U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2007 [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from 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 KongN/A(Address of principal executive offices)(Zip Code) Registrant's telephone number, including area code: (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, 2007: 21,500,000 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. Unaudited Consolidated Financial Statements.... 3Consolidated Income Statements (unaudited) for the three months ended September 30, 2007 and 2006, the six months ended September 30, 2007 and 2006 and the 12 months ended March 31, 2007..3Consolidated Balance Sheet  September 30, 2007, September 30 2006 and March 31, 2007.....  4Consolidated Statement of Stockholders Equity  September 30, 2007 .. 5Consolidated Statement of Cash Flows for the six months ended September 30, 2007 and September 30, 2006 and the 12 months ended March 31, 2007.......6Notes to Consolidated Financial Statements ...7  Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ....20  Item 3. Controls and Procedures ...24  PART II  OTHER INFORMATION:  Item 1. Legal Proceedings ....24  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds .24  Item 3. Defaults Upon Senior Securities ......24  Item 4. Submission of Matters to a Vote of Security Holders ..24  Item 5. Other Information .....24  Item 6. Exhibits ..25


Signatures ..25 PART I  FINANCIAL INFORMATION Item 1. Unaudited Interim Financial Statements  BAOSHINN CORPORATION Unaudited CONSOLIDATED INCOME STATEMENT (Stated in US Dollars)    For 3 Months
Ended Sept 30,
unauditedFor 6 Months
Ended Sept 30,
unaudited12 months Ended
audited200720062007200631 March 07$$$$$Net sales9,834,7608,245,09718,279,81215,998,10932,080,684Cost of sales(9,517,804)(7,930,075)(17,684,077)(15,373,972)(30,846,517)Gross profit316,956315,022595,735624,1371,234,167Depreciation(11,135)(9,862)(21,675)(19,087)(39,771)Administrative and other operating expenses(403,987)(443,000)(784,400)(758,118)(1,464,876)Loss from operations(98,166)(137,840)(210,340)(153,068)(270,480)Other income - Note 521,0747,04059,6729,44945,538Interest expenses  Note 6(17,439)(14,070)(31,540)(14,167)(43,175)Loss before taxes(94,531)(144,870)(182,208)(157,786)(268,117)Income taxes - Note 7-----Net loss(94,531)(144,870)(182,208)(157,786)(268,117)Earnings per share of common stock  Note 8- Basic(0.01)(0.01)(0.01)(0.01)(0.01)- DilutedN/AN/AN/AN/AN/AWeighted average number of common stock  Note 8- Basic21,500,00021,500,00021,500,00021,500,00021,500,000- DilutedN/AN/AN/AN/AN/A     See notes to consolidated financial statements  2   BAOSHINN CORPORATION Unaudited CONSOLIDATED BALANCE SHEET (Stated in US Dollars)   At Sept 30,
unaudited,At Mar 31,2007
audited20072006$$$ASSETSCurrent AssetsCash and cash equivalents953,025632,670770,431Accounts receivable1,716,0451,392,5901,781,913Amount due from a related party  Note 12206,12212,168177,151Deposits, prepaid expenses and other receivables - Note 9892,5261,010,047844,792Total Current Assets3,767,7183,047,4753,574,287Plant and equipment  Note 10105,134123,391111,128TOTAL ASSETS3,872,8523,170,8663,685,415LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIESCurrent LiabilitiesAccounts payable2,682,6751,881,7052,478,105Other payables and accrued liabilities  Note 11269,466207,141236,562Amounts due to related parties  Note 12692,505561,538560,604Total Current Liabilities3,644,6462,650,3843,275,271TOTAL LIABILITIES3,644,6462,650,3843,275,271COMMITMENTS AND CONTINGENCIES  Note 14STOCKHOLDERS EQUITYCommon stockPar value : 2007 - US$0.001 (2006  US$0.001)Authorized: 2007  200,000,000 shares (2006  200,000,000)Issued and outstanding: 2007  21,500,000 shares (2006  21,500,000)21,50021,50021,500Additional paid-in capital1,090,9441,090,9441,090,944Accumulated other comprehensive income263-(7)Accumulated deficit(884,501)(591,962)(702,293)TOTAL STOCKHOLDERS EQUITY228,206520,482410,144TOTAL LIABILITIES AND STOCKHOLDERS EQUITY3,872,8523,170,8663,685,415     See notes to consolidated financial statement  3   BAOSHINN CORPORATION  CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (Stated in US Dollars)  Common stockSharesAmountAdditional Paid in CapitalAccumulated other comprehensive incomeAccumulated DeficitTotal$$$$$Balance, April 1, 200516,500,00016,500304,013-(213,786)106,727Capital contribution--769,231--769,231Effect of reverse acquisition5,000,0005,00017,700--22,700Comprehensive incomeNet loss----(220,390)(220,390)Balance, March 31, 200621,500,00021,5001,090,9440(434,176)678,268Comprehensive incomeNet loss----(268,117)(268,117)Foreign currency translation adjustments---(7)-(7)Total000(7)(268,117)(268,124)Balance, March 31, 200721,500,00021,5001,090,944(7)(702,293)410,144Comprehensive incomeNet loss0000(182,208)(182,208)Foreign currency translation adjustments0002700270Total000270(182,208)(181,938)Balance, Sept 30, 200721,500,00021,5001,090,944263(884,501)228,206   See notes to consolidated financial statements  4   BAOSHINN CORPORATION  CONSOLIDATED STATEMENT OF CASH FLOWS (Stated in US Dollars) For 6 Months
