UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20459





FORM 20-F/A

(amendment no. 2)



(Mark One)



| |  ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12 (b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | -----------------------------------------------------------------------------------------------



OR



| | x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ------------------------------------------------------------------------------------



For the year ended December 31, 2011.



OR



| |  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ----------------------------------------------------------------------------------------



OR



| |  ̈ | 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: 000-53973



GALAXY STRATEGY & COMMUNICATIONS
INC.



(Exact name of Registrant as specified in
its charter)



(Translation of Registrant’s name
into English)



British Virgin Islands



(Jurisdiction of incorporation or organization)



Unit 202, 2/F Malaysia Building, 50 Gloucester
Road, Wanchai, Hong Kong



(Address of principal executive offices)



Qiang Wu, Unit 202, 2/F Malaysia Building,
50 Gloucester Road, Wanchai, Hong Kong

Tel. 852-2332-0661, Fax 852-2332-0304



(Name, Telephone, E-mail and/or Facsimile
number and Address of Company Contact Person)



Securities registered or to be registered pursuant to Section
12(b) of the Act:  None



Securities registered or to be registered pursuant to Section
12(g) of the Act.



Ordinary Shares



(Title of Class)



Securities for which there is reporting obligation pursuant
to Section 15(d) of the Act: None



Indicate the number of outstanding shares
of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.  3,255,400
ordinary shares with no par value.



Indicate by check mark if the registrant is a well-known season
issuer, as defined in Rule 405 of the Securities Act.  ̈  Yes     x  No



If this report is an annual or  transition report,
indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.      ̈  Yes     x  No



Note – Checking the box above will not relieve any registrant
required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those
Sections.



Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.    x  Yes      ̈  No



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).  ̈
Yes     x No



Indicate by check mark whether the registrant
is a large accelerated filed, an accelerated filer, or a non-accelerated filed.  See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.  (Check one):



|Large accelerated filer  ̈ | Accelerated filer  ̈ | Non-accelerated filer x
|------------------------- | ------------------- | -----------------------



Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:



|U.S. GAAP  ̈ | International Financial Reporting Standards as issued | Other  ̈
|----------- | ----------------------------------------------------- | -------
|            | by the International Accounting Standards Board x     |        



If “Other” has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ̈       Item
18 ̈



If this is an annual report, indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 ̈ Yes     x
No











TABLE OF CONTENTS



|                  |                                                                              |    | Page
|----------------- | ---------------------------------------------------------------------------- | -- | ----
|                  |                                                                              |    |     
|PRELIMINARY NOTES |                                                                              |   
|                  |                                                                              |   
|PART I           
|                  |                                                                              |    |     
|Item 1.           | Identity of Directors, Senior Management and Advisers                        |    | 1   
|Item 2.           | Offer Statistics and Expected Timetable                                      |    | 1   
|Item 3.           | Key Information                                                              |    | 2   
|Item 4.           | Information on the Company                                                   |    | 15  
|Item 5.           | Operating and Financial Review and Prospects                                 |    | 19  
|Item 6.           | Directors, Senior Management and Employees                                   |    | 21  
|Item 7.           | Major Shareholders and Related Party Transactions                            |    | 23  
|Item 8.           | Financial Information                                                        |    | 24  
|Item 9.           | The Offer and Listing                                                        |    | 25  
|Item 10.          | Additional Information                                                       |    | 25  
|Item 11.          | Quantitative and Qualitative Disclosures About Market Risk                   |    | 28  
|Item 12.          | Description of Securities Other than Equity Securities                       |    | 28  
|                  |                                                                              |    |     
|PART II          
|Item 13.          | Defaults, Dividend Arrearages and Delinquencies                              |    | 29  
|Item 14.          | Material Modifications to the Rights of Security Holders and Use of Proceeds |    | 29  
|Item 15.          | Controls and Procedures                                                      |    | 29  
|Item 16A.         | Audit Committee Financial Expert                                             |    | 30  
|Item 16B.         | Code of Ethics                                                               |    | 30  
|Item 16C.         | Principal Account Fees and Services                                          |    | 31  
|Item 16D.         | Exemptions from the Listing Standards for Audit Committees                   |    | 31  
|Item 16E.         | Purchases of Equity Securities by the Issuer and Affiliated Purchasers       |    | 31  
|Item 16F.         | Change in Registrant’s Certifying Accountant                                 |    | 31  
|Item 16G.         | Corporate Governance                                                         |    | 31  
|Item 16H.         | Mine Safety Disclosure                                                       |    | 31  
|PART III         
|                  |                                                                              |    |     
|Item 17.          | Financial Statements                                                         |    | 32  
|Item 18.          | Financial Statements                                                         |    | 32  
|Item 19.          | Exhibits                                                                     |    | 32  
|SIGNATURES        |                                                                              | 33



Pursuant to General Instruction E(a) of Form 20-F, this annual
report filed under the Securities Exchange Act of 1934 includes the information specified in Part I, II and III.



Pursuant to General Instruction E(c) of Form 20-F, the registrant
has elected to provide the financial statements and related information specified in Item 18 in lieu of Item 17.











PRELIMINARY NOTE



Foreign Private Issuer:  Galaxy Strategy
& Communications Inc. (hereinafter referred to as “we” or the “Company”) is a “foreign private
issuer” as defined in Rule 3b-4 under the Securities Exchange Act of 1934.  As a result, we are eligible to file
this annual report on Form 20-F and to file interim reports on Form 6-K.



International Financial Reporting Standards: Our
financial statements and the related notes have been prepared in conformity with International Financial Reporting Standards (“IFRS”)
as issued by the International Accounting Standards Board (“IASB”) and IFRS as adopted by the EU. IFRS as adopted by
the EU differ in certain respects from IFRS as issued by the IASB, however, the differences have no impact on the Company’s
financial statements for the years presented. References to “IFRS” hereafter
should be construed as reference to IFRS as issued by the IASB.



Currency:The Company’s functional
and currency is the United States dollar.  All references in this annual report to “$” refer to United States
dollars.



Forward-Looking Information:This annual report
contains “forward-looking statements.” Such forward-looking statements are subject to important risks, uncertainties
and other factors, including those set forth under “Item 3.D. Risk Factors” and elsewhere in this annual report, which
could cause actual results to differ materially from those stated in the forward-looking statements.  Any statements
in this annual report that are not statements of historical or current facts or conditions may be deemed “forward-looking”
statements.  Forward-looking statements often may be identified by terminology such as “intend,” “should,”
“would,”  “expect,” “may,” “plan,” “anticipate,”  “continue,”
“believe,” “estimate,” “project,” “predict,” and the negative and variations of
such words and comparable terminology.  While these forward-looking statements, and any assumptions upon which they are
based, are made in good faith and reflect our current judgment concerning future events, the risks and uncertainties involved in
such forward-looking statements may cause actual results, performance and achievements to differ materially from any estimates,
predictions, projections or plans about future events.  Statements containing forward-looking information are necessarily
based upon a number of factors and assumptions that, while considered reasonable by us as of the date of such statements, are inherently
subject to significant business and economic risks and uncertainties which may cause the actual results, performance or achievements
to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements.
Given these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only
as of the date made. Except as otherwise required by law, we expressly disclaim any obligation or undertaking to release publicly
any updates or revisions to any such forward-looking statements to reflect any change in our expectations or any change in events,
conditions or circumstances on which any such statements are based.



PART I



Item 1.  Identity of Directors, Senior Management
and Advisers



A.  Our directors and senior management are:



Qiang Wu, CEO and Director.  Unit 202, 2/F
Malaysia Building, 50 Gloucester Road, Wanchai, Hong Kong.  Mr. Wu has served as CEO and director of the Company since
March 20, 2010.



B.  Our legal advisers are Blank Rome LLP, 405 Lexington
Avenue, New York, NY 10174.



C.  Our auditors during the three fiscal years ended
December 31, 2011 are: UHY Vocation HK CPA Limited, 3/F Malaysia Building, 50 Gloucester Road, Wanchai, Hong Kong.



Item 2.  Offer Statistics and Expected Timetable



Not applicable.



1







Item 3.  Key Information



A.Selected financial data:  The following
table presents selected financial data for thethree most recent financial years ended December 31, 2011,
2010 and 2009.



|Selected Financial Data |  | For the Year Ended December 31, 2011 |          |   | For the Year Ended December 31, 2010 |   |         | For the Year Ended December 31, 2009 | 
|----------------------- |  | ------------------------------------ | -------- | - | ------------------------------------ | - | ------- | ------------------------------------ | 
|Revenues                |  | $                                    | 23,995   |   |                                      | $ | 126,955 |                                      | 
|Operating (Loss)/Income |  | $                                    | (195,415 | ) |                                      | $ | 3,408   |                                      | 
|Net (Loss)/Income       |  | $                                    | (195,274 | ) |                                      | $ | 3,408   |                                      | 
|(Loss)/Income per share |  | $                                    | (0.0573  | ) |                                      | $ | 0.0014  |                                      | 
|Total Assets            |  | $                                    | 512,698  |   |                                      | $ | 161,676 |                                      | 



The official currency of the British Virgin Islands is the United
States dollar.  The Company’s functional currency is the United States dollar.  Therefore, a description
of the exchange rate between the British Virgin Islands and United States dollar is not applicable.



B.Capitalization and indebtedness:This
item is not required on an annual report.



C.Reasons for the offer and use of proceeds.Not
applicable.



D.Risk Factors.  An investment in the Company’s
securities involves a high degree of risk. An investor should carefully consider the risks described below as well as other information
contained in this annual report. The risks and uncertainties described below are not the only ones facing us. Additional risks
and uncertainties not presently known to us or that we currently believe are immaterial may also impair our business operations.
If any of the following risks actually occur, our business, financial condition or results of operations could be materially adversely
affected, the value of our securities could decline, and an investor may lose all or part of his or her investment.



Risks Related to our Business



We have a limited operating history upon which an evaluation
of our prospects can be made.



We were formed on January 12, 2000 and have had only limited
operations since our inception upon which to evaluate our business prospects. We have generated minimal revenues to date. As a
result, an investor does not have access to the same type of information in assessing his or her proposed investment as would be
available to purchasers in a company with a history of prior operations. We face all the risks inherent in a new business, including
the expenses, difficulties, complications and delays frequently encountered in connection with conducting operations, including
capital requirements and management’s potential underestimation of initial and ongoing costs. We also face the risk that
we may not be able to effectively implement our business plan. If we are not effective in addressing these risks, we may not operate
profitably and we may not have adequate working capital to meet our obligations as they become due.



We have had limited revenues and a history of losses and
we may not be able to achieve meaningful profitability in the future.



From the date of inception through December 31, 2011, we have
accumulated losses of $191,816 based on a limited scope of operations and limited revenues.  There can be no assurance that
we will achieve meaningful profitability in the future as we attempt to expand our business. If we are not profitable and cannot
obtain sufficient capital we may have to cease our operations.



2







We will need additional financing to execute our business
plan and fund operations, and such additional financing may not be available on reasonable terms or at all.



We have limited funds. If we do not raise additional capital
we will not be able to execute our current business plan, expand our consulting services and fund business operations long enough
to become cash-flow positive or to achieve profitability. Our ultimate success may be affected by our ability to raise additional
capital. There can be no assurance that additional funds will be available when needed from any source or, if available, will be
available on terms that are acceptable to us.  We will be required to pursue sources of additional capital through various
means, including debt or equity financings. Future financings through equity investments will be dilutive to existing stockholders.
Also, the terms of securities we may issue in future capital transactions may be more favorable for our new investors. Newly issued
securities may include preferences, superior voting rights, and the issuance of warrants or other convertible securities, which
will have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and/or financing, including
investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required
to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which
will adversely impact our financial condition and results of operations.



Our ability to obtain needed financing may be impaired by such
factors as the weakness of capital markets, both generally and specifically in the industry, and the fact that we have not been
profitable, which could impact the availability or cost of future financings. If the amount of capital we are able to raise from
financing activities, together with our revenues from operations, if any, is not sufficient to satisfy our capital needs, even
to the extent that we reduce our operations accordingly, we may be required to cease operations.



Our future success is dependent upon our ability to compete
in providing consulting services.



In our consulting business, there is intense competition among
consultants, including individuals and large and small entities, for consulting clients in China.  Many of these competitors
have substantially greater financial and marketing resources than we do, stronger name recognition, and longer-standing relationships
with our target clients.  Our future success is dependent upon our ability to compete and our failure to do so could
adversely affect our business, financial condition and results of operation.



We are subject to the risk that we may not be compensated
for our services since we generally receive fees only if our clients’ transactions are completed.



We generally structure our fees for services as success fees.  As
a result, we receive revenue only if our clients’ transactions are completed.  The completion of our clients’
transactions are subject to many risks outside of our control, such as their ability to enter into definitive agreements on terms
acceptable to them, general economic conditions in China and internationally and changes in political, economic and regulatory
policies in China.  In addition, we may incur substantial expenses in connection with a client engagement for which we
may not be reimbursed if a client’s transaction is not completed.  Failure of our clients to complete their transactions
could adversely affect our operating results.



Additionally, because our clients’ transactions are often
lengthy processes, and could take at least three to 12 months to complete, our operating results are expected to fluctuate significantly
due to potential fluctuations in the number and size of transactions completed in any operating period and our cash flows will
be negatively impacted by delays in completion of the transactions.



Our operating results may fluctuate.



Our operating results are dependent on a number of factors,
many of which are outside our control, including (i) the general economic conditions in China and the world, (ii) the competition
in the market place, (iii) our ability to obtain necessary additional financing to maintain a continuous operation, and (iv) the
size, number and length of any service contracts we enter into.



We may not be able to effectively control and manage our
growth, which would negatively impact our operations.



If our business and markets grow and develop it will be necessary
for us to finance and manage expansion in an orderly fashion. We may face challenges in managing expanding service offerings and
in integrating any acquired businesses with our own. Such eventualities will increase demands on our existing management, workforce
and facilities. Failure to satisfy increased demands could interrupt or adversely affect our operations or cause administrative
inefficiencies.



3







We may be subject to risks in connection
with acquisitions and the integration of our recent acquisition may be difficult.



We periodically evaluate acquisitions and
other strategic transactions that appear to fit within our overall business strategy. Integrating these acquisitions, including
the business of Beijing Lianchuang through our contractual relationship, may involve certain risks, including:



| | • | diversion of our management’s attention to evaluating, negotiating and integrating significant acquisitions and strategic
transactions;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------



| | • | the challenge and cost of integrating acquired operations, information management and other technology systems and business
cultures with those of ours while carrying on our ongoing business;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | difficulty associated with coordinating geographically separate organizations; and
| | - | ----------------------------------------------------------------------------------



| | • | the challenge of attracting and retaining personnel associated with acquired operations.
| | - | ----------------------------------------------------------------------------------------



The process of integrating operations could
cause an interruption of, or loss of momentum in, the activities of our business. Members of our senior management may be required
to devote considerable amounts of time to this integration process, which will decrease the time they will have to manage our business.
If our senior management is not able to effectively manage the integration process, or if any significant business activities are
interrupted as a result of the integration process, our business could suffer.



We are dependent upon key personnel whose loss may adversely
impact our business.



Our future business and results of operations depend in significant
part upon the continuing contribution of Mr. Qiang Wu, our CEO and Director.  We expect to rely on Mr. Wu for client
referrals and client services.  Mr. Wu currently devotes substantially all of his time to our business.  If
Mr. Wu ceases to be employed by us, we may have difficulty finding a suitable replacement with equal leadership and industry
experience, and our business would suffer because we will not have the leadership needed to capitalize on market opportunities
and to direct our growth, leading to a possible decrease in revenues and inappropriate capital investments in projects that may
not benefit our long-term growth.



We will be subject to certain requirements of the Sarbanes-Oxley
Act of 2002 and the related rules and regulations adopted by the Securities Exchange Commission pursuant to that Act.  If
we are unable to comply timely with such requirements or if the costs of compliance are too great, our profitability, the market
price of our ordinary shares, and our results of operations and financial condition could be materially adversely affected.



The requirements, rules and regulations to which we will be
subject include: Chief Executive Officer/Chief Financial Officer certifications of disclosure in periodic reports and registration
statements under the Securities Act of 1933; disclosure regarding conclusions of evaluation of disclosure controls and procedures
and internal control of financial reporting; conditions for use of non-GAAP financial measures; disclosure in Management’s
Discussion and Analysis of certain off-balance sheet arrangements and aggregate contractual arrangements; disclosure of whether
or not we have an audit committee financial expert who is independent and experienced, and if not, why not; disclosure of whether
or not we have adopted a written code of ethics for our chief executive officer and senior financial officers, and if not, why
not.  The requirements will involve substantial additional time and effort by our Chief Executive Officer and additional
time, effort and expense for our auditors and counsel, as well as for us, all of whom will be subject to potential liabilities
for failure to comply with the requirements and some of whom may be unwilling or unable to satisfy the requirements.



4







Risks Related To Doing Business In the People’s Republic
of China



The effectiveness of the share pledge
in our Equity Pledge Agreement with Beijing Lianchuang and its controlling shareholder is uncertain under the PRC Property Rights
Law.



Under the Equity Pledge Agreement among
Galaxy Beijing, Beijing Lianchuang and its controlling shareholder, the shareholder has pledged all of her equity interests in
Beijing Lianchuang to Galaxy Beijing to secure the performance of the obligations by Beijing Lianchuang under the Exclusive Consulting
Services Agreement. According to the PRC Property Rights Law, which became effective as of October 1, 2007, a share pledge is not
effective without being registered with the relevant local industry and commerce bureau. We have not yet registered the equity
pledge with the relevant local industry and commerce bureau. Our share pledge may be deemed ineffective before it is registered
under the PRC Property Rights Law, and we may not be able to successfully enforce the share pledge, if prior to such registration,
Beijing Lianchuang breaches its obligations under the Exclusive Consulting Services Agreement.



