##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 20-F
 (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, 2009
 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 100033, China
 Jun Wang, Chief Financial Officer
Telephone: + (86 10) 58325399
Email: jun.wang@jrj.com.cn
Facsimile: + (86 10)58325200
9/F, Tower C, Corporate Square
No.35 Financial Street, Xicheng District
Beijing 100033, China
 (Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
  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 Yes þ No
 o Yes þ No
 þ Yes o No
 þ Yes o No
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
  U.S. GAAP þ
    
    International Financial Reporting Standards as issued
    
    Other oBy the International Accounting Standards Board o
 Item 17 o  Item 18 o
 o Yes þ No




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##### 



CHINA FINANCE ONLINE CO. LIMITED

TABLE OF CONTENTS
 INTRODUCTIONPART IITEM 1 Identity of Directors, Senior Management and Advisers
    
    
    4ITEM 2 Offer Statistics and Expected Timetable
    
    
    4ITEM 3 Key Information
    
    
    5ITEM 4 Information on the Company
    
    
    34ITEM 5 Operating and Financial Review and Prospects
    
    
    57ITEM 6 Directors, Senior Management and Employees
    
    
    76ITEM 7 Major Shareholders and Related Party Transaction
    
    
    86ITEM 8 Financial Information
    
    
    99ITEM 9 The Offer and Listing
    
    
    99ITEM 10 Additional Information
    
    
    100ITEM 11 Quantitative and Qualitative Disclosures About Market Risk
    
    
    107ITEM 12 Description of Securities Other than Equity Securities
    
    
    107PART IIITEM 13 Defaults, Dividend Arrearages and Delinquencies
    
    
    110ITEM 14 Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    110ITEM 15 Controls and Procedures
    
    
    110ITEM 16A Audit Committee Financial Expert
    
    
    112ITEM 16B Code of Ethics
    
    
    112ITEM 16C Principal Accountant Fee and Services
    
    
    113ITEM 16D Exemption from the Listing Standard for Audit Committees
    
    
    113ITEM 16E Purchases of Equity Securities by the Issue and Affiliated Purchasers
    
    
    113PART IIIITEM 17 Financial Statement
    
    
    113ITEM 18 Financial Statements
    
    
    113ITEM 19 Exhibits
    
    
    113Exhibit 4.3Exhibit 4.35Exhibit 4.36Exhibit 4.37Exhibit 4.40Exhibit 4.41Exhibit 4.42Exhibit 4.43Exhibit 4.44Exhibit 4.45Exhibit 4.46Exhibit 4.47Exhibit 4.48Exhibit 4.49Exhibit 4.50Exhibit 4.51Exhibit 4.52Exhibit 4.53Exhibit 4.54Exhibit 4.55Exhibit 4.56Exhibit 4.57Exhibit 4.58Exhibit 4.59Exhibit 4.60Exhibit 4.61Exhibit 4.62Exhibit 4.63Exhibit 4.64Exhibit 4.65Exhibit 4.66Exhibit 4.67Exhibit 4.68Exhibit 4.69Exhibit 4.71Exhibit 4.72Exhibit 4.73Exhibit 4.74Exhibit 4.75Exhibit 4.81Exhibit 4.82Exhibit 4.83Exhibit 4.84Exhibit 4.85Exhibit 4.86Exhibit 4.87Exhibit 4.88Exhibit 4.89Exhibit 4.90Exhibit 4.110Exhibit 4.111Exhibit 4.112Exhibit 4.119Exhibit 4.120Exhibit 4.121Exhibit 4.127Exhibit 4.128Exhibit 4.129Exhibit 4.142Exhibit 4.143Exhibit 4.144Exhibit 4.151Exhibit 8.1Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 13.2Exhibit 15.1Exhibit 15.2
   2




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INTRODUCTION
  
    
    we, us, our company, the company, our, Group refer to China Finance Online
Co. Limited, or CFO Hong Kong and its subsidiaries, and, in the context of describing our
operations include our PRC-incorporated affiliates;
 
    
    shares and ordinary shares refer to our ordinary shares, preferred shares refers
to our preferred shares, all of which were converted into our ordinary shares upon the
completion of our initial public offering on October 20, 2004, ADSs refers to our
American depositary shares, each of which represents five ordinary shares, and ADRs
refers to the American depositary receipts which evidence our ADSs;
 
    
    China or PRC refers to the Peoples Republic of China, excluding Taiwan, Hong Kong
and Macau;
 
    
    Hong Kong refers to the Hong Kong Special Administrative Region of the Peoples
Republic of China; and
 
    
    all references to Renminbi, RMB or yuan are to the legal currency of China, all
references to U.S. dollars, dollars, $ or US$ are to the legal currency of the
United States and all references to Hong Kong dollars or HK$ are to the legal currency
of Hong Kong. Any discrepancies in any table between totals and sums of the amounts listed
are due to rounding.
  FORWARD-LOOKING INFORMATION
  
    
    our goals and strategies, including how we effect our goals and strategies;
 
    
    our future business developments, business prospects, financial condition and results
of operations;
 
    
    our future pricing strategies or policies;
 
    
    our plans to expand our service offerings;
 
    
    our plans to use acquisitions and strategic investments as part of our corporate
strategy;
 
    
    competition in the PRC financial data and information services industry;
  3




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
    
    performance of Chinas securities markets;
 
    
    performance of Hong Kongs securities markets;
 
    
    growth in our subscriber base;
 
    
    PRC governmental policies relating to taxes and how they will impact our business;
 
    
    PRC governmental policies relating to the Internet and Internet content providers;
 
    
    PRC governmental policies relating to the distribution of content, especially the
distribution of financial content over the Internet; and
 
    
    PRC governmental policies relating to mobile value-added services.
    
 PART I
 
 ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
  
 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
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ITEM 3. KEY INFORMATION
 A. Selected financial data .
  For the year ended December 31,(in thousands of U.S. dollars, except per share or per ADS data)(1)
    
    2005 (5)
    
    
    2006 (4) (5)
    
    
    2007 (4) (5)
    
    
    2008 (5)
    
    
    2009(As adjusted)
    
    
    (As adjusted)
    
    
    (As adjusted)
    
    
    (As adjusted)Consolidated statement of operations and comprehensive income (loss) data:Net revenues
    
    
    7,482
    
    
    
    7,128
    
    
    
    25,903
    
    
    
    56,243
    
    
    
    53,606Cost of revenues
    
    
    (482
    )
    
    
    (1,468
    )
    
    
    (4,427
    )
    
    
    (9,367
    )
    
    
    (8,147
    )Gross profit
    
    
    7,000
    
    
    
    5,660
    
    
    
    21,476
    
    
    
    46,876
    
    
    
    45,459Operating expenses:General and administrative
    
    
    (1,740
    )
    
    
    (2,956
    )
    
    
    (7,784
    )
    
    
    (15,371
    )
    
    
    (16,982
    )Product development
    
    
    (236
    )
    
    
    (742
    )
    
    
    (2,269
    )
    
    
    (5,635
    )
    
    
    (10,754
    )Sales and marketing
    
    
    (1,795
    )
    
    
    (2,666
    )
    
    
    (6,924
    )
    
    
    (13,521
    )
    
    
    (26,095
    )Total operating expenses
    
    
    (3,771
    )
    
    
    (6,364
    )
    
    
    (16,977
    )
    
    
    (34,527
    )
    
    
    (53,831
    )Subsidy income
    
    
    
    
    
    
    
    
    
    
    136
    
    
    
    437
    
    
    
    567Income (loss) from operations
    
    
    3,229
    
    
    
    (704
    )
    
    
    4,635
    
    
    
    12,786
    
    
    
    (7,805
    )Interest income
    
    
    1,486
    
    
    
    1,003
    
    
    
    1,105
    
    
    
    1,608
    
    
    
    1,352Gain from trading securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40Other income (expense)
    
    
    
    
    
    
    115
    
    
    
    9
    
    
    
    (169
    )
    
    
    (257
    )Exchange gain (net)
    
    
    366
    
    
    
    267
    
    
    
    424
    
    
    
    1,490
    
    
    
    2Loss from impairment of cost method investment
    
    
    
    
    
    
    (1,322
    )
    
    
    (11,127
    )
    
    
    
    
    
    
    Income (loss) before income taxes
    
    
    5,081
    
    
    
    (641
    )
    
    
    (4,954
    )
    
    
    15,715
    
    
    
    (6,668
    )Income tax benefit (provision)
    
    
    (457
    )
    
    
    41
    
    
    
    809
    
    
    
    3,047
    
    
    
    446Purchased pre-acquisition earning
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    227
    
    
    
    Net income (loss)
    
    
    4,624
    
    
    
    (600
    )
    
    
    (4,145
    )
    
    
    18,989
    
    
    
    (6,222
    )Less: net loss attributable to the noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    31
    
    
    
    2Net income (loss) attributable to China Finance Online Co., Ltd.
    
    $
    4,624
    
    
    $
    (600
    )
    
    $
    (4,130
    )
    
    $
    19,020
    
    
    $
    (6,220
    )Net income (loss) per share attributable to China Finance Online Co., Ltd.-basic
    
    $
    0.05
    
    
    $
    (0.01
    )
    
    $
    (0.04
    )
    
    $
    0.19
    
    
    $
    (0.06
    )-diluted
    
    $
    0.04
    
    
    $
    (0.01
    )
    
    $
    (0.04
    )
    
    $
    0.17
    
    
    $
    (0.06
    )Net income(loss) per ADS equivalent attributable to China Finance Online Co., Ltd.-basic(2)
    
    $
    0.25
    
    
    $
    (0.03
    )
    
    $
    (0.22
    )
    
    $
    0.96
    
    
    $
    (0.30
    )-diluted(2)
    
    $
    0.22
    
    
    $
    (0.03
    )
    
    $
    (0.22
    )
    
    $
    0.84
    
    
    $
    (0.30
    )
  5




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For the year ended December 31,(in thousands of U.S. dollars)(1)
    

2005 (5)
    
    

2006 (5)
    
    

2007 (5)
    
    

2008 (5)
    
    

2009(As adjusted)
    
    
    (As adjusted)
    
    
    (As adjusted)
    
    
    (As adjusted)Consolidated balance sheet data:Cash and cash equivalents
    
    $
    46,168
    
    
    $
    44,956
    
    
    $
    74,729
    
    
    $
    97,544
    
    
    $
    107,391Current working capital(3)
    
    
    45,227
    
    
    
    38,011
    
    
    
    53,811
    
    
    
    78,226
    
    
    
    81,255Total assets
    
    
    63,113
    
    
    
    71,119
    
    
    
    103,885
    
    
    
    141,823
    
    
    
    165,609Deferred revenue, current
    
    
    1,859
    
    
    
    6,419
    
    
    
    20,457
    
    
    
    28,202
    
    
    
    30,620Total current liabilities
    
    
    2,282
    
    
    
    8,521
    
    
    
    31,034
    
    
    
    35,472
    
    
    
    52,401Deferred revenue, non-current
    
    
    
    
    
    
    
    
    
    
    4,665
    
    
    
    8,786
    
    
    
    14,547Total equity
    
    $
    60,831
    
    
    $
    62,453
    
    
    $
    67,834
    
    
    $
    96,942
    
    
    $
    97,667
 (1)
    
    For the results of operations for a specified period, all translations from Renminbi to U.S.
dollars were calculated by using the average of the exchange rates on each day during the
period. All translations from Renminbi to U.S. dollars were calculated for the periods listed
below at the corresponding rates: For the years ended December 31,
    
    RMB per US$1.002004
    
    
    8.27802005
    
    
    8.14722006
    
    
    7.96932007
    
    
    7.60722008
    
    
    6.94772009
    
    
    6.8310
  As at December 31,
    
    RMB per US$1.002004
    
    
    8.27652005
    
    
    8.07022006
    
    
    7.80872007
    
    
    7.29462008
    
    
    6.82252009
    
    
    6.8282
 (2)
    
    Each ADS represents five ordinary shares.(3)
    
    Current working capital is the difference between total current assets and total current
liabilities.(4)
    
    In 2006, the Company changed its method of accounting for stock-based compensation to conform
to authoritative pronouncement effective on January 1, 2006. In 2007, the Company adopted the
authoritative pronouncement Accounting for Uncertainty in Income Taxes.(5)
    
    In 2009, the Company adopted the authoritative guidance on noncontrolling interests in
consolidated financial statements on January 1, 2009, which was applied retrospectively.
The following adjustments have been made: a)
    
    the noncontrolling interests (previously described as minority interest) has now
been included as a component of total equity whereas previously it was shown outside
of equity,b)
    
    the net income or loss attributable to the noncontrolling interests is now shown
as an allocation of net income for the year rather than being deducted in arriving at
net income.  6




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Exchange Rate Information
    Average(1)
    
    
    High
    
    
    Low
    
    
    Period-end(RMB per U.S.$1.00)December 31, 2005
    
    
    8.1472
    
    
    
    8.2765
    
    
    
    8.0702
    
    
    
    8.0702December 31, 2006
    
    
    7.9693
    
    
    
    8.0705
    
    
    
    7.8051
    
    
    
    7.8087December 31, 2007
    
    
    7.5806
    
    
    
    7.8127
    
    
    
    7.2946
    
    
    
    7.2946December 31, 2008
    
    
    6.9193
    
    
    
    7.2946
    
    
    
    6.7800
    
    
    
    6.8225December 31, 2009
    
    
    6.8314
    
    
    
    6.8399
    
    
    
    6.8201
    
    
    
    6.8282Most recent six months:November 2010
    
    
    6.8274
    
    
    
    6.8282
    
    
    
    6.8267
    
    
    
    6.8272December 2010
    
    
    6.8279
    
    
    
    6.8287
    
    
    
    6.8268
    
    
    
    6.8282January 2010
    
    
    6.8273
    
    
    
    6.8281
    
    
    
    6.8269
    
    
    
    6.8270February 2010
    
    
    6.8270
    
    
    
    6.8273
    
    
    
    6.8269
    
    
    
    6.8269March 2010
    
    
    6.8264
    
    
    
    6.8268
    
    
    
    6.8261
    
    
    
    6.8263April 2010
    
    
    6.8262
    
    
    
    6.8265
    
    
    
    6.8259
    
    
    
    6.8263May 2010 (through 17th)
    
    
    6.8270
    
    
    
    6.8275
    
    
    
    6.8265
    
    
    
    6.8275
 
 (1)
    
    Averages are calculated from month-end rates. B. Capitalization and indebtedness.
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C. Reasons for the offer and use of proceeds.
  D. Risk factors.
 Risks relating to our business
 Any prolonged or substantial slowdown in the Chinese economy could adversely affect Chinese
investors interests and engagement in the securities market, which may in turn have a
significantly negative impact on our business.
  Negative changes in Chinas securities markets, economic conditions, inflation, regulatory
policies, interests rates and other factors that could affect investors interests in investing in
Chinas securities markets could have an adverse effect on our business.
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Downturns, disruptions and volatility in Hong Kong securities markets and negative developments in
the business, economic and market conditions that could affect investors investing in Hong Kong
securities markets could have a material and adverse impact on our business in the future.
  Our securities brokerage, futures trading, wealth management and securities advising business in
Hong Kong operate in a highly regulated industry and compliance failures could materially and
adversely affect our business.
   9




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Our business could be materially and adversely affected if new features and new research tools are
not accepted by users.
  We may not be able to successfully implement our growth strategies, which could materially and
adversely affect our business, financial condition and results of operations.
  www.jrj.com www.stockstar.com
  We face significant competition which could materially and adversely affect our business, financial
condition and results of operations .
    10




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Our business could be materially and adversely affected if the stock exchanges from which we
receive data and information fail to deliver us reliable data and price quotes or other trading
related information, or if we cannot maintain our current business relationships with our
historical data providers on commercially reasonable terms.
      11




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www.JRJ.com www.JRJ.com
       12




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Our business would be adversely affected if we do not continue to maintain an effective
telemarketing and customer support force.
  Acquisitions present many risks, and we may not realize the financial and strategic goals that were
contemplated at the time of the acquisitions.
    13




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
    
    the acquisition may not further our business strategy, or we may pay more than it is
worth;
 
    
    we may not realize the anticipated increase in our revenues if we are unable to sell
the acquired companys products to our customer base, or the acquired contract models of
acquired contract models companies;
 
    
    we may have difficulty identifying suitable acquisition opportunities and integrating
acquired companies with our existing operations or their products and services with our
existing products and services;
 
    
    we may have higher than anticipated costs in continuing support and development of
acquired products;
 
    
    we may have multiple and overlapping product lines that are offered, priced and
supported differently, which could cause customer confusion and delays;
 
    
    our due diligence process may fail to identify problems, such as issues with unlicensed
use of intellectual property;
 
    
    we may have legal and tax exposures or lose anticipated tax benefits as a result of
unforeseen difficulties in our legal entity integration activities;
 
    
    we may face contingencies related to intellectual property, financial disclosures and
accounting practices or internal controls;
 
    
    our ongoing business may be disrupted and our managements attention may be diverted by
transition or integration issues; and
 
    
    to the extent that we issue a significant amount of equity securities in connection
with future acquisitions, existing ADS holders and shareholders may be diluted and
earnings per share may decrease.
  Our securities investment advisory business conducted through our newly acquired PRC-incorporated
affiliates operates in a highly regulated industry and compliance failures could adversely affect
our business.
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Our plan to make strategic investments may negatively affect our business due to the poor financial
condition and operating performance of those companies we invest in and other risks.
   Our business could be materially and adversely affected if increased usage strains our server
systems or if we suffer from other system malfunctions.
    15




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If we are not able to respond successfully to technological or industry developments, our business
may be materially and adversely affected.
  We may be subject to, and may expend significant resources in defending against claims based on the
content and services we provide through our website and our research tools.
  We may be subject to intellectual property infringement claims, which may force us to incur
substantial legal expenses and, if determined adversely against us, may materially disrupt our
business.
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Unauthorized use of our intellectual property by third parties, and the expenses incurred in
protecting our intellectual property rights, may materially and adversely affect our business.
  We depend on our key personnel and our business and growth prospects may be severely disrupted if
we lose their services.
   PRCs new labor law restricts our ability to reduce our workforce in the PRC in the event of an
economic downturn and may increase our labor costs.
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Undetected programming errors or defects in our research tools could materially and adversely
affect our business, financial condition and results of operations.
  If tax benefits currently available to us in PRC were no longer available under the new Enterprise
Income Taxes law effective January 1, 2008, our effective income tax rates for our PRC operations
could increase.
   
    
    providing CFO Software tax exemption for 2007 and a reduced tax rate of 7.5% for 2008,
2009 and 2010; and
 
    
    providing CFO Meining and CFO Genius a reduced tax rate of 15% for 2008, 2009 and 2010.
  18




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
    
    providing CFO Success tax exemption for 2008 and 2009 and a preferential EIT rate of
12.5% for 2010, 2011 and 2012; and
 
    
    providing CFO Zhengning tax exemption for 2008 and a preferential EIT rate of 12.5% for
2009, 2010 and 2011.
    Dividends we receive from our operating subsidiaries located in the PRC may be subject to PRC
withholding tax.
   19




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We may be deemed a PRC resident enterprise under the EIT Law and be subject to the PRC taxation on
our worldwide income.
  Dividends payable by us to our foreign investors and gain on the sale of our ADSs or ordinary
shares may become subject to taxes under PRC tax laws.
  We may become a passive foreign investment company, or PFIC, which could result in adverse U.S. tax
consequences to U.S. investors.
   20




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Because there is limited business insurance coverage in China, any business disruption or
litigation we experience might result in our incurring substantial costs and the diversion of
resources.
  Risks relating to our industry
 The Internet infrastructure in China, which is not as well developed as in the United States or
other more developed countries, may limit our growth.
  The limited use of personal computers in China and the relatively high cost of Internet access with
respect to per capita gross domestic product may limit the development of the Internet in China and
impede our growth.
  We depend largely on the infrastructure of the telecommunications operators in China, and any
interruption of their network infrastructure may result in severe disruptions to our business.
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Unexpected network interruptions, security breaches or computer virus attacks could have a material
adverse effect on our business, financial condition and results of operations.
  
    
    any breakdowns or system failures resulting in a sustained shutdown of all or a
material portion of our servers, including failures which may be attributable to sustained
power shutdowns, or efforts to gain unauthorized access to our systems causing loss or
corruption of data or malfunctions of software or hardware; and
 
    
    any disruption or failure in the national backbone network, which would prevent our
users from logging on to our website or accessing our services.
  Concerns about the security and confidentiality of information on the Internet may increase our
costs, reduce the use of our website and impede our growth.
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Risks relating to regulation of our business and to our structure
 We primarily rely on contractual arrangements with Beijing Fuhua Innovation Technology Development
Co., Ltd., or CFO Fuhua, Beijing Glory Technology Co., Ltd., or CFO Glory, Beijing Premium
Technology Co., Ltd., or CFO Premium, CFO Newrand, CFO Huifu, CFO Zhongcheng, Shanghai Shangtong
Co., Ltd., or CFO Shangtong, CFO Chongzhi, Fortune (Beijing) Yingchuang Technology Co., Ltd., or
CFO Yingchuang, Fortune (Beijing) Qicheng Technology Co., Ltd., or CFO Qicheng, Shanghai Decheng
Information & Technology Co., Ltd., or CFO Decheng, CFO Chuangying and Shenzhen Shangtong Software
Co., Ltd., or CFO Shenzhen Shangtong, our PRC-incorporated affiliates, and their shareholders for
our China operations, which may not be as effective in providing operational control as direct
ownership. If the affiliates fail to perform their obligations under these contractual arrangements
or PRC laws impair the enforceability of these contracts, our business, financial condition and
results of operations may be materially and adversely affected.
      23




