  The performance for the current
reporting period was significantly impacted by the global financial crisis which
resulted in a severely depressed shipping market, offset by the positive output
from management initiatives of cost control and the implementation of our
shipping online portal. The Company intends to steadily expand its capacity and
enlarge the size of its ocean transport fleet by acquiring additional vessels or
businesses at lower prices in light of the current slump in the shipping market.
The Company intends to continue to push forward with its comprehensive shipping
and logistics services with Shipping Online in order to expand its market
share.
 
 On June 3, 2009, Winland Shipping and
Bao Shun Shipping S.A. entered into a Memorandum of Agreement (“MOA”) with Mario
Shipping Corporation (“MSC”) for the
purchase by the Company from MSC of a 2003 built handysize vessel (20,212 gross
tonnage, 10,948 net tonnage) known as “Bao Shun” for a price of
US$20,700,000.  On June 4, 2009, the MOA was amended to nominate Bao
Shun Shipping S.A. as the actual buyer that would remain fully responsible for
performing under the MOA, and on July 14, 2009 the MOA was further amended to
change the expected time of delivery to the period of July 14, 2009 to October
10, 2009 and to modify certain payment and interest terms.  On August 14,
2009, the Company paid ten percent (10%) of the purchase price for the vessel
(approximately US$2,070,000) in cash.
 
 On September 25, 2009, the parties to
the MOA closed on the purchase of the vessel whereby the Company paid the
balance on the purchase price of US$18,630,000 as well as acquisition cost of
$181,125.  The Company funded $14,490,000 through a long-term loan
with Mitsubishi UFJ Lease & Finance Co., Ltd., which is secured by the
vessel “Bao Shun”, and funded $3,000,000 via a long-term note. The Company paid
the remaining balance of $1,321,125 in cash.  The loan is to be repaid
in eighty-four (84) monthly payments with an interest rate at the Japanese LIBOR
plus 2.3%.
  - 7
-
  Summary
of Significant Accounting Policies
 
 Use
of Estimates
 
 The preparation of the consolidated
financial statements in conformity with generally accepted accounting principles
of the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting periods. Management makes these estimates using the best
information available at the time the estimates are made. Actual results could
differ materially from those estimates.
 
 Revenue
Recognition
 
 Revenue
is recognized based on the following four criteria:
  (I)
                The
      amount of revenue can be measured reliably;(II)
                It
      is probable that the economic benefits will flow to the
      Company;(III)
                The
      stage of completion at the balance sheet date can be measured
      reliably;(IV)
                The
      costs incurred, or to be incurred can be measured
  reliably.
  For dry
bulk shipping service, the allocation of revenue between reporting periods is
based on relative transit time in each reporting period with expenses recognized
as incurred.
 
 For
chartering brokerage services, sales are recognized when the ship leaves
port.
 
 For
shipping agency and freight forwarding services, sales are recognized when the
ship leaves port.
 
 For
online services, sales are recognized according to the stage of completion in
accordance with the service period defined in executed contracts.
 
 Recent
Accounting Pronouncements
 
 Effective
January 1, 2009, the Company adopted ASC 805 (formerly SFAS No. 141 (R),
Business Combinations).
ASC 805 requires an acquirer to measure the identifiable assets acquired,
the liabilities assumed, and any noncontrolling interest in the acquiree at
their fair values on the acquisition date, with goodwill being the excess value
over the net identifiable assets acquired. The adoption of ASC 805 did not have
any effect on the Company’s condensed consolidated financial statements as of
September 30, 2009.
  Effective
January 1, 2009, the Company adopted ASC 810-10 (formerly SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements). This Statement establishes accounting
and reporting standards that require the ownership interests in subsidiaries’
non-parent owners be clearly presented in the equity section of the balance
sheet; requires the amount of consolidated net income attributable to the parent
and to the noncontrolling interest be clearly identified and presented on the
face of the consolidated statement of income; requires that changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently; requires that when a
subsidiary is deconsolidated, any retained noncontrolling equity investment in
the former subsidiary be initially measured at fair value and the gain or loss
on the deconsolidation of the subsidiary be measured using the fair value of any
noncontrolling equity; requires that entities provide disclosures that clearly
identify the interests of the parent and the interests of the noncontrolling
owners. The adoption of ASC 810-10 did not have a significant effect on the
Company’s condensed consolidated financial statements as of September 30,
2009.
 
 Effective
January 1, 2009, the Company adopted ASC 815-10 (formerly SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities), which amends SFAS No. 133 and
expands disclosures to include information about the fair value of derivatives,
related credit risks and a company's strategies and objectives for using
derivatives. The adoption of ASC 815-10 did not have a material effect on the
condensed consolidated financial statements as of September 30,
2009.
  - 8
-
  Effective
January 1, 2009, the Company adopted ASC 815-40 (formerly Emerging Issues Task
Force (“EITF”) Issue No. 07-05, Determining Whether an Instrument
(or Embedded Feature) Is Indexed to an Entity’s Own Stock(“EITF
07-05”). ASC 815-40
addresses the determination of whether an instrument (or an embedded feature) is
indexed to an entity's own stock, which is the first part of the scope exception
in paragraph 11(a) of FASB SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities(“SFAS 133”). If an instrument (or an
embedded feature) that has the characteristics of a derivative instrument under
paragraphs 6–9 of SFAS 133 is indexed to an entity's own stock, it is still
necessary to evaluate whether it is classified in stockholders' equity (or would
be classified in stockholders' equity if it were a freestanding instrument).
Other applicable authoritative accounting literature, including Issues EITF
00-19, Accounting for
Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company Own Stock, and EITF 05-2, The Meaning of “Conventional Debt
Instrument” in Issue No. 00-19, provides guidance for determining whether
an instrument (or an embedded feature) is classified in stockholders' equity (or
would be classified in stockholders' equity if it were a freestanding
instrument). ASC 815-40 does not address that second part of the scope exception
in paragraph 11(a) of SFAS 133. The adoption of ASC 815-40 did not have a
material effect on the condensed consolidated financial statements as of
September 30, 2009.
 
