UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                  FORM 10 - KSB


(MARK ONE)
[X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934 For the Fiscal Year Ended June 30, 2007.

OR

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______.


                       COL China Online International Inc.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

                                    Delaware
                  --------------------------------------------
                 (State or other jurisdiction of incorporation)

        333-39208                                          52-2224845
 ----------------------                      ----------------------------------
(Commission File Number)                    (IRS Employer Identification Number)

                       3176 South Peoria Court, Suite 100
                             Aurora, Colorado 80014
            ---------------------------------------------------------
           (Address of principal executive offices including zip code)

                                 (303) 695-8530
           -----------------------------------------------------------
          (Small Business Issuer telephone number, including area code)

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

      Securities registered pursuant to Section 12(g) of the Exchange Act:
                          $.001 par value common stock

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]

<PAGE>


Check here if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.  [X]

Issuer's revenues for its most recent fiscal year:  $249,409.

As of December 31, 2006, the aggregate market value of the voting stock held by
non-affiliates of the issuer was approximately $197,750. Because there is no
public trading market for the issuer's common stock, this calculation is based
upon the sale price of $.05 per share of common stock sold in the Registrant's
initial public offering pursuant to a Registration Statement on Form SB-2/A
declared effective by the U.S. Securities and Exchange Commission on February 8,
2001 (Registration No. 333-32908). Without asserting that any director or
executive officer of the issuer, or the beneficial owner of more than five
percent of the issuer's common stock, is an affiliate, the shares of which they
are the beneficial owners have been deemed to be owned by affiliates solely for
this calculation.

The number of shares of the registrant's common stock, par value $.001 per
share, outstanding as of September 21, 2007 was 50,155,000.





<PAGE>


                       COL China Online International Inc.
                     10-KSB for the Year Ended June 30, 2007

                                Table of Contents

PART I........................................................................2

Item 1.      Business.........................................................2

Item 2.      Properties.......................................................9

Item 3.      Legal Proceedings................................................9

Item 4.      Submission of Matters to a Vote of Security Holders..............9


PART II......................................................................10

Item 5.      Market for Common Equity and Related Stockholder Matters........10

Item 6.      Management's Discussion and Analysis or Plan of Operation.......10

Item 7.      Financial Statements............................................13

Item 8.      Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure .......................................13

Item 8A.     Controls and Procedures.........................................13

Item 8B.     Other Information ..............................................14


PART III.....................................................................14
--------

Item 9.      Directors, Executive Officers, Promoters and Control Persons:
             Compliance with Section 16(a) of the Exchange Act...............14

Item 10.     Executive Compensation..........................................16

Item 11.     Security Ownership of Certain Beneficial Owners and Management..17

Item 12.     Certain Relationships and Related Transactions..................19

Item 13.     Exhibits........................................................21

Item 14.     Principal Accountant Fees and Services..........................22


                                       i

<PAGE>


                                     PART I

Item 1.  Business

Overview of COL International

         COL China Online International Inc., which is referred to herein as
"COL International", the "Company", "our Company", "we", "us" or "our", was
formed on February 18, 2000 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. Beginning in approximately
January 2004, the Company focused its business on internet and telecommunication
convergence solutions and customer-specific solutions for the retail industry.

         Initial Public Offering - In July 2001, the Company completed its
initial public offering of common stock. The Company issued 1,655,000 shares of
common stock in this offering at US$0.05 per share (approximately US$83,000).
All net proceeds from this offering were used to pay costs associated with the
offering.

         Going Concern - The ability of COL International to continue operations
as a going concern is dependent upon continued support from Honview
International Limited (Honview), a former shareholder of Migration, which is now
a major stockholder of COL International, until such time as, when or if, the
combined entity of COL International and Migration achieve profitable operations
and/or additional funds are raised in future private and public offerings.

         Acquisition - In September 2001, the Company acquired all the
outstanding shares of common stock of Migration in exchange for 40.2 million
shares of the Company's common stock. As a result of the acquisition, Migration
became a wholly-owned subsidiary of COL International. However, for accounting
purposes, this transaction is treated as a reverse acquisition, whereby
Migration was considered an acquirer.

         Migration was formed on May 18, 1998 and has two subsidiaries, Shenzhen
Knowledge & Communications Co., Ltd. (formerly Shenzhen Rayes Electronic Systems
Co., Ltd.), referred to as Joint Venture, and Shanghai Shangyi Science and Trade
Information Consulting Co., Ltd., referred to as Shangyi, in which it has 90%
and 70% equity interests, respectively. The Joint Venture and Shangyi are
Sino-foreign equity joint ventures in the People's Republic of China, or the
PRC. Most of the operations of Migration are through the Joint Venture, which
did not commence substantive operations until the spring of 1999.

         Migration initially provided marketing and technical services for
Internet Service Providers (ISP) and value-added services generally related to
the installation of computer network systems (i.e., Local Area Networks or LANs)
in the PRC.

         Sale of Wuhan Operations - On July 5, 2002, COL International entered
into a sales and purchase agreement with a third party to sell the Company's
Wuhan operations for an aggregate sales price of Rmb750,000 (approximately
US$90,614). The sale included the entire ownership of the Wuhan Education Net
and accounts receivables of Wuhan branch of the Joint Venture. The transaction
resulted in a net gain of approximately Rmb375,439 (approximately US$45,360),
which was recognized in the fiscal year ended June 30, 2003. The decision to
sell the business of Wuhan branch was made after consideration of the past
operating results of the branch.

