FORM
10-Q



SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549

(Mark One)

[X] QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the
quarterly period ended December 31, 2011



OR



[_] TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Commission
File Number: 333-39208



COL
China Online International Inc.

(Exact
name of registrant as specified in its charter)



|Delaware                                                           |  | 52-2224845                          
|------------------------------------------------------------------ |  | ------------------------------------
|(State or other jurisdiction of incorporation
    or organization) |  | (I.R.S. Employer Identification No.)



3176
South Peoria Court, Suite 100

Aurora,
Colorado, 80014

(Address
of principal executive offices) (Zip Code)



(303)
695-8530

(Registrant's
telephone number, including area code)

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 such
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.



Yes [X]
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 (§ 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 [_]
No [X]





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

| |                                                   |                                  
| | ------------------------------------------------- | ---------------------------------
| | Large
    accelerated filer [_]                   | Accelerated
    filer [_]        
| |                                                   |                                  
| | Non-accelerated
    filer [_]                     | Smaller
    reporting company [X]
| | (Do
    not check if a smaller reporting company) |                                  
| |                                                   |                                  

Indicate
by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



Yes [X]
No [_]



As
of December 31, 2011, the registrant had outstanding 50,155,000 shares of its common stock, par value $0.001.











TABLE
OF CONTENTS



|                                                                                                    |                                                                                                                                                  | PAGE
|--------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------ | ----
|                                                                                                    |                                                                                                                                                  |     
|PART
    I - FINANCIAL INFORMATION                                                                  |                                                                                                                                                 
|                                                                                                    |                                                                                                                                                  |     
|ITEM
    1.   FINANCIAL STATEMENTS                                                                  |                                                                                                                                                 
|                                                                                                    |                                                                                                                                                  |     
|                                                                                                    | Condensed Consolidated
    Balance Sheets at December 31, 2011 (Unaudited) and June 30, 2011                                                     | 3   
|                                                                                                    |                                                                                                                                                  |     
|                                                                                                    | Unaudited Condensed
    Consolidated Statements of Operations for the three and six months ended December 31, 2011 and 2010                      | 4   
|                                                                                                    |                                                                                                                                                  |     
|                                                                                                    | Unaudited Consolidated
    Statement of Changes in Stockholder’s deficit for the six months ended December 31, 2011 and year ended June 30, 2011 | 6   
|                                                                                                    |                                                                                                                                                  |     
|                                                                                                    | Unaudited Condensed
    Consolidated Statements of Cash Flows for the six months ended December 31, 2011 and 2010                                | 7   
|                                                                                                    |                                                                                                                                                  |     
|                                                                                                    | Notes to Financial
    Statements                                                                                                                | 8   
|                                                                                                    |                                                                                                                                                  |     
|ITEM
    2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 11                                                                                                                                              
|                                                                                                    |                                                                                                                                                  |     
|ITEM
    3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            | 13                                                                                                                                              
|                                                                                                    |                                                                                                                                                  |     
|ITEM
    4.   CONTROLS AND PROCEDURES                                                               | 13                                                                                                                                              
|                                                                                                    |                                                                                                                                                  |     
|PART
    II - OTHER INFORMATION                                                                     |                                                                                                                                                 
|                                                                                                    |                                                                                                                                                  |     
|ITEM
    6. EXHIBITS                                                                                | 14                                                                                                                                              
|                                                                                                    |                                                                                                                                                  |     
|                                                                                                    | SIGNATURES                                                                                                                                       | 15  





















































PART
I – FINANCIAL INFORMATION



Item
1. Financial Statements



COL
CHINA ONLINE INTERNATIONAL INC.