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If the PRC government finds that the agreements that establish the structure for operating our
internet business do not comply with PRC government restrictions on foreign investment in the
online financial data and information service industry, we could be subject to severe penalties .
  www.jrj.com and www.stockstar.com
   
    
    revoking business and operating licenses of CFO Beijing, CFO Software, CFO Stockstar,
CFO Genius, CFO Jujin, CFO Zhengning, CFO Wisdom, CFO Success, CFO Juda, CFO Zhengtong,
CFO Zhengyong, CFO Fuhua or CFO Meining;
 
    
    discontinuing or restricting our operations or those of CFO Beijing, CFO Software, CFO
Stockstar, CFO Genius, CFO Jujin, CFO Zhengning, CFO Wisdom, CFO Success, CFO Juda, CFO
Zhengtong, CFO Zhengyong, CFO Fuhua or CFO Meining;
  24




---



##### Table of Contents




    
    imposing conditions or requirements with which we, CFO Beijing, CFO Software, CFO
Stockstar, CFO Genius, CFO Jujin, CFO Zhengning, CFO Wisdom, CFO Success, CFO Juda, CFO
Zhengtong, CFO Zhengyong, CFO Fuhua or CFO Meining could not satisfy;
 
    
    requiring us, CFO Beijing, CFO Software, CFO Stockstar, CFO Genius, CFO Jujin, CFO
Zhengning, CFO Wisdom, CFO Success, CFO Juda, CFO Zhengtong, CFO Zhengyong, CFO Fuhua or
CFO Meining to restructure the relevant ownership structure or operations;
 
    
    restricting or prohibiting our use of the proceeds of our initial public offering in
2004 to finance our business and operations in China; or
 
    
    taking other regulatory or enforcement actions, including levying fines that could be
harmful to our business.
  Contractual arrangements that we have entered into with our PRC-incorporated affiliates may be
subject to scrutiny by the PRC tax authorities and a finding that we or our PRC-incorporated
affiliates owe additional taxes could substantially reduce our consolidated net income.
  We rely principally on dividends and other distributions on equity paid by our wholly owned
operating subsidiaries to fund any cash and financing requirements we may have.
   25




---



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The PRC government may prevent us from distributing, and we may be subject to liability for,
content that it believes is inappropriate.
      26




---



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Risks relating to doing business in the Peoples Republic of China
  The PRCs economic, political and social conditions, as well as government policies, could affect
the financial markets in China and our business.
   The PRC legal system embodies uncertainties which could limit the legal protections available to
you and us.
   27




---



##### Table of Contents



Restrictions on currency exchange may limit our ability to utilize our revenues effectively.
  Fluctuations in exchange rates could result in foreign currency exchange losses.
     28




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Risks relating to our shares and ADSs
 Stock prices of Internet-related companies, particularly companies with business operations
primarily in China, have fluctuated widely in recent years, and the trading prices of our ADSs are
likely to be volatile, which could result in substantial losses to investors.
    If we grant employee share options and other share-based compensation in the future, our net income
could be materially and adversely affected.
    29




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The sale or availability for sale of substantial amounts of our ADSs could adversely affect their
market price.
   A significant percentage of our outstanding ordinary shares are held by a small number of our
shareholders, and these shareholders may have significantly greater influence on us and our
corporate actions by nature of the size of their shareholdings relative to our public shareholders.
  Provisions in our charter documents and Hong Kong law, and change in control agreements we have
entered into with each of our chief executive officer and chief financial officer, may discourage
our acquisition by a third party, which could limit your opportunity to sell your shares at a
premium.
  
    
    Our articles of association provide for a staggered board, which means that our
directors, excluding our chief executive officer, are divided into two classes, with half
of our board,
excluding our chief executive officer, standing for election every two years. Our chief
executive officer will at all times serve as a director, and will not retire as a director,
so long as he remains our chief executive officer. This means that, with our staggered
board, at least two annual shareholders meetings, instead of one, are generally required
in order to effect a change in a majority of our directors. Our staggered board can
discourage proxy contests for the election of our directors and purchases of substantial
blocks of our shares by making it more difficult for a potential acquirer to take control
of our board in a relatively short period of time.
  30




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
    
    Hong Kong law permits shareholders of a company to remove directors by a shareholders
resolution. Our articles of association require any shareholder who wishes to remove a
director in this way to give us at least 120 days notice of the resolution, making it
more difficult and time consuming for a potential acquirer who has accumulated a
substantial voting position to obtain control of our board by removing opposing directors.
 
    
    Our articles of association provide that our board can have no less than five and no
more than nine directors. Our board currently has five directors. Any increase in the
maximum number of directors on our board beyond nine directors can only be accomplished by
amending our articles of association, which under Hong Kong law requires a shareholders
supermajority vote of 75% and at least 21 days notice. These restrictions can make it
more difficult for a potential acquirer who has accumulated a majority of our shares to
take control of us by promptly increasing the size of our board and appointing new
directors that are its nominees.
 
    
    Hong Kong does not have merger laws that permit Hong Kong companies to merge in the
same way as U.S. companies could in the United States. However, the Hong Kong Companies
Ordinance has provisions that facilitate arrangements for the reconstruction and
amalgamation of companies. The arrangement must be approved by a majority in number of
each class of shareholders and creditors with whom the arrangement is to be made,
representing three-fourths in value of each such class of shareholders or creditors that
are present and voting either in person or by proxy at meetings convened by the High Court
of Hong Kong. The arrangements must be sanctioned by the High Court of Hong Kong after
shareholders or creditors approve it at the court-convened meeting.
 
    
    Our shareholders have authorized our board of directors, without any further action by
shareholders, to issue additional shares. Under Hong Kong law, the authority granted by
our shareholders will remain valid until the conclusion of our next annual general
meeting, or the time when our next annual general meeting is required to be held. For as
long as this approval remains effective, or is renewed, our board of directors will have
the power to issue additional ordinary shares (including ordinary shares represented by
ADSs) and preference shares without any further action by shareholders.
 We are a Hong Kong company and because the legal and procedural protections afforded minority
shareholders under Hong Kong law differ from those under U.S. law, you may have difficulty
protecting your interests as our shareholder relative to shareholders of corporations organized in
the U.S.
  
    
    to recognize or enforce against us judgments of courts of the United States based on
the civil liability provisions of U.S. securities laws; or
 
    
    to allow original actions brought in Hong Kong, based on the civil liability provisions
of U.S. securities laws that are penal in nature.
  31




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The voting rights of holders of ADSs must be exercised in accordance with the terms of the deposit
agreement, the American depositary receipts, and the procedures established by the depositary. The
process of voting through the depositary may involve delays that limit the time available to you to
consider proposed shareholders actions and also may restrict your ability to subsequently revise
your voting instructions.
    32




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You may not receive distributions on our ordinary shares or any value for them if such distribution
is illegal or if any required government approval cannot be obtained in order to make such
distribution available to you.
  You may be subject to limitations on transfer of your ADSs.
   33




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Your right as a holder of ADSs to participate in any future rights offerings may be limited, which
may cause dilution to your holdings.
   
 ITEM 4. INFORMATION ON THE COMPANY
 A. History and development of the company.
 www.jrj.com.cn, www.jrj.com,
     34




---



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www.stockstar.com
     35




---



##### Table of Contents



www.jrj.com JRJ.com
 Alibaba.com
  36




---



##### Table of Contents



B. Business overview.
 http://www.jrj.com http://www.stockstar.com
   37




---



##### Table of Contents



Comprehensiveness.
  Integration.
  Interaction.
  Timeliness.
   38




---



##### Table of Contents



Unbiasedness.
  User-friendliness.
    Our websites
 www.jrj.com www.stockstar.com
 
    
    to attract visitors and market our subscription based service offerings. The pool of
registered users that are attracted by the two finance portals for information and free
services forms a natural target for our subscription services and brokerage services;
 
    
    to store content and serve as an integral part of our information platform;
 
    
    to serve as download platforms for our service offerings; and
 
    
    to display online advertisements.
  39




---



##### Table of Contents



Our subscription services
  Our features
   
    
    financial analysis tools that permit users to calculate and analyze quantitatively
financial data;
 
    
    current and historical financial data and information for Chinas and Hong Kongs
listed company stocks, bonds, mutual funds and stock index futures;
 
    
    categorized news and research reports; and
 
    
    online forums and bulletin boards.
  40




---



##### Table of Contents



www.jrj.com www.stockstar.com
 Financial analysis tools.
  
    
    Securities market data analysis tools. Our Securities Market Data service packages are
developed on the basis of Level II quotes licensed from the Shanghai and Shenzhen Stock
Exchanges. In June 2006, we entered into an agreement with SSE Infonet Ltd. Co, which is
associated with the Shanghai Stock Exchange. Under the definitive agreement, we are
certified by Shanghai Stock Exchange to develop service packages based on Level II quotes,
and upgrade the features and functions of our current products. The definitive agreement
was contemplated to continue through July 31, 2009 and was renewed in 2009 for an
additional three years ending on July 31, 2012.In April 2010, we were certified by Shenzhen Securities Information Co., Ltd. to develop
service packages based on Level II quotes, and upgrade the features and functions of our
current products. The definitive agreement is contemplated to continue through March 31,
2011.Level II quotes give investors unique insight into a stocks price movement, which, we
believe, is of great value to Chinese investors. In addition, Level II quotes provide
faster and more comprehensive trading data and statistical information on market
transactions.
 
    
    Technical Analysis.Technical Analysis involves researching historical price and
volume data, patterns and trends to predict the performance of a given stock. This type of
analysis focuses on chart formations and formulas in identifying major and minor trends to
recognize buying opportunities and exit points.
 
    
    Fundamental Analysis.Fundamental Analysis involves examining the companys financials
and operations, especially sales, earnings, growth potential, assets, debt, management,
products, and competition. Fundamental Analysis takes into consideration only those
variables that are directly related to the company itself, rather than the overall state
of the market or technical analysis data.
   41




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Real-time and historical data.
   News.
  Research reports.
  Online forums.
   42




---



##### Table of Contents



Our research tools
   
    
    Categorized macro information. This feature allows subscribers to search and sort
up-to-date and comprehensive news and information relating to the broader financial
markets or a specific financial topic or industry sector. We have a dedicated team of
professional editors who collect, organize, categorize and index macro-economic and
financial market information on a daily basis, according to user feedback and
classification methods that we believe are accepted practice in securities markets in
China.
 
    
    Industry sector analysis. Many investors in China seek to distinguish between listed
companies with investment potential and those prone to financial trouble by analyzing
listed companies financial data published in their financial statements and comparing
such data among companies within the same industry sector. We collect and process listed
company financial data and information according to classification methods set by relevant
PRC regulatory authorities, and allow subscribers to view the relative standings of listed
companies in the same industry sector or geographical locations based on market accepted
performance parameters, including price-to-earnings ratios and profit margins etc.
 
    
    Fundamental analysis. Historical and real-time financial information are important to
investors because they provide insight into company fundamentals. This research tool
integrates the historical and real-time trading information we maintain in our database,
as well as fundamental financial information such as earnings-per-share, shareholding
structure, business description and competition and other related data and information.
Our subscribers can receive fundamental financial and trading information organized by
their specifications and display these results on a graphical interface that we designed
to be easy to visualize and navigate.
 
    
    Mutual fund analysis. Our mutual fund research tool focuses on categorizing information
relating to the portfolio holdings of mutual funds. This feature allows subscribers to
study the collective effect of large market players on individual stocks. This feature
also offers information relating to the performance of individual mutual funds, allowing
subscribers to assess the risks and rewards of investing in mutual funds.
 
    
    Technical analysis. This feature allows investors interested in trends formulated by
historical trading data to perform technical analysis on listed companies. With over 60
markets accepted technical indicators and a complete database of historical data and
information on all of Chinas and Hong Kongs listed company stocks, our subscribers can
perform extensive chart analysis and pattern recognition on any stock listed on Chinas
stock exchanges.
 
    
    Securities market data analysis. This feature provides faster and more comprehensive
trading data and statistical information on market transactions. With our Securities
Market Data service packages developed on the basis of Level II quotes licensed from the
Shanghai and Shenzhen Stock Exchanges, our subscribers are provided with trading
transparency and unique insight into a stock prices movements, and can make more informed
investment decisions.
  43




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Pricing policy
   Our brokerage services
  Our online advertisement services
 www.jrj.com www.stockstar.com
 Customer support
   44




---



##### Table of Contents



Our content providers
  Shanghai, Shenzhen and Hong Kong Stock Exchanges
    JRJ.com
 China Financial Futures Exchange
  Data providers
   45




---



##### Table of Contents



Financial Institutions, securities advisors and stock brokerages
  News and media conglomerates
  Chinese news publishers and media companies
  Sales and marketing
    46




---



##### Table of Contents



Product development
    
    
    to increase the breadth of our service offerings through the addition of new features
and functions to our service packages;
 
    
    to enhance our subscribers experience by improving the quality of our research tools
and website;
 
    
    to develop additional research tools, features and content specifically targeting the
high-end subscribers; and
 
    
    to design and build new financial instrument service products that fit our strategies.
 Technology and infrastructure
  Web server technology.
   47




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##### Table of Contents



Database technology.
  Remote data aggregation engine.
  Growth Strategy
   
    
    leveraging our own website platform and other online and mobile platform to increase
registered user base;
 
    
    increasing our subscriber base by expanding distribution channels such as other
websites, banks, mutual funds and brokerage firms;
 
    
    building our customer database by better understanding and in depth user data mining on
our registered users;
 
    
    upgrading our existing service offerings and expanding our present service;
 
    
    improving efficiency by providing telemarketing sales personnel with better training to
improve sales skills; and
 
    
    encouraging our subscribers to migrate to newer and more comprehensive service
offerings.
  
    
    acquiring strategic resources and capabilities in order to strength entry barriers,
broaden product offering, expand business scale, diverse revenue resources and monetize
registered user base; and
 
    
    obtaining access to complementary resources and capabilities through strategic
partnerships that enable us to penetrate into a bigger market to solidify our leading
position and enhance our brand awareness.
  48




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##### Table of Contents



Competition
  
    
    publishers and distributors of traditional media, including print, radio and television
as well as radio and television programs and news focused on financial news and
information;
 
    
    internet portals providing information on business, finance and investing;
 
    
    financial information web pages offered by websites;
 
    
    personal stock research software vendors, especially those that develop and market
stock research software through stock brokerage companies; and
 
    
    stock brokerage companies, especially stock brokerage companies with online trading
capabilities.
   Intellectual property
    49




---



##### Table of Contents



www.jrj.com www.stockstar.com www.jrj.com.cn
 Regulation
  
    
    MIIT;
 
    
    CSRC;
 
    
    Ministry of Culture;
 
    
    General Administration of Press and Publication (National Copyright Administration);
 
    
    State Administration of Industry and Commerce;
 
    
    Ministry of Public Security;
 
    
    Ministry of Commerce; and
 
    
    State Administration of Radio, Film and Television
  Foreign ownership restriction on Internet content provision businesses
    50




---



##### Table of Contents



Licenses and permits
        Regulation of Internet content
   51




---



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Regulation of information security
   Intellectual property rights
   www.jrj.com www.stockstar.com
  52




---



##### Table of Contents



Website name
  Privacy protection
  Advertising regulation
  C. Organizational structure.
    53




---



##### Table of Contents



LegalJurisdiction
    
    Ownershipof
    
    InterestName
    
    Incorporation
    
    InterestFortune Software (Beijing) Co., Ltd.
    
    PRC
    
    
    100
    %China Finance Online (Beijing) Co., Ltd.
    
    PRC
    
    
    100
    %Beijing Fuhua Innovation Technology Development
Co., Ltd. *
    
    PRC
    
    NilFortune (Beijing) Wisdom Technology Co., Ltd.
    
    PRC
    
    
    100
    %Fortune (Beijing) Success Technology Co., Ltd.
    
    PRC
    
    
    100
    %Fortune (Beijing) Yingchuang Technology Co., Ltd. *
    
    PRC
    
    NilFortune (Beijing) Qicheng Technology Co., Ltd. *
    
    PRC
    
    NilBeijing CFO Glory Technology Co., Ltd.*
    
    PRC
    
    NilBeijing CFO Premium Technology Co., Ltd*
    
    PRC
    
    NilBeijing Chuangying Advisory and Investment Co.,
Ltd.*
    
    PRC
    
    NilHuifu Jinyuan Co., Ltd.*
    
    PRC
    
    NilZhongcheng Futong Co., Ltd.*
    
    PRC
    
    NilShanghai Meining Computer Software Co., Ltd.*
    
    PRC
    
    NilShanghai Shangtong Co., Limited. *
    
    PRC
    
    NilZhengning Information & Technology (Shanghai) Co.,
Ltd.
    
    PRC
    
    
    100
    %Zhengtong Information Technology (Shanghai) Co.,
Ltd.
    
    PRC
    
    
    100
    %Zhengyong Information Technology (Shanghai) Co.,
Ltd.
    
    PRC
    
    
    100
    %Shanghai Chongzhi Co., Ltd.*
    
    PRC
    
    NilShanghai Decheng Information & Technology Co.,
Ltd. *
    
    PRC
    
    NilShanghai Securities Consulting Co., Ltd. *
    
    PRC
    
    NilJujin Software (Shenzhen) Co., Ltd.
    
    PRC
    
    
    100
    %Juda Software (Shenzhen) Co., Ltd.
    
    PRC
    
    
    100
    %Shenzhen Genius Information Technology Co., Ltd.
    
    PRC
    
    
    100
    %Shenzhen Shangtong Software Co., Ltd. *
    
    PRC
    
    NilShenzhen Newrand Securities Advisory and
Investment Co., Ltd.*
    
    PRC
    
    NilShenzhen Newrand Securities Training Center*
    
    PRC
    
    NilStockstar Information Technology (Shanghai) Co.,
Ltd.
    
    PRC
    
    
    100
    %Giant Bright International Holdings Limited
    
    BVI
    
    
    100
    %Daily Growth Financial Holdings Limited
    
    BVI
    
    
    100
    %Daily Growth Futures Limited
    
    Hong Kong
    
    
    100
    %Daily Growth Securities Limited
    
    Hong Kong
    
    
    100
    %Daily Growth Wealth Management Limited
    
    Hong Kong
    
    
    100
    %Daily Growth Investment Services Limited
    
    Hong Kong
    
    
    100
    %Danford (H.K.) Limited
    
    Hong Kong
    
    
    100
    %
 
 *
    
    Denotes variable interest entity or subsidiaries of variable interest entities  54




---



##### Table of Contents



Loan Agreement.
  Purchase Option Agreement .
  55




---



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Voting arrangement.
 Share Pledge Agreement .
   56




---



##### Table of Contents



D. Property and equipment.
  
 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
 http://www.jrj.com http://www.stockstar.com
   57




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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;
 
    
    termination of our TopView series of market data analysis products. On December 31,
2008, SSE Infonet Ltd. Co terminated the provision of TopView data to third-party software
vendors, including us. We subsequently terminated the offering of TopView products to our
customers. Our 2009 operating results were impacted from the TopView termination;
 
    
    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
Success, CFO Zhengning and CFO Jujin being the New Software Manufacture Enterprises and
CFO Software, CFO Meining and CFO Genius being the High and New Technology companies;
 
    
    our cost structure, including, in particular, our cost for raw data, bandwidth costs
and personnel-related expenses;
 
    
    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, Daily Growth
Securities and the contractual arrangements with CFO Newrand, CFO Huifu and CFO
Zhongcheng, CFO Qicheng, CFO Yingchuang, CFO Fuhua, CFO Decheng, CFO Shenzhen Shangtong,
CFO Shangtong, CFO Chongzhi, CFO Chuangying and CFO Securities Consulting; and
 
    
    PRC telecommunication and regulatory policies.
  58




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##### Table of Contents



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.
 www.jrj.com www.stockstar.com www.jrj.com www.stockstar.com
  Net revenues
   59




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##### Table of Contents



Years ended December 31,2007
    
    
    2008
    
    
    2009Subscription fees
    
    $
    22,712,043
    
    
    $
    49,551,711
    
    
    $
    46,175,235Advertising revenue
    
    
    1,560,194
    
    
    
    2,946,389
    
    
    
    3,985,699SMS revenue
    
    
    1,339,321
    
    
    
    1,047,218
    
    
    
    1,025,927Brokerage service revenue
    
    
    80,896
    
    
    
    956,549
    
    
    
    2,228,630Others
    
    
    210,620
    
    
    
    1,740,901
    
    
    
    190,386Total revenue from external customers
    
    $
    25,903,074
    
    
    $
    56,242,768
    
    
    $
    53,605,877
 Revenue recognition
    Cost of revenues
  Rent.
 Bandwidth Costs.
  60




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##### Table of Contents



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
  General and administrative expenses.
 Product development expenses.
 Sales and marketing expenses.
 Stock option plan and option agreements
   61




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62




---



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Critical accounting policies
  Income taxes.
  Stock-based compensation
  63




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##### Table of Contents



Cost method investment.
 Goodwill.
    64




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##### Table of Contents




    
    The revenue growth is projected at a compound annual growth rate, or CAGR. For the
year 2010-2014, the CAGR of the four reporting units are approximately 20%, 12%, 10%, 8%,
3% for Southern China, 36.2%, 19%, 12%, 10%, 5% for Eastern China, 20%, 12%, 10%, 8%, 3%
for Northern China and 39.8%, 24.3%, 19.9%, 9.8%, 8.6% for Hong Kong, which is within the
range of comparable companies at the time of valuation.
 
    
    In the projection period, the cost of revenues as a percentage of revenues is
expected to remain stable.
 
    
    Operating expenses, including selling expenses, R&D expenses and general and
administrative expenses, as a percentage of sales is expected to remain stable.
 
    
    To maintain normal operations, capital expenditures are estimated to be around 6%,
8%, 6%, and 6.34% of revenue for the four reporting units, respectively.
 
    
    The working capital requirement is estimated based on main accounts turnover days.
 
    
    A perpetual growth rate after 2014 is assumed to be at 3% per year for the four
reporting units.
 