PRC regulations relating to offshore
investment activities by PRC residents may increase our administrative burden and restrict our overseas and cross-border investment
activity. If our shareholders fail to make any required applications and filings under such regulations, we may be unable to distribute
profits and may become subject to liability under PRC laws.



The PRC State Administration of Foreign
Exchange, or SAFE, issued a public notice in October 2005, or the SAFE notice, requiring PRC residents to register with the local
SAFE branch before establishing or controlling any company outside of the PRC for the purpose of capital financing with assets
or equities of PRC companies, referred to in the notice as an "offshore special purpose company." Our current and future
beneficial owners who are PRC citizens will be required to register with local SAFE branches and to amend their registrations to
reflect recent developments with respect to our company and our PRC subsidiary. The failure of the current and future beneficial
owners of our company who are PRC residents to comply with the registration procedures set forth in the SAFE notice may subject
such beneficial owners to fines and legal sanctions and may also limit our ability to contribute additional capital to our PRC
subsidiary, limit the ability of our PRC subsidiary to distribute dividends to our company or otherwise materially and adversely
affect our business.



The PRC is a developing nation governed
by a one-party government and may be more susceptible to political, economic, and social upheaval than other nations; any such
upheaval could cause us to temporarily or permanently cease operations.



China is a developing country governed
by a one-party government that imposes restrictions on individual liberties that are significantly stricter than those typically
found in western nations. China has an extremely large population, significant levels of poverty, widening income gaps between
rich and poor and between urban and rural residents, large minority ethnic and religious populations, and growing access to information
about the different social, economic, and political systems to be found in other countries. China has also experienced rapid economic
growth over the last decade, and its legal and regulatory systems have changed rapidly to accommodate this growth. These conditions
make China unique and may make it susceptible to major structural changes. Such changes could include a reversal of China’s
movement to encourage private economic activity, labor disruptions or other organized protests, nationalization of private businesses,
internal conflicts between the police or military and the citizenry, and international political or military conflict. If any of
these events were to occur, it could damage China’s economy and impair our business.



PRC regulations involve complex procedures
for acquisitions conducted by foreign investors that could make it more difficult for us to grow through acquisitions.



The new M&A Rule on Merger and Acquisitions
of Domestic Enterprises by Foreign Investors (the “New M&A Rules”) established additional procedures and requirements
that are expected to make merger and acquisition activities in China by foreign investors more time-consuming and complex, including
requirements in some instances that the MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor
takes control of a PRC domestic enterprise, or that the approval from the MOFCOM be obtained in circumstances where overseas companies
established or controlled by PRC enterprises or residents acquire affiliated domestic companies and special anti-monopoly submissions
for parties meeting certain reporting thresholds. We may grow our business in part by acquiring other businesses. Complying with
the requirements of the new regulations to complete such transactions could be time-consuming, and any required approval processes,
including approval from MOFCOM, may delay or inhibit our ability to complete such transactions, which could affect our ability
to expand our business or maintain our market share.



5







Anti-inflation measures could harm
the economy generally and could harm our business.



The PRC government exercises significant
control over the PRC economy. In recent years, the PRC government has instituted measures to curb the risk of inflation. These
measures have included revaluations of the RMB, restrictions on the availability of domestic credit, and limited re-centralization
of the approval process for some international transactions. These measures may not succeed in controlling inflation, or they may
slow the economy below a healthy growth rate and lead to economic stagnation or recession; in the worst-case scenario, the measures
could slow the economy without curbing inflation, causing “stagflation.” The PRC government could adopt additional
measures to further combat inflation, including the establishment of price freezes or moratoriums on certain projects or transactions.
Such measures could harm the economy generally and hurt our business by limiting the income of our customers available to purchase
our services or products, by forcing us to lower our profit margins, and by limiting our ability to obtain credit or other financing
to pursue our expansion plan or maintain our business.



Fluctuations in the value of the
RMB may reduce the value of your investment.



The value of the RMB against the U.S. dollar
and other currencies is affected by, among other things, changes in China's political and economic conditions and China's foreign
exchange policies. The conversion of RMB into foreign currencies, including U.S. dollars, has been based on exchange rates set
by the People's Bank of China. On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the RMB
solely to the U.S. dollar. Under this revised policy, the RMB is permitted to fluctuate within a narrow and managed band against
a basket of certain foreign currencies. Following the removal of the U.S. dollar peg, the RMB appreciated more than 20% against
the U.S. dollar over the following three years. However, the People’s Bank of China regularly intervenes in the foreign exchange
market to prevent significant short-term fluctuations in the exchange rate and achieve policy goals. For almost two years after
July 2008, the RMB traded within a narrow range against the U.S. dollar. As a consequence, the RMB fluctuated significantly during
that period against other freely traded currencies, in tandem with the U.S. dollar. In June 2010, the PRC government announced
that it would increase RMB exchange rate flexibility. However, it remains unclear how this flexibility might be implemented. There
remains significant international pressure on the PRC government to adopt a more flexible currency policy, which could result in
a further and more significant appreciation of the RMB against the U.S. dollar.



Because substantially all of Galaxy Beijing’s
revenues and expenditures are denominated in RMB and our cash is denominated in U.S. dollars, fluctuations in the exchange rate
between the U.S. dollar and RMB will affect the relative purchasing power of such amounts and our balance sheet and earnings per
share in U.S. dollars. In addition, we report financial results in U.S. dollars, and appreciation or depreciation in the value
of the RMB relative to the U.S. dollar would affect our financial results reported in U.S. dollars terms without giving effect
to any underlying change in our business or results of operations. Fluctuations in the exchange rate will also affect the relative
value of earnings from and the value of any U.S. dollar-denominated investments we make in the future.



Very limited hedging transactions are available
in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an
effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the
future, the availability and effectiveness of these hedging transactions may be limited and we may not be able to successfully
hedge our exposure at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that
restrict our ability to convert RMB into foreign currency.



The RMB is not a freely convertible
currency, which could limit our ability to obtain sufficient foreign currency to support our business operations in the future
and could prevent us from paying dividends.



We receive a substantial portion of our
revenues in RMB. The PRC government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases,
the remittance of currency out of the PRC. Shortages in the availability of foreign currency may restrict our ability to remit
sufficient foreign currency to pay dividends, or other payments in United States dollars, or otherwise satisfy foreign currency
denominated obligations. Although the PRC government introduced regulations in 1996 to allow greater convertibility of the RMB
for current account transactions, significant restrictions still remain, including the restriction that foreign-invested enterprises
like us may buy, sell or remit foreign currencies only after providing valid commercial documents at PRC banks specifically authorized
to conduct foreign-exchange business. Under existing PRC foreign exchange regulations, payments of current account items, including
profit distributions, interest payments and expenditures from the transaction, can be made in foreign currencies without prior
approval from SAFE by complying with certain procedural requirements. However, approval from appropriate governmental authorities
is required where RMB are to be converted into foreign currency and remitted out of the PRC to pay capital expenses, such as the
repayment of bank loans denominated in foreign currencies.



6







In addition, conversion of RMB for capital
account items, including direct investment and loans, is subject to governmental approval in the PRC, and companies are required
to open and maintain separate foreign-exchange accounts for capital account items. There is no guarantee that PRC regulatory authorities
will not impose additional restrictions on the convertibility of the RMB. These restrictions could prevent us from distributing
dividends and thereby reduce the value of our ordinary shares.



Governmental control of foreign exchange
markets in the PRC may affect the value of your investment, limit our ability to use revenue efficiently and restrict our ability
to obtain financing.



Under existing PRC foreign exchange regulations,
payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions,
can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. However,
conversion of RMB into foreign currencies and of foreign currencies into RMB, for payments relating to ‘‘capital account
transactions,’’ which principally includes investments and loans, generally requires the approval of SAFE and other
relevant PRC governmental authorities.



If we finance Galaxy Beijing through additional
capital contributions, the amount of these capital contributions must be approved by MOFCOM or its local counterparts. On August
29, 2008, SAFE promulgated Notice of the General Affairs Department of the State Administration of Foreign Exchange on the Relevant
Operating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreign-invested
Enterprises (“Circular 142”), a notice regulating the conversion by a foreign-invested company of foreign currency
into RMB by restricting how the converted RMB may be used. Circular 142 requires that RMB converted from the foreign currency-denominated
capital of a foreign-invested company may only be used for purposes within the business scope approved by the applicable governmental
authority and may not be used for equity investments within the PRC unless specifically provided otherwise. In addition, SAFE strengthened
its oversight of the flow and use of RMB funds converted from the foreign currency denominated capital of a foreign-invested company.
The use of such RMB fund may not be changed without approval from SAFE or its local counterparts, and may not be used to repay
RMB loans if the proceeds of such loans have not yet been used for purposes within the company’s approved business scope.
Violations of Circular 142 may result in severe penalties, including substantial fines as set forth in the Foreign Exchange Administration
Regulations.



We cannot assure you that we will be able
to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with
respect to future loans by us to Galaxy Beijing or with respect to future capital contributions by us to Galaxy Beijing. We may
not be able to transfer funds to Galaxy Beijing, which may adversely affect our ability to fund and expand our business. In addition,
the PRC government may also at its discretion restrict future access to foreign currencies for current account transactions. If
the Chinese foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands,
we may not be able to pay dividends in foreign currencies to shareholders or fulfill our foreign currency denominated obligations,
which may adversely affect the value of your investment.



We may be treated as a resident enterprise
for PRC tax purposes under the currently effective EIT Law, which may subject us to PRC income tax on our taxable global income.



On March 16, 2007, the National People’s
Congress approved and promulgated a new tax law, the PRC Enterprise Income Tax Law (“EIT Law”). On November 28, 2007,
the PRC State Council passed the implementing rules of the EIT Law. Both the EIT Law and the implementing rules of the EIT Law
took effect on January 1, 2008. Under the EIT Law, enterprises are classified as “resident enterprises” and “non-resident
enterprises.” An enterprise established outside of China with “de facto management bodies” within China is considered
a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise
income tax purposes. The implementing rules of the EIT Law define “de facto management bodies” as a managing body that
in practice exercises “substantial and overall management and control over the production and operations, personnel, accounting,
and properties” of the enterprise; however, it remains unclear whether the PRC tax authorities would deem our managing body
as being located within China. Due to the short history of the EIT Law and lack of applicable legal precedents, the PRC tax authorities
determine the PRC tax resident treatment of a foreign (non-PRC) company on a case-by-case basis.





7









If the PRC tax authorities determine that
we are a “resident enterprise” for PRC enterprise income tax purposes, a number of PRC tax consequences could follow.
First, we may be subject to the enterprise income tax at a rate of 25% on our global taxable income, as well as PRC enterprise
income tax reporting obligations. Second, under the EIT Law and its implementing rules, dividends paid between “qualified
resident enterprises” are exempt from enterprise income tax. It is unclear whether the dividends we receive from Strategy
& Communications (Hong Kong) Group Ltd. (“Strategy HK”) will constitute dividends between “qualified resident
enterprises” and would therefore qualify for tax exemption, because the definition of qualified resident enterprises is
unclear and the relevant PRC governmental authorities have not yet issued guidance with respect to the processing of outbound
remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes.



In addition to the uncertainty as to the
application of the “resident enterprise” classification, there can be no assurance that the PRC governmental authorities
will not amend or revise the taxation laws, rules and regulations to impose stricter tax requirements, higher tax rates or retroactively
apply the EIT Law, or any subsequent changes in PRC tax laws, rules or regulations. If such changes occur and/or if such changes
are applied retroactively, such changes could materially and adversely affect our results of operations and financial condition.



Dividends we receive from Galaxy
Beijing may be subject to PRC withholding tax, which could materially and adversely affect the amount of dividends, if any, we
may pay our shareholders.



The EIT Law provides that an income tax
rate of 20% may be applicable to dividends payable to non-resident investors, which (i) do not have an establishment or place of
business in the PRC or (ii) have an establishment or place of business in the PRC but the relevant income is not effectively connected
with the establishment or place of business, to the extent such dividends are derived from sources within the PRC. The State Council
of the PRC reduced such rate to 10% through the implementing rules of the EIT Law. Pursuant to the Double Tax Avoidance Arrangement
between the Mainland China and the Hong Kong Special Administrative Region (the “Double Tax Avoidance Arrangement”)
and the Notice on Certain Issues Concerning the Enforcement of Dividend Provisions under Tax Treaties (“Circular 81”),
which was issued on February 20, 2009 by the State Administration of Taxation (“SAT”), if the Hong Kong resident enterprise
owns more than 25% of the equity interest in a company in China within 12 months immediately prior to receiving dividend from such
company, the 10% withholding tax on the dividends the Hong Kong resident enterprise received from such company in China may be
reduced to 5%. We are a British Virgin Islands holding company and we have a wholly owned subsidiary in Hong Kong, Strategy HK,
which in turn holds 100% of the equity interests of Galaxy Beijing. A substantial portion of our income may be derived from dividends
we receive from Galaxy Beijing. If we and Strategy HK are considered as non-resident enterprises and Strategy HK is considered
to be a Hong Kong resident enterprise under the Double Tax Avoidance Arrangement, then the dividends paid to Strategy HK by Galaxy
Beijing may be subject to the reduced income tax rate of 5% under the Double Tax Avoidance Arrangement. However, based on the Circular
81, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate
due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment;
and based on the Notice on the Comprehension and Recognition of Beneficial Owner in Tax Treaties issued on October 27, 2009 by
the SAT, funnel companies, which are established for the purpose of evading or reducing tax, or transferring or accumulating profits,
shall not be recognized as beneficial owners and thus are not entitled to the abovementioned reduced income tax rate of 5% under
the Double Tax Avoidance Arrangement. If we are required under the EIT Law to pay income tax on any dividends we receive from Galaxy
Beijing (through Strategy HK), or if Strategy HK is determined by the PRC tax authorities as receiving benefits from a reduced
income tax rate due to a structure or arrangement that is primarily tax-driven, it would materially and adversely affect the amount
of dividends, if any, we may pay to our shareholders.



8







If we are treated as a resident enterprise
for PRC tax purposes under the currently effective EIT Law, this could result in adverse PRC tax consequences to our non-PRC resident
shareholders.



If we are determined to be a “resident
enterprise” under the EIT Law, this could result in (i) a 10% PRC tax being imposed on dividends we pay to our investors
that are not tax residents of the PRC (“non-resident investors”) and that are enterprises (but not individuals) and
gains derived by them from transferring our or ordinary shares, if such income or gain is considered PRC-sourced income by the
relevant PRC tax authorities and (ii) a potential 20% PRC tax being imposed on dividends we pay to our non-resident investors who
are individuals and gains derived by them from transferring our ordinary shares, if such income or gain is considered PRC-sourced
income by the relevant PRC tax authorities. In such event, we may be required to withhold the applicable PRC income tax on any
dividends paid to our non-resident investors. Our non-resident investors also may be responsible for paying the applicable PRC
tax on any such gain realized from the sale or transfer of our ordinary shares. We would not, however, have an obligation to withhold
PRC tax with respect to such gain under the PRC tax laws.



Moreover, the SAT released Notice of the
State Administration of Taxation on Strengthening the Administration of Enterprise Income Tax on Gain Derived from Equity Transfer
Made by Non-Resident Enterprise (the “Circular 698”) on December 10, 2009, which reinforces the taxation of certain
equity transfers by non-resident investors through overseas holding vehicles. Circular 698 addresses indirect equity transfers
as well as other issues. Circular 698 is retroactively effective from January 1, 2008. According to Circular 698, where a non-resident
investor who indirectly holds an equity interest in a PRC resident enterprise through a non-PRC offshore holding company indirectly
transfers an equity interest in the PRC resident enterprise by selling an equity interest in the offshore holding company, and
the latter is located in a country or jurisdiction where the actual tax burden is less than 12.5% or where the offshore income
of its residents is not taxable, the non-resident investor is required to provide the PRC tax authority in charge of that PRC resident
enterprise with certain relevant information within 30 days of the execution of the equity transfer agreement. The tax authorities
in charge will evaluate the offshore transaction for tax purposes. In the event that the tax authorities determine that such transfer
is abusing forms of business organization and a reasonable commercial purpose for the offshore holding company other than the avoidance
of PRC income tax liability is lacking, the PRC tax authorities will have the power to re-assess the nature of the equity transfer
under the doctrine of substance over form. A reasonable commercial purpose may be established when the overall international (including
U.S.) offshore structure is set up to comply with the requirements of supervising authorities of international (including U.S.)
capital markets. If the SAT’s challenge of a transfer is successful, it may deny the existence of the offshore holding company
that is used for tax planning purposes and subject the non-resident investor to PRC tax on the capital gain from such transfer.
Since Circular 698 has a short history, there is uncertainty as to its application. We (or a non-resident investor) may become
at risk of being taxed under Circular 698 and may be required to expend valuable resources to comply with Circular 698 or to establish
that we(or such non-resident investor) should not be taxed under Circular 698, which could have a material adverse effect on our
financial condition and results of operations (or such non-resident investor’s investment in us).



If any PRC tax applies to a non-resident
investor, the non-resident investor may be entitled to a reduced rate of PRC tax under an applicable income tax treaty and/or a
deduction for such PRC tax against such investor’s domestic taxable income or a foreign tax credit in respect of such PRC
tax against such investor’s domestic income tax liability (subject to applicable conditions and limitations). Investors should
consult with their own tax advisors regarding the applicability of any such taxes, the effects of any applicable income tax treaties,
and any available deductions or foreign tax credits.



The PRC laws and regulations governing our
current business operations are sometimes vague and uncertain. Any changes in such PRC laws and regulations may have a material
and adverse effect on our business.



There are substantial uncertainties regarding the interpretation
and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing our business, and
the enforcement and performance of our arrangements with clients in the PRC in the event of the imposition of statutory liens,
death, bankruptcy and criminal proceedings.  These laws and regulations are sometimes vague and may be subject to future
changes, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness of newly enacted
laws, regulations or amendments may be delayed, resulting in detrimental reliance by foreign investors. New laws and regulations
that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation
of existing or new PRC laws or regulations may have on our businesses.



