U.S. 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, 2010  [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934  For the transition period from ______________________ to ______________________  Commission File No. 333-134991  BAOSHINN CORPORATION(Exact name of small business issuer as specified in its charter) Nevada20-3486523(State or other jurisdiction of incorporation or formation)(I.R.S. employer identification number)   A-B 8/F Hart Avenue Tsimshatsui  Kowloon, Hong Kong  N/A  (Address of principal executive offices) (Zip Code)  Registrant's telephone number: (852) 2815-1355_______________________________________________  Securities registered under Section 12(b) of the Exchange Act:  None.   Securities registered under Section 12(g) of the Exchange Act:  Common Stock, $.001 par value per share  (Title of Class)  Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]  State the number of shares outstanding of each of the issuer's classes of common equity, as of September 30, 2010: 21,400,000 shares of common stock.  Transitional Small Business Disclosure Format (check one):  Yes [ ] No [X]


BAOSHINN CORPORATION
UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS INDEX   PART I  FINANCIAL INFORMATION:   Item 1. Financial Statements (Unaudited) 3   Condensed Consolidated Statement of Comprehensive Income (unaudited) for the nine months ended September 30, 2010 and  the three months ending September 30, 2010 6   Unaudited Condensed Consolidated Balance Sheet at September 30, 2010 and at September 30, 2009 5   Unaudited Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2010 and September 30, 2009 7   Notes to Consolidated Interim Financial Statements 8-26   Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 27   Item 3. Quantitative and Qualitative Disclosure About Market Risk 37   Item 4T. Controls and Procedures 37   PART II  OTHER INFORMATION:   Item 1. Legal Proceedings 38   Item 1A. Risk Factors 38   Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 38   Item 3. Defaults Upon Senior Securities 38    Item 5. Other Information 38   Item 6. Exhibits 39   Signatures 39  2


PART I  FINANCIAL INFORMATION  Item 1. Financial Statements     Baoshinn Corporation Unaudited Condensed Consolidated Financial Statements For the Nine months ended September 30, 2010 and 2009 (Stated in US Dollars)


3


These financial statements have been prepared by Baoshinn Corporation (the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such SEC rules and regulations. In the opinion of management, the accompanying statements contain all adjustments necessary to present fairly the financial position of the Company as of September 30, 2010, and its results of operations, stockholders equity, and its cash flows for the three months ended September 30, 2010. The results for these interim periods are not necessarily indicative of the results for the entire year. It is suggested that the accompanying financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the companys Annual Report on Form 10-K.   4    BAOSHINN CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Stated in US Dollars)


|                                                 |                                           |                                           |              |             
|------------------------------------------------ | ----------------------------------------- | ----------------------------------------- | ------------ | ------------
|                                                 | For 3 Months
Ended September 30
Unaudited | For 9 months
Ended September 30
Unaudited
|                                                 | 2010                                      | 2009                                      | 2010         | 2009        
|                                                 | $                                         | $                                         | $            | $           
|Retail and Corporate revenue                     | 8,451,190                                 | 6,558,580                                 | 22,080,447   | 18,240,802  
|Commission from travel booking services          | 25,550                                    | 29,835                                    | 82,439       | 142,862     
|Incentive commissions                            | 83,025                                    | 58,927                                    | 236,637      | 182,094     
|                                                 |                                           |                                           |              |             
|Net sales                                        | 8,559,765                                 | 6,647,342                                 | 22,399,523   | 18,565,758  
|Cost of sales                                    | (8,233,711)                               | (6,313,256)                               | (21,385,054) | (17,587,045)
|                                                 |                                           |                                           |              |             
|Gross profit                                     | 326,054                                   | 334,086                                   | 1,014,469    | 978,713     
|Other operating income  Note 5                  | 9,372                                     | 9,774                                     | 25,659       | 32,561      
|Depreciation                                     | (4,787)                                   | (6,929)                                   | (16,220)     | (21,139)    
|Administrative and other operating expenses      | (312,731)                                 | (316,175)                                 | (926,113)    | (979,595)   
|                                                 |                                           |                                           |              |             
|Profit/(Loss) from operations                    | 17,908                                    | 20,756                                    | 97,795       | 10,540      
|Other non-operating (income)/expenses - Note 6   | (735)                                     | 419                                       | (445)        | 1,516       
|Interest expenses  Note 7                       | -                                         | (295)                                     | (141)        | (932)       
|                                                 |                                           |                                           |              |             
|Profit before income taxes                       | 17,173                                    | 20,880                                    | 97,209       | 11,124      
|Income taxes - Note 8                            | -                                         | -                                         | -            | -           
|                                                 |                                           |                                           |              |             
|Net Profit                                       | 17,173)                                   | 20,880                                    | 97,209       | 11,124      
|Non-controlling interest                         | (15,716)                                  | (9,963)                                   | (51,636)     | (7,743)     
|                                                 |                                           |                                           |              |             
|Net Profit attributable to the Company           | 1,457                                     | 10,917                                    | 45,573       | 3,381       
|                                                 |                                           |                                           |              |             
|Earning per share of common stock  Note 4       |                                           |                                           |              |             
|- Basic                                          | 0.007 cents                               | 0.050 cents                               | 0.213 cents  | 0.016 cents 
|- Diluted                                        | 0.007 cents                               | 0.050 cents                               | 0.210 cents  | 0.016 cents 
|                                                 |                                           |                                           |              |             
|Weighted average number of common stock  Note 4 |                                           |                                           |              |             
|- Basic                                          | 21,400,000                                | 21,400,000                                | 21,400,000   | 21,400,000  
|- Diluted                                        | 21,780,000                                | 21,648,000                                | 21,657.670   | 21,536,791  

See accompanying notes to unaudited condensed consolidated financial statements  5    BAOSHINN CORPORATION UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET (Stated in US Dollars)


|                                                               |                  |  |               
|-------------------------------------------------------------- | ---------------- |  | --------------
|                                                               | At September 30, |  | At December 31
|                                                               | 2010             |  | 2009          
|                                                               | (unaudited)      |  | (audited)     
|                                                               | $                |  | $             
|ASSETS                                                         |                  |  |               
|Current Assets                                                 |                  |  |               
|Cash and cash equivalents                                      | 285,536          |  | 260,155       
|Accounts receivable                                            | 1,236,704        |  | 763,183       
|Amount due from a related party  Note 12                      | 86,962           |  | 87,029        
|Deposits, prepaid expenses and other receivables  Note 9      | 860,576          |  | 800,482       
|                                                               |                  |  |               
|Total Current Assets                                           | 2,469,778        |  | 1,910,849     
|Plant and equipment  Note 10                                  | 42,073           |  | 52,430        
|                                                               |                  |  |               
|TOTAL ASSETS                                                   | 2,511,851        |  | 1,963,279     
|                                                               |                  |  |               
|LIABILITIES AND STOCKHOLDERS EQUITY                           |                  |  |               
|LIABILITIES                                                    |                  |  |               
|Current Liabilities                                            |                  |  |               
|                                                               |                  |  |               
|Accounts payable                                               | 1,127,319        |  | 781,494       
|Other payables and accrued liabilities  Note 11               | 345,432          |  | 267,566       
|Income tax payable                                             | 6,167            |  | 6,172         
|Amounts due to related parties  Note 12                       | 141,716          |  | 113,553       
|                                                               |                  |  |               
|Total current liabilities                                      | 1,620,634        |  | 1,168,785     
|                                                               |                  |  |               
|TOTAL LIABILITIES                                              | 1,620,634        |  | 1,168,785     
|                                                               |                  |  |               
|COMMITMENTS AND CONTINGENCIES  Note 16
GOING CONCERN  Note 3 |                  |  |               
|                                                               |                  |  |               
|STOCKHOLDERS EQUITY                                           |                  |  |               
|Common stock                                                   |                  |  |               
|Par value :  - US$0.001                                        |                  |  |               
|Authorized:   200,000,000 shares                              |                  |  |               
|Issued and outstanding:   21,400,000 shares                   | 21,400           |  | 21,400        
|Additional paid-in capital                                     | 1,778,263        |  | 1,778,263     
|Accumulated other comprehensive income                         | (243)            |  | 32            
|Accumulated deficit                                            | (1,147,604)      |  | (1,193,172)   
|                                                               |                  |  |               
|TOTAL STOCKHOLDERS EQUITY OF THE COMPANY                      | 651,816          |  | 606,523       
|NON-CONTROLLING INTERESTS                                      | 239,401          |  | 187,971       
|                                                               |                  |  |               
|TOTAL STOCKHOLDERS EQUITY                                     | 891,217          |  | 794,494       
|                                                               |                  |  |               
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                     | 2,511,851        |  | 1,963,279     