         Recent Developments: Termination of Plan of Operations - Because the
Company's past business model was not successful, the Company developed a new
business model in late 2003. Since this time, the Company has focused on the
business of providing internet and telecommunication convergence solutions to
its customers. However, the Company's Board of Directors is currently
considering an option and anticipates that it will discontinue the Company's

                                     Page 2
<PAGE>


current operations upon expiration of the business license of the Joint Venture
on December 10, 2007. The majority of business activities have been suspended
effective July 2007. The Company has hired an accounting firm in the PRC to
handle any necessary procedures relating to the winding up of the Joint Venture,
which management expects will take a minimum of three months to complete. The
Company intends to use any amounts collected from its accounts receivable and
deposits paid to pay any outstanding liabilities or accounts payable, and does
not expect that there will be any assets left to distribute to the parties of
the Joint Venture of shareholders of the Company. For further information
regarding the Company's Plan of Operations following the termination of its
business, see Part II, Item 6 "Management's Discussion and Analysis or Plan of
Operation" below.

Exchange Rate

         In this report, references to "U.S. dollars," "US$" or "$" are to U.S.
currency and references to "Renminbi," "RMB" or "Rmb" are to China's currency.
Solely for the convenience of the reader, this report contains translations of
certain Renminbi amounts into U.S. dollars at specified rates. These
translations should not be construed as representations that the Renminbi
amounts actually represent such U.S. dollar amounts or could be converted into
U.S. dollars at the rate indicated. The Rmb is not a freely convertible
security. Unless otherwise stated, conversion of amounts from Renminbi into
United States dollars for the convenience of the reader has been made at the
exchange rate of US$1.00 = Rmb7.6248, which was close to the exchange rate on
June 30, 2007 and is not expected to have a material effect on the Company's
financial statement.

         The following table sets forth certain information concerning exchange
rates between Renminbi and U.S. dollars for the periods indicated:

                                         Noon Buying Rate (1)
                       --------------------------------------------------------
   Calendar Year         Period End            Average (2)   High         Low
   -------------       -----------------       --------      ----         ---
                                             (Rmb per US$)
                       --------------------------------------------------------
        1996               8.3284                8.3387      8.5000      8.3267
        1997               8.3099                8.3193      8.3260      8.3099
        1998               8.2789                8.2969      8.3100      8.2778
        1999               8.2795                8.2785      8.2800      8.2770
        2000               8.2774                8.2784      8.2799      8.2768
        2001               8.2766                8.2772      8.2783      8.2766
        2002               8.2771                8.2769      8.2774      8.2765
        2003               8.2776                8.2774      8.2800      8.2767
        2004               8.2866                8.2871      8.2870      8.2468
        2005               8.2865                8.2869      8.2868      8.2365
        2006               8.0353                8.0807      8.2666      7.9665
2007 (through June)        7.6248                7.8285      7.9950      7.6035


----------------------

(1)  The noon buying rate in New York for cable transfers payable in foreign
     currencies as certified for customs purposes by the Federal Reserve Bank of
     New York.

(2)  Determined by averaging the rates on the last business day of each month
     during the relevant period.

Corporate Structure

         Prior to January 1, 2004, our operations consisted primarily of
internet related services, including business-to-business e-commerce, online
distance learning, network engineering services, website hosting and ISP
consulting. Because this past business model was not successful, the Company
developed a new business model. After January 2004, the Company developed two IT
businesses through two divisions. COL Convergence focused on the provision of


                                     Page 3

<PAGE>


internet and telecommunication convergence solutions and COL Interactive focused
on providing customer-specific solutions for the retail industry. As of June 30,
2005, all assets and operations unrelated to the business of COL Convergence and
COL Interactive had been disposed of. Thus, the financial statements for the
period ending June 30, 2007, include only operations of COL Convergence and COL
Interactive.

         Most of the Company's operations for the year ended June 30, 2007 were
conducted through the Joint Venture, Shenzhen Knowledge & Communications Co.,
Ltd. (formerly Shenzhen Rayes Electronic Systems Co., Ltd.), a Sino-foreign
joint venture, of which Migration owns 90 percent of the equity interests.

         Shenzhen Rayes Group Co., Ltd., or Rayes Group, a privately owned
limited liability company incorporated in China, owns the other ten percent of
the equity interests in the Joint Venture. Migration also owns 70 percent of the
outstanding equity interests of Shanghai Shangyi Science and Trade Information
Consulting Co., Ltd, which owns a Chinese website for trading construction
materials. It was sold during 2003.

         The following chart shows the corporate structure of COL International
(inactive entities have been omitted):

           Corporate Structure of COL China Online International Inc.

                                             -----------------------------------
                                             COL China Online International Inc.
                                             Delaware
                                             -----------------------------------
                                                            100%
  -----------------------------               ------------------------------
  Shenzhen Rayes Group Co., Ltd.              Migration Developments Limited
            China                                 British Virgin Islands
  -----------------------------               ------------------------------
              10%                                   90%
  --------------------------------------------------------
  Shenzhen Knowledge & Communications Co., Ltd.
  (formerly Shenzhen Rayes Electronic Systems Co.,
                        Ltd.)
  --------------------------------------------------------

  -------------
  Shanghai COL
     Branch
  -------------


Business of the Joint Venture

         Prior to January 1, 2004, the Joint Venture conducted business in five
principal areas, including: network engineering, web hosting, integrated
solutions for small and medium sized enterprises, online services for export
companies and business to business e-commerce. A more detailed account of those
areas of business is set forth in the Company's previous filings.