9







Adverse changes in political and economic policies of
the PRC government could impede the overall economic growth of the PRC, which could reduce the demand for our services and adversely
affect our business and prospects.



We generate all of our revenues from clients which conduct substantially
all of their operations in the PRC. Accordingly, our clients’ business, financial condition, results of operations and prospects
will be affected significantly by changes in the PRC’s economic, political and legal systems in the PRC, which affects our
prospects and operations.



Since 1978, the PRC has been one of the world’s fastest-growing
economies in terms of gross domestic product, or GDP growth. We cannot assure you, however, that such growth will be sustained
in the future. If, in the future, the PRC’s economy experiences a downturn or grows at a slower rate than expected, there
may be less demand for spending in certain industries.



Our ability to implement our business plan is based on the assumption
that the Chinese economy will continue to grow. The PRC’s economic growth has been uneven, both geographically and among
various sectors of the economy. The PRC government has implemented various measures to encourage economic growth and guide the
allocation of resources. Some of these measures benefit the overall PRC economy, but may also have a negative effect on us.



The PRC economy has been transitioning from a planned economy
to a more market-oriented economy. Although in recent years the PRC government has implemented measures emphasizing the use of
market forces for economic reform, the reduction of state ownership of productive assets and the establishment of sound corporate
governance in business enterprises, a substantial portion of productive assets in the PRC is still owned by the PRC government.
In addition, the PRC government continues to play a significant role in regulating industry development by imposing industrial
policies. It also exercises significant control over PRC economic growth through the allocation of resources, controlling payment
of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries
or companies. We cannot assure you that changes in the PRC’s economic, political or legal systems will not detrimentally
affect our business, prospects, financial conditions and results of operations.



Deterioration of the PRC’s political relations with
the U.S., Europe, or other nations could make Chinese businesses less attractive to Western investors which could reduce the demand
for our services.



The relationship between the U.S. and the PRC is subject to
sudden fluctuation and periodic tension. Changes in political conditions in the PRC and changes in the state of Sino-foreign relations
are difficult to predict and could materially adversely affect our operations or cause potential clients to be less interested
in our services. This could lead to a decline in our profitability. Any weakening of relations between the U.S., Europe, or other
nations and the PRC could have a material adverse effect on our operations or our ability to raise additional capital.



Risks Relating to Our Corporate Structure



If the PRC government determines
that the agreements that establish the structure for operating our PRC business otherwise do not comply with applicable PRC laws,
rules and regulations, we could be subject to severe penalties.



The PRC government requires any foreign
entities that invest in the advertising services industry to have at least two years of direct operations in the advertising industry
outside of the PRC. We have not directly operated any advertising business outside of the PRC and therefore, we currently do not
qualify under PRC regulations to directly provide advertising services. We are a BVI company and a foreign legal person under PRC
laws. Accordingly, our subsidiary, Galaxy Beijing, is currently ineligible to apply for the required licenses for providing advertising
services in the PRC. We provide our advertising services business currently through our contractual arrangements with Beijing Lianchuang,
our affiliated entity in the PRC. Beijing Lianchuang is currently majority controlled by an individual shareholder, who is PRC
citizen, and holds the requisite licenses to provide advertising services in the PRC. We are and are expected to continue to be
dependent on affiliated entities to operate our advertising services business. We do not have any equity interest in Beijing Lianchuang
but substantially control its operations and receive the economic benefits and bears economic risks of the company through a series
of contractual arrangements.





10







There are uncertainties regarding the interpretation
and application of current and future PRC laws, rules and regulations, including but not limited to the laws, rules and regulations
governing the validity and enforcement of our contractual arrangements with Beijing Lianchuang. We cannot assure you that the PRC
regulatory authorities will not adopt any new regulation to restrict or prohibit foreign investment in advertising business through
contractual arrangement in the future, or will not determine that our corporate structure and contractual arrangements violate
PRC laws, rules or regulations.



If we, Beijing Lianchuang or any of its
current or future subsidiaries are found to be in violation of any existing or future PRC laws or regulations, or fail to obtain
or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing
with such violations, including:



| | · | revoking the business licenses of Beijing Lianchuang;
| | - | -----------------------------------------------------



| | · | discontinuing or restricting the conduct of any transactions among our PRC subsidiary and Beijing
Lianchuang;
| | - | -------------------------------------------------------------------------------------------------------------



| | · | imposing fines, confiscating the income of Beijing Lianchuang or our income, or imposing other
requirements with which we or our PRC subsidiary and Beijing Lianchuang may not be able to comply;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | requiring us or our PRC subsidiary and Beijing Lianchuang to restructure our ownership structure
or operations; or
| | - | ------------------------------------------------------------------------------------------------------------------



| | · | restricting or prohibiting our use of the proceeds of our equity or debt offerings to finance our
business and operations in China.
| | - | -----------------------------------------------------------------------------------------------------------------------------------



The imposition of any of these penalties
could preclude us from operating our advertising services business, which would have a material adverse effect on our financial
condition and results of operations.



We rely on contractual arrangements
with Beijing Lianchuang and its controlling shareholder for a substantial portion of our business operations in the PRC, which
may not be as effective in providing operational control or enabling us to derive economic benefits as through direct ownership
of controlling equity interest.



We rely on and expect to continue to rely
on contractual arrangements with Beijing Lianchuang, our affiliated entity in the PRC and its controlling shareholder to operate
our advertising services business. These contractual arrangements may not be as effective in providing us with control over Beijing
Lianchuang as ownership of controlling equity interests would be in providing us with control over, or enabling us to derive economic
benefits from the operations of, Beijing Lianchuang. If we had direct ownership of Beijing Lianchuang, we would be able to exercise
our rights as a shareholder to (i) effect changes in the board of directors of the company, which in turn could effect changes,
subject to any applicable fiduciary obligations, at the management level, and (ii) derive economic benefits from the operations
of the company by causing it to declare and pay dividends. However, under the current contractual arrangements, as a legal matter,
if Beijing Lianchuang or its controlling shareholder fails to perform its or her respective obligations under these contractual
arrangements, we may have to incur substantial costs and resources to enforce such arrangements, and rely on legal remedies available
under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which we cannot assure you will
be effective.



If (i) the applicable PRC authorities invalidate
these contractual arrangements for violation of PRC laws, rules and regulations, (ii) Beijing Lianchuang or its controlling shareholder
terminates the contractual arrangements, or (iii) Beijing Lianchuang or its controlling shareholder fails to perform their obligations
under these contractual arrangements, our business operations in the PRC would be materially and adversely affected, and the value
of our shares would substantially decrease. In addition, if Beijing Lianchuang or all or part of its assets become subject to liens
or rights of third-party creditors, we may be unable to continue our advertising services business activities in the PRC, which
could materially and adversely affect our business, financial condition and results of operations. If Beijing Lianchuang undergoes
a voluntary or involuntary liquidation proceeding, its shareholders or unrelated third-party creditors may claim rights to some
or all of these assets, thereby hindering our ability to operate our advertising services business, which could materially and
adversely affect our business, our ability to generate revenues and the market price of our shares.



11







All of these contractual arrangements are
governed by PRC law and provide for the resolution of disputes through arbitration in the PRC. The legal environment in the PRC
is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system
could limit our ability to enforce these contractual arrangements. In the event we are unable to enforce these contractual arrangements,
we may not be able to exert effective control over Beijing Lianchuang and we may be precluded from operating our advertising services
business, which would have a material adverse effect on our financial condition and results of operations.



The controlling shareholder of Beijing
Lianchuang may have potential conflicts of interest with us.



The controlling shareholder of Beijing
Lianchuang is the legal shareholder of the company. Her interests as the controlling shareholder of Beijing Lianchuang and the
interests of our company may conflict. We cannot assure you that when conflicts of interest arise, the controlling shareholder
will act in the best interests of our company or that any conflict of interest will be resolved in our favor. In addition, the
controlling shareholder of Beijing Lianchuang may breach or cause Beijing Lianchuang to breach the existing contractual arrangements,
which will have a material adverse effect on our ability to effectively control Beijing Lianchuang and receive economic benefits
from it. If we cannot resolve any conflicts of interest or disputes between us and the controlling shareholder of Beijing Lianchuang,
we would have to rely on legal proceedings, the outcome of which is uncertain and which could be disruptive to our business.



We may rely on dividends and other
distributions on equity paid by our wholly owned subsidiary to fund any cash and financing requirements we may have, and any limitation
on the ability of our subsidiary to pay dividends to us could have a material adverse effect on our ability to conduct our business.



We are a holding company, and we may rely
on dividends and other distributions on equity paid by Galaxy Beijing, our subsidiary in the PRC, for our cash requirements, including
the funds necessary to service any debt we may incur. If Galaxy Beijing incurs debt on its own behalf in the future, the instruments
governing the debt may restrict its ability to pay dividends or make other distributions to us. In addition, the PRC tax authorities
may require us to adjust our taxable income under the contractual arrangements Galaxy Beijing currently has in place with Beijing
Lianchuang in a manner that would materially and adversely affect the ability of Galaxy Beijing to pay dividends and other distributions
to us. Further, relevant PRC laws, rules and regulations permit payments of dividends by Galaxy Beijing only out of its retained
earnings, if any, determined in accordance with accounting standards and regulations of the PRC. Under PRC laws, rules and regulations,
Galaxy Beijing is also required to set aside a portion of its net income each year to fund specific reserve funds. In addition,
the statutory general reserve fund requires annual appropriations of 10% of after-tax income to be set aside prior to payment of
dividends until the cumulative fund reaches 50% of the registered capital. As a result of these PRC laws, rules and regulations,
Galaxy Beijing is restricted from transferring a portion of its net assets to us whether in the form of dividends, loans or advances.
Any limitation on the ability of our subsidiary to pay dividends to us could materially and adversely limit our ability to grow,
make investments or acquisitions that could be beneficial to our businesses, pay dividends or otherwise fund and conduct our business.



Risks Related to our Ordinary Shares



There is no trading market for our ordinary shares and
as a result investors may not be able to sell our ordinary shares.



There is no active trading market for our ordinary shares and
there may never be such market for our ordinary shares. Although we intend to seek to have a broker-dealer apply for quotation
of our ordinary shares on the OTC Bulletin Board (“OTCBB”) after effectiveness of this annual report, there can be
no assurance we will be able to identify a broker-dealer to file the necessary documents with the Financial Industry Regulatory
Authority to obtain such quotation or that any such application will be approved. If our ordinary shares are not quoted on the
OTCBB, we expect that our ordinary shares may be quoted and traded from time to time on the Pink Sheets. Such Pink Sheet quotations
and trading may be limited or sporadic and our shareholders may have difficulty in selling their shares in such an illiquid market.
In the absence of an active trading market, an investor may have difficulty buying and selling or obtaining market quotations,
the market visibility for our stock may be limited, and the lack of visibility for our ordinary shares may have a depressive effect
on the market price for our ordinary shares.



12







Our ordinary shares are considered a “penny stock”
under SEC rules, which limits the market for our shares and our ability to raise capital in an equity offering of our securities.



Unless our ordinary shares become listed on a national securities
exchange or have a minimum bid price of $4.00 per share our ordinary shares will continue to be considered a “penny stock,”
as defined in Rule 3a51-1 of the Securities Exchange Act of 1934.  SEC rules impose additional specific disclosure and
other requirements on broker-dealers effecting transactions in penny stocks, which rules may reduce the market liquidity for our
shares.



The Securities and Exchange Commission has adopted Rule
15g-9 for transactions in penny stocks which requires that:



In order to approve a person's account for transactions in penny
stocks, the broker or dealer must:

·      obtain
financial information and investment experience objectives of the person; and

·      make
a reasonable determination that transactions in penny stocks are suitable for that person and the person has sufficient knowledge
and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.



The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

·      sets
forth the basis on which the broker or dealer made the suitability determination;

·      that
the broker or dealer received a signed, written agreement from the investor prior to the transaction; and

·      the
broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased.



Disclosure also has to be made about: the risks of investing
in penny stocks in both public offerings and in secondary trading; the commissions and other compensation payable to both the broker-dealer
and the registered representative in connection with the penny stock transaction; current quotations for the penny stocks and other
information relating to the penny stock market; and the rights and remedies available to an investor in cases of fraud in penny
stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in
the account and information on the limited market in penny stocks.



If a market for our ordinary shares develops, there is
a significant risk that our stock price may fluctuate dramatically which may negatively impact an investor’s investment in
our ordinary shares.



Although our ordinary shares have been approved for quotation
on the over-the-counter bulletin board, very limited trading in our ordinary shares has occurred.  Since our ordinary
shares are not currently eligible for trading through the Depository Trust Company’s Fast Automated Securities Transfer
program, we expect trading, if it develops, to remain limited until such time, if even, that all shares are eligible for trading
in such program.  If a market for our ordinary shares develops, there is a significant risk that our stock price may
fluctuate dramatically in the future in response to any of the following factors, some of which are beyond our control including:



| | § | changes in our industry;
| | - | ------------------------



| | § | competitive pricing pressures;
| | - | ------------------------------



| | § | our ability to obtain working capital;
| | - | --------------------------------------



| | § | additions or departures of key personnel;
| | - | -----------------------------------------





13







| | § | limited “public float” in the hands of a small number of persons whose sales or lack
of sales could result in positive or negative pricing pressure on the market price for our ordinary shares;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | § | sales of our ordinary shares;
| | - | -----------------------------



| | § | our ability to execute our business plan;
| | - | -----------------------------------------



| | § | operating results that fall below expectations;
| | - | -----------------------------------------------



| | § | loss of any strategic relationship;
| | - | -----------------------------------



| | § | economic and other external factors; and
| | - | ----------------------------------------



| | § | period-to-period fluctuations in our financial results.
| | - | -------------------------------------------------------



In addition, the securities markets have from time to time experienced
significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market
fluctuations may also materially and adversely affect the market price of our ordinary shares.



Our five shareholders holding the largest percentage of
voting stock, including our CEO, own approximately 60.59% of our outstanding ordinary shares and 83.41% of the votes.



As of the date of the filing of this annual report, our five
largest shareholders, including Mr. Wu, our CEO and director, own approximately 60.59% of our outstanding ordinary shares and 83.41%
of the votes.  As a result, these shareholders will control the elections of our board of directors and all other matters
submitted to a vote of the Company’s shareholders. Such concentration of share ownership may have the effect of discouraging,
delaying or preventing a change in control of the Company.



On February 25, 2011, we issued 500,000 preferred shares to
all of our existing shareholder of ordinary shares, based on a ratio of 1 preferred share allotted to every 5 ordinary shares held
on that day.  As of December 31, 2011, we have 500,000 preferred shares outstanding. The preferred shares vote together
with the ordinary shares on all matters as to which our shareholders are entitled to vote. Each preferred shares is entitled to
100 votes. On December 31, 2011, the preferred shares were entitled to an aggregate of 50,000,000 votes, or 93.89% of the total
votes that may be cast by our shareholders. Our holders of preferred shares may change in the future and may have conflicting interests
with the holders of our ordinary shares and may vote in a different manner than the holders of our ordinary shares.



We have not paid dividends in the past and do not expect
to pay dividends in the future. Any return on investment may be limited to the value of our ordinary shares.



We have never paid cash dividends on our ordinary shares and
do not anticipate doing so in the foreseeable future. The payment of dividends on our ordinary shares will depend on earnings,
financial condition and other business and economic factors affecting us that our Board of Directors may consider relevant. If
we do not pay dividends, our ordinary shares may be less valuable because a return on an investor’s investment will only
occur if our stock price appreciates.



Your ability to bring an action against us or against
our director and officer, or to enforce a judgment against us or him, will be limited because we conduct substantially all of our
operations in Hong Kong  and because our director and officer resides outside of the United States.



Your ability to bring an action against us or against our director
and officer, or to enforce a judgment against us or him, will be limited because we conduct substantially all of our operations
in Hong Kong and because our director and officer resides outside of the United States.





14







Item 4.   Information on the Company



A.History and Development of the Company



Galaxy Strategy & Communications Inc. is a limited liability
company incorporated on January 12, 2000 under the laws of the British Virgin Islands as Calendar Profits Limited.  The
address and phone number of the Company are Unit 202, 2/F Malaysia Building, 50 Gloucester Road, Wanchai, Hong Kong, 852-2821-3373.



The Company is a development stage company engaged in providing
advice on products, branding and communications, public relations, financial and other consulting services.  Given
the business nature being a consulting and advisory, we do not have any material capital expenditure or major physical assets.  Our
business is not regulated by any PRC or BVI regulators, and therefore we do not need to apply or maintain any particular industry
qualification license.  In 2009, we completed a project where we advised a PRC manufacturer, based in central China,
in its fund raising activities in the US, and we provided advice on matters such as how to make effective presentations, how to
understand and address questions raised by various parties during the process, and how to describe the current events in China.



On February 25, 2011, the Company changed its name to Galaxy
Strategy & Communications Inc. by shareholder approval.  On the same day, our shareholders approved certain amendments
to our Memorandum and Articles of Association to provide that the Board of Directors may allow for the issuance of preferred shares
as discussed further in Item 10, below.



On November 18, 2010, the Company acquired Strategy & Communications
(Hong Kong) Group Limited, a wholly-owned subsidiary organized in Hong Kong (“H.K. Strategy”), as an intermediate holding
company for the purpose of conducting its business in China.



On February 25, 2011, our director approved an issuance of 500,000
Preferred Shares pro rata among the current holders of our Ordinary Shares as of the same day on the basis of 1 Preferred Share
for every 5 issued Ordinary Shares.  The rights, powers, preferences and privileges of our preferred shares are described
in Item 9.



On April 28, 2011, our subsidiary, H.K. Strategy injected HK$500,000
capital into Galaxy Strategy & Communications (Beijing) Management Co., Ltd. (“Galaxy Beijing”), a wholly-owned
subsidiary with registered capital of HK$500,000 newly incorporated in Beijing on January 27, 2011.