See accompanying notes to unaudited condensed consolidated financial statement  6


BAOSHINN CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Stated in US Dollars)  For 9 months
Ended September 30
unaudited20102009$$Cash flows from operating activitiesNet Profit97,20911,124Adjustments to reconcile net profit to net cash flowsprovided by operating activities :Depreciation16,22021,139Changes in operating assets and liabilities :Accounts receivable(473,521)(394,957)Deposits, prepaid expenses and other receivables(60,094)7,062Accounts payable345,825251,536Other payables and accrued liabilities77,866(46,696)Net cash flows provided by/(used in) operating activities3,505(150,792)Cash flows from investing activityAcquisition of plant and equipment(3,230)-Net cash flows (used in) investing activity(3,230)-Cash flows from financing activitiesAmounts due from related parties-10,691Amounts due to related parties28,16374,571Net cash flows provided by financing activities28,16385,262Net increase/ (decrease) in cash and cash equivalents28,438(65,530)Effect of foreign currency translation on cash and cash equivalents(3,057)(4,101)Cash and cash equivalents - beginning of period260,155217,453Cash and cash equivalents - end of period285,536147,822Supplemental disclosures for cash flow information :Cash paid for :Interest141932Income taxes--   7     BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)  1. Corporation information Baoshinn Corporation (the Company) was incorporated under the laws of the State of Nevada on September 9, 2005, under the name of JML Holdings, Inc. During the year ended September 30, 2008, The Group issued 2,400,000 restricted common shares of $0.001 per share at a value of $0.3 per share with a net proceeds of approximately $624,000 and redeemed 2,500,000 restricted common shares and these shares are classified as not issued and outstanding.  On February 20, 2008, BSIE incorporated a wholly owned subsidiary, Bao Shinn (China) Express Limited (BSCE) of 1,000,000 ordinary shares at $0.128 per share. On October 2009, BSCE has been deregistered.  On July 16, 2008, Bao Shinn Holidays Limited (BSHL) was incorporated with 3,000,000 ordinary shares issued and paid at $0.128 per share. BSIE owns 55% of BSHL.  8    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   2. Description of business  Bao Shinn International Express Limited (BSIE), a wholly owned subsidiary of The Group, offers extended travel services primarily focused on wholesale businesses and corporate clients. BSIE is a ticket consolidator of major international airlines including Thai Airways, Eva Airways, Dragon Air, Air China, China Southern Airlines and China Eastern Airlines that provides travel services such as ticketing, hotel and accommodation arrangements, tour packages, incentive tours and group sightseeing services.  However, the Group relies on the shareholder, Bao Shinn Express Company Limited, which is the member of International Air Transport Association to supply air tickets and tour packages from different airlines companies.  BSCE offers extended travel services primarily focused on wholesale businesses and corporate clients in the Mainland China.  BSHL offers extended travel services primarily focused on corporate client in Hong Kong and the Mainland China.   3. Going concern  These financial statements have been prepared in accordance with generally accepted principles in the United States applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Group has generated recurring losses resulting in an accumulated deficit. The Group requires additional funds to maintain its operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.  Management believes that actions presently taken to revise the Groups operating and financial requirements provide the opportunity for the Group to continue as a going concern. The Companys shareholders agreed to provide continuing financial supports to the Company in terms of a temporary loan. The agreements for continuing financial support are verbal.  9     BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)     4. Summary of significant accounting policies  Basis of presentation and consolidation   The accompanying consolidated financial statements of The Group have been prepared in accordance with generally accepted accounting principles in the United States of America.  On June 29, 2009, the Financial Accounting Standards Board (FASB) established the FASB Accounting Standards Codification (Codification) as the single source of authoritative US generally accepted accounting principles (GAAP) for all non governmental entities Rules and interpretive releases of the Securities and Exchange Commission (SEC) and also sources of authoritative US GAAP for SEC registrants. The Codification does not change US GAAP but takes previously issued FASB standards and other U.S. GAAP authoritative pronouncements, changes the way the standards are referred to, and includes them in specific topic arrears. The Codification is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of the Codification did not have any impact on the Groups financial statements.  The consolidated financial statements include the accounts of The Group and its subsidiaries.  All significant inter-company accounts and transactions have been eliminated in consolidation.  The results of subsidiaries acquired or disposed of during the years are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal.   10    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   4. Summary of significant accounting policies (Continued)  Use of estimates  In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year.  These accounts and estimates include, but are not limited to, the valuation of accounts receivable, deferred income taxes and the estimation on useful lives of plant and equipment.  Actual results could differ from those estimates.   Concentrations of credit risk  Financial instruments that potentially subject the Group to significant concentrations of credit risk consist principally of accounts receivable.  In respect of accounts receivable, the Group extends credit based on an evaluation of the customers financial condition, generally without requiring collateral or other security.  In order to minimize the credit risk, the management of the Group has delegated a team responsibility for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts.  Further, the Group reviews the recoverable amount of each individual trade debt at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts.  In this regard, the directors of the Group consider that the Groups credit risk is significantly reduced.   Concentrations of supplier risk  The Group relies on Thai Airways as its major supplier of air tickets and tour packages. If this supplier became unwilling to cooperate with the Group, the Group would have to find alternative resources, which could materially affect the Groups ability to generate revenue and profitability.      11    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   4. Summary of significant accounting policies (Continued)  Cash and cash equivalents  Cash and cash equivalents include all cash, deposits in banks and other highly liquid investments with initial maturities of three months or less.  The group does not have any other liquid investments other than cash at September 30, 2010.   Accounts receivable  Accounts receivable are stated at original amount less allowance made for doubtful receivables, if any, based on a review of all outstanding amounts at the year end.  An allowance is also made when there is objective evidence that the Group will not be able to collect all amounts due according to original terms of receivables.  Bad debts are written off when identified.  The Group extends unsecured credit to customers in the normal course of business and believes all accounts receivable in excess of the allowances for doubtful receivables to be fully collectible.  The Group does not accrue interest on trade accounts receivable.  The Group has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis credit evaluations are preferred on all customers requiring credit over a certain amount.  During the reporting 9 months ended September 30, 2010 and 2009, the Group did not experience any bad debts and accordingly, did not make any allowance for doubtful debts.   Plant and equipment  Plant and equipment are stated at cost less accumulated depreciation.  Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use.  Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized.  Depreciation of plant and equipment is provided using the straight-line method over their estimated useful lives at the following annual rates:  Furniture and fixtures 20% Office equipment 20%  Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated.  12    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   4. Summary of significant accounting policies (Continued)   Revenue recognition  The Group recognizes revenue when it is earned and realizable based on the following criteria: persuasive evidence that an arrangement exists, services have been rendered, the price is fixed or determinable and collectability is reasonably assured.  The Group also evaluates the presentation of revenue on a gross versus a net basis through application of Emerging Issues Task Force No. (EITF) 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent. The consensus of this literature is that the presentation of revenue as the gross amount billed to a customer because it has earned revenue from the sale of goods or services or the net amount retained (that is, the amount billed to a customer less the amount paid to a supplier) because it has earned a commission or fee is a matter of judgment that depends on the relevant facts and circumstances. In making an evaluation of this issue, some of the factors that should be considered are: whether the Group is the primary obligor in the arrangement (strong indicator); whether it has general inventory risk (before customer order is placed or upon customer return) (strong indicator); and whether we have latitude in establishing price. The guidance clearly indicates that the evaluations of these factors, which at times can be contradictory, are subject to significant judgment and subjectivity. If the conclusion drawn is that the Group performs as an agent or a broker without assuming the risks and rewards of ownership of goods, revenue should be reported on a net basis.  The Group has the following three types of revenues:  - Retail and corporate travel service revenues, - Referral fee for travel booking services, and - Incentive commission from travel suppliers.  Retail and corporate travel service revenues  Revenues from retail and corporate travel services are recognized when the travel service provided by the Group is completely delivered.  The Group presents revenue from such transactions on a gross basis in the consolidated statements of operations, as the Group acts as a principal, assumes inventory and credit risks, and has primary obligations to the airlines or hotels for cancelled air tickets, packaged tour products or hotel reservations.  The Group also has latitude in determining the ticket prices.  The Group changes the product by combining air ticket and hotel accommodations with local car transportation and other ancillary services to make it a holiday package or business travel solution for customers.   13    BAOSHINN CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)  4. Summary of significant accounting policies (Continued) Revenue recognition (Continued)  Referral fee for travel booking services  The Group receives referral fee from travel product providers for booking travel services through the Group. The itinerary and product price are generally fixed by the travel product providers and the Group books the travel services on behalf of the customers.  Referral fees from travel booking services rendered are recognized as commissions after the services are rendered and collections are reasonably assured.  The Group presents revenues from such transactions on a net basis in the consolidated statements of operations, as the Group acts as an agent, does not assume any inventory and credit risks, has no obligations for cancelled airline or hotel ticket reservations, and does not have latitude in determining the service prices.  Incentive commission from travel suppliers  The Group earns an incentive commission from many travel suppliers. Contracts with certain travel suppliers contain discretionary escalating commissions that are paid to the Group subject to achieving specific performance targets.  Such discretionary escalating commissions are recognized on an accrual basis because such commissions are usually paid in arrears and the Group can reasonably estimate such commissions.  The Group presents revenues from such transactions on a net basis in the statements of operations, as the Group acts as an agent, does not assume any inventory risk, and has no obligations for cancelled airline ticket reservations.  Advertising expenses  Advertising expenses are charged to expense as incurred.  For 3 months ended 30/09 For 9 months ended 30/09 2010 2009 2010 2009 $ $ $ $ 1,287 5,261 5,532 6,038  Income Taxes  Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in consolidated statement of comprehensive income in the period that includes the enactment date or date of change in tax rate.  The FASB issued Accounting Standard Codification Topic 740 (ASC 740) Income Taxes. ASC 740 clarifies the accounting for uncertainty in tax positions. This requires that an entity recognized in the consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained upon examination, based on the technical merits of the position. The adoption of ASC 740 did not  14    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)  4. Summary of significant accounting policies (Continued)  Income Taxes (Continued)  have any impact on the Groups results of operations or financial condition for the year ended 31 December, 2009.  As of the date of the adoption of ASC 740, the Group has no material unrecognized tax benefit which would favorably affect the effective income tax rate in future periods.  The Group has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of income tax expense in the consolidated statements of comprehensive income.  Comprehensive income  Other comprehensive income refers to revenues, expenses, gains and losses that under U.S. GAAP are included in comprehensive income but are excluded from net income as these amounts are recorded as a component of stockholders equity.  The Companys other comprehensive income represented foreign currency translation adjustments.   Foreign currency translation  The functional currency of the Group is Hong Kong dollars (HK$).  The Group maintains its financial statements in the functional currency.  Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates.  Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction.  Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.  15    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   4.      Summary of significant accounting policies (Continued)   Foreign currency translation (Continued)  For financial reporting purposes, the financial statements of the Group which are prepared using the functional currency have been translated into United States dollars.  Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders equity is translated at historical exchange rates.  Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders equity.  For months Ended September 30, 2010 2009  Quarter end HK$:  US$ exchange rate 7.762 7.751 Average quarterly HK$:  US$ exchange rate 7.771 7.751  Fair value of financial instruments  The carrying values of the Groups financial instruments, including cash and cash equivalents, trade and other receivables, deposits, trade and other payables approximate their fair values due to the short-term maturity of such instruments. The carrying amounts of borrowings approximate their fair values because the applicable interest rates approximate current market rates.   Basic and diluted earnings per share  The Group computes earnings per share (EPS) in accordance with FASB Accounting Standard Codification Topic 260 (ASC 260) Earnings Per Share, and SEC Staff Accounting Bulletin No. 98 (SAB 98). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. The calculation of diluted weighted average common shares outstanding for the year ended December 31, 2009 is based on the estimated fair value of The Groups common stock during such periods applied to options using the treasury stock method to determine if they are dilutive.   16    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   4.     Summary of significant accounting policies (Continued)  The following tables are a reconciliation of the weighted average shares used in the computation of basic and diluted earnings per share for the periods presented:


|                                                    |                                 |                                 |             |             |  |             |  |  |  | 
|--------------------------------------------------- | ------------------------------- | ------------------------------- | ----------- | ----------- |  | ----------- |  |  |  | 
|                                                    | For 3 months ended
September 30 | For 9 months ended
September 30
|                                                    | 2010                            |                                 | 2009        | 2010        |  | 2009       
|                                                    | $                               |                                 | $           | $           |  | $          
|Numerator for basic and diluted
earnings per share: |                                 |                                 |             |             |  |            
|Net Profit                                          | 1,457                           |                                 | 10,917      | 45,573      |  | 3,381      
|                                                    |                                 |                                 |             |             |  |            
|Denominator:                                        |                                 |                                 |             |             |  |            
|Basic weighted average shares                       | 21,400,000                      |                                 | 21,400,000  | 21,400,000  |  | 21,400,000 
|Effect of dilutive securities                       | 380,000                         |                                 | 248,000     | 257,670     |  | 136,791    
|                                                    |                                 |                                 |             |             |  |            
|Diluted weighted average shares                     | 21,780,000                      |                                 | 21,648,000  | 21,657,670  |  | 21,536,791 
|                                                    |                                 |                                 |             |             |  |            
|Basic earnings/(loss) per share:                    | 0.007cents                      |                                 | 0.050 cents | 0.213 cents |  | 0.016 cents
|                                                    |                                 |                                 |             |             |  |            
|Diluted earnings/(loss) per share:                  | 0.007cents                      |                                 | 0.050cents  | 0.210 cents |  | 0.016 cents