(A
Development Stage Company)

CONDENSED
CONSOLIDATED BALANCE SHEETS





|                                                                                                          |  |  |      | December 31, 2011 (Unaudited) |  | June 30, 2011
|--------------------------------------------------------------------------------------------------------- |  |  | ---- | ----------------------------- |  | -------------
|                                                                                                          |  |  | Note |                               |  |              
|ASSETS                                                                                                    |  |  |      |                               |  |              
|                                                                                                          |  |  |      |                               |  |              
|Current Assets:                                                                                           |  |  |      |                               |  |              
|Cash                                                                                                      |  |  |      |                               |  |              
|Rental deposits                                                                                           |  |  |      |                               |  |              
|                                                                                                          |  |  |      |                               |  |              
|Total Assets                                                                                              |  |  |      |                               |  |              
|                                                                                                          |  |  |      |                               |  |              
|LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                     |  |  |      |                               |  |              
|                                                                                                          |  |  |      |                               |  |              
|Current Liabilities:                                                                                      |  |  |      |                               |  |              
|Accounts payable and accrued expenses                                                                     |  |  |      |                               |  |              
|                                                                                                          |  |  |      |                               |  |              
|Total current liabilities                                                                                 |  |  |      |                               |  |              
|                                                                                                          |  |  |      |                               |  |              
|Non-Current Liabilities:                                                                                  |  |  |      |                               |  |              
|Payable to related party with convertible option                                                          |  |  | 7    |                               |  |              
|                                                                                                          |  |  |      |                               |  |              
|Total non-current liabilities                                                                             |  |  |      |                               |  |              
|                                                                                                          |  |  |      |                               |  |              
|COMMITMENTS AND CONTINGENCIES                                                                             |  |  | 8    |                               |  |              
|                                                                                                          |  |  |      |                               |  |              
|Stockholders’ Deficit:                                                                                    |  |  |      |                               |  |              
|Common stock, US$0.001 par value, 100,000,000 shares authorized and 50,155,000 shares issued, outstanding |  |  |      |                               |  |              
|Additional paid-in capital                                                                                |  |  |      |                               |  |              
|Accumulated deficit before reentering development stage                                                   |  |  |      |                               |  |              
|Accumulated deficit from inception of reentering development stage                                        |  |  |      |                               |  |              
|Other comprehensive income                                                                                |  |  |      |                               |  |              
|                                                                                                          |  |  |      |                               |  |              
|Total Stockholders’ deficit                                                                               |  |  |      |                               |  |              
|                                                                                                          |  |  |      |                               |  |              
|Total Liabilities and Stockholders’ Deficit                                                               |  |  |      |                               |  |              











The
financial statements should be read in conjunction with the accompanying notes.













COL
CHINA ONLINE INTERNATIONAL INC.

(A
Development Stage Company)

UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS





|                                                                                 |  |  |      | For the three months ended |  | For the six months ended |                     | Cumulative since reentering development stage on
|-------------------------------------------------------------------------------- |  |  | ---- | -------------------------- |  | ------------------------ | ------------------- | ------------------------------------------------
|                                                                                 |  |  |      | December 31, 2011          |  | December 31, 2010        |                     | December 31, 2011                               
|                                                                                 |  |  | Note |                            |  |                          | (US$)               |                                                 
|                                                                                 |  |  |      |                            |  |                          | (Illustrative only) |                                                 
|                                                                                 |  |  |      |                            |  |                          |                     |                                                 
|                                                                                 |  |  |      |                            |  |                          |                     |                                                 
|General and administrative expenses                                              |  |  |      |                            |  |                          | (34,003             | )                                               
|                                                                                 |  |  |      |                            |  |                          |                     |                                                 
|                                                                                 |  |  |      |                            |  |                          |                     |                                                 
|NET LOSS                                                                         |  |  |      |                            |  |                          | (34,003             | )                                               
|                                                                                 |  |  |      |                            |  |                          |                     |                                                 
|Other comprehensive income, before tax: Foreign currency translation adjustments |  |  |      |                            |  |                          | 14,010              |                                                 
|Income tax expense related to other comprehensive income                         |  |  |      |                            |  |                          | —                   |                                                 
|Other comprehensive income, net of tax                                           |  |  |      |                            |  |                          | 14,010              |                                                 
|                                                                                 |  |  |      |                            |  |                          |                     |                                                 
|INCOME                                                                           |  |  | 5    |                            |  |                          | 19,993              |                                                 







The
financial statements should be read in conjunction with the accompanying notes.















COL
CHINA ONLINE INTERNATIONAL INC.