 On
April 1, 2009, the FASB approved ASC 805 (formerly FSP FAS 141(R)-1, Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from
Contingencies),which amends Statement 141(R) and eliminates the distinction between
contractual and non-contractual contingencies. Under ASC 805, an acquirer is
required to recognize at fair value an asset acquired or liability assumed in a
business combination that arises from a contingency if the acquisition-date fair
value of that asset or liability can be determined during the measurement
period. If the acquisition-date fair value cannot be determined, the acquirer
applies the recognition criteria in SFAS No. 5, Accounting for Contingencies
and Interpretation 14, “Reasonable Estimation of the Amount of a Loss – and
interpretation of FASB Statement No. 5,” to determine whether the
contingency should be recognized as of the acquisition date or after it. The
Company is currently evaluating the potential impact of adopting this
statement.
 
 ASC
320-10 (formerly FSP FAS 115-2 and FAS 124-2) amends the other-than-temporary
impairment guidance in U.S. GAAP for debt securities to make the guidance more
operational and to improve the presentation and disclosure of
other-than-temporary impairments on debt and equity securities in the financial
statements. It did not amend existing recognition and measurement guidance
related to other-than-temporary impairments of equity securities. We are
required to adopt ASC 320-10 for our interim and annual reporting periods ending
after June 15, 2009. ASC 320-10 does not require disclosures for periods
presented for comparative purposes at initial adoption. ASC 320-10 requires
comparative disclosures only for periods ending after initial adoption. The
Company is currently evaluating the potential impact of adopting this
statement.
 
 On
April 9, 2009, the FASB also approved ASC 825-10 (formerly FSP FAS 107-1
and APB 28-1, Interim
Disclosures about Fair Value of Financial Instruments)to require disclosures
about fair value of financial instruments in interim period financial statements
of publicly traded companies and in summarized financial information required by
APB Opinion No. 28, Interim Financial Reporting.
We are required to adopt ASC 825-10 for our interim and annual reporting periods
ending after June 15, 2009. ASC 825-10 does not require disclosures for
periods presented for comparative purposes at initial adoption. ASC 825-10
requires comparative disclosures only for periods ending after initial adoption.
The Company is currently evaluating the potential impact of adopting this
statement.
 
 In June 2009, the FASB SFAS No. 167,
Amendments to FASB
Interpretation No. 46(R),requires an enterprise to perform an analysis
and ongoing reassessments to determine whether the enterprises variable interest
or interests give it a controlling financial interest in a variable interest
entity and amends certain guidance for determining whether an entity is a
variable interest entity. It also requires enhanced disclosures that will
provide users of financial statements with more transparent information about an
enterprises involvement in a variable interest entity.  SFAS 167 is
effective as of the beginning of each reporting entity’s first annual reporting
period that begins after November 15, 2009 and for all interim reporting periods
after that.  The Company is currently evaluating the impact of the adoption
of SFAS 167. This recently issued but not yet enacted accounting standard has
not yet been codified by the FASB.
  - 9
-
  Results
of Operations for the Nine Months Ended September 30, 2009 Compared With the
Nine Months Ended September 30, 2008 (in U.S. dollars, except otherwise as
indicated)
 
 For The Nine Months Ended September
      30,2009
                    
                    
                    2008
                    
                    
                    Increase (Decrease)Amount
                    
                    
                    % of
                      Revenues
                    
                    
                    Amount
                    
                    
                    % of
                      Revenues
                    
                    
                    In Amount
                    
                    
                    In %Revenues
                    
                    
                    36,368,521
                    
                    
                    
                    100.0
                    %
                    
                    
                    70,552,447
                    
                    
                    
                    100.0
                    %
                    
                    
                    (34,183,926
                    )
                    
                    
                    -48.5
                    %Vessel
      operating expenses
                    
                    
                    30,757,559
                    
                    
                    
                    84.6
                    %
                    
                    
                    39,994,317
                    
                    
                    
                    56.7
                    %
                    
                    
                    (9,236,758
                    )
                    
                    
                    -23.1
                    %Service
      costs
                    
                    
                    2,488,842
                    
                    
                    
                    6.8
                    %
                    
                    
                    4,012,632
                    
                    
                    
                    5.7
                    %
                    
                    
                    (1,523,790
                    )
                    
                    
                    -38.0
                    %Depreciation
      and amortization
                    
                    
                    5,513,270
                    
                    
                    
                    15.2
                    %
                    
                    
                    5,563,243
                    
                    
                    
                    7.9
                    %
                    
                    
                    (49,973
                    )
                    
                    
                    -0.9
                    %General
      and administrative expenses
                    
                    
                    2,057,126
                    
                    
                    
                    5.7
                    %
                    
                    
                    2,492,468
                    
                    
                    
                    3.5
                    %
                    
                    
                    (435,342
                    )
                    
                    
                    -17.5
                    %Selling
      expenses
                    
                    
                    253,064
                    
                    
                    
                    0.7
                    %
                    
                    
                    -
                    
                    
                    
                    0.0
                    %
                    
                    
                    253,064
                    
                    
                    
                    0.0
                    %Interest
      expense, net
                    
                    
                    (131,978
                    )
                    
                    
                    -0.4
                    %
                    
                    
                    (540,129
                    )
                    
                    
                    -0.8
                    %
                    
                    
                    408,151
                    
                    
                    
                    -75.6
                    %Other
      expense, net
                    
                    
                    (218,667
                    )
                    
                    
                    -0.6
                    %
                    
                    
                    (468,069
                    )
                    
                    
                    -0.7
                    %
                    
                    
                    249,402
                    
                    
                    
                    -53.3
                    %Income
      tax expense
                    
                    
                    (49,060
                    )
                    
                    
                    -0.1
                    %
                    
                    
                    (133,954
                    )
                    
                    
                    -0.2
                    %
                    
                    
                    84,894
                    
                    
                    
                    -63.4
                    %Net
      (loss) income from discontinued operation
                    
                    
                    (225,552
                    )
                    
                    
                    -0.6
                    %
                    
                    
                    74,556
                    
                    
                    
                    0.1
                    %
                    
                    
                    (300,108
                    )
                    
                    
                    -402.5
                    %Net
      (loss) income
                    
                    
                    (5,326,597
                    )
                    
                    
                    -14.6
                    %
                    
                    
                    17,422,191
                    
                    
                    
                    24.7
                    %
                    
                    
                    (22,748,788
                    )
                    
                    
                    -130.6
                    %Weighted
      Average Shares Outstanding-
      Basic
                    