Stock-Based Compensation  Effective January 1, 2006, the Group adopted Statements of Financial Accounting Standards (SFAS) No. 123R, Share-Based Payment (SFAS No. 123R). Under SFAS No. 123R, the Group measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the costs over the period the employee is required to provide service in exchange for the award, which generally is the vesting period.  During the quarter ended September 30, 2010 and 2009, the Company did not record stock-based compensation.   17    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   4.     Summary of significant accounting policies (Continued)   Related parties transactions  A related party is generally defined as (i) any person that holds 10% or more of The Groups securities and their immediate families, (ii) the Groups management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Group, or (iv) anyone who can significantly influence the financial and operating decisions of the Group. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.   Commitments and contingencies  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.   Recently issued accounting pronouncements  In October 2009, the FASB has published ASU 2009-13, Revenue Recognition (Topic 605)-Multiple Deliverable Revenue Arrangements, which addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined unit. Specifically, this guidance amends the criteria in Subtopic 605-25, Revenue Recognition-Multiple-Element Arrangements, for separating consideration in multiple-deliverable arrangements. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) estimates. This guidance also eliminates the residual method of allocation and requires that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method and also requires expanded disclosures. The guidance in this update is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on The Groups consolidated financial position and results of operations.  ASC 105, Generally Accepted Accounting Principles (ASC 105), reorganized by topic existing accounting and reporting guidance issued by the Financial Accounting Standards Board (FASB) into a single source of authoritative generally accepted accounting principles (GAAP) to be applied by nongovernmental entities. All guidance contained in the Accounting Standards Codification (ASC) carries an equal level of authority. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Accordingly, all other accounting literature will be deemed non-authoritative. ASC 105 is effective on a prospective basis for financial statements issued for interim and annual periods ending after September 15, 2009. The Group has implemented the guidance included in ASC 105 as of July 1, 2009. The implementation of this guidance changed the Groups references to GAAP authoritative guidance but did not impact The Groups financial position or results of operations.  18     BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   4.      Summary of significant accounting policies (Continued)  Recently issued accounting pronouncements (Continued)   In January 2010, the FASB issued Accounting Standards Update No. 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures which amends ASC Topic 820, adding new requirements for disclosures for Levels 1 and 2, separate disclosures of purchases, sales, issuances, and settlements relating to Level 3 measurements and clarification of existing fair value disclosures.  ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for the requirement to provide Level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which will be effective for fiscal years beginning after December 15, 2010 (the Groups fiscal year 2012); early adoption is permitted.  The Group is currently evaluating the impact of adopting ASU 2009-14 on its financial statements.  In February 2010, the FASB issued ASU 2010-09 which requires that an SEC filer, as defined, evaluate subsequent events through the date that the financial statements are issued. The update also removed the requirement for an SEC filer to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. The adoption of this guidance on January 1, 2010 did not have a material effect on the Companys financial statements.   19    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   5. Other operating income  For 3 months ended September 30For 9 months ended September 302010200920102009$$$$GDS commission income-336-712Management service income9,37221,62525,65931,8499,37221,96125,65932,561    6. Other non-operating income (expenses)  For 3 months ended September 30For 9 months ended September 302010200920102009$$$$Gain (Loss) on exchange(740)255(461)1,045Interest income516416471(735)419(445)1,561   7. Interest expenses   For 3 months ended September 30For 9 months ended September 302010200920102009$$$$Interest expense0295141932     20    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)    8. Income taxes   The Company was subject to Hong Kong profits or income tax at 16.5% for the quarter ended September 30, 2010 and 2009.  No provision for Hong Kong profits tax has been made for the period.  Deferred taxes are determined based on the temporary differences between the financial statement and income tax bases of assets and liabilities as measured by the enacted tax rates which will be in effect when these differences reverse. The Group follows FASB Accounting Standard Codification Topic 740- (ASC 740) Income taxes, ASC 740 and requires a valuation allowance, if any, to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  .  9. Deposits, prepaid expenses and other receivables   At September 30At December 3120102009(unaudited)(audited)$$Security deposits to suppliers[1]715,298691,505Prepayments and other receivables109,59076,231Utility, rental and other deposits35,68832,746860,576800,482  [1]Represents a deposit with the airline companies to allow the Group to issue an agreed upon amount of air tickets per month.  21    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   10.     Plant and equipment  At September 30,At December 31,20102009(unaudited)(audited)$$CostFurniture and fixtures47,06447,934Office equipment61,07699,922108,140147,856Accumulated depreciationFurniture and fixtures24,16421,264Office equipment41,90474,16266,06895,426NetFurniture and fixtures22,90126,670Office equipment19,17225,76042,07352,430  Depreciation expenses for the 3 months ended 30 September 2010 are $4,787 (2009: $6,929).  Depreciation expenses for the 9 months ended 30 September 2010 are $16,220 (2009: $21,139).    11. Other payables and accrued liabilities  At September 30At December 3120102009(unaudited)(audited)$$Sale deposits received110,500102,359Accrued expenses171,303133,404Other payables63,62931,803345,432267,566   22    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   12. Amounts due from/(to) related parties  Amounts due from/(to) related parties for working capital are as follows:  At September 30,At December 31,20102009(unaudited)(audited)$$Amount due from shareholder86,96287,029Amounts due to shareholders141,716113,553  The amount due from shareholder is temporary advance, interest free, unsecured and due on demand.  The amounts due to shareholders, represent advances from certain shareholders of the Company, are interest-bearing at the rate of 5.5% (2009: 5.5%) per annum, unsecured and have no fixed repayment terms.   13. Stock options  The Company has stock options plans that allow it to grant options to its key employees. Over the course of employment, the Company issues vested or non-vested stock options to an employee which is struck at US$0.35 per share. The exercise period of the options commenced on March 31, 2008 and will expire on March 31, 2011.  The fair value of these options at the date of grant was estimated to be $0.1533 and $0.1125 for vested and non-vested options per unit respectively using the Black-Scholes option pricing model with the following weighted average assumptions: expected life of three years; risk-free interest rate of 3.07%; expected dividend yield of 0% and an expected volatility of 47.77%. The stock-based compensation expense recorded in the quarter ended September 30, 2010 and 2009 were nil.  23    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   13. Stock options (Continued)  WeightedWeightedaverageNumber ofaverageremainingoptionsexercise pricelife$(year)Exercisable as of January 1, 2010230,0000.351.25Exercisable during 9 months ended September 30, 2010100,0000.35Exercisable as of September 30, 2010330,0000.350.50  The total intrinsic value during the quarter ended September 30, 2010 and 2009 were $nil as no options were exercised during the respective period.   14. Concentration of credit  A substantial percentage of the Group's sales are made to the following customers. Details of the customers accounting for 10% or more of total net revenue are as follows:  For 9 months period ended September 30(unaudited)20102009Travel Expert Limited (a Hong Kong incorporated travel agent)15%11%   Details of the accounts receivable from the one customer with the largest receivable balances at September 30, 2010 and December 31, 2009 are as follows:  Percentage of account receivableSeptember 30, 2010December 31,2009(unaudited)(audited)Travel Expert Limited (a Hong Kong incorporated travel agent)17%10%    24    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   15. Pension plans  The Group participates in a defined contribution pension scheme under the Mandatory Provident Fund Schemes Ordinance MPF Scheme for all its eligible employees in Hong Kong.  The MPF Scheme is available to all employees aged 18 to 64 with at least 60 days of service in the employment in Hong Kong.  Contributions are made by the Groups subsidiary operating in Hong Kong at 5% of the participants relevant income with a ceiling of HK$20,000.  The participants are entitled to 100% of the Groups contributions together with accrued returns irrespective of their length of service with the Group, but the benefits are required by law to be preserved until the retirement age of 65.  The only obligation of the Group with respect to MPF Scheme is to make the required contributions under the plan.  The assets of the schemes are controlled by trustees and held separately from those of the Group.  Total pension cost was $23,674 during 9 months ended September 30, 2010 (9 months ended September 30, 2009: $29,786.)   16. Commitments and contingencies  Operating leases commitments  The Group leases office premises under various non-cancelable operating lease agreements that expire at various dates through years 2010 to 2011, with an option to renew the lease.  All leases are on a fixed repayment basis.  None of the leases includes contingent rentals.  Minimum future commitments under these agreements payable as of September 30, 2010 are as follows:-  September 30, 2010 $  Within 1 year 96,851 2-5 years 54,046  150,897   Rental expenses for the 3 months ended 30 September, 2010 were $24,218 (3 months ended 30 September 2009: $23,684).   17. Related party transactions  In the ordinary course of business, BSIE, our wholly-owned subsidiary, purchases and sells air tickets and tour packages from/to Bao Shinn Express Company Limited (BSEL). BSEL holds 38.6% of Baoshinn Corporations outstanding common stock.  The consolidated income statement for the periods presented includes the following related party transactions:  25    BAOSHINN CORPORATION  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   17. Related party transactions (Continued)