         Because the Company's past business model was not successful, the
Company developed a new business model and developed two IT businesses through
its two divisions, COL Convergence and COL Interactive. COL Convergence focuses
on the business of providing internet and telecommunication convergence
solutions, and COL Interactive focuses on providing customer-specific solutions
for the retail industry.

                                     Page 4
<PAGE>


Term and Scope of Licenses

         On September 15, 1999, the State Administration of Industry and
Commerce granted the Joint Venture a certificate of approval to establish its
enterprise and a business license with a business scope for "computer software,
hardware and network systems, and the development of telecommunications
hardware." The term of the business license is for ten years beginning on
December 11, 1997 to December 10, 2007, the date in which the Joint Venture,
under the name Neihi Electronic Systems Co. Ltd., was formed. All business
activities of the Joint Venture will cease upon expiration of the business
license on December 10, 2007.

Research and Development

         In the years ended June 30, 2007 and June 30, 2006, the Company did not
incur any research and development costs as compared to Rmb 658,172 (US$79,427)
during the year ended June 30, 2005, and Rmb 133,658 (US$16,128) during the year
ended June 30, 2004. The Company did not incur any research and development
costs during the years ended June 30, 2003 and 2002.

Employees

         The Joint Venture is subject to the Sino-foreign Equity Joint Venture
Enterprise Labour Management Regulations. In compliance with those regulations,
the Joint Venture's management may hire and discharge employees and make other
determinations with respect to wages, welfare, insurance and discipline of
employees. The Joint Venture will, as required by law, establish special funds
for enterprise development, employee welfare and incentives, as well as a
general reserve. In addition, the Joint Venture is required to provide its
employees with facilities sufficient to enable the employees to carry out trade
union activities.

         As of June 30, 2007, the Joint Venture had 7 employees, all of whom
were employed full time. If the Board of Directors affirmatively decides to
cease the current business of the Company, these positions will eventually be
terminated as the business of the Company and the Joint Venture winds up.

Taxation

         A Sino-foreign joint venture with a minimum term of ten years that is
engaged in internet services is exempt from state income tax for the first year
after becoming profitable. For two years thereafter, it is eligible for a 50
percent reduction in applicable state income tax. The Joint Venture has not yet
become profitable, and due to the Company's current plan to end its current
business, the Company does not believe it will be able to take advantage of
these tax advantages.

Distribution of Profits

         After provision for social welfare funds for employees and provision
for taxation, the profits, if any, of the Joint Venture will be available for
distribution to the parties in proportion to their respective capital
contributions. Any such distributions must be authorized by the Joint Venture's
board.

Assignment of Interest

         Any assignment of an interest in the Joint Venture must be approved by
the Chinese government. The Chinese joint venture laws also provide for
preemptive rights and the consent of the other joint venture party for any
proposed assignments by one party to a third party.

                                     Page 5
<PAGE>


Liquidation

         Under the Chinese joint venture laws, the Joint Venture may be
liquidated in certain limited circumstances, including expiration of the
ten-year term or any term of extension, the inability to continue operations due
to severe losses, force majeure, or the failure of a party to honor its
obligations under the joint venture agreement or the Articles Of Association in
such a manner as to impair the operations of the joint venture. The Chinese
joint venture laws provide that, upon liquidation, the net asset value (based on
the prevailing market value of the assets) of a joint venture shall be
distributed to the parties in proportion to their respective registered capital
in the joint venture. Currently, the Company does not expect that there will be
any distribution to the parties of the Joint Venture if the Board of Directors
affirmatively decides to cease business effective in December 2007.

Resolution of Disputes

         In the event of a dispute between the parties of the Joint Venture,
attempts will be made to resolve the dispute through friendly consultation or
mediation. In the absence of a friendly resolution, the parties have agreed that
the matter will first be referred to the Shenzhen Committee of the International
Economic and Trade Arbitration Commission, whose decisions are final and
enforceable in Chinese courts. The losing party will be liable for the
arbitration fees.

Expropriation

         The Chinese joint venture laws provide that China will not nationalize
or requisition enterprises in which foreign funds have been invested. However,
under special circumstances, when public interest requires, enterprises with
foreign capital may be legally requisitioned and appropriate compensation will
be made.

Disclosure Regarding Forward-Looking Statements and Cautionary Statements

         Forward-Looking Statements

         This Annual Report on Form 10-KSB includes "forward-looking
statements." All statements other than statements of historical fact included in
this Annual Report, including without limitation under Item 1: "Business" and
Item 6: "Management's Discussion and Analysis of Financial Condition and Results
of Operations," regarding our financial position, business strategy, plans and
objectives of our management for future operations and capital expenditures, and
other matters, other than historical facts, are forward-looking statements.
Although we believe that the expectations reflected in such forward-looking
statements and the assumptions upon which the forward-looking statements are
based are reasonable, we can give no assurance that such expectations will prove
to have been correct.