(A
Development Stage Company)

UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                              |  |  |      | For the three months ended |  | For the six months ended |                     | Cumulative since reentering development stage on
|------------------------------------------------------------- |  |  | ---- | -------------------------- |  | ------------------------ | ------------------- | ------------------------------------------------
|                                                              |  |  |      | December 31, 2011          |  | December 31, 2010        |                     | December 31, 2011                               
|                                                              |  |  | Note |                            |  |                          | (US$)               |                                                 
|                                                              |  |  |      |                            |  |                          | (Illustrative only) |                                                 
|                                                              |  |  |      |                            |  |                          |                     |                                                 
|Basic and Diluted Loss Per Share                              |  |  | 6    |                            |  |                          |                     |                                                 
|                                                              |  |  |      |                            |  |                          |                     |                                                 
|Loss per share of common stock                                |  |  |      |                            |  |                          | (0.0007             | )                                               
|                                                              |  |  |      |                            |  |                          |                     |                                                 
|Weighted Average Common Share Outstanding – basic and diluted |  |  |      |                            |  |                          | 50,155,000          |                                                 
|                                                              |  |  |      |                            |  |                          |                     |                                                 







The
financial statements should be read in conjunction with the accompanying notes.









COL
CHINA ONLINE INTERNATIONAL INC.

(A
Development Stage Company)

CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR
THE SIX MONTHS ENDED DECEMBER 31, 2011 AND YEAR ENDED JUNE 30, 2011





|                                            |  | Common stock |            | Additional paid-in capital |  | Accumulated deficit before reentering development stage |         | Accumulated deficit from inception of reentering development stage |  | Accumulated other comprehens-ive income |           | Total
|------------------------------------------- |  | ------------ | ---------- | -------------------------- |  | ------------------------------------------------------- | ------- | ------------------------------------------------------------------ |  | --------------------------------------- | --------- | -----
|                                            |  |              | Number     |                            |  |                                                         | (Rmb)   |                                                                    |  |                                         | (Rmb)     |      
|                                            |  |              |            |                            |  |                                                         |         |                                                                    |  |                                         |           |      
|Balance as of July 1, 2010                  |  |              | 50,155,000 |                            |  |                                                         | 408,864 |                                                                    |  |                                         | 1,214,118 |      
|Net loss for the year                       |  |              | —          |                            |  |                                                         | —       |                                                                    |  |                                         | —         |      
|Other comprehensive income                  |  |              | —          |                            |  |                                                         | —       |                                                                    |  |                                         | —         |      
|                                            |  |              |            |                            |  |                                                         |         |                                                                    |  |                                         |           |      
|Balance as of July 1, 2011                  |  |              | 50,155,000 |                            |  |                                                         | 408,864 |                                                                    |  |                                         | 1,214,118 |      
|Net loss for the period (unaudited)         |  |              | —          |                            |  |                                                         | —       |                                                                    |  |                                         | —         |      
|Other comprehensive income (unaudited)      |  |              | —          |                            |  |                                                         | —       |                                                                    |  |                                         | —         |      
|                                            |  |              |            |                            |  |                                                         |         |                                                                    |  |                                         |           |      
|Balance as of December 31, 2011 (unaudited) |  |              | 50,155,000 |                            |  |                                                         | 408,864 |                                                                    |  |                                         | 1,214,118 |      
|                                            |  |              |            |                            |  |                                                         |         |                                                                    |  |                                         |           |      
|                                            |  |              |            |                            |  |                                                         |         |                                                                    |  |                                         |           |      
|                                            |  |              |            |                            |  |                                                         |         |                                                                    |  |                                         |           |      
|                                            |  |              |            |                            |  |                                                         |         |                                                                    |  |                                         |           |      











The
financial statements should be read in conjunction with the accompanying notes.

















COL
CHINA ONLINE INTERNATIONAL INC.