Ended Sept 30
unaudited12 Months
audited20072006At Mar 31,2007$$$Cash flows from operating activitiesNet loss(182,208)(157,786)(268,117)Adjustments to reconcile net loss to net cash flowsprovided by operating activities :Depreciation21,67519,11939,771Changes in operating assets and liabilities:Accounts receivable130,735(156,807)(550,475)Deposits, prepaid expenses and other receivables(13,997)(318,226)(154,767)Accounts payable103,1651,103,523Other payables and accrued liabilities22,718531,49960,965Net cash flows provided by / (used in) operating activities82,088(82,201)230,900Cash flows from investing activityAcquisition of plant and equipment(15,163)(33,756)(42,337)Net cash flows used in investing activity(15,163)(33,756)(42,337)Cash flows from financing activitiesAmounts due from related parties(21,180)116,883(47,792)Amounts due to related parties131,901403,205404,216Net cash flows provided by financing activities110,721520,088356,424Net increase/(decrease) in cash and cash equivalents177,646404,131544,987Effect of foreign currency translation on cash and cash equivalents4,948-(3,095)Cash and cash equivalents - beginning of year770,431228,539228,539Cash and cash equivalents - end of year953,025632,670770,431Supplemental disclosures for cash flow information:Cash paid for:Interest31,54014,16743,175Income taxes---    See notes to consolidated financial statements  5   BAOSHINN CORPORATION  NOTES TO 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.  The Company was formed as a "blind pool" or "blank check" company whose business plan was to seek to acquire a business opportunity through completion of a merger, exchange of stock, or other similar type of transaction.  During the fiscal year ended March 31, 2006, the Company issued 5,000,000 restricted common shares at $0.01 per share for total cash consideration of $50,000.  On March 31, 2006, the Company consummated a merger (the merger) with Bao Shinn International Express Limited (BSIE), a privately held Hong Kong corporation, by issuing 16,500,000 shares in the share exchange transaction for 100% of the issued and outstanding shares of BSIE common stock.  As a result of the share exchange transaction, BSIE became our wholly owned subsidiary. The former stockholders of BSIE acquired 76.74% of the Companys issued and outstanding common stock as a result of completion of the share exchange transaction.  Therefore, although BSIE became the Companys wholly-owned subsidiary, the transaction was accounted for as a recapitalization of the Company, whereby BSIE is deemed to be the accounting acquirer and is deemed to have adopted the Companys capital structure.  Since the Merger was accounted for as a reverse acquisition, the accompanying consolidated financial statements reflect the historical financial statements of BSIE, the accounting acquirer, as adjusted for the effects of the exchange of shares on its equity accounts, the inclusion of net liabilities of the accounting subsidiary as of the date of the merger on their historical basis and the inclusion of the accounting subsidiarys results of operations from that date. Although the Company is the legal acquirer, BSIE will be treated as having acquired the Company for accounting purposes and all of the operations reported represent the historical financial statements of BSIE.  2. Description of business  Bao Shinn International Express Limited (BSIE), a wholly owned subsidiary of the Company, 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.     6    BAOSHINN CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)  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.  Managements plans in this regard are to raise private debt or equity financing as required. There is no assurance that such additional funds will be available for the Group on acceptable terms, if at all.  Currently the Company plans to fund through public offering.  The companys SB2 registration with U.S Securities and Exchange Commission has been effective on April 3, 2007, and is in the process of public offering at the moment.  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 Groups ability to achieve these objectives cannot be determined at this stage. If the Group is unsuccessful in its endeavors, it may be forced to cease operations. These financial statements do not include any adjustments that might result from this uncertainty.   4. Summary of significant accounting policies  Basis of presentation and consolidation  The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.  The consolidated financial statements include the accounts of the Company 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.  