|                                  |                                    |                                           |                                 |                                 |             |            
|--------------------------------- | ---------------------------------- | ----------------------------------------- | ------------------------------- | ------------------------------- | ----------- | -----------
|Related party                     | Nature of relationship
and control | Description of transactions               | For
3 Months ended September 30 | For
9 months ended September 30
|                                  |                                    |                                           | 2010                            | 2009                            | 2010        | 2009       
|                                  |                                    |                                           | (unaudited)                     | (unaudited)                     | (unaudited) | (unaudited)
|                                  |                                    |                                           | $                               | $                               | $           | $          
|                                  |                                    |                                           |                                 |                                 |             |            
|Bao Shinn Express Company Limited | Shareholder
38.6%                  | Sales of air tickets and tour packages    | (37,587)                        | (32,860)                        | (130,379)   | (62,870)   
|                                  |                                    |                                           |                                 |                                 |             |            
|                                  |                                    | Management service income                 | (9,003)                         | (9,778)                         | (25,300)    | (31,851)   
|                                  |                                    |                                           |                                 |                                 |             |            
|                                  |                                    | Purchase of air tickets and tour packages | 13,201                          | 19,625                          | 36,436      | 84,407     
|                                  |                                    |                                           |                                 |                                 |             |            
|                                  |                                    | Interest Paid                             | -                               |                                 | 18          | -          

18. Segment Information  SFAS No.131, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments in financial statements. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance.  For management purposes, the Group is regarded as a single segment, being engaged in the provision of travel agent services. These principal activities and geographical market are substantially based in Hong Kong. Accordingly, no geographical segment information is presented.                                                                                                                                                                                                                                                            26    Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.  CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS  This discussion and analysis of our financial condition and results of operations includes forward-looking statements that reflect our current views with respect to future events and financial performance. We use words such as expect, anticipate, believe, and intend and similar expressions to identify forward-looking statements. You should be aware that actual results may differ materially from our expressed expectations because of risks and uncertainties inherent in future events and you should not rely unduly on these forward looking statements. We disclaim any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. Reference in the following discussion to our, us and we refer to the operations of Baoshinn Corporation and its subsidiaries (the Company), except where the context otherwise indicates or requires.  The following discussion of our financial condition and results of operations should be read in conjunction with the audited financial statements and the notes to the audited financial statements included in this annual report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.  Results of operations for the nine months ended September 30, 2010 compared to nine months ended September 30, 2009 Nine months endedNine months endedSeptember 30, 2010September 30, 2009(unaudited)(unaudited)$$Retail and Corporate revenue22,080,44718,240,802Commission from travel booking services82,439142,862Incentive commissions236,637182,09422,399,52318,565,758Cost of sales(21,385,054)(17,587,045)Gross profit1,014,469978,713Other operating income25,65932,561Depreciation(16,220)(21,139)Administrative and other operation expenses(926,113)(979,595)Income from operations97,79510,540Other non-operating income (expenses)(445)1,516Interest expenses(141)(932)Profit before income tax97,20911,124Income tax--Non- controlling interest(51,636)(7,743)Net Income from continuing operations45,5733,381    27    Going Concern  The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. We had a net income of $45,573 for the nine months ended September 30, 2010 and a net loss since inception of $1,147,604. On September 30, 2010 we had cash on hand of $285,536. These circumstances raise substantial doubt about our ability to continue as a going concern. These doubts were outlined in our independent auditors report on our consolidated financial statements for the year ended December 31, 2009, which are included in this quarterly report on Form 10-Q. Although our consolidated financial statements raise substantial doubt about our ability to continue as a going concern, they do not include any adjustments relating to recoverability and classification of recorded assets, or the amounts or classifications of liabilities that might be necessary in the event we cannot continue as a going concern. Certain of the Companys shareholders have verbally agreed to provide continuing financial support to the Company for future losses it may incur.  Revenues  For the nine months ended September 30, 2010, the Company has experienced an increase in sales revenues, and the Company was recognized by Eva Airline as its top selling agent in Hong Kong. Eva Airlines operates both short haul routes within South East Asia and long haul routes including North America and Europe. The company has also been appointed as a first tier agent for two additional airlines, i.e., HongKong Airlines & HongKong Express. Hong Kong Airlines mainly operates flights originating from Hong Kong to destinations in Asian cities, including Bangkok, Kuala Lumpur, Manila, and major cities in Japan. HongKong express mainly operates flights originating from Hong Kong to mainland China, second tier cities, including Changsha, Fuzhou, Hangzhou, Hefei, Guiyang etc.  Our revenue for the nine months ended September 30, 2010 was $22,399,523, compared to $18,565,758 in the nine months ended September 30, 2009. We generate our revenues primarily from retail and corporate business. For the nine months ended September 30, 2010, we derived 98.5%, 0.4% and 1.1% of our revenues from our retail & corporate clients, commissions from travel booking services and airline incentive commissions respectively.  The table below sets forth the revenues from our principal lines of business for the periods indicated.


|                                        |                                      |                                      | 
|--------------------------------------- | ------------------------------------ | ------------------------------------ | 
|                                        | Nine months ended September 30, 2010 | Nine months ended September 30, 2009 | 
|                                        | Unaudited                            | Unaudited                           
|                                        |                                      |                                     
|                                        | $                                    | $                                    | 
|Retail and Corporate revenue            | 22,080,447                           | 18,240,802                           | 
|Commission from travel booking services | 82,439                               | 142,862                              | 
|Incentive commissions                   | 236,637                              | 182,094                              | 
|                                        |                                      |                                      | 
|Total revenue                           | 22,399,523                           | 18,565,758                           | 