(A
Development Stage Company)

UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                           |  | For the six months ended |                     | Cumulative since reentering development stage on
|------------------------------------------------------------------------------------------ |  | ------------------------ | ------------------- | ------------------------------------------------
|                                                                                           |  | December 31, 2011        |                     | December 31, 2010                               
|                                                                                           |  |                          | (US$)               |                                                 
|                                                                                           |  |                          | (Illustrative only) |                                                 
|Cash Flows from Operating Activities:                                                      |  |                          |                     |                                                 
|Net loss                                                                                   |  |                          | (68,366             | )                                               
|                                                                                           |  |                          |                     |                                                 
|Adjustments to reconcile net loss to net                cash used in operating activities: |  |                          |                     |                                                 
|                                                                                           |  |                          |                     |                                                 
|Change in operating assets and liability:                                                  |  |                          |                     |                                                 
|Decrease in:                                                                               |  |                          |                     |                                                 
|Rental deposits                                                                            |  |                          | —                   |                                                 
|Accounts payable and accrued expenses                                                      |  |                          | (13,742             | )                                               
|                                                                                           |  |                          |                     |                                                 
|Net cash used in operating activities                                                      |  |                          | (82,108             | )                                               
|                                                                                           |  |                          |                     |                                                 
|Cash Flows from Financing Activities:                                                      |  |                          |                     |                                                 
|Advances from 45.6% stockholder                                                            |  |                          | 88,054              |                                                 
|                                                                                           |  |                          |                     |                                                 
|Net cash provided by financing activities                                                  |  |                          | 88,054              |                                                 
|                                                                                           |  |                          |                     |                                                 
|Effect of Exchange Rate Changes on Cash                                                    |  |                          | (56                 | )                                               
|                                                                                           |  |                          |                     |                                                 
|Net Increase (decrease)  in Cash                                                           |  |                          | 5,890               |                                                 
|                                                                                           |  |                          |                     |                                                 
|Cash, beginning of period                                                                  |  |                          | 3,664               |                                                 
|                                                                                           |  |                          |                     |                                                 
|Cash, end of period                                                                        |  |                          | 9,554               |                                                 









The
financial statements should be read in conjunction with the accompanying notes.

















1.           Company
Organization and Operations



Nature
of Operations – COL China Online International Inc. was incorporated as a Delaware corporation on February 22, 2000, for
the purpose of acquiring Migration Developments Limited, a British Virgin Islands company (“Migration”) and raising
equity capital to be utilized in the business of Migration.  Migration held a 90% equity interest in Shenzhen Knowledge
& Communication Co. Ltd. which was a Sino-foreign equity joint venture (“Joint Venture”) in the People’s
Republic of China (“PRC”). COL China Online International Inc. and its subsidiaries are collectively referred to as
the “Company” in these financial statements.



As
more fully explained in note 3 to these financial statements, the Company has terminated its operations since December 10, 2007
and has become a shell company. After becoming a shell company, the Company has reentered the development stage on December 10,
2007.  For the Company’s plan of operations following the termination of its business, see note 3 to the consolidated
financial statements.





2.           Basis
of Presentation



The
consolidated financial statements have been prepared assuming the Company will continue operating as a going concern. Following
the termination of operations as more fully explained in note 3 to these financial statements, the Company’s business has
been suspended as of November 2007 and the Company will likely seek to enter into a business combination with one or more yet
to be identified privately held businesses.



The
Company’s ability to continue as a going concern is dependent upon several factors, including, but not limited to, continued
financial support by the 45.6% stockholder, the successfulness of a possible business combination and whether the post-combination
business would be able to achieve and maintain profitable operations and to raise additional capital.  The accompanying
consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.



The
Company is confident that its 45.6% stockholder, Honview International Limited (“Honview”), will continue to provide
funding during the forthcoming year.



The
unaudited consolidated financial statements have been prepared by the Company, pursuant to the rules and regulations of the Securities
and Exchange Commission (the “SEC”).  Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such SEC
rules and regulations; nevertheless, the Company believes that the disclosures are adequate to make the information presented
not misleading.  Information as of June 30, 2011 was derived from the audited financial statements of the Company for
the year ended June 30, 2011. These financial statements have been prepared on the same basis as the annual financial statements.  These
financial statements and the notes hereto should be read in conjunction with the financial statements and notes thereto included
in the Company’s Annual Report on Form 10-K for the year ended June 30, 2011, which was filed on September 28, 2011.  In
the opinion of the directors, all adjustments, including normal recurring adjustments necessary to present fairly the financial
position of the Company as of December 31, 2011 and the results of its operations for the three month period and six month period
and cash flows for the six month period then ended, have been included.  The results of operations for the interim period
are not necessarily indicative of the results for the full year.