                    
                    130,000,000
                    
                    
                    
                    
                    
                    
                    
                    111,135,766
                    
                    
                    
                    
                    
                    
                    
                    18,864,234
                    
                    
                    
                    17.0
                    %-
      Diluted
                    
                    
                    130,000,000
                    
                    
                    
                    
                    
                    
                    
                    111,135,766
                    
                    
                    
                    
                    
                    
                    
                    18,864,234
                    
                    
                    
                    17.0
                    %Net
      (loss) income per share-
      Basic
                    
                    
                    (0.04
                    )
                    
                    
                    
                    
                    
                    
                    0.16
                    
                    
                    
                    
                    
                    
                    
                    (0.20
                    )
                    
                    
                    -125.0
                    %-
      Diluted
                    
                    
                    (0.04
                    )
                    
                    
                    
                    
                    
                    
                    0.16
                    
                    
                    
                    
                    
                    
                    
                    (0.20
                    )
                    
                    
                    -125.0
                    %
 
 Revenues
 
 Our
revenues are derived from the operation of:
 ·
              Dry
      bulk shipping
 ·
              Chartering
      brokerage
 ·
              Other
      activities which represent shipping agency services, freight forwarding
      services, and online services.
 
 Of the
total revenues, dry bulk shipping, chartering brokerage and other activities
contributed 46.8%, 44.2% and 9.0% for the nine months ended September 30, 2009,
respectively, compared with 68.7%, 26.4% and 4.9% for the comparable period in
2008, respectively.
  - 10
-
 
 For the
nine months ended September 30, 2009, total revenues decreased by approximately
$34.2 million, or 48.5%, to $36.4 million from $70.6 million for the nine months
ended September 30, 2008. This decrease consisted of a dry bulk shipping decline
of $31.5 million, or 64.9%; a chartering brokerage decline of $2.5 million, or
13.7%; and other activities decline of $0.4 million, or 11.7%.
 
 The
significant decrease in revenue was due to the severity of the decline in the
global shipping market as the impact of the global financial crisis and the
economic recession has broadened and deepened since late 2008. The Baltic Dry
Index, a leading indicator of the global dry bulk shipping market, dropped
approximately 67% for the nine months ended September 30, 2009 as compared with
the same period of 2008.
 
 Among
other activities, online services grew significantly. We believe this growth
reflected the management’s strategic decision to implement and market the
shipping online portal more aggressively at the beginning of 2009.
  Vessel Operating Expenses
 
 Vessel
operating expenses include mainly fuel costs, port fees and crew wages which
were incurred in the operation of dry bulk shipping, and vessel chartering costs
which were incurred in the business of chartering brokerage. For the nine months
ended September 30, 2009, vessel operating expenses decreased by $9.2 million,
or 23.1%, to $30.8 million, compared with $40.0 million for the comparable
period in 2008. This decrease is principally attributable to the lower fuel rate
worldwide as well as decreased business volume, which resulted in the decrease
in fuel and related consumption.
 
 Service Costs
 
 Service
costs were incurred in the operation of other activities in our freight
forwarding services. For the nine months ended September 30, 2009, service costs
decreased by $1.5 million, or 38.0%, to $2.5 million, compared with $4.0 million
for the comparable period in 2008. This decrease was in line with the decreased
revenue generated from the operation of our freight forwarding
services.
 
 Depreciation and
Amortization
 
 Depreciation
of vessels and amortization of deferred dry dock fees decreased slightly by
$0.05 million, or 0.9%, to $5.5 million for the nine months ended September 30,
2009, compared with $5.6 million for the same period in 2008. This decrease is
attributable to the decreased depreciation of $0.3 million as a result of two
vessels being fully depreciated in the first half year of 2008, offset by
increased amortization of dry dock fees of $0.2 million.
 
 General and Administrative
Expenses
 
 General
and administrative expenses decreased by approximately $0.4 million, or 17.5%,
to $2.1 million for the nine months ended September 30, 2009 from $2.5 million
for the same period in 2008. This decrease is mainly attributable to decreased
management costs as a result of the management’s strategic cost control
initiative which was established at the beginning of 2009.
 
 Selling Expenses
 
 Selling
expenses were commissions paid to promote our dry bulk shipping and chartering
brokerage business, which reflected the management’s strategy of expanding the
business initiated at the beginning of 2009. For the nine months ended September
30, 2009, selling expenses were $0.3 million.
 
 Interest Expense, Net
 
 Net
interest expense declined significantly by $0.4 million, or 75.6%, to $0.1
million for the nine months ended September 30, 2009, compared with
approximately $0.5 million for corresponding period in 2008. This decrease is
primarily attributable to an interest rate decline on long-term loans and
increased payments to pay off outstanding long-term loans.
  - 11
-
  Other
Expense, Net
 
 Other
expense decreased by $0.3 million, or 53.3%, to $0.2 million for the nine months
ended September 30, 2009, compared with $0.5 million for the nine months ended
September 30, 2008. This decrease is mainly attributable to currency translation
resulting from other activities which is deemed to be a reasonable
fluctuation.
 
 Income Tax Expense
 
 Income
tax was imposed on the taxable income from other activities. For the nine months
ended September 30, 2009, income tax expense was $0.05 million as compared with
$0.10 million for the same period in 2008. This difference is mainly
attributable to changes in deferred tax assets and liabilities.
 
 Net (Loss) Income from Discontinued
Operation
 
 Net loss
from discontinued operation was $0.2 million for the nine months ended September
30, 2009, compared with net income from discontinued operation of $0.07 million
for the same period in 2008. Due to the depressed ship market, the discontinued
operation of a vessel suffered a loss for the nine months ended September 30,
2009.
 
 Net (Loss) Income
 
 Net
income decreased by approximately $22.7 million, or 130.6%, to a net loss of
$5.3 million for the nine months ended September 30, 2009 from a net income of
$17.4 million for the same period in 2008. This decrease is primarily
attributable to the significant decline in revenue, loss incurred from
discontinued operation, and increased selling expenses, partially offset by the
cumulative effect of other factors aforementioned.
 
 As a
percentage of revenue, net (loss) income was (14.6%) and 24.7% for the nine
months ended September 30, 2009 and 2008, respectively. This change was a
reflection of the unprecedented macro-economic environment affecting the
shipping market negatively worldwide.
 