    
    The weighted average cost of capital, or WACC, used in the calculation is 21%, 21%,
21% and 19% for the four reporting units, respectively.
  Impairment of long-lived assets.
  65




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Results of operations
  (in thousands of U.S. dollars, except as %
    
    For the year ended December 31,of net revenues)(1)
    
    2007 (2)(3)
    
    
    2008 (3)
    
    
    2009(As adjusted)
    
    
    (As adjusted)Consolidated statement of operations and comprehensive income (loss) data:Gross revenues
    
    $
    26,570
    
    
    
    102.6
    %
    
    $
    57,146
    
    
    
    101.6
    %
    
    $
    55,108
    
    
    
    102.8
    %Business tax
    
    
    (667
    )
    
    
    (2.6
    )
    
    
    (903
    )
    
    
    (1.6
    )
    
    
    (1,502
    )
    
    
    (2.8
    )Net revenues
    
    
    25,903
    
    
    
    100
    %
    
    
    56,243
    
    
    
    100
    %
    
    
    53,606
    
    
    
    100
    %Cost of revenues
    
    
    (4,427
    )
    
    
    (17.1
    )
    
    
    (9,367
    )
    
    
    (16.7
    )
    
    
    (8,147
    )
    
    
    (15.2
    )Gross profit
    
    
    21,476
    
    
    
    82.9
    
    
    
    46,876
    
    
    
    83.3
    
    
    
    45,459
    
    
    
    84.8Operating expenses:General and administrative
    
    
    (7,784
    )
    
    
    (30.1
    )
    
    
    (15,371
    )
    
    
    (27.3
    )
    
    
    (16,982
    )
    
    
    (31.7
    )Product development
    
    
    (2,269
    )
    
    
    (8.8
    )
    
    
    (5,635
    )
    
    
    (10.0
    )
    
    
    (10,754
    )
    
    
    (20.1
    )Sales and marketing
    
    
    (6,924
    )
    
    
    (26.7
    )
    
    
    (13,521
    )
    
    
    (24.0
    )
    
    
    (26,095
    )
    
    
    (48.7
    )Total operating expenses
    
    
    (16,977
    )
    
    
    (65.5
    )
    
    
    (34,527
    )
    
    
    (61.4
    )
    
    
    (53,831
    )
    
    
    (100.4
    )Subsidy income
    
    
    136
    
    
    
    0.5
    
    
    
    437
    
    
    
    0.8
    
    
    
    567
    
    
    
    1.1Income (loss) from operations
    
    
    4,635
    
    
    
    17.9
    
    
    
    12,786
    
    
    
    22.7
    
    
    
    (7,805
    )
    
    
    (14.6
    )Interest income
    
    
    1,105
    
    
    
    4.3
    
    
    
    1,608
    
    
    
    2.9
    
    
    
    1,352
    
    
    
    2.5Exchange gain (net)
    
    
    424
    
    
    
    1.6
    
    
    
    1,490
    
    
    
    2.6
    
    
    
    2
    
    
    
    Other expense (income), net
    
    
    9
    
    
    
    0.03
    
    
    
    (169
    )
    
    
    (0.3
    )
    
    
    (217
    )
    
    
    (0.4
    )Loss from impairment of cost method investment
    
    
    (11,127
    )
    
    
    (43.0
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Loss) income before income taxes benefit (provision)
    
    
    (4,954
    )
    
    
    (19.1
    )
    
    
    15,715
    
    
    
    27.9
    
    
    
    (6,668
    )
    
    
    (12.4
    )Purchased pre-acquisition earning
    
    
    
    
    
    
    
    
    
    
    227
    
    
    
    0.4
    
    
    
    
    
    
    
    Income tax benefit
    
    
    809
    
    
    
    3.1
    
    
    
    3,047
    
    
    
    5.4
    
    
    
    446
    
    
    
    0.8Net income (loss)
    
    
    (4,145
    )
    
    
    (16.0
    )
    
    
    18,989
    
    
    
    33.8
    
    
    
    (6,222
    )
    
    
    (11.6
    )Less: net loss attributable to noncontrolling interests
    
    
    15
    
    
    
    0.06
    
    
    
    31
    
    
    
    0.1
    
    
    
    2
    
    
    
    Net income (loss) attributable to China Finance Online Co., Ltd.
    
    $
    (4,130
    )
    
    
    (15.9
    %)
    
    $
    19,020
    
    
    
    33.8
    %
    
    $
    (6,220
    )
    
    
    (11.6
    %)
 (1)
    
    For the results of operations for a specified period, all translations from Renminbi to U.S.
dollars were calculated by using the average of the exchange rates on each day during the
period. All translations from Renminbi to U.S. dollars were calculated for the periods listed
below at the corresponding rates For the years ended December 31,
    
    RMB per US$1.002004
    
    
    8.27802005
    
    
    8.14722006
    
    
    7.96932007
    
    
    7.60722008
    
    
    6.94772009
    
    
    6.8310
  As at December 31,
    
    RMB per US$1.002004
    
    
    8.27652005
    
    
    8.07022006
    
    
    7.80872007
    
    
    7.29462008
    
    
    6.82252009
    
    
    6.8282
 (2)
    
    In 2007, the Company adopted the authoritative pronouncement Accounting for Uncertainty in
Income Taxes.(3)
    
    In 2009, the Company adopted the authoritative pronouncement on noncontrolling interests in
consolidated financial statements on January 1, 2009, which was applied retrospectively.
The following adjustments have been made: a)
    
    the noncontrolling interests (previously described as minority interest) has now
been included as a component of total equity whereas previously it was shown outside
of equity,b)
    
    the net income or loss attributable to the noncontrolling interests is now shown
as an allocation of net income for the year rather than being deducted in arriving at
net income.  66




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Year ended December 31, 2009 compared to year ended December 31, 2008
 Revenues
     Cost of revenues
  Gross profit
  Operating expenses
  General and administrative.
 Product development.
 Sales and marketing.
 Income (loss) from operations
  Interest income
   67




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Loss from impairment of cost method investment
     Income tax benefit
  Net income / (loss)attributable to the Company
   68




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Year ended December 31, 2008 compared to year ended December 31, 2007
 Revenues
     Cost of revenues
 jrj.com stockstar.com
 Gross profit
  Operating expenses
  General and administrative.
  69




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Product development.
 Sales and marketing.
 Income from operations
  Interest income
  Loss from impairment of cost method investment
   
   70




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Income tax benefit
  Net income loss attributable to the Company
  B. Liquidity and capital resources.
 Cash flows and working capital
   For the year ended December 31,(in thousands of U.S. dollars)
    
    2007
    
    
    2008
    
    
    2009Net cash provided by operating activities
    
    $
    28,426
    
    
    $
    27,849
    
    
    $
    16,231Net cash used in investing activities
    
    
    (4,830
    )
    
    
    (7,410
    )
    
    
    (6,472
    )Net cash provided by financing activities
    
    
    3,226
    
    
    
    573
    
    
    
    189Net increase in cash and cash equivalents
    
    
    29,773
    
    
    
    22,815
    
    
    
    9,847Cash and cash equivalents at beginning of year
    
    
    44,956
    
    
    
    74,729
    
    
    
    97,544Cash and cash equivalents at end of year
    
    $
    74,729
    
    
    $
    97,544
    
    
    $
    107,391
    Capital resources
   71




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##### Table of Contents



Restricted net assets
   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.
   72




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E. Off-balance sheet arrangements.
  F. Tabular disclosure of contractual obligations.
  Office Premises
    
    
    Data Purchase
    
    
    Total(in U.S. dollars)Less than 1 year
    
    
    2,535,100
    
    
    
    916,912
    
    
    
    3,452,0121  3 years
    
    
    1,907,031
    
    
    
    130,278
    
    
    
    2,037,3093  5 years
    
    
    
    
    
    
    
    
    
    
    
  G. Quantitative and qualitative disclosures about market risk.
 Interest rate risk
  Foreign currency risk
   73




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H. Recently issued accounting pronouncements not yet adopted.
     74




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75




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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 A. Directors and senior management.
  Name
    
    Age
    
    PositionZhiwei Zhao
    
    
    46
    
    
    Chief Executive Officer and a member of the Board of DirectorsHugo Shong
    
    
    53
    
    
    Chairman of the Board of DirectorsKheng Nam Lee(1)
    
    
    62
    
    
    DirectorLing Wang(1)(2)(3)
    
    
    47
    
    
    DirectorFansheng Guo(1)(2)(3)
    
    
    54
    
    
    DirectorJun (Jeff) Wang +
    
    
    39
    
    
    Chief Financial OfficerCaogang Li
    
    
    44
    
    
    Chief Operating Officer
 
 (1)
    
    Member, audit committee(2)
    
    Member, compensation committee(3)
    
    Member, nominations committee  Biographical Information
 Hugo Shong
 Zhiwei Zhao
 Kheng Nam Lee
  76




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Ling Wang
 Fansheng Guo
 Jun (Jeff) Wang
 Dr. Caogang Li
 B. Compensation of directors and executive officers.
    77




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Directors and officers liability insurance
  Employees stock option plan
 
   78




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Number ofordinary Shares tobe issued upon
    
    
    Exercise price perexercise of options
    
    
    ordinary share
    
    
    Date of grant
    
    Date of expirationZhiwei Zhao
    
    
    400,000
    
    
    $
    1.120
    
    
    November 15, 2005
    
    November 15, 2015400,000
    
    
    $
    1.070
    
    
    July 5, 2006
    
    July 5, 2016800,000
    
    
    $
    0.960
    
    
    January 18, 2007
    
    January 17, 2017Hugo Shong
    
    
    *
    
    
    $
    0.160
    
    
    January 5, 2004
    
    March 5, 2009*
    
    
    $
    1.040
    
    
    June 15, 2004
    
    March 5, 2009*
    
    
    $
    1.314
    
    
    February 18, 2005
    
    February 18, 2015*
    
    
    $
    0.960
    
    
    January 18, 2007
    
    January 17, 2017Kheng Nam Lee
    
    
    *
    
    
    $
    0.160
    
    
    February 18, 2004
    
    March 5, 2009*
    
    
    $
    1.040
    
    
    June 15, 2004
    
    March 5, 2009*
    
    
    $
    1.314
    
    
    February 18, 2005
    
    February 18, 2015*
    
    
    $
    0.960
    
    
    January 18, 2007
    
    January 17, 2017Fansheng Guo
    
    
    *
    
    
    $
    0.160
    
    
    January 5, 2004
    
    March 5, 2009*
    
    
    $
    1.040
    
    
    June 15, 2004
    
    March 5, 2009*
    
    
    $
    1.314
    
    
    February 18, 2005
    
    February 18, 2015*
    
    
    $
    0.960
    
    
    January 18, 2007
    
    January 17, 2017Ling Wang
    
    
    *
    
    
    $
    0.160
    
    
    January 5, 2004
    
    March 5, 2009*
    
    
    $
    1.040
    
    
    June 15, 2004
    
    March 5, 2009*
    
    
    $
    1.314
    
    
    February 18, 2005
    
    February 18, 2015*
    
    
    $
    0.960
    
    
    January 18, 2007
    
    January 17, 2017Jun (Jeff) Wang
    
    
    *
    
    
    $
    1.070
    
    
    July 5, 2006
    
    July 5, 2016*
    
    
    $
    0.960
    
    
    January 18, 2007
    
    January 17, 2017Caogang Li
    
    
    *
    
    
    $
    1.158
    
    
    November 30, 2005
    
    November 30, 2015*
    
    
    $
    0.96
    
    
    January 18, 2007
    
    January 17, 2017Zuoli (Alex) Xu
    
    
    *
    
    
    $
    1.26
    
    
    December 1, 2008
    
    November 30, 2018
 *
    
    Upon exercise of all options granted, would beneficially own less than
1% of our outstanding ordinary shares.  79




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Equity Incentive Plan
   Name
    
    Number
    
    
    PercentSelected EmployeesZhiwei Zhao
    
    
    8,958,493
    
    
    
    8.16
    %Jun (Jeff) Wang
    
    
    *
    
    
    
    *Caogang Li
    
    
    *
    
    
    
    *All executive officers as a group (3 persons)
    
    
    10,558,493
    
    
    
    9.62
    %
   C. Board practices .
  Board committees
   80




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##### Table of Contents



Audit committee.
 
    
    recommending to our shareholders, if appropriate, the annual re-appointment of our
independent registered public accounting firm and pre-approving all auditing and
non-auditing service fees permitted to be performed by the independent registered public
accounting firm;
 
    
    annually reviewing an independent registered public accounting firms report describing
the independent registered public accounting firms internal quality-control procedures,
any material issues raised by the most recent internal quality control review, or peer
review, of the independent registered public accounting firm and all relationships between
the independent registered public accounting firm and our company;
 
    
    setting clear hiring policies for employees or former employees of the independent
registered public accounting firm;
 
    
    reviewing with the independent registered public accounting firm any audit problems or
difficulties and managements response;
 
    
    reviewing and approving all proposed related-party transactions, as defined in Item 404
of Regulation S-K under the U.S. securities laws;
 
    
    discussing the annual audited financial statements with management and the independent
registered public accounting firm;
 
    
    discussing with management and the independent registered public accounting firm major
issues regarding accounting principles and financial statement presentations; reviewing
reports prepared by management or the independent auditors relating to significant
financial reporting issues and judgments;
 
    
    reviewing reports prepared by management or the independent registered public
accounting firm relating to significant financial reporting issues and judgments;
 
    
    discussing earnings press releases, as well as financial information and earnings
guidance provided to analysts and rating agencies;
 
    
    reviewing with management and the independent registered public accounting firm the
effect of regulatory and accounting initiatives, as well as off-balance sheet structures
on our financial statements;
 
    
    discussing policies with respect to risk assessment and risk management;
 
    
    reviewing major issues as to the adequacy of our internal controls and any special
audit steps adopted in light of material control deficiencies;
 
    
    timely reviewing annual reports from the independent registered public accounting firm
regarding all critical accounting policies and practices to be adopted by our company, all
alternative treatments of financial information within U.S. GAAP that have been discussed
with management and all other material written communications between the independent
registered public accounting firm and management;
  81




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
    
    establishing procedures for the receipt, retention and treatment of complaints received
from our employees regarding accounting, internal accounting controls or auditing matters
and the confidential, anonymous submission by our employees of concerns regarding
questionable accounting or auditing matters;
 
    
    annually reviewing and reassessing the adequacy of our audit committee charter;
 
    
    such other matters that are specifically delegated to our audit committee by our board
of directors from time to time;
 
    
    meeting separately, periodically, with management and the independent registered public
accounting firm; and
 
    
    reporting regularly to the full board of directors.
 Compensation committee.
 
    
    determining and recommending the compensation of our senior management;
 
    
    reviewing and making recommendations to our board of directors regarding our
compensation policies and forms of compensation provided to our directors and officers;
 
    
    reviewing and determining bonuses for our officers and other employees;
 
    
    reviewing and determining stock-based compensation for our directors, officers,
employees and consultants;
 
    
    administering our equity incentive plans in accordance with the terms thereof; and
 
    
    such other matters that are specifically delegated to the compensation committee by our
board of directors from time to time.
 Nominations committee.
 Corporate governance
    82




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Duties of directors
   
    
    convening shareholders meetings and reporting its work to shareholders at such
meetings;
 
    
    implementing shareholders resolutions;
 
    
    determining our business plans and investment proposals;
 
    
    formulating our profit distribution plans and loss recovery plans;
 
    
    determining our debt and finance policies and recommending proposals for the increase
or decrease in our share capital and the issuance of debentures;
 
    
    formulating our major acquisition and disposition plans, and plans for consolidation,
division or dissolution;
 
    
    proposing amendments to our articles of association; and
 
    
    exercising any other powers conferred at shareholders meetings or under our memorandum
and articles of association.
 Terms of directors and executive officers
  D. Employees .
    83




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##### Table of Contents



E. Share ownership.
   
    
    each person known to us to own beneficially more than 5% of our ordinary shares; and
 
    
    each of our directors and executive officers who beneficially own any of our ordinary
 shares.
  *
    
    Unless otherwise noted, the address of each shareholder is China Finance Online (Beijing) Co.,
Ltd., 9th Floor of Tower C, Corporate Square, No.35 Financial Street, Xicheng District, Beijing,
China 100033. Number of Shares Beneficially OwnedName
    
    Number
    
    
    Percent5% ShareholderIDG Technology Venture Investment, Inc.(1)
    
    
    16,248,507
    
    
    
    14.74
    %IDG Technology Venture Investments, LP (2)
    
    
    6,723,115
    
    
    
    6.10
    %Vertex Technology Fund (III) Ltd. (3)
    
    
    7,595,569
    
    
    
    6.89
    %Jianping Lu (4)
    
    
    7,156,121
    
    
    
    6.49
    %Ling Zhang (5)
    
    
    8,746,370
    
    
    
    7.93
    %C&F International Holdings Limited (6)
    
    
    10,558,493
    
    
    
    9.58
    %FMR LLC (7)
    
    
    10,993,840
    
    
    
    9.97
    %Directors and executive officersHugo Shong
    
    
    *
    
    
    
    *Kheng Nam Lee
    
    
    *
    
    
    
    *Ling Wang
    
    
    *
    
    
    
    *Fansheng Guo
    
    
    *
    
    
    
    *Zhiwei Zhao
    
    
    8,946,036
    
    
    
    8.11
    %Jun (Jeff) Wang
    
    
    *
    
    
    
    *Caogang Li
    
    
    *
    
    
    
    *Zuoli (Alex) Xu
    
    
    *
    
    
    
    *All current directors and executive officers as
a group (8 persons)
    
    
    12,699,248
    
    
    
    11.52
    %
 
 *
    
    Upon exercise of all options currently exercisable
or vesting within 60 days of the date of this
annual report, would beneficially own less than 1%
of our ordinary shares.(1)
    
    Includes16,248,507 ordinary shares held by IDG
Technology Venture Investment, Inc. IDG Technology
Venture Investment, Inc. is the limited partner of
IDG Technology Venture Investments, LP and does not
control IDG Technology Venture Investments, LP. IDG
Technology Venture Investment, Inc., a
Massachusetts corporation, is wholly owned by
International Data Group Inc., a Massachusetts
corporation, which is controlled by Patrick
McGovern, the majority shareholder, founder and
chairman of International Data Group Inc. IDG
Technology Venture Investment, Inc. disclaims
beneficial ownership of all of the ordinary shares
owned by IDG Technology Venture Investments, LP.
The registered address of IDG Technology Venture
Investment, Inc. is 5 Speen Street, Framingham, MA
01701, U.S.A.  84




---



##### Table of Contents



(2)
    
    Includes 6,723,115 ordinary shares held by IDG
Technology Venture Investments, LP. The general
partner of IDG Technology Venture Investments, LP
is IDG Technology Venture Investments, LLC. Messrs.
Patrick McGovern and Quan Zhou are managing members
of IDG Technology Venture Investments, LLC, both of
whom disclaim beneficial ownership of our shares
held by IDG Technology Venture Investments, LLC.
IDG Technology Venture Investment, Inc. is a
limited partner of IDG Technology Venture
Investments, LP, and does not control IDG
Technology Venture Investments, LP. IDG Technology
Venture Investments, LP disclaims beneficial
ownership of all of the ordinary shares owned by
IDG Technology Venture Investment, Inc. The
registered address of IDG Technology Venture
Investments, LP is Corporation Service Company,
1013 Centre Road, Wilmington, County of New Castle,
Delaware 19805-1297, U.S.A.(3)
    
    Includes 7,595,569 ordinary shares held by Vertex
Technology Fund (III) Ltd as of December 31, 2009
in the form of 1,519,113 ADS and 4 ordinary shares.
Vertex Management (II) Pte Ltd is the fund manager
of Vertex Technology Fund (III) Ltd, and may be
deemed to have power to vote and dispose of the
shares held of record by Vertex Technology Fund
(III) Ltd. Vertex Venture Holdings Ltd, as the sole
shareholder of Vertex Technology Fund (III) Ltd,
and as the sole shareholder of Vickers Capital
Limited, which is the sole shareholder of Vertex
Management (II) Pte Ltd, may also be deemed to have
the power to vote and dispose of these shares. The
address of Vertex Technology Fund (III) Ltd is 250
North Bridge Road, #05-01 Raffles City Tower,
Singapore 179101.(4)
    
    Includes (i) 4,028,156 ordinary shares held by Cast
Technology, Inc.; and (ii) 3,127,965 ordinary
shares held by Fanasia Capital Limited. Both Cast
Technology, Inc. and Fanasia Capital Limited are
held 45% and 55% by Jianping Lu and Ling Zhang,
respectively.(5)
    
    Includes (i) 4,923,302 ordinary shares held by Cast
Technology, Inc.; and (ii) 3,823,068 ordinary
shares held by Fanasia Capital Limited. Both Cast
Technology, Inc. and Fanasia Capital Limited are
held 45% and 55% by Jianping Lu and Ling Zhang,
respectively.(6)
    
    Includes 10,558,493 ordinary shares held by C&F
International Holdings Limited, a company
incorporated in British Virgin Islands. C&F
International Holdings Limited holds the ordinary
shares on behalf of and exclusively for the benefit
of the group of employees eligible for the 2007
Equity Incentive Plan. C&F International Holdings
Limited is 100% owned by C&F Global Limited, a
British Virgin Islands Company, which is in turn
owned by the selected employees.(7)
    
    Includes 10,993,840 ordinary shares held by
Fidelity Management & Research Company(Fidelity),
a wholly-owned subsidiary of FMR LLC and an
investment adviser. Edward C. Johnson 3d, Chairman
of FMR LLC, and FMR LLC, through its control of
Fidelity, and the funds each has sole power to
dispose of the 10,993,840 shares owned by the
funds. Members of the family of Edward C. Johnson
3d are the predominant owners, directly or through
trusts, of Series B voting common shares of FMR
LLC, representing 49% of the voting power of FMR
LLC. Neither FMR LLC nor Edward C. Johnson 3d has
the sole power to vote or direct the voting of the
shares owned directly by the Fidelity funds. The
registered address of FMR LLC is 82 Devonshire
Street, Boston, MA 02109, U.S.A.   85