On July 8, 2011, we, through Galaxy Beijing, our indirect wholly-owned
subsidiary in the PRC, entered into a series of agreements with Beijing Lianchuang and its controlling shareholder, Haijuan Xu,
which provide us effective control over Beijing Lianchuang and its subsidiaries. In addition, on the same date, the parties entered
into (i) an Agreement to Issue Shares under which the Company agreed to issue 230,400 ordinary shares in accordance with Xu’s
instructions, up to 115,200 of which are subject to forfeiture in the event certain earnings targets of Beijing Lianchuang are
not met, and (ii) a Deed for Non-competition Undertaking in favor of Beijing Lianchuang and the Company. At Ms. Xu’s instructions,
the ordinary shares were issued to Le Wang Limited, an entity which is majority-owned and controlled by Ms. Xu.



Pursuant to an Agreement for Exclusive Purchase Right, Galaxy
Beijing has an exclusive option to purchase, or to designate other persons to purchase, to the extent permitted by applicable PRC
laws, the entire equity interest in Beijing Lianchuang from Ms. Xu. As we have not exercised the purchase right to date, we have
only an indirect interest in Beijing Lianchuang, and we have decided not to exercise certain control power granted to us pursuant
to the Letter of Authorization signed by Ms. Xu, and therefore, the financial results of Beijing Lianchuang have not been consolidated
with our financial statements for the year ended December 31, 2011.  If we intend to consolidate the financial results of
Beijing Lianchuang into our financial statements in the future, we will choose to exercise our purchase right, or full
control power over the activities of Beijing Lianchuang, taking into consideration the cost and effort involved and our expansion
plans among other things.





15







B.Business Overview



The Company is engaged in the business of providing advice on
products, branding and communications, public relations, financial and other consulting services.  The Company helps
various Chinese clients in business strategies and branding analysis and provides independent advice to clients on matters such
as product growth strategy, how to present a positive corporate image, how to effectively communicate with outside parties, how
to build a brand in the market place, and public relations.  Through management’s network of people and contacts,
the Company introduces clients to potential business collaborators and advises on government relations.  Additionally,
we advise on financial strategy such as initial public offerings (“IPOs”), pre-IPO financing, post-financing matters,
financial officer placement, and managing the relationship between a client’s financial officer and other officers.  In
the above financial transactions, we do not necessarily advise on all the related issues, rather, we provide advice only in
selected areas where we believe that we can add value.



Generally, we only charge success fees to be received upon completion
of our clients’ transactions.  We believe this approach creates trust in existing and potential clients.  In
performing our work to our clients, we often seek third parties advice from our network of experts such as investment bankers,
lawyers, accountants and valuation experts.  Our practice is to structure our arrangements with these third party experts
to compensate them upon consummation of our own service to our clients and our receipt of our success fee.  We believe
our network of outside professional contacts as a key asset of our practice.



Since the Company’s inception, we have had discussions
with at least a dozen potential Chinese clients, although we did not generate any
revenues until 2009.  In the past years, we focused on building our network and relations in the market place by working
with various parties.  We have sought to obtain client engagements through recommendations and referrals from our officer’s
contacts and their attendance at industry forums and conferences.  We promote our Company and our service capability
mainly through our networking and reputation and image of our key personnel.



Additionally, through our interests in Beijing Lianchuang ,
we are engaged in the advertising service business in the PRC, a subsector of the marketing and communications service industry.
Our main business is marketing and communications services, which is to advise and help clients, and provide advice on products,
branding and communications, public relations, financial and other consulting services. We assist various Chinese clients in business
strategies and branding analysis and provide independent advice to clients on matters such as product growth strategy, presenting
a positive corporate image, effectively communicating with outside parties, building a brand in the market place, and public relations.
Through the contractual arrangements with Beijing Lianchuang, we have expanded our businesses in the PRC.



Under applicable PRC laws, rules and regulations, to invest
in the advertising industry, foreign investors must have at least two years of direct operations in the advertising industry as
their core businesses outside of the PRC. We are a BVI company and a foreign legal person under PRC laws and we do not currently
directly operate any advertising business outside of the PRC. Therefore, we do not qualify under PRC regulations to directly own
equity interest in advertising services providers. Accordingly, our subsidiary, Galaxy Beijing, is ineligible to apply for the
required licenses for providing advertising services in the PRC. We operate advertising services business through contractual arrangements
with Beijing Lianchuang, our affiliated entity. These contractual arrangements enable us to exercise effective control over Beijing
Lianchuang and receive a substantial portion of the economic benefits from the company.



Our strategy is to continue to develop our network of business
contacts and pursue suitable business transactions for our Chinese clients.  We do not intend to be a generalist to every
potential client, rather, we intend to add value where we have unique skill sets, leveraging our relationship.  Our strategy
is to continue to close transactions to further build our credentials in the coming year.



As of the date of this report, we have a staff of nine full
time personnel, including Qiang Wu, our Chief Executive Officer, who now devotes substantially all of his business time to our
operations.  We intend to further increase our staffing in 2012. We plan to add more professionals who have significant
prior experience in business and consulting services to Chinese clients.  We may also engage professionals as third-party
consultants on our projects, and eventually bring them as our full time employees as business volume grows.



We are seeking to increase the completion rate of our potential
transactions by focusing on the types of transactions which are expected to provide a higher rate of success.  We intend
to conduct further analysis to determine which transactions have a higher chance of completion and, therefore, revenue to be recognized
by us.





16







We operate in a competitive environment among other companies
offering similar or identical services to the Chinese market.  Many of our competitors are larger with more established
businesses than us and have substantially greater resources than we do.



C.Organizational Structure

The following diagram illustrates our corporate structure as
of the date of this report:







à Equity
interest



------- Contractual arrangements



|“Galaxy Beijing”     |  | Galaxy Strategy & Communications (Beijing) Management Co., Ltd., our indirect wholly-owned subsidiary in the PRC                                                                                                              
|-------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                     |  |                                                                                                                                                                                                                               
|“Beijing Lianchuang” |  | Beijing Lianhe Chuangxiang Advertising Co., Ltd., a company incorporated in the PRC with limited liability. The company is principally engaged in the advertising services business, and majority controlled by a PRC resident



Agreements that Provide Us with Effective Control



Agreement for Exclusive Purchase Right. Galaxy Beijing,
Beijing Lianchuang and Ms. Xu entered into the Agreement for Exclusive Purchase Right, pursuant to which Galaxy Beijing has an
exclusive option to purchase, or to designate other persons to purchase, to the extent permitted by applicable PRC laws, the entire
equity interest in Beijing Lianchuang from Ms. Xu. The purchase price shall be a nominal price or the minimum price permitted by
applicable PRC laws. The agreement became effective upon execution and will remain so for so long as Beijing Lianchuang remains
in operation.



Letter of Authorization. Ms. Xu signed a Letter of Authorization,
pursuant to which Ms. Xu irrevocably granted on an exclusive basis Galaxy Beijing, or a person designated by Galaxy Beijing, the
right to appoint directors and senior management of Beijing Lianchuang, and to exercise all of her other voting rights as controlling
shareholder of Beijing Lianchuang in accordance with the company’s articles of association and the applicable PRC laws. The
letter will remain in effect for so long as the controlling shareholder remains a shareholder of Beijing Lianchuang.





17







Equity Pledge Agreement. Galaxy Beijing, Beijing Lianchuang
and Ms. Xu entered into the Equity Pledge Agreement, under which Ms. Xu pledged her entire equity interests in Beijing Lianchuang
to Galaxy Beijing to secure the obligations of Beijing Lianchuang under the Exclusive Consulting Services Agreement with Galaxy
Beijing. In addition, Ms. Xu agreed not to transfer, sell, pledge, dispose of or create any encumbrance on her equity interests
in Beijing Lianchuang, unless with the prior written consent of the Company. Beijing Lianchuang covenants, among other things,
that without prior consent of Galaxy Beijing, it will not distribute any dividends. The pledge of equity interests under the agreement
will remain in effect for so long as the Exclusive Consulting Services Agreement remains effective.



Agreement that Transfers Economic Benefits to Us



Exclusive Consulting Services Agreement. Under the Exclusive
Consulting Services Agreement between Galaxy Beijing and Beijing Lianchuang, Galaxy Beijing will provide consulting services and
support to Beijing Lianchuang, and will be entitled to service fees to be paid out of Beijing Lianchuang’s operating profits.
Galaxy Beijing is entitled to adjust the service fees, or decide to waive such fees for the benefits of the Company and Beijing
Lianchuang, at its sole discretion. Galaxy Beijing has decided to waive the service fees for the following three fiscal years and
leave the funds for Beijing Lianchuang’s business development and expansion. In the future, the Company may demand payment
of the service fees, at its sole discretion, depending on the business needs of itself and Beijing Lianchuang, and our goal is
to support Beijing Lianchuang to expand and grow its business, and we would provide necessary support, including technical and
financial aids, to Beijing Lianchuang as we see fit.  The agreement became effective upon signing and will remain so
for so long as Beijing Lianchuang remains in operation.



Agreement to Issue Shares



We, Galaxy Beijing, Beijing Lianchuang, Ms. Xu and her majority-controlled
BVI entity, Le Wang Limited, entered into the Agreement to Issue Shares, pursuant to which:



| | · | we agreed to issue to Le Wang Limited 230,400 ordinary shares, valued at $2.50, upon execution of the agreement.  Of
the ordinary shares issued to Le Wang Limited, 115,200 shares are subject to forfeiture and will not be released to Le Wang Limited
until Beijing Lianchuang achieving certain predetermined earnings targets;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Ms. Xu agreed to a restriction on transfer of the shares for a period of 36 months, during which period she or Le Wang Limited
will not transfer, sell, pledge, dispose of or create any encumbrance on the shares of the Company held by them, without our prior
written consent; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | if Beijing Lianchuang fails to achieve the predetermined earnings targets for each of fiscal years 2011, 2012 and 2013, Le
Wang Limited will not receive all or a portion of the 115,200 shares which are being held by us and such shares will be forfeited
to us.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Deed for Non-competition Undertaking



Ms. Xu executed a Deed for Non-competition Undertaking in favor
of Beijing Lianchuang and Strategy & Communications (Hong Kong) Group Limited, our direct wholly-owned subsidiary in Hong Kong,
under which the controlling shareholder undertook:



| | · | to remain in her current position within Beijing Lianchuang for 5 years following the signing of the deed; and
| | - | --------------------------------------------------------------------------------------------------------------

| | · | during a period of 10 years from the later of (x) the date of the deed, and (y) the date Ms. Xu is no longer employed by Beijing
Lianchuang, without our prior written consent, she will not directly or indirectly, (i) alone or with others, in any form, own,
engage in, be concerned or interested in any business in competition with the businesses of the Company and its subsidiaries and
affiliates; (ii) employ, solicit or attempt to employ or solicit any person who at the date of or at any time during the 12 months
prior to termination of service as a director, officer, legal representative, manager or employee of the Company or its subsidiaries
or affiliates; (iii) solicit or transfer or attempt to solicit or transfer, or transfer or attempt to transfer to any third party,
any business activities with, or services or products offered to, any clients  or prospective clients by the Company
or any of its subsidiaries or affiliates or (iv) cause or attempt to cause any vendor, supplier, independent contractor or other
person carrying out business with the Company or any of its subsidiaries or affiliates to terminate or change their relationship
with the Company or any of its subsidiaries or affiliates.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





18







D. Property, Plants and Equipment



On August 30, 2011, we entered
into a 24 month lease agreement for a 209.11 square meter facility at Level 5, Tower 3, China Central Place, 77 Jianguo Road, Chaoyang
District, Beijing, PRC, at approximately $12,500 (RMB79,044) per month. This facility serves as the corporate office for Galaxy
Beijing.



Item 4A.  Unresolved Staff Comments



Not applicable.



Item 5.  Operating and Financial Review and Prospects



A.  Operating results.



Revenue



Our 2011 revenue was $23,995, compared to $126,955 in 2010.
This decrease was mainly due to that there were no larger-scaled transactions for which we were engaged that were successfully
completed in 2011. During 2011, we continued to develop our service ability in different aspects, including establishing a PRC
subsidiary and opening an office in Beijing to better service our clients in China, entering into discussion with a greater number
of potential clients and working with outside consultants and service professionals. We began to establish more stable client relationship
this year compared to 2010.

Cost of service



Our 2011 cost of service was $11,342, compared to $81,090 in
2010. The cost of service decreased along with the reduced volume of businesses.



Gross profit



Our gross profit was $12,653 in 2011, compared to $45,865 in
2010.



Operating expenses



Our operating expenses were $208,068 in 2011, compared to $42,457
in 2010. Our operating expenses primarily consisted of the professional fees paid for legal, accounting and other necessary filing
and maintenance expenses related to being a reporting company in the United States, travel and entertainment expenses, as well
as expenses related to setting up our PRC subsidiary and opening and maintaining an office in Beijing. The increase in operating
expenses was mainly due to the increased travel and entertainment expenses, and rental cost for our office in Beijing.



Operating loss



We incurred an operating loss of $195,274 in 2011, compared
to an operating income of $3,408 in 2010.



Income taxes



We did not pay any income taxes for 2011.



Net income



We recorded a net loss of $195,274 in 2011, compared to net
income of $3,408 in 2010.





19







B.  Liquidity and capital resources.



In 2011, we generated negative operating cash flows of $226,064,
consisting primarily of our net loss.



Net cash used in investing activities amounted to $53,063 in
2011, primarily consisting of our purchase of office equipment and furniture, and payment of utility and rental deposits, for our
office in Beijing.



We raised capital from new issuance of stock for cash proceeds
of $658,000 during 2011. Our principal sources of liquidity have been cash generated from capital raises, and are expected to
continue to remain so over the near term.



Our current assets are comprised of accounts receivable, prepaid
expenses and cash and cash equivalents. As of December 31, 2011, our accounts receivable were nil, and prepaid expenses amounted
to $12,559, which were the prepaid rental expense for our office in Beijing. We had $447,214 of cash and cash equivalents at December
31, 2011.



Our current liabilities consist of accrued liabilities and
other payables. As of December 31, 2011, our accounts payable were nil. Accrued liabilities and other payables amounted to $18,669,
substantially all of which represented outstanding fees payable to professionals and outstanding reimbursement of business expenses.



C.  Research and development, patents and licenses,
etc.



None/Not applicable.



D.  Trend information.



We will continue to explore opportunities to grow our business
and service capabilities, including through acquisitions.



The Company’s strategy is to continue to develop its network
of business contact and pursue suitable business transactions for our Chinese clients.  We do not intend to be a generalist
to every potential client, rather, we intend to add value where we have unique skill sets, leveraging our relationship.  Our
strategy is to continue to close transactions to further build our credentials in the coming year, and in the meantime, we plan
to add more professionals who have significant prior experience in business and consulting services to Chinese clients.  We
may engage such professionals as third-party consultants on our projects, and eventually bring them as our full time employees
as business volume grows.



We also intend to increase the completion rate of our potential
transactions.  We would conduct further analysis to determine which transactions have a higher chance of completion,
therefore revenue to be recognized by us.  In the future, we will focus on the transactions which present higher rate
of completion.



As China’s economy has continued to recover from the global
financial crisis we expect our prospective clients to seek to enter into acquisition and financing transactions at a greater rate
and therefore potentially result in continually increasing engagements and revenues for us in 2012.



E.  Off-balance sheet arrangements



None/Not applicable.



F.  Tabular disclosure of contractual obligations



|                            |  | Total |         |  | Less than 1 year |   |         | 1-3 years |  |   | 3-5 years |  |  | More than 5 years |  
|--------------------------- |  | ----- | ------- |  | ---------------- | - | ------- | --------- |  | - | --------- |  |  | ----------------- | -
|Operating lease commitments |  | $     | 276,293 |  |                  | $ | 150,705 |           |  | $ | 125,588   |  |  | $                 | -
|Total                       |  | $     | 276,293 |  |                  | $ | 150,705 |           |  | $ | 125,588   |  |  | $                 | -





20







G. Safe Harbor



Certain statements in this document constitute
“forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995.
These statements include, without limitation, statements regarding the status of development, or expenditures relating to our business,
plans to fund our current activities, statements concerning our partnering activities, health regulatory submissions, strategy,
future operations, future financial position, future revenues and projected costs. In some cases, forward-looking statements can
be identified by terminology such as “may”, “will”, “should”, “expects”, “plans”,
“anticipates”, “believes”, “estimates”, “predicts”, “potential”, “continue”,
“intends”, “could”, or the negative of such terms or other comparable terminology. We made a number of
assumptions in the preparation of these forward-looking statements. Undue reliance should not be placed on our forward-looking
statements, which are subject to a multitude of risks and uncertainties that could cause actual results, future circumstances or
events to differ materially from those projected in the forward-looking statements. These risks include, but are not limited to,
securing and maintaining corporate alliances, the need for additional capital, the effect of capital market conditions and other
factors, including the current status of our programs, on capital availability, the potential dilutive effects of any financing
and other risks detailed from time to time in our public disclosure documents or other filings with the securities commissions
or other securities regulatory bodies in the U.S. Additional risks and uncertainties relating to the Company and our business can
be found in the “Risk Factors” section of this document, as well as in our other public filings. The forward-looking
statements are made as of the date hereof, and we disclaim any intention and have no obligation or responsibility, except as required
by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.



