UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 20-F/A
 (Amendment No. 1)
 (Mark One)
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF
1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Date of event requiring this shell company report
 For the transition period from ___________ to ___________.
 Commission file number: 000-50975
 CHINA FINANCE ONLINE CO. LIMITED
  Not Applicable  (Translation of Registrants name into English)
 Hong Kong  (Jurisdiction of incorporation or organization)
 9th Floor of Tower C, Corporate Square
NO.35 Financial Street, Xicheng District
Beijing 100032, China  (Address of principal
executive offices)
  Title of each class
    
    Name of each exchange on which registeredNone
    
    None
  American Depositary Shares, each representing 5 ordinary shares,
 par value HK$0.001 per share *
 *
    
Not for trading, but only in connection with the listing on the Nasdaq Global Market of American
Depository Shares each representing 5 ordinary shares pursuant to the requirements of the
Securities and Exchange Commission.
 None
  o þ
 o þ
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
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Explanatory Note
     ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
 The following discussion of our financial condition and results of operations is based upon and
should be read in conjunction with our consolidated financial statements and their related notes
included in this annual report on Form 20-F . This report contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934, including, without limitation, statements regarding our expectations, beliefs,
intentions or future strategies that are signified by the words expect, anticipate, intend,
believe, or similar language. All forward-looking statements included in this annual report are
based on information available to us on the date hereof, and we assume no obligation to update any
such forward  looking statements. Actual results could differ materially from those projected in
the forward  looking statements. In evaluating our business, you should carefully consider the
information provided under the caption Risk Factors in this annual report on Form 20-F . We
caution you that our businesses and financial performance are subject to substantial risks and
uncertainties.
 A. Operating Results .
 www.jrj.com and stockstar.com
    55




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Key factors affecting our operating results and financial condition
  
    
    performance of Chinas securities markets, and user demand for market intelligence on
Chinas securities markets, as well as the overall performance of Chinas economy;
 
    
    contribution of alternative revenue resources such as revenues from online advertising;
 
    
    seasonality associated with the level of activity of our users and subscribers and the
trading activities of Chinas securities markets;
 
    
    tax refund from the PRC tax authorities for value-added-taxes we are required to pay on
the sale of subscriptions to our service packages;
 
    
    other tax incentives we receive from PRC tax authorities resulting from CFO Beijing
being a foreign invested software development company and CFO Software being a foreign
invested high-technology company;
 
    
    our cost structure, including, in particular, our cost for raw data;
 
    
    the desirability of our service packages relative to other products and offerings
available in the market;
 
    
    our ability to benefit from the acquisition of CFO Stockstar, CFO Genius, and Daily
Growth Securities; and
 
    
    PRC telecommunication and regulatory policies.
    Gross revenues
   
    
    the number of registered user accounts on our websites;
 
    
    the number of active paying individual subscribers; and
 
    
    the service packages selected by our subscribers.
  56




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##### 



www.jrj.com www.stockstar.com www.jrj.com www.stockstar.com
  Net revenues
   Years ended December 31,2005
    
    
    2006
    
    
    2007Subscription fees
    
    $
    5,811,395
    
    
    $
    5,075,830
    
    
    $
    22,712,043Advertising revenue
    
    
    996,311
    
    
    
    1,337,630
    
    
    
    1,560,194SMS revenue
    
    
    
    
    
    
    298,232
    
    
    
    1,339,321Brokerage service revenue
    
    
    
    
    
    
    
    
    
    
    80,896Others
    
    
    674,460
    
    
    
    416,386
    
    
    
    210,620$
    7,482,166
    
    
    $
    7,128,078
    
    
    $
    25,903,074
 Revenue recognition
     57




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##### 



Cost of revenues
  Rent.
 Cost of raw data.
 
    
    if we enter into additional commercial agreements for purchasing data from new sources
or if we obtain different or additional data from existing sources or
 
    
    due to rate increases we may experience in the future upon renewal of our existing
agreements.
 Salary and compensation.
 Depreciation.
 Operating expenses
  
    
    salary and compensation for our employees, particularly our sales and marketing
personnel and our management team;
 
    
    stock-based compensation expenses for the grant of the performance-based restricted
stock and for new grants issued in 2007;
 
    
    professional services and other related costs associated with being publicly listed in
the U.S; and
 
    
    expansion in operating scale associated with the acquisition of CFO Stockstar, CFO
Genius and Daily Growth Securities.
  58




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##### 



General and administrative expenses.
 Product development expenses.
 Sales and marketing expenses.
 Stock option plan and option agreements
     59




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##### 



Critical accounting policies
  Income taxes.
 Stock-based compensation.
  Cost method investment.
  60




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##### 



Goodwill.
   Impairment
of long-lived assets
 Results of operations
  For the year ended December 31,(in thousands of U.S. dollars, except as % of net revenues)(1)
    
    2005
    
    
    2006
    
    
    2007Consolidated statement of operations and comprehensive income
(loss) data:Gross revenues(2)
    
    $
    7,627
    
    
    
    101.9
    %
    
    $
    7,337
    
    
    
    102.9
    %
    
    $
    26,570
    
    
    
    102.6
    %Business tax
    
    
    (145
    )
    
    
    (1.9
    )
    
    
    (209
    )
    
    
    (2.9
    )
    
    
    (667
    )
    
    
    (2.6
    )Net revenues
    
    
    7,482
    
    
    
    100
    %
    
    
    7,128
    
    
    
    100
    %
    
    
    25,903
    
    
    
    100
    %Cost of revenues
    
    
    (482
    )
    
    
    (6.4
    )
    
    
    (1,468
    )
    
    
    (20.6
    )
    
    
    (4,427
    )
    
    
    (17.1
    )Gross profit
    
    
    7,000
    
    
    
    93.6
    
    
    
    5,660
    
    
    
    79.4
    
    
    
    21,476
    
    
    
    82.9Operating expenses:General and administrative
    
    
    (1,740
    )
    
    
    (23.3
    )
    
    
    (2,956
    )
    
    
    (41.5
    )
    
    
    (7,784
    )
    
    
    (30.1
    )Product development
    
    
    (236
    )
    
    
    (3.2
    )
    
    
    (742
    )
    
    
    (10.4
    )
    
    
    (2,269
    )
    
    
    (8.8
    )Sales and marketing
    
    
    (1,795
    )
    
    
    (24.0
    )
    
    
    (2,666
    )
    
    
    (37.4
    )
    
    
    (6,924
    )
    
    
    (26.7
    )Total operating expenses
    
    
    (3,771
    )
    
    
    (50.5
    )
    
    
    (6,364
    )
    
    
    (89.3
    )
    
    
    (16,977
    )
    
    
    (65.5
    )Subsidy income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    136
    
    
    
    0.5Income from operations
    
    
    3,229
    
    
    
    43.2
    
    
    
    (704
    )
    
    
    (9.9
    )
    
    
    4,635
    
    
    
    17.9Interest income
    
    
    1,486
    
    
    
    19.9
    
    
    
    1,003
    
    
    
    14.1
    
    
    
    1,105
    
    
    
    4.3Exchange gain (net)
    
    
    366
    
    
    
    4.9
    
    
    
    267
    
    
    
    3.7
    
    
    
    424
    
    
    
    1.6Other expense, net
    
    
    
    
    
    
    
    
    
    
    115
    
    
    
    1.6
    
    
    
    9
    
    
    
    0.03Loss from impairment of cost method investment
    
    
    
    
    
    
    
    
    
    
    (1,322
    )
    
    
    (18.5
    )
    
    
    (11,127
    )
    
    
    (43.0
    )Income before income taxes benefit (provision)
    
    
    5,081
    
    
    
    67.9
    
    
    
    (641
    )
    
    
    (9.0
    )
    
    
    (4,954
    )
    
    
    (19.1
    )Minority interests in net income of consolidated subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    0.06Income tax benefit (provision)
    
    
    (457
    )
    
    
    (6.1
    
    
    
    41
    
    
    
    (0.58
    )
    
    
    809
    
    
    
    3.1Net income (loss)
    
    $
    4,624
    
    
    
    61.8
    %
    
    $
    (600
    )
    
    
    (8.4%
    )
    
    $
    (4,130
    )
    
    
    (15.9%
    )
 (1)
    
    For the results of operations for a specified period, all translations from Renminbi to U.S.
dollars were calculated at the average exchange rate for that period. For the years ended December
31, 2005, 2006 and 2007, all translations from Renminbi to U.S. dollars were calculated at
RMB8.1472, RMB7.9693 and RMB7.6072 per US$1.00, respectively.(2)
    
    For subscriptions provided to individual investors, we receive subscription fees at the
beginning of the subscribers subscription periods. Revenues from the subscription fees are
deferred and recognized ratably over the subscription period, typically twelve months.  61




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Year ended December 31, 2007 compared to year ended December 31, 2006
 Revenues
     Cost of revenues
  Gross profit
  Operating expenses
  General and administrative.
  62




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Product development.
 Sales and marketing.
 Income/(Loss) from operations
  Interest income
  Loss from impairment of cost method investment
     Income tax benefit
   63




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##### 



Net income/(loss)
  Year ended December 31, 2006 compared to year ended December 31, 2005
 Revenues
    Cost of revenues
  Gross profit
  Operating expenses
  General and administrative.
 Product development.
  64




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Sales and marketing.
 Income/(Loss) from operations
  Interest income
  Loss from impairment of cost method investment
   Income tax benefit
  Net income/(loss)
  B. Liquidity and capital resources .
 Cash flows and working capital
   65




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##### 



For the year ended December 31(in thousands of U.S. dollars)
    
    2005
    
    
    2006
    
    
    2007Net cash provided by operating activities
    
    $
    3,059
    
    
    $
    5,892
    
    
    $
    28,426Net cash used in investing activities
    
    
    (15,235
    )
    
    
    (8,202
    )
    
    
    (4,830
    )Net cash provided by (used in) financing activities
    
    
    (12,923
    )
    
    
    (76
    )
    
    
    3,226Net increase (decrease) in cash and cash equivalents
    
    
    (24,428
    )
    
    
    (1,213
    )
    
    
    29,773Cash and cash equivalents at beginning of year
    
    
    70,596
    
    
    
    46,168
    
    
    
    44,956Cash and cash equivalents at end of year
    
    $
    46,168
    
    
    $
    44,956
    
    
    $
    74,729
    Capital resources
    Restricted net assets
    66




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##### 



C. Research
and development .
  
    
    increase the breadth of our service offerings through the addition of new features and
functions to our service packages;
 
    
    enhance our subscribers experience by improving the quality of our research tools and
website; and
 
    
    develop additional research tools, features and content specifically targeting the
high-end subscribers.
 D. Trend information .
  E. Off-balance sheet arrangements .
  F. Tabular disclosure of contractual obligations .
  Office Premises
    
    
    Data Purchase
    
    
    Total(in U.S. dollars)Less than 1 year
    
    
    1,521,127
    
    
    
    486,673
    
    
    
    2,007,8001  3 years
    
    
    2,845,844
    
    
    
    21,934
    
    
    
    2,867,7783  5 years
    
    
    22,128
    
    
    
    
    
    
    
    22,128
  G. Quantitative and qualitative disclosures about market risk .
 Interest rate risk
  Foreign currency risk
   67




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##### 



H.
Recent accounting standards .
       68




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##### 



ITEM 18. FINANCIAL STATEMENTS
   69




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##### 



ITEM 19. EXHIBITS
 Index to exhibits
 ExhibitNumber
    
    Description1.1
    
    
    Amended and Restated Memorandum and Articles of
Association of China Finance Online Co. Limited
(incorporated by reference to Exhibit 3.1 from our
Registration Statement on Form F-1 (File No.
333-119166) filed with the Securities and Exchange
Commission on October 4, 2004)2.1
    
    
    Specimen ordinary share certificate (incorporated
by reference to Exhibit 4.1 from our Registration
Statement on Form F-1 (File No. 333-119166) filed
with the Securities and Exchange Commission on
September 21, 2004)2.2
    
    
    Specimen American depositary receipt of China
Finance Online Co. Limited (Incorporated by
reference to the Registration Statement on Form
F-6 (File No. 333-119530) filed with the
Securities and Exchange Commission with respect to
American depositary shares representing ordinary
shares on October 5, 20042.3
    
    
    Shareholders Agreement of China Finance Online Co.
Limited dated June 2000 among China Finance Online
Co., Ltd. and certain of its shareholders
(incorporated by reference to Exhibit 4.2 from our
Registration Statement on Form F-1 (File No.
333-119166) filed with the Securities and Exchange
Commission on September 21, 2004)4.1
    
    
    2004 Incentive Stock Option Plan and form of
option agreement (incorporated by reference to
Exhibit 4.1 from our 2006 Annual Report on Form
20-F (File No.000-50975) filed with the Securities
and Exchange Commission on May 29, 2007)4.2
    
    
    Restricted Stock Issuance and Allocation
Agreement-2007 Equity Incentive Plan (incorporated
by reference to Exhibit 99.1 on Form 6-K (File No.
000-50975) filed with the Securities and Exchange
Commission on August 24, 20074.3
    