The
amounts included in the financial statements are presented in Renminbi (“Rmb”) because the Company’s activities
are primarily conducted in the PRC.  For illustrative purposes, the condensed consolidated balance sheet as at December
31, 2011 and condensed consolidated statement of operations for the three and six months ended December 31, 2011 and condensed
consolidated statement of cash flows for the six months ended December 31, 2011 have been translated into US dollars at approximately
6.3523 Rmb to the dollar.















3.           Termination
of Operations



On
November 23, 2007, the Board of Directors resolved to cease the Company’s primary operations due to the expiration of the
Joint Venture’s business license on December 10, 2007. The Company  expects that any unpaid liabilities will be
undertaken by Honview.  The Company does not expect any assets to remain outstanding or to be available for distribution
to the parties of the Joint Venture or shareholders of the Company.



In
connection with the termination of substantially all of the Company’s operations on November 23, 2007, the Company effectively
became a “shell company”.  Under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), a “shell company” is defined as a company that has (1) no or nominal operations; and (2) either: (a)
no or nominal assets; (b) assets consisting solely of cash and cash equivalents; or (c) assets consisting of any amount of cash
and cash equivalents and nominal other assets.   Because the Company is now effectively a shell company, under
the Exchange Act, it is currently seeking to enter into a business combination with one or more yet to be identified privately
held businesses.  The Board of Directors believes that the Company will be attractive to privately held companies interested
in becoming publicly traded by means of a business combination with the Company, without offering their own securities to the
public.



The
Board of Directors does not expect to restrict its search for business combination candidates to any particular geographical area,
industry or industry segment, and may enter into a combination with a private business engaged in any line of business. The Company’s
discretion is, as a practical matter, unlimited in the selection of a combination candidate.



Following
the suspension of business effective July 2007, the Company’s Board of Directors resolved on November 23, 2007 to cease
the operations of the only business of the Company upon the expiration of the Joint Venture’s business license on December
10, 2007. Accordingly, the Company reentered development stage for accounting purposes on December 10, 2007. It is expected that
the Company will remain in such status unless and until a business combination takes place. There can be no assurance that this
will occur.



Since
November 23, 2007, the Company has not entered into any agreement, arrangement or understanding of any kind with any person regarding
a business combination. Depending upon the nature of the transaction, the current officers and directors of the Company probably
will resign their directorship and officer positions with the Company in connection with any consummation of a business combination.
The current management is not expected to have any control over the conduct of the Company’s business following the completion
of a business combination. The Company has no plans, understandings, agreements, or commitments with any individual or entity
to act as a finder of or as a business consultant in regard to any business opportunities for the Company. In addition, there
are no plans to use advertisements, notices or any general solicitation in the search for combination candidates.



4.           Recently
Issued Accounting Standards



As
of the date of this quarterly report is filed, there are no recently issued accounting pronouncements which adoption would have
a material impact on the Company’s financial statements.



5.           Comprehensive
Income



The
Company accounts for comprehensive income in accordance with ASC Topic 220, Comprehensive Income.  ASC Topic
220 establishes standards for reporting comprehensive income and its components in financial statements.  Other comprehensive
income, as defined therein, refers to revenues, expenses, gains and losses that are not included in net income but rather are
recorded directly in stockholders’ equity. Other comprehensive income for the three and six months ended December 31, 2011
and 2010 represented gain on foreign currency translation adjustments which are mainly arisen from the translation of the amount
payable to our 45.6% stockholder which is denominated in the US dollars.













6.           Net
Loss Per Share



Basic
and diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding.



7.           
Payable to 45.6% Stockholder



The
amount due is unsecured, interest-free and repayable on demand. The fair value of the advance from the 45.6% stockholder is not
practicable to be estimated due to the relationship between the stockholder and the Company.