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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 A. Major shareholders.
  B. Related party transactions .
 Contractual arrangements with CFO Fuhua and its shareholders.
  Loan Agreements.
  Purchase Option Agreement .
  86




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Voting arrangement.
 Share Pledge Agreement .
 Financing support.
  87




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##### Table of Contents



Indemnifications.
 Contractual Arrangements with CFO Premium and its shareholders
  Strategic Consulting Service Agreement .
 Technical Support Agreement .
 Operation Agreement .
  88




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##### Table of Contents



Loan Agreements.
 Purchase Option Agreement
 Voting Arrangement .
 Share Pledge Agreement .
   89




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##### Table of Contents



Contractual Arrangements with CFO Glory and Its Individual Shareholders
  
    
    a strategic consulting service agreement between CFO Software and CFO Glory;
 
    
    a technical support agreement between CFO Software and CFO Glory;
 
    
    an operation agreement between CFO Software and CFO Glory;
 
    
    Loan agreements with Wu Chen, Zhiwei Zhao and Jun Wang. On September 1, 2007, we entered
into a loan agreement with Wu Chen and Zhiwei Zhao, the shareholders of CFO Glory, to extend
to each of Wu Chen and Zhiwei Zhao a loan in the amount of $77,000 and $63,000, respectively,
for the sole purpose of financing their investments in CFO Glory as CFO Glorys registered
capital. On September 10, 2007, we entered into a loan agreement with Jun Wang to extend to
Jun Wang a loan in the amount of $77,000 for the sole purpose of financing Jun Wang to acquire
Wu Chens entire holdings in CFO Glory;
 
    
    a purchase option agreement among CFO Software, CFO Glory, Zhiwei Zhao and Jun Wang;
 
    
    voting arrangements with each of Jun Wang and Zhiwei Zhao regarding their voting rights in
CFO Glory; and
 
    
    a share pledge agreement among CFO Software, Zhiwei Zhao and Jun Wang.
 Contractual Arrangements with CFO Shangtong and Its Individual Shareholders
  
    
    a strategic consulting service agreement between CFO Software and CFO Shangtong;
 
    
    a technical support agreement between CFO Software and CFO Shangtong;
 
    
    an operation agreement between CFO Software and CFO Shangtong;
 
    
    a loan agreement with Shaoming Shi and Lin Yang. We entered into a loan agreement with Lin
Yang and Shaoming Shi to extend to each of them a loan in the amount of $80,615 and $65,958,
respectively, for the sole purpose of financing their investments in CFO Shangtong as CFO
Shangtongs registered capital;
 
    
    a purchase option agreement among CFO Software, CFO Shangtong, Lin Yang and Shaoming Shi;
 
    
    voting arrangements with each of Shaoming Shi and Lin Yang regarding their voting rights in
CFO Shangtong; and
 
    
    a share pledge agreement among CFO Software, Lin Yang and Shaoming Shi.
   90




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Contractual Arrangements with CFO Chongzhi and Its Individual Shareholders
  
    
    a strategic consulting service agreement between CFO Software and CFO Chongzhi;
 
    
    a technical support agreement between CFO Software and CFO Chongzhi;
 
    
    an operation agreement between CFO Software and CFO Chongzhi;
 
    
    a loan agreement with Xun Zhao and Zhenfei Fan. We entered into a loan agreement with Xun
Zhao and Zhenfei Fan to extend to them a loan in the amount of $65,958 and $80,615,
respectively, for the sole purpose of financing their acquisition of equity interests in CFO
Chongzhi;
 
    
    a purchase option agreement among CFO Software, CFO Chongzhi, Xun Zhao and Zhenfei Fan;
 
    
    voting arrangements with each of Xun Zhao and Zhenfei Fan regarding their voting rights in
CFO Shangtong; and
 
    
    a share pledge agreement among CFO Software, Xun Zhao and Zhenfei Fan.
  Contractual Arrangements with CFO Huifu and Its Individual Shareholders
  
    
    a strategic consulting service agreement between CFO Software and CFO Huifu;
 
    
    a technical support agreement between CFO Software and CFO Huifu;
  91




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
    
    an operation agreement between CFO Software and CFO Huifu;
 
    
    a loan agreement with Shaoming Shi and Lin Yang. We entered into a loan agreement with
Shaoming Shi and Lin Yang to extend to each of them a loan in the amount of $5,757 and $8,636,
respectively, for the sole purpose of financing their acquisition of equity interests in CFO
Huifu;
 
    
    a purchase option agreement among CFO Software, CFO Huifu, Shaoming Shi and Lin Yang;
 
    
    voting arrangements with each of Shaoming Shi and Lin Yang regarding their voting rights in
CFO Huifu; and
 
    
    a share pledge agreement among CFO Software, Shaoming Shi and Lin Yang.
 Contractual Arrangements with CFO Zhongcheng and Its Individual Shareholders
  
    
    a strategic consulting service agreement between CFO Software and CFO Zhongcheng;
 
    
    a technical support agreement between CFO Software and CFO Zhongcheng;
 
    
    an operation agreement between CFO Software and CFO Zhongcheng;
 
    
    a loan agreement with Shaoming Shi and Lin Yang. We entered into a loan agreement with
Shaoming Shi and Lin Yang to extend to each of them a loan in the amount of $3,598 and
$68,368, respectively, for the sole purpose of financing their acquisition of equity interests
in
CFO Zhongcheng;
 
    
    a purchase option agreement among CFO Software, CFO Zhongcheng, Shaoming Shi and Lin Yang;
 
    
    voting arrangements with each of Shaoming Shi and Lin Yang regarding their voting rights in
CFO Zhongcheng; and
 
    
    a share pledge agreement among CFO Software, Shaoming Shi and Lin Yang.
   92




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Contractual Arrangements with CFO Newrand and Its Individual Shareholders
 Loans to Lin Yang and Linghai Ma .
 Purchase option agreement .
 Contractual Arrangements with CFO Chuangying and Its Individual Shareholders
  
    
    a strategic consulting and service agreement between CFO Software and CFO Chuangying;
 
    
    a technical support agreement between CFO Software and CFO Chuangying;
 
    
    an operation agreement between CFO Software and CFO Chuangying;
 
    
    a loan agreement with Yang Yang and Zhenfei Fan. We entered into a loan agreement with
Yang Yang and Zhenfei Fan to extend to each of them a loan in the amount of $322,100 and
$263,500, respectively, for the sole purpose of financing their acquisition of equity
interests in CFO Chuangying;
 
    
    a purchase option agreement among CFO Software, CFO Chuangying, Yang Yang and Zhenfei Fan;
and
 
    
    voting arrangements with each of Yang Yang and Zhenfei Fan regarding their voting rights in
CFO Chuangying.
  93




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Contractual Arrangements with CFO Shenzhen Shangtong and Its Individual Shareholders
  
    
    a strategic consulting service agreement between CFO Success and CFO Shenzhen Shangtong;
 
    
    a technical support agreement between CFO Success and CFO Shenzhen Shangtong;
 
    
    an operation agreement between CFO Success and CFO Shenzhen Shangtong;
 
    
    a loan agreement with Lin Yang and Shaoming Shi. We entered into a loan agreement with Lin
Yang and Shaoming Shi to extend to each of them a loan in the amount of $80,500 and $65,900,
respectively, for the sole purpose of financing their acquisition of equity interests in CFO
Shenzhen Shangtong;
 
    
    a purchase option agreement among CFO Success, CFO Shenzhen Shangtong, Lin Yang and
Shaoming Shi;
 
    
    voting arrangements with each of Lin Yang and Shaoming Shi regarding their voting rights in
CFO Shenzhen Shangtong; and
 
    
    a share pledge agreement among CFO Success, Lin Yang and Shaoming Shi.
 Contractual Arrangements with CFO Qicheng and Its Individual Shareholders
  
    
    a strategic consulting service agreement between CFO Chuangying and CFO Qicheng;
 
    
    a technical support agreement between CFO Chuangying and CFO Qicheng;
 
    
    an operation agreement between CFO Chuangying and CFO Qicheng;
 
    
    a loan agreement with Lin Yang and Yang Yang. We entered into a loan agreement with Yang Yang and Lin Yang to extend to each of them a loan in the amount of $80,500 and $65,900,
respectively, for the sole purpose of financing their acquisition of equity interests in CFO
Qicheng;
  94




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
    
    a purchase option agreement among CFO Chuangying, CFO Qicheng, Lin Yang and Yang Yang;
 
    
    voting arrangements with each of Lin Yang and Yang Yang regarding their voting rights in
CFO Qicheng; and
 
    
    a share pledge agreement among CFO Chuangying, Lin Yang and Yang Yang.
 Contractual Arrangements with CFO Yingchuang and Its Individual Shareholders
  
    
    a strategic consulting service agreement between CFO Chuangying and CFO Yingchuang;
 
    
    a technical support agreement between CFO Chuangying and CFO Yingchuang;
 
    
    an operation agreement between CFO Chuangying and CFO Yingchuang;
 
    
    a loan agreement with Yang Yang and Lin Yang. We entered into a loan agreement with Yang
Yang and Lin Yang to extend to each of them a loan in the amount of $80,500 and $65,900,
respectively, for the sole purpose of financing their acquisition of equity interests in CFO
Yingchuang;
 
    
    a purchase option agreement among CFO Chuangying, CFO Yingchuang, Lin Yang and Yang
Yang;
 
    
    voting arrangements with each of Lin Yang and Yang Yang regarding their voting rights in
CFO Yingchuang; and
 
    
    a share pledge agreement among CFO Chuangying, Lin Yang and Yang Yang.
 Contractual Arrangements with CFO Decheng and Its Individual Shareholders
  
    
    a strategic consulting service agreement between CFO Chongzhi and CFO Decheng;
 
    
    a technical support agreement between CFO Chongzhi and CFO Decheng;
 
    
    an operation agreement between CFO Chongzhi and CFO Decheng;
 
    
    a loan agreement with Ran Yuan and Zhihong Wang. We entered into a loan agreement with Ran
Yuan and Zhihong Wang to extend to each of them a loan in the amount of $8,050 and $6,590,
respectively, for the sole purpose of financing their acquisition of equity interests in CFO
Decheng;
  95




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
    
    a purchase option agreement among CFO Chongzhi,CFO Decheng, Ran Yuan and Zhihong Wang;
 
    
    voting arrangements with each of Ran Yuan and Zhihong Wang regarding their voting rights in
CFO Decheng; and
 
    
    a share pledge agreement among CFO Chongzhi, Ran Yuan and Zhihong Wang.
 Contractual Arrangements in connection with Information and Technology Support
 Information and Technology Support Agreement with CFO Newrand
 Information and Technology Support Agreement with CFO Securities Consulting
 Information and Technology Support Agreement with CFO Chuangying
  96




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2004 Stock Incentive Plan
  2007 Equity Incentive Plan
   Other related party transactions
 Shareholders Agreement
   97




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
    
    the fifth anniversary of the consummation of our initial public offering, or October
24, 2009;
 
    
    upon such holder holding less than 1% of our outstanding ordinary shares after our
initial public offering; and
 
    
    upon such holder becoming eligible to sell all of such holders registrable securities
pursuant to Rule 144 under the Securities Act within any three-month period without volume
limitations, under Rule 144(k), or under any comparable securities law of a jurisdiction
other than the United States for sale of registrable securities in such jurisdiction.
   98




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C. Interests of experts and counsel.
  
 ITEM 8. FINANCIAL INFORMATION
 A. Consolidated financial statements and other financial information.
  Legal Proceedings
  Dividend Policy
  B. Significant changes since December 31, 2009 .
  
 ITEM 9. THE OFFER AND LISTING
 A. Offering and listing details.
   99




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Sales PriceHigh
    
    
    LowYearly highs and lowsYear 2005
    
    
    11.14
    
    
    
    5.22Year 2006
    
    
    9.68
    
    
    
    3.95Year 2007
    
    
    47.68
    
    
    
    4.53Year 2008
    
    
    26.15
    
    
    
    4.72Year 2009
    
    
    13.54
    
    
    
    6.97Quarterly highs and lowsFirst Quarter 2008
    
    
    22.43
    
    
    
    10.02Second Quarter 2008
    
    
    26.15
    
    
    
    13.90Third Quarter 2008
    
    
    18.75
    
    
    
    10.40Fourth Quarter 2008
    
    
    11.62
    
    
    
    4.72First Quarter 2009
    
    
    11.44
    
    
    
    6.97Second Quarter 2009
    
    
    13.54
    
    
    
    9.17Third Quarter 2009
    
    
    13.28
    
    
    
    8.64Fourth Quarter 2009
    
    
    9.25
    
    
    
    7.28First Quarter 2010
    
    
    9.01
    
    
    
    6.86Monthly highs and lowsNovember 2009
    
    
    9.23
    
    
    
    8.10December 2009
    
    
    8.24
    
    
    
    7.28January 2010
    
    
    9.01
    
    
    
    7.42February 2010
    
    
    7.47
    
    
    
    6.86March 2010
    
    
    8.31
    
    
    
    7.15April 2010
    
    
    8.03
    
    
    
    7.45
 B. Plan of distribution.
  C. Markets.
  D. Selling shareholders.
  E. Dilution.
  F. Expenses of the issue.
  
 ITEM 10. ADDITIONAL INFORMATION
 A. Share capital.
   100




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B. Memorandum and articles of association.
  C. Material contracts.
  D. Exchange controls.
      101




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E. Taxation.
 Hong Kong taxation
 Profits tax.
  Estate duty.
 Stamp duty.
  102




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U.S. federal income taxation
  
    
    dealers in securities or currencies;
 
    
    traders in securities that elect to use a mark-to-market method of accounting for
securities holdings;
 
    
    banks or other financial institutions;
 
    
    insurance companies;
 
    
    tax-exempt organizations;
 
    
    partnerships and other entities treated as partnerships for U.S. federal income tax
purposes or persons holding ADSs through any such entities;
 
    
    persons that hold ADSs as part of a hedge, straddle, constructive sale, conversion
transaction or other integrated investment;
 
    
    U.S. Holders (as defined below) whose functional currency for tax purposes is not the
U.S. dollar;
 
    
    persons liable for alternative minimum tax; or
 
    
    persons who actually or constructively own 10% or more of the total combined voting
power of all classes of our shares (including ADSs) entitled to vote.
    
    
    a citizen or resident of the United States for U.S. federal income tax purposes;
 
    
    a corporation, or other entity taxable as a corporation, that was created or
organized in or under the laws of the United States or any political
subdivision thereof;
 
    
    an estate the income of which is subject to U.S. federal income tax regardless
of its source; or
 
    
    a trust if (a) a court within the United States is able to exercise primary
supervision over its administration and one or more U.S. persons have the
authority to control all substantial decisions of the trust, or (b) the trust
has a valid election in effect to be treated as a U.S. person.
  103




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U.S. Holders
 Dividends on ADSs
    Sales and other dispositions of ADSs
   104




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Passive Foreign Investment Company
       105




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Non-U.S. Holders
  
    
    that gain is effectively connected with the conduct of a U.S. trade or
business and, if an applicable income tax treaty so requires as a
condition for you to be subject to U.S. federal income tax with
respect to income from your ADSs, such gain is attributable to a
permanent establishment that you maintain in the United States; or
 
    
    you are a nonresident alien individual and are present in the United
States for at least 183 days in the taxable year of the sale or other
disposition and either (1) your gain is attributable to an office or
other fixed place of business that you maintain in the United States
or (2) you have a tax home in the United States.
  U.S. information reporting and backup withholding rules
    106




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F. Dividends and paying agents.
  G. Statement by experts.
  H. Documents on display.
  www.sec.gov
   I. Subsidiaries information.
  
 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
 Debt Securities
  Warrants and Rights
  Other Securities
  American Depository Shares
  107




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Fees and Charges Payable by ADS Holders
  Category
    
    Depositary actions
    
    Associated fee(a) Depositing or
substituting 
the underlying shares
    
    Each person to whom ADSs are
issued against deposits of
shares, including deposits
and issuances in respect of:
    
    US$5.00 for each 100
ADSs (or portion
thereof) evidenced by
the ADRs issued Share distributions,
stock dividend, stock split,
merger Exchange of securities
or any other transaction or
event affecting the ADSs or
the deposited securities(b) Receiving or
distributing dividends
    
    Distribution of cash dividends
    
    US$0.02 or less per ADS(c) Selling or
exercising rights
    
    Distribution or sale of
securities, the fee being in an
amount equal to the fee for the
execution and delivery of ADSs
which would have been charged
as a result of the deposit of
such securities
    
    Up to US$5.00 for
each 100 ADSs (or
portion thereof)
  108




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Category
    
    Depositary actions
    
    Associated fee(d) Withdrawing an
underlying
security
    
    Acceptance of ADRs surrendered
for withdrawal of deposited
securities
    
    US$5.00 for each
100 ADSs (or
portion thereof)
evidenced by the
ADRs surrendered(e) Transferring,
splitting or
grouping receipts
    
    Transfers of depositary receipts
    
    US$1.50 per ADS(f) General depositary
services,
particularly those
charged on an annual
basis
    
    Services performed by the
depositary in administering the
ADRs
    
    US$0.02 per ADS (or
portion thereof)
not more than once
each calendar year
and payable at the
sole discretion of
the depositary by
billing ADR Holders
or by deducting
such charge from
one or more cash
dividends or other
cash distributions(g) Expenses of the
Depositary
    
    Expenses incurred on behalf of
ADR Holders in connection with:     Compliance with foreign
exchange control regulations or
any law or regulation relating
to foreign investment     The depositarys or its
custodians compliance with
applicable law, rule or
regulation
    
    Expenses payable at
the sole discretion
of the depositary
by billing ADR
Holders or by
deducting such
charges from one or
more cash dividends
or other cash
distributions     Stock transfer or other
taxes and other governmental
charges     Cable, telex and
facsimile transmission and
delivery charges     fees for the transfer or
registration of deposited
securities in connection with
the deposit or withdrawal of
deposited securities     Expenses of the
depositary in connection with
the conversion of foreign
currency into U.S. dollars
(which are paid out of such
foreign currency)     Any other charge payable
by depositary or its agents in
connection with the servicing
of the shares or the deposited
securities
  109




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Fees and Payments from the Depositary to US
  
 PART II
 
 ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  
 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
  
 ITEM 15. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
   Managements Annual Report on Internal Control over Financial Reporting
    110




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Report of the Independent Registered Public Accounting Firm
 
     111




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ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
    
 ITEM 16B. CODE OF ETHICS
  http://www.chinafinanceonline.com/list/en_CorporateGovernance.shtml.
  112




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ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  For the Year Ended December 31,2009
    
    
    2008
    
    
    2007Audit Fees(1)
    
    US$
    735,000
    
    
    US$
    735,000
    
    
    US$
    635,000Tax Fees(2)
    
    
    
    
    
    
    119,737
    
    
    
    22,278
 
 (1)
    
    Audit Fees means the aggregate fees in each of the fiscal years listed for
professional services rendered by Deloitte Touche Tohmatsu CPA Ltd. for the audit of our annual
financial statements, review of interim financial statements and attestation services that are
provided in connection with statutory and regulatory filings or engagements.(2)
    
    Tax Fees means the aggregate fees billed in each of the fiscal years listed for
professional tax services rendered by Deloitte Touche Tohmatsu CPA Ltd. 
 ITEM 16D. EXEMPTION FROM THE LISTING STANDARD FOR AUDIT COMMITTEES
  
 ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
  
 PART III
 
 ITEM 17. FINANCIAL STATEMENT
  
 ITEM 18. FINANCIAL STATEMENTS
  
 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, 2004
  113




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ExhibitNumber
    
    Description2.3
    
    
    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, 2007)4.3
    *
    
    Amended Restricted Stock Issuance and Allocation Agreement 2007 Equity Incentive Plan
dated May 20, 20094.4
    
    
    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)4.5
    
    
    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)4.6
    
    
    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)4.7
    
    
    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)4.8
    
    
    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)4.9
    
    
    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)4.10
    
    
    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)4.11
    
    
    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)4.12
    
    
    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)
  114




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ExhibitNumber
    
    Description4.13
    
    
    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)4.14
    
    
    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. (incorporated by reference to Exhibit 4.15 from our 2007 Annual Report on Form
20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5,
2008)4.15
    
    
    Loan Agreement between China Finance Online Co. Limited and Jun Wang dated October
18, 2007 (incorporated by reference to Exhibit 4.16 from our 2007 Annual Report on
Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on
June 5, 2008)4.16
    
    
    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 Wang
(incorporated by reference to Exhibit 4.17 from our 2007 Annual Report on Form 20-F
(File No.000-50975) filed with the Securities and Exchange Commission on June 5,
2008)4.17
    
    
    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. (incorporated by reference to Exhibit 4.18 from our 2007 Annual Report on Form
20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5,
2008)4.18
    
    
    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. (incorporated by reference to Exhibit 4.19 from our 2007 Annual
Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange
Commission on June 5, 2008)4.19
    
    
    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. (incorporated by reference to Exhibit 4.20 from our 2007 Annual
Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange
Commission on June 5, 2008)4.20
    
    
    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 Zhao (incorporated by reference to Exhibit 4.21 from our
2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and
Exchange Commission on June 5, 2008)4.21
    
    
    Loan Agreement dated March 3, 2008 among China Finance Online (Beijing) Co., Ltd.,
Jun Wang and Zhiwei Zhao (incorporated by reference to Exhibit 4.22 from our 2007
Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange
Commission on June 5, 2008)4.22
    
    
    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. (incorporated by reference to Exhibit 4.23 from our 2007 Annual Report on Form
20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5,
2008)4.23
    