    
    Form of Option Agreement with outside consultants
and strategic advisors (incorporated by reference
to Exhibit 10.2 from our Registration Statement on
Form F-1 (File No. 333-119166) filed with the
Securities and Exchange Commission on September
21, 2004)4.4
    
    
    Purchase Option and Cooperation Agreement dated
May 27, 2004 among China Finance Online Co.
Limited, Jun Ning, Wu Chen and CFO Fuhua
Innovation Technology Development Co., Ltd.
(incorporated by reference to Exhibit 10.3 from
our Registration Statement on Form F-1 (File No.
333-119166) filed with the Securities and Exchange
Commission on September 21, 2004)4.5
    
    
    Share Pledge Agreement dated May 27, 2004 among
Jun Ning, Wu Chen and China Finance Online
(Beijing) Co., Ltd. (incorporated by reference to
Exhibit 10.4 from our Registration Statement on
Form F-1 (File No. 333-119166) filed with the
Securities and Exchange Commission on September
21, 2004)4.6
    
    
    Proxy from Wu Chen to Jian Feng dated May 27, 2004
(incorporated by reference to Exhibit 10.6 from
our Registration Statement on Form F-1 (File No.
333-119166) filed with the Securities and Exchange
Commission on September 21, 2004)4.7
    
    
    Framework Agreement on Exercising Purchase Option dated November 20,
2006 by and among Jun Ning, Wu Chen, Zhiwei Zhao, CFO Fuhua
Innovation Technology Development Co., Ltd. and China Finance Online
(Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.7 from
our 2006 Annual Report on Form 20-F (File No.000-50975 ) filed with
the Securities and Exchange Commission on May 29, 2007)
  70




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ExhibitNumber
    
    Description4.8
    
    
    Share Transfer Contract (related to shares of Beijing Fuhua
Innovation Technology Development Co., Ltd.) dated November 20, 2006
by and between Jun Ning and Zhiwei Zhao (incorporated by reference
to Exhibit 4.8 from our 2006 Annual Report on Form 20-F (File
No.000-50975 ) filed with the Securities and Exchange Commission on
May 29, 2007)4.9
    
    
    Loan Agreement dated November 20, 2006 by and between China Finance
Online Co. Limited by and Zhiwei Zhao (incorporated by reference to
Exhibit 4.9 from our 2006 Annual Report on Form 20-F (File
No.000-50975 ) filed with the Securities and Exchange Commission on
May 29, 2007)4.10
    
    
    Purchase Option and Cooperation Agreement dated November 20, 2006
among China Finance Online Co. Limited, Zhiwei Zhao, Wu Chen, Fuhua
Innovation Technology Development Co., Ltd. and China Finance Online
(Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.10 from
our 2006 Annual Report on Form 20-F (File No.000-50975 ) filed with
the Securities and Exchange Commission on May 29, 2007)4.11
    
    
    Share Pledge Agreement dated November 20, 2006 among Zhiwei Zhao, Wu
Chen, Fuhua Innovation Technology Development Co., Ltd. and China
Finance Online (Beijing) Co., Ltd. (incorporated by reference to
Exhibit 4.11 from our 2006 Annual Report on Form 20-F (File
No.000-50975 ) filed with the Securities and Exchange Commission on
May 29, 2007)4.12
    
    
    Equipment Lease Agreement between China Finance Online (Beijing)
Co., Ltd. and Fuhua Innovative Technology Development Co., Ltd.
dated May 27, 2004 (incorporated by reference to Exhibit 10.7 from
our Registration Statement on Form F-1 (File No. 333-119166) filed
with the Securities and Exchange Commission on September 21, 2004)4.13
    
    
    Technical Support Agreement between China Finance Online (Beijing)
Co., Ltd. and Fuhua Innovative Technology Development Co., Ltd.
dated May 27, 2004 (incorporated by reference to Exhibit 10.8 from
our Registration Statement on Form F-1 (File No. 333-119166) filed
with the Securities and Exchange Commission on September 21, 2004)4.14
    
    
    Amended and Restated Strategic Consulting Agreement between China
Finance Online (Beijing) Co., Ltd. and Fuhua Innovative Technology
Development Co., Ltd. dated May 27, 2004 (incorporated by reference
to Exhibit 10.9 from our Registration Statement on Form F-1 (File
No. 333-119166) filed with the Securities and Exchange Commission on
September 21, 2004)4.15
    *
    
    Framework Agreement on Exercising Purchase Option dated October 18,
2007 by and among China Finance Online Co. Limited, Wu Chen, Zhiwei
Zhao, Jun Wang, CFO Fuhua Innovation Technology Development Co., Ltd
and China Finance Online (Beijing) Co., Ltd.4.16
    *
    
    Loan Agreement between China Finance Online Co. Limited and Jun Wang
dated October 18, 20074.17
    *
    
    Share Transfer Contract (related to shares of Beijing Fuhua
Innovation Technology Development Co., Ltd.) dated October 18, 2007
by and between Wu Chen and Jun Wang4.18
    *
    
    Share Pledge Agreement dated October 18, 2007 among Zhiwei Zhao, Jun
Wang, Fuhua Innovation Technology Development Co., Ltd. and China
Finance Online (Beijing) Co., Ltd.
  71




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ExhibitNumber
    
    Description4.19
    *
    
    Purchase Option and Cooperation Agreement dated October 18, 2007
among China Finance Online Co. Limited, Zhiwei Zhao, Jun Wang and
CFO Fuhua Innovation Technology Development Co., Ltd.4.20
    *
    
    Purchase Option and Coopration Agreement dated March 3, 2008 among
China Finance Online Co. Limited, Zhiwei Zhao, Jun Wang and CFO
Fuhua Innovation Technology Development Co., Ltd.4.21
    *
    
    Capital Increase Agreement relating to CFO Fuhua Innovation
Technology Development Co., Ltd. dated March 3, 2008 among CFO Fuhua
Innovation Technology Development Co., Ltd. , Jun Wang and Zhiwei
Zhao4.22
    *
    
    Loan Agreement dated March 3, 2008 among China Finance Online
(Beijing) Co., Ltd., Jun Wang and Zhiwei Zhao4.23
    *
    
    Share Pledge Agreement dated March 3,2008 among Zhiwei Zhao, Jun
Wang, Fuhua Innovation Technology Development Co., Ltd. and China
Finance Online (Beijing) Co., Ltd.4.24
    *
    
    Loan Agreement dated August 21, 2007 among Fortune Software
(Beijing) Co., Ltd., Wei Xiong and Zhenfei Fan4.25
    *
    
    Operation Agreement among dated August 21, 2007 by and between
Fortune Software (Beijing) Co., Ltd. and Beijing CFO Premium
Technology Co., Ltd.4.26
    *
    
    Technical Support Agreement between Fortune Software (Beijing) Co.,
Ltd. and Beijing CFO Premium Technology Co., Ltd. dated August 21,
20074.27
    *
    
    Strategic Consulting and Service Agreement between Fortune Software
(Beijing) Co., Ltd. and Beijing Premium Technology Co., Ltd. dated
August 21, 20074.28
    *
    
    Purchase Option Agreement dated August 21, 2007 among Fortune
Software. Limited, Wei Xiong, Zhenfei Fan and Beijing Premium
Technology Co., Ltd.4.29
    *
    
    Framework Agreement among Fortune Software (Beijing) Co., Ltd., Wu
Chen, Jun Wang and Beijing Glory Co., Ltd. dated September 10, 20074.30
    *
    
    Loan Agreement dated September 1, 2007 among Fortune Software
(Beijing) Co., Ltd., Wu Chen and Zhiwei Zhao4.31
    *
    
    Share Transfer Contract (related to shares of Beijing Glory Co.,
Ltd.) dated September 10, 2007 by and between Wu Chen and Jun Wang4.32
    *
    
    Operation Agreement among dated September 10, 2007 by and between
Fortune Software (Beijing) Co.,Ltd. and Beijing Glory Co., Ltd.4.33
    *
    
    Technical Support Agreement between Fortune Software (Beijing) Co.,
Ltd. and Beijing CFO Glory Co., Ltd. dated September 10, 20074.34
    *
    
    Strategic Consulting and Service Agreement between Fortune Software
(Beijing) Co., Ltd. and Beijing Glory Co., Ltd. dated September 10,
20074.35
    *
    
    Purchase Option Agreement dated September 10, 2007 among China
Finance Online Co. Limited, Jun Wang, Zhiwei Zhao and Beijing Glory
Co., Ltd.4.36
    
    
    Shanghai Stock Exchange Level-II Quotations License Agreement dated
June 15, 2006 between SSE Infonet Ltd. and Fortune Software
(Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.15 from
our 2006 Annual Report on Form 20-F (File No.000-50975 ) filed with
the Securities and Exchange Commission on May 29, 2007)
  72




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##### 



ExhibitNumber
    
    Description4.37
    *
    
    License Agreement relating to the distribution of TopView between
Fortune Software (Beijing) Co., Ltd. and Shanghai Stock Exchange
Information Network Co., Ltd. dated December 26, 20074.38
    
    
    Shenzhen Stock Exchange Proprietary Information License Agreement
dated March 20, 2007 between Fortune Software (Beijing) Co., Ltd.
and Shenzhen Securities Information Co., Ltd. (incorporated by
reference to Exhibit 4.16 from our 2006 Annual Report on Form 20-F
(File No.000-50975 ) filed with the Securities and Exchange
Commission on May 29, 2007)4.39
    
    
    Domain Name Transfer Agreement dated October 30, 2006 by and among
China Finance Online Co., Ltd., China Finance Online (Beijing) Co.,
Ltd. and Being Fuhua Innovation Technology Development Co.,
Ltd.(incorporated by reference to Exhibit 4.17 from our 2006 Annual
Report on Form 20-F (File No.000-50975 ) filed with the Securities
and Exchange Commission on May 29, 2007)4.40
    
    
    Domain Name Transfer Agreement dated October 30, 2006 between
Stockstar Information Technology (Shanghai) Co., Ltd. and Shanghai
Meining Computer Software Company Limited (incorporated by reference
to Exhibit 4.18 from our 2006 Annual Report on Form 20-F (File
No.000-50975 ) filed with the Securities and Exchange Commission on
May 29, 2007)4.41
    
    
    Lease Contract for Housing Unit of Corporate Square dated January
19, 2006 between Fortune Software (Beijing) Co. Ltd. and China
Galaxy Securities Company Limited (incorporated by reference to
Exhibit 4.20 from our Annual Report on Form 20-F filed with the
Securities and Exchange Commission on May 23, 2006)4.42
    
    
    Lease Contract for Housing Unit of Corporate Square dated January
19, 2006 between Beijing Fuhua Innovation Technology Co., Ltd. and
China Galaxy Securities Company Limited (incorporated by reference
to Exhibit 4.20 from our Annual Report on Form 20-F filed with the
Securities and Exchange Commission on May 23, 2006)4.43
    
    
    Lease Contract for Housing Unit of Corporate Square dated January
19, 2006 between China Finance Online Co., Ltd. and China Galaxy
Securities Company Limited (incorporated by reference to Exhibit
4.20 from our Annual Report on Form 20-F filed with the Securities
and Exchange Commission on May 23, 2006)4.44
    
    
    Lease Contract for Housing Unit of Corporate Square dated December
29, 2006 between Beijing Fuhua Innovation Technology Co., Ltd. and
China Galaxy Securities Company Limited (incorporated by reference
to Exhibit 4.22 from our 2006 Annual Report on Form 20-F (File
No.000-50975 ) filed with the Securities and Exchange Commission on
May 29, 2007)4.45
    
    
    Lease Contract for Housing Unit of Corporate Square dated December
29, 2006 between Fortune Software (Beijing) Co. Ltd. and China
Galaxy Securities Company Limited (incorporated by reference to
Exhibit 4.23 from our 2006 Annual Report on Form 20-F (File
No.000-50975 ) filed with the Securities and Exchange Commission on
May 29, 2007)4.46
    *
    
    Lease Contract for Housing Unit of Corporate Square dated August 9,
2007 between Fortune Software (Beijing) Co. Ltd. and China Galaxy
Securities Company Limited4.47
    *
    
    Lease Contract for Housing Unit of Corporate Square dated August 9,
2007 between Beijing Fuhua Innovation Technology Co., Ltd. and China
Galaxy Securities Company Limited
  73




---



##### 



ExhibitNumber
    
    Description4.48
    *
    
    Lease Contract for Housing Unit of Corporate Square dated August 1,
2007 between China Finance Online (Beijing) Co., Ltd. and China
Galaxy Securities Company Limited4.49
    *
    
    Lease Contract for Housing Unit of Corporate Square dated August 1,
2007 between Beijing Fuhua Innovation Technology Co., Ltd. and China
Galaxy Securities Company Limited4.50
    *
    