         Additional statements concerning important factors that could cause
actual results to differ materially from our expectations are disclosed in the
following "Cautionary Statements" section and elsewhere in this Annual Report.
All written and oral forward-looking statements attributable to us or persons
acting on our behalf subsequent to the date of this Annual Report are expressly
qualified in their entirety by the following Cautionary Statements.

Risk Factors that May Affect Future Operating Results

         You should carefully consider the risks described below before making
an investment decision. The risks and uncertainties described below are not the
only ones facing our Company. Additional risks and uncertainties not presently
known to us or what we currently deem 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. In such case, the trading price of our common stock could decline and

                                     Page 6
<PAGE>


you could lose all or part of your investment. You should also refer to the
other information about us contained in this Form 10-KSB, including our
financial statements and related notes.

         We have yet to achieve or sustain profitability or positive cash flows
from our operating activities, and our auditors have issued a going concern
report.

         We have yet to achieve or sustain profitability or positive cash flows
from our operating activities. Furthermore, our auditors have included in their
report on the financial statements that there is substantial doubt about our
ability to continue operations as a going concern. The financial statements have
been prepared on a going concern basis that contemplates the realization of
assets and liquidation of liabilities in the normal course of business. As
discussed herein, the Board of Directors has decided to consider discontinuing
the Joint Venture's operations in December 2007, and therefore, the assets and
liabilities could be liquidated at amounts less than their reported amounts.
Management has estimated that the reported amounts approximate values estimated
to be received upon terminating of the Joint Venture's operations.

         We have no operating history nor any revenues or earnings from
operations.

         We have no operating history nor any revenues or earnings from
operations. We have no assets or other financial resources. We have operated at
a loss to date and will, in all likelihood, continue to sustain operating
expenses without corresponding revenues, at least until the consummation of a
business combination.

         Our management does not devote its full time to our business and
operations.

         In connection with the Board of Directors' decision to consider
discontinuing business operations as of December 2007, our management will only
devote minimal time to the new business plan. Management does not have any
written employment agreement with us, and is not expected to enter into one. Our
management will serve only on a part-time basis. We lack the funds or other
incentives to hire full-time experienced management. Management has other
employment or business interests to which we expect he will devote his primary
attention to after we discontinue operations, devoting time to the Company only
on an as-needed basis.

         Our proposed operations are purely speculative.

         The success of our proposed plan of operation will depend to a great
extent on the operations, financial condition and management of the identified
target company. While business combinations with entities having established
operating histories are preferred, there can be no assurance that we will be
successful in locating candidates meeting these criteria. If we complete a
business combination, the success of our operations will be dependent upon
management of the target company and numerous other factors beyond our control.
No combination candidate has been identified for acquisition by the Board of
Directors or Management, nor has any determination been made as to any business
for the Company to enter, and stockholders will have no meaningful voice in any
such determinations. There is no assurance that we will be successful in
completing a combination or originating a business, nor that we will be
successful or that our shares will have any value even if a combination is
completed or a business originated.

         Our operations are highly dependent on our majority stockholder.

         Our continued existence is largely dependent upon the support of
Honview International Limited, our majority stockholder. As of June 30, 2007,
Honview owns approximately 45.6 percent of our outstanding shares of common
stock. In addition, Honview has continued to financial support the Company's
business. Pursuant to a Loan Agreement, Honview 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 COL International, any amounts loaned from Honview

                                     Page 7

<PAGE>


prior to February 8, 2001, the effective date of the registration statement
related to COL International's initial public offering, may be paid by us, at
the option of Honview, by converting, at any time after October 10, 2001, part
or all the unpaid principal amount of the loan into shares of COL
International'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 the effective date of that registration
statement may be paid, at the option of Honview, by converting, at any time
after October 10, 2001, part or all the unpaid principal amount of the loan into
shares of COL International'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. Since 2001, there were
additional advances from Honview to COL. As of June 30, 2007, additional
advances from Honview without any conversion rights totaled Rmb80,129,352
(US$10,509,098).

         With the Board of Directors' decision to consider ceasing the
operations of the Joint Venture upon expiration of the business license on
December 10, 2007, there is substantial risk that stockholders other than
Honview may be significantly diluted or will be harmed due to the significant
liabilities currently owed to Honview. These liabilities may also deter
prospective target companies from seeking a business combination with us.

         Management has controlling ownership of COL International that creates
conflicts of interest.

         Kam Che Chan, our Chairman of the Board, and Paul Wong and Qi Yu Zhang,
two of our directors, are considered beneficial owners of 45.6 percent, 45.6
percent and 34.7 percent, respectively, of our outstanding shares of common
stock. Controlling ownership of our business by our directors could create
conflicts of interest. Although management's duties are directed to the best
interests of COL International, we cannot guarantee that conflicts of interests
will not arise.

         We may have significant difficulty in locating a viable business
combination candidate.

         We are and will continue to be an insignificant participant in the
business of seeking mergers with and acquisitions of business entities. A large
number of established and well-financed entities, including venture capital
firms, are active in mergers and acquisitions of companies that may be merger or
acquisition target candidates for us. Nearly all of these competitors have
significantly greater financial resources, technical expertise and managerial
capabilities than we do and, consequently, we will be at a competitive
disadvantage in identifying possible business opportunities and successfully
completing a business combination. Moreover, we will also compete with numerous
other small public companies in seeking merger or acquisition candidates.

         It is possible that the per share value of your stock will decrease
upon the consummation of a business combination.