Pursuant
to the Loan Agreement, Honview International Limited, the 45.6% stockholder of the Company, agreed to lend Migration its cash
needs, from time to time, at any time until January 1, 2004 up to an aggregate principal amount of US$8 million.  As
a result of Migration becoming a wholly owned subsidiary of the Company, any amounts loaned from Honview prior to February 8,
2002, the effective date of the registration statement related to the Company’s initial public offering, may be paid at
the option of Honview, by converting, at any time after October 10, 2002, part or all the unpaid principal amount of the loan
into shares of the Company’s common stock, at a price equal to the greater of $1.20 per share or 90 percent of the average
weighted trading price of the common stock for the 20 trading days preceding the date of notice of exercise of conversion.  Any
amounts loaned from Honview after February 8, 2002 may be paid, at the option of Honview, by converting, at any time after October
10, 2002, part or all the unpaid principal amount of the loan into shares of the Company’s common stock, at a price equal
to the greater of $1.20 per share or 110 percent of weighted average trading price of common stock for the 20 trading days preceding
the date of the loan.



There
has been no change to the above loan condition during either of the quarters ended December 31, 2011 and 2010. As at December
31 and June 30, 2011, the payable to Honview is convertible into 10,680,615 and 10,462,992 shares of the Company’s common
stock, respectively.



8.           Commitments
and Contengencies



As
of December 31, 2011 and June 30, 2011, the Company had no material outstanding commitments and contingencies.



9.            Income
Taxes



The
Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which they
operate.



The
Company’s subsidiary established in the PRC is subject to the PRC income taxes at a rate of 25%. No PRC income tax has been
provided for in the financial statements as the subsidiary in the PRC neither incurred a loss nor has any assessable profits for
the periods presented.



Migration
operates in Hong Kong where the statutory tax rate is 16.5% for the three and six months ended December 31, 2011 and 2010, respectively,
on assessable income arising in Hong Kong. No Hong Kong profits tax has been provided for as Migration’s operations in Hong
Kong incurred a loss for taxation purposes for the periods presented. Migration is exempt from any BVI income taxes under BVI
International Business Act for its operations being located only in Hong Kong.



The
Company has net operating losses carry forward for tax reporting purposes in the PRC amounting to Rmb665,740 as of December 31
and June 30, 2011. The tax losses will expire in five years after the losses were incurred. Full valuation allowances have been
made as it is not probable that future taxable profit will be available against which the Company can utilize the benefit therefrom.
No deferred income taxes are provided as there are no temporary differences between the tax and book basis of assets and liabilities
due to the current status of the Company as a shell company.













Item
2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations



This
document contains certain forward-looking statements that involve risks and uncertainties, such as statements of the Company’s
plans, objectives, expectations and intentions.  When used in this document, the words “expects”, “anticipates”,
“intends” and “plans” and similar expressions are intended to identify certain of these forward-looking
statements.  The cautionary statements made in this document should be read as being applicable to all related forward-looking
statements wherever they appear in this document.  Our actual results could differ materially from those discussed in
this document.  Factors that could cause or contribute to such difference include those discussed below and in the Annual
Report on Form 10-K for the year ended June 30, 2011.





Overview

COL
China Online International, Inc. was formed for the purpose of acquiring and conducting the engineering services and the internet
related business of Migration Development Limited, a British Virgin Islands company (“Migration”), and raising equity
capital to be utilized in the business of Migration. Migration held a 90% equity interest in Shenzhen Knowledge & Communication
Co. Ltd. which was a Sino-foreign equity joint venture (the “Joint Venture”) in the People’s Republic of China
(“PRC”).



Going
concern – The ability of the Company to continue operations as a going concern is dependent upon the continuing support
from Honview International Limited (“Honview”), a 45.6% stockholder of the Company, until such time as, when or if,
the Company achieves profitable operations and/or additional funds are raised in future private and public offerings or the Company
is party to a business combination.



Termination
of Operations – The Company had focused on the business of providing internet and telecommunication convergence solutions
to its customers up to the end of 2007 fiscal year.  Substantially all of the Company’s business activities have
been suspended effectively in 2007. On November 23, 2007, the Board of Directors resolved to cease the Company’s primary
operations due to the expiration of the Joint Venture’s business license on December 10, 2007. The Company intended to use
any amounts collected from its deposits paid and cash on hand to pay any outstanding liabilities or accounts payable, and expects
that the remaining liabilities will be undertaken by Honview. The Company does not expect any assets to remain outstanding or
to be available for distribution to the parties of the Joint Venture or shareholders of the Company.