    Lease Contract for Housing Unit of Corporate Square dated August 1,
2007 between Fortune Software (Beijing) Co. Ltd. and China Galaxy
Securities Company Limited4.51
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among William
Wang, FNG International Holdings Limited and China Finance Online
Co. Limited4.52
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Tsang
Kin-Woo, FNG International Holdings Limited and China Finance Online
Co., Limited4.53
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Wong Chan
Miu-Wan Stella, FNG International Holdings Limited and China Finance
Online Co. Limited4.54
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Shun Kin
Enterprises Limited, FNG International Holdings Limited and China
Finance Online Co. Limited4.55
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Midopa
Enterprises Limited, FNG International Holdings Limited and China
Finance Online Co. Limited4.56
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Hung Yung,
FNG International Holdings Limited and China Finance Online Co.
Limited4.57
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Chu
Ping-Im, FNG International Holdings Limited and China Finance Online
Co. Limited4.58
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Eternal
Growth Investment Limited, FNG International Holdings Limited and
China Finance Online Co. Limited4.59
    
    
    Form of indemnification agreement for directors and officers
(incorporated by reference to Exhibit 10.18 from our Registration
Statement on Form F-1 (File No. 333-119166) filed with the
Securities and Exchange Commission on September 21, 2004)4.60
    
    
    Labor Contract of Jeff Wang dated May 24, 2006 (incorporated by
reference to Exhibit 4.25 from our 2006 Annual Report on Form 20-F
(File No.000-50975 ) filed with the Securities and Exchange
Commission on May 29, 2007)4.61
    
    
    Labor Contract of Zhao Zhiwei dated June 21, 2005 (incorporated by
reference to Exhibit 4.26 from our Annual Report on Form 20-F filed
with the Securities and Exchange Commission on May 23, 2006)
  74




---



##### 



ExhibitNumber
    
    Description4.62
    
    
    [Intentionally Omitted]4.63
    
    
    [Intentionally Omitted]4.64
    
    
    Form of Change in Control Agreement (incorporated
by reference to Exhibit 10.1 from our Registration
Statement on Form F-1 (File No. 333-119166) filed
with the Securities and Exchange Commission on
October 4, 2004)4.65
    
    
    Shanghai Meining Computer Software Company Limited
Share Transfer Agreement dated August 15, 2006
among Shanghai Kemei Taidi Telecommunication
Equipment Co., Ltd., Beijing Fuhua Innovation
Technology Development Co., Ltd., China Finance
Online (Beijing) Co., Ltd.(incorporated by
reference to Exhibit 4.30 from our 2006 Annual
Report on Form 20-F (File No.000-50975 ) filed
with the Securities and Exchange Commission on May
29, 2007)4.66
    
    
    Stockstar Information Technology (Shanghai) Co.,
Ltd. Share Transfer Agreement dated August 15,
2006 by and among Stockstar.com, Inc. and China
Finance Online Co., Ltd.(incorporated by reference
to Exhibit 4.31 from our 2006 Annual Report on
Form 20-F (File No.000-50975 ) filed with the
Securities and Exchange Commission on May 29,
2007)4.67
    *
    
    Engagement Letter between China Finance Online
Co., Ltd. and Deloitte Touche Tohmatsu CPA. Ltd
dated February 26, 20088.1
    *
    
    List of subsidiaries10.1
    *
    
    Consent of Deloitte Touche Tohmatsu CPA Ltd.10.2
    *
    
    Written Consent of American Appraisal China Limited12.1
    *
    
    CEO Certification Pursuant to Rule 13a-14(a) (17
CFR 240.13a-14(a)) (17 CFR 240.13a-14(a)) or Rule 
15d-1(a) (17 CFR 240.15d-14(a))12.2
    *
    
    CFO Certification Pursuant to Rule 13a-14(a) (17
CFR 240.13a-14(a)) or Rule 
15d-1(a) (17 CFR  240.15d-14(a))13.1
    *
    
    CEO Certification Pursuant to Section 906 of the
Sarbanes-Oxley Act of 200213.2
    *
    
    CFO Certification Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
  75




---



##### 



CHINA FINANCE ONLINE CO. LIMITED
SIGNATURE
  Date: February 23, 2009
    CHINA FINANCE ONLINE CO. LIMITED/s/ Jeff WangName:
    Jeff WangTitle:
    Chief Financial Officer  76




---



##### 



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 CONTENTS
    
    PAGEREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    
    F - 2CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2006 AND 2007
    
    
    F - 3CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
    
    
    F - 4CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
    
    
    F - 5CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
    
    
    F - 6NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    
    
    F - 7SCHEDULE 1
    
    
    F - 42
  F - 1




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 CHINA FINANCE ONLINE CO. LIMITED
      
  F - 2




---



##### 



CONSOLIDATED BALANCE SHEETS
(In U.S. dollars, except share-related data)
 December 31,2006
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    44,955,553
    
    
    $
    74,729,033Prepaid expenses and other current assets
    
    
    927,697
    
    
    
    2,947,054Trust bank balances held on behalf of customers
    
    
    
    
    
    
    2,850,541Advances to employees
    
    
    
    
    
    
    1,672,575Accounts receivable
    
    
    477,778
    
    
    
    1,491,454Deferred tax assets
    
    
    170,478
    
    
    
    1,129,515Total current assets
    
    
    46,531,506
    
    
    
    84,820,172Property and equipment, net
    
    
    1,697,481
    
    
    
    5,454,858Acquired intangible assets, net
    
    
    2,045,224
    
    
    
    1,938,177Cost method investment
    
    
    12,606,571
    
    
    
    1,479,571Rental deposits
    
    
    86,216
    
    
    
    500,222Goodwill
    
    
    8,151,851
    
    
    
    9,651,719Other assets
    
    
    
    
    
    
    25,647Deferred tax assets, non-current
    
    
    
    
    
    
    14,382Total assets
    
    $
    71,118,849
    
    
    $
    103,884,748Liabilities and shareholders equityCurrent liabilities:Deferred revenue
    
    $
    6,418,502
    
    
    $
    20,457,316Accrued expenses and other current liabilities
    
    
    2,086,017
    
    
    
    6,950,254Amounts due to customers for the trust bank balances held on their behalf
    
    
    
    
    
    
    2,850,541Accounts payable
    
    
    10,535
    
    
    
    763,458Income taxes payable
    
    
    5,483
    
    
    
    11,968Total current liabilities
    
    
    8,520,537
    
    
    
    31,033,537Deferred revenue, non-current
    
    
    
    
    
    
    4,665,112Deferred tax liabilities, non-current
    
    
    145,533
    
    
    
    352,273Total liabilities
    
    
    8,666,070
    
    
    
    36,050,922Commitments (Note 15)Minority interests
    
    
    
    
    
    
    471,431Shareholders equity:Ordinary shares ($0.00013 par value; 500,000,000 shares authorized; shares
issued and outstanding 104,384,933 in 2006 and 109,754,433 in 2007)
    
    
    13,474
    
    
    
    14,172Additional paid-in capital
    
    
    52,555,919
    
    
    
    58,727,378Accumulated other comprehensive income
    
    
    1,634,269
    
    
    
    4,501,432Retained earnings
    
    
    8,249,117
    
    
    
    4,119,413Total shareholders equity
    
    
    62,452,779
    
    
    
    67,362,395Total liabilities, minority interests and shareholders equity
    
    $
    71,118,849
    
    
    $
    103,884,748
   F - 3




---



##### 



CONSOLIDATED STATEMENTS OF OPERATIONS
 (In U.S. dollars, except share-related data)
 Years ended December 31,2005
    
    
    2006
    
    
    2007Net revenues
    
    $
    7,482,166
    
    
    $
    7,128,078
    
    
    $
    25,903,074Cost of revenues (including stock-based compensation
of $740, $111,612 and $16,192, respectively)
    
    
    482,068
    
    
    
    1,467,745
    
    
    
    4,426,602Gross profit
    
    
    7,000,098
    
    
    
    5,660,333
    
    
    
    21,476,472Operating expenses:General and administrative (including stock-based
compensation of $365,949, $833,685 and $2,667,613
respectively)
    
    
    1,740,117
    
    
    
    2,955,948
    
    
    
    7,783,668Product development (including stock-based
compensation of $1,610, $131,134 and $123,461
respectively)
    
    
    236,438
    
    
    
    742,728
    
    
    
    2,268,878Sales and marketing (including stock-based compensation
of $2,482, $107,231 and $139,074, respectively)
    
    
    1,794,569
    
    
    
    2,665,847
    
    
    
    6,924,336Total operating expenses
    
    
    3,771,124
    
    
    
    6,364,523
    
    
    
    16,976,882Government subsidies
    
    
    
    
    
    
    
    
    
    
    135,834Income (loss) from operations
    
    
    3,228,974
    
    
    
    (704,190
    )
    
    
    4,635,424Interest income
    
    
    1,486,276
    
    
    
    1,002,975
    
    
    
    1,104,701Other income, net
    
    
    365,965
    
    
    
    381,875
    
    
    
    433,069Loss from impairment of cost method investment
    
    
    
    
    
    
    (1,322,000
    )
    
    
    (11,127,000
    )Income before income tax (provision) benefit
    
    
    5,081,215
    
    
    
    (641,340
    )
    
    
    (4,953,806
    )Income tax (provision) benefit
    
    
    (457,028
    )
    
    
    40,707
    
    
    
    808,625Minority interest in net loss of consolidated subsidiary
    
    
    
    
    
    
    
    
    
    
    15,477Net income (loss)
    
    $
    4,624,187
    
    
    $
    (600,633
    )
    
    $
    (4,129,704
    )Income (loss) per shareBasic
    
    $
    0.05
    
    
    $
    (0.01
    )
    
    $
    (0.04
    )Diluted
    
    $
    0.04
    
    
    $
    (0.01
    )
    
    $
    (0.04
    )Weighted average shares used in calculating
net income (loss) per shareBasic
    
    
    94,341,061
    
    
    
    93,650,653
    
    
    
    94,500,529Diluted
    
    
    104,781,492
    
    
    
    93,650,653
    
    
    
    94,500,529
   F - 4




---



##### 



CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME
 (In U.S. dollars, except share-related data)
 AccumulatedotherAdditional
    
    
    Deferred
    
    
    comprehensive
    
    
    
    
    
    
    TotalOrdinary shares
    
    
    paid-in
    
    
    stock-based
    
    
    income
    
    
    Retained
    
    
    shareholders
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    capital
    
    
    compensation
    
    
    (loss)
    
    
    earnings
    
    
    equity
    
    
    incomeBalances as of January 1, 2005
    
    
    99,329,933
    
    
    $
    12,814
    
    
    $
    64,175,132
    
    
    $
    (325,221
    )
    
    $
    (11
    )
    
    $
    4,225,563
    
    
    $
    68,088,277Repurchase of ordinary shares
    
    
    
    
    
    
    
    
    
    
    (13,200,394
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,200,394
    )Issuance of ordinary shares to employees
    
    
    2,000,000
    
    
    
    263
    
    
    
    276,713
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    276,976Stock options issued to non-employees
    
    
    
    
    
    
    
    
    
    
    112,689
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112,689Amortization of deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    258,092
    
    
    
    
    
    
    
    
    
    
    
    258,092Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    671,133
    
    
    
    
    
    
    
    671,133
    
    
    $
    671,133Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,624,187
    
    
    
    4,624,187
    
    
    
    4,624,187Balance as of December 31, 2005
    
    
    101,329,933
    
    
    
    13,077
    
    
    
    51,364,140
    
    
    
    (67,129
    )
    
    
    671,122
    
    
    
    8,849,750
    
    
    
    60,830,960
    
    
    $
    5,295,320Amortization of deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    (67,129
    )
    
    
    67,129
    
    
    
    
    
    
    
    
    
    
    
    Issuance of ordinary shares for exercise of
stock option by employees
    
    
    3,000,000
    
    
    
    390
    
    
    
    66,453
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66,843Exercise of share options by non-employees
    
    
    55,000
    
    
    
    7
    
    
    
    8,793
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,800Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    1,183,662
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,183,662Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    963,147
    
    
    
    
    
    
    
    963,147
    
    
    $
    963,147Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (600,633
    )
    
    
    (600,633
    )
    
    
    (600,633
    )Balance as of December 31, 2006
    
    
    104,384,933
    
    
    
    13,474
    
    
    
    52,555,919
    
    
    
    
    
    
    
    1,634,269
    
    
    
    8,249,117
    
    
    
    62,452,779
    
    
    $
    362,514Exercise of stock option by employees
    
    
    
    
    
    
    
    
    
    
    2,366,697
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,366,697Exercise of share options by non-employees
    
    
    5,369,500
    
    
    
    698
    
    
    
    858,422
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    859,120Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    2,946,340
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,946,340Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,867,163
    
    
    
    
    
    
    
    2,867,163
    
    
    $
    2,867,163Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,129,704
    )
    
    
    (4,129,704
    )
    
    
    (4,129,704
    )Balance as of December 31, 2007
    
    
    109,754,433
    
    
    $
    14,172
    
    
    $
    58,727,378
    
    
    $
    
    
    