 Net (Loss) Income Per
Share
 
 For both
basic and diluted shares, net (loss) income per share decreased by $0.2, or
125.0%, to net loss of $(0.04) per share for the nine months ended September 30,
2009 from $0.16 per share for the same period of 2008. This decrease is
attributable to decreased net income of $22.8 million, offset by an increase of
18,864,234 shares during the comparable periods.
 
 Results
of Operations for the Three Months Ended September 30, 2009 Compared With the
Three Months Ended September 30, 2008 (in U.S. dollars, except otherwise as
indicated)
 
 For
      The Three Months Ended September 30,2009
                        
                        
                        2008
                        
                        
                        Increase
      (Decrease)Amount
                        
                        
                        %
      of
                          Revenues
                        
                        
                        Amount
                        
                        
                        %
      of
                          Revenues
                        
                        
                        In
      Amount
                        
                        
                        In
      %Revenues
                        
                        
                        11,841,798
                        
                        
                        
                        100.0
                        %
                        
                        
                        22,302,487
                        
                        
                        
                        100.0
                        %
                        
                        
                        (10,460,689
                        )
                        
                        
                        -46.9
                        %Vessel
      operating expenses
                        
                        
                        9,586,920
                        
                        
                        
                        81.0
                        %
                        
                        
                        11,277,732
                        
                        
                        
                        50.6
                        %
                        
                        
                        (1,690,812
                        )
                        
                        
                        -15.0
                        %Service
      costs
                        
                        
                        505,173
                        
                        
                        
                        4.3
                        %
                        
                        
                        1,418,584
                        
                        
                        
                        6.4
                        %
                        
                        
                        (913,411
                        )
                        
                        
                        -64.4
                        %Depreciation
      and amortization
                        
                        
                        1,770,878
                        
                        
                        
                        15.0
                        %
                        
                        
                        1,856,199
                        
                        
                        
                        8.3
                        %
                        
                        
                        (85,321
                        )
                        
                        
                        -4.6
                        %General
      and administrative expenses
                        
                        
                        748,348
                        
                        
                        
                        6.3
                        %
                        
                        
                        1,702,528
                        
                        
                        
                        7.6
                        %
                        
                        
                        (954,180
                        )
                        
                        
                        -56.0
                        %Selling
      expenses
                        
                        
                        88,907
                        
                        
                        
                        0.8
                        %
                        
                        
                        -
                        
                        
                        
                        0.0
                        %
                        
                        
                        88,907
                        
                        
                        
                        0.0
                        %Interest
      expense, net
                        
                        
                        (43,478
                        )
                        
                        
                        -0.4
                        %
                        
                        
                        (266,404
                        )
                        
                        
                        -1.2
                        %
                        
                        
                        222,926
                        
                        
                        
                        -83.7
                        %Other
      expense, net
                        
                        
                        (149,229
                        )
                        
                        
                        -1.3
                        %
                        
                        
                        (505,367
                        )
                        
                        
                        -2.3
                        %
                        
                        
                        356,138
                        
                        
                        
                        -70.5
                        %Income
      tax expense
                        
                        
                        (16,049
                        )
                        
                        
                        -0.1
                        %
                        
                        
                        (37,902
                        )
                        
                        
                        -0.2
                        %
                        
                        
                        21,853
                        
                        
                        
                        -57.7
                        %Net
      (loss) income from discontinued operation
                        
                        
                        (102,809
                        )
                        
                        
                        -0.9
                        %
                        
                        
                        60,704
                        
                        
                        
                        0.3
                        %
                        
                        
                        (163,513
                        )
                        
                        
                        -269.3
                        %Net
      (loss) income
                        
                        
                        (1,169,993
                        )
                        
                        
                        -9.9
                        %
                        
                        
                        5,298,476
                        
                        
                        
                        23.8
                        %
                        
                        
                        (6,468,469
                        )
                        
                        
                        -122.1
                        %Weighted
      Average Shares Outstanding-
      Basic
                        
                        
                        130,000,000
                        
                        
                        
                        
                        
                        
                        
                        119,465,761
                        
                        
                        
                        
                        
                        
                        
                        10,534,239
                        
                        
                        
                        8.8
                        %-
      Diluted
                        
                        
                        130,000,000
                        
                        
                        
                        
                        
                        
                        
                        119,465,761
                        
                        
                        
                        
                        
                        
                        
                        10,534,239
                        
                        
                        
                        8.8
                        %Net
      (loss) income per share-
      Basic
                        
                        
                        (0.01
                        )
                        
                        
                        
                        
                        
                        
                        0.04
                        
                        
                        
                        
                        
                        
                        
                        (0.05
                        )
                        
                        
                        -125.0
                        %-
      Diluted
                        
                        
                        (0.01
                        )
                        
                        
                        
                        
                        
                        
                        0.04
                        
                        
                        
                        
                        
                        
                        
                        (0.05
                        )
                        
                        
                        -125.0
                        %
 
 - 12
-
  Revenues
 
 Our
revenues are derived from the operation of:
 ·
              Dry
      bulk shipping
 ·
              Chartering
      brokerage
 ·
              Other
      activities which represent shipping agency services, freight forwarding
      services, and online services.
 
 For the
three months ended September 30, 2009, total revenues declined by approximately
$10.5 million, or 46.9%, to $11.8 million from $22.3 million for the three
months ended September 30, 2008.
 
 This
significant revenue decrease is attributable to the severity of the decline in
the global shipping market as the impact of the global financial crisis and the
economic recession has broadened and deepened since late 2008. The Baltic Dry
Index, a leading indicator of the global dry bulk shipping market, dropped
approximately 57% for the three months ended September 30, 2009 compared with
the same period of 2008.
 
 Among
other activities, online services continued to grow. This growth reflected the
management’s strategic decision to implement and market the shipping online
portal more aggressively at the beginning of 2009.
 
 Vessel Operating Expenses
 
 Vessel
operating expenses include mainly fuel costs, port fees and crew wages which
were incurred in the operation of dry bulk shipping, and vessel chartering costs
which were incurred in the business of chartering brokerage. For the three
months ended September 30, 2009, vessel operating expenses decreased by $1.7
million, or 15.0%, to $9.6 million, compared with $11.3 million for the
comparable period in 2008. This decrease is principally attributable to the
lower fuel rate worldwide as well as decreased business volume, which resulted
in the decrease in fuel and related consumption.
 