In
connection with the termination of substantially all of the Company’s operations on November 23, 2007, the Company effectively
became a “shell company”. Under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), a “shell company” is defined as a company that has (1) no or nominal operations; and (2) either: (a)
no or nominal assets; (b) assets consisting solely of cash and cash equivalents; or (c) assets consisting of any amount of cash
and cash equivalents and nominal other assets. Because the Company is now effectively a shell company, under the Exchange Act,
it is currently seeking to enter into a business combination with one or more yet to be identified privately held businesses.
The Board of Directors believes that the Company will be attractive to privately held companies interested in becoming publicly
traded by means of a business combination with the Company, without offering their own securities to the public.  The
Board of Directors does not expect to restrict its search for business combination candidates to any particular geographical area,
industry or industry segment, and may enter into a combination with a private business engaged in any line of business. The Company’s
discretion is, as a practical matter, unlimited in the selection of a combination candidate.



Since
November 23, 2007, the Company has not entered into any agreement, arrangement or understanding of any kind with any person regarding
a business combination. Depending upon the nature of the transaction, the current officers and directors of the Company probably
will resign their directorship and officer positions with the Company in connection with any consummation of a business combination.
The current management is not expected to have any control over the conduct of the Company’s business following the completion
of a business combination. The Company has no plans, understandings, agreements, or commitments with any individual or entity
to act as a finder of or as a business consultant in regard to any business opportunities for the Company. In addition, there
are no plans to use advertisements, notices or any general solicitation in the search for combination candidates.











Results
of Operations



General
and administrative included salaries and other expenses. For the six months ended December 31, 2011 and 2010, general and administrative
expenses increased to Rmb434,281 (US$68,366) from Rmb390,948, and for the three months ended December 31, 2011 and 2010, general
and administrative expenses increased to Rmb214,752 (US$34,003) from Rmb197,755 due to an increase in salary expenses.



There
was no revenue for the three month or six month periods ended December 31, 2011 and December 31, 2010 due to the Company’s
cessation of business since December 2007.



The
foregoing expenses have resulted in net losses of Rmb214,752 (US$34,003) and Rmb197,755 for the three months ended December 31,
2011 and 2010, respectively, and in net losses of Rmb434,281 (US$68,366) and Rmb390,948 for the six months ended December 31,
2011 and 2010, respectively. The Company expects to continue to incur non-operating expenses as a shell company.



The
Company has recorded other comprehensive income of Rmbs’ 95,893 (US$14,010) and Rmb266,895 for the three months ended December
31, 2011 and 2010, respectively, and other comprehensive income of Rmb292,999 (US$46,125) and Rmb635,095, for the six months ended
December 31, 2011 and 2010, respectively, directly into the stockholders’ deficit account. This comprehensive income for
the three and six months ended December 31, 2011 is mainly the result of unrealized gain on translation of United States dollar
advances from Honview from US$ to Rmb on consolidation. The significant decrease in comprehensive income is because the exchange
rate between US$ and Rmb was comparatively stable during the period ended December 31, 2011.



Liquidity
and Capital Resources



As
of December 31, 2011 and June 30, 2011, the Company had a negative working capital of Rmb70,378 (US$11,080) and Rmb198,080, respectively.
As of December 31, 2011, advances from the 45.6% stockholder totaled Rmb81,415,766 (US$12,816,738) compared to advances from the
45.6% stockholder of Rmb81,146,782 as of June 30, 2011. The 45.6% stockholder has confirmed its intention to provide financial
support to the Company.



Cash
used in operating activities for the six months ended December 31, 2011 was Rmb521,573 (US$82,108) as compared with Rmb485,997
for the six months ended December 31, 2010.  The cash used in operations was to fund operating losses of Rmb434,281
(US$68,366) and Rmb390,948 for the six months ended December 31, 2011 and 2010, respectively.