    $
    4,501,432
    
    
    $
    4,119,413
    
    
    $
    67,362,395
    
    
    $
    (1,262,541
    )
   F - 5




---



##### 



CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In U.S. dollars)
 Years ended December 31,2005
    
    
    2006
    
    
    2007Operating activities:Net income (loss)
    
    $
    4,624,187
    
    
    $
    (600,633
    )
    
    $
    (4,129,704
    )Adjustments to reconcile net income (loss) to net cash
provided by operating activities:Stock-based compensation
    
    
    370,781
    
    
    
    1,183,662
    
    
    
    2,946,340Depreciation and amortization
    
    
    129,833
    
    
    
    301,941
    
    
    
    973,953Deferred taxes
    
    
    322,289
    
    
    
    (40,081
    )
    
    
    (737,712
    )Loss on disposal of property and equipment
    
    
    9,686
    
    
    
    
    
    
    
    84,796Loss from impairment of cost method investment
    
    
    
    
    
    
    1,322,000
    
    
    
    11,127,000Gain from disposal of cost method investment
    
    
    
    
    
    
    (116,071
    )
    
    
    Minority interest
    
    
    
    
    
    
    
    
    
    
    (15,477
    )Changes in assets and liabilities:Accounts receivable
    
    
    (110,773
    )
    
    
    122,363
    
    
    
    37,377Income taxes recoverable
    
    
    14,573
    
    
    
    
    
    
    
    Prepaid expenses and other current assets
    
    
    (799,572
    )
    
    
    334,687
    
    
    
    (1,786,912
    )Advances to employees
    
    
    
    
    
    
    
    
    
    
    (1,672,575
    )Trust bank balances held on behalf of customers
    
    
    
    
    
    
    
    
    
    
    (465,101
    )Rental deposits
    
    
    (10,657
    )
    
    
    (31,955
    )
    
    
    (403,912
    )Deferred revenue
    
    
    (1,627,937
    )
    
    
    3,840,892
    
    
    
    17,509,161Account payable
    
    
    
    
    
    
    
    
    
    
    (30,297
    )Accrued expenses and other current liabilities
    
    
    95,997
    
    
    
    (388,662
    )
    
    
    4,566,829Amounts due to customers for the trust bank balance
held on their behalf
    
    
    
    
    
    
    
    
    
    
    465,101Income taxes payable
    
    
    40,762
    
    
    
    (36,041
    )
    
    
    (43,267
    )Net cash provided by operating activities
    
    
    3,059,169
    
    
    
    5,892,102
    
    
    
    28,425,600Investing activities:Purchase of property and equipment
    
    
    (234,696
    )
    
    
    (1,042,423
    )
    
    
    (3,836,412
    )Acquisition of businesses (net of cash acquired of $828,494,
for the year ended December 31, 2006, and $2,631,008
for the year ended December 31, 2007)
    
    
    
    
    
    
    (8,346,856
    )
    
    
    (993,845
    )Proceeds from partial sale of cost method investment
    
    
    
    
    
    
    1,187,500
    
    
    
    Acquisition of cost investment
    
    
    (15,000,000
    )
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (15,234,696
    )
    
    
    (8,201,779
    )
    
    
    (4,830,257
    )Financing activities:Proceeds from stock options exercised by employees
    
    
    276,976
    
    
    
    66,843
    
    
    
    2,366,697Proceeds from exercise of options granted to non-employee
    
    
    
    
    
    
    8,800
    
    
    
    859,120Repurchase of ordinary shares
    
    
    (13,200,394
    )
    
    
    
    
    
    
    Net cash (used in) provided by financing activities
    
    
    (12,923,418
    )
    
    
    75,643
    
    
    
    3,225,817Effect of exchange rate changes
    
    
    671,133
    
    
    
    1,021,202
    
    
    
    2,952,320Net (decrease) increase in cash and cash equivalents
    
    
    (24,427,812
    )
    
    
    (1,212,832
    )
    
    
    29,773,480Cash and cash equivalents, beginning of year
    
    
    70,596,197
    
    
    
    46,168,385
    
    
    
    44,955,553Cash and cash equivalents, end of year
    
    $
    46,168,385
    
    
    
    44,955,553
    
    
    
    74,729,033Supplemental disclosure of cash flow information
Income taxes paid
    
    $
    93,977
    
    
    $
    36,089
    
    
    $
    38,761
   F - 6




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIESChina Finance Online Co. Limited (China Finance Online or the Company) was incorporated
in Hong Kong on November 2, 1998. China Finance Online and its subsidiaries including its
variable interest entities (collectively, the Group) are principally engaged in the sale
of online financial services analyzing financial and listed company information in the
Peoples Republic of China (PRC). The services are provided through proprietary research
tools on their website www.jrj.com and www.stockstar.com.Details of China Finance Onlines subsidiaries and variable interest entities as of December
31, 2007 were as follows:
 Date of
    
    
    BeneficialPlace of
    
    
    incorporation or
    
    
    ownershipCompany name
    
    incorporation
    
    
    establishment
    
    
    interestChina Finance Online (Beijing) Co., Ltd. (CFO Beijing)
    
    Beijing, PRC
    
    Jul.9, 1998
    
    
    100
    %Fortune Software (Beijing) Co., Ltd. (CFO Software)
    
    Beijing, PRC
    
    Dec.7, 2004
    
    
    100
    %Beijing Fuhua Innovation Technology Investment Co., Ltd. 
(CFO Fuhua)*
    
    Beijing, PRC
    
    Dec.31, 2000
    
    
    100
    %Beijing CFO Premium Technology Co., Ltd. (CFO Premium)*
    
    Beijing, PRC
    
    Aug.31, 2007
    
    
    100
    %Beijing CFO Glory Technology Co., Ltd. (CFO Glory)*
    
    Beijing, PRC
    
    Sep.11, 2007
    
    
    100
    %Fortune (Beijing) Wisdom Technology Co., Ltd. (CFO Wisdom)
    
    Beijing, PRC
    
    Oct.16, 2007
    
    
    100
    %Fortune (Beijing) Success Technology Co., Ltd. (CFO Success)
    
    Beijing, PRC
    
    Oct.16, 2007
    
    
    100
    %Shenzhen Genius Information Technology Co., Ltd. (CFO Genius) 
(Note 3)
    
    Shenzhen, PRC
    
    Sep.21, 2006
    
    
    100
    %Jujin Software (Shenzhen) Co., Ltd. (CFO Jujin)
    
    Shenzhen, PRC
    
    Mar.9, 2007
    
    
    100
    %Shanghai Meining Computer Software Co., Ltd. (CFO Meining) 
(Note 3)
    
    Shanghai, PRC
    
    Oct.1, 2006
    
    
    100
    %Stockstar Information Technology (Shanghai) Co., Ltd. (CFO Stockstar) (Note 3)
    
    Shanghai, PRC
    
    Oct.1, 2006
    
    
    100
    %Zhengning Information & Technology (Shanghai) Co., Ltd. (CFO Zhengning)
    
    Shanghai, PRC
    
    Jan.31, 2007
    
    
    100
    %FNG International Holdings Limited (CFO FNG)
    
    BVI
    
    Jul.16, 2007
    
    
    100
    %Giant Bright International Holdings Limited (CFO Giant Bright)
    
    BVI
    
    Jul.16, 2007
    
    
    100
    %Mount First Investments Limited (CFO Mount First)
    
    BVI
    
    Jul.23, 2007
    
    
    100
    %Team Gear Limited (CFO Team Gear)
    
    HongKong, PRC
    
    Oct.22, 2007
    
    
    100
    %Kinco Limited (CFO Kinco)
    
    HongKong, PRC
    
    Oct.22, 2007
    
    
    100
    %Danford (H.K) Limited (CFO Danford)
    
    HongKong, PRC
    
    Nov.30, 2007
    
    
    100
    %Daily Growth Securities Limited (CFO Daily Growth) (Note 3)
    
    HongKong, PRC
    
    Nov.23, 2007
    
    
    85
    %
 *
    
    Represents variable interest entity (VIE)   F - 7




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES  continued
 CFO Fuhua
   
    
    an equipment leasing agreement, pursuant to which CFO Fuhua leases a
substantial majority of its operating assets from CFO Beijing;
    
    a technical support agreement, pursuant to which CFO Beijing provides technical
support for CFO Fuhuas operations;
    
    an amended and restated strategic consulting agreement, pursuant to which CFO
Beijing provides strategic consulting services to CFO Fuhua, including consulting
services in relation to CFO Fuhuas online advertising business; and
    
    a domain name licensing agreement, pursuant to which CFO Beijing licenses to
CFO Fuhua its domain name, www.jrj.com.cn.
    F - 8




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES  continued
 CFO Fuhua
  
    
    the shareholders of CFO Fuhua have granted China Finance Online or individuals
designated by China Finance Online an irrevocable proxy to exercise all their voting
rights as shareholders of CFO Fuhua, including the right to appoint directors, the
general manager and other senior management of CFO Fuhua;
 
    
    CFO Fuhua will not enter into any transaction that may materially affect its
assets, liabilities, equity or operations without China Finance Onlines prior written
consent;
    
    CFO Fuhua will not distribute any dividends;
    
    China Finance Online may purchase the entire equity interest in, or all the
assets of, CFO Fuhua at a price equal to the total principal amount of the loan lent by
the Company to the owners of CFO Fuhua when and if such purchase is permitted by PRC
law or the current shareholders of CFO Fuhua cease to be directors or employees of CFO
Fuhua;
    
    the shareholders of CFO Fuhua have pledged their equity interest in CFO Fuhua
to CFO Beijing to secure the payment obligations of CFO Fuhua under the equipment
leasing agreement, the technical support agreement and the amended and restated
strategic consulting agreement between CFO Beijing and CFO Fuhua; and
    
    the shareholders of CFO Fuhua will not transfer, sell, pledge, dispose of or
create any encumbrance on their equity interest in CFO Fuhua without the prior written
consent of CFO Beijing.
     F - 9




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES  continued
 CFO Premium and CFO Glory
   
    
    strategic consulting services agreement, pursuant to which the amount of the
fee to be charged is 30% of CFO Premium and CFO Glorys income before tax ;
 
    
    technical support services agreement, pursuant to which the amount of the fee
to be charged is 30% of CFO Premium and CFO Glorys income before tax;
 
    
    operating support services agreement, pursuant to which the amount of the fee
to be charged is 40% of CFO Premium and CFO Glorys income before tax;
   
    
    the shareholders of CFO Premium and CFO Glory have granted CFO Software or
individuals designated by CFO Software an irrevocable proxy to exercise all their
voting rights as shareholders of CFO Premium and CFO Glory, including the right to
appoint directors, the general manager and other senior management of CFO Premium and
CFO Glory;
 
    
    CFO Premium and CFO Glory will not enter into any transaction that may
materially affect its assets, liabilities, equity or operations without CFO Softwares
prior written consent;
 
    
    CFO Premium and CFO Glory will not distribute any dividends;
 
    
    CFO Premium and CFO Glory may purchase the entire equity interest in, or all
the assets of, CFO Premium and CFO Glory at a price equal to the total principal amount
of the loan lent by the Company to the owners of CFO Premium and CFO Glory when and if
such purchase is permitted by PRC law or the current shareholders of CFO Premium and
CFO Glory cease to be directors or employees of CFO Premium and CFO Glory;
    
    the shareholders of CFO Premium and CFO Glory will not transfer, sell, pledge,
dispose of or create any encumbrance on their equity interest in CFO Premium and CFO
Glory without the prior written consent of CFO Software.
  F - 10




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES  continued
 CFO Premium and CFO Glory
    Year ended December 31,2006
    
    
    2007CFO Fuhua
    
    
    CFO Fuhua
    
    
    CFO Premium
    
    
    CFO GloryTotal assets
    
    $
    3,294,204
    
    
    $
    3,215,556
    
    
    $
    617,495
    
    
    $
    13,838,596Total liabilities
    
    
    2,915,166
    
    
    
    3,865,930
    
    
    
    480,708
    
    
    
    13,709,484
 Year ended December 31,2005
    
    
    2006
    
    
    2007CFO Fuhua
    
    
    CFO Fuhua
    
    
    CFO Fuhua
    
    
    CFO Premium
    
    
    CFO GloryNet revenue
    
    
    1,222,747
    
    
    
    1,286,614
    
    
    
    1,022,735
    
    
    
    
    
    
    
    Net income (loss)
    
    
    435
    
    
    
    (4,999
    )
    
    
    (1,013,166
    )
    
    
    (296
    )
    
    
    (7,828
    )
  F - 11




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of presentation
  Basis of consolidation
  Cash and cash equivalents
  Trust bank balances held on behalf of customers
  Advance to employees
  Use of estimates
   F - 12




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Property and equipment, net
  Technology infrastructure
    
    5 yearsComputer equipment
    
    5 yearsFurniture, fixtures and equipment
    
    5 yearsMotor vehicle
    
    5 yearsLeasehold improvements
    
    Shorter of the lease term or 5 years
 Acquired intangible assets, net
      F - 13




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Impairment of long-lived assets
  Goodwill
     F - 14




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Revenue recognition
      F - 15




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Business taxes and value added taxes
    Government subsidies
  Deferred revenue
  Cost method investment
   F - 16




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Foreign currency translation
   Foreign currency risk
  Cost of raw data
  Product development expenses
   F - 17




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Advertising costs
  Income taxes
   Comprehensive income
  Fair value of financial instruments
   F - 18




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Concentrations of credit risk
    Stock-based compensation
   Income (loss) per share
   F - 19




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Recent accounting standards
     F - 20




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Recent accounting standards
   3.
    