The Company also evaluates consolidation of entities under Financial Accounting Standards Board (FASB) Interpretation No.46, Consolidation of Variable Interest Entities (FIN 46). FIN 46 requires management to evaluate whether an entity or interest is a variable interest entity and whether the Company is the primary beneficiary. Consolidation is required if both of these criteria are met. The Company does not have any variable interest entities requiring consolidation.      7    BAOSHINN CORPORATION  NOTES TO 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.  Other than set forth below, no customers represented 10% or more of the Groups net sales and accounts receivable.  At Sept 30, 2007, customers represented 9% or more of the Groups net sales and accounts receivable are:  2007$Net sales-Accounts receivable151,412   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.    8     BAOSHINN CORPORATION  NOTES TO 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.   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.  During the reporting period, the Group had no bad debts    (2006: $2,804).   Plant and equipment  Plant and equipment are stated at cost less accumulated depreciation.  Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use.  Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized.  Depreciation of plant and equipment is provided using the straight-line method over their estimated useful lives at the following annual rates:  Furniture and fixtures20%Office equipment20%  Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.   Impairment of long-lived assets  Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.  The Group recognizes impairment of long-lived assets in the event that the net book values of such assets exceed the future undiscounted cash flows attributable to such assets.  No impairment of long-lived assets was recognized for the year presented.  9    BAOSHINN CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)  4. Summary of significant accounting policies (Continued)  Revenue recognition  The Group recognizes revenue on travel agent services when services are rendered to the customers. The revenue recognition process is considered complete when persuasive evidence of an arrangement exists, the service has been rendered, fees are fixed and determinable, collectibility is probable and when all other significant obligations have been fulfilled.  Advertising expenses  Advertising expenses are charged to expense as incurred. 3 months ended 30/096 months ended 30/0912 months ended 30/3/072007
20062007
2006$
$$
$$897
2,564897
2,6833,136  Income Taxes  The Group uses the asset and liability method of accounting for income taxes pursuant to SFAS No. 109 Accounting for Income Taxes.  Under the asset and liability method of SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry forwards and their respective tax bases.  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.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.  Comprehensive income  The Group has adopted SFAS 130, Reporting Comprehensive Income, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances.  Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments of the Group.  Foreign currency translation  The functional currency of the Group is Hong Kong dollars (HK$).  The Group maintains its financial statements in the functional currency.  Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates.  Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction.  Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.  10    BAOSHINN CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   4. Summary of significant accounting policies (Continued)  Foreign currency translation (Continued)  For financial reporting purposes, the financial statements of the Group which are prepared using the functional currency have been translated into United States dollars.  Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders equity is translated at historical exchange rates.  Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders equity.  20072006Quarter end HK$: US$ exchange rate7.76897.80Average quarterly HK$: US$ exchange rate7.80677.80   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.   Basic earnings per share  The Company reports basic earnings or loss per share in accordance with SFAS No. 128, Earnings Per Share.  Basic earnings per share is computed using the weighted average number of shares outstanding during the periods presented.  The weighted average number of shares of the Company represents the common stock outstanding during the years.   Related parties transactions  A related party is generally defined as (i) any person that holds 10% or more of the Company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.        