 - 13
-
  Service
Costs
  Service
costs were incurred in the operation of other activities in our freight
forwarding services. For the three months ended September 30, 2009, service
costs decreased by $0.9 million, or 64.4%, to $0.5 million, compared with $1.4
million for the comparable period in 2008. This decrease was in line with the
decreased revenue generated from the operation of our freight forwarding
services.
 
 Depreciation and
Amortization
 
 Depreciation
of vessels and amortization of deferred dry dock fees decreased by $0.09
million, or 4.6%, to $1.8 million for the three months ended September 30, 2009,
compared with $1.9 million for the same period in 2008. This decrease is
principally attributable to the decreased depreciation of vessels as a result of
two vessels being fully depreciated in the first half year of 2008.
 
 General and Administrative
Expenses
 
 General
and administrative expenses decreased by approximately $1.0 million, or 56.0%,
to $0.7 million for the three months ended September 30, 2009 from $1.7 million
for the same period in 2008. This decrease is mainly attributable to decreased
management costs as a result of the management’s strategic cost control
initiative which was established at the beginning of 2009.
 
 Selling Expenses
 
 Selling
expenses were commissions paid to promote our dry bulk shipping and chartering
brokerage business, which reflected the management’s strategy of expanding the
business initiated at the beginning of 2009. For the three months ended
September 30, 2009, selling expenses were $0.09 million.
 
 Interest Expense, Net
 
 Net
interest expense declined significantly by $0.2 million, or 83.7%, to $0.04
million for the three months ended September 30, 2009, compared with
approximately $0.27 million for corresponding period in 2008. This decrease is
primarily attributable to an interest rate decline on loans and increased
payments to pay off outstanding long-term loans.
 
 Other Expense, Net
 
 Other
expense decreased by $0.4 million, or 70.5%, to $0.1 million for the three
months ended September 30, 2009, compared with $0.5 million for the same period
in 2008. This decrease is mainly attributable to currency translation resulting
from other activities which is deemed to be a reasonable
fluctuation.
 
 Income Tax Expense
 
 Income
tax was imposed on the taxable income from other activities. For the three
months ended September 30, 2009, income tax expense was $0.02 million as
compared with $0.04 million for the same period in 2008. This difference is
mainly attributable to changes in deferred tax assets and
liabilities.
 
 Net (Loss) Income from Discontinued
Operation
 
 Net loss
from discontinued operation was $0.1 million for the three months ended
September 30, 2009, compared with net gain from discontinued operation of $0.06
million for the same period in 2008. Due to the depressed ship market, the
discontinued operation of a vessel suffered a loss for the three months ended
September 30, 2009.
 
 Net (Loss) Income
 
 Net
income decreased by approximately $6.5 million, or 122.1%, to a net loss of $1.2
million for the three months ended September 30, 2009 from a net income of $5.3
million for the same period in 2008. This decrease is primarily attributable to
the significant decline in revenue, loss incurred from discontinued operation,
and increased selling expenses, partially offset by the cumulative effect of
other factors aforementioned.
  - 14
-
  As a
percentage of revenue, net (loss) income was (9.9%) and 23.8% for the three
months ended September 30, 2009 and 2008, respectively. This change was a
reflection of the unprecedented macro-economic environment affecting the
shipping market negatively worldwide.
 
 Net (Loss) Income Per
Share
 
 For both
basic and diluted shares, net (loss) income per share decreased by $0.05, or
125.0%, to net loss of $(0.01) per share for the three months ended September
30, 2009 from $0.04 per share for the same period of 2008. This decrease is
attributable to decreased net income of $6.5 million, offset by an increase of
10,534,239 shares during the comparable period.
 
 Liquidity
and Capital Resources
 
 Working Capital
 
 We
had a working capital deficit of $8.9 million at September 30, 2009 as compared
to a working capital of $1.7 million at December 31, 2008. This is principally
attributable to decreased cash and cash equivalents resulting from the net loss
of $5.3 million, cash used in operating activities of $0.4 million, and cash
used in investing activities of $19.6 million resulted from a vessel purchase
for the nine months ended September 30, 2009 compared with the net income of
$17.4 million, cash provided by operating activities of $21.9 million, and cash
used in investing activities of $0.1 million for the corresponding period in
2008, respectively; offset by cash provided by financing activities of $14.2
million compared with cash used of $19.2 million for the comparable
periods.
 
 Operating Activities
 
 For the
nine months ended September 30, 2009, our cash used in operating activities was
$0.4 million. This is primarily attributable to our net loss of $5.3 million
adjusted by amortization of $3.1 million and depreciation of $2.4 million; and
to increased dry docking cost of $2.0 million and other receivables of $0.7
million. These were offset by increased accounts payable of $0.5 million,
increased advance from customers of $0.3 million and increased other current
liabilities of $0.2 million.
 
 For the
nine months ended September 30, 2008, our cash provided by operating activities
of $21.9 million is primarily attributable to the net income of $17.4 million
with adjustments of amortization of $2.9 million and depreciation of $2.7
million; to decreased other receivables of $2.6 million; and to increased other
current liabilities of $0.7 million. These were offset by increased deferred dry
dock fees of $1.4 million, decreased accounts payable of $1.6 million, and
decreased advance from customers of $1.3 million.
 
 Investing Activities
 
 Net cash
used in investing activities for the nine months ended September 30, 2009 was
$19.6 million. This was due to acquiring a new vessel, offset by the net cash
proceeds from disposition of a vessel.
 
 For the
nine months ended September 30, 2008, net cash used in investing activities was
$0.1 million which was used to purchase fixed assets.
 
 Financing Activities
 
 Net cash
provided by our financing activities was $14.2 million for the nine months ended
September 30, 2009. It is mainly attributable to proceeds from long-term loans
of $14.5 million, related parties of $3.2 million, long-term notes of $2.7
million, and short-term loans of $1.2 million, respectively; offset by
repayments to related parties of $5.3 million and long-term loans of $2.1
million, respectively.
  - 15
-
  
 For the
nine months ended September 30, 2008, net cash used in our financing activities
was $19.2 million. It principally included payment of dividends of $48.2
million, advances to related parties of $3.3 million and repayments of the
credit facilities including loans and note of $5.0 million; offset by the
proceeds from related parties of $37.4 million.
 