    ACQUISITIONS
   F - 21




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 3.
    
    ACQUISITIONS  continued
 Acquisition of CFO Daily Growth
  AmortizationperiodPurchase Price allocation (preliminary):Cash and cash equivalents
    
    $
    2,631,008Accounts receivable
    
    
    998,320Trust bank balance held on behalf of customers
    
    
    2,391,925Prepaid and other current assets
    
    
    55,761Property and equipment, net
    
    
    26,100Account payable
    
    
    (350,261
    )Amount due to customers for the trust bank balance
held on their behalf
    
    
    (2,391,925
    )Accrued expenses and other current liabilities
    
    
    (57,137
    )Income tax payable
    
    
    (49,225
    )Deferred tax liabilities
    
    
    (9,562
    )Minority interest
    
    
    (488,186
    )Acquired intangible asset:Stock Exchange Trading Right
    
    
    54,642
    
    
    IndefiniteGoodwill
    
    
    813,393Total
    
    
    3,624,853
   F - 22




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 3.
    
    ACQUISITIONS  continued
 Acquisition of CFO Genius
  AmortizationperiodPurchase price allocation:Cash and cash equivalents
    
    $
    35,802Accounts receivable
    
    
    14,174Prepaid and other current assets
    
    
    14,023Property and equipment, net
    
    
    42,506
    
    
    3-5 yearsAcquired intangible assets:Completed technology
    
    
    332,545
    
    
    5.3 yearsTrademark
    
    
    75,866
    
    
    IndefiniteCustomer relationships
    
    
    117,592
    
    
    5.3 yearsTotal assets acquired
    
    
    632,508Deferred revenue
    
    
    (361,361
    )Accrued expenses and other current liabilities
    
    
    (231,904
    )Deferred tax liabilities related to acquired
intangible assets
    
    
    (67,520
    )Total net liabilities
    
    
    (28,277
    )Goodwill
    
    
    1,068,358Total
    
    $
    1,040,081
   F - 23




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 3.
    
    ACQUISITIONS  continued
 Acquisition of CFO Meining and CFO Stockstar
  AmortizationPeriodPurchase price allocation:Cash and cash equivalents
    
    $
    792,692Accounts receivable
    
    
    432,753Prepaid expenses and other current assets
    
    
    78,298Property and equipment
    
    
    297,024Acquired intangible assets:Trademark
    
    
    652,446
    
    
    IndefiniteCompleted technology
    
    
    402,089
    
    
    5.3 yearsAgreements with mobile operators
    
    
    10,495
    
    
    3 yearsCustomer relationships
    
    
    475,426
    
    
    4.3 yearsValue-added service license
    
    
    23,392
    
    
    3.3 yearsTotal assets acquired
    
    
    3,164,615Deferred revenue
    
    
    (222,868
    )Accrued expenses and other current liabilities
    
    
    (1,702,727
    )Deferred tax liabilities related to acquired
intangible assets
    
    
    (136,710
    )Total net assets
    
    
    1,102,310Goodwill
    
    
    7,032,959Total
    
    $
    8,135,269
   F - 24




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 3.
    
    ACQUISITIONS  continued
  For the years ended December 31,2005
    
    
    2006
    
    
    2007(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Revenues
    
    $
    10,915,618
    
    
    $
    10,671,796
    
    
    $
    26,930,986Net income (loss)
    
    $
    2,136,433
    
    
    $
    (2,891,544
    )
    
    $
    235,997Income per share  basic
    
    $
    0.02
    
    
    $
    (0.03
    )
    
    $
    0.00Income per share  diluted
    
    $
    0.02
    
    
    $
    (0.03
    )
    
    $
    0.00
 4.
    
    PREPAID EXPENSES AND OTHER CURRENT ASSETS
  December 31,2006
    
    
    2007VAT refund receivable
    
    $
    
    
    
    $
    844,800Advances to suppliers
    
    
    181,913
    
    
    
    809,221Prepaid capital to be injected in VIE (note 1)
    
    
    
    
    
    
    685,439Interest receivable (note 2)
    
    
    415,441
    
    
    
    216,947Other current assets
    
    
    330,343
    
    
    
    390,647$
    927,697
    
    
    $
    2,947,054
  1.
    
    As of December 31, 2007, $685,439 had been held by the CEO, who is the
designated owner of CFO Fuhua, for the additional capital to be injected to CFO Fuhua.2.
    
    Interest receivable is interest earned from the Groups bank deposits.  F - 25




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 5.
    
    COST METHOD INVESTMENT
     6.
    
    PROPERTY AND EQUIPMENT, NETProperty and equipment, net consisted of:
 December 31,2006
    
    
    2007Technology infrastructure
    
    $
    1,277,972
    
    
    $
    3,360,909Computer equipment
    
    
    255,246
    
    
    
    1,036,325Furniture, fixtures and equipment
    
    
    354,488
    
    
    
    894,783Motor vehicle
    
    
    64,374
    
    
    
    129,636Leasehold improvements
    
    
    354,399
    
    
    
    1,268,7312,306,479
    
    
    
    6,690,384Less: accumulated depreciation
    
    
    (608,998
    )
    
    
    (1,235,526
    )$
    1,697,481
    
    
    $
    5,454,858
   F - 26




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 7.
    
    ACQUIRED INTANGIBLE ASSETS, NET
  December 31,2006
    
    
    2007Intangible assets not subject to amortization:Trademarks
    
    
    737,638
    
    
    
    789,625Stock exchange trading right
    
    
    
    
    
    
    54,498Intangible assets subject to amortization:Completed technology
    
    $
    744,042
    
    
    $
    796,480Customer relationship
    
    
    600,612
    
    
    
    642,941Value-added service license
    
    
    23,692
    
    
    
    25,361Agreement with mobile operators
    
    
    10,629
    
    
    
    11,3782,116,613
    
    
    
    2,320,283Less: Accumulated amortization
    
    
    (71,389
    )
    
    
    (382,106
    )$
    2,045,224
    
    
    $
    1,938,177
  8.
    
    GOODWILL
  Balance as of January 1, 2006
    
    
    50,534Acquisitions (Note 3):CFO Genius
    
    
    1,068,358CFO Meining and CFO Stockstar
    
    
    7,032,959Balance as of December 31, 2006
    
    
    8,151,851Acquisition of CFO Daily Growth (Note 3)
    
    
    813,393Exchange difference
    
    
    686,475Balance as
of December 31, 2007
    
    
    9,651,719
  F - 27




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 9.
    
    ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
  December 31,2006
    
    
    2007Accrued bonus
    
    $
    598,388
    
    
    $
    1,956,670Accrued professional service fees
    
    
    200,706
    
    
    
    1,188,163Withholding individual income tax-option exercise
    
    
    13,268
    
    
    
    1,139,110Value added taxes payable
    
    
    386,806
    
    
    
    936,625Other taxes payable
    
    
    56,811
    
    
    
    440,149Accrued raw data cost
    
    
    303,474
    
    
    
    425,076Accrued rental
    
    
    120,538
    
    
    
    130,820Accrued welfare benefits
    
    
    18,891
    
    
    
    81,406Others
    
    
    387,135
    
    
    
    652,235$
    2,086,017
    
    
    $
    6,950,254
 10.
    
    STOCK OPTIONS AND NONVESTED SHARES
  2004 Stock incentive plan
   F - 28




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 10.
    
    STOCK OPTIONS AND NONVESTED SHARES  continued
 2004 Stock
incentive plan
 Options to employees
    Years ended December 31,2006
    
    
    2007Weighted average risk free rate of return
    
    
    5.24
    %
    
    
    4.71
    %Weighted average expected option life
    
    5.75 years
    
    
    5.96 yearsVolatility rate
    
    
    58.84
    %
    
    
    59.92
    %Dividend yield
    
    
    
    
    
    
    
 Options to non-employees
   F - 29




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 10.
    
    STOCK OPTIONS AND NONVESTED SHARES  continued2004 Stock incentive plan continuedOptions to non-employees  continuedThe following assumptions were used in the option pricing model:
 Years ended December 31,2005
    
    
    2006
    
    
    2007Options to non-employees:Weighted average risk-free rate of return
    
    
    3.48
    %
    
    
    4.70
    %
    
    
    3.26
    %Weighted average expected option life
    
    2.14 years
    
    
    5.76 years
    
    
    3.73 yearsVolatility
    
    
    56.96
    %
    
    
    53.33
    %
    
    
    51.85
    %Dividend yield
    
    
    
    
    
    
    
    
    
    
    
 Summary of stock options to employees and non-employees
  2005
    
    
    2006
    
    
    2007Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedNumber
    
    
    average
    
    
    Number
    
    
    average
    
    
    Number
    
    
    averageof options
    
    
    exercise price
    
    
    of options
    
    
    exercise price
    
    
    of options
    
    
    exercise priceOutstanding at beginning of year
    
    
    12,492,988
    
    
    $
    0.18
    
    
    
    15,250,488
    
    
    $
    0.52
    
    
    
    14,843,688
    
    
    $
    0.56Granted
    
    
    5,003,000
    
    
    $
    1.29
    
    
    
    700,000
    
    
    $
    1.07
    
    
    
    3,848,000
    
    
    $
    1.07Exercised
    
    
    (1,731,500
    )
    
    $
    0.16
    
    
    
    (473,000
    )
    
    $
    0.17
    
    
    
    (7,746,280
    )
    
    $
    0.42Forfeited
    
    
    (514,000
    )
    
    $
    1.05
    
    
    
    (633,800
    )
    
    $
    0.69
    
    
    
    (387,840
    )
    
    $
    0.87Outstanding at end of year
    
    
    15,250,488
    
    
    $
    0.52
    
    
    
    14,843,688
    
    
    $
    0.56
    
    
    
    10,557,568
    
    
    $
    0.84Shares exercisable at end of year
    
    
    9,986,488
    
    
    $
    0.29
    
    
    
    11,705,508
    
    
    $
    0.43
    
    
    
    5,939,888
    
    
    $
    0.68
  F - 30




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 10.
    
    STOCK OPTIONS AND NONVESTED SHARES  continued
 2004 Stock incentive plan
 Summary of stock options to employees and non-employees
  Options outstanding
    
    
    Option exercisableAggregate
    
    
    
    
    
    
    
    
    
    
    AggregateWeighted
    
    
    Weighted
    
    
    intrinsic
    
    
    
    
    
    
    Weighted
    
    
    intrinsicaverage
    
    
    average
    
    
    value as of
    
    
    
    
    
    
    average
    
    
    value as ofNumber
    
    
    remaining
    
    
    exercise
    
    
    December 31
    
    
    Number
    
    
    exercise
    
    
    December 31outstanding
    
    
    contractual life
    
    
    price
    
    
    2007
    
    
    exercisable
    
    
    price
    
    
    2007Ordinary shares$0.16
    
    
    3,373,988
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,069,988$1.04
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000$1.31
    
    
    1,846,580
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,700,900$1.32
    
    
    27,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,000$1.12
    
    
    400,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    400,000$1.16
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000$1.07
    
    
    700,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    350,000$0.96
    
    
    3,240,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $1.25
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $1.32
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $2.03
    
    
    317,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $2.19
    
    
    3,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,557,568
    
    
    5.97 years
    
    
    $
    0.83
    
    
    $
    3.55
    
    
    
    5,939,888
    
    
    $
    0.68
    
    
    $
    3.70
     F - 31




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 10.
    
    STOCK OPTIONS AND NONVESTED SHARES  continued
 2004 Stock incentive plan
 Summary of stock options to employees and non-employees
  Year endedDecember 31, 2005Income attributable to ordinary shareholders as reported:
    
    
    4,624,187Add: Stock-based compensation as reported
    
    
    13,589Less: Stock-based compensation determined
using the fair value method
    
    
    (1,935,649
    )Pro forma income attributable to ordinary shareholders
    
    
    2,702,127Basic net income per share:As reported
    
    $
    0.05Pro forma
    
    $
    0.04Diluted net income per share:As reported
    
    $
    0.04Pro forma
    
    $
    0.03
  Year endedOption grants
    
    December 31, 2005Weighted average risk-free rate of return
    
    
    3.37
    %Weighted average expected option life
    
    2.94 yearsVolatility
    
    
    65.08
    %Dividend yield
    
    
    
  F - 32




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 10.
    