11   BAOSHINN CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   4. Summary of significant accounting policies (Continued)  Recent accounting pronouncements  In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections (SFAS 154), which changes the requirements for the accounting for and reporting of a change in accounting principle.  The statement requires retrospective application to prior period financial statements of changes in accounting principle, unless impracticable to do so.  It also requires that a change in the depreciation, amortization, or depletion method for long-lived non-financial assets be accounted as a change in accounting estimate, effected by a change in accounting principle.  Accounting for error corrections and accounting estimate changes will continue under the guidance in APB Opinion 20, Accounting Changes, as carried forward in this pronouncement. The statement is effective for fiscal years beginning after December 15, 2005.  In November 2005, the FASB issued FSP Nos. FAS 115-1 and 124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments.  This FSP addresses the determination as to when an investment is considered impaired, whether the impairment is other-than-temporary, and the measurement of an impairment loss.  The investment is impaired if the fair value is less than cost.  The impairment is other-than-temporary for equity securities and debt securities that can contractually be prepaid or otherwise settled in such a way that the investor would not recover substantially all of its cost. If other-than-temporary, an impairment loss shall be recognized in earnings equal to the difference between the investments cost and its fair value.  The guidance in this FSP is effective in reporting periods beginning after December 15, 2005.  In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments, which amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS No. 155), and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.  SFAS No. 155 simplifies the accounting for certain derivatives embedded in other financial instruments by allowing them to be accounted for as a whole if the holder elects to account for the whole instrument on a fair value basis.  SFAS No. 155 also clarifies and amends certain other provisions of SFAS No. 133 and SFAS No. 140.  SFAS No. 155 is effective for all financial instruments acquired, issued or subject to a remeasurement event occurring in fiscal years beginning after September 15, 2006.  Earlier adoption is permitted, provided the Group has not yet issued financial statements, including for interim periods, for that fiscal year.  The Group does not believe the adoption of SFAS No. 155 will have a material impact on the Groups consolidated financial position or results of operations.           12    BAOSHINN CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)  4. Summary of significant accounting policies (Continued)  Recent accounting pronouncements (Continued)  The FASB released SFAS No. 156, Accounting for Servicing of Financial Assets, to simplify accounting for separately recognized servicing assets and servicing liabilities. SFAS No. 156 amends SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. SFAS No. 156 permits an entity to choose either the amortization method or the fair value measurement method for measuring each class of separately recognized servicing assets and servicing liabilities after they have been initially measured at fair value. SFAS No. 156 applies to all separately recognized servicing assets and liabilities acquired or issued after the beginning of an entitys fiscal year that begins after September 15, 2006. SFAS No. 156 will be effective for the Group as of December 31, 2006, the beginning of the Groups 2007 fiscal year. The Group does not believe the adoption of SFAS No. 156 will have a material impact on the Groups consolidated financial position or results of operations.  In July 2006, the FASB issued FIN 48 Accounting for Uncertainty in Income Taxes.  This interpretation requires that we recognize in our financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position.  The provisions of FIN 48 are effective as of the beginning of our 2007 fiscal year, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings.  The Group is currently evaluating the effect of FIN 48 on its financial statements.  In September 2006, the FASB issued SFAS No. 157 Fair Value Measurement (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This Statement shall be effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including any financial statements for an interim period within that fiscal year. The provisions of this statement should be applied prospectively as of the beginning of the fiscal year in which this Statement is initially applied, except in some circumstances where the statement shall be applied retrospectively.  