    
    Loan Agreement dated August 21, 2007 among Fortune Software (Beijing) Co., Ltd., Wei
Xiong and Zhenfei Fan (incorporated by reference to Exhibit 4.24 from our 2007 Annual
Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange
Commission on June 5, 2008)
  115




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ExhibitNumber
    
    Description4.24
    
    
    Operation Agreement among dated August 21, 2007 by and between Fortune Software
(Beijing) Co., Ltd. and Beijing CFO Premium Technology Co., Ltd.(incorporated by
reference to Exhibit 4.25 from our 2007 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008)4.25
    
    
    Technical Support Agreement between Fortune Software (Beijing) Co., Ltd. and Beijing
CFO Premium Technology Co., Ltd. dated August 21, 2007 (incorporated by reference to
Exhibit 4.26 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with
the Securities and Exchange Commission on June 5, 2008)4.26
    
    
    Strategic Consulting and Service Agreement between Fortune Software (Beijing) Co.,
Ltd. and Beijing Premium Technology Co., Ltd. dated August 21, 2007 (incorporated by
reference to Exhibit 4.27 from our 2007 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008)4.27
    
    
    Purchase Option Agreement dated August 21, 2007 among Fortune Software. Limited, Wei
Xiong, Zhenfei Fan and Beijing Premium Technology Co., Ltd. (incorporated by
reference to Exhibit 4.28 from our 2007 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008)4.28
    
    
    Framework Agreement among Fortune Software (Beijing) Co., Ltd., Wu Chen, Jun Wang and
Beijing Glory Co., Ltd. dated September 10, 2007 (incorporated by reference to
Exhibit 4.29 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with
the Securities and Exchange Commission on June 5, 2008)4.29
    
    
    Loan Agreement dated September 1, 2007 among Fortune Software (Beijing) Co., Ltd., Wu
Chen and Zhiwei Zhao (incorporated by reference to Exhibit 4.30 from our 2007 Annual
Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange
Commission on June 5, 2008)4.30
    
    
    Share Transfer Contract (related to shares of Beijing Glory Co., Ltd.) dated
September 10, 2007 by and between Wu Chen and Jun Wang (incorporated by reference to
Exhibit 4.31 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with
the Securities and Exchange Commission on June 5, 2008)4.31
    
    
    Operation Agreement dated September 10, 2007 by and between Fortune Software
(Beijing) Co.,Ltd. and Beijing Glory Co., Ltd. (incorporated by reference to Exhibit
4.32 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the
Securities and Exchange Commission on June 5, 2008)4.32
    
    
    Technical Support Agreement between Fortune Software (Beijing) Co., Ltd. and Beijing
CFO Glory Co., Ltd. dated September 10, 2007 (incorporated by reference to Exhibit
4.33 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the
Securities and Exchange Commission on June 5, 2008)4.33
    
    
    Strategic Consulting and Service Agreement between Fortune Software (Beijing) Co.,
Ltd. and Beijing Glory Co., Ltd. dated September 10, 2007 (incorporated by reference
to Exhibit 4.34 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed
with the Securities and Exchange Commission on June 5, 2008)4.34
    
    
    Purchase Option Agreement dated September 10, 2007 among China Finance Online Co.
Limited, Jun Wang, Zhiwei Zhao and Beijing Glory Co., Ltd. (incorporated by reference
to Exhibit 4.3 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed
with the Securities and Exchange Commission on June 5, 2008)4.35
    *
    
    Framework Agreement for Exercise of Purchase Option dated June 2, 2009 among Wei
Xiong, Zhenfei Fan, Zhiwei Zhao, Jun Wang, CFO Software and CFO Premium4.36
    *
    
    Purchase Option Agreement dated June 2, 2009 among CFO Software, CFO Premium, Zhiwei
Zhao and Jun Wang
  116




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##### Table of Contents



ExhibitNumber
    
    Description4.37
    *
    
    Share Pledge Agreement dated June 2, 2009 among CFO Software, Zhiwei Zhao and Jun Wang4.38
    
    
    Loan Agreement dated January 21, 2009 among CFO Software, Yang Yang and Zhenfei Fan
(incorporated by reference to Exhibit 4.92 from our 2008 Annual Report on Form 20-F
(File No.000-50975) filed with the Securities and Exchange Commission on May 22,
2009)4.39
    
    
    Purchase Option Agreement dated January 21, 2009 among CFO Software, CFO Chuangying
(formerly known as Guangzhou Boxin Investment Advisory Co., Ltd.), Yang Yang and
Zhenfei Fan (incorporated by reference to Exhibit 4.93 from our 2008 Annual Report on
Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on
May 22, 2009)4.40
    *
    
    Operation Agreement dated February 12, 2009 between CFO Software and CFO Chuangying4.41
    *
    
    Technical Support Agreement dated February 12, 2009 between CFO Software and CFO
Chuangying4.42
    *
    
    Strategic Consulting and Service Agreement dated February 12, 2009 between CFO
Software and CFO Chuangying4.43
    *
    
    Framework Agreement for Exercise of Purchase Option dated October 15, 2009 among Yang
Yang, Zhenfei Fan, Zhiwei Zhao, Jun Wang, CFO Chuangying and CFO Software4.44
    *
    
    Purchase Option Agreement dated October 15, 2009 among CFO Software, CFO Chuangying,
Zhiwei Zhao and Jun Wang4.45
    *
    
    Loan Agreement dated August 3, 2009 among CFO Success, Lin Yang and Shaoming Shi4.46
    *
    
    Share Pledge Agreement dated August 3, 2009 among CFO Success, Lin Yang and Shaoming
Shi4.47
    *
    
    Purchase Option Agreement dated August 3, 2009 among CFO Success, CFO Shenzhen
Shangtong, Lin Yang and Shaoming Shi4.48
    *
    
    Operation Agreement dated August 3, 2009 between CFO Success and CFO Shenzhen
Shangtong4.49
    *
    
    Technical Support Agreement dated August 3, 2009 between CFO Success and CFO Shenzhen
Shangtong4.50
    *
    
    Strategic Consulting and Service Agreement dated August 3, 2009 between CFO Success
and CFO Shenzhen Shangtong4.51
    *
    
    Loan Agreement dated November 20, 2009 among CFO Chuangying, Yang Yang and Lin Yang4.52
    *
    
    Share Pledge Agreement dated November 20, 2009 among CFO Chuangying, Yang Yang and
Lin Yang4.53
    *
    
    Purchase Option Agreement dated November 20, 2009 among CFO Chuangying, CFO Qicheng,
Yang Yang and Lin Yang4.54
    *
    
    Operation Agreement dated November 20, 2009 between CFO Chuangying and CFO Qicheng4.55
    *
    
    Technical Support Agreement dated November 20, 2009 between CFO Chuangying and CFO
Qicheng4.56
    *
    
    Strategic Consulting and Service Agreement dated November 20, 2009 between CFO
Chuangying and CFO Qicheng4.57
    *
    
    Loan Agreement dated November 25, 2009 among CFO Chuangying, Yang Yang and Lin Yang
  117




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##### Table of Contents



ExhibitNumber
    
    Description4.58
    *
    
    Share Pledge Agreement dated November 25, 2009 among CFO Chuangying, Yang Yang and
Lin Yang4.59
    *
    
    Purchase Option Agreement dated November 25, 2009 among CFO Chuangying, CFO
Yingchuang, Yang Yang and Lin Yang4.60
    *
    
    Operation Agreement dated November 25, 2009 between CFO Chuangying and CFO Yingchuang4.61
    *
    
    Technical Support Agreement dated November 25, 2009 between CFO Chuangying and CFO
Yingchuang4.62
    *
    
    Strategic Consulting and Service Agreement dated November 25, 2009 between CFO
Chuangying and CFO Yingchuang4.63
    *
    
    Loan agreement dated November 30, 2009 among CFO Chuangying, Ran Yuan and Zhihong Wang4.64
    *
    
    Share Pledge Agreement dated November 25, 2009 among CFO Chongzhi, Ran Yuan and
Zhihong Wang4.65
    *
    
    Purchase Option Agreement dated November 30, 2009 among CFO Chongzhi, CFO Decheng,
Ran Yuan and Zhihong Wang4.66
    *
    
    Operation Agreement dated November 30, 2009 between CFO Chongzhi and CFO Decheng4.67
    *
    
    Technical Support Agreement dated November 30, 2009 between CFO Chongzhi and CFO
Decheng4.68
    *
    
    Strategic Consulting and Service Agreement dated November 30, 2009 between CFO
Chongzhi and CFO Decheng4.69
    *
    
    Shanghai Stock Exchange Level-II Quotations License Agreement dated July 30, 2009
between SSE Infonet Ltd. and Fortune Software (Beijing) Co., Ltd. (certain portions
of the agreement have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment, which request
is pending)4.70
    
    
    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, 2007 (incorporated by reference to Exhibit 4.37 from our 2007 Annual
Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange
Commission on June 5, 2008)4.71
    *
    
    Shenzhen Stock Exchange Proprietary Information License Agreement dated April 15,
2010 between Fortune Software (Beijing) Co., Ltd. and Shenzhen Securities Information
Co., Ltd. (certain portions of the agreement have been omitted and filed separately
with the Securities and Exchange Commission pursuant to a request for confidential
treatment, which request is pending)4.72
    *
    
    Securities Information License Contract dated January 28, 2010 between SSE Infonet
Ltd. and CFO Software (certain portions of the agreement have been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment, which request is pending)4.73
    *
    
    Shenzhen Stock Exchange Quatations(Web Based Plus Version) License Agreement dated
October 21, 2009 between Shenzhen Stock Exchange and Fortune Software (Beijing) Co.,
Ltd.
  118




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##### Table of Contents



ExhibitNumber
    
    Description4.74
    *
    
    Basic Market Prices Agreement dated September 28, 2009 between HKEx Information
Services Limited and China Finance Online Co., Ltd. (certain portions of the
agreement have been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment, which request is
pending)4.75
    *
    
    China Financial Futures Exchange Futures Information License Agreement dated April 8,
2009 between CFO Software and China Financial Futures Exchange (certain portions of
the agreement have been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment, which request is
pending)4.76
    
    
    Lease Contract for Housing Unit of Corporate Square dated August 9, 2007 between
Fortune Software (Beijing) Co. Ltd. and China Galaxy Securities Company Limited
(incorporated by reference to Exhibit 4.46 from our 2007 Annual Report on Form 20-F
(File No.000-50975) filed with the Securities and Exchange Commission on June 5,
2008)4.77
    
    
    Lease Contract for Housing Unit of Corporate Square dated August 9, 2007 between
Beijing Fuhua Innovation Technology Development Co., Ltd. and China Galaxy Securities
Company Limited (incorporated by reference to Exhibit 4.47 from our 2007 Annual
Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange
Commission on June 5, 2008)4.78
    
    
    Lease Contract for Housing Unit of Corporate Square dated August 1, 2007 between
China Finance Online (Beijing) Co., Ltd. and China Galaxy Securities Company Limited
(incorporated by reference to Exhibit 4.48 from our 2007 Annual Report on Form 20-F
(File No.000-50975) filed with the Securities and Exchange Commission on June 5,
2008)4.79
    
    
    Lease Contract for Housing Unit of Corporate Square dated August 1, 2007 between
Beijing Fuhua Innovation Technology Development Co., Ltd. and China Galaxy Securities
Company Limited (incorporated by reference to Exhibit 4.49 from our 2007 Annual
Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange
Commission on June 5, 2008)4.80
    
    
    Lease Contract for Housing Unit of Corporate Square dated August 1, 2007 between
Fortune Software (Beijing) Co. Ltd. and China Galaxy Securities Company Limited
(incorporated by reference to Exhibit 4.50 from our 2007 Annual Report on Form 20-F
(File No.000-50975) filed with the Securities and Exchange Commission on June 5,
2008)4.81
    *
    
    Lease Contract dated June 26, 2009 between China National Precision Machinery I&E
Corp. Beijing Aerospace CPMIEC Building and CFO Wisdom (Unit 619)4.82
    *
    
    Lease Contract dated June 26,2009 between China National Precision Machinery I&E
Corp. Beijing Aerospace CPMIEC Building and CFO Wisdome (Unit 621)4.83
    *
    
    Lease Contract dated June 26,2009 between China National Precision Machinery I&E
Corp. Beijing Aerospace CPMIEC Building and CFO Wisdom (Unit 622)4.84
    *
    
    Lease Contract dated June 26, 2009 between China National Precision Machinery I&E
Corp. Beijing Aerospace CPMIEC Building and CFO Success (Unit 623)4.85
    *
    
    Lease Contract dated June 26,2009 between China National Precision Machinery I&E
Corp. Beijing Aerospace CPMIEC Building and CFO Software (Unit 626)4.86
    *
    
    Lease Contract dated March 30, 2009 between Beijing Jintai Hengye Co., Ltd. House
Lease Branch and CFO Wisdom (Unit 1106)4.87
    *
    
    Suntrans Office Building Lease Contract dated April 30, 2009 between Beijing Suntrans
Real Estate Development Co. Ltd. and CFO Chuangying (Unit 1125-1136)4.88
    *
    
    Suntrans Office Building Lease Contract dated April 30, 2009 between Beijing Suntrans
Real Estate Development Co. Ltd. CFO Yingchuang (Unit 1137-1140)4.89
    *
    
    Suntrans Office Building Lease Contract dated April 30, 2009 between Beijing Suntrans
Real Estate Development Co. Ltd. and CFO Qicheng (Unit 1141-1144)4.90
    *
    
    Suntrans Office Building Lease Contract dated April 30, 2009 between Beijing Suntrans
Real Estate Development Co. Ltd. and CFO Wisdom (Unit 1145-1148)
  119




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##### Table of Contents



ExhibitNumber
    
    Description4.91
    
    
    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. Limited (incorporated by reference to Exhibit
4.51 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the
Securities and Exchange Commission on June 5, 2008)4.92
    
    
    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., Limited (incorporated by reference to Exhibit
4.52 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the
Securities and Exchange Commission on June 5, 2008)4.93
    
    
    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. Limited (incorporated by reference to
Exhibit 4.53 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with
the Securities and Exchange Commission on June 5, 2008)4.94
    
    
    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 (incorporated by reference to
Exhibit 4.54 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with
the Securities and Exchange Commission on June 5, 2008)4.95
    
    
    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. Limited (incorporated by reference to
Exhibit 4.55 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with
the Securities and Exchange Commission on June 5, 2008)4.96
    
    
    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. Limited (incorporated by reference to Exhibit 4.56 from
our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and
Exchange Commission on June 5, 2008)4.97
    
    
    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. Limited (incorporated by reference to Exhibit 4.57 from
our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and
Exchange Commission on June 5, 2008)4.98
    
    
    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. Limited (incorporated by
reference to Exhibit 4.58 from our 2007 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008)4.99
    
    
    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)4.100
    
    
    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)4.101
    
    
    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)
  120




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##### Table of Contents



ExhibitNumber
    
    Description4.102
    
    
    Form of Amended Change in Control Agreement dated October 15, 2008 (incorporated by
reference to Exhibit 4.55 from our 2008 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009)4.103
    
    
    Engagement Letter between China Finance Online Co., Ltd. and Deloitte Touche Tohmatsu CPA. Ltd
dated February 26, 2008 (incorporated by reference to Exhibit 4.67 from our 2007 Annual Report on
Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008)4.104
    
    
    Loan Agreement dated May 8, 2008 among Fortune Software (Beijing) Co., Ltd., Lin Yang and Shaoming
Shi (incorporated by reference to Exhibit 4.57 from our 2008 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009)4.105
    
    
    Operation Agreement dated June 8, 2008 between Fortune Software (Beijing) Co., Ltd. and Shanghai
Shangtong Information Technology Co., Ltd. (incorporated by reference to Exhibit 4.58 from our
2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange
Commission on May 22, 2009)4.106
    
    
    Technical Support Agreement dated June 8, 2008 between Fortune Software (Beijing) Co., Ltd. and
Shanghai Shangtong Information Technology Co., Ltd. (incorporated by reference to Exhibit 4.59
from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and
Exchange Commission on May 22, 2009)4.107
    
    
    Strategic Consulting Service Agreement dated June 8, 2008 between Fortune Software (Beijing) Co.,
Ltd. and Shanghai Shangtong Information Technology Co., Ltd. (incorporated by reference to Exhibit
4.60 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and
Exchange Commission on May 22, 2009)4.108
    
    
    Purchase Option and Cooperation Agreement dated June 8, 2008 among Fortune Software(Beijing) Co.,
Ltd., Lin Yang, Shaoming Shi and Shanghai Shangtong Information Technology Co., Ltd. (incorporated
by reference to Exhibit 4.61 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed
with the Securities and Exchange Commission on May 22, 2009)4.109
    
    
    Share Pledge Agreement dated June 8, 2008 among Lin Yang, Shaoming Shi and Fortune
Software(Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.62 from our 2008 Annual Report
on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22,
2009)4.110
    *
    
    Framework Agreement on Exercising Purchase Option dated January 5, 2010 by and among Shaoming Shi,
Lin Yang, Juanjuan Wang, Minghua Wang, Shanghai Shangtong Co., Ltd. and Fortune Software
(Beijing) Co., Ltd.4.111
    *
    
    Purchase Option and Cooperation Agreement dated January 5, 2010 among Fortune Software(Beijing)
Co., Ltd., Juanjuan Wang, Minghua Wang and Shanghai Shangtong Co., Ltd.4.112
    *
    
    Share Pledge Agreement dated January 5, 2010 among Juanjuan Wang, Minghua Wang and Fortune
Software(Beijing) Co., Ltd.4.113
    
    
    Loan Agreement dated May 8, 2008 among Fortune Software (Beijing) Co., Ltd., Zhenfei Fan and Xun
Zhao (incorporated by reference to Exhibit 4.63 from our 2008 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009)4.114
    
    
    Operation Agreement dated June 8, 2008 between Fortune Software (Beijing) Co., Ltd. and Shanghai
Chongzhi Information Technology Co., Ltd. (also known as Shanghai Chongzhi Co., Ltd.)
(incorporated by reference to Exhibit 4.64 from our 2008 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009)
  121




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##### Table of Contents



ExhibitNumber
    
    Description4.115
    
    
    Technical Support Agreement dated June 8, 2008 between Fortune Software (Beijing) Co., Ltd. and
Shanghai Chongzhi Co., Ltd. (incorporated by reference to Exhibit 4.65 from our 2008 Annual Report
on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22,
2009)4.116
    
    
    Strategic Consulting Service Agreement dated June 8, 2008 between Fortune Software (Beijing) Co.,
Ltd. and Shanghai Chongzhi Co., Ltd. (incorporated by reference to Exhibit 4.66 from our 2008
Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission
on May 22, 2009)4.117
    
    
    Purchase Option and Cooperation Agreement dated June 8, 2008 among Fortune Software(Beijing) Co.,
Ltd., Zhenfei Fan, Xun Zhao and Shanghai Chongzhi Co., Ltd. (incorporated by reference to Exhibit
4.67 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and
Exchange Commission on May 22, 2009)4.118
    
    
    Share Pledge Agreement dated June 8, 2008 among Zhenfei Fan, Xun Zhao and Fortune
Software(Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.68 from our 2008 Annual Report
on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22,
2009)4.119
    *
    
    Framework Agreement on Exercising Purchase Option dated January 8, 2010 by and among Zhenfei Fan,
Xun Zhao, Zhengyan Wu, Shanghai Chongzhi Co., Ltd., and Fortune Software (Beijing) Co., Ltd.4.120
    *
    
    Purchase Option and Cooperation Agreement dated January 8, 2010 among Fortune Software(Beijing)
Co., Ltd., Zhengyan Wu, Xun Zhao and Shanghai Chongzhi Co., Ltd.4.121
    *
    
    Share Pledge Agreement dated January 8, 2010 among Zhengyan Wu, Xun Zhao and Fortune
Software(Beijing) Co., Ltd.4.122
    
    
    Loan Agreement dated August 21, 2008 among Fortune Software (Beijing) Co., Ltd., Shaoming Shi and
Lin Yang (incorporated by reference to Exhibit 4.69 from our 2008 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009)4.123
    
    
    Operation Agreement dated October 15, 2008 by and between Fortune Software (Beijing) Co., Ltd. and
Zhongcheng Futong Co., Ltd. (formerly known as Beijing Tongxinshengshi Environment Engineering
Co., Ltd.) (incorporated by reference to Exhibit 4.70 from our 2008 Annual Report on Form 20-F
(File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009)4.124
    
    
    Technical Support Agreement dated October 15, 2008 between Fortune Software (Beijing) Co., Ltd.
and Zhongcheng Futong Co., Ltd. (incorporated by reference to Exhibit 4.71 from our 2008 Annual
Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May
22, 2009)4.125
    
    
    Strategic Consulting Service Agreement dated October 15, 2008 between Fortune Software (Beijing)
Co., Ltd. and Zhongcheng Futong Co., Ltd. (incorporated by reference to Exhibit 4.72 from our 2008
Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission
on May 22, 2009)4.126
    
    
    Purchase Option Agreement dated October 15, 2008 among Fortune Software(Beijing) Co., Ltd.,
Shaoming Shi, Lin Yang and Zhongcheng Futong Co., Ltd. (incorporated by reference to Exhibit 4.73
from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and
Exchange Commission on May 22, 2009)4.127
    *
    
    Framework Agreement on Exercising Purchase Option dated January 5, 2010 by and among Shaoming Shi,
Lin Yang, Dongmei Wang, Wei Cui, Zhongcheng Futong Co., Ltd. and Fortune Software (Beijing) Co.,
Ltd.
  122




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##### Table of Contents



ExhibitNumber
    
    Description4.128
    *
    
    Purchase Option and Cooperation Agreement dated January 5, 2010 among Fortune Software(Beijing)
Co., Ltd., Dongmei Wang, Wei Cui and Zhongcheng Futong Co., Ltd.4.129
    *
    