    STOCK OPTIONS AND NONVESTED SHARES  continued
 2004 Stock incentive plan
 Summary of stock options to employees and non-employees
   2007 Equity incentive plan
    Weighted-
    
    
    Weighted-average
    
    
    average
    
    
    Aggregateexercise
    
    
    grant date
    
    
    intrinsicNon-vested shares
    
    Shares
    
    
    price
    
    
    fair value
    
    
    valueAt beginning of year 2007
    
    
    
    
    
    
    
    
    
    
    Granted
    
    
    10,558,493
    
    
    
    
    
    
    
    1.84Vested
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    At end of year 2007
    
    
    10,558,493
    
    
    
    
    
    
    
    1.84
    
    
    
    46,246,199
   F - 33




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
 FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 11.
    
    INCOME TAXES
    Chinese state
    
    
    Chinese
    
    
    Concession from
    
    Concession from
    
    Year ofincome
    
    
    local income
    
    
    Chinese State
    
    Chinese local
    
    commencementPRC entities
    
    tax rate
    
    
    tax rate
    
    
    unified income tax*
    
    income tax
    
    of tax holidayCFO Beijing
    
    
    24
    %
    
    
    3
    %
    
    Full exemption for the year
2003 and 2004; 50% tax
relief from 2005 to 2007
    
    Full exemption from 2003
to 2007
    
    
    2003CFO Software
    
    
    15
    %
    
    
    3
    %
    
    Full exemption from
2005 to 2007
    
    Full exemption from
2005 to 2007
    
    
    2005CFO Fuhua
    
    
    30
    %
    
    
    3
    %
    
    N/A
    
    N/A
    
    
    N/ACFO Meining
    
    
    15
    %
    
    
    N/A
    
    
    15% in 2007
    
    N/A
    
    
    N/ACFO Stockstar
    
    
    15
    %
    
    
    N/A
    
    
    Same as CFO Meining
    
    N/A
    
    
    N/ACFO Zhenning
    
    
    15
    %
    
    
    N/A
    
    
    Same as CFO Meining
    
    N/A
    
    
    N/ACFO Genius
    
    
    15
    %
    
    
    N/A
    
    
    Same as CFO Meining
    
    N/A
    
    
    N/ACFO Jujin
    
    
    15
    %
    
    
    N/A
    
    
    Same as CFO Meining
    
    N/A
    
    
    N/ACFO Wisdom
    
    
    30
    %
    
    
    3
    %
    
    N/A
    
    N/A
    
    
    N/ACFO Success
    
    
    30
    %
    
    
    3
    %
    
    N/A
    
    N/A
    
    
    N/ACFO Premium
    
    
    30
    %
    
    
    3
    %
    
    N/A
    
    N/A
    
    
    N/ACFO Glory
    
    
    30
    %
    
    
    3
    %
    
    N/A
    
    N/A
    
    
    N/A
 *
    
    The concession from Chinese State unified income tax is shown on the assumption
that the subsidiary, VIE and the VIEs subsidiaries will not be qualified as a high
and new technology enterprise strongly supported by the state by the authorities.Based on the recently issued tax regulation after 2007.   F - 34




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 11.
    
    INCOME TAXES  continued
  December 31,2005
    
    
    2006
    
    
    2007Income taxes expenses:Current
    
    $
    (134,739
    )
    
    $
    626
    
    
    $
    70,913Deferred
    
    
    (322,289
    )
    
    
    40,081
    
    
    
    737,712Total
    
    $
    (457,028
    )
    
    $
    40,707
    
    
    $
    808,625
  December 31,2006
    
    
    2007Current deferred tax assets:Deferred revenue  current
    
    $
    135,658
    
    
    $
    841,315Accrued expenses and other liability
    
    
    34,820
    
    
    
    288,200Current deferred tax assets
    
    $
    170,478
    
    
    $
    1,129,515Non-current deferred tax assets (liabilities):Net operating loss carry forwards
    
    $
    802,010
    
    
    $
    1,136,729Intangible assets
    
    
    (204,043
    )
    
    
    (321,816
    )Property and equipment
    
    
    
    
    
    
    (30,457
    )597,967
    
    
    
    784,456Less: valuation allowance
    
    
    (743,500
    )
    
    
    (1,136,729
    )Non-current deferred tax liabilities, net
    
    $
    (145,533
    )
    
    $
    (352,273
    )Non-current deferred tax asset:Deferred revenue  non-current
    
    $
    
    
    
    $
    14,382
    F - 35




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 11.
    
    INCOME TAXES  continued
  Years ended December 31,2005
    
    
    2006
    
    
    2007%
    
    
    %
    
    
    %Statutory tax rate in PRC
    
    
    33.0
    
    
    
    (33.0
    )
    
    
    (33.0
    )Effect of tax holiday
    
    
    (18.0
    )
    
    
    (92.1
    )
    
    
    (91.8
    )Non-deductible expenses
    
    
    3.6
    
    
    
    139.9
    
    
    
    99.7Non-taxable income
    
    
    (10.3
    )
    
    
    (54.8
    )
    
    
    (16.7
    )Effect on deferred taxes due to changes in
tax rates under the new law for certain
subsidiaries
    
    
    
    
    
    
    
    
    
    
    18.5Change in valuation allowance
    
    
    0.7
    
    
    
    33.7
    
    
    
    7.0Effective tax rate
    
    
    9.0
    
    
    
    (6.3
    )
    
    
    (16.3
    )
      F - 36




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 12.
    
    SHAREHOLDERS EQUITY
    Repurchased shares
  13.
    
    OTHER (EXPENSES) INCOME, NET
  2005
    
    
    2006
    
    
    2007Exchange gain, net
    
    $
    365,965
    
    
    $
    267,302
    
    
    $
    424,338Gain on partial disposal of an
investment in Moloon (see Note 5)
    
    
    
    
    
    
    116,071
    
    
    
    Others
    
    
    
    
    
    
    (1,498
    )
    
    
    8,731$
    365,965
    
    
    $
    381,875
    
    
    $
    433,069
   F - 37




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 14.
    
    INCOME (LOSS) PER SHARE
  Years ended December 31,2005
    
    
    2006
    
    
    2007Net income (loss) attributable to ordinary
shareholders, basic and diluted
    
    $
    4,624,187
    
    
    $
    (600,633
    )
    
    $
    (4,129,704
    )Weighted average ordinary shares
outstanding used in computing
basic net income per share
    
    
    94,341,061
    
    
    
    93,650,653
    
    
    
    94,500,529Plus: Incremental shares from assumed
conversions of stock options
    
    
    10,440,431
    
    
    
    
    
    
    
    Weighted average ordinary shares
outstanding used in computing
diluted net income per share (note)
    
    
    104,781,492
    
    
    
    93,650,653
    
    
    
    94,500,529Net income (loss) per share-basic
    
    $
    0.05
    
    
    $
    (0.01
    )
    
    $
    (0.04
    )Net income (loss) per share-diluted
    
    $
    0.04
    
    
    $
    (0.01
    )
    
    $
    (0.04
    )
   1.
    
    In 2006, the Company transferred 3,000,000 ordinary shares to its depositary
bank representing 750,000 ADSs to be issued to employees and non-employees upon the
exercise of their vested share options. As of December 31, 2007, shares out of such
2,526,280 shares had been issued to the employees and non-employees upon exercise of
their share options and 473,720 shares remained available for future issuances. As a
result, 473,720 ordinary shares were excluded in computing basic net income per share.2.
    
    In July 2007, the Company adopted granted non-vested shares covering 10,558,493
ordinary shares of the Company to the employees who are eligible for the 2007 Plan.
The vesting of the non-vested shares are subject to achieving certain financial
performance targets stated in the 2007 Plan. Nonvested shares have not be included in
the computation of basic earnings per share as such shares are considered contingently
returnable shares if the employee does not render the requisite service, the shares are
returned to the Company.3.
    
    The Group has options and non-vested shares outstanding which could potentially
dilute basic net income/(loss) per share, but which were excluded from the computation
of diluted net income/(loss) per share for the year end December 31, 2006 and 2007, as
their effects would have been auti-dilutive. Such outstanding options and non-vested
 shares consist of 15,950,488 options for year end December 31, 2006, and 18,691,688
options and 10,558,493 non-vested shares for year end December 31, 2007.
  F - 38




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 15.
    
    MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION
  16.
    
    COMMITMENTS
   Year ending2008
    
    $
    2,007,8002009
    
    
    1,496,4962010
    
    
    1,046,9442011
    
    
    324,3382012
    
    
    22,128Total
    
    $
    4,897,706
 17.
    
    SEGMENT AND GEOGRAPHIC INFORMATION
   F - 39




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 17.
    
    SEGMENT AND GEOGRAPHIC INFORMATION  continued
  For the year ended December 31, 2007
 Subscriptionservices andother related
    
    
    Brokerageservices
    
    
    services
    
    
    ConsolidatedNet revenue
    
    $
    25,822,178
    
    
    $
    80,896
    
    
    $
    25,903,074Cost of revenue
    
    
    (4,403,605
    )
    
    
    (22,997
    )
    
    
    (4,426,602
    )Operating expensesGeneral and administrative
    
    
    (7,599,367
    )
    
    
    (184,301
    )
    
    
    (7,783,668
    )Product development
    
    
    (2,268,878
    )
    
    
    
    
    
    
    (2,268,878
    )Sales and marketing
    
    
    (6,911,624
    )
    
    
    (12,712
    )
    
    
    (6,924,336
    )Total operating expenses
    
    
    (16,779,869
    )
    
    
    (197,013
    )
    
    
    (16,976,882
    )Government subsidies
    
    
    135,834
    
    
    
    
    
    
    
    135,834Income (loss) from operations
    
    
    4,774,538
    
    
    
    (139,114
    )
    
    
    4,635,424Total assets
    
    
    95,774,776
    
    
    
    8,109,972
    
    
    
    103,884,748
   Years ended December 31,2005
    
    
    2006
    
    
    2007Subscription fees
    
    $
    5,811,395
    
    
    $
    5,075,830
    
    
    $
    22,712,043Advertising revenue
    
    
    996,311
    
    
    
    1,337,630
    
    
    
    1,560,194SMS revenue
    
    
    
    
    
    
    298,232
    
    
    
    1,339,321Brokerage service revenue
    
    
    
    
    
    
    
    
    
    
    80,896Others
    
    
    674,460
    
    
    
    416,386
    
    
    
    210,620$
    7,482,166
    
    
    $
    7,128,078
    
    
    $
    25,903,074
  F - 40




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2005, 2006 AND 2007
(In U.S. dollars)
 18.
    
    RESTRICTED NET ASSETS
   19.
    
    SUBSEQUENT EVENT
   F - 41




---



##### 



Additional Information  Financial Statement Schedule I
 Financial information of Parent Company
Balance sheets
(In U.S. dollars, except share-related data)
 December 31,2006
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    5,758,063
    
    
    $
    19,374,617Amounts due from subsidiaries
    
    
    64,172
    
    
    
    4,408,362Prepaid expenses and other current assets
    
    
    93,618
    
    
    
    133,572Dividends receivable
    
    
    2,473,269
    
    
    
    Total current assets
    
    
    8,389,122
    
    
    
    23,916,551Investments in subsidiaries
    
    
    37,615,158
    
    
    
    43,844,335Cost-method investment
    
    
    12,606,571
    
    
    
    1,479,571Goodwill
    
    
    50,534
    
    
    
    50,534Loans receivable from subsidiaries
    
    
    4,000,000
    
    
    
    Total assets
    
    $
    62,661,385
    
    
    $
    69,290,991Liabilities and shareholders equityCurrent liabilities:Accrued expenses and other current liabilities
    
    
    148,072
    
    
    
    1,868,059Amounts due to a subsidiary
    
    
    60,534
    
    
    
    60,537Total current liabilities
    
    $
    208,606
    
    
    $
    1,928,596Shareholders equityOrdinary shares ($0.00013 par value; 500,000,000 shares
authorized; shares issued and outstanding 104,384,933
in 2006 and 109,754,433 in 2007)
    
    
    13,474
    
    
    
    14,172Additional paid-in capital
    
    
    52,555,919
    
    
    
    58,727,378Accumulated other comprehensive income
    
    
    1,634,269
    
    
    
    4,501,432Retained earnings
    
    
    8,249,117
    
    
    
    4,119,413Total shareholders equity
    
    
    62,452,779
    
    
    
    67,362,395Total liabilities and shareholders equity
    
    $
    62,661,385
    
    
    $
    69,290,991
  F - 42




---



##### 



Financial information of Parent Company
Statements of operations
(In U.S. dollars)
 December 31,2005
    
    
    2006
    
    
    2007Operating expenses:General and administrative
    
    $
    692,453
    
    
    $
    873,496
    
    
    $
    975,931Stock-based compensation
    
    
    370,781
    
    
    
    1,183,662
    
    
    
    2,946,340Total operating expenses
    
    
    1,063,234
    
    
    