The Group is currently evaluating the effect, if any, of SFAS 157 on its financial statements.  The FASB released SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans: an amendment of FASB Statements No. 87, 88, 106, and 132(R), which requires an employer to recognize the over funded or under funded status of defined benefit and other postretirement plans as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through an adjustment to comprehensive income. This statement also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. The Group is required to initially recognize the funded status of its defined benefit and other postretirement plans as of December 31, 2006, and to provide the required disclosures in the Groups 2006 annual report on Form 10-KSB.  The Group is assessing the impact on the adoption of SFAS No. 158 will have on the Groups consolidated financial position.  13    BAOSHINN CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   4. Summary of significant accounting policies (Continued)  Recent accounting pronouncements (Continued)  On February 15, 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an Amendment of SFAS No. 115. The fair value option established by SFAS No. 159 permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity will report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments. SFAS No. 159 is effective as of the beginning of an entitys first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of SFAS. No.157. The Group does not early adopt this statement.  5. Other income  Other revenue3 Months ended 30/9/073 Months ended 30/9/066 Months ended 30/9/076 Months ended 30/9/0612 Months ended 31/3/07Commission income$  3,116$  5,132$  6,182$  5,628$23,214Exchange gain$  5,994$  1,604$  7,902$  3,057$  6,350Interest income$     872$     304$  4,937$     764$  9,882Sundry income$11,092-$40,651-$  6,092$21,074$  7,040$59,672$  9,449$45,538   6. Interest expenses  3 Months ended 30/9/073 Months ended 30/9/066Months Ended 30/9/076 Months Ended 30/9/0612 months ended 31/3/07Interest ExpenseInterest Expense$17,439$14,070$31,540$14,167$43,175   14    BAOSHINN CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   7. Income taxes  No provision for Hong Kong profits tax has been made for any of the year presented, as the Group does not have any assessable profits during the year.  No provision for deferred tax liabilities has been made, as the Group has no material temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements. The Group has not recognized deferred tax assets in respect of losses due to the unpredictability of the future earnings. The tax losses do not expire under current tax legislation.   8. Earnings per share of common stock  Basic earnings per share of common stock was calculated by dividing the loss of $182,208 (2006: $157,786) by the weighted average number of ordinary shares 21,500,000 (2006: 21,500,000).  There is no dilution effect to the basic earnings per share of common stock for the year presented.


BAOSHINN CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   9. Deposits, prepaid expenses and other receivables  At Sept 30At March 31200720062007$$$Security deposits to suppliers[1]850,289757,515795,767Prepayments13,38319,74720,333Utility, rental and other deposits28,85424,11628,692Other receivable-208,668-892,5261,010,046844,792  [1] Represents a deposit with the airline companies to allow the Group to issue an agreed upon amount of air tickets per month.   10. Plant and equipment  At Sept 30,At March 31200720062007$$$CostFurniture and fixtures100,43398,94799,191Office equipment123,726100,879108,624224,159199,826207,815Accumulated depreciationFurniture and fixtures63,52443,39553,213Office equipment55,50133,03943,474119,02576,43496,687NetFurniture and fixtures36,90955,55245,978Office equipment68,22567,84065,150105,134123,392111,128  Depreciation expenses for the 3 months are $11,135 (2006: $9,862) Depreciation expenses for the April-Sep 2007 are $21,675 (2006: $19,120).    15    BAOSHINN CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)  11. Other payables and accrued liabilities  At Sept 30At March 31200720062007$$$Sale deposits received76,29181,08980,457Accrued expenses193,175126,052155,845Other payables--260269,466207,141236,562  12. Amounts due from/(to) related parties  Amounts due from/(to) related parties for working capital are as follows:  At Sept 30At March 31200720062007$$$Amount due from a shareholder206,12212,168177,151Amounts due to shareholders692,505561,538560,604  The amount due from a shareholder is temporary advance, interest free, unsecured and due on demand.  The amounts due to shareholders, represents advances from certain shareholders of the Company, are interest-bearing at the rate of 10% per annum, unsecured and have no fixed repayment terms.  