Retail and Corporate Revenue  Revenues from retail and corporate travel services are recognized when the travel service provided by the Company is completely delivered. The Company presents revenue from such transactions on a gross basis in the consolidated statements of comprehensive income, as the Company acts as a principal, assumes inventory and credit risks, and has the primary obligation to the airlines or hotels for cancelled air tickets, packaged tour products or hotel reservations. The Company also has discretion in determining the service prices. The Company changes the product by combining air ticket and hotel accommodations with local car transportation and other ancillary services to make it a holiday package or business travel solution for customers.  Referral fees for travel booking services  We receive referral fees from travel product providers for booking travel services. The itinerary and product price are generally fixed by the travel product providers and we book the travel services on behalf of the customers. Referral  28    fees from travel booking services rendered are recognized as commissions after the services are rendered and collections are reasonably assured. We present revenues from such transactions on a net basis in the consolidated statements of operations, as we act as an agent, we do not assume any inventory and credit risks, we have no obligations for cancelled airline or hotel ticket reservations, and do not have discretion in determining the service prices.  Incentive commission from travel suppliers  We earn an incentive commission from many travel suppliers. Contracts with certain travel suppliers contain discretionary escalating commissions that are paid to us subject to achieving specific performance targets. Such discretionary escalating commissions are recognized on an accrual basis because such commissions are usually paid in arrears and we can reasonably estimate such commissions. Our statement of operations presents revenues from such transactions on a net basis, because we act as an agent, we do not assume any inventory risk, and we have no obligation for cancelled airline tickets.  Cost of Sales  Costs of sales are costs directly attributable to rendering our revenues, which consist primarily of payments for travel costs to airlines and suppliers. Cost of revenues accounted for 95.46% of our revenue in the nine months ended September 30, 2010 and 94.73% of our revenues in the nine months ended September 30, 2009.  The table below sets forth the cost of sales for the periods indicated.


|              |                                      |                                      |              |  |  | 
|------------- | ------------------------------------ | ------------------------------------ | ------------ |  |  | 
|              | Nine months ended September 30, 2010 | Nine months ended September 30, 2009
|              | Unaudited                            |                                      | Unaudited    | 
|              | $                                    |                                      | $            | 
|Total revenue | 22,399,523                           |                                      | 18,565,758  
|Cost of sales | (21,383,054)                         |                                      | (17,587,045)
|              |                                      |                                      |             
|Gross profit  | 1,014,469                            |                                      | 978,713     

Gross Profit and Gross Profit Margin  Our gross profit for the nine months ended September 30, 2010 was $1,014,469, compared to $978,713 in the nine months ended September 30, 2009. The gross profit margin rate increased from 4.53% for the nine months ended September 30, 2009 to 5.27% for the nine months ended September 30, 2010. The increase in our gross profit margin rate is mainly due to the recovery of the Hong Kong economy for the 9 months ended September 30, 2010.   29    Operating Expenses  Overview  Total operating expenses for the nine months ended September 30, 2010 were $926,113 or 4.1% of revenues, while the operating expenses for nine months ended September 30, 2009 were $979,595 or 5.3% of revenues. The decreases in dollar amount are mainly attributable to our cost saving strategy, which significantly reduced salaries, commissions, and allowances as compared to the same period last year.


|                                |                                      |              |                                      |             
|------------------------------- | ------------------------------------ | ------------ | ------------------------------------ | ------------
|                                | Nine months ended September 30, 2010 | % of Revenue | Nine months ended September 30, 2009 | % of Revenue
|Salaries, commission, allowance | $562,034                             | 2.5%         | $624,025                             | 3.3%        
|Legal & Professional fees       | 29,468                               | 0.1%         | 29,786                               | 0.2%        
|Office Rental                   | 72,638                               | 0.4%         | 71,070                               | 0.4%        
|Other operating expenses        | 261,973                              | 1.1%         | 254,714                              | 1.4%        
|                                | $926,113                             | 4.1%         | $979,595                             | 5.3%        

Salaries, Commissions and Allowances  Salaries, Commissions and Allowances has decreased from $624,025 for the nine months ended September 30, 2009 to $562,034 for the nine months ended September 30, 2010,The Group has flattened organization structure by cutting senior management staff reducing staff redundancy and decentralizing its operations. Meanwhile, support and administration staffing has also been cut to keep back office costs down.  Legal and Professional Fees  Legal and professional fees for the nine months ended September 30, 2010 were $29,468 or 0.1% of revenues, while the legal and professional fees for nine months ended September 30, 2009 were $29,786 or 0.2% of revenues. Legal and professional fees in the current period were consistent with the same period last year.  Office Rental  Office rental for the nine months ended September 30, 2010 was $72,638 or 0.4% of revenues, while the Office rental for nine months ended September 30, 2009 was $71,070 or 0.4% of revenues.  Office rental expenses in the current period were consistent to the same period last year.  Other General and Administration Expenses  Other expenses for the nine months ended September 30, 2010 were $261,973 or 1.1% of revenues, while the other expenses for nine months ended September 30, 2009 were $254,714 or 1.4% of revenues. The expenses in the current period were consistent to the same period last year.     30    Other operating income Nine months endedNine months endedSeptember 30, 2010September 30, 2009UnauditedUnaudited$$Commission income-712Management service income25,65931,84925,65932,561 Commission Income  Commission income for the nine months ended September 30, 2010 were nil compared to $712 for nine months ended September 30, 2009. During the nine months ended September 30, 2010, we increased the number of tickets booked through a lower percentage commission booking system, which resulted in a lower amount of commissions.  Commission income is received by the Company from the Global Distribution Systems Supplier (GDS), which is the booking system that links airlines, IATA and travel agencies. GDS acts as an information medium between the Airlines and Travel agencies. Travel consultants check seat availability and fare conditions, and make reservations through GDS. GDS also links Airline and Travel Agencies through IATAs Bill and Settling Plans (BSP). Once the ticket is issued from IATA through the GDS system, travel agencies will settle the payment with airlines through IATAs fortnightly BSP Payment.  Each GDS system has a different layout, and different user manual and command. Airlines can choose to link with one or a few GDS. The Company currently has 4 GDSs installed; they are Amadeus, Worldspan, Travelsky and Abacus. A GDS will normally provide equipment and install their system onsite for a travel agency. The travel agency must generally sign an agreement with each GDS supplier which details the usage and reward scheme. Some GDS suppliers require travel agencies to maintain a minimum usage volume, otherwise the travel agency will have to pay fees for the equipment. GDS suppliers also encourage travel agencies to book tickets through their system by rewarding travel agencies on the number of tickets booked in a certain period of time.  The Company encourages its consultants to use the GDS that has the best compensation structure, however, a balance between operational efficiency is also considered. Some airlines are more user friendly with a specific GDS, also with each travel consultancys experience with different systems, the Company leaves it to the consultants discretion to choose the GDS it uses.  Management Service Income  Management service income represents compensation from a related party, Bao Shinn Express Company Limited (BSEL). BSEL currently holds 38.55% of the companys outstanding common stock. The Company has provided management services to BSEL on business operations and general travel industry knowledge. Management service income from BSEL was $25,659 in the nine months ended September 30, 2010, compared to $31,849 in the nine months ended September 30, 2009.  The Company recognizes the management service as other operating income, as the Companys management team is part of its operation team. Accordingly, the revenue generated by the management team is considered part of the Companys operations.   31    Other non-operating income / (expenses) Nine months endedNine months endedSeptember 30, 2010September 30, 2009UnauditedUnaudited$$Gain/(Loss) on exchange(461)1,045Interest income/expenses16471(445)1,516 Exchange Gain  The exchange (loss)/gain was $(461) for the nine months ended September 30, 2010 compared to $1,045 in the nine months ended September 30, 2009. This was attributable to a more stable rate of the Hong Kong Dollar against foreign currencies, including the U.S. Dollar, RMB and the Thai Baht for the nine months ended September 30, 2010  The Company pays overseas suppliers in their currency, and charges its customers in HK dollars, with the exchange rate determined at the point of invoicing. Because of the timing difference between payments and receipts, the Company incurs exchange differences in transactions with overseas suppliers. The Company recognizes the gain or loss as non-operational income or expense, as this is not from operations.  Interest Income  Interest income was $16 for the nine months ended September 30, 2010, compared to $471 for the nine months ended September 30, 2009. This interest was earned from bank savings and fixed deposit accounts. The Company considers it non-operational income. The decrease in the interest income for the nine months ended September 30, 2010 was mainly due to a decrease in the bank interest rate compare to the same period in 2009.  Net Income  Our net income was $45,573 for the nine months ended September 30, 2010, compared to a net income of $3,381 for the nine months ended September 30, 2009. The increase in net income for the nine months ended September 30, 2010 compared to the same period last year was mainly due to the increase in gross margin as a result of the Companys change in business strategy, as well as an improvement in the general economy in the beginning of 2010 compared to the same period in 2009. Operating Activities   Net cash provided by operating activities was $3,505 for the nine months ended September 30, 2010, compared to net cash used in operating activities of $150,792 for the nine months ended September 30, 2009. The cash provided during the nine months ended September 30, 2010 is mainly for working capital. Working capital increased $107,080 from $742,064 as of December 31, 2009 to $849,144 as of September 30, 2010. Investing Activities   For the nine months ended September 30, 2010, net cash used in investing activities was $3,230 compared to nil for the same period in 2009. The cash was mainly used for the purchase of new office equipment for our subsidiary. Financing Activities  Net cash provided by financing activities was $28,163 for the nine months ended September 30, 2010, compared to $85,262 net cash provided by financing activities for the nine months ended September 30, 2009. For the nine months  32    ended September 30, 2010 and 2009, there were no financing activities, the movement in cash is mainly due to the changes in temporary advances from directors.  Results of operations for the Three months ended September 30, 2010 compared to the Three months ended September 30, 2009 Three months endedThree months endedSeptember 30, 2010September 30, 2009(unaudited)(unaudited)$$Retail and Corporate revenue8,451,1906,558,580Commission from travel booking services25,55029,835Incentive commissions83,02558,9278,559,7656,647,342Cost of sales(8,233,711)(6,313,256)Gross profit326,054334,086Other operating income9,3729,774Depreciation(4,787)(6,929)Administrative and other operation expenses(312,731)(316,175)Income from operations17,90820,756Other non-operating income/(expenses)(735)419Interest expenses-(295)Profit before income tax17,17320,880Income tax--Non-controlling interest(15,716)(9,963)Net Income from continuing operations1,45710,917 Revenues For the three months ended September 30, 2010, the Company has experienced an increase in sales revenues, the Company was recognized by Eva Airline as its top selling agent in Hong Kong. Eva Airlines operates both short haul routes within South East Asia and long haul routes including North America and Europe. The Company has also been appointed as a first tier agent for two additional airlines, i.e., HongKong Airlines & HongKong Express. Hong Kong Airlines mainly operates flights originating from Hong Kong to destinations in Asian cities, including Bangkok, Kuala Lumpur, Manila, and major cities in Japan. HongKong express mainly operates flights originating from Hong Kong to mainland Chinas second tier cities, including Changsha, Fuzhou, Hangzhou, Hefei, Guiyang etc. Our revenue for the three months ended September 30, 2010 was $8,451,190, compared to $6,558,580 in the three months ended September 30, 2009. We generate our revenues primarily from retail and corporate business. For the three months ended September 30, 2010, we derived 98.7%, 0.3% and 1.0% of our revenues from our retail & corporate clients, commissions from travel booking services and airline incentive commissions respectively.  33    The table below sets forth the revenues from our principal lines of business for the periods indicated.