    2,057,158
    
    
    
    3,922,271Interest income
    
    
    560,772
    
    
    
    202,484
    
    
    
    253,003Equity in earnings of subsidiaries and VIEs
    
    
    5,126,649
    
    
    
    2,395,622
    
    
    
    10,299,974Other income
    
    
    
    
    
    
    180,419
    
    
    
    366,590Loss from impairment of cost method
investment
    
    
    
    
    
    
    (1,322,000
    )
    
    
    (11,127,000
    )Net income (loss)
    
    $
    4,624,187
    
    
    $
    (600,633
    )
    
    $
    (4,129,704
    )
  F - 43




---



##### 



Financial Information of Parent Company
Statement of Shareholders Equity and Other Comprehensive Income
(In U.S. dollars, except share-related data)
 AccumulatedotherAdditional
    
    
    Deferred
    
    
    comprehensive
    
    
    
    
    
    
    TotalOrdinary shares
    
    
    paid-in
    
    
    stock-based
    
    
    income
    
    
    Retained
    
    
    shareholders
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    capital
    
    
    compensation
    
    
    (loss)
    
    
    earnings
    
    
    equity
    
    
    incomeBalances as of January 1, 2005
    
    
    99,329,933
    
    
    $
    12,814
    
    
    $
    64,175,132
    
    
    $
    (325,221
    )
    
    $
    (11
    )
    
    $
    4,225,563
    
    
    $
    68,088,277Repurchase of ordinary shares
    
    
    
    
    
    
    
    
    
    
    (13,200,394
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,200,394
    )Issuance of ordinary shares to employees
    
    
    2,000,000
    
    
    
    263
    
    
    
    276,713
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    276,976Stock options issued to non-employees
    
    
    
    
    
    
    
    
    
    
    112,689
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112,689Amortization of deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    258,092
    
    
    
    
    
    
    
    
    
    
    
    258,092Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    671,133
    
    
    
    
    
    
    
    671,133
    
    
    $
    671,133Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,624,187
    
    
    
    4,624,187
    
    
    
    4,624,187Balance as of December 31, 2005
    
    
    101,329,933
    
    
    
    13,077
    
    
    
    51,364,140
    
    
    
    (67,129
    )
    
    
    671,122
    
    
    
    8,849,750
    
    
    
    60,830,960
    
    
    $
    5,295,320Amortization of deferred stock-based compensation
    
    
    
    
    
    
    
    
    
    
    (67,129
    )
    
    
    67,129
    
    
    
    
    
    
    
    
    
    
    
    Issuance of ordinary shares for exercise of
stock option by employees
    
    
    3,000,000
    
    
    
    390
    
    
    
    66,453
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66,843Exercise of share options by non-employees
    
    
    55,000
    
    
    
    7
    
    
    
    8,793
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,800Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    1,183,662
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,183,662Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    963,147
    
    
    
    
    
    
    
    963,147
    
    
    $
    963,147Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (600,633
    )
    
    
    (600,633
    )
    
    
    (600,633
    )Balance as of December 31, 2006
    
    
    104,384,933
    
    
    
    13,474
    
    
    
    52,555,919
    
    
    
    
    
    
    
    1,634,269
    
    
    
    8,249,117
    
    
    
    62,452,779
    
    
    $
    362,514Exercise of stock option by employees
    
    
    
    
    
    
    
    
    
    
    2,366,697
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,366,697Exercise of share options by non-employees
    
    
    5,369,500
    
    
    
    698
    
    
    
    858,422
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    859,120Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    2,946,340
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,946,340Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,867,163
    
    
    
    
    
    
    
    2,867,163
    
    
    $
    2,867,163Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,129,704
    )
    
    
    (4,129,704
    )
    
    
    (4,129,704
    )Balance as of December 31, 2007
    
    
    109,754,433
    
    
    $
    14,172
    
    
    $
    58,727,378
    
    
    $
    
    
    
    $
    4,501,432
    
    
    $
    4,119,413
    
    
    $
    67,362,395
    
    
    $
    (1,262,541
    )
   F - 44




---



##### 



Financial information of Parent Company
Statements of cash flows
(In U.S. dollars, except share-related data)
 December 31,2005
    
    
    2006
    
    
    2007Operating activities:Net income (loss)
    
    
    4,624,187
    
    
    
    (600,633
    )
    
    
    (4,129,704
    )Adjustments to reconcile net income (loss) to
net cash (used in) provided by operating activities:Stock-based compensation
    
    
    370,781
    
    
    
    1,183,662
    
    
    
    2,946,340Loss from impairment of cost method investment
    
    
    
    
    
    
    1,322,000
    
    
    
    11,127,000Gain from disposal of cost method investment
    
    
    
    
    
    
    (116,071
    )
    
    
    Equity in earnings of subsidiaries
    
    
    (4,455,510
    )
    
    
    (958,872
    )
    
    
    (10,299,974
    )Changes in assets and liabilities:Dividend receivable
    
    
    
    
    
    
    (2,473,269
    )
    
    
    2,473,269Prepaid expenses and other current assets
    
    
    42,226
    
    
    
    (56,221
    )
    
    
    (39,954
    )Amounts due from subsidiaries
    
    
    
    
    
    
    (64,543
    )
    
    
    (4,344,190
    )Accrued expenses and other current liabilities
    
    
    (27,234
    )
    
    
    27,032
    
    
    
    1,719,911Amounts due to subsidiaries
    
    
    (477,841
    )
    
    
    41,947
    
    
    
    3Net cash provided by (used in) operating activities
    
    
    76,609
    
    
    
    (1,694,968
    )
    
    
    (547,299
    )Investing activities:Net increase in loans to subsidiaries
    
    
    (13,990,000
    )
    
    
    9,990,000
    
    
    
    4,000,000Proceeds from partial sale of cost method investment
    
    
    
    
    
    
    1,187,500
    
    
    
    Acquisition of businesses
    
    
    
    
    
    
    (6,582,144
    )
    
    
    (2,300,476
    )Investments in subsidiaries
    
    
    (20,500,000
    )
    
    
    
    
    
    
    Acquisition of cost investment
    
    
    (15,000,000
    )
    
    
    
    
    
    
    Net cash (used in) provided by investing activities
    
    
    (49,490,000
    )
    
    
    4,595,356
    
    
    
    1,699,524Financing activities:Proceeds from stock options exercised by employees
    
    
    276,976
    
    
    
    66,843
    
    
    
    2,366,697Proceeds from exercise of options granted to non-employee
    
    
    
    
    
    
    8,800
    
    
    
    859,120Repurchase of treasury shares
    
    
    (13,200,394
    )
    
    
    
    
    
    
    Dividend from a subsidiary
    
    
    5,373,182
    
    
    
    
    
    
    
    9,238,436Net cash provided by (used in) financing activities
    
    
    (7,550,236
    )
    
    
    75,643
    
    
    
    12,464,253Effect of exchange rate changes
    
    
    (6
    )
    
    
    5
    
    
    
    76Net increase (decrease) in cash and cash equivalents
    
    
    (56,963,633
    )
    
    
    2,976,036
    
    
    
    13,616,554Cash and cash equivalents, beginning of the year
    
    
    59,745,660
    
    
    
    2,782,027
    
    
    
    5,758,063Cash and cash equivalents, end of the year
    
    $
    2,782,027
    
    
    $
    5,758,063
    
    
    $
    19,374,617
  Basis for preparation
   F - 45




---



##### 



EXHIBIT INDEX
 ExhibitNumber
    
    Description1.1
    
    
    Amended and Restated Memorandum and Articles of
Association of China Finance Online Co. Limited
(incorporated by reference to Exhibit 3.1 from our
Registration Statement on Form F-1 (File No.
333-119166) filed with the Securities and Exchange
Commission on October 4, 2004)2.1
    
    
    Specimen ordinary share certificate (incorporated
by reference to Exhibit 4.1 from our Registration
Statement on Form F-1 (File No. 333-119166) filed
with the Securities and Exchange Commission on
September 21, 2004)2.2
    
    
    Specimen American depositary receipt of China
Finance Online Co. Limited (Incorporated by
reference to the Registration Statement on Form
F-6 (File No. 333-119530) filed with the
Securities and Exchange Commission with respect to
American depositary shares representing ordinary
shares on October 5, 20042.3
    
    
    Shareholders Agreement of China Finance Online Co.
Limited dated June 2000 among China Finance Online
Co., Ltd. and certain of its shareholders
(incorporated by reference to Exhibit 4.2 from our
Registration Statement on Form F-1 (File No.
333-119166) filed with the Securities and Exchange
Commission on September 21, 2004)4.1
    
    
    2004 Incentive Stock Option Plan and form of
option agreement (incorporated by reference to
Exhibit 4.1 from our 2006 Annual Report on Form
20-F (File No.000-50975) filed with the Securities
and Exchange Commission on May 29, 2007)4.2
    
    
    Restricted Stock Issuance and Allocation
Agreement-2007 Equity Incentive Plan (incorporated
by reference to Exhibit 99.1 on Form 6-K (File No.
000-50975) filed with the Securities and Exchange
Commission on August 24, 20074.3
    
    
    Form of Option Agreement with outside consultants
and strategic advisors (incorporated by reference
to Exhibit 10.2 from our Registration Statement on
Form F-1 (File No. 333-119166) filed with the
Securities and Exchange Commission on September
21, 2004)4.4
    
    
    Purchase Option and Cooperation Agreement dated
May 27, 2004 among China Finance Online Co.
Limited, Jun Ning, Wu Chen and CFO Fuhua
Innovation Technology Development Co., Ltd.
(incorporated by reference to Exhibit 10.3 from
our Registration Statement on Form F-1 (File No.
333-119166) filed with the Securities and Exchange
Commission on September 21, 2004)4.5
    
    
    Share Pledge Agreement dated May 27, 2004 among
Jun Ning, Wu Chen and China Finance Online
(Beijing) Co., Ltd. (incorporated by reference to
Exhibit 10.4 from our Registration Statement on
Form F-1 (File No. 333-119166) filed with the
Securities and Exchange Commission on September
21, 2004)4.6
    
    
    Proxy from Wu Chen to Jian Feng dated May 27, 2004
(incorporated by reference to Exhibit 10.6 from
our Registration Statement on Form F-1 (File No.
333-119166) filed with the Securities and Exchange
Commission on September 21, 2004)




---



##### 



ExhibitNumber
    
    Description4.7
    
    
    Framework Agreement on Exercising Purchase Option dated November 20,
2006 by and among Jun Ning, Wu Chen, Zhiwei Zhao, CFO Fuhua
Innovation Technology Development Co., Ltd. and China Finance Online
(Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.7 from
our 2006 Annual Report on Form 20-F (File No.000-50975 ) filed with
the Securities and Exchange Commission on May 29, 2007)4.8
    
    
    Share Transfer Contract (related to shares of Beijing Fuhua
Innovation Technology Development Co., Ltd.) dated November 20, 2006
by and between Jun Ning and Zhiwei Zhao (incorporated by reference
to Exhibit 4.8 from our 2006 Annual Report on Form 20-F (File
No.000-50975 ) filed with the Securities and Exchange Commission on
May 29, 2007)4.9
    
    
    Loan Agreement dated November 20, 2006 by and between China Finance
Online Co. Limited by and Zhiwei Zhao (incorporated by reference to
Exhibit 4.9 from our 2006 Annual Report on Form 20-F (File
No.000-50975 ) filed with the Securities and Exchange Commission on
May 29, 2007)4.10
    
    
    Purchase Option and Cooperation Agreement dated November 20, 2006
among China Finance Online Co. Limited, Zhiwei Zhao, Wu Chen, Fuhua
Innovation Technology Development Co., Ltd. and China Finance Online
(Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.10 from
our 2006 Annual Report on Form 20-F (File No.000-50975 ) filed with
the Securities and Exchange Commission on May 29, 2007)4.11
    
    
    Share Pledge Agreement dated November 20, 2006 among Zhiwei Zhao, Wu
Chen, Fuhua Innovation Technology Development Co., Ltd. and China
Finance Online (Beijing) Co., Ltd. (incorporated by reference to
Exhibit 4.11 from our 2006 Annual Report on Form 20-F (File
No.000-50975 ) filed with the Securities and Exchange Commission on
May 29, 2007)4.12
    
    
    Equipment Lease Agreement between China Finance Online (Beijing)
Co., Ltd. and Fuhua Innovative Technology Development Co., Ltd.
dated May 27, 2004 (incorporated by reference to Exhibit 10.7 from
our Registration Statement on Form F-1 (File No. 333-119166) filed
with the Securities and Exchange Commission on September 21, 2004)4.13
    
    
    Technical Support Agreement between China Finance Online (Beijing)
Co., Ltd. and Fuhua Innovative Technology Development Co., Ltd.
dated May 27, 2004 (incorporated by reference to Exhibit 10.8 from
our Registration Statement on Form F-1 (File No. 333-119166) filed
with the Securities and Exchange Commission on September 21, 2004)4.14
    
    
    Amended and Restated Strategic Consulting Agreement between China
Finance Online (Beijing) Co., Ltd. and Fuhua Innovative Technology
Development Co., Ltd. dated May 27, 2004 (incorporated by reference
to Exhibit 10.9 from our Registration Statement on Form F-1 (File
No. 333-119166) filed with the Securities and Exchange Commission on
September 21, 2004)4.15
    *
    
    Framework Agreement on Exercising Purchase Option dated October 18,
2007 by and among China Finance Online Co. Limited, Wu Chen, Zhiwei
Zhao, Jun Wang, CFO Fuhua Innovation Technology Development Co., Ltd
and China Finance Online (Beijing) Co., Ltd.