         A business combination normally will involve the issuance of a
significant number of additional shares. Depending upon the value of the assets
acquired in a business combination, the current stockholders of the Company may
experience severe dilution of their ownership due to the issuance of shares in
the combination. Any combination effected by the Company almost certainly will
require its existing management and board members to resign, thus stockholders
have no way of knowing what persons ultimately will direct the Company and may
not have an effective voice in their selection.

         Any business combination that we engage in may have tax effects on us.

         Federal and state tax consequences, and possible international tax
consequences, will, in all likelihood, be major considerations in any business
combination that we may undertake. Currently, a business combination may be
structured so as to result in tax-free treatment to both companies pursuant to

                                     Page 8
<PAGE>


various federal and state tax provisions. We intend to structure any business
combination so as to minimize the federal and state tax consequences to both us
and the target company; however, there can be no assurance that a business
combination will meet the statutory requirements of a tax-free reorganization or
that the parties will obtain the intended tax-free treatment upon a transfer of
stock or assets. A non-qualifying reorganization could result in the imposition
of both federal and state taxes that may have an adverse effect on both parties
to the transaction.

         We are subject to the penny stock rules.

         Our securities may be classified as penny stock. The Securities and
Exchange Commission has adopted Rule 15g-9, which establishes the definition of
a "penny stock," for purposes relevant to us, as any equity security that has a
market price of less than $5.00 per share or with an exercise price of less than
$5.00 per share whose securities are admitted to quotation but do not trade on a
national securities exchange. For any transaction involving a penny stock,
unless exempt, the rules require delivery of a document to investors stating the
risks, special suitability inquiry, regular reporting and other requirements.
Prices for penny stocks are often not available and investors are often unable
to sell this stock. Thus, an investor may lose his investment in a penny stock
and consequently should be cautious of any purchase of penny stocks.

Item 2.  Properties

         COL maintains an office in the United States at 3176 South Peoria
Court, Suite 100, Aurora, Colorado 80014 through COL's North American
representative. The cost is included in the $1,000 per month paid to the
representative and this arrangement may be cancelled at any time.

         In February 2000, the Joint Venture purchased its offices in Wuhan,
consisting of approximately 501.3 square meters, for Rmb2,026,255 (US$244,766)
and has a related obligation for Rmb1,500,000 (US$181,200). In December 2000,
the Joint Venture entered into a supplemental agreement with the seller of this
property requiring a further down payment of Rmb110,000 that was paid in early
January 2001. This agreement also requires that the remaining balance of
Rmb1,390,000, plus accrued interest at the rate of 5.31% per annum, be repaid by
monthly installments of Rmb26,428 for five years during the period from January
2001 to December 2005. This property was not included in the divestiture of the
Wuhan operations in July 2002. The Joint Venture disposed of its Wuhan property
in November 2003 for a total consideration of Rmb1,911,486 (US$230,650) and
resulted in loss on disposal of Rmb230,750 (US$27,843).

         The Joint Venture also has a two-and-a-half-year lease that expires on
April 24, 2008 on an approximately 7,000 square foot office in Shanghai. The
lease costs approximately $12,800 (Rmb97,477) per month until the expiry of the
lease term. The lease is renewable upon mutual consent of the parties on the
expiration date; however, due to the Board of Director's decision to consider
ceasing the Company's business in December 2007, management would not anticipate
renewing the lease.

         All properties are in good condition.

Item 3.  Legal Proceedings


         We know of no litigation pending, threatened, or contemplated, or
unsatisfied judgments against COL International, or any proceedings of which the
Joint Venture is a party. We know of no legal actions pending or threatened, or
judgments entered against any of our officers or directors in their capacities
as such.

Item 4.  Submission of Matters to a Vote of Security Holders

         Not applicable.

                                     Page 9
<PAGE>


                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

         There is no established public trading market for any of COL
International's securities, and there is no assurance that a trading market will
develop. To the extent that a trading market in the common stock develops, of
which there is no assurance, it currently is anticipated that the common stock
will be quoted on the Electronic Bulletin Board. It should be assumed that even
if the common stock is eventually quoted on the Electronic Bulletin Board, of
which there is no assurance, there will be an extremely limited trading market -
and very little liquidity - for the common stock. As of June 30, 2007, the
Company had approximately 331 shareholders of record.

Recent Sales of Unregistered Securities

         Not applicable.

Equity Compensation Plan Information

Securities authorized for issuance under our equity compensation plans as of
June 30, 2007 are as follows:

<TABLE>
<CAPTION>

                         Equity Compensation Plan Table

-------------------------------------- --------------------------- -------------------------- ------------------------
                                        Number of securities to        Weighted average        Number of securities
                                        be issued upon exercise        exercise price of        remaining available
                                         of outstanding option,      outstanding options,       for future issuance
                                          warrants and rights         warrants and rights
-------------------------------------- --------------------------- -------------------------- ------------------------

<S>                                                <C>                         <C>                   <C>
Equity compensation plans approved                 0                           0                     4,000,000
by security holders
-------------------------------------- --------------------------- -------------------------- ------------------------
Equity compensation plans not                     n/a                         n/a                       n/a
approved by security holders
-------------------------------------- --------------------------- -------------------------- ------------------------
Total:                                             0                           0                     4,000,000
-------------------------------------- --------------------------- -------------------------- ------------------------
</TABLE>


Item 6.  Management's Discussion and Analysis or Plan of Operation

         The following is COL International's plan of operation and a discussion
and comparison of the financial condition and results of operations of COL
International as of June 30, 2007 and the periods then ended. These discussions
should be read in conjunction with our financial statements, the notes to the
financial statements, and the other financial data included elsewhere in this
report.