13. 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 $10,374 during 2007 (2006: $9,013).  16   BAOSHINN CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars) 14. 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 2008 to 2010, 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 Sept 30,2007are as follows:  Sept 30$200885,611200954,11220108,667148,390 Rental expenses for the April-Sept 2007 were $73,858 (2006: $58,905).  15. 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 38.4% of Baoshinn Corporations outstanding common stock.  The consolidated income statement for the periods presented includes the following related party transactions: Related partyNature of relationship and controlDescription of transactions3 Months ended 30 September6 Months ended 30 September12 Months ended
31 March20072006200720062007$$$$$Bao Shinn Express Company LimitedShareholder
38.4%Sales of air tickets and tour packages(87,611)(107,285)(157,077)(224,941)(188,369)Management service income(10,808)-(19,543)-(5,784)Purchase of air tickets and tour packages21,71753,90948,214104,371373,624Loan interest paid7,8864

,

88215,7664,97914,424Rent paid8,0706,52816,13313,07726,219Mr. Wong Yun Leung, EdwardShareholder
18.4%Loan interest paid76715311,5331,5313,073  17     BAOSHINN CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Stated in US Dollars)   16. Comparative amounts  Certain amounts included in prior years consolidated financial statements have been reclassified to conform to the current years presentation.  These reclassifications had no effect on reported total assets, liabilities, shareholders equity, or net income.   18   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 the Company Baoshinn Corporation and its subsidiaries, except where the context otherwise indicates or requires.  This discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited Financial Statements included in this filing. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, and reflect the historical financial position, results of operations, and cash flows. The financial information included in this filing, however, is not necessarily indicative of our future performance.  Results from operations for the three month and six month periods ended September 30, 2007 compared to the corresponding periods from 2006.  Revenues  Our Revenue increased by $1,589,663 or 19.28% from $8,245,097 in the three months ended September 30, 2006 to $9,834,760 for the corresponding period in 2007. For the six months ended September 30 2007, our revenue increased by $2,281,703 or 14.26% from $15,998,109 in 2006 to $18,279,812 in 2007. This is a record high for the second quarter compared to previous fiscal years. The increase in revenues is mainly due to growth in our corporate traveler sector and the addition of experience staff.  Gross Profit and Gross Profit Margin  Our gross profit increased by $1,934 or 0.61% from $315,022 in the three months ended September 30, 2006 to $316,956 for the corresponding period in 2007. For the six months ended September 30 2007, our gross profit decreased by $28,402 or (4.55%) from $624,137 in 2006 to $595,735 in 2007. The gross profit margin rate deceased 0.6% from 3.82% in the three months ended September 30, 2006 to 3.22% for the corresponding period in 2007. For the six months ended September 30 2007, our gross profit margin decreased 0.64% from 3.90% in 2006 to 3.26% in 2007. The reason for the decrease in gross margin is due to the promotional activity among travel agencies during the low season. From April to Sept this year, there have been a few price wars in the short haul Asia Pac segment of the market. To establish a strong image and win over the consumers, we sacrificed our gross margin in short term.  Operating Expenses  Overview Total operating expenses for the three months ended Sept 30, 2007, were $403,987 or 4.11% of revenues, while the numbers from same period in 2006 were $443,000 or 5.37%. This is a decrease of $39,013 or 8.81% in operating expenses. Included in the current periods increase are: Salaries, commissions and allowances, Legal and professional fees, Office rental and building management fees, and Management Fees.  19   Salaries, commissions and allowances Staff costs as a percentage of revenue have decreased this quarter from 2.68% in 2006 to 2.54% in 2007. Though, the absolute dollar amount has increased from $221,228 in 2006 to $249,369 in 2007. There are a few factors that contributed to the increased staff costs. The key reason is that the company is recruiting experienced staff from our competitors. Management expects that these experienced staff will not only increase productivity, but also bring their network of clients to our company.  