|                                        |                                       |                                       | 
|--------------------------------------- | ------------------------------------- | ------------------------------------- | 
|                                        | Three months ended September 30, 2010 | Three months ended September 30, 2009 | 
|                                        | Unaudited                             | Unaudited                            
|                                        | $                                     | $                                     | 
|Retail and Corporate revenue            | 8,451,190                             | 6,558,580                             | 
|Commission from travel booking services | 25,550                                | 29,835                                | 
|Incentive commissions                   | 83,025                                | 58,927                                | 
|                                        |                                       |                                       | 
|Total revenue                           | 8,559,765                             | 6,647,342                             | 

Cost of Sales Costs of sales are costs directly attributable to rendering our revenues, which consist primarily of payments for travel costs to airlines and suppliers. Cost of revenues accounted for 96.2% of our revenue in the Three months ended September 30, 2010 and 95% of our revenues in the Three months ended September 30, 2009. The table below sets forth the cost of sales for the periods indicated.


|              |                                       |                                       |             | 
|------------- | ------------------------------------- | ------------------------------------- | ----------- | 
|              | Three months ended
September 30, 2010 | Three months ended
September 30, 2009
|              | Unaudited                             |                                       | Unaudited   | 
|              |                                       |                                       | $           | 
|Total revenue | 8,559,765                             |                                       | 6,647,342  
|Cost of sales | (8,233,711)                           |                                       | (6,313,256)
|              |                                       |                                       |            
|Gross profit  | 326,054                               |                                       | 334,086    

Gross Profit and Gross Profit Margin Our gross profit for the three months ended September 30, 2010 was $326,054, compared to $334,086 in the three months ended September 30, 2009. The gross profit margin rate decreased from 5.03% for the three months ended September 30, 2009 to 3.81% for the three months ended September 30, 2010. The decrease in gross profit margin rate is mainly due to higher competition in the travel market as a result of the recovery of the Hong Kong economy. Operating Expenses Overview Total operating expenses for the three months ended September 30, 2010 were $312,731 or 3.7% of revenues, while the operating expenses for three months ended September 30, 2009 were $316,175 or 4.8% of revenues. The decrease in operating expenses was due to our cost saving strategy, which significantly reduced expenses, such as salaries, commissions, and allowances compared to the same period last year.


|                                |                                       |              |                                       |             
|------------------------------- | ------------------------------------- | ------------ | ------------------------------------- | ------------
|                                | Three months ended September 30, 2010 | % of Revenue | Three months ended September 30, 2009 | % of Revenue
|Salaries, commission, allowance | $196,341                              | 2.3%         | 191,389                               | 2.9%        
|Legal & Professional fees       | 9,846                                 | 0.1%         | 9,720                                 | 0.1%        
|Office Rental                   | 24,218                                | 0.3%         | 23,684                                | 0.4%        
|Other operating expenses        | 82,326                                | 1.0%         | 91,382                                | 1.4%        
|                                | $ 312,731                             | 3.7%         | 316,175                               | 4.8%        