    Share Pledge Agreement dated January 5, 2010 among Dongmei Wang, Wei Cui and Fortune
Software(Beijing) Co., Ltd.4.130
    
    
    Share Transfer Agreement dated August 19, 2008 among Lin Yang, Shaoming Shi, Xin Wang and Zhihua
Yang (incorporated by reference to Exhibit 4.74 from our 2008 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009)4.131
    
    
    Loan Agreement dated August 21, 2008 among Fortune Software (Beijing) Co., Ltd., Shaoming Shi and
Lin Yang (incorporated by reference to Exhibit 4.75 from our 2008 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009)4.132
    
    
    Operation Agreement dated October 15, 2008 by and between Fortune Software (Beijing) Co., Ltd. and
Huifu Jinyuan Co., Ltd., (formerly known as Wisdom Door (Beijing) International Culture Spread
Co., Ltd.) (incorporated by reference to Exhibit 4.76 from our 2008 Annual Report on Form 20-F
(File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009)4.133
    
    
    Technical Support Agreement dated October 15, 2008 by and between Fortune Software (Beijing) Co.,
Ltd. and Huifu Jinyuan Co., Ltd., (incorporated by reference to Exhibit 4.77 from our 2008 Annual
Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May
22, 2009)4.134
    
    
    Strategic Consulting Service Agreement dated October 15, 2008 between Fortune Software (Beijing)
Co., Ltd. and Huifu Jinyuan Co., Ltd., (incorporated by reference to Exhibit 4.78 from our 2008
Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission
on May 22, 2009)4.135
    
    
    Purchase Option Agreement dated October 15, 2008 among Fortune Software(Beijing) Co., Ltd.,
Shaoming Shi, Lin Yang and Huifu Jinyuan Co., Ltd., (incorporated by reference to Exhibit 4.79
from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and
Exchange Commission on May 22, 2009)4.136
    
    
    Share Transfer Agreement dated September 25, 2008 among Lin Yang, Shaoming Shi, Yiming Li and Xu
Wang (incorporated by reference to Exhibit 4.80 from our 2008 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009)4.137
    
    

Loan Agreement dated October 17, 2008 between Fortune Software (Beijing) Co., Ltd. and Lin Yang
(incorporated by reference to Exhibit 4.81 from our 2008 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009)4.138
    
    
    Loan Agreement dated October 17, 2008 among Fortune Software (Beijing) Co., Ltd., Fortune
(Beijing) Success Technology Co., Ltd. and Linghaima (incorporated by reference to Exhibit 4.82
from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and
Exchange Commission on May 22, 2009)4.139
    
    
    Purchase Option Agreement dated October 17, 2008 among Fortune Software (Beijing) Co., Ltd.,
Shenzhen Newland Securities Investment and Advisory Co., Ltd. and Lin Yang (incorporated by
reference to Exhibit 4.83 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with
the Securities and Exchange Commission on May 22, 2009)4.140
    
    
    Purchase Option Agreement dated October 17, 2008 among Fortune Software (Beijing) Co., Ltd.,
Fortune (Beijing) Success Technology Co., Ltd., Shenzhen Newland Securities Investment and
Advisory Co., Ltd. and Linghai Ma (incorporated by reference to Exhibit 4.84 from our 2008 Annual
Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May
22, 2009)
  123




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##### Table of Contents



ExhibitNumber
    
    Description4.141
    
    
    Share Transfer Agreement dated September 16, 2008 among Linhai Ma, Lin Yang, Shenzhen Guoxuan
Capital Holding Co., Ltd., Labor Union Committee of Shenzhen Newland Securites Investment Advisory
Co., Ltd., Zhaowen Li and Shiqin Wang (incorporated by reference to Exhibit 4.85 from our 2008
Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission
on May 22, 2009)4.142
    *
    
    Securities Investment and Consultancy Information and Technical Support Agreement dated October
17, 2009 between Shenzhen Newland Securities Investment and Advisory Co., Ltd. and Shenzhen Genius
Information Technology Co., Ltd.4.143
    *
    
    Securities Investment and Consultancy Information and Technical Support Agreement dated January
27, 2010 between Shanghai Securities Consulting Co.,Ltd. and Shanghai Meining Computer Software
Co., Ltd.4.144
    *
    
    Securities Investment and Consultancy Information and Technical Support Agreement dated January
27, 2010 between Beijing Chuangying Advisory and Investment Co., Ltd. and Beijing Fuhua Innovation
Technology Development Co., Ltd.4.145
    
    
    Loan Agreement dated January 21, 2009 among Fortune Software (Beijing) Co., Ltd., Yang Yang and
Zhenfei Fan (incorporated by reference to Exhibit 4.92 from our 2008 Annual Report on Form 20-F
(File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009)4.146
    
    
    Lease Contract dated January 10, 2008 between Shanghai Lushi Food Co., Ltd. and Shanghai Meining
Computer Software Co., Ltd. (incorporated by reference to Exhibit 4.96 from our 2008 Annual Report
on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22,
2009)4.147
    
    
    Lease Contract dated April 10, 2008 between Shenzhen Zhiguangda Industrial Development Co., Ltd.
and Shenzhen Genius Information Technology Co., Ltd. (incorporated by reference to Exhibit 4.99
from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and
Exchange Commission on May 22, 2009)4.148
    
    
    Entrusted Loan Contract dated May 7, 2008 among Fortune (Beijing) Success Technology Co., Ltd.,
Beijing Glory Co., Ltd. and China Bohai Bank Co., Ltd. Beijing Branch (incorporated by reference
to Exhibit 4.100 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the
Securities and Exchange Commission on May 22, 2009)4.149
    
    
    Entrusted Loan Contract dated December 11, 2007 among Beijing Glory Co., Ltd., Fortune Software
(Beijing) Co., Ltd. and China Construction Bank (incorporated by reference to Exhibit 4.101 from
our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange
Commission on May 22, 2009)4.150
    
    
    Entrusted Loan Contract dated April 11, 2008 between Beijing Premium Technology Co., Ltd.,
Zhengning Information Technology (Shanghai) Co., Ltd. and China Construction Bank Corporation
(incorporated by reference to Exhibit 4.102 from our 2008 Annual Report on Form 20-F (File
No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009)4.151
    *
    
    Entrusted Loan Contract dated January 12, 2009 among CFO Success, CFO Glory and Hua Xia Bank Co,
Ltd. Beijing Zizhuqiao Branch4.152
    
    
    Issuer Information Feed Service Agreement dated February 13, 2009 between HKEx Information Service
Limited and Fortune Software (Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.103 from
our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange
Commission on May 22, 2009)
  124




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##### Table of Contents



ExhibitNumber
    
    Description8.1
    *
    
    List of subsidiaries12.1
    *
    
    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 200215.1
    *
    
    Consent of Deloitte Touche Tohmatsu CPA Ltd.15.2
    *
    
    Written Consent of American Appraisal China Limited
  125




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##### Table of Contents



CHINA FINANCE ONLINE CO. LIMITED
 
 SIGNATURE
  Date: May 28, 2010
    CHINA FINANCE ONLINE CO. LIMITED/s/ Jeff WangName:
    Jeff WangTitle:
    Chief Financial Officer  126




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##### Table of Contents



CHINA FINANCE ONLINE CO. LIMITED
 
  127




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##### Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 CONTENTS
    
    PAGEREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    
    F - 2CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2008 AND 2009
    
    
    F - 3CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
    
    
    F - 4CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
    
    
    F - 5CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
    
    
    F - 6NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    
    
    F - 7SCHEDULE 1
    
    
    F - 50




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##### Table of Contents



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




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##### Table of Contents



CONSOLIDATED BALANCE SHEETS
 (In U.S. dollars, except share-related data)
 December 31,2008
    
    
    2009(As adjusted)AssetsCurrent assets:Cash and cash equivalents
    
    $
    97,544,219
    
    
    $
    107,391,084Prepaid expenses and other current assets
    
    
    8,581,415
    
    
    
    4,281,137Trust bank balances held on behalf of customers
    
    
    2,010,339
    
    
    
    13,310,238Accounts receivable, net of allowance for doubtful accounts
of $31,466 and $31,440 in 2008 and 2009, respectively
    
    
    2,875,548
    
    
    
    5,369,152Trading securities
    
    
    
    
    
    
    67,588Advances to employees
    
    
    160,837
    
    
    
    Deferred tax assets
    
    
    2,525,523
    
    
    
    3,236,810Total current assets
    
    
    113,697,881
    
    
    
    133,656,009Property and equipment, net
    
    
    8,588,691
    
    
    
    10,268,480Acquired intangible assets, net
    
    
    3,473,116
    
    
    
    4,779,101Cost method investment
    
    
    1,479,571
    
    
    
    1,479,571Rental deposits
    
    
    592,048
    
    
    
    725,261Goodwill
    
    
    12,018,512
    
    
    
    12,602,699Other assets
    
    
    219,358
    
    
    
    219,473Deferred tax assets, non-current
    
    
    1,754,134
    
    
    
    1,878,843Total assets
    
    $
    141,823,311
    
    
    $
    165,609,437Liabilities and shareholders equityCurrent liabilities:Deferred revenue
    
    $
    28,202,139
    
    
    $
    30,620,060Accrued expenses and other current liabilities
    
    
    4,895,859
    
    
    
    8,244,867Amounts due to customers for the trust bank balances held on their behalf
    
    
    2,010,339
    
    
    
    13,310,238Accounts payable
    
    
    221,574
    
    
    
    101,646Income taxes payable
    
    
    142,103
    
    
    
    123,880Total current liabilities
    
    
    35,472,014
    
    
    
    52,400,691Deferred revenue, non-current
    
    
    8,786,143
    
    
    
    14,547,248Deferred tax liabilities, non-current
    
    
    622,799
    
    
    
    994,573Total liabilities
    
    
    44,880,956
    
    
    
    67,942,512Commitments (Note 18)Equity:China Finance Online Co. Limited shareholders equity:Ordinary shares ($0.00013 par value; 500,000,000 shares authorized;
shares issued and outstanding 110,014,433 in 2008 and 110,250,163 in 2009)
    
    
    14,206
    
    
    
    14,237Additional paid-in capital
    
    
    67,340,543
    
    
    
    74,130,609Accumulated other comprehensive income
    
    
    6,448,078
    
    
    
    6,342,765Retained earnings
    
    
    23,139,528
    
    
    
    16,919,785Total China Finance Online Co. Limited shareholders equity
    
    
    96,942,355
    
    
    
    97,407,396Noncontrolling interests
    
    
    
    
    
    
    259,529Total equity
    
    
    96,942,355
    
    
    
    97,666,925Total liabilities and equity
    
    $
    141,823,311
    
    
    $
    165,609,437
   F - 3




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##### Table of Contents



CONSOLIDATED STATEMENTS OF OPERATIONS
 (In U.S. dollars, except share-related data)
 Years ended December 31,2007
    
    
    2008
    
    
    2009(As adjusted)
    
    
    (As adjusted)Net revenues
    
    $
    25,903,074
    
    
    $
    56,242,768
    
    
    $
    53,605,877Cost of revenues (including stock-based compensation
of $16,192, $nil and $nil for 2007, 2008 and 2009, respectively)
    
    
    4,426,602
    
    
    
    9,367,143
    
    
    
    8,146,724Gross profit
    
    
    21,476,472
    
    
    
    46,875,625
    
    
    
    45,459,153Operating expenses:General and administrative (including stock-based
compensation of $2,667,613, $7,767,874 and $6,436,536
for 2007, 2008 and 2009, respectively)
    
    
    7,783,668
    
    
    
    15,371,171
    
    
    
    16,982,032Product development (including stock-based compensation
of $123,461, $59,200 and $56,505 for 2007, 2008 and 2009, respectively)
    
    
    2,268,878
    
    
    
    5,635,173
    
    
    
    10,754,380Sales and marketing (including stock-based compensation
of $139,074, $213,076 and $107,675 for 2007, 2008 and 2009, respectively)
    
    
    6,924,336
    
    
    
    13,520,295
    
    
    
    26,095,233Total operating expenses
    
    
    16,976,882
    
    
    
    34,526,639
    
    
    
    53,831,645Government subsidies
    
    
    135,834
    
    
    
    436,946
    
    
    
    567,373Income (loss) from operations
    
    
    4,635,424
    
    
    
    12,785,932
    
    
    
    (7,805,119
    )Interest income
    
    
    1,104,701
    
    
    
    1,609,112
    
    
    
    1,352,307Exchange gain
    
    
    424,338
    
    
    
    1,489,076
    
    
    
    1,874Gain from trading securities
    
    
    
    
    
    
    
    
    
    
    40,574Other income (expense), net
    
    
    8,731
    
    
    
    (168,536
    )
    
    
    (257,674
    )Loss from impairment of cost method investment
    
    
    (11,127,000
    )
    
    
    
    
    
    
    Income (loss) before income tax benefit
    
    
    (4,953,806
    )
    
    
    15,715,584
    
    
    
    (6,668,038
    )Income tax benefit
    
    
    808,625
    
    
    
    3,047,129
    
    
    
    446,164Purchased pre-acquisition earning
    
    
    
    
    
    
    226,769
    
    
    
    Net income (loss)
    
    $
    (4,145,181
    )
    
    $
    18,989,482
    
    
    $
    (6,221,874
    )Less: net loss attributable to the noncontrolling interests
    
    
    15,477
    
    
    
    30,633
    
    
    
    2,131Net income (loss) attributable to China Finance Online Co. Limited
    
    $
    (4,129,704
    )
    
    $
    19,020,115
    
    
    $
    (6,219,743
    )Net income (loss) per share attributable to China Finance Online Co. LimitedBasic
    
    $
    (0.04
    )
    
    $
    0.19
    
    
    $
    (0.06
    )Diluted
    
    $
    (0.04
    )
    
    $
    0.17
    
    
    $
    (0.06
    )Weighted average shares used in calculating net income (loss) per shareBasic
    
    
    94,500,529
    
    
    
    98,957,993
    
    
    
    105,203,564Diluted
    
    
    94,500,529
    
    
    
    112,984,532
    
    
    
    105,203,564
   F - 4




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##### Table of Contents



CONSOLIDATED STATEMENTS OF EQUITY
 AND COMPREHENSIVE INCOME
 (In U.S. dollars, except share-related data)
 Accumulated other
    
    
    
    
    
    
    Total China Finance
    
    
    Non
    
    
    
    
    
    
    TotalOrdinary shares
    
    
    Additional
    
    
    comprehensive
    
    
    Retained
    
    
    Online Co. Limited
    
    
    controlling
    
    
    Total
    
    
    comprehensiveShares
    
    
    Amount
    
    
    paid-in capital
    
    
    income (loss)
    
    
    earnings
    
    
    shareholders equity
    
    
    interests
    
    
    equity
    
    
    income (loss)Balance as of January 1, 2007
    
    
    104,384,933
    
    
    
    13,474
    
    
    
    52,555,919
    
    
    
    1,634,269
    
    
    
    8,249,117
    
    
    
    62,452,779
    
    
    

    

    
    
    
    62,452,779Exercise of share option by employees
    
    
    
    
    
    
    
    
    
    
    2,366,697
    
    
    
    
    
    
    
    
    
    
    
    2,366,697
    
    
    
    
    
    
    
    2,366,697Exercise of share options by non-employees
    
    
    5,369,500
    
    
    
    698
    
    
    
    858,422
    
    
    
    
    
    
    
    
    
    
    
    859,120
    
    
    
    
    
    
    
    859,120Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    2,946,340
    
    
    
    
    
    
    
    
    
    
    
    2,946,340
    
    
    
    
    
    
    
    2,946,340Acquisition of Daily Growth Securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    486,908
    
    
    
    486,908Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,867,163
    
    
    
    
    
    
    
    2,867,163
    
    
    
    
    
    
    
    2,867,163
    
    
    $
    2,867,163Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,129,704
    )
    
    
    (4,129,704
    )
    
    
    (15,477
    )
    
    
    (4,145,181
    )
    
    
    (4,145,181
    )Balance as of December 31, 2007 (As adjusted)
    
    
    109,754,433
    
    
    
    14,172
    
    
    
    58,727,378
    
    
    
    4,501,432
    
    
    
    4,119,413
    
    
    
    67,362,395
    
    
    
    471,431
    
    
    
    67,833,826
    
    
    
    (1,278,018
    )Exercise of share option by employees
    
    
    
    
    
    
    
    
    
    
    531,449
    
    
    
    
    
    
    
    
    
    
    
    531,449
    
    
    
    
    
    
    
    531,449Exercise of share options by non-employees
    
    
    260,000
    
    
    
    34
    
    
    
    41,566
    
    
    
    
    
    
    
    
    
    
    
    41,600
    
    
    
    
    
    
    
    41,600Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    8,040,150
    
    
    
    
    
    
    
    
    
    
    
    8,040,150
    
    
    
    
    
    
    
    8,040,150Additional capital injection in Daily Growth Securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (440,798
    )
    
    
    (440,798
    )Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,946,646
    
    
    
    
    
    
    
    1,946,646
    
    
    
    
    
    
    
    1,946,646
    
    
    $
    1,946,646Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,020,115
    
    
    
    19,020,115
    
    
    
    (30,633
    )
    
    
    18,989,482
    
    
    
    18,989,482Balance as of December 31, 2008 (As adjusted)
    
    
    110,014,433
    
    
    
    14,206
    
    
    
    67,340,543
    
    
    
    6,448,078
    
    
    
    23,139,528
    
    
    
    96,942,355
    
    
    
    
    
    
    
    96,942,355
    
    
    
    20,936,128Exercise of share option by employees
    
    
    185,730
    
    
    
    24
    
    
    
    181,357
    
    
    
    
    
    
    
    
    
    
    
    181,381
    
    
    
    
    
    
    
    181,381Exercise of share options by non-employees
    
    
    50,000
    
    
    
    7
    
    
    
    7,993
    
    
    
    
    
    
    
    
    
    
    
    8,000
    
    
    
    
    
    
    
    8,000Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    6,600,716
    
    
    
    
    
    
    
    
    
    
    
    6,600,716
    
    
    
    
    
    
    
    6,600,716Acquisition of CFO Securities Consulting
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    261,660
    
    
    
    261,660Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (105,313
    )
    
    
    
    
    
    
    (105,313
    )
    
    
    
    
    
    
    (105,313
    )
    
    $
    (105,313
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,219,743
    )
    
    
    (6,219,743
    )
    
    
    (2,131
    )
    
    
    (6,221,874
    )
    
    
    (6,221,874
    )Balance as of December 31, 2009
    
    
    110,250,163
    
    
    
    14,237
    
    
    
    74,130,609
    
    
    
    6,342,765
    
    
    
    16,919,785
    
    
    
    97,407,396
    
    
    
    259,529
    
    
    
    97,666,925
    
    
    
    (6,327,187
    )
   F - 5




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In U.S. dollars)
 Years ended December 31,2007
    
    
    2008
    
    
    2009(As adjusted)
    
    
    (As adjusted)Operating activities:Net (loss) income
    
    $
    (4,145,181
    )
    
    $
    18,989,482
    
    
    $
    (6,221,874
    )Adjustments to reconcile net (loss) income to net cash provided
by operating activities:Stock-based compensation
    
    
    2,946,340
    
    
    
    8,040,150
    
    
    
    6,600,716Depreciation and amortization
    
    
    973,953
    
    
    
    2,139,145
    
    
    
    2,987,094Gain from trading securities
    
    
    
    
    
    
    
    
    
    
    (40,553
    )Deferred taxes
    
    
    (737,712
    )
    
    
    (3,200,390
    )
    
    
    (917,284
    )Loss on disposal of property and equipment
    
    
    84,796
    
    
    
    37,659
    
    
    
    182,235Loss from impairment of cost method investment
    
    
    11,127,000
    
    
    
    
    
    
    
    Purchased pre-acquisition earning
    
    
    
    
    
    
    (226,769
    )
    
    
    Changes in assets and liabilities:Accounts receivable
    
    
    37,377
    
    
    
    (1,292,386
    )
    
    
    (2,497,002
    )Prepaid expenses and other current assets
    
    
    (1,786,912
    )
    
    
    (5,567,706
    )
    
    
    4,648,114Advances to employees
    
    
    (1,672,575
    )
    
    
    1,597,941
    
    
    
    160,634Trust bank balances held on behalf of customers
    
    
    (465,101
    )
    
    
    854,063
    
    
    
    (11,305,861
    )Rental deposits
    
    
    (403,912
    )
    
    
    (74,487
    )
    
    
    (133,601
    )Deferred revenue
    
    
    17,509,161
    
    
    
    9,943,656
    
    
    
    8,206,417Account payable
    
    
    (30,297
    )
    
    
    (182,528
    )
    
    
    (113,289
    )Accrued expenses and other current liabilities
    
    
    4,566,829
    
    
    
    (2,482,122
    )
    
    
    3,387,725Amounts due to customers for the trust bank balance held on
their behalf
    
    
    465,101
    
    
    
    (854,063
    )
    
    
    11,305,861Income taxes payable
    
    
    (43,267
    )
    
    
    126,961
    
    
    
    (18,097
    )Net cash provided by operating activities
    
    
    28,425,600
    
    
    
    27,848,606
    
    
    
    16,231,235Investing activities:Purchase of property and equipment
    
    
    (3,836,412
    )
    
    
    (5,006,365
    )
    
    
    (4,514,342
    )Acquisition of businesses (net of cash acquired of $2,631,008,
$1,521,109 and $8,282 for the years ended
December 31, 2007, 2008, and 2009, respectively)
    
    
    (993,845
    )
    
    
    (2,403,620
    )
    
    
    (1,932,472
    )Purchase of trading securities
    
    
    
    
    
    
    
    
    
    
    (267,782
    )Proceeds from sales of trading securities
    
    
    
    
    
    
    
    
    
    
    240,775Proceeds from disposal of fixed assets
    
    
    