         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 above
in this Annual Report on Form 10-KSB for the year ended June 30, 2007.

Recent Developments: Termination of Plan of Operations

         Because the Company's past business model was not successful, the
Company developed a new business model in late 2003. Since this time, the
Company has focused on the business of providing internet and telecommunication
convergence solutions to its customers. However, after the end of the 2007

                                    Page 10
<PAGE>

fiscal year, the Company's Board of Directors decided to consider discontinuing
the Company's current operations upon expiration of the business license of the
Joint Venture on December 10, 2007. The majority of business activities have
been suspended effective July 2007. The Company has hired an accounting firm in
the PRC to handle any necessary procedures relating to the winding up of the
Joint Venture, which management expects will take a minimum of three months to
complete. The Company intends to use any amounts collected from its accounts
receivable and deposits paid to pay any outstanding liabilities or accounts
payable, and does not expect that there will be any assets left to distribute to
the parties of the Joint Venture of shareholders of the Company.

         If the Board of Directors affirmatively decides to cease the business
of the Joint Venture, the Company will become a "shell company" after the
expiration of the Joint Venture's business license in December 2007. Under Rule
12b-2 of the Exchange Act of 1934, as amended, 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.
After becoming a shell company, the Company will likely seek 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.

         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.

         The Company's auditors have included in their report on the financial
statements that there is substantial doubt about the Company's ability to
continue operations as a going concern. The financial statements have been
prepared on a going concern basis that contemplates the realization of assets
and liquidation of liabilities in the normal course of business.

Results of Operations

         Revenues for the year ended June 30, 2007 was the services commission
revenues from telecommunication of Rmb1,135,609 (US$148,937) and marketing fee
of Rmb766,272 (US$100,472) compared to services commission revenues from
telecommunication and marketing fee of Rmb4,344,744 and Rmb963,516 respectively
for the year ended June 30, 2006.

         The Company contracted with a telecommunication services company
selling IDD (IP phone) to end-users and receives telecommunication services
commission income from the agent, which is a percentage of monthly usage of the
end users.

         In addition, the Company contracted with Commonwealth Business Media,
Inc., or CBM, on a revenue sharing basis to promote and market their trade data
products to end users in the region of Eastern China.

                                    Page 11
<PAGE>


         For the year ended June 30, 2007, the Company had other income of
Rmb66,706 (US$8,748) as compared to Rmb2,634 for the year ended June 30, 2006.
"Other income" primarily represents interest income and miscellaneous income.
The net increase in other income is primarily due to an increase in
miscellaneous income.

         Also, during the fiscal year ended June 30, 2007, because of the
reduction in the Company's need for office space, the Company has sub-leased of
its surplus area to related companies totaled Rmb797,477 (US$104,590) and
Rmb912,500 for the year ended June 30, 2007 and 2006, respectively.

         General and administrative costs include salaries, rent, travel and
other overhead costs. For the year ended June 30, 2007 and 2006, general and
administrative costs totaled Rmb4,498,113 (US$589,934) and Rmb6,466,905,
respectively. The decrease is primarily the result of a decrease in salaries and
staff welfare as the number of staff decreased from fiscal 2006 to fiscal 2007.

         Amortization and depreciation expense for the year ended June 30, 2007
and 2006 was Rmb83,855 (US$10,998) and Rmb417,365, respectively. The decrease is
due to parts of the computer equipments cost were written off in last year and
during the year and resulted in less depreciation.

         Provision for impairment loss on Property, Office Space and Equipment
for the year ended June 30, 2007, and 2006 was Rmb150,194 (US$19,698) and
RMB244,924, respectively. The impairment loss is related to the decoration and
plant and equipment.

         Waiver of loans for the year ended June 30, 2007 and 2006 were
Rmb51,236 (US$6,720) and Rmb317,760, respectively. The loan waiver for fiscal
year ended June 30, 2007 was a payable owed to Shanghai Paisi Computer
Technology Ltd., a group company, while the loan waiver for fiscal year ended
June 30, 2006 was related to the other payables owed to Shanghai Shangyi Science
and Trade Information Consulting Co. Ltd. (Shangyi), a subsidiary of the
Company.

         The Company has not recognized any future tax benefits resulting from
its operating losses due to the uncertainty of future realization. No share of
loss has been absorbed by minority shareholder for the years ended June 30, 2007
and 2006 as its initial capital contribution was fully absorbed.

         The above has resulted in net losses of Rmb2,151,466 (US$282,168) and
Rmb3,949,385 for the year ended June 30, 2007 and 2006, respectively. The
Company expects to continue to incur losses.

         The Company has recorded other comprehensive income of Rmb771,186
(US$177,346) and Rmb490,160 for the year ended June 30, 2007 and 2006,
respectively, directly in the stockholders' equity. This comprehensive income is
resulted from the unrealized gain on translation of United States dollar
advances from the majority stockholder, Honview International Limited, from US$
to Rmb on consolidation. The significant increase in comprehensive income is
resulted from the appreciation of Rmb during the year.