Legal and professional fees Legal & professional fees increased during this quarter by $3,485 compare to the same period last year, from nil in 2006 to $3,485 in 2007. This was due to the professional services related to SEC filings and other US regulatory requirements.  Office rental and building management fees Office rental increased by $3,707 compared to the same period last year from $37,778 in 2006 to $41,485 in 2007. The increase is due to, the Company adding more office space to our current location in the China to support the growth. They Company also relocated the finance & accounting department from its current location to the corporate management office.  Management Fees The management fee expense increased by $31,554 compared to the same period last year from $9,308 in 2006 to $40,862 in 2007. This was due to the extra corporate finance people that were sourced to assist with the Companys SEC registration and funding arrangements. This staff also worked on financial reporting and business analysis, which was used to support the management in making commercial and operating decisions.  Other general and administration expenses Other general and administration expenses decreased by $105,901 compare to the corresponding period in 2006 from $174,687 to $68,786. This is due to an effective implementation of the office expenses saving plan, which was reinforced by upper management.  Other Incomes (Expenses)  Sundry Income The sundry income of $11,092 comprised of a management fee of $10,808 and a $285 unused ticket refund.  The $10,808 management fee is from a related party, Bao Shinn Express Company Limited (BSEL). BSEL currently hold 38.4% of Baoshinn Corporations outstanding common stock. BSEL paid a management service fee of $10,808 to us during this quarter for consultation and advice that we provide to BSEL on business operation and general travel industry knowledge.  The $285 unused ticket refunds are monies we received from airlines as a result of not being able to reimburse clients for unused tickets. The Companys policy is to take amounts previously expensed for tickets back into income after a ticket has not been used for 18 months.  Commission Income The commission income is from various booking systems connected to International Air Transport Association (IATA) based on the number of tickets booked through each system. Our commission income  20   decreased from $5,132 in 2006 to $3,116 in 2007. During this quarter, we increased the number of tickets booked through a lower percentage commission booking system, which result the decreasing in dollar amount.  Interest Income Interest income comes from interest gained from cash deposit held by airlines as a guarantee. The cash deposit guarantee increases as sales volume increases. Our interest income was $872 for the three months ended Sept 30, 2007, compared to $304 for the same period in 2006.  Exchange Gain During this quarter, the exchange gain increased from $1,604 in 2006 to $5,994 in 2007 due to the appreciation of the Hong Kong Dollar.  Interest Expense The Company incurred interest expense of $17,439 or 0.18% of total revenues for the three months ended Sept 30, 2007, compared to $14,070 for the corresponding period in 2006. The interest expense increased as a result of the Companys growth being financed by shareholder loans, which bear interest at 10% per annum.  Net Loss  Net loss decreased in dollar amount from $144,870 in the three months ended Sept 30, 2006 to $94,530 in the corresponding period in 2007. This decrease is mainly due to the promotion activity mentioned before, which resulted in a higher gross margin.  Liquidity and Capital Resources  Operating Activities For the six months ended Sep 30, 2007, operating activities provided cash flows of $82,088, compared to ($82,201) from the same period in 2006. The company went from generating a negative cash flow to generating a positive cash flow. This was primarily due to better working capital utilization, which shortened the trade receivable collection cycle and allowed for better credit terms with suppliers in regard to payments.  Investing Activities For the six months ended Sep 30, 2007, Net cash used in investing activities was $15,163, compared to $33,756 for the same period in 2006. The primary uses of cash were for capital expenditures on new computer equipment and expansion of new office facilities. Since the Company had already built up the infrastructure during 2006, less money had to be spent on capital expenditures in 2007.  Financing Activities For the six months ended Sep 30, 2007, Net cash provided by financing activities was $110,721 compared to $520,088 for the same period in 2006.   The $21,180 in legal cost accrual in this quarter is associated with our SEC registration, which will be paid back to the company by its shareholders. During this quarter, the shareholders of the Company provided extra temporary loan of $131,901 to the company, which was used as working capital.   