Item 6.  Directors, Senior Management and Employees



A. Directors and senior management.  Our
directors and senior management are:





Qiang Wu, age 44, Mr. Wu served as a senior
consultant for Oriental Patron Financial Group (“OP”) from October 2008 to March 2010, when Mr. Wu joined our Company
as the Chief Executive Officer and as our Principal Financial Officer.  As the Head of Principal Investment, Mr. Wu
helped OP to develop the overall strategy and execution of investment projects in China, as well as originating suitable investment
opportunities in China.  Mr. Wu also worked at JP Morgan Securities (Asia Pacific) Limited in Hong Kong from January
2006 to May 2008 as an Executive Director of Investment Banking Division, in which position Mr. Wu was responsible for business
development and origination of China business.  From August 2001 to September 2005, Mr. Wu worked at The Hongkong and
Shanghai Banking Corporation Limited, serving functions as Co-Head of Corporate Finance, and then subsequently as the Head of
China Coverage and a Director of Corporate Finance under the Division of Corporate, Investment Banking and Markets.  Mr.
Wu joined the financial service industry in 1996 and has been working in Hong Kong and China for the past 14 years.  Mr.
Wu holds MBA degree in Finance and Economics from the New York University, Stern School of Management, and also a BBA degree in
Accounting from Baruch College, CUNY, in New York City.



B. Compensation.



Our officer and director did not receive any compensation from
the Company in the past.  In the near future, our key officers, including the CEO, will not receive salaries or
other benefits.  We are considering developing a profit sharing plan on a project-by-project basis, in which the key
officers will receive a portion of the revenue or profit generated from a particular project, the exact amount of compensation
or formula to be determined and agreed on a case-by-case basis, depending on the nature of the project.



C.  Board Practices.



The current term of office of our director are not specified.  Mr.
Wu has served as director since March 2010.  Our director does not have a service contract providing for benefits upon
termination of his term.



We currently do not have an audit committee.





21







D.  Employees.



We had 9 employees as of December 31, 2011.  We will
consider adding additional employees as needed and expect to continue to use third-party experts.



E.  Share Ownership.





The following tables sets forth, as of April 30, 2012, the beneficial
ownership of Ordinary Shares and preferred shares of the Company beneficially owned by (1) each person known to be the beneficial
owner of more than 5% of our Ordinary Shares or more than 5% of our preferred shares and (2) each of the members of senior management
identified in Item 6.A., above. (The term “beneficial owner” of securities refers to any person who, even if not the
record owner of the securities, has or shares the underlying benefits of ownership. These benefits include the power to direct
the voting or the disposition of the securities or to receive the economic benefit of ownership of the securities. A person also
is considered to be the “beneficial owner” of securities that the person has the right to acquire within 60 days by
option or other agreement. Beneficial owners include persons who hold their securities through one or more trustees, brokers, agents,
legal representatives or other intermediaries, or through companies in which they have a “controlling interest,” which
means the direct or indirect power to direct the management and policies of the entity.)





|Name                       |  | Ordinary Shares |         |  | Ordinary
Shares (%) |  |       | Preferred Shares |  |  | Preferred
Shares (%) |  |  | Voting (%) (1) |      
|-------------------------- |  | --------------- | ------- |  | ------------------- |  | ----- | ---------------- |  |  | -------------------- |  |  | -------------- | -----
|Qiang Wu                   |  |                 | 591,500 |  |                     |  | 18.17 | %                |  |  | 143,300              |  |  |                | 28.66
|Bingren Wu (2)             |  |                 | 668,000 |  |                     |  | 20.52 | %                |  |  | 133,600              |  |  |                | 26.72
|Mingwang Lu                |  |                 | 300,000 |  |                     |  | 9.22  | %                |  |  | -                    |  |  |                | -    
|Plumpton Group Limited (3) |  |                 | 247,500 |  |                     |  | 7.60  | %                |  |  | 49,500               |  |  |                | 9.90 
|Ma Wai Yee Christine       |  |                 | 245,500 |  |                     |  | 7.54  | %                |  |  | 49,100               |  |  |                | 9.82 
|Pinger Zhang               |  |                 | 220,000 |  |                     |  | 6.76  | %                |  |  | 49,000               |  |  |                | 9.80 
|Le Wang Limited (4)        |  |                 | 207,360 |  |                     |  | 6.37  | %                |  |  | -                    |  |  |                | -    



* Less than one percent.



(1)   On April 30, 2012, we had 3,255,400 Ordinary
Shares and 500,000 preferred shares outstanding.  Each preferred share entitles the holder to 100 votes. As of April
30, 2012, the total number of votes entitled to be cast at a meeting was 53,255,400.



(2)  Represents shares held by Equity Plus Holding. Bingren
Wu is the sole shareholder of Equity Plus Holding and has sole voting and dispositive power over such shares.



(3)  Pinger Zhang, Stan Wong and Raymond Ho are shareholders
of Plumpton Group Limited and have shared voting and dispositive power over such shares.



(4) Ms. Xu is the majority owner of the BVI entity, Le Wang
Limited. The shares held by Le Wang Limited are subject to a restriction on transfer of the shares for a period of 36 months, during
which period she or Le Wang Limited will not transfer, sell, pledge, dispose of or create any encumbrance on the shares of the
Company held by them, without our prior written consent. Additionally, 115,200 shares are subject to forfeiture and will not be
released to Le Wang Limited until Beijing Lianchuang achieves certain predetermined earnings targets.



The Preferred Shares are, subject to applicable law, convertible,
at the option of the holder thereof at any time, and without payment of additional consideration by the holder thereof, into an
equal number of Ordinary Shares.  Upon conversion, the enhanced voting privilege of the Preferred Shares will terminate.  The
rights and preferences of our Preferred Shares are described more fully in Item 10.



There is no arrangement involving any person named in the table
that involves the issue or grant of options for our shares or any shares.





22







Item 7.  Major Shareholders and Related Party Transactions



A.  Major Shareholders.



As of April 30, 2012, our major shareholders own shares of the
Company as shown on the table in Item 6E, above.



None of our 3,255,400 issued and outstanding Ordinary Shares
as of April 30, 2012 are held by persons in the United States.



In April 2010, we sold 2,457,970 Ordinary Shares at a price
of $.01 per share.  Our CEO and director, Mr. Wu, purchased 676,470 Ordinary Shares on the same terms and conditions
as the other investors.  Prior to the offering, there were 42,030 Ordinary Shares outstanding, of which Mr. Wu held 40,030.  Most
of our other major shareholders acquired their shares in the April 2010 offering. On February 25, 2011 we amended our Memorandum
and Articles of Association to authorize the Board of Directors to issue preferred shares of Company stock as discussed in Item
10, below.  On February 25, 2011,  our director approved an issuance of 500,000 Preferred Shares pro rata among
the current holders of our Ordinary Shares as of February 25, 2011 on the basis of 1 Preferred Share for every 5 issued and outstanding
Ordinary Shares.  In connection with the preferred share issuance, Qiang Wu was issued 143,300 preferred shares. In April
2011, the Company issued and sold to three accredited investors an aggregate of 500,000 Ordinary Shares. Also in April 2011, we
issued 25,000 Ordinary Shares to Qiang Wu in exchange for the cancellation of the $50,000 principal amount loan made to us in April
2010. In July 2011, we agreed to issue to Le Wang Limited 230,400 Ordinary Shares (of which 115,200 Ordinary Shares are subject
to potential forfeiture), pursuant to the Agreement to Issue Shares.



We know of no arrangement the operation of which may at a subsequent
date result in a change in control.  Our major shareholder does not have different voting rights.



B.  Related Party Transactions.



In April 2010, we sold 2,457,970 Ordinary Shares at a price
of $.01 per share.  Our CEO and director, Mr. Wu, purchased 676,470 Ordinary Shares on the same terms and conditions
as the other investors.



In April 2010, Mr. Wu loaned us $50,000 without interest with
a due date of April 26, 2011. In April 2011, we issued 25,000 Ordinary Shares to Qiang Wu in exchange for the cancellation of the
$50,000 principal amount loan.



On April 28, 2011, the Company’s subsidiary, H.K. Strategy
injected HK$500,000 capital to Galaxy Beijing, an indirect wholly-owned subsidiary with registered capital of HK$500,000 newly
incorporated in Beijing (People’s Republic of China) on January 27, 2011.



On July 8, 2011, we, through Galaxy Beijing entered into a series
of agreements with Beijing Lianchuang and its controlling shareholder, Haijuan Xu, which provide us effective control over Beijing
Lianchuang and its subsidiaries. In addition, on the same date, the parties entered into (i) an Agreement to Issue Shares under
which the Company agreed to issue 230,400 ordinary shares in accordance with Xu’s instructions, up to 115,200 of which are
subject to forfeiture in the event certain earnings targets of Beijing Lianchuang are not met, and (ii) a Deed for Non-competition
Undertaking in favor of Beijing Lianchuang and the Company. At Ms. Xu’s instructions, the ordinary shares were issued to
Le Wang Limited, an entity which is majority owned and controlled by Ms. Xu.



Pursuant to an Agreement for Exclusive Purchase Right, Galaxy
Beijing has an exclusive option to purchase, or to designate other persons to purchase, to the extent permitted by applicable PRC
laws, the entire equity interest in Beijing Lianchuang from Ms. Xu. As we have not exercised the purchase right to date, we have
only an indirect interest in Beijing Lianchuang, and we have decided not to exercise certain control power granted to us pursuant
to the Letter of Authorization signed by Ms. Xu, and therefore, the financial results of Beijing Lianchuang have not been consolidated
with our financial statements for the year ended December 31, 2011.  If we intend to consolidate the financial results of
Beijing Lianchuang into our financial statements in the future, we will choose to exercise our purchase right, or full
control power over the activities of Beijing Lianchuang, taking into consideration the cost and effort involved and our expansion
plans among other things.



23







Agreements that Provide Us with Effective Control



Agreement for Exclusive Purchase Right. Galaxy Beijing,
Beijing Lianchuang and Ms. Xu entered into the Agreement for Exclusive Purchase Right, pursuant to which Galaxy Beijing has an
exclusive option to purchase, or to designate other persons to purchase, to the extent permitted by applicable PRC laws, the entire
equity interest in Beijing Lianchuang from Ms. Xu. The purchase price shall be a nominal price or the minimum price permitted by
applicable PRC laws. The agreement became effective upon execution and will remain so for so long as Beijing Lianchuang remains
in operation.



Letter of Authorization. Ms. Xu signed a Letter of Authorization,
pursuant to which Ms. Xu irrevocably granted on an exclusive basis Galaxy Beijing, or a person designated by Galaxy Beijing, the
right to appoint directors and senior management of Beijing Lianchuang, and to exercise all of her other voting rights as controlling
shareholder of Beijing Lianchuang in accordance with the company’s articles of association and the applicable PRC laws. The
letter will remain in effect for so long as the controlling shareholder remains a shareholder of Beijing Lianchuang.



Equity Pledge Agreement. Galaxy Beijing, Beijing Lianchuang
and Ms. Xu entered into the Equity Pledge Agreement, under which Ms. Xu pledged her entire equity interests in Beijing Lianchuang
to Galaxy Beijing to secure the obligations of Beijing Lianchuang under the Exclusive Consulting Services Agreement with Galaxy
Beijing. In addition, Ms. Xu agreed not to transfer, sell, pledge, dispose of or create any encumbrance on her equity interests
in Beijing Lianchuang, unless with the prior written consent of the Company. Beijing Lianchuang covenants, among other things,
that without prior consent of Galaxy Beijing, it will not distribute any dividends. The pledge of equity interests under the agreement
will remain in effect for so long as the Exclusive Consulting Services Agreement remains effective.



Agreement that Transfers Economic Benefits to Us



Exclusive Consulting Services Agreement. Under the Exclusive
Consulting Services Agreement between Galaxy Beijing and Beijing Lianchuang, Galaxy Beijing will provide consulting services and
support to Beijing Lianchuang, and will be entitled to service fees to be paid out of Beijing Lianchuang’s operating profits.
Galaxy Beijing is entitled to adjust the service fees, or decide to waive such fees for the benefits of the Company and Beijing
Lianchuang, at its sole discretion. Galaxy Beijing has decided to waive the service fees for the following three fiscal years and
leave the funds for Beijing Lianchuang’s business development and expansion. In the future, the Company may demand payment
of the service fees, at its sole discretion, depending on the business needs of itself and Beijing Lianchuang, and our goal is
to support Beijing Lianchuang to expand and grow its business, and we would provide necessary support, including technical and
financial aids, to Beijing Lianchuang as we see fit.  The agreement became effective upon signing and will remain so
for so long as Beijing Lianchuang remains in operation.



Agreement to Issue Shares



We, Galaxy Beijing, Beijing Lianchuang, Ms. Xu and her majority-controlled
BVI entity, Le Wang Limited, entered into the Agreement to Issue Shares, pursuant to which:



| | · | we agreed to issue to Le Wang Limited 230,400 ordinary shares, valued at $2.50, upon execution of the agreement.  Of
the ordinary shares issued to Le Wang Limited, 115,200 shares are subject to forfeiture and will not be released to Le Wang Limited
until Beijing Lianchuang achieving certain predetermined earnings targets;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Ms. Xu agreed to a restriction on transfer of the shares for a period of 36 months, during which period she or Le Wang Limited
will not transfer, sell, pledge, dispose of or create any encumbrance on the shares of the Company held by them, without our prior
written consent; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | if Beijing Lianchuang fails to achieve the predetermined earnings targets for each of fiscal years 2011, 2012 and 2013, Le
Wang Limited will not receive all or a portion of the 115,200 shares which are being held by us and such shares will be forfeited
to us.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item 8.  Financial Information



A.  Consolidated Statements and Other Financial
Information



The financial statements as required under Item 8 are attached
hereto and found immediately following the text of this Annual report.





24







B.  Significant Changes



There have been no significant changes to our financial condition
since December 31, 2011.



Item 9.  The Offer and Listing



Markets.



Our Ordinary Shares have been approved for quotation on the
over-the-counter bulletin board under the symbol “CLPFF”, however, very limited trading in our Ordinary Shares has
occurred to date.  There is no trading market for our preferred shares.



Item 10.  Additional Information



Memorandum and articles of association.



(1)  The Company was incorporated under The International
Business Companies Act of the Territory of the British Virgin Islands, on January 12, 2000 and automatically re-registered as a
business company on January 1, 2007.  The Company has applied the transitional provisions of the BVI Business Companies
Act, 2004, as amended, on April 29, 2010.  Clause 4 of the Memorandum of Association provides that the Company has, irrespective
of corporate benefit, full capacity to carry on or undertake any business or activity, do any act or enter into any transaction
that is not prohibited under any law for the time being in force in the British Virgin Islands.



(2)  Article 38 of the Articles of Association provides
that the number of directors shall be fixed by the first director or directors of the Company, and thereafter by a Resolution of
Directors.  The current maximum number of directors is seven (7).  There are no limitations or restrictions
on the borrowing power of directors; there are no age limit requirements and no shareholding requirements.  Article 52.1
provides that a director shall, after becoming aware of the fact that he is interested in a transaction entered into or to be entered
into by the Company, disclose the interest to the Board, unless the transaction or proposed transaction (a) is between the director
and the Company and (b) is to be entered into in the ordinary course of the Company’s business and on usual terms and conditions.  A
transaction entered into by the Company in respect of which a director is interested is voidable by the Company unless the director
complies with the provision of Article 52.1 or (a) the material facts of the interest of the director in the transaction are known
by the members entitled to vote at a meeting of members and the transaction is approved or ratified by a resolution of members
or (b) the Company received fair value for the transaction.  For purposes of this provision, a disclosure is not made
to the Board unless it is made or brought to the attention of every director on the Board.  A director who is interested
in a transaction entered into or to be entered into by the Company may vote on a matter relating to the transaction, attend a meeting
of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for
the purposes of a quorum and sign a document on behalf of the Company, or do any other thing in his capacity as director that relates
to the transaction.



(3)  Article 16.1 of the Articles of Association provide
that directors may authorize a Distribution (as defined in the Articles) by way of dividend at any time if they are satisfied on
reasonable grounds that immediately after the Distribution the value of the Company’s assets will exceed its liabilities
and that the Company will be able to pay its debts as they fall due.



(4)  Clause 7 of the Memorandum of Association provides
that the rights attached to any class or series of shares (unless otherwise provided by the terms of issue of the shares of that
class or series), whether or not the Company is being wound-up, may be varied with the consent in writing of all the holders of
the issued shares of that class or series or with the sanction of a resolution passed by a majority of the votes cast at a separate
meeting of the holders of the shares of the class or series.



(5)  Article 20 of the Articles of Association provides
that the directors may convene meetings of shareholders.  Article 22 of the Articles of Association provides that shareholders
entitled to exercise 30% or more of the outstanding shares may request directors in writing to convene a meeting of shareholders.





25







(6)  There are no limitations or restrictions on the
rights of non-resident or foreign shareholders to own shares or to hold or exercise voting rights.



(7)  There are no provisions that would have an effect
of delaying, deferring or preventing a change in control of the Company.



(8)  There are no provisions governing the threshold
above which shareholder ownership must be disclosed.



(9)  On February 25, 2011, the Memorandum of Association
was amended to create Preferred Shares, each share of which entitles the holder to one hundred (100) votes, as compared to the
one (1) vote per share which may be cast by holders of the Company’s Ordinary Shares, on any matter on which the holders
of our Ordinary Shares are entitled to vote.  The Company’s Preferred Shares are, subject to applicable law, convertible,
at the option of the holder thereof at any time, and without payment of additional consideration by the holder thereof, into an
equal number of Ordinary Shares.  In the event of an optional conversion, before any holder of Preferred Shares shall
be entitled to convert the same into Ordinary Shares and to receive certificates therefor, such holder shall surrender the certificate
or certificates therefor at the principal business or registered office of the Company or of any transfer agent for the Preferred
Shares and shall give written notice to the Company at such principal business or registered office of the Company that the holder
elects to convert the same.  The Company shall promptly issue and deliver to such holder, at the address of the holder
listed on the share register, a certificate or certificates for the number of Ordinary Shares to which the holder shall be entitled
as aforesaid.  Such conversion shall be effective as soon as the Register of Members of the Company has been updated.



(10)  Each of the Company’s Preferred Shares
and Ordinary Shares confers on the holders (i) the right to an equal share in any Distribution paid by the Company, and (ii) the
right to an equal share in the distribution of the surplus assets of the Company on a winding up.



Material contracts.