Liquidity and Capital Resources

         As of June 30, 2007 and 2006, the Company had a negative working
capital of Rmb301,627 (US$39,560) and Rmb453,274, respectively. As of June 30,
2007, advances from the Company's majority stockholder totaled Rmb80,129,352
(US$10,509,098). COL's ability to continue operations is currently dependent
upon continuing financial support from its majority stockholder. Although the
Company's Board of Directors has decided to consider discontinuing the Joint
Venture's business as of December 2007, the Company will still be dependent on
its majority stockholder to continue to fund the dormant company and any of its
liabilities.

                                    Page 12
<PAGE>


         Cash used in operating activities for the year ended June 30, 2007 was
Rmb2,083,044 (US$273,194) as compared with Rmb3,104,678 for the year ended June
30, 2006. The cash used in operations was to fund operating losses of
Rmb2,151,466 (US$282,168) and Rmb3,949,385 generally offset by non-cash expenses
related to amortization and depreciation of Rmb83,855 (US$10,998) and Rmb417,365
and provision for impairment loss on property, office space and equipment of
Rmb150,194 (US$19,698) and Rmb244,924 for the year ended June 30, 2007 and 2006,
respectively.

         Cash used in investing activities of Rmb3,333 (US$437) for the year
ended June 30, 2007 was due to acquisition of equipment during the year compared
to cash used in investing activities for the year ended June 30, 2006 was
Rmb39,980.

         Cash flows from financing activities have generally come from advances
by the majority stockholder of the Company and other loan (repaid to) or raised
from a third party. During the year ended June 30, 2007 and 2006, the majority
stockholder has advanced Rmb2,178,722 (US$285,750) and Rmb2,598,169,
respectively.

Critical Accounting Policies

         The Company's significant accounting policies are described in Note 2
to the financial statements for the years ended June 30, 2007 and 2006 included
in the Company's Form 10-KSB in the accompanying financial statements and notes
to consolidated financial statements. The Company believes its most critical
accounting policies include accounting for provision for doubtful debts and
impairment loss provision and the Company's ability to continue operations as a
going concern basis.

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 7.  Financial Statements

         The financial statements and schedules that constitute Item 7 of this
Annual Report on Form 10-KSB are included in Item 13 below.

Item 8.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

         See Part 14 below, incorporated herein by reference.

Item 8A. Controls and Procedures

         Within the 90-day period prior to the filing of this report, an
evaluation was carried out under the supervision and with participation of the
Company's management, including our Chief Executive Officer and Principal
Financial Officer, of the effectiveness of our disclosure controls and
procedures (as defined in Rule 13a-14 (c) under the Securities Exchange Act of
1934). Based on their evaluation, as of June 30, 2007, our Chief Executive
Officer and Principal Financial Officer have concluded that disclosure controls
and procedures are, to the best of their knowledge, effective to ensure that
information required to be disclosed by the Company 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. Subsequent to the date of their evaluation, there were not
significant changes in the Company's internal controls or in other factors that
could significantly affect these controls, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                    Page 13
<PAGE>


Item 8B. Other Information

         Not applicable.
                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons:
         Compliance with Section 16(a) of the Exchange Act

Directors and Officers

         Our directors and executive officers are listed below, including their
respective names, ages and positions with COL International. Each director,
unless such director resigns or is removed, shall serve on the Company's Board
of Directors until the next annual meeting or until his successor is duly
elected and qualified. Each officer, unless officer resigns or is terminated,
shall serve in his respective position until his successor is duly appointed and
qualified.

     NAME              Age          Position with COL International
     ----              ---          -------------------------------

Kam Che Chan           58     Chairman of the Board
Chi Keung Wong         69     Chief Executive Officer, Chief Financial Officer
                              and Chief Operating Officer
Anthony Ng             58     Director and Secretary
Paul Wong              57     Director
Qi Yu Zhang            49     Director

         Kam Che Chan has served as a director and Chairman of the Company's
Board of Directors since our formation in 2000. He has been the General Manager
and a director of Hogan Industries Limited since 1989, which has operations in
China, Vietnam, the U.S. and Mexico and nearly 5,000 staff members. In these
capacities, Mr. Chan has been working in project management and marketing for
Hogan Industries. After majoring in accounting at what is now Hong Kong Baptist
University in Hong Kong, he spent 18 years working in several major certified
public accounting firms in Hong Kong before moving into marketing and
management.

         Chi Keung Wong has been a director of the Joint Venture since 1999 and
the Chief Financial Officer of the Joint Venture since 1999. Mr. Wong also has
been a director and Chief Financial Officer of Migration since July 1998. Mr.
Wong was appointed as Chief Executive Officer, Chief Financial Officer, and
Chief Operating Officer of the Company effective September 1, 2004. Mr. Wong has
40 years of experience as a financial controller and an auditor both in
Australia and Hong Kong. He started his career in the audit department of Lowe
Bingham & Mathews (now PricewaterhouseCoopers LLP) in 1960 after having
graduated in Hong Kong in accounting. He was the Financial Controller for the
YMCA of Darwin, Australia from 1984 through July 1998. Chi Keung Wong is the
brother of Paul Wong, one of the directors of the Company.

