Sino Assurance Inc. (OTC: SNAS) Reports Third Quarter 2011 Earnings

SINO ASSURANCE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2011 AND DECEMBER 31, 2010

(Currency expressed in United States Dollars ("US$"), except for number of shares)

September 30, 2011

December 31, 2010

(Unaudited)

(Audited)

ASSETS

Current assets:

    Cash and cash equivalents

$

8,171,638

$

7,074,893

    Restricted cash

20,861,834

13,050,117

    Marketable securities

156,206

-

    Guarantee fee receivable

37,774

18,003

    Loans receivable, unsecured

5,998,310

2,842,001

    Prepayments and other receivable

402,790

262,127

Total current assets

35,628,552

23,247,141

Non-current assets:

   Plant and equipment, net

520,104

410,807

TOTAL ASSETS

$

36,148,656

$

23,657,948

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

    Accounts payable, trade

$

60,176

$

130,209

    Customer collateral

17,722,717

8,830,517

    Deferred revenue

1,646,051

915,847

    Amount due to a related party

63,634

61,614

    Income tax payable

-

529,447

    Deferred tax liabilities

2,061,562

1,422,843

    Accrued liabilities and other payable

2,051,827

1,455,009

Total current liabilities

23,605,967

13,345,486

Commitments and contingencies

Stockholders' equity:

    Common stock, $0.001 par value; 200,000,000 shares authorized;
      60,200,000 shares issued and outstanding, respectively 

60,200

60,200

    Additional paid-in capital

2,970,045

2,970,045

    Accumulated other comprehensive income

836,937

468,837

    Statutory reserve

332,153

332,153

    Retained earnings 

8,343,354

6,481,227

Total stockholders' equity

12,542,689

10,312,462

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

36,148,656

$

23,657,948

SINO ASSURANCE INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Currency expressed in United States Dollars ("US$"))

(Unaudited)

Three months ended September 30,

Nine months ended September 30,

2011

2010

2011

2010

REVENUES, NET

Guarantee fee income

$

1,321,721

$

2,981,863

$

6,853,304

$

7,230,368

Interest income

51,965

53,041

110,235

113,838

Total revenues, net

1,373,686

3,034,904

6,963,539

7,344,206

COST OF REVENUE

423,228

524,677

1,223,884

1,292,481

GROSS PROFIT

950,458

2,510,227

5,739,655

6,051,725

Operating expenses:

Selling, general and administrative

1,150,598

733,317

2,887,546

2,037,497

Provision for guarantee losses

87,347

163,687

407,421

400,883

Total operating expenses

1,237,945

897,004

3,294,967

2,438,380

(LOSS) INCOME BEFORE INCOME TAXES

(287,487)

1,613,223

2,444,688

3,613,345

Income tax benefit (expense)

83,999

(376,984)

(582,561)

(847,947)

NET (LOSS) INCOME

$

(203,488)

$

1,236,239

$

1,862,127

$

2,765,398

Other comprehensive income:

- Foreign currency translation gain

105,748

125,902

368,100

152,803

COMPREHENSIVE (LOSS) INCOME

$

(97,740)

$

1,362,141

$

2,230,227

$

2,918,201

Net (loss) income per share – Basic and diluted

$

(0.00)

$

0.02

$

0.03

$

0.05

Weighted average common shares outstanding – Basic and diluted

60,200,000

60,000,000

60,200,000

60,000,000

SINO ASSURANCE INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(Currency expressed in United States Dollars ("US$"))

(Unaudited)

Nine months ended September 30,

2011

2010

Cash flows from operating activities:

Net income

$

1,862,127

$

2,765,398

Adjustments to reconcile net income to net cash provided 
 by operating activities:

   Depreciation

113,112

82,043

   Loss on disposal of plant and equipment

5,310

1,183

   Provision for guarantee losses

407,421

400,883

   Deferred tax expense

582,561

554,876

Changes in operating assets and liabilities:

   Guarantee fee receivable

(18,873)

(26,064)

   Prepayments and other receivable

(129,949)

(232,788)

   Accounts payable, trade

(73,114)

15,185

   Deferred revenue

688,947

260,816

   Income tax payable

(538,056)

259,004

   Accrued liabilities and other payable

132,873

(38,711)

Net cash provided by operating activities

3,032,359

4,041,825

Cash flows from investing activities:

   Change in restricted cash, net of customer collateral

1,199,375

(949,296)

   Purchase of marketable securities

(153,704)

-

   Receipts from loans receivable

2,888,213

283,968

   Payment on loans receivable

(5,902,232)

(2,268,060)

   Proceeds from disposal of plant and equipment

247

290

   Purchase of plant and equipment

(212,955)

(145,947)

Net cash used in investing activities

(2,181,056)

(3,079,045)

Cash flows from financing activities:

   Advance from a related party

-

14,930

Net cash provided by financing activities

-

14,930

Effect of exchange rate changes in cash 
and cash equivalents

245,442

28,616

NET CHANGE IN CASH AND CASH EQUIVALENTS

1,096,745

1,006,326

CASH AND CASH EQUIVALENT, BEGINNING OF 
 PERIOD 

7,074,893

559,105

CASH AND CASH EQUIVALENT, END OF PERIOD

$

8,171,638

$

1,565,431

SUPPLEMENTAL DISCLOSURE OF CASH FLOW 
 INFORMATION:

Cash paid for income taxes

$

538,056

$

32,368

Cash paid for interest

$

-

$

-