34    Salaries, Commissions and Allowances Salaries, Commissions and Allowances increased from $191,389 for the three months ended September 30, 2009 to $196,341 for the three months ended September 30, 2010,the Group flattened its organization structure by cutting senior management staff, reducing staff redundancy and decentralizing its operations. Meanwhile, support and administration staffing has also been cut to keep back office costs down. Legal and Professional Fees Legal and professional fees for the three months ended September 30, 2010 were $9,846 or 0.1% of revenues, while the legal and professional fees for three months ended September 30, 2009 were $9,720 or 0.1% of revenues. Legal and professional fees in the current period were consistent with the same period last year. Office Rental Office rental for the three months ended September 30, 2010 was $24,218 or 0.3% of revenues, while the Office rental for three months ended September 30, 2009 was $23,684 or 0.4% of revenues.  Office rental expenses in the current period were consistent with the same period last year. Other General and Administration Expenses Other expenses for the three months ended September 30, 2010 were $82,326 or 1% of revenues, while the other expenses for Three months ended September 30, 2009 were $91,382 or 1.4% of revenues. The expenses in the current period were consistent with the same period last year. Other operating income Three months endedThree months endedSeptember 30, 2010September 30, 2009UnauditedUnaudited$$Commission income-336Management service income9,37221,6259,37221,961 Commission Income Commission income for the three months ended September 30, 2010 were nil compared to $336 for three months ended September 30, 2009. During the Three months ended September 30, 2010, we increased the number of tickets booked through a lower percentage commission booking system, which resulted in a lower amount of commissions. Management Service Income Management service income represents compensation from a related party, Bao Shinn Express Company Limited (BSEL). Management service income from BSEL was $9,372 in the three months ended September 30, 2010, compared to $21,625 in the three months ended September 30, 2009. The Company recognizes the management service as other operating income, as the Companys management team is part of its operation team. Accordingly, the revenue generated by the management team is considered part of the Companys operations.  35    Other non-operating income / (expenses) Three months endedThree months endedSeptember 30, 2010September 30, 2009UnauditedUnaudited$$Gain / (Loss) on exchange(740)255Interest income5164(735)419 Exchange Gain The exchange (loss)/gain was $(740) for the three months ended September 30, 2010 compared to $255 for the three months ended September 30, 2009. This was attributable to depreciation of the Hong Kong Dollar against foreign currencies, including RMB and the Thai Baht during the three months ended September 30, 2010 Interest Income Interest income was $5 for the Three months ended September 30, 2010, compared to $164 for the three months ended September 30, 2009. This interest was earned from bank savings and fixed deposit accounts. The Company considers it non-operational income. The decrease in the interest income for the three months ended September 30, 2010 was mainly due to a decrease in the bank interest rate compare to the same period in 2009. Net Income Our net profit was $17,173 for the three months ended September 30, 2010, compared to a net profit of $20,880 for the three months ended September 30, 2009. The decrease in net profit for the three months ended September 30, 2010 compared to the same period last year was mainly due to the increase in gross margin as a result of the change in the Companys business strategy, as well as an improvement in the overall economy.  Liquidity and Capital Resources  Our primary source of capital has been from sales and issuances of equity securities. Our primary use of capital has been for the expansion and development of our business, and the associated need for increased working capital. Our working capital requirements are expected to increase in line with the growth of our business. We have no lines of credit or other bank financing arrangements. We expect that working capital requirements will be funded through a combination of our existing funds, cash flow from operations, private loans, and issuance of equity and debt securities. Additional issuances of equity and debt securities will result in dilution to our current common stockholders. The Companys former shareholders agreed to provide continuing financial support to the Company in the form of a temporary loan. The agreements for continuing financial support are verbal. These temporary loans were unsecured with no fixed term of repayment during the nine months ended September 30, 2010. Interest was paid at the rate of 5.5% per annum.   Financing Our Capital Expenditures  During the next 12 months, the Company anticipates that it will implement its business plan for expanding into the China market. The initial investment is expected to be approximately US$1,200,000. These funds will be used for setting up a China flagship company in Shanghai. Expenses are expected to include obtaining travel licenses, office renovation, purchase of communication equipment, purchase of computers and office equipment. An additional investment of US$1,500,000 may be required as the working capital for the Shanghai office.   36    The new flagship company will be a wholly owned subsidiary of the Company, it will be registered in Shanghai and it will serve as our China headquarters. We subsequently plan to open branch offices in Beijing, Guangzhou, Chongqing and Kunming. There is no assurance that all these plans will be accomplished.  As a marketing tool, an On-line travel business team will be set up in Shanghai. The team includes the IT specialist for development of a travel booking system to China.  Off-Balance Sheet Arrangements  For the nine months ended September 30, 2010, and the nine months ended September 30, 2009, the Company did not engage in any off-balance sheet activities or have any relationships or arrangements with unconsolidated entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Further, we have not guaranteed any obligations of unconsolidated entities nor do we have any commitment or intent to provide additional funding to any such entities.  Related Party Transactions  The amounts due to related parties, represent advances from certain directors and shareholders of the Company, are interest-bearing at the rate of 5.5% (2009: 5.5%) per annum, and they are unsecured and have no fixed repayment terms. The amounts due from related parties, represent advances to a minority shareholder of Bao Shinn Holidays Limited (BSHL). This advance is temporary, it is interest free, it is unsecured and it is due on demand.


|                                  |                                    |                                           |                                 |                                 |             |            
|--------------------------------- | ---------------------------------- | ----------------------------------------- | ------------------------------- | ------------------------------- | ----------- | -----------
|Related party                     | Nature of relationship
and control | Description of transactions               | For
3 Months ended September 30 | For
9 Months ended September 30
|                                  |                                    |                                           | 2010                            | 2009                            | 2010        | 2009       
|                                  |                                    |                                           | (unaudited)                     | (unaudited)                     | (unaudited) | (unaudited)
|                                  |                                    |                                           | $                               | $                               | $           | $          
|                                  |                                    |                                           |                                 |                                 |             |            
|Bao Shinn Express Company Limited | Shareholder
38.6%                  | Sales of air tickets and tour packages    | (37,587)                        | (32,860)                        | (130,379)   | (62,870)   
|                                  |                                    |                                           |                                 |                                 |             |            
|                                  |                                    | Management service income                 | (9,003)                         | (9,778)                         | (25,300)    | (31,851)   
|                                  |                                    |                                           |                                 |                                 |             |            
|                                  |                                    | Purchase of air tickets and tour packages | 13,201                          | 19,625                          | 36,436      | 84,407     
|                                  |                                    | Interest paid                             | -                               | -                               | 18          | -          
|                                  |                                    |                                           |                                 |                                 |             |            

Item 3. Quantitative and Qualitative Disclosure About Market Risks.  Not Applicable.   Item 4T. Controls and Procedures.   (a) Evaluation of disclosure controls and procedures.  As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934, the Companys principal executive officer and principal financial officer have evaluated the Companys disclosure controls and  37    procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q.  Based on this evaluation these officers have concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective and were adequate to insure that the information required to be disclosed by the Company in reports it files or submits under the Exchange Act were recorded, processed, summarized and reported within the time period specified in the Commission's rules and forms.  It is also important to point out that all internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements.  Therefore even those systems determined to be effective can only provide reasonable assurance with respect to financial reporting reliability and financial statements preparation and presentation.   (b) Changes in internal controls.  There have been no significant changes in our internal controls or other factors that could significantly affect such controls and procedures subsequent to the date we completed our evaluation.  Therefore, no corrective actions were taken.  PART II - OTHER INFORMATION   Item 1. Legal Proceedings.  To the best knowledge of the Companys officers and directors, the Company is currently not a party to any material pending legal proceeding.   Item 1A. Risk Factors.  There have been no material changes to the risk factors previously disclosed under item 1 of the Companys Registration Statement on Form SB-2, as filed with the United States Securities and Exchange Commission on June 14, 2006.   Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.  None.   Item 3. Defaults Upon Senior Securities.  None.    Item 5. Other Information.  None.    38     Item 6. Exhibits   (a) Exhibits   *3.1 Certificate of Incorporation   *3.2 Amended and Restated Certificate of Incorporation   *3.3 By-laws   *4.0 Stock Certificate   31.1 Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002   31.1 Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002   32.1 Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002   32.2 Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002   * Filed as an exhibit to the Company's registration statement on Form SB-2, as filed with the Securities and Exchange Commission on June 14, 2006, and incorporated herein by this reference.  (b) Reports of Form 8-K  None.   SIGNATURES  In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.  Dated:  November 15, 2010  BAOSHINN CORPORATON   By:  /s/ Sean Webster  Name:  Sean Webster  Title: President       39