Lease Agreement



On August 30, 2011, we entered into a 24 month lease agreement
for a 209.11 square meter facility at Level 5, Tower 3, China Central Place, 77 Jianguo Road, Chaoyang District, Beijing, PRC,
at approximately $12,500 (RMB79,044) per month. This facility serves as the corporate office for Galaxy Beijing.



Agreements that Provide Us with Effective Control



On July 8, 2011 we, through Galaxy Beijing, our indirect wholly-owned
subsidiary in the PRC, entered into a series of agreements with Beijing Lianchuang and its controlling shareholder, Haijuan Xu,
which provide us effective control over Beijing Lianchuang and its subsidiaries.



Agreement for Exclusive Purchase Right. Galaxy Beijing,
Beijing Lianchuang and Ms. Xu entered into the Agreement for Exclusive Purchase Right, pursuant to which Galaxy Beijing has an
exclusive option to purchase, or to designate other persons to purchase, to the extent permitted by applicable PRC laws, the entire
equity interest in Beijing Lianchuang from Ms. Xu. The purchase price shall be a nominal price or the minimum price permitted by
applicable PRC laws. The agreement became effective upon execution and will remain so for so long as Beijing Lianchuang remains
in operation.



Letter of Authorization. Ms. Xu signed a Letter of Authorization,
pursuant to which Ms. Xu irrevocably granted on an exclusive basis Galaxy Beijing, or a person designated by Galaxy Beijing, the
right to appoint directors and senior management of Beijing Lianchuang, and to exercise all of her other voting rights as controlling
shareholder of Beijing Lianchuang in accordance with the company’s articles of association and the applicable PRC laws. The
letter will remain in effect for so long as the controlling shareholder remains a shareholder of Beijing Lianchuang.





26







Equity Pledge Agreement. Galaxy Beijing, Beijing Lianchuang
and Ms. Xu entered into the Equity Pledge Agreement, under which Ms. Xu pledged her entire equity interests in Beijing Lianchuang
to Galaxy Beijing to secure the obligations of Beijing Lianchuang under the Exclusive Consulting Services Agreement with Galaxy
Beijing. In addition, Ms. Xu agreed not to transfer, sell, pledge, dispose of or create any encumbrance on her equity interests
in Beijing Lianchuang, unless with the prior written consent of the Company. Beijing Lianchuang covenants, among other things,
that without prior consent of Galaxy Beijing, it will not distribute any dividends. The pledge of equity interests under the agreement
will remain in effect for so long as the Exclusive Consulting Services Agreement remains effective.



Agreement that Transfers Economic Benefits to Us



Exclusive Consulting Services Agreement. Under the Exclusive
Consulting Services Agreement between Galaxy Beijing and Beijing Lianchuang, Galaxy Beijing will provide consulting services and
support to Beijing Lianchuang, and will be entitled to service fees to be paid out of Beijing Lianchuang’s operating profits.
Galaxy Beijing is entitled to adjust the service fees, or decide to waive such fees for the benefits of the Company and Beijing
Lianchuang, at its sole discretion. Galaxy Beijing has decided to waive the service fees for the following three fiscal years and
leave the funds for Beijing Lianchuang’s business development and expansion. In the future, the Company may demand payment
of the service fees, at its sole discretion, depending on the business needs of itself and Beijing Lianchuang, and our goal is
to support Beijing Lianchuang to expand and grow its business, and we would provide necessary support, including technical and
financial aids, to Beijing Lianchuang as we see fit.  The agreement became effective upon signing and will remain so
for so long as Beijing Lianchuang remains in operation.



Agreement to Issue Shares



We, Galaxy Beijing, Beijing Lianchuang, Ms. Xu and her majority-controlled
BVI entity, Le Wang Limited, entered into the Agreement to Issue Shares, pursuant to which:



| | · | we agreed to issue to Le Wang Limited 230,400 ordinary shares, valued at $2.50, upon execution of the agreement.  Of
the ordinary shares issued to Le Wang Limited, 115,200 shares are subject to forfeiture and will not be released to Le Wang Limited
until Beijing Lianchuang achieving certain predetermined earnings targets;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Ms. Xu agreed to a restriction on transfer of the shares for a period of 36 months, during which period she or Le Wang Limited
will not transfer, sell, pledge, dispose of or create any encumbrance on the shares of the Company held by them, without our prior
written consent; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | if Beijing Lianchuang fails to achieve the predetermined earnings targets for each of fiscal years 2011, 2012 and 2013, Le
Wang Limited will not receive all or a portion of the 115,200 shares which are being held by us and such shares will be forfeited
to us.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Deed for Non-competition Undertaking



Ms. Xu executed a Deed for Non-competition Undertaking in favor
of Beijing Lianchuang and Strategy & Communications (Hong Kong) Group Limited, our direct wholly-owned subsidiary in Hong Kong,
under which the controlling shareholder undertook:



| | · | to remain in her current position within Beijing Lianchuang for 5 years following the signing of the deed; and
| | - | --------------------------------------------------------------------------------------------------------------

| | · | during a period of 10 years from the later of (x) the date of the deed, and (y) the date Ms. Xu is no longer employed by Beijing
Lianchuang, without our prior written consent, she will not directly or indirectly, (i) alone or with others, in any form, own,
engage in, be concerned or interested in any business in competition with the businesses of the Company and its subsidiaries and
affiliates; (ii) employ, solicit or attempt to employ or solicit any person who at the date of or at any time during the 12 months
prior to termination of service as a director, officer, legal representative, manager or employee of the Company or its subsidiaries
or affiliates; (iii) solicit or transfer or attempt to solicit or transfer, or transfer or attempt to transfer to any third party,
any business activities with, or services or products offered to, any clients  or prospective clients by the Company
or any of its subsidiaries or affiliates or (iv) cause or attempt to cause any vendor, supplier, independent contractor or other
person carrying out business with the Company or any of its subsidiaries or affiliates to terminate or change their relationship
with the Company or any of its subsidiaries or affiliates.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





27







Exchange controls.



Neither the British Virgin Islands nor the PRC
has any system of exchange controls and there is no restriction of any kind on the repatriation of capital or the remittance of
dividends, profits, interests, royalties or other payments to non-resident holders of the Company’s securities.



Taxation.



The Company shall not assume any responsibility for withholding
taxes unless required by applicable law.  There is no withholding tax expected to be imposed by the BVI, Hong Kong or
the PRC.



For United States federal income tax purposes, the gross
amount of all distributions paid with respect to our Ordinary Shares to a person subject to United States federal income taxation
generally will be treated as foreign source dividend income to such person.  Gain or loss from the sale of our shares
generally will be subject to federal income taxation at a maximum federal income tax rate of 15% for non-corporate taxpayers if
the shares were held for more than 12 months or at ordinary income rates if held for less than 12 months provided that for taxable
years beginning after December 31, 2010, the maximum long-term capital gain rate for non-corporate taxpayers shall be 20% under
current law.



The Company may be classified as a passive foreign investment
company ("PFIC") under United States federal income tax purposes.  If it is, U.S. shareholders would be subject
to mandatory information reporting requirements, and certain additional taxes may be imposed on dividends received or on capital
gains upon sale of our shares.  The PFIC rules are complex, and United States shareholders should consult their tax advisors
about the application of such rules to a holding of our shares.



Documents on display.



Item 19 sets forth a list of exhibits that are
filed as part of this annual report; that list is incorporated herein by reference.



Item 11.  Quantitative and Qualitative Disclosures
About Market Risk



We have not entered into market risk sensitive instruments for
any purpose.



Item 12.  Description of Securities Other than
Equity Securities.



None/Not applicable.



28







PART II



Item 13.         Defaults,
Dividend Arrearages and Delinquencies



There has not been a material default in the payment of principal
or interest relating to our indebtedness.



We are not in arrears or delinquent in the payment of any dividend.



Item 14.         Material
Modifications to the Rights Of  Security Holders And Use of Proceeds



On February 25, 2011,  our director approved an issuance
of 500,000 Preferred Shares pro rata among the current holders of our Ordinary Shares as of February 25, 2011 on the basis of 1
Preferred Share for every 5 issued and outstanding Ordinary Shares.  Each Preferred Share entitles the holder to one
hundred (100) votes, as compared to the one (1) vote per share which may be cast by holders of the Company’s Ordinary Shares,
on any matter on which the holders of our Ordinary Shares are entitled to vote.  The Company’s Preferred Shares
are, subject to applicable law, convertible, at the option of the holder thereof at any time, and without payment of additional
consideration by the holder thereof, into an equal number of Ordinary Shares.



Item 15.         Controls
and Procedures



Evaluation of disclosure controls and procedures





The Company's management, with the participation of the
Company's Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls
and procedures as of December 31, 2011 pursuant to Rule 13a-15 under the Securities Exchange Act of 1934.  In designing
and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design
of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required
to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.



Our review of our disclosure controls and procedures are
intended to assure that they are designed at a reasonable assurance level and are effective to provide reasonable assurance that
information the Company is required to disclose in reports that the Company files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated
and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.



Based on such evaluation, the Company's Chief Executive
Officer and Chief Financial Officer concluded that, as of December 31, 2011, the Company's disclosure controls and procedures
were not effective due to our management’s failure to prepare its report on internal controls over financial reporting in
a timely manner. We plan on taking measures to implement a process by which management is alerted to events requiring disclosure.



Management's report on internal control over financial reporting





The Company’s management is responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The
Company’s internal control over financial reporting is a process designed to provide reasonable assurance to the Company’s
management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements
for external purposes.



The Company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of accurate financial statements, and that receipts and expenditures
of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s
assets that could have a material effect on the financial statements.





29







Because of its inherent limitations, internal controls over
financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent
limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective
internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



The Company’s management assessed the effectiveness
of the Company’s internal control over financial reporting as of December 31, 2011. In making this assessment, it used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated
Framework. Based on the Company’s assessment, it believes that, as of December 31, 2011, the Company’s internal
control over financial reporting was effective based on those criteria.





Attestation of Internal Control Over Financial Reporting



This annual report does not include an attestation report
of our independent registered public accounting firm regarding internal control over financial reporting for the Company. As the
Company is a non-accelerated filer, management's report is not subject to attestation by our independent registered public accounting
firm pursuant to Section 404(c) of the Sarbanes-Oxley Act of 2002



Changes in internal control over financial reporting.



There were no changes in the Company's internal control over
financial reporting that occurred during the period covered by this annual report on Form 20-F that have materially affected, or
are reasonably likely to materially affect, the Company's internal control over financial reporting.



The Company will continue to periodically review its disclosure
controls and procedures and internal control over financial reporting and may make modifications from time to time as considered
necessary or desirable.



Item 15T.      Controls and
Procedures



Not Applicable.



Item 16.         [Reserved]



Item 16A.      Audit Committee
Financial Expert



We do not have a separately-designated standing audit committee
of the board of directors or a committee performing similar functions.  Our director is not “independent,”
as that term is defined in Section 15A(a) of the Securities Exchange Act of 1934, since he acts as our Chief Executive Officer.  However,
if business circumstances warrant expansion of the board of directors, consideration will be given to appointing an audit committee.



Item 16B.      Code of Ethics



We have not yet adopted a code of ethics that applies to our
principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar
functions, because our management currently consists of only one individual.





30









Item 16C.      Principal Accountant
Fees and Services



Audit Fees:The aggregate fees
for each of the last two fiscal years ended December 31, 2011 for professional services rendered by UHY Vocation, our principal
accountant for the audit of our annual financial statements, were $14,500 for fiscal 2011 and $8,000 for fiscal 2010.



Audit-Related Fees:None.



Tax Fees: UHY Vocation did not render
or bill for any services relating to tax compliance, tax advice or tax planning during the last two fiscal years.



All Other Fees:UHY Vocation
did not provide any products or other services during the last two fiscal years.



Item 16D.      Exemptions from
the Listing Standards for Audit Committees.



Not Applicable.



Item 16E.       Purchase
of Equity Securities by the Issuers and Affiliated Purchasers



The following Affiliates of the Company purchased our Ordinary
Shares in the fiscal year ended December 31, 2011.



|Period                                 |  | Total Number of Ordinary Shares Purchased |                   |  | Average Price Paid per Ordinary Share |   |      | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  |  | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | 
|-------------------------------------- |  | ----------------------------------------- | ----------------- |  | ------------------------------------- | - | ---- | -------------------------------------------------------------------------------- |  |  | ------------------------------------------------------------------------------ | 
|January 1, 2011-January 31, 2011       |  |                                           | 0                 |  |                                       |   | N/A  |                                                                                  |  |  | N/A                                                                            | 
|February 1, 2011 - February 28, 2011   |  |                                           | 0                 |  |                                       |   | N/A  |                                                                                  |  |  | N/A                                                                            | 
|March 1, 2011 - March 31, 2011         |  |                                           | 0                 |  |                                       |   | N/A  |                                                                                  |  |  | N/A                                                                            | 
|April 1, 2011 - April 30, 2011         |  |                                           | Qiang Wu – 25,000 |  |                                       | $ | 2.00 |                                                                                  |  |  | N/A                                                                            | 
|May 1, 2011 - May 31, 2011             |  |                                           | 0                 |  |                                       |   | N/A  |                                                                                  |  |  | N/A                                                                            | 
|June 1, 2011 - June 30, 2011           |  |                                           | 0                 |  |                                       |   | N/A  |                                                                                  |  |  | N/A                                                                            | 
|July 1, 2011 - July 31, 2011           |  |                                           | 0                 |  |                                       |   | N/A  |                                                                                  |  |  | N/A                                                                            | 
|August 1, 2011 - August 31, 2011       |  |                                           | 0                 |  |                                       |   | N/A  |                                                                                  |  |  | N/A                                                                            | 
|September 1, 2011 - September 30, 2011 |  |                                           | 0                 |  |                                       |   | N/A  |                                                                                  |  |  | N/A                                                                            | 
|October 1, 2011 - October 31, 2011     |  |                                           | 0                 |  |                                       |   | N/A  |                                                                                  |  |  | N/A                                                                            | 
|November 1, 2011 - November 30, 2011   |  |                                           | 0                 |  |                                       |   | N/A  |                                                                                  |  |  | N/A                                                                            | 
|December 1, 2011 - December 31, 2011   |  |                                           | 0                 |  |                                       |   | N/A  |                                                                                  |  |  | N/A                                                                            | 



Item 16F.            Changes
in Registrant’s Certifying Accountant



None.



Item 16G.            Corporate
Governance



Not applicable.



Item 16H.            Mine
Safety Disclosure



Not applicable.



31







Part III



Pursuant to General Instruction E(c) of Form 20-F,
the registrant has elected to provide the financial statements and related information specified in Item 18 in lieu of Item
17.



Item 17.    Reserved



Item 18.    Financial Statements



The financial statements and other financial information included
in this annual report are attached to this annual report and incorporated herein by reference.



Item 19.    Exhibits



Exhibits and Exhibit Index.    The
following Exhibits are filed as part of this annual report and incorporated herein by reference to the extent applicable:



Exhibit Index





|Exhibit No. |  | Description                                                                                                                             
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|            |  |                                                                                                                                         
|1           |  | Memorandum and Articles of Association (1)                                                                                              
|            |  |                                                                                                                                         
|1.1         |  | Second Amended and Restated Memorandum and Articles of Association (1)                                                                  
|            |  |                                                                                                                                         
|2           |  | Specimen Ordinary Shares Certificate (1)                                                                                                
|            |  |                                                                                                                                         
|4.1         |  | Cash Advance Letter dated April 26, 2010 (1)                                                                                            
|            |  |                                                                                                                                         
|4.2         |  | Exclusive Consulting Services Agreement between Galaxy Beijing and Beijing Lianchuang dated July 8, 2011 (1)                            
|            |  |                                                                                                                                         
|4.3         |  | Agreement for Exclusive Purchase Right by and among Galaxy Beijing, Beijing Lianchuang and Ms. Xu dated July 8, 2011
    (1)            
|            |  |                                                                                                                                         
|4.4         |  | Letter of Authorization by Ms. Xu dated July 8, 2011 (1)                                                                                
|            |  |                                                                                                                                         
|4.5         |  | Equity Pledge Agreement by and among Galaxy Beijing, Beijing Lianchuang and Ms. Xu dated July 8, 2011 (1)                               
|            |  |                                                                                                                                         
|4.6         |  | Agreement to Issue Shares by and among Galaxy Beijing, Beijing Lianchuang, Ms. Xu and Le Wang Limited dated July 8,
    2011 (1)        
|            |  |                                                                                                                                         
|4.7         |  | Deed for Non-competition Undertaking by Ms. Xu in favor of Beijing Lianchuang dated July 8, 2011 (1)                                    
|            |  |                                                                                                                                         
|8           |  | Subsidiaries (1)                                                                                                                        
|            |  |                                                                                                                                         
|12.1        |  | Certificate of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002
|            |  |                                                                                                                                         
|13.1        |  | Certificate of Principal Executive Officer and Principal Financial Officer Pursuant to Title 18, United States Code,
    Section 1350   
|            |  |                                                                                                                                         



(1) – Filed previously.



32







SIGNATURES





The registrant hereby certifies that
it meets all of the requirements for filing on Form 20-F/A and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.



|                  | GALAXY STRATEGY & COMMUNICATIONS INC.
|----------------- | -------------------------------------
|                  |                                      
|December 21, 2012 | By:                                  
|                  |                                      
|                  |                                      



33







GALAXY STRATEGY & COMMUNICATIONS
INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2011,
2010 AND 2009







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009



CONTENTS





|                                                                  |  | Pages 
|----------------------------------------------------------------- |  | ------
|                                                                  |  |       
|Report of Independent Registered Public Accounting Firm           |  | 1     
|                                                                  |  |       
|Consolidated Statements of Financial Position                     |  | 2     
|                                                                  |  |       
|Consolidated Statements of Income and Comprehensive (loss)/income |  | 3 - 4 
|                                                                  |  |       
|Consolidated Statement of Changes in Shareholders’ Equity         |  | 5     
|                                                                  |  |       
|Consolidated Statements of Cash Flows                             |  | 6     
|                                                                  |  |       
|Notes to the Consolidated Financial Statements                    |  | 7 - 19













REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



TO THE SHAREHOLDERS AND THE BOARD OF
DIRECTORS OF

GALAXY STRATEGY & COMMUNICATIONS
INC. AND SUBSIDIARIES





We have
audited the accompanying consolidated statement of financial position of Galaxy Strategy & Communications Inc. and subsidiaries
(the “Company”) as of December 31, 2011 and 2010, and the related consolidat ed statements of income
and comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended
December 31, 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on these consolidated financial statements based on our audits.