    
    
    
    
    
    
    
    1,468Net cash used in investing activities
    
    
    (4,830,257
    )
    
    
    (7,409,985
    )
    
    
    (6,472,353
    )Financing activities:Proceeds from stock options exercised by employees
    
    
    2,366,697
    
    
    
    531,449
    
    
    
    181,381Proceeds from exercise of options granted to non-employee
    
    
    859,120
    
    
    
    41,600
    
    
    
    8,000Net cash provided by financing activities
    
    
    3,225,817
    
    
    
    573,049
    
    
    
    189,381Effect of exchange rate changes
    
    
    2,952,320
    
    
    
    1,803,516
    
    
    
    (101,398
    )Net increase in cash and cash equivalents
    
    
    29,773,480
    
    
    
    22,815,186
    
    
    
    9,846,865Cash and cash equivalents, beginning of year
    
    
    44,955,553
    
    
    
    74,729,033
    
    
    
    97,544,219Cash and cash equivalents, end of year
    
    
    74,729,033
    
    
    
    97,544,219
    
    
    
    107,391,084Supplemental disclosure of cash flow information
Income taxes paid
    
    $
    38,761
    
    
    $
    169,270
    
    
    $
    515,782
   F - 6




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
 (In U.S. dollars)
 1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES
   Place of
    
    Date of
    
    legalincorporation or
    
    incorporation or
    
    ownership
    
    
    PrincipalCompany name
    
    establishment
    
    acquisition
    
    interest
    
    
    activitySubsidiaries:China Finance Online (Beijing) Co., Ltd. (CFO Beijing)
    
    Beijing, PRC
    
    Jul. 9, 1998
    
    
    100
    %
    
    Subscription serviceFortune Software (Beijing) Co., Ltd. (CFO Software)
    
    Beijing, PRC
    
    Dec. 7, 2004
    
    
    100
    %
    
    Subscription serviceFortune (Beijing) Wisdom Technology Co., Ltd. (CFO Wisdom)
    
    Beijing, PRC
    
    Oct. 16, 2007
    
    
    100
    %
    
    Subscription serviceFortune (Beijing) Success Technology Co., Ltd. (CFO Success)
    
    Beijing, PRC
    
    Oct. 16, 2007
    
    
    100
    %
    
    Subscription serviceShenzhen Genius Information Technology Co., Ltd. (CFO Genius)
    
    Shenzhen, PRC
    
    Sep. 21, 2006
    
    
    100
    %
    
    Database subscriptionJujin Software (Shenzhen) Co., Ltd. (CFO Jujin)
    
    Shenzhen, PRC
    
    Mar. 9, 2007
    
    
    100
    %
    
    Subscription serviceJuda Software (Shenzhen) Co., Ltd. (CFO Juda)
    
    Shenzhen, PRC
    
    Nov. 11, 2008
    
    
    100
    %
    
    Subscription serviceStockstar Information Technology (Shanghai) Co., Ltd.
(CFO Stockstar)
    
    Shanghai, PRC
    
    Oct. 1, 2006
    
    
    100
    %
    
    Subscription serviceZhengning Information & Technology (Shanghai) Co., Ltd.
(CFO Zhengning)
    
    Shanghai, PRC
    
    Jan. 31, 2007
    
    
    100
    %
    
    Subscription serviceZhengtong Information Technology (Shanghai) Co., Ltd
(CFO Zhengtong)
    
    Shanghai, PRC
    
    Jun. 26, 2008
    
    
    100
    %
    
    N/AZhengyong Information Technology (Shanghai) Co., Ltd
(CFO Zhengyong)
    
    Shanghai, PRC
    
    Jun. 24, 2008
    
    
    100
    %
    
    N/ADaily Growth Financial Holdings Limited (Daily Growth Holdings)
    
    BVI
    
    Jul. 16, 2007
    
    
    100
    %
    
    Investment HoldingsGiant Bright International Holdings Limited (CFO Giant Bright)
    
    BVI
    
    Jul. 16, 2007
    
    
    100
    %
    
    N/AMount First Investments Limited (CFO Mount First)
    
    BVI
    
    Jul. 23, 2007
    
    
    100
    %
    
    N/AMainfame Group Limited (CFO Mainfame)
    
    BVI
    
    Jan. 2, 2008
    
    
    100
    %
    
    N/AManca Development Limited (CFO Manca)
    
    BVI
    
    Jan. 3, 2008
    
    
    100
    %
    
    N/ATeam Gear Limited (CFO Team Gear)
    
    Hong Kong, PRC
    
    Oct. 22, 2007
    
    
    100
    %
    
    N/AKinco Limited (CFO Kinco)
    
    Hong Kong, PRC
    
    Oct. 22, 2007
    
    
    100
    %
    
    N/ADanford (H.K) Limited (CFO Danford)
    
    Hong Kong, PRC
    
    Nov. 30, 2007
    
    
    100
    %
    
    N/AKingford International Limited (CFO Kingford)
    
    Hong Kong, PRC
    
    Feb. 11, 2008
    
    
    100
    %
    
    N/AAsiaciti (H.K.) Limited (CFO Asiaciti)
    
    Hong Kong, PRC
    
    Feb. 11, 2008
    
    
    100
    %
    
    N/ADaily Growth Securities Limited (Daily Growth Securities) (Note 3)
    
    Hong Kong, PRC
    
    Nov. 23, 2007
    
    
    100
    %
    
    Brokerage serviceDaily Growth Futures Limited (Daily Growth Futures)
    
    Hong Kong, PRC
    
    Apr. 16, 2008
    
    
    100
    %
    
    Brokerage serviceDaily Growth Wealth Management Limited
(Daily Growth Wealth Management)
    
    Hong Kong, PRC
    
    Oct. 8, 2008
    
    
    100
    %
    
    ConsultingDaily Growth Investment Services Limited
(Daily Growth Investment Services)
    
    HongKong, PRC
    
    Jun. 30, 2009
    
    
    100
    %
    
    N/AVariable interest entities:Beijing Fuhua Innovation Technology Investment Co., Ltd.
(CFO Fuhua)
    
    Beijing, PRC
    
    Dec. 31, 2000
    
    Nil
    
    
    Advertising serviceShanghai Shangtong Co., Ltd. (CFO Shangtong)
    
    Shanghai, PRC
    
    Jun. 6, 2008
    
    Nil
    

    
    Subscription serviceShanghai Chongzhi Co., Ltd., (CFO Chongzhi)
    
    Shanghai, PRC
    
    Jun. 6, 2008
    
    Nil
    

    
    Subscription serviceShanghai Decheng Information & Technology Co., Ltd.
(CFO Decheng)
    
    Shanghai, PRC
    
    Dec. 24, 2009
    
    Nil
    

    
    N/ABeijing Premium Technology Co., Ltd. (CFO Premium)
    
    Beijing, PRC
    
    Aug. 31, 2007
    
    Nil
    

    
    N/ABeijing Glory Technology Co., Ltd. (CFO Glory)
    
    Beijing, PRC
    
    Sep. 11, 2007
    
    Nil
    

    
    N/AHuifu Jinyuan Co., Ltd. (CFO Huifu) (Note 3)
    
    Beijing, PRC
    
    Oct. 31, 2008
    
    Nil
    

    
    N/AZhongcheng Futong Co., Ltd. (CFO Zhongcheng) (Note 3)
    
    Beijing, PRC
    
    Oct. 31, 2008
    
    Nil
    

    
    N/AFortune (Beijing) Yingchuang Technology Co., Ltd. (CFO Yingchuang)
    
    Beijing,PRC
    
    Dec. 18, 2009
    
    Nil
    

    
    N/AFortune (Beijing) Qicheng Technology Co., Ltd. (CFO Qicheng)
    
    Beijing, PRC
    
    Dec. 18, 2009
    
    Nil
    

    
    N/ABeijing Chuangying Advisory and Investment Co., Ltd.
(CFO Chuangying) (Note 3)
    
    Beijing, PRC
    
    Jan. 9, 2009
    
    Nil
    

    
    ConsultingShenzhen Newrand Securities Advisory and Investment Co., Ltd.
(CFO Newrand ) (Note 3)
    
    Shenzhen, PRC
    
    Oct. 17, 2008
    
    Nil
    

    
    Consulting and trainingShenzhen Shangtong Software Co., Ltd. (CFO Shenzhen Shangtong)
    
    Shenzhen, PRC
    
    Sep. 23, 2009
    
    Nil
    

    
    N/ASubsidiaries of variable interest entities:Shanghai Meining Computer Software Co., Ltd. (CFO Meining)
    
    Shanghai, PRC
    
    Oct. 1, 2006
    
    Nil
    

    
    Subscription and SMSShenzhen Newrand Securities Training Center
(CFO Newrand Training)
    
    Shenzhen, PRC
    
    Oct. 17, 2008
    
    Nil
    

    
    TrainingShanghai Securities Consulting Co., Ltd
(CFO Securities Consulting) (Note 3)
    
    Shanghai, PRC
    
    Nov. 5, 2009
    
    Nil
    

    
    Consulting
  F - 7




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES  continued
    
    
    the shareholders of the VIEs have granted the Group or individuals designated by the
Group an irrevocable proxy to exercise all their voting rights as shareholders of the
VIEs, including the right to appoint directors, the general manager and other senior
management of the VIEs;
 
    
    the VIEs will not enter into any transaction that may materially affect its assets,
liabilities, equity or operations without the Groups prior written consent;
 
    
    the VIEs will not distribute any dividends;
 
    
    the Group may purchase the entire equity interest in, or all the assets of the VIEs
at a price equal to the total principal amount of the loan lent by the Group to the
owners of the VIEs when and if such purchase is permitted by PRC law or the current
shareholders of the VIEs cease to be directors or employees of the VIEs;
 
    
    the shareholders of the VIEs will not transfer, sell, pledge, dispose of or create
any encumbrance on their equity interest in the VIEs without the prior written consent
of the Group.
  
    
    strategic consulting services agreement, pursuant to which the amount of the fee to
be charged is 30% of each VIEs income before tax;
 
    
    technical support services agreement, pursuant to which the amount of the fee to be
charged is 30% of each VIEs income before tax;
    
    operating support services agreement, pursuant to which the amount of the fee to be
charged is 40% of each VIEs income before tax;
  F - 8




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES  continued
   VIE Name
    
    Contractual Arrangement Date
    
    
    CounterpartCFO Fuhua
    
    May 27, 2004
    
    CFO BeijingCFO Premium
    
    August 21,2007
    
    CFO SoftwareCFO Glory
    
    September 10, 2007
    
    CFO SoftwareCFO Chongzhi
    
    June 8, 2008
    
    CFO SoftwareCFO Shangtong
    
    June 8, 2008
    
    CFO SoftwareCFO Zhongcheng
    
    October 15, 2008
    
    CFO SoftwareCFO Huifu
    
    October 15, 2008
    
    CFO SoftwareCFO Newrand
    
    October 17, 2008
    
    CFO SoftwareCFO Chuangying
    
    January 21, 2009
    
    CFO SoftwareCFO Shenzhen Shangtong
    
    August 3, 2009
    
    CFO SuccessCFO Qicheng
    
    November 20, 2009
    
    CFO ChuangyingCFO Yingchuang
    
    November 25, 2009
    
    CFO ChuangyingCFO Decheng
    
    November 30,2009
    
    CFO Chongzhi
  Year ended December 31,2008
    
    
    2009Total assets
    
    $
    75,142,761
    
    
    $
    90,506,462Total liabilities
    
    
    71,209,109
    
    
    
    83,135,588
 Year ended December 31,2007
    
    
    2008
    
    
    2009Net revenue
    
    
    1,022,735
    
    
    
    3,712,343
    
    
    
    11,167,473Net income (loss)
    
    
    (1,021,290
    )
    
    
    227,474
    
    
    
    2,572,248
  F - 9




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of presentation
  Basis of consolidation
  Cash and cash equivalents
  Fair value
       F - 10




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Trust bank balances held on behalf of customers
  Advances to employees
  Use of estimates
  Trading securities
  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
  F - 11




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Acquired intangible assets, net
       F - 12




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Impairment of long-lived assets
  Business combinations
    F - 13




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Goodwill
    Revenue recognition
   F - 14




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Revenue recognition
    Business taxes and value added taxes
     F - 15




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Government subsidies
  Deferred revenue
  Cost method investment
   F - 16




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(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




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Advertising costs
  Income taxes
   Comprehensive income (loss)
  Fair value of financial instruments
   F - 18




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Concentrations of credit risk
    Stock-based compensation
     F - 19




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
 FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
 (In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Net income (loss) per share
  Recently issued accounting pronouncements not yet adopted
    F - 20




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Recently issued accounting pronouncements not yet adopted
     F - 21




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  continued
 Recently issued accounting pronouncements not yet adopted
    F - 22




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
 FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
 (In U.S. dollars)
 3.
    
    ACQUISITIONS
  Acquisition of CFO Chuangying
  Useful lifePurchase price allocation:Acquired intangible assets:Securities consulting license
    
    $
    549,758
    
    
    15 yearsTotal assets acquired
    
    
    549,758Deferred tax liabilities
    
    
    (137,440
    )Total net asset
    
    
    412,318Goodwill
    
    
    172,794Total
    
    
    585,112
  F - 23




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 3.
    
    ACQUISITIONS  continued
 Acquisition of CFO Securities Consulting
  Useful lifePurchase price allocation:Cash and cash equivalents
    
    $
    8,282Other account receivables
    
    
    222,317Acquired intangible asset:Trademark
    
    
    350,191
    
    
    15 yearsSecurities consulting license
    
    
    900,596
    
    
    15 yearsTotal assets acquired
    
    
    1,481,386Deferred tax liabilities
    
    
    (312,697
    )Noncontrolling interests
    
    
    (261,660
    )Total net asset
    
    
    907,029Goodwill
    
    
    421,011Total
    
    
    1,328,040
  F - 24




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 3.
    
    ACQUISITIONS  continued
 Acquisition of CFO Newrand
  Useful lifePurchase price allocation:Cash and cash equivalents
    
    $
    1,521,109Acquired intangible assets:Securities consulting license
    
    
    1,183,926
    
    
    15 yearsTrade mark
    
    
    440,496
    
    
    15 yearsTotal assets acquired
    
    
    3,145,531Deferred tax liabilities
    
    
    (406,106
    )Total net asset
    
    
    2,739,425Goodwill
    
    
    1,086,871Total
    
    
    3,826,296
 Acquisitions of CFO Zhongcheng & CFO Huifu
   F - 25




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 3.
    
    ACQUISITIONS  continued
 Acquisition of Daily Growth Securities
  Useful lifePurchase price allocation: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
    
    
    26,100Acquired intangible asset:Stock exchange trading right
    
    
    54,642
    
    
    IndefiniteTotal assets acquired
    
    
    6,157,756Account 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
    )Total net asset
    
    
    2,811,460Goodwill
    
    
    813,393Total
    
    
    3,624,853
   F - 26




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 3.
    
    ACQUISITIONS  continued
  For the years ended December 31,2007
    
    
    2008
    
    
    2009(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Revenues
    
    $
    26,930,986
    
    
    $
    56,371,385
    
    
    $
    53,605,878Net income (loss) attributable to China
Finance Online Co., Limited
    
    $
    235,997
    
    
    $
    18,858,118
    
    
    $
    (6,318,295
    )Net income (loss) per share attributable
to China Finance Online Co. Limited basic
    
    $
    0.00
    
    
    $
    0.19
    
    
    $
    (0.06
    ) diluted
    
    $
    0.00
    
    
    $
    0.17
    
    
    $
    (0.06
    )
 Fair value of acquired assets
   F - 27




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 4.
    
    PREPAID EXPENSES AND OTHER CURRENT ASSETS
  December 31,2008
    
    
    2009Prepayment of advertising fees
    
    $
    3,833,486
    
    
    $
    526,492Advertising deposit (note 1)
    
    
    175,889
    
    
    
    261,460Prepayment to sales agents
    
    
    950,752
    
    
    
    212,294Advances to suppliers
    
    
    817,432
    
    
    
    805,212VAT refund receivable
    
    
    791,784
    
    
    
    817,532Income tax prepayment and business tax
refund receivable
    
    
    228,564
    
    
    
    175,434Rebate receivable for raw data fee (note 2)
    
    
    477,596
    
    
    
    22,131Prepayment for raw data fee (note 3)
    
    
    305,328
    
    
    
    Interest receivable
    
    
    224,656
    
    
    
    409,194Other current assets
    
    
    775,928
    
    
    
    1,051,388$
    8,581,415
    
    
    $
    4,281,137
 Notes:(1)
    
    The advertising deposit represents amounts of deposit paid to advertising
agent, which is expected to be refunded within a year.(2)
    
    According to various license agreements with SSE Infonet Ltd., the Company was
entitled to receive certain rebate as incentive, which was calculated based on the
volume of raw data used by the Company in the provision of subscription services.(3)
    
    On December 12, 2008, SSE Infonet Ltd., terminated one of the license
agreements and would no longer provide certain raw data to third party vendors,
including the Company, effective January 1, 2009. As a result, the Company would not
be able to continue to provide the subscription services based on such raw data, which
were subscribed by the customers before the termination of this license agreement.
Therefore, the prepaid royalty fee according to this agreement was refunded by SSE
Infonet Ltd. in year 2009.  F - 28




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 5.
    
    TRADING SECURITIES
  6.
    
    COST METHOD INVESTMENT
      F - 29




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 7.
    
    PROPERTY AND EQUIPMENT, NET
  December 31,2008
    
    
    2009Technology infrastructure
    
    $
    5,954,777
    
    
    $
    7,759,146Computer equipment
    
    
    1,574,533
    
    
    
    1,874,318Furniture, fixtures and equipment
    
    
    1,955,792
    
    
    
    2,384,253Motor vehicle
    
    
    432,940
    
    
    
    645,517Leasehold improvements
    
    
    1,807,211
    
    
    
    2,667,51211,725,253
    
    
    
    15,330,746Less: accumulated depreciation
    
    
    (3,136,562
    )
    
    
    (5,062,266
    )$
    8,588,691
    
    
    $
    10,268,480
  8.
    
    ACQUIRED INTANGIBLE ASSETS, NET
  December 31,Useful2008
    
    
    2009
    
    
    lifeIntangible assets not subject to amortization:Trademarks
    
    
    844,265
    
    
    
    843,561
    
    
    IndefiniteStock exchange trading right
    
    
    64,517
    
    
    
    64,475
    
    
    IndefiniteFutures exchange trading right
    
    
    64,517
    
    
    
    64,475
    
    
    IndefiniteIntangible assets subject to amortization:Completed technology
    
    
    851,594
    
    
    
    850,883
    
    
    5 yearsCustomer relationship
    
    
    687,431
    
    
    
    686,857
    
    
    4-5 yearsValue-added service license
    
    
    27,116
    
    
    
    27,094
    
    
    3 yearsAgreement with mobile operators
    
    
    12,166
    
    
    
    12,155
    
    
    3 yearsSecurities consulting license and
related trademarks
    
    
    1,626,969
    
    
    
    3,426,717
    
    
    15 yearsIntellectual property
    
    
    73,287
    
    
    
    73,226
    
    
    10 years4,251,862
    
    
    
    6,049,443Less: Accumulated amortization
    
    
    (778,746
    )
    
    
    (1,270,342
    )$
    3,473,116
    
    
    $
    4,779,101
  F - 30




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 8.
    
    ACQUIRED INTANGIBLE ASSETS, NET  continued
  9.
    
    GOODWILL
  Southern
    
    
    Eastern
    
    
    NorthernChina
    
    
    China
    
    
    China
    
    
    Hong Kong
    
    
    TotalBalance as of December 31, 2007
    
    
    1,161,337
    
    
    
    7,679,127
    
    
    
    
    
    
    
    811,255
    
    
    
    9,651,719Acquisition (Note 3)
    
    
    1,086,871
    
    
    
    
    
    
    
    202,359
    
    
    
    456,501
    
    
    
    1,745,731Exchange difference
    
    
    82,066
    
    
    
    531,377
    
    
    
    400
    
    
    
    7,219
    
    
    
    621,062Balance as of December 31, 2008
    
    
    2,330,274
    
    
    
    8,210,504
    
    
    
    202,759
    
    
    
    1,274,975
    
    
    
    12,018,512Acquisition (Note 3)
    
    
    
    
    
    
    421,011
    
    
    
    172,794
    
    
    
    
    
    
    
    593,805Exchange difference
    
    
    (1,945
    )
    
    
    (6,886
    )
    
    
    35
    
    
    
    (822
    )
    
    
    (9,618
    )Balance as of December 31, 2009
    
    
    2,328,329
    
    
    
    8,624,629
    
    
    
    375,588
    
    
    
    1,274,153
    
    
    
    12,602,699
     F - 31




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 9.
    
    GOODWILL  continued
     F - 32




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 10.
    
    ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
  December 31,2008
    
    
    2009Accrued bonus
    
    $
    1,079,265
    
    
    $
    4,355,130Accrued professional service fees
    
    
    295,152
    
    
    
    436,834Withholding individual income tax-option exercise
    
    
    171,158
    
    
    
    144,979Value added taxes payable
    
    
    908,699
    
    
    
    444,278Other taxes payable
    
    
    313,201
    
    
    
    487,461Accrued raw data cost
    
    
    173,841
    
    
    
    308,566Accrued office rental
    
    
    93,600
    
    
    
    131,603Accrued bandwidth cost
    
    
    1,231
    
    
    
    519,763Accrued welfare benefits
    
    
    143,834
    
    
    
    288,123Sales return to customers (note 1)
    
    
    906,182
    
    
    
    Loan payable
    
    
    146,574
    
    
    
    146,451Acquisition consideration payable
    
    
    117,259
    
    
    
    89,335Others
    
    
    545,863
    
    
    
    892,344$
    4,895,859
    
    
    $
    8,244,867
 Notes:(1)
    
    Sales return to customers represents the amounts of sales return resulting from
termination of license agreement with SSE Infonet Ltd. for certain information
provision. (see Note 4(3)). 11.
    