 To face
the challenges of a global financial crisis and a depressed shipping market, we
have taken effective initiatives to pursue profitability by pushing forward the
implementation of our online portal, which has resulted in sales increases on
the segment of on line services. We have developed cost control strategies on
cutting vessel management costs as well as general management
costs.  We have carried out our strategies to collect outstanding
balances while maintaining strong business relationships with our customers. We
also negotiate with our vendors to extend our credit term. To improve liquidity,
we changed the registrations of the flags of two vessels. With new
registrations, we believe dry dock fees will continue to decrease while such
vessels keep meeting the standards of certification and inspection.
  Our
principal capital sources are cash flows from operations and short-term bank
loan and long-term loans as well as private debt if needed. We believe that cash
flow from our operations will improve as business operations rebound and global
economy showing signs of recovery. We believe that existing cash and resources
from our credit facilities are sufficient to meet our projected operating
requirements for the next twelve months.
 
 Capital Expenditures
 
 We intend
to make capital expenditures in connection with fleet expansion if possible. We
will incur capital expenditures for the implementation of our shipping online
portal and dry dockings of our fleet for the next twelve months.
 
 Material
Commitments/Tabular Disclosure of Contractual Obligations
 
 The repayment schedule for the
principal amount of long-term loans is as follows:
 
 Period Ended September 30,
                      
                      Amount2010
                      
                      $
                      4,128,9082011
                      
                      
                      4,128,9082012
                      
                      
                      1,427,0492013
                      
                      
                      1,317,2762014
                      
                      
                      1,317,276Thereafter
                      
                      
                      8,201,263Total
                      
                      $
                      20,520,680
  The repayment schedule for long-term
notes payable is as follows:
 
 Period Ended September 30,
                    
                    Amount2010
                    
                    $
                    3,366,9502011
                    
                    
                    445,0942012
                    
                    
                    576,1982013
                    
                    
                    738,6882014
                    
                    
                    834,635Total
                    
                    $
                    5,961,565
 
 - 16
-
 As of
September 30, 2009, future minimum payments required under non-cancelable leases
are:
 
 Period Ended September 30,
                    
                    Amount2010
                    
                    
                    69,2542011
                    
                    
                    8,390Total
                    
                    $
                    77,644
  On June 3, 2009, Winland Shipping and
Bao Shun Shipping S.A. entered into a Memorandum of Agreement (“MOA”) with Mario
Shipping Corporation (“MSC”) for the
purchase by the Company from MSC of a 2003 built handysize vessel (20,212 gross
tonnage, 10,948 net tonnage) known as “Bao Shun” for a price of $20,700,000. On
June 4, 2009, the MOA was amended to nominate Bao Shun Shipping S.A. as the
actual buyer who would remain full responsible for performing under the MOA, and
on July 14, 2009, the MOA was further amended to change the expected time of
delivery to the period of July 14, 2009 to October 10, 2009 and to modify
certain payment and interest terms. On August 14, 2009, the Company paid ten
percent (10%) of the purchase price for the vessel (approximately US$2,070,000)
in cash.
  On September 25, 2009, the parties to
the MOA closed on the purchase of the vessel whereby the Company paid the
balance on the purchase price of $18,630,000 as well as acquisition cost of
$181,125. The Company funded $14,490,000 through a long-term loan with
Mitsubishi UFJ Lease & Finance Co., Ltd., which is secured by the vessel
“Bao Shun”, and funded $3,000,000 via a long-term note. The Company paid the
remaining balance of $1,321,125 in cash. The loan is to be repaid in eighty-four
(84) monthly payments with an interest rate at the Japanese LIBOR plus
2.3%.
  Off-Balance
Sheet Arrangements
 
 None.
 
 ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 Not
required for a “smaller reporting company”.
 
 ITEM
4. CONTROLS AND PROCEDURES
 
 Disclosure
Controls and Procedures
 
 Under the supervision and with the
participation of our management, including our principal executive officer and
principal financial officer, we conducted an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures, as defined
in Rule 13a-15(e) under the Exchange Act. Based on this evaluation, our
management, including our principal executive officer and our principal
financial officer, concluded that our disclosure controls and procedures were
effective as of the fiscal quarter covered by this report, to ensure that
information required to be disclosed by us in the reports filed or submitted by
us under the Exchange Act (i) is recorded, processed, summarized and
reported within the time period specified in SEC rules and forms, and
(ii) is accumulated and communicated to our management, including our
principal executive officer and our principal financial officer, as appropriate
to allow appropriate decisions on a timely basis regarding required
disclosure.
 
 Internal
Control over Financial Reporting
 
 There were no changes in internal
control over financial reporting that occurred during the fiscal quarter covered
by this report that have materially affected, or are reasonably likely to
materially affect, our internal control over financial
reporting.
  - 17
-
  PART
II
 OTHER
INFORMATION
 
 ITEM
1.  LEGAL PROCEEDINGS
 
 In the normal course of business, we
are named as a defendant in lawsuits in which claims are asserted against us. In
our opinion, the liabilities, if any, which may ultimately result from such
lawsuits, are not expected to have a material adverse effect on our financial
position, results of operations or cash flows. As of September 30, 2009, the
claim of approximately $501,640(including interest) by
Sinoriches Global Ltd. in connection with a voyage charter contract dispute is
in arbitration.
 
 ITEM
1A. RISK FACTORS
 
 Not
required for a "smaller reporting company".
 
 ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
 None.
 
 ITEM
3. DEFAULTS UPON SENIOR SECURITIES
 
 None.
 
 ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
 
 None.
 