---



##### 



ExhibitNumber
    
    Description4.16
    *
    
    Loan Agreement between China Finance Online Co. Limited and Jun Wang
dated October 18, 20074.17
    *
    
    Share Transfer Contract (related to shares of Beijing Fuhua
Innovation Technology Development Co., Ltd.) dated October 18, 2007
by and between Wu Chen and Jun Wang4.18
    *
    
    Share Pledge Agreement dated October 18, 2007 among Zhiwei Zhao, Jun
Wang, Fuhua Innovation Technology Development Co., Ltd. and China
Finance Online (Beijing) Co., Ltd.4.19
    *
    
    Purchase Option and Cooperation Agreement dated October 18, 2007
among China Finance Online Co. Limited, Zhiwei Zhao, Jun Wang and
CFO Fuhua Innovation Technology Development Co., Ltd.4.20
    *
    
    Purchase Option and Coopration Agreement dated March 3, 2008 amongChina Finance Online Co. Limited, Zhiwei Zhao, Jun Wang and CFO
Fuhua Innovation Technology Development Co., Ltd.4.21
    *
    
    Capital Increase Agreement relating to CFO Fuhua Innovation
Technology Development Co., Ltd. dated March 3, 2008 among CFO Fuhua
Innovation Technology Development Co., Ltd. , Jun Wang and Zhiwei
Zhao4.22
    *
    
    Loan Agreement dated March 3, 2008 among China Finance Online
(Beijing) Co., Ltd., Jun Wang and Zhiwei Zhao4.23
    *
    
    Share Pledge Agreement dated March 3,2008 among Zhiwei Zhao, Jun
Wang, Fuhua Innovation Technology Development Co., Ltd. and China
Finance Online (Beijing) Co., Ltd.4.24
    *
    
    Loan Agreement dated August 21, 2007 among Fortune Software
(Beijing) Co., Ltd., Wei Xiong and Zhenfei Fan4.25
    *
    
    Operation Agreement among dated August 21, 2007 by and between
Fortune Software (Beijing) Co., Ltd. and Beijing CFO Premium
Technology Co., Ltd.4.26
    *
    
    Technical Support Agreement between Fortune Software (Beijing) Co.,
Ltd. and Beijing CFO Premium Technology Co., Ltd. dated August 21,
20074.27
    *
    
    Strategic Consulting and Service Agreement between Fortune Software
(Beijing) Co., Ltd. and Beijing Premium Technology Co., Ltd. dated
August 21, 20074.28
    *
    
    Purchase Option Agreement dated August 21, 2007 among Fortune
Software. Limited, Wei Xiong, Zhenfei Fan and Beijing Premium
Technology Co., Ltd.4.29
    *
    
    Framework Agreement among Fortune Software (Beijing) Co., Ltd., Wu
Chen, Jun Wang and Beijing Glory Co., Ltd. dated September 10, 20074.30
    *
    
    Loan Agreement dated September 1, 2007 among Fortune Software
(Beijing) Co., Ltd., Wu Chen and Zhiwei Zhao4.31
    *
    
    Share Transfer Contract (related to shares of Beijing Glory Co.,
Ltd.) dated September 10, 2007 by and between Wu Chen and Jun Wang




---



##### 



ExhibitNumber
    
    Description4.32
    *
    
    Operation Agreement among dated September 10, 2007 by and between
Fortune Software (Beijing) Co.,Ltd. and Beijing Glory Co., Ltd.4.33
    *
    
    Technical Support Agreement between Fortune Software (Beijing) Co.,
Ltd. and Beijing CFO Glory Co., Ltd. dated September 10, 20074.34
    *
    
    Strategic Consulting and Service Agreement between Fortune Software
(Beijing) Co., Ltd. and Beijing Glory Co., Ltd. dated September 10,
20074.35
    *
    
    Purchase Option Agreement dated September 10, 2007 among China
Finance Online Co. Limited, Jun Wang, Zhiwei Zhao and Beijing Glory
Co., Ltd.4.36
    
    
    Shanghai Stock Exchange Level-II Quotations License Agreement dated
June 15, 2006 between SSE Infonet Ltd. and Fortune Software
(Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.15 from
our 2006 Annual Report on Form 20-F (File No.000-50975 ) filed with
the Securities and Exchange Commission on May 29, 2007)4.37
    *
    
    License Agreement relating to the distribution of TopView between
Fortune Software (Beijing) Co., Ltd. and Shanghai Stock Exchange
Information Network Co., Ltd. dated December 26, 20074.38
    
    
    Shenzhen Stock Exchange Proprietary Information License Agreement
dated March 20, 2007 between Fortune Software (Beijing) Co., Ltd.
and Shenzhen Securities Information Co., Ltd. (incorporated by
reference to Exhibit 4.16 from our 2006 Annual Report on Form 20-F
(File No.000-50975 ) filed with the Securities and Exchange
Commission on May 29, 2007)4.39
    
    
    Domain Name Transfer Agreement dated October 30, 2006 by and among
China Finance Online Co., Ltd., China Finance Online (Beijing) Co.,
Ltd. and Being Fuhua Innovation Technology Development Co.,
Ltd.(incorporated by reference to Exhibit 4.17 from our 2006 Annual
Report on Form 20-F (File No.000-50975 ) filed with the Securities
and Exchange Commission on May 29, 2007)4.40
    
    
    Domain Name Transfer Agreement dated October 30, 2006 between
Stockstar Information Technology (Shanghai) Co., Ltd. and Shanghai
Meining Computer Software Company Limited (incorporated by reference
to Exhibit 4.18 from our 2006 Annual Report on Form 20-F (File
No.000-50975 ) filed with the Securities and Exchange Commission on
May 29, 2007)4.41
    
    
    Lease Contract for Housing Unit of Corporate Square dated January
19, 2006 between Fortune Software (Beijing) Co. Ltd. and China
Galaxy Securities Company Limited (incorporated by reference to
Exhibit 4.20 from our Annual Report on Form 20-F filed with the
Securities and Exchange Commission on May 23, 2006)4.42
    
    
    Lease Contract for Housing Unit of Corporate Square dated January
19, 2006 between Beijing Fuhua Innovation Technology Co., Ltd. and
China Galaxy Securities Company Limited (incorporated by reference
to Exhibit 4.20 from our Annual Report on Form 20-F filed with the
Securities and Exchange Commission on May 23, 2006)




---



##### 



ExhibitNumber
    
    Description4.43
    
    
    Lease Contract for Housing Unit of Corporate Square dated January
19, 2006 between China Finance Online Co., Ltd. and China Galaxy
Securities Company Limited (incorporated by reference to Exhibit
4.20 from our Annual Report on Form 20-F filed with the Securities
and Exchange Commission on May 23, 2006)4.44
    
    
    Lease Contract for Housing Unit of Corporate Square dated December
29, 2006 between Beijing Fuhua Innovation Technology Co., Ltd. and
China Galaxy Securities Company Limited (incorporated by reference
to Exhibit 4.22 from our 2006 Annual Report on Form 20-F (File
No.000-50975 ) filed with the Securities and Exchange Commission on
May 29, 2007)4.45
    
    
    Lease Contract for Housing Unit of Corporate Square dated December
29, 2006 between Fortune Software (Beijing) Co. Ltd. and China
Galaxy Securities Company Limited (incorporated by reference to
Exhibit 4.23 from our 2006 Annual Report on Form 20-F (File
No.000-50975 ) filed with the Securities and Exchange Commission on
May 29, 2007)4.46
    *
    
    Lease Contract for Housing Unit of Corporate Square dated August 9,
2007 between Fortune Software (Beijing) Co. Ltd. and China Galaxy
Securities Company Limited4.47
    *
    
    Lease Contract for Housing Unit of Corporate Square dated August 9,
2007 between Beijing Fuhua Innovation Technology Co., Ltd. and China
Galaxy Securities Company Limited4.48
    *
    
    Lease Contract for Housing Unit of Corporate Square dated August 1,
2007 between China Finance Online (Beijing) Co., Ltd. and China
Galaxy Securities Company Limited4.49
    *
    
    Lease Contract for Housing Unit of Corporate Square dated August 1,
2007 between Beijing Fuhua Innovation Technology Co., Ltd. and China
Galaxy Securities Company Limited4.50
    *
    
    Lease Contract for Housing Unit of Corporate Square dated August 1,
2007 between Fortune Software (Beijing) Co. Ltd. and China Galaxy
Securities Company Limited4.51
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among William
Wang, FNG International Holdings Limited and China Finance Online
Co. Limited4.52
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Tsang
Kin-Woo, FNG International Holdings Limited and China Finance Online
Co., Limited4.53
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Wong Chan
Miu-Wan Stella, FNG International Holdings Limited and China Finance
Online Co. Limited4.54
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Shun Kin
Enterprises Limited, FNG International Holdings Limited and China
Finance Online Co. Limited




---



##### 



ExhibitNumber
    
    Description4.55
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Midopa
Enterprises Limited, FNG International Holdings Limited and China
Finance Online Co. Limited4.56
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Hung Yung,
FNG International Holdings Limited and China Finance Online Co.
Limited4.57
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Chu
Ping-Im, FNG International Holdings Limited and China Finance Online
Co. Limited4.58
    *
    
    Agreement for the Sale and Purchase of Shares in Daily Growth
Investment Company Limited dated September 7, 2007 among Eternal
Growth Investment Limited, FNG International Holdings Limited and
China Finance Online Co. Limited4.59
    
    
    Form of indemnification agreement for directors and officers
(incorporated by reference to Exhibit 10.18 from our Registration
Statement on Form F-1 (File No. 333-119166) filed with the
Securities and Exchange Commission on September 21, 2004)4.60
    
    
    Labor Contract of Jeff Wang dated May 24, 2006 (incorporated by
reference to Exhibit 4.25 from our 2006 Annual Report on Form 20-F
(File No.000-50975 ) filed with the Securities and Exchange
Commission on May 29, 2007)4.61
    
    
    Labor Contract of Zhao Zhiwei dated June 21, 2005 (incorporated by
reference to Exhibit 4.26 from our Annual Report on Form 20-F filed
with the Securities and Exchange Commission on May 23, 2006)4.62
    
    
    [Intentionally Omitted]4.63
    
    
    [Intentionally Omitted]4.64
    
    
    Form of Change in Control Agreement (incorporated
by reference to Exhibit 10.1 from our Registration
Statement on Form F-1 (File No. 333-119166) filed
with the Securities and Exchange Commission on
October 4, 2004)4.65
    
    
    Shanghai Meining Computer Software Company Limited
Share Transfer Agreement dated August 15, 2006
among Shanghai Kemei Taidi Telecommunication
Equipment Co., Ltd., Beijing Fuhua Innovation
Technology Development Co., Ltd., China Finance
Online (Beijing) Co., Ltd.(incorporated by
reference to Exhibit 4.30 from our 2006 Annual
Report on Form 20-F (File No.000-50975 ) filed
with the Securities and Exchange Commission on May
29, 2007)4.66
    
    
    Stockstar Information Technology (Shanghai) Co.,
Ltd. Share Transfer Agreement dated August 15,
2006 by and among Stockstar.com, Inc. and China
Finance Online Co., Ltd.(incorporated by reference
to Exhibit 4.31 from our 2006 Annual Report on
Form 20-F (File No.000-50975 ) filed with the
Securities and Exchange Commission on May 29,
2007)4.67
    *
    
    Engagement Letter between China Finance Online
Co., Ltd. and Deloitte Touche Tohmatsu CPA. Ltd
dated February 26, 20088.1
    *
    
    List of subsidiaries




---



##### 



ExhibitNumber
    
    Description10.1
    *
    
    Consent of Deloitte Touche Tohmatsu CPA Ltd.10.2
    *
    
    Written Consent of American Appraisal China Limited12.1
    *
    
    CEO Certification Pursuant to Rule 13a-14(a) (17
CFR 240.13a-14(a)) (17 CFR 240.13a-14(a)) or 
Rule
15d-1(a) (17 CFR 240.15d-14(a))12.2
    *
    
    CFO Certification Pursuant to Rule 13a-14(a) (17
CFR 240.13a-14(a)) or Rule 15d-1(a) (17
CFR 
240.15d-14(a))13.1
    *
    
    CEO Certification Pursuant to Section 906 of the
Sarbanes-Oxley Act of 200213.2
    *
    
    CFO Certification Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002