We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.



In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of Galaxy Strategy & Communications
Inc. and Subsidiaries as of December 31, 2011 and 2010, the consolidated results of its operations and its consolidated cash flows
for each of the three years in the period ended December 31, 2011, in conformity with International Financial Reporting Standards
as issued by the International Accounting Standards Board.



UHY VOCATION HK CPA LIMITED

Certified Public Accountants



Hong Kong, the People’s Republic
of China

April 30, 2012



1







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(IN US DOLLARS)



|                                                                                                                                                                   |  | December 31, |          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ | ---------
|                                                                                                                                                                   |  | 2011         |          
|Assets                                                                                                                                                             |  |              |          
|Non current assets                                                                                                                                                 |  |              |          
|Property, plant and equipment, net                                                                                                                                 |  | $            | 5,652    
|Utility and rental deposits                                                                                                                                        |  |              | 47,273   
|                                                                                                                                                                   |  |              | 52,925   
|Current assets                                                                                                                                                     |  |              |          
|Accounts receivable                                                                                                                                                |  |              | -        
|Prepaid expenses                                                                                                                                                   |  |              | 12,559   
|Cash and cash equivalents                                                                                                                                          |  |              | 447,214  
|Total current assets                                                                                                                                               |  |              | 459,773  
|                                                                                                                                                                   |  |              |          
|Total assets                                                                                                                                                       |  | $            | 512,698  
|                                                                                                                                                                   |  |              |          
|Liabilities and shareholders' equity                                                                                                                               |  |              |          
|                                                                                                                                                                   |  |              |          
|Shareholders' equity                                                                                                                                               |  |              |          
|                                                                                                                                                                   |  |              |          
|Common stock,                                                                                                                                                      |  |              |          
|Ordinary shares, 10,000,000 shares authorized with no par value; 3,255,400 shares outstanding as of December 31, 2011 and 2,500,000 shares as of December 31, 2010 |  | $            | -        
|Additional paid in capital                                                                                                                                         |  |              | 1,075,030
|Accumulated (losses)/profits                                                                                                                                       |  |              | (191,816 
|Subscription receivable                                                                                                                                            |  |              | (392,000 
|Translation reserve                                                                                                                                                |  |              | 2,815    
|                                                                                                                                                                   |  |              |          
|Total shareholders' equity                                                                                                                                         |  |              | 494,029  
|                                                                                                                                                                   |  |              |          
|Current liabilities                                                                                                                                                |  |              |          
|Accounts payable                                                                                                                                                   |  |              | -        
|Accrued liabilities and other payables                                                                                                                             |  |              | 18,669   
|Total current liabilities                                                                                                                                          |  |              | 18,669   
|                                                                                                                                                                   |  |              |          
|Total liabilities                                                                                                                                                  |  |              | 18,669   
|                                                                                                                                                                   |  |              |          
|Total liabilities and shareholders' equity                                                                                                                         |  | $            | 512,698  



See accompanying notes to consolidated financial statements.



2







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE(LOSS)/INCOME

(IN US DOLLARS)



|                                                           |  | For the Year Ended December 31, |          
|---------------------------------------------------------- |  | ------------------------------- | ---------
|                                                           |  | 2011                            |          
|                                                           |  |                                 |          
|Revenue                                                    |  | $                               | 23,995   
|Cost of service                                            |  |                                 | (11,342  
|Gross profit                                               |  |                                 | 12,653   
|                                                           |  |                                 |          
|Operating expenses:                                        |  |                                 |          
|General and administrative expenses                        |  |                                 | (208,068 
|                                                           |  |                                 |          
|Total operating expenses                                   |  |                                 | (208,068 
|                                                           |  |                                 |          
|Operating (loss)/income                                    |  |                                 | (195,415 
|Other income:                                              |  |                                 |          
|Interest income                                            |  |                                 | 141      
|Operating (loss)/income before income tax expense          |  |                                 | (195,274 
|Income tax expenses                                        |  |                                 | -        
|Net (loss)/income for the year                             |  | $                               | (195,274 
|                                                           |  |                                 |          
|(Loss)/earnings per share                                  |  |                                 |          
|- Basic and diluted                                        |  | $                               | (0.0573  
|                                                           |  |                                 |          
|Weighted average ordinary and preferred shares outstanding |  |                                 |          
|                                                           |  |                                 |          
|- Basic and diluted                                        |  |                                 | 3,408,715



See accompanying notes to consolidated
financial statements.



3







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE(LOSS)/INCOME

(IN US DOLLARS)



|                                    |  | For the Year Ended December 31, |         
|----------------------------------- |  | ------------------------------- | --------
|                                    |  | 2011                            |         
|Net (loss)/income                   |  | $                               | (195,274
|                                    |  |                                 |         
|Other comprehensive income          |  |                                 |         
|- Foreign exchange translation gain |  |                                 | 2,815   
|                                    |  |                                 |         
|Total comprehensive (losses)/income |  | $                               | (192,459



See accompanying notes to consolidated financial statements.



4







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

(IN US DOLLARS)



|                                                   |  | Common Stock     |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|-------------------------------------------------- |  | ---------------- | --------- |  | ------ | - | --- | -------------------------- |  | - | ----------------------- |  |  | ---------------------------- | -------- | - | ------------------- | -
|                                                   |  | Number of shares |           |  | Amount |   |     | Additional Paid-in capital |  |   | Subscription receivable |  |  | Accumulated profits/(losses) |          |   | Translation reserve |  
|                                                   |  |                  |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|Balance, January 1, 2009                           |  |                  | 30        |  |        | $ | 30  |                            |  | $ | -                       |  |  | $                            | (30      | ) |                     | $
|                                                   |  |                  |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|Net income                                         |  |                  | -         |  |        |   | -   |                            |  |   | -                       |  |  |                              | -        |   |                     |  
|                                                   |  |                  |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|Balance, December 31, 2009                         |  |                  | 30        |  |        |   | 30  |                            |  |   | -                       |  |  |                              | (30      | ) |                     |  
|                                                   |  |                  |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|Additional shares issued                           |  |                  | 2,499,970 |  |        |   | -   |                            |  |   | 25,000                  |  |  |                              | -        |   |                     |  
|                                                   |  |                  |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|Retrospectively restated that the par value to nil |  |                  | -         |  |        |   | (30 | )                          |  |   | 30                      |  |  |                              | -        |   |                     |  
|                                                   |  |                  |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|Subscription receivable settled                    |  |                  | -         |  |        |   | -   |                            |  |   | -                       |  |  |                              | 30       |   |                     |  
|                                                   |  |                  |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|Net income                                         |  |                  | -         |  |        |   | -   |                            |  |   | -                       |  |  |                              | -        |   |                     |  
|                                                   |  |                  |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|Balance, December 31, 2010                         |  |                  | 2,500,000 |  |        | $ | -   |                            |  | $ | 25,030                  |  |  | $                            | -        |   |                     | $
|                                                   |  |                  |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|Net loss                                           |  |                  | -         |  |        |   | -   |                            |  |   | -                       |  |  |                              | -        |   |                     |  
|                                                   |  |                  |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|Additional shares issued                           |  |                  | 755,400   |  |        |   | -   |                            |  |   | 1,050,000               |  |  |                              | -        |   |                     |  
|                                                   |  |                  |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|Subscription receivable                            |  |                  | -         |  |        |   | -   |                            |  |   | -                       |  |  |                              | (392,000 | ) |                     |  
|                                                   |  |                  |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|Foreign currency translation gain                  |  |                  | -         |  |        |   | -   |                            |  |   | -                       |  |  |                              | -        |   |                     |  
|                                                   |  |                  |           |  |        |   |     |                            |  |   |                         |  |  |                              |          |   |                     |  
|Balance, December 31, 2011                         |  |                  | 3,255,400 |  |        | $ | -   |                            |  | $ | 1,075,030               |  |  | $                            | (392,000 | ) |                     | $



See accompanying notes to consolidated
financial statements.



5







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                            |  | For the year ended December 31, |         
|--------------------------------------------------------------------------- |  | ------------------------------- | --------
|                                                                            |  | 2011                            |         
|Cash flows from operating activities:                                       |  |                                 |         
|                                                                            |  |                                 |         
|Net (loss)/income after tax                                                 |  | $                               | (195,274
|                                                                            |  |                                 |         
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                                 |         
|Depreciation of property, plant and equipment                               |  |                                 | 134     
|Changes in assets and liabilities:                                          |  |                                 |         
|Accounts receivable                                                         |  |                                 | 96,154  
|Prepaid expenses                                                            |  |                                 | (12,559 
|Accounts payable                                                            |  |                                 | (72,754 
|Accrued liabilities and other payables                                      |  |                                 | (41,765 
|Net cash (used in)/generated from operating activities                      |  |                                 | (226,064
|                                                                            |  |                                 |         
|Cash flows from investing activities:                                       |  |                                 |         
|Purchase of property, plant and equipment                                   |  |                                 | (5,790  
|Utility and rental deposits                                                 |  |                                 | (47,273 
|Net cash used in investing activities                                       |  |                                 | (53,063 
|                                                                            |  |                                 |         
|Cash flows from financing activities:                                       |  |                                 |         
|Issue of ordinary shares for cash                                           |  |                                 | 658,000 
|Subscription receivable                                                     |  |                                 | -       
|Net cash flows generated from financing activities                          |  |                                 | 658,000 
|                                                                            |  |                                 |         
|Net increase in cash                                                        |  |                                 | 378,873 
|                                                                            |  |                                 |         
|Effect on change of exchange rates                                          |  |                                 | 2,819   
|                                                                            |  |                                 |         
|Cash at the beginning of the year                                           |  |                                 | 65,522  
|Cash at the ended of the year                                               |  | $                               | 447,214 



Non-cash financing transaction

There was a subscription receivable of $392,000 for 196,000
ordinary shares at a price of $2.00 per share.



See accompanying notes to consolidated financial statements.



6







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN US DOLLARS)



| | 1. | DESCRIPTION OF BUSINESS AND ORGANIZATION
| | -- | ----------------------------------------



The Company was established
in the British Virgin Islands ("BVI") on January 12, 2000 as a limited liability company.



The Company incorporated with
US$50,000 authorized capital, which comprises with 50,000 shares of US$1.00 par value. The Company issued 30 shares at par value
to a sole shareholder, Zhang Pinger.



On March 20, 2010, the Company
issued 42,000 shares at US$0.01 per share, that increased the shareholding by US$420. Wu Qiang had acquired 40,000 shares and Nie
Wanying had acquired 2,000 shares. On April 12, 2010, Zhang Pinger transferred all his shares to Wu Qiang at US$0.01.



Pursuant to an ordinary resolution
passed on April 15, 2010, the authorized share capital of the Company was increased to 10,000,000 shares by the creation of additional
9,950,000 shares.



On April 15, 2010, 2,457,970
shares of US$0.01 each were issued to shareholders to broaden the capital base of the Company. The sole director also approved
a written resolution to restate its ordinary shares with no par value.



On November 18, 2010, the Company
acquired 100% shares of Strategy & Communication (Hong Kong) Group Limited ("H.K. Strategy") with consideration of
HK$1.00. Strategy was newly incorporated in Hong Kong on May 6, 2010.



On February 25, 2011, the Company
is authorized to issue an unlimited number of shares without par value and such shares shall be ordinary shares and preferred shares
with the rights set out in the Amended and Restated Memorandum of Association and Articles of Association.



On February 25, 2011, the Board
of Directors of the Company authorized the Company’s corporate name change from Calendar Profits Limited to Galaxy Strategy
& Communications Inc.



On February 26, 2011, the Company
announced to allot and issue 500,000 preferred shares for every 5 issued ordinary shares. Each preferred shares is entitled to
100 votes on all matters as to which their shareholders are entitled to vote.



225,000 ordinary shares of US$2.00
each and 300,000 ordinary shares of US$2.00 each were issued to shareholders on April 4, 2011 and April 27, 2011 respectively to
broaden the capital base of the Company. The directors also approved written resolution to restate its ordinary shares with no
par values, only 50,000 shares of these issued ordinary shares were paid in cash.



On April 28, 2011, the Company’s
subsidiary, H.K. Strategy injected HK$500,000 capital to BJ Galaxy Management Consulting Co. (“Galaxy Beijing”), a
wholly-owned subsidiary with registered capital of HK$500,000 newly incorporated in Beijing (People’s Republic of China)
on January 27, 2011.



On July 8, 2011, the Company’s
subsidiary “Galaxy Beijing” signed variable interest entity (“VIE”) agreements with Beijing Lianhe Chuangxiang
Advertising Co., Ltd. (“Beijing Lianhe”) and its controlling shareholder to obtain 100% voting interest of “Beijing
Lianhe”. “Galaxy Beijing” will provide consultation and technical service on operation for “Beijing Lianhe”.



“Galaxy Beijing”
has power to control the activities of “Beijing Lianhe” through its right solely obtained under power of attorney.
Furthermore equity’s right of “Beijing Lianhe” was pledged for guarantee of consultancy service fee.



In addition, the Company issued
230,400 ordinary shares of US$2.50 each to Le Wang Limited on July 8, 2011, up to 115,200 of shares which are subject to forfeiture
in the event certain earnings targets of “Beijing Lianhe” are not met, in connection with the VIE transaction to obtain
control of “Beijing Lianhe”.



7







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN US DOLLARS)



| | 1. | DESCRIPTION OF BUSINESS AND ORGANIZATION (.../Cont’d)
| | -- | ---------------------------------------------------



Details of the Company’s
subsidiaries which are included in these consolidated financial statements are as follows:



|                                                    |  |                               |  | Percentage of                |  |                             
|--------------------------------------------------- |  | ----------------------------- |  | ---------------------------- |  | ----------------------------
|                                                    |  | Place and date of             |  | ownership                    |  |                             
|Subsidiaries’ names                                 |  | incorporation                 |  | by the Company               |  | Principal activities        
|                                                    |  |                               |  |                              |  |                             
|Strategy & Communications (Hong Kong) Group Limited |  | Hong Kong May 6, 2010         |  | 100%                         |  | Intermediate holding company
|                                                    |  |                               |  |                              |  |                             
|BJ Galaxy Management Consulting Company             |  | Beijing, PRC January 27, 2011 |  | 100% (through H.K. Strategy) |  | Subsidiary                  



| | 2. | APPLICATION OF INTERNATIONAL
FINANCIAL REPORTING STANDARDS ("IFRSs") AND CHANGES IN ACCOUNTING POLICIES
| | -- | -------------------------------------------------------------------------------------------------------



The accounting policies are
consistent with those of the consolidated financial statements for the year ended December 31, 2011, except as described below.



| | a. | Standards, amendments and interpretations to existing standards effective in 2011 but not relevant
to the Company
| | -- | -----------------------------------------------------------------------------------------------------------------



The Company has not adopted the
following new and amended IFRS as of 1 January 2011:



| | · | IAS 24 (Revised) Related Party disclosures:
IAS24 (Revised) clarifies and simplifies the definitions of related parties. The new definitions emphasis a symmetrical view of
related party relationship and clarify the circumstances in which persons and key management personnel affect related party relationship
of an entity. The revised standard also introduces an exemption from the general related party disclosure requirements for transactions
with a government and entities that are controlled, jointly controlled or significantly influenced by the same government as the
reporting entity. The accounting policy for related parties has been revised to reflect the changes in definitions of related parties
under the revised standards. The adoption of revised standard did not have any impact on the financial position or performance
of the Company.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



8







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN US DOLLARS)



| | 2. | APPLICATION OF INTERNATIONAL
FINANCIAL REPORTING STANDARDS ("IFRSs") ANDCHANGES
IN ACCOUNTING POLICIES (.../Cont’d)
| | -- | -----------------------------------------------------------------------------------------------------------------



| | a. | Standards, amendments and interpretations to existing standards effective in 2011 but not relevant
to the Company (.../Cont’d)
| | -- | ----------------------------------------------------------------------------------------------------------------------------



| | · | IFRS 3 Business Combinations: The amendment
clarifies that the amendments to IFRS7, IAS32 and IAS39 that eliminate the exemption for contingent consideration does not apply
to contingent consideration that arose from business combinations whose acquisition dates precede the application of IFRS 3 (as
revised in 2008).
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In addition, the amendment limits
the scope of measurement choices for non-controlling interest. Only the components of non-controlling interest that are present
ownership interests and entitle the holders to a proportionate share of the acquiree’s net assets in the event of liquidation
are measured at either fair value or at the present ownership instruments’ proportionate share of the acquiree’s identifiable
net assets. All other components of non-controlling interest are measured at their acquisition date fair value unless another measurement
basis is required by another IFRS.