 ITEM
5. OTHER INFORMATION
 
 On August 18, 2009, Dalian Winland
International Shipping Agency Co., Ltd., a company controlled by Best Summit
Enterprise Limited, which is a wholly-owned subsidiary of SkyAce Group Limited,
a wholly-owned subsidiary of the Company, executed a Vessel Sale and Purchase
Contract pursuant to which it sold the general cargo vessel “Hao Yue” to Dalian
Winland Shipping Co., Ltd. (“DWSC”), a subsidiary of Winland Group Company, Ltd.
(“Winland Group”), a company which is related to the Company through common
shareholders.  The Company received net cash proceeds of $1,272,685 after
deducting tax expenses of $28,350 from the gross proceeds of
$1,301,035.
  On June
3, 2009, Winland Shipping Co. Ltd. and Bao Shun Shipping S.A., each a
wholly-owned subsidiary of Plentimillion Group Limited, which is a wholly-owned
subsidiary of SkyAce, entered into a Memorandum of Agreement with Mario Shipping
Corporation (“MSC”) for the purchase by the Company from MSC of a 2003 built
handysize vessel (20,212 gross tonnage, 10,948 net tonnage) known as “Bao Shun”
(the “MOA”) for a price of approximately US$20,700,000. A copy of the MOA is
attached hereto as Exhibit 10.23. On June 4, 2009, the MOA was amended to
nominate Bao Shun Shipping S.A. as the actual buyer who would remain full
responsible for performing under the MOA. (a copy of which is attached hereto as
Exhibit 10.24), and on July 14, 2009, the MOA was further amended to change the
expected time of delivery to the period of July 14, 2009 to October 10, 2009 and
to modify certain payment and interest terms (a copy of which is attached hereto
as Exhibit 10.25). On August 14, 2009, the Company paid ten percent (10%) of the
purchase price for the vessel (approximately US$2,070,000) in cash.
  On
September 25, 2009, the parties to the MOA closed on the purchase of the vessel
whereby the Company paid the balance of US$18,630,000 as well as acquisition
cost of $181,125. The Company funded $14,490,000 through a long-term loan with
Mitsubishi UFJ Lease & Finance Co., Ltd. and $3,000,000 via a long-term
note. The Company paid the remaining balance of $1,321,125 in cash. The loan is
secured by the vessel “Bao Shun” and is to be repaid in eighty-four (84) monthly
payments with an interest rate at the Japanese LIBOR plus 2.3%. The loan
documents are attached hereto as Exhibits 10.26 - 10.29.
  - 18
-
  ITEM
6. EXHIBITS
 
 (a) Exhibits:
  EXHIBIT
                        NO.
                      
                      DESCRIPTION
                      
                      LOCATION2.1
                      
                      Share
      Exchange Agreement, dated August 12, 2008, by and among Trip Tech, Inc.,
      SkyAce Group Limited and Pioneer Creation Holdings Limited
                      
                      Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 20083.1
                      
                      Articles
      of Incorporation of Trip Tech, Inc.
                      
                      Incorporated
      by reference to Exhibit 3.1 to the Company’s Registration Statement on
      Form SB-2 as filed with the SEC on May 14, 20073.2
                      
                      Amended
      and Restated Bylaws of Trip Tech, Inc. dated as of August 27,
      2008
                      
                      Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on September 29, 20083.3
                      
                      Memorandum
      and Articles of Associationof SkyAce Group
      Limited
                      
                      Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 20083.4
                      
                      Certificate
      of Incorporation of SkyAce Group Limited
                      
                      Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 20083.5
                      
                      Memorandum
      and Articles of Association of Plentimillion Group Limited
                      
                      Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 20083.6
                      
                      Certificate
      of Incorporation of Plentimilllion Group Limited
                      
                      Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 20083.7
                      
                      Memorandum
      and Articles of Association of Best Summit Enterprises
    Limited
                      
                      Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 20083.8
                      
                      Certificate
      of Incorporation of Best Summit Enterprises Limited
                      
                      Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 20083.9
                      
                      Memorandum
      and Articles of Association of Wallis Development Limited
                      
                      Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 20083.10
                      
                      Certificate
      of Incorporation of Wallis Development Limited
                      
                      Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 20083.11
                      
                      Articles
      of Association of Beijing Huate Xingye Keji Co. Ltd.
                      
                      Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 20083.12
                      
                      Certificate
      of Incorporation of Beijing Huate Xingye Keji Co. Ltd.
                      
                      Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 20083.13
                      
                      Certificate
      of Correction to Trip Tech’s Articles of Incorporation, dated August 11,
      2008
                      
                      Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12,
2008
  - 19
-
 
 3.14
                
                Certificate
      of Amendment to Certificate of Incorporation of the Company, dated
      September 24, 2008
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on September 29, 20083.15
                
                Certificate
      of Corporate Resolutions Designating Series A Preferred Stock of the
      Company, dated August 12, 2008
                
                Incorporated
      by reference to Exhibit 3.15 to the Company’s Annual Report on Form 10-K
      as filed with the SEC on March 31, 200910.1
                
                Exclusive
      Technology Consultation Service Agreement, dated March 31, 2008, by and
      among Beijing Huate Xingye Keji Co. Ltd. and Winland
      International
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 2008
 
 10.2
                
                Exclusive
      Technology Consultation Service Agreement, dated March 31, 2008, by and
      among Beijing Huate Xingye Keji Co. Ltd. and Winland
    Logistics
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.3
                
                Exclusive
      Technology Consultation Service Agreement, dated March 31, 2008, by and
      among Beijing Huate Xingye Keji Co. Ltd. and Shipping
    Online
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.4
                
                Exclusive
      Equity Interest Purchase Agreement, dated March 31, 2008, by and among
      Wallis Development Limited, Dalian Winland International Shipping Agency
      Co., Ltd. and Dalian Winland Group Co., Ltd.
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.5
                
                Exclusive
      Equity Interest Purchase Agreement, dated March 31, 2008, by and among
      Wallis Development Limited, Dalian Winland International Shipping Agency
      Co., Ltd. and Dalian Weihang Logistic Agent Co., Ltd.
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.6
                
                Exclusive
      Equity Interest Purchase Agreement, dated March 31, 2008, by and among
      Wallis Development Limited, Dalian Winland International Shipping Agency
      Co., Ltd. and Dalian Winland Shipping Co., Ltd.
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.7
                
                Exclusive
      Equity Interest Purchase Agreement, dated March 31, 2008, by and between
      Wallis Development Limited, Dalian Winland International Logistics Co.,
      Ltd. and Dalian Winland Group Co., Ltd.
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.8
                
                Exclusive
      Equity Interest Purchase Agreement, dated March 31, 2008, by and between
      Wallis Development Limited, Dalian Winland International Logistics Co.,
      Ltd. and Dalian Winland Shipping Co., Ltd.
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.9
                