Cash
flows from financing activities have generally come from advances by the 45.6% stockholder of the Company.  During the
six months ended December 31, 2011 and 2010, the 45.6% stockholder has advanced Rmb559,343 (US$88,054) and Rmb487,080, respectively.



Critical
Accounting Policies



The
preparation of financial statements in conformity with accounting principles generally accepted in the U.S., or U.S. GAAP, requires
the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.



The
critical accounting policies and use of estimates are discussed in and should be read in conjunction with the annual consolidated
financial statements and notes included in the latest Form 10-K, as filed with the SEC, which includes audited consolidated financial
statements for the two fiscal years ended June 30, 2011.













Off
Balance Sheet Arrangements



The
Company does not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect
on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures
or capital resources that is material to investors.



Item
3.  Quantitative and Qualitative Disclosures About Market Risk



None



Item
4. Controls and Procedures



Evaluation
of Disclosure Controls and Procedures



The
responsibility for establishing and maintaining adequate controls resides with the Company’s management. The Company's management,
with the participation of its chief executive officer and chief financial officer, evaluated the effectiveness of the Company's
disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) and pursuant to Rules 13a-15(b) and 15d-15(b) under
the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. 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.



Based
on the Company's evaluation, the Company’s management, including its chief executive officer and chief financial officer,
concluded that as of the end of the period covered by this report, the Company's disclosure controls and procedures were effective
to ensure that information the Company is required to disclose in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and
that such information is accumulated and communicated to management, including the Company's chief executive officer and chief
financial officer, as appropriate, to allow timely decisions regarding required disclosure.





Changes
in Internal Control over Financial Reporting



The
Company regularly reviews its system of internal control over financial reporting and makes changes to its processes and systems
to improve controls and increase efficiency, while ensuring that the Company maintains an effective internal control environment.
Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.



There
were no changes in the Company's internal controls over financial reporting (as such term is defined under Rules 13a-15(f) and
15d-15(f) under the Exchange Act) in connection with such evaluation that occurred during the period covered by this Report on
Form 10-Q that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial
reporting.













PART
II – OTHER INFORMATION



Item 6. Exhibits.





|             |  |                                                                                                                                                                                           
|------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1         |  | Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer                                                                                           
|             |  |                                                                                                                                                                                           
|32.1         |  | Section 1350 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|             |  |                                                                                                                                                                                           
|101.INS XBRL |  | Instance Document                                                                                                                                                                         
|             |  |                                                                                                                                                                                           
|101.SCH XBRL |  | Taxonomy Extension Schema Document                                                                                                                                                        
|             |  |                                                                                                                                                                                           
|101.CAL XBRL |  | Taxonomy Extension Calculation Linkbuse Document                                                                                                                                          
|             |  |                                                                                                                                                                                           
|101.DEF XBRL |  | Taxonomy Extension Definitions Linkbuse Document                                                                                                                                          
|             |  |                                                                                                                                                                                           
|101.LAB XBRL |  | Taxonomy Extension Label Linkbuse Document                                                                                                                                                
|             |  |                                                                                                                                                                                           
|101.PRE XBRL |  | Taxonomy Extension Presentation Linkbuse Document                                                                                                                                         



















SIGNATURES



In
accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.





|Date:  February         
    , 2012 |                                         
|----------------------------------- | ----------------------------------------
|                                    | COL CHINA ONLINE INTERNATIOONAL
    INC.
|                                    | (Registrant)                            
|                                    |                                         
|                                    |                                         
|                                    | By:  /s/  Chi Keung Wong                
|                                    | Chi Keung Wong                          
|                                    | Chief Executive Officer and             
|                                    | Chief Financial Officer                 
|                                    | (Principal Accounting Officer)          
|                                    |                                         













EXHIBIT
INDEX





|Exhibit No.      Description
|----------------------------
|                            
|31.1                        
|                            
|32.1                        
|                            
|101.INS XBRL                
|                            
|101.SCH XBRL                
|                            
|101.CAL XBRL                
|                            
|101.DEF XBRL                
|                            
|101.LAB XBRL                
|                            
|101.PRE XBRL