The amendment also added explicit
guidance to clarify the accounting treatment for non-replaced and voluntarily replaced share-based payment awards.



| | · | IAS27 Consolidated and Separate Financial
Statements: The amendment clarifies that the consequential amendments from IAS 27 (as revised in 2008) made to IAS 21, IAS 28 and
IAS 31 shall be applied prospectively for annual periods beginning on or after 1 July 2009 or earlier if IAS 27 is applied earlier.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | IFRIC 13 Customer Loyalty Programmes:
The amendment clarifies that when the fair value of award credits is measured based on the value of the awards for which they could
be redeemed, the amounts of discounts or incentives otherwise granted to customers not participating in the award scheme are to
be taken into account.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



9







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN US DOLLARS)



| | 2. | APPLICATION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRSs") AND CHANGES
IN ACCOUNTING POLICIES (.../Cont’d)
| | -- | ------------------------------------------------------------------------------------------------------------------



| | b. | The following new standards, new interpretations and amendments to standards and interpretations
have been issued but are not effective for the financial year beginning 1 January 2011 and have not been early adopted:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Company has not applied
the following new and revised IFRSs, that have been issued but are not yet effective, in these financial statements.



|IFRS 1 Amendments |  | Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards – Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters1
|----------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|IFRS 7 Amendments |  | Amendments to IFRS 7 Financial Instruments: Disclosures - Transfers of Financial Assets1                                                                           
|IFRS 7 Amendments |  | Amendments to IFRS 7 Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities4                                                   
|IFRS 9            |  | Financial Instruments6                                                                                                                                             
|IFRS 10           |  | Consolidated Financial Statements4                                                                                                                                 
|IFRS 11           |  | Joint Arrangements4                                                                                                                                                
|IFRS 12           |  | Disclosure of Interests in Other Entities4                                                                                                                         
|IFRS 13           |  | Fair Value Measurement4                                                                                                                                            
|IAS 1 Amendments  |  | Presentation of Financial Statements – Presentation of Items Items of Other Comprehensive Income3                                                                  
|IAS 12 Amendments |  | Amendments to IAS 12 Income Taxes - Deferred Tax : Recovery of Underlying Assets2                                                                                  
|IAS 19 (2011)     |  | Employee Benefits4                                                                                                                                                 
|IAS 27 (2011)     |  | Separate Financial Statements4                                                                                                                                     
|IAS 28 (2011)     |  | Investments in Associates and Joint Ventures4                                                                                                                      
|IAS 32 Amendments |  | Amendments to IAS 32 Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities5                                                  



1Effective for accounting periods beginning
on or after 1 July 2011

2Effective for accounting periods beginning
on or after 1 January 2012

3Effective for accounting periods beginning
on or after 1 July 2012

4Effective for accounting periods beginning
on or after 1 January 2013

5Effective for accounting periods beginning
on or after 1 January 2014

6Effective for accounting periods beginning
on or after 1 January 2015



Further information about those
changes that are expected to significantly affect the Company is as follows:



IFRS 9 issued in November 2009
is the first part of phase 1 of a comprehensive project to entirely replace IAS 39 Financial Instruments: Recognition and Measurement.
This phase focuses on the classification and measurement of financial assets. Instead of classifying financial assets into four
categories, an entity shall classify financial assets as subsequently measured at either amortised cost or fair value, on the basis
of both the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the
financial assets. This aims to improve and simplify the approach for the classification and measurement of financial assets compared
with the requirements of IAS 39.



10







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN US DOLLARS)



| | 3. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
| | -- | --------------------------------------------------------------------



| | a. | Basis of preparation
| | -- | --------------------



The consolidated financial statements
include the financial statement of the Company for the years ended December 31, 2011, 2010 and 2009. The measurement basis used
in the preparation of consolidated the financial statements is the historical basis.



The Variable interest entity
(“VIE”) transaction was in process and the consolidated financial statements does not include the financials of VIE.



The preparation of consolidated
financial statements in conformity with International Financial Reporting Standards (“IFRSs”) requires management to
make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities,
income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that
are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.



| | b. | Subsidiary
| | -- | ----------



Subsidiary companies are those
companies in which the Company, directly or indirectly, holds more than 50% of the equity capital as a long term investment or
controls more than half of the voting power, directly or indirectly or controls the composition of the board of directors. Subsidiary
companies are considered to be controlled if the Company has the power, directly or indirectly, to govern the financial and operating
policies, so as to obtain benefits from their activities. Investments in subsidiary companies are stated at cost less provision
for permanent diminution in value.



| | c. | Provisions
| | -- | ----------



A provision is recognized when
a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of
resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.



When the effect of discounting
is material, the amount recognized for a provision is the present value at the end of the reporting period the future expenditures
expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage
of time is included in finance costs in the statement of income and comprehensive income.



| | d. | Cash and cash equivalents
| | -- | -------------------------



Cash represents cash in banks
and cash on hand.



| | e. | Accounts receivable
| | -- | -------------------



Accounts receivables are amounts
due from customers for merchandise sold or services performed in the ordinary course of business. If collection of trade receivables
is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets.
If not, they are presented as non-current assets.



11







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN US DOLLARS)



| | 3. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (.../Cont’d)
| | -- | -------------------------------------------------------------------------------



| | f. | Property, plant and equipment
| | -- | -----------------------------



Property, plant and equipment
are recorded at cost less accumulated depreciation. Expenditure for major additions and betterments are capitalized. Maintenance
and repairs are charged to general and administrative expenses as incurred. Depreciation of property, plant and equipment is computed
by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful
lives of five years. Upon sale or retirement of property, plant and equipment, the related cost and accumulated depreciation are
removed from the accounts and any gain or loss is reflected in operations. The estimated useful lives of the assets are as follows:



|                                        | Estimated Life (Years)
|--------------------------------------- | ----------------------
|Furniture fixtures and office equipment | 5                     



| | g. | Accounting estimates and judgements
| | -- | -----------------------------------



The estimates and associated
assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances.
The estimates and underlying assumptions are reviewed on an ongoing basis. The key assumptions concerning the future and other
key sources of estimation uncertainty at the end of reporting date, that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial year, are discussed below.



Estimated provision for impairment
of accounts receivable



The Company makes provision
for doubtful debts based on an assessment of the recoverability of accounts receivable. Provisions are applied to trade receivables
where events or changes in circumstances indicate that the balances may not be collectible. The identification of doubtful debts
requires the use of judgement and estimates based on the credit history of the customers and the current market conditions. Where
the expectation is different from the original estimate, such difference will have an impact on the carrying value of receivables
and doubtful debt expenses in the period in which such estimate has been changed.



| | h. | Revenue recognition
| | -- | -------------------



The Company generates revenue
primarily from providing advisory services to corporate fund raising.



Revenue is recognized when service
is provided to the customer.



12







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN US DOLLARS)



| | 3. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (.../Cont’d)
| | -- | -------------------------------------------------------------------------------



| | i. | Income taxes
| | -- | ------------



Income tax comprises current and
deferred tax. Income tax is recognized in the statement of income and comprehensive income, or in equity if it relates to items
that are recognized in the same or a different period directly in equity.



Current tax assets and liabilities
for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities.



Deferred tax is provided, using
the liability method, on all temporary differences at the end of reporting period between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes.



Deferred tax
liabilities are recognised for all taxable temporary differences, except:-



| | · | where the deferred tax liability arises
from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | in respect of taxable temporary differences
associated with investments in subsidiaries and interests in jointly-controlled entities, where the timing of the reversal of the
temporary differences can be controlled by the Company and it is probable that the temporary differences will not reverse in the
foreseeable future.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Deferred tax assets are recognized
for all deductible temporary differences, carryforward of unused tax credits and unused tax losses, to the extent that it is probable
that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax credits
and unused tax losses can be utilized except:-



| | · | where the deferred tax asset relating
to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not
a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | in respect of deductible temporary differences
associated with investments in subsidiaries and interests in jointly-controlled entities, deferred tax assets are only recognized
to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will
be available against which the temporary differences can be utilized.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The carrying amount of deferred
tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Conversely, previously unrecognized
deferred tax assets are reassessed at each reporting period and are recognized to the extent that it is probable that sufficient
taxable profit will be available to allow all or part of the deferred tax asset to be utilized.



Deferred tax assets and liabilities
are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled,
based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of reporting period.



13







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN US DOLLARS)



| | 3. | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (.../Cont’d)
| | -- | -------------------------------------------------------------------------------



| | j. | Earnings per share
| | -- | ------------------



Basic earnings per share is
computed on the basis of the weighted-average number of shares of our common stock outstanding during the year.



In accordance with Memorandum
and Article dated February 25, 2011, it was stated that a preferred share confers on the holders the right to an equal share in
any distribution paid by the Company.



The following
table sets forth the computation of basic and diluted net (loss)/income per common share:



|                                                                     |  | For the Years Ended December 31, |          
|-------------------------------------------------------------------- |  | -------------------------------- | ---------
|                                                                     |  | 2011                             |          
|                                                                     |  |                                  |          
|Net (loss)/income per ordinary and preferred share                   |  | $                                | (195,274 
|                                                                     |  |                                  |          
|Weighted average outstanding ordinary and preferred shares:          |  |                                  | 3,408,715
|                                                                     |  |                                  |          
|Basic and diluted                                                    |  |                                  |          
|(Loss)/profit per ordinary and preferred shares: - Basic and diluted |  | $                                | (0.0573  



| | 4. | ACCOUNTS RECEIVABLE
| | -- | -------------------



The Company performs ongoing
credit evaluations of its customers' financial conditions. The Company generally encourages its clients to settle the outstanding
balance within credit terms. As of December 31, 2011, and 2010, no provision on accumulated allowance for doubtful accounts was
provided.



| | 5. | UTILITY AND RENTAL DEPOSITS
| | -- | ---------------------------



Utility and rental deposits
of December 31, 2011 and 2010 consisted of the following:



|                            |  | The Group |       
|--------------------------- |  | --------- | ------
|                            |  | 2011      |       
|                            |  |           |       
|Utility and rental deposits |  | $         | 47,273



14







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN US DOLLARS)



| | 6. | PROPERTY, PLANT AND EQUIPMENT
| | -- | -----------------------------



Property, plant and equipment
of December 31, 2011 and 2010 consist of the following:



|                                        |  | The Group |      
|--------------------------------------- |  | --------- | -----
|                                        |  | 2011      |      
|                                        |  |           |      
|Furniture, fixture and office equipment |  | $         | 5,789
|Less : Accumulated depreciation         |  |           | (137 
|                                        |  | $         | 5,652



| | 7. | ACCOUNTS PAYABLE
| | -- | ----------------



Accounts payable as of December
31, 2011 and 2010 were nil and $72,754 respectively, representing the amount the Company agreed to pay the advertising fee to third
parties .



| | 8. | ACCRUED LIABILITIES AND OTHER PAYABLES
| | -- | --------------------------------------



Accrued liabilities and other
payables as of December 31, 2011 and 2010 consist of the following:



|                                    |  | The Group |       
|----------------------------------- |  | --------- | ------
|                                    |  | 2011      |       
|                                    |  |           |       
|Accrued expenses and other payables |  | $         | 12,389
|Amount due to a director            |  |           | 6,280 
|                                    |  | $         | 18,669



Accrued liabilities and other
payables as of December 31, 2011, 2010 consist of the following:



|                         |  | The Company |       
|------------------------ |  | ----------- | ------
|                         |  | 2011        |       
|                         |  |             |       
|Accrued expenses         |  | $           | 10,587
|Amount due to a director |  |             | 6,071 
|                         |  | $           | 16,658



15







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN US DOLLARS)



| | 9. | INVESTMENT IN SUBSIDIARIES
| | -- | --------------------------



|                                                                        |  | The Company |          
|----------------------------------------------------------------------- |  | ----------- | ---------
|                                                                        |  | 2011        |          
|                                                                        |  |             |          
|Unlisted shares, at cost                                                |  | $           | 576,001  
|Expenses paid on behalf the subsidiaries                                |  |             | 2,454    
|Loan receivable from Strategy & Communication (Hong Kong) Group Limited |  |             | 265,385  
|Loan receivable from BJ Galaxy Management Consulting Company            |  |             | 200,000  
|                                                                        |  |             | 1,043,840



|                                                   |  |                         |      |  |             |     |         |               |  |                       |  | Percentage   | 
|-------------------------------------------------- |  | ----------------------- | ---- |  | ----------- | --- | ------- | ------------- |  | --------------------- |  | ------------ | 
|                                                   |  |                         |      |  |             |     |         |               |  |                       |  | of equity    | 
|                                                   |  | Nominal                 |      |  |             |     |         |               |  |                       |  | directly     | 
|                                                   |  | value of                |      |  |             |     |         | Place and     |  | Class of              |  | attributable | 
|                                                   |  | issued                  |      |  | Issue share |     |         | date of       |  | shares                |  | to the       | 
|Name                                               |  | capital                 |      |  | to VIE      |     |         | incorporation |  | in issue              |  | Company      | 
|Subsidary                                          |  |                         |      |  |             |     |         |               |  |                       |  |              | 
|Strategy & Communication (Hong Kong) Group Limited |  | HK$                     | 1.00 |  |             |     | -       |               |  | Hong Kong May 6, 2011 |  | Ordinary     | 
|                                                   |  | (equivalent to US$1.00) |      |  |             |     |         |               |  |                       |  |              | 
|Variable interest entity                           |  |                         |      |  |             |     |         |               |  |                       |  |              | 
|Beijing Lianhe Chuangxiang Advertising Co., Ltd.   |  |                         | -    |  |             | US$ | 576,000 |               |  | PRC October 10,2002   |  | Ordinary     | 



On November 18, 2010, the shareholder
of Strategy & Communication (Hong Kong) Group Limited, Wu Qiang (also director and shareholder of the Company) transferred
his share to the Company for consideration of HK$1.00. The subsidiary has not commenced its operation.



Furthermore, The Company issued
230,400 ordinary shares of US$2.50 each to Le Wang Limited on July 8, 2011, up to 115,200 of shares which are subject to forfeiture
in the event certain earnings targets of “Beijing Lianhe” are not met, in connection with the VIE transaction to obtain
control of “Beijing Lianhe”. The VIE transaction was in process and the consolidated financial
statements does not include the financials of VIE.



Loan to Strategy & Communication
(Hong Kong) Group Limited and BJ Galaxy Management Consulting Company is non-interest bearing, secured and has no fixed terms of
repayment.



16







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN US DOLLARS)



| | 10. | INCOME TAXES (.../Cont’d)
| | --- | -----------------------



The entities within the Company
file separate tax returns in the respective tax jurisdictions that they operate.



The Company is incorporated
in the British Virgin Islands, the laws of which do not require the Company to pay any income taxes or other taxes based on income,
business activity or assets. The Company has subsidiaries domiciled and operating in other countries and those entities file separate
tax returns in the respective jurisdictions in which they are domiciled or operate.



The Company's consolidated subsidiary,
Strategy & Communications (Hong Kong) Group Limited is domiciled in Hong Kong, PRC would be subject to statutory profits tax
in that jurisdiction of 16.5% if it incurred revenue and profits there.



The Company's consolidated subsidiary,
BJ Galaxy Management Consulting Co. is domiciled in PRC would be subject to statutory profits tax in that jurisdiction of 25% if
it incurred revenue and profits there.



The Company's VIE, Beijing Lianhe
Chungxiang Advertising Co., Ltd., is domiciled in PRC, is subject to PRC enterprise income tax of 25% respectively for the year
ended December 31, 2011.



The Company's entities sustained
losses and accordingly no income tax was provided for the year ended December 31, 2011, 2010 and 2009.



As
of December 31, 2011, 2010and 2009,the Company did not
have any significant temporary differences and carry forwards that may result in deferred tax. The Company has analyzed the tax
positions taken or expected to be taken in its tax filings and has concluded it has no material liability related to uncertain
tax positions or unrecognized tax benefits. The Company classifies interest and/or penalties related to income tax matters in income
tax expense. For the year ended December 31, 2011, 2010and 2009,
the Company has not recognized any amount of interest and penalties related to uncertain tax positions. The Company does not anticipate
any significant increases or decreases to its liability for unrecognized tax benefits within the next 12 months.



| | 11. | ISSUED CAPITAL
| | --- | --------------



The Company is authorized to
issue an unlimited number of shares without par value and such shares shall be ordinary shares and preferred shares with the rights
set out in the Amended and Restated Memorandum of Association and Articles of Association.



17







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN US DOLLARS)



| | 12. | ACCUMULATED (LOSSES)/PROFITS
| | --- | ----------------------------



|                                                         |  | The Group |         
|-------------------------------------------------------- |  | --------- | --------
|                                                         |  | 2011      |         
|                                                         |  |           |         
|Accumulated (losses)/profits                             |  | $         | (191,816
|                                                         |  |           |         
|Balance brought forward from the beginning of the year   |  | $         | 3,458   
|Net (loss)/profit attributable to members of the Company |  |           | (195,274
|                                                         |  |           |         
|Balance carried forward at the end of the year           |  | $         | (191,816



|                                                         |  | The Company |         
|-------------------------------------------------------- |  | ----------- | --------
|                                                         |  | 2011        |         
|                                                         |  |             |         
|Accumulated (losses)/profits                             |  | $           | (127,080
|                                                         |  |             |         
|Balance brought forward from the beginning of the year   |  | $           | 3,666   
|Net (loss)/profit attributable to members of the Company |  |             | (130,746
|Balance carried forward at the end of the year           |  | $           | (127,080



| | 13. | LIQUIDITY AND CAPITAL MANAGEMENT
| | --- | --------------------------------



Capital comprises of share capital
and reserves stated on the statement of financial position. The Company's objective when managing capital is to safeguard its ability
to continue as a going concern, so that it can continue to provide returns for shareholders.



In 2011, the Company generated
negative operating cash flows. The Company issued capital raise funds during 2011 which, together with operations, provided sufficient
cash resources to its business operations.



The Company expects to receive
additional funds from interested investors to support its proposed business expansion plans.



18







GALAXY STRATEGY & COMMUNICATIONS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN US DOLLARS)



| | 14. | OPERATING LEASE COMMITMENTS
| | --- | ---------------------------



As of December 31, 2011, the
total future minimum lease payments under non-cancellable operating leases in respect of premises, which were based on the closing
rate as of December 31, 2011, are as follows:



|For the year ended December 31, |  |   |         | 
|------------------------------- |  | - | ------- | 
|2012                            |  | $ | 150,705 | 
|2013                            |  |   | 125,588 | 
|TOTAL                           |  | $ | 276,293 | 



| | 15. | COMPARATIVE FIGURES
| | --- | -------------------



Certain comparative figures
have been reclassified to conform to current year's presentation.





19