                Exclusive
      Equity Interest Purchase Agreement, dated March 31, 2008, by and between
      Wallis Development Limited, Dalian Winland International Logistics Co.,
      Ltd. and Dalian Winland International Shipping Agency Co.,
      Ltd.
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 2008
  - 20
-
 
 10.10
                
                Exclusive
      Equity Interest Purchase Agreement, dated March 31, 2008, by and among
      Wallis Development Limited, Dalian Shipping Online Network Co., Ltd. and
      Li Honglin
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.11
                
                Exclusive
      Equity Interest Purchase Agreement, dated March 31, 2008, by and among
      Wallis Development Limited, Dalian Shipping Online Network Co., Ltd. and
      Xue Ying
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 2008
 
 10.12
                
                Equity
      Interest Pledge Agreement, dated March 31, 2008, by and between Beijing
      Huate Xingye Keji Co. Ltd. and Dalian Winland Group Co.
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.13
                
                Equity
      Interest Pledge Agreement, dated March 31, 2008, by and between Beijing
      Huate Xingye Keji Co. Ltd. and Dalian Winland Shipping Co.,
      Ltd.
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.14
                
                Equity
      Interest Pledge Agreement, dated March 31, 2008, by and between Beijing
      Huate Xingye Keji Co. Ltd. and Dalian Weihang Logistic Agent Co.,
      Ltd.
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.15
                
                Equity
      Interest Pledge Agreement, dated March 31, 2008, by and between Beijing
      Huate Xingye Keji Co. Ltd. and Dalian Winland International Logistics Co.,
      Ltd.
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.16
                
                Equity
      Interest Pledge Agreement, dated March 31, 2008, by and between Beijing
      Huate Xingye Keji Co. Ltd. and Dalian Winland Group Co.
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.17
                
                Equity
      Interest Pledge Agreement, dated March 31, 2008, by and between Beijing
      Huate Xingye Keji Co. Ltd. and Winland Shipping Co., Ltd.
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.18
                
                Equity
      Interest Pledge Agreement, dated March 31, 2008, by and between Beijing
      Huate Xingye Keji Co. Ltd. and Li Honglin
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.19
                
                Equity
      Interest Pledge Agreement, dated March 31, 2008, by and between Beijing
      Huate Xingye Keji Co. Ltd. and Xue Ying
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.20
                
                Powers
      of Attorney, dated March 31, 2008, executed by Dalian Winland Group Co.,
      Ltd., Dalian Winland Shipping Co., Ltd. and Dalian Weihang Logistic Agent
      Co., Ltd. in favor of Beijing Huate Xingye Keji Co. Ltd. For Dalian
      Winland International Shipping Agency Co., Ltd.
                
                Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 2008
  - 21
-
 
 10.21
                    
                    Powers
      of Attorney, dated March 31, 2008, executed by Dalian Winland Group Co.,
      Ltd., Dalian Winland Shipping Co., Ltd. and Dalian Winland International
      Shipping Agency Co., Ltd. in favor of Beijing Huate Xingye Keji Co. Ltd.
      for Dalian Winland International Logistics Co., Ltd.
                    
                    Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.22
                    
                    Powers
      of Attorney, dated March 31, 2008, executed by Li Honglin and Xue Ying in
      favor of Beijing Huate Xingye Keji Co. Ltd. and Dalian Shipping Online
      Network Co., Ltd.
                    
                    Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200810.23
                    
                    Memorandum
      of Agreement, dated June 3, 2009, by and between Mario Shipping
      Corporation and Winland Shipping Co. Ltd.
                    
                    Provided
      herewith10.24
                    
                    Addendum No.
      1 to Memorandum of Agreement dated June 4, 2009 (Bao
      Shun)
                    
                    Provided
      herewith10.25
                    
                    Addendum
      No. 2 to Memorandum of Agreement dated July 14, 2009 (Bao
      Shun)
                    
                    Provided
      herewith10.26
                    
                    Loan
      Agreement (Mitsubishi UFJ Lease Finance Co., Ltd.)
                    
                    Provided
      herewith10.27
                    
                    Amendment
      to Loan Agreement (Mitsubishi UFJ Lease Finance Co., Ltd.)
                    
                    Provided
      herewith10.28
                    
                    First
      Preferred Panamanian Ship Mortgage
                    
                    Provided
      herewith10.29
                    
                    Deed
      of Guarantee
                    
                    Provided
      herewith14.1
                    
                    Code
      of Ethics
                    
                    Incorporated
      by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-KSB
      as filed with the SEC on March 28, 200821
                    
                    List
      of Subsidiaries
                    
                    Incorporated
      by reference to the Company’s Current Report on Form 8-K as filed with the
      SEC on August 12, 200831.1
                    
                    Certifications
      of the Chief Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
                    
                    Provided
      herewith31.2
                    
                    Certifications
      of the Chief Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
                    
                    Provided
      herewith32.1
                    
                    Certification
      Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
      the Sarbanes-Oxley Act Of 2002
                    
                    Provided
      herewith
  - 22
-
 
 32.2
                
                Certification
      Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
      the Sarbanes-Oxley Act Of 2002
                
                Provided
      herewith99.1
                
                Audit
      Committee Charter, dated January 15, 2009
                
                Incorporated
      by reference Exhibit 99.1 to the Company’s Current Report on Form 8-K as
      filed with the SEC on January 20, 200999.2
                
                Compensation
      Committee Charter, dated January 15, 2009
                
                Incorporated
      by reference Exhibit 99.2 to the Company’s Current Report on Form 8-K as
      filed with the SEC on January 20, 200999.3
                
                Corporate
      Governance and Nominating Committee Charter, dated January 15,
      2009
                
                Incorporated
      by reference Exhibit 99.3 to the Company’s Current Report on Form 8-K as
      filed with the SEC on January 20,
2009
  - 23
-
  SIGNATURES
 
 Pursuant
to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this Amendment No. 1 to Form
10-Q to be signed on its behalf by the undersigned, thereunto duly
authorized.
  Date: November
      13, 2009
                    By:
                    /s/
      Xue YingName:
                    Xue
      YingIts:
                    Chief
      Executive Officer, Principal Executive Officer,
                      Secretary
      and DirectorDate: November
      13, 2009
                    By:
                    /s/
      Jing YanName:
                    Jing
      YanIts:
                    Chief
      Financial Officer, Principal Financial and
                      Accounting
      Officer
  - 24
-