    STOCK OPTIONS AND NONVESTED SHARES
   F - 33




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 11.
    
    STOCK OPTIONS AND NONVESTED SHARES  continued
 2004 Stock incentive plan
  Options to employees
    Years ended December 31,2008
    
    
    2009Weighted average risk free rate of return
    
    
    2.14
    %
    
    
    2.03
    %Weighted average expected option life
    
    5.98 years
    
    5.98 yearsExpected volatility rate
    
    
    61.87
    %
    
    
    57.92
    %Dividend yield
    
    
    
    
    
    
    
  F - 34




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 11.
    
    STOCK OPTIONS AND NONVESTED SHARES  continued
 2004 Stock incentive plan
 Options to employees
 (1)
    
    Expected volatility
  (2)
    
    Risk-free interest rate
  (3)
    
    Expected option life
  (4)
    
    Dividend yield
    F - 35




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 11.
    
    STOCK OPTIONS AND NONVESTED SHARES  continued
 2004 Stock incentive plan
 Options to non-employees
   Summary of stock options to employees and non-employees
  2007
    
    
    2008
    
    
    2009Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedNumber
    
    
    average
    
    
    Number
    
    
    average
    
    
    Number
    
    
    averageof options
    
    
    exercise price
    
    
    of options
    
    
    exercise price
    
    
    of options
    
    
    exercise priceOutstanding at beginning of year
    
    
    14,843,688
    
    
    $
    0.56
    
    
    
    10,557,568
    
    
    $
    0.84
    
    
    
    11,439,978
    
    
    $
    0.91Granted
    
    
    3,848,000
    
    
    $
    1.07
    
    
    
    2,820,840
    
    
    $
    1.79
    
    
    
    10,000
    
    
    $
    1.65Exercised
    
    
    (7,746,280
    )
    
    $
    0.42
    
    
    
    (829,670
    )
    
    $
    0.69
    
    
    
    (236,480
    )
    
    $
    0.80Forfeited
    
    
    (387,840
    )
    
    $
    0.87
    
    
    
    (138,760
    )
    
    $
    1.00
    
    
    
    (69,360
    )
    
    $
    1.22Cancelled
    
    
    
    
    
    
    
    
    
    
    (970,000
    )
    
    $
    2.81
    
    
    
    (309,840
    )
    
    $
    2.03Outstanding at end of year
    
    
    10,557,568
    
    
    $
    0.84
    
    
    
    11,439,978
    
    
    $
    0.91
    
    
    
    10,834,298
    
    
    $
    0.87Shares exercisable at end of year
    
    
    5,939,888
    
    
    $
    0.68
    
    
    
    7,903,538
    
    
    $
    0.80
    
    
    
    9,439,258
    
    
    $
    0.82
  F - 36




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 11.
    
    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 31,outstanding
    
    
    contractual life
    
    
    price
    
    
    2009
    
    
    exercisable
    
    
    price
    
    
    2009Ordinary shares$0.16
    
    
    2,883,738
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,883,738$1.04
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000$1.31
    
    
    1,497,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,497,600$1.32
    
    
    27,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,000$1.12
    
    
    400,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    400,000$1.16
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000$1.07
    
    
    700,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    700,000$0.96
    
    
    2,886,360
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,681,400$1.25
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84,000$1.32
    
    
    128,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    110,200$2.03
    
    
    3,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,280$1.26
    
    
    1,798,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    653,040$1.65
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,834,298
    
    
    5.00 years
    
    $
    0.87
    
    
    $
    6,366,038
    
    
    
    9,439,258
    
    
    $
    0.82
    
    
    $
    6,028,593
     F - 37




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 11.
    
    STOCK OPTIONS AND NONVESTED SHARES  continued
 2007 Equity incentive plan
    Weighted-average
    
    
    Aggregategrant date
    
    
    intrinsicNonvested shares
    
    Shares
    
    
    fair value
    
    
    valueAt the beginning of year 2007
    
    
    
    
    
    
    
    
    
    
    Granted
    
    
    10,558,493
    
    
    
    1.84
    
    
    
    Vested
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    At the end of year 2007
    
    
    10,558,493
    
    
    
    1.84
    
    
    
    46,246,199Granted
    
    
    
    
    
    
    
    
    
    
    Vested
    
    
    (4,329,024
    )
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    At the end of year 2008
    
    
    6,229,469
    
    
    
    1.84
    
    
    
    8,758,633Granted
    
    
    
    
    
    
    
    
    
    
    Vested
    
    
    (2,886,016
    )
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    At the end of year 2009
    
    
    3,343,453
    
    
    
    1.84
    
    
    
    4,881,441
   F - 38




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 12.
    
    INCOME TAXES
 British Virgin Islands
  Hong Kong
  PRC
       F - 39




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 12.
    
    INCOME TAXES  continued
 PRC
  The new HNTE status obtained by CFO Software, CFO Meining and CFO Genius in
2008 under the New EIT Law is valid for three years and qualifying entities can then
apply to renew for an additional three years provided their business operations
continue to qualify for the new HNTE status. The Group assumed its qualifying entities
will not continue to obtain the renewal in the future.
Accordingly, in calculating deferred tax assets and liabilities, the Group assumed
its qualifying entities will not continue to renew the new HNTE status at the
conclusion of the initial three year period.    F - 40




---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 12.
    
    INCOME TAXES  continued
 PRC
   December 31,2007
    
    
    2008
    
    
    2009Current
    
    $
    70,913
    
    
    $
    (153,261
    )
    
    $
    (471,120
    )Deferred
    
    
    737,712
    
    
    
    3,200,390
    
    
    
    917,284Total
    
    $
    808,625
    
    
    $
    3,047,129
    
    
    $
    446,164
  December 31,2008
    
    
    2009Current deferred tax assets:Deferred revenue  current
    
    $
    1,873,600
    
    
    $
    2,852,510Accrued expenses and other liability
    
    
    50,706
    
    
    
    200,775Net operating loss carrying forwards
    
    
    601,217
    
    
    
    183,525Total current deferred tax assets
    
    $
    2,525,523
    
    
    
    3,236,810Non-current deferred tax assets:Deferred revenue  non-current
    
    $
    1,167,931
    
    
    $
    1,829,496Net operating loss carrying forwards
    
    
    1,367,919
    
    
    
    2,321,949Less: valuation allowance
    
    
    (781,716
    )
    
    
    (2,272,602
    )Total non-current deferred tax assets
    
    $
    1,754,134
    
    
    $
    1,878,843Non-current deferred tax liabilities:Intangible assets
    
    
    (622,005
    )
    
    
    (994,573
    )Property and equipment
    
    
    (794
    )
    
    
    Total non-current deferred tax liabilities
    
    $
    (622,799
    )
    
    $
    (994,573
    )
  F - 41




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 12.
    
    INCOME TAXES  continued
 PRC
   Years ended December 31,2007
    
    
    2008
    
    
    2009%
    
    
    %
    
    
    %Statutory tax rate in PRC
    
    
    (33.0
    )
    
    
    25.0
    
    
    
    (25.0
    )Effect of tax holiday
    
    
    (91.8
    )
    
    
    (73.0
    )
    
    
    (35.6
    )Non-deductible expenses
    
    
    99.7
    
    
    
    39.0
    
    
    
    45.9Non-taxable income
    
    
    (16.7
    )
    
    
    (7.9
    )
    
    
    (14.4
    )Effect on deferred taxes due to
changes in tax rates under the new EIT law
for certain PRC entities
    
    
    18.5
    
    
    
    
    
    
    
    Change in valuation allowance
    
    
    7.0
    
    
    
    (2.2
    )
    
    
    22.4Effective tax rate
    
    
    (16.3
    )
    
    
    (19.1
    )
    
    
    (6.7
    )
    F - 42




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 13.
    
    SHAREHOLDERS EQUITY
       Repurchased shares
   F - 43




---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 14.
    
    NET INCOME (LOSS) PER SHARE
  Years ended December 31,2007
    
    
    2008
    
    
    2009Net income (loss) attributable to
China Finance
Online Co. Limited
    
    $
    (4,129,704
    )
    
    $
    19,020,115
    
    
    $
    (6,219,743
    )Weighted average ordinary shares
outstanding used in computing basic
net income per share
    
    
    94,500,529
    
    
    
    98,957,993
    
    
    
    105,203,564Plus: Incremental shares from assumed
conversions of stock options
and nonvested shares
    
    
    
    
    
    
    14,026,539
    
    
    
    Weighted average ordinary shares
outstanding used in computing diluted
net income per share (note)
    
    
    94,500,529
    
    
    
    112,984,532
    
    
    
    105,203,564Net income (loss) per share attributable to
China Finance Online Co. Limited basic
    
    $
    (0.04
    )
    
    $
    0.19
    
    
    $
    (0.06
    ) diluted
    
    $
    (0.04
    )
    
    $
    0.17
    
    
    $
    (0.06
    )
  Note:(1)
    
    In July 2007, the Company granted nonvested shares covering 10,558,493 ordinary
shares of the Company to the employees who are eligible for the 2007 Plan. The vesting
of the nonvested shares is subject to achieving certain financial performance targets
stated in the 2007 Plan. Nonvested shares are not included in the computation of basic
earnings per share as such shares may be returned to the Company if the employee does
not render the requisite service.(2)
    
    As of December 31, 2008, 1,491,776 options and zero nonvested shares were
excluded in computation of diluted net income per share because their effects were
anti-dilutive. For year 2007 and 2009, all of the options and nonvested shares were
anti-dilutive because the Group were in the loss position.  F - 44




---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 15.
    
    MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION
  16.
    
    NONCONTROLLING INTERESTS
  17.
    
    ADOPTION OF AUTHORITATIVE GUIDANCE REGARDING NONCONTROLLING INTERESTS
   (a)
    
    the noncontrolling interests (previously described as minority interest) has
now been included as a component of total equity whereas previously it was shown
outside of equity,
 (b)
    
    the net income or loss attributable to the noncontrolling interests is now
shown as an allocation of net income for the year rather than being deducted in
arriving at net income, and
 (c)
    
    consolidated comprehensive income or loss now includes the comprehensive income
or loss attributable to the noncontrolling interests.
  F - 45




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 18.
    
    COMMITMENTS
   Year ending2010
    
    
    3,452,0122011
    
    
    1,572,4572012
    
    
    464,852Total
    
    $
    5,489,321
 19.
    
    SEGMENT AND GEOGRAPHIC INFORMATION
   F - 46




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 19.
    
    SEGMENT AND GEOGRAPHIC INFORMATION  continued
  For the year ended December 31, 2009
 Subscriptionservices andother related
    
    
    Brokerageservices
    
    
    services
    
    
    ConsolidatedNet revenue
    
    $
    51,377,247
    
    
    $
    2,228,630
    
    
    $
    53,605,877Cost of revenue
    
    
    7,498,892
    
    
    
    647,832
    
    
    
    8,146,724Operating expenses:General and administrative
    
    
    15,302,683
    
    
    
    1,679,349
    
    
    
    16,982,032Product development
    
    
    10,754,380
    
    
    
    
    
    
    
    10,754,380Sales and marketing
    
    
    25,762,671
    
    
    
    332,562
    
    
    
    26,095,233Total operating expenses
    
    
    51,819,734
    
    
    
    2,011,911
    
    
    
    53,831,645Government subsidies
    
    
    567,373
    
    
    
    
    
    
    
    567,373Loss from operations
    
    
    (7,374,006
    )
    
    
    (431,113
    )
    
    
    (7,805,119
    )Total assets
    
    
    137,075,374
    
    
    
    28,534,063
    
    
    
    165,609,437
 For the year ended December 31, 2008
 Subscriptionservices andother related
    
    
    Brokerageservices
    
    
    services
    
    
    ConsolidatedNet revenue
    
    $
    55,286,219
    
    
    $
    956,549
    
    
    $
    56,242,768Cost of revenue
    
    
    (9,181,922
    )
    
    
    (185,221
    )
    
    
    (9,367,143
    )Operating expenses:General and administrative
    
    
    (14,055,716
    )
    
    
    (1,315,455
    )
    
    
    (15,371,171
    )Product development
    
    
    (5,635,173
    )
    
    
    
    
    
    
    (5,635,173
    )Sales and marketing
    
    
    (13,342,967
    )
    
    
    (177,328
    )
    
    
    (13,520,295
    )Total operating expenses
    
    
    (33,033,856
    )
    
    
    (1,492,783
    )
    
    
    (34,526,639
    )Government subsidies
    
    
    436,946
    
    
    
    
    
    
    
    436,946Income (loss) from operations
    
    
    13,507,387
    
    
    
    (721,455
    )
    
    
    12,785,932Total assets
    
    
    124,128,214
    
    
    
    17,695,097
    
    
    
    141,823,311
  F - 47




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 19.
    
    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 expenses:General 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 31,2007
    
    
    2008
    
    
    2009Subscription fees
    
    $
    22,712,043
    
    
    $
    49,551,711
    
    
    $
    46,175,235Advertising revenue
    
    
    1,560,194
    
    
    
    2,946,389
    
    
    
    3,985,699SMS revenue
    
    
    1,339,321
    
    
    
    1,047,218
    
    
    
    1,025,927Brokerage service revenue
    
    
    80,896
    
    
    
    956,549
    
    
    
    2,228,630Others
    
    
    210,620
    
    
    
    1,740,901
    
    
    
    190,386Total revenue from external customers
    
    $
    25,903,074
    
    
    $
    56,242,768
    
    
    $
    53,605,877
  F - 48




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  continued
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
 20.
    
    RESTRICTED NET ASSETS
   21.
    
    SUBSEQUENT EVENT
   F - 49




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##### Table of Contents



Additional Information  Financial Statement Schedule I
 Financial information of Parent Company
 Balance sheets
 (In U.S. dollars, except share-related data)
 December 31,2008
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    4,435,407
    
    
    $
    3,620,238Amounts due from subsidiaries
    
    
    18,388,250
    
    
    
    19,016,051Prepaid expenses and other current assets
    
    
    48,877
    
    
    
    20,352Dividends receivable
    
    
    25,858,199
    
    
    
    25,836,613Total current assets
    
    
    48,730,733
    
    
    
    48,493,254Investments in subsidiaries
    
    
    47,021,860
    
    
    
    47,893,966Cost-method investment
    
    
    1,479,571
    
    
    
    1,479,571Goodwill
    
    
    50,534
    
    
    
    50,534Total assets
    
    $
    97,282,698
    
    
    $
    97,917,325Liabilities and shareholders equityCurrent liabilities:Accrued expenses and other current liabilities
    
    
    327,021
    
    
    
    367,357Amounts due to subsidiaries
    
    
    13,322
    
    
    
    142,572Total current liabilities
    
    $
    340,343
    
    
    $
    509,929Shareholders equityOrdinary shares ($0.00013 par value; 500,000,000 shares
authorized; shares issued and outstanding 109,754,433 in 2007,
110,014,433 in 2008 and 110,250,163 in 2009)
    
    
    14,206
    
    
    
    14,237Additional paid-in capital
    
    
    67,340,543
    
    
    
    74,130,609Accumulated other comprehensive income
    
    
    6,448,078
    
    
    
    6,342,765Retained earnings
    
    
    23,139,528
    
    
    
    16,919,785Total shareholders equity
    
    
    96,942,355
    
    
    
    97,407,396Total liabilities and shareholders equity
    
    $
    97,282,698
    
    
    $
    97,917,325
  F - 50




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##### Table of Contents



Financial information of Parent Company
Statements of operations
(In U.S. dollars)
 December 31,2007
    
    
    2008
    
    
    2009Operating expenses:General and administrative
    
    $
    975,931
    
    
    $
    577,934
    
    
    $
    1,071,533Stock-based compensation
    
    
    2,946,340
    
    
    
    8,040,150
    
    
    
    6,600,716Total operating expenses
    
    
    3,922,271
    
    
    
    8,618,084
    
    
    
    7,672,249Interest income
    
    
    253,003
    
    
    
    50,970
    
    
    
    4,510Equity in earnings of subsidiaries and VIEs
    
    
    10,299,974
    
    
    
    25,997,391
    
    
    
    1,469,390Exchange gain(loss)
    
    
    365,135
    
    
    
    1,589,838
    
    
    
    (21,394
    )Other income
    
    
    1,455
    
    
    
    
    
    
    
    Loss from impairment of cost method investment
    
    
    (11,127,000
    )
    
    
    
    
    
    
    Net income (loss)
    
    $
    (4,129,704
    )
    
    $
    19,020,115
    
    
    $
    (6,219,743
    )
  F - 51




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##### Table of Contents



Financial Information of Parent Company
Parent Company Statement of Shareholders Equity and Comprehensive Income
(In U.S. dollars, except share data)
 Additional
    
    
    Accumulated other
    
    
    
    
    
    
    TotalOrdinary shares
    
    
    paid-in
    
    
    comprehensive
    
    
    Retained
    
    
    shareholders
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    capital
    
    
    income (loss)
    
    
    earnings
    
    
    equity
    
    
    incomeBalance as of January 1, 2007
    
    
    104,384,933
    
    
    
    13,474
    
    
    
    52,555,919
    
    
    
    1,634,269
    
    
    
    8,249,117
    
    
    
    62,452,779Exercise of share 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
    )Exercise of share option by employees
    
    
    
    
    
    
    
    
    
    
    531,449
    
    
    
    
    
    
    
    
    
    
    
    531,449Exercise of share options by non-employees
    
    
    260,000
    
    
    
    34
    
    
    
    41,566
    
    
    
    
    
    
    
    
    
    
    
    41,600Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    8,040,150
    
    
    
    
    
    
    
    
    
    
    
    8,040,150Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,946,646
    
    
    
    
    
    
    
    1,946,646
    
    
    $
    1,946,646Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,020,115
    
    
    
    19,020,115
    
    
    
    19,020,115Balance as of December 31, 2008
    
    
    110,014,433
    
    
    
    14,206
    
    
    
    67,340,543
    
    
    
    6,448,078
    
    
    
    23,139,528
    
    
    
    96,942,355
    
    
    
    20,966,761Exercise of share option by employees
    
    
    185,730
    
    
    
    24
    
    
    
    181,357
    
    
    
    
    
    
    
    
    
    
    
    181,381
    
    
    
    Exercise of share options by non-employees
    
    
    50,000
    
    
    
    7
    
    
    
    7,993
    
    
    
    
    
    
    
    
    
    
    
    8,000
    
    
    
    Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    6,600,716
    
    
    
    
    
    
    
    
    
    
    
    6,600,716
    
    
    
    Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (105,313
    )
    
    
    
    
    
    
    (105,313
    )
    
    $
    (105,313
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,219,743
    )
    
    
    (6,219,743
    )
    
    
    (6,219,743
    )Balance as of December 31, 2009
    
    
    110,250,163
    
    
    
    14,237
    
    
    
    74,130,609
    
    
    
    6,342,765
    
    
    
    16,919,785
    
    
    
    97,407,396
    
    
    
    (6,325,056
    )
  F - 52




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##### Table of Contents



Financial information of Parent Company
 Statements of cash flows
(In U.S. dollars, except share-related data)
 December 31,2007
    
    
    2008
    
    
    2009Operating activities:Net income (loss)
    
    $
    (4,129,704
    )
    
    $
    19,020,115
    
    
    $
    (6,219,743
    )Adjustments to reconcile net income (loss) to
net cash (used in) provided by operating activities:Stock-based compensation
    
    
    2,946,340
    
    
    
    8,040,150
    
    
    
    6,600,716Loss from impairment of cost method investment
    
    
    11,127,000
    
    
    
    
    
    
    
    Equity in earnings of subsidiaries
    
    
    (10,299,974
    )
    
    
    (25,997,391
    )
    
    
    (1,469,390
    )Changes in assets and liabilities:Dividend receivable
    
    
    2,473,269
    
    
    
    
    
    
    
    Prepaid expenses and other current assets
    
    
    (39,954
    )
    
    
    84,695
    
    
    
    28,525Amounts due from subsidiaries
    
    
    (4,344,190
    )
    
    
    (15,071,573
    )
    
    
    (105,742
    )Accrued expenses and other current liabilities
    
    
    1,719,911
    
    
    
    (1,541,036
    )
    
    
    31,836Amounts due to subsidiaries
    
    
    3
    
    
    
    (47,217
    )
    
    
    129,250Net cash used in operating activities
    
    
    (547,299
    )
    
    
    (15,512,257
    )
    
    
    (1,004,548
    )Investing activities:Net increase in loans to subsidiaries
    
    
    4,000,000
    
    
    
    
    
    
    
    Acquisition of businesses
    
    
    (2,300,476
    )
    
    
    
    
    
    
    Net cash provided by investing activities
    
    
    1,699,524
    
    
    
    
    
    
    
    Financing activities:Proceeds from stock options exercised by employees
    
    
    2,366,697
    
    
    
    531,449
    
    
    
    181,381Proceeds from exercise of options granted to non-employee
    
    
    859,120
    
    
    
    41,600
    
    
    
    8,000Dividend from a subsidiary
    
    
    9,238,436
    
    
    
    
    
    
    
    Net cash provided by financing activities
    
    
    12,464,253
    
    
    
    573,049
    
    
    
    189,381Effect of exchange rate changes
    
    
    76
    
    
    
    (2
    )
    
    
    (2
    )Net increase (decrease) in cash and cash equivalents
    
    
    13,616,554
    
    
    
    (14,939,210
    )
    
    
    (815,169
    )Cash and cash equivalents, beginning of the year
    
    
    5,758,063
    
    
    
    19,374,617
    
    
    
    4,435,407Cash and cash equivalents, end of the year
    
    $
    19,374,617
    
    
    $
    4,435,407
    
    
    $
    3,620,238
  Basis for preparation
   F - 53