21   Our working capital and additional funding requirements will depend on numerous factors, including: (i) an increase in current company personnel; (ii) the level of resources that we devote to our sales and marketing force; and (iii) the activities of our competitors.  To date, we have incurred substantial losses and will require financing to meet our operating obligations. Our SEC registration statement became effective on April 3, 2007. The Company has raised equity financing during the last quarter. On September 28, 2007, the Corporation officially completed its offering of 2,400,000 shares of common stock registered on Form SB-2 to 59 subscribers raising a total of $720,000.00 with net proceeds of $624,000.  These funds will be used as the working capital to support the business and for expansion. We will subsequently need to raise additional working capital to fund our future operations as our current level of operations do not provide sufficient cash flows to support our working capital needs. Management plans to raise private debt or equity financing as required. There is no assurance that such additional funds will be available to the Company on acceptable terms.  Currently, the Companys shareholders provided the working capital to the Company on a temporary loan basis. These temporary loans total $692,505 and bear interest at 10% per annum. All temporary loans and accumulated interest was repaid on October 10 2007, and the repayment will be reflected on next quarters financial statement.  Financing our Capital Expenditures  During the next 12 months, the Company will implement its business plan for expanding into the China market. The initial investment on capital expenditures will be approximately US$1.2 million, which includes license purchase, leasehold improvements, furniture and fixtures, communication equipment, computers and office equipment for a new location in Shanghai. Subsequently, the working capital for Shanghai office will be around US$1.5 million, which will include airline guarantee cash deposits, other prepayments and supplier deposits.  The headquarters for the Chinese market will be based in Shanghai. The company plans to establish the office during the 3rd or 4th quarter of the 2007/2008 fiscal year. After the first Chinese office is running smoothly, the company will duplicate the business model in Beijing, Guangzhou, Chongqing and Kunming within next 12 months.  Off-Balance Sheet Arrangements  During the period ended September 30, 2007, and the last fiscal year ended March 31, 2007, we 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  Loans from shareholders represent temporary advances from certain shareholders of the Company. The amounts are unsecured, they bear interest at 10% per annum, and they have no fixed terms of repayment. As of Sept 30, 2007, accrued and unpaid interest on the outstanding loans totaled $26,709.  Specific details of such loans are contained in the table that follows:   22    Related partyNature of Relationship and Control9/30/079/30/06Bao Shinn Express Company LimitedShareholder377,14596,154Edwin WongShareholder30,89230,769Benny KanShareholder21,23921,154Mike LamShareholder164,116394,231Chiu Lim Chiu LuanShareholder11,58511,538Pang Hoi PingShareholder87,5287,692Total692,505561,538 Item 3. Controls and Procedures Evaluation of disclosure controls and procedures We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports filed pursuant to the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules, regulations and related forms, and that such information is accumulated and communicated to our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. As of September 30, 2007, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective. Changes in internal controls There have been no changes in our internal controls or in other factors that could significantly affect these controls and procedures during the quarter ended September 30, 2007. PART II - OTHER INFORMATION Item 1.  Legal Proceedings. The Company is currently not a party to any pending legal proceedings and no such action by or to the best of its knowledge, against the Company has been threatened. Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds. None. Item 3.  Defaults Upon Senior Securities. None. Item 4.  Submission of Matters to a Vote of Security Holders. No matter was submitted during the quarter ending September 30, 2007, covered by this report, to a vote of the Companys shareholders, through the solicitation of proxies or otherwise. Item 5.  Other Information. None.  23   Item 6.  Exhibits and Reports of Form 8-K.  (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 13, 2007 BAOSHINN CORPORATON  By: /s/ Ricky Chiu Name: Ricky Chiu Title: President                24