         Anthony Ng became the Secretary, and also was elected as a director, of
the Company effective March 31, 2002. From March 31, 2002 to September 1, 2004,
he served as the Chief Executive Officer of COL International. From 1996 to
1999, Mr. Ng was the Chief Executive Officer of Pan Pacific Strategy
Corporation, a listed company in Canada, which is an investment company with
investments mainly in the Asian region and the People's Republic of China. From
1999 to 2001, Mr. Ng was the Chief Executive Officer of Zuespac Capital Partners
Limited, which is a financial consulting company.

                                    Page 14
<PAGE>


         Paul Wong has been a director of the Company since our formation in
2000. He is the founder and has served as the Chairman of the board of directors
of Hogan Industries Limited since 1982. Mr. Wong's factories are suppliers of
molded baby bottles to leading U.S. and European brand names, as well as
precision scale models to major airlines worldwide. His responsibilities include
new product concepts regarding investments in high tech companies in Asia. Paul
Wong is the brother of Chi Keung Wong, the Company's Chief Executive Officer,
Chief Financial Officer, and Chief Operating Officer.

         Qi Yu Zhang has been a director of the Company since our formation in
2000. He became Chief Executive Officer of the Rayes Group in April 1997. Mr.
Zhang was one of the founders and has served as a director of the Rayes Group
since 1995. In these capacities, he has been responsible for the ISP and ICP
development and operations of the Rayes Group in more than ten Chinese cities.
Mr. Zhang also became the Chief Executive Officer and a director of Migration in
July 1998. Mr. Zhang is a member of the Computer Engineering Application
Association in China and has obtained advanced degrees after studying Computer
Telecommunications at Xian Electronic Technology University.

Following are biographies of the directors and certain key employees of the
Joint Venture:

Directors and other Key Employees of the Joint Venture

         Kam Che Chan, 58, has been the Deputy Chairman of the board of the
Joint Venture since 1999. Refer to his business experience above under the
caption, "Directors and Officers."

         Xiang Yang Chang, 56, has been the General Manager of the Joint
Venture's Wuhan Office since 1999. Prior to this position, Mr. Chang was General
Manager of the Rayes Group from 1993 to 1999. Mr. Chang has published several
books and periodicals on computer communications. He was a Director of Research
at Harbin University after graduating with advanced degrees in computer science
in 1968. He has extensive administrative experience.

         Liang Qiao, 33, has been a director and Deputy Chief Financial Officer
of the Joint Venture since 1999. Mr. Qiao is a graduate of the Shanghai Finance
University, where he studied investment finance management. He worked as an
accountant during the early 1990s before joining the Rayes Group in 1996, where
he ran the investment management department.

         Chi Keung Wong, 69, has been a director of the Joint Venture since 1999
and the Chief Financial Officer of the Joint Venture since 1999. Refer to his
business experience above under the caption, "Directors and Officers".

         Paul Wong has been a director of the Joint Venture since 1999. Refer to
his business experience above under the caption, "Directors and Officers".

         Qi Yu Zhang has been the Chairman of the board of the Joint Venture
since 1999. Refer to his business experience above under the caption, "Directors
and Officers".

Involvement in Certain Legal Proceedings

         None of the Company's directors, director nominees or executive
officers has been involved in any transactions with the Company or any of the
Company's directors, executive officers, affiliates or associates that are
required to be disclosed pursuant to the rules and regulations of the SEC other
than as set forth in "Item 12. Certain Relationships and Related Transactions"
below. None of the directors, director designees or executive officers to our
knowledge has been convicted in a criminal proceeding, excluding traffic
violations or similar misdemeanors, or has been a party to any judicial or
administrative proceeding during the past five years that resulted in a
judgment, decree or final order enjoining the person from future violations of,

                                    Page 15

<PAGE>


or prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws, except for matters
that were dismissed without sanction or settlement.

Compliance with Section 16(a) of the Securities Exchange Act

         Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of the Company's common stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company.
The Company believes that during the year ended June 30, 2007, its officers,
directors and holders of more than 10% of the Company's common stock complied
with all Section 16(a) filing requirements. In making these statements, the
Company has relied solely upon its review of copies of the Section 16(a) reports
filed for the fiscal year ended June 30, 2007 on behalf of the Company's
directors, officers and holders of more than 10% of the Company's common stock.

Audit Committee

         The Company has not established an audit committee and does not
currently have an audit committee financial expert on either an audit committee
or the Board of Directors. Although the Company believes it would be desirable
to have an audit committee financial expert, the Company currently believes that
the costs associated with retaining such an expert would be prohibitive.

Code of Ethics

         The Company has not adopted a code of ethics for its executive
officers.

Item 10. Executive Compensation

Summary Compensation Table

         The following table sets forth in summary form the compensation
received by Chi Keung Wong, our Chief Executive Officer, Chief Financial
Officer, and Chief Operating Officer. None of our employees and no employees of
the Joint Venture received total salary and bonus in excess of $100,000 during
the last fiscal year.

<TABLE>
<CAPTION>

                                                          Summary Compensation Table

                                                                                        Change in
                                                                                        Pension
                                                                                        Value and
                                                                                       Nonqualified
                                                                       Non-Equity        Deferred
                                             Bonus   Stock   Option  Incentive Plan   Compensation      All Other
Name and Principal                Salary($)   ($)    Award   Awards  Compensation        Earnings      Compensation    Total
Position                   Year      (1)      (2)     ($)     ($)       ($)(3)            ($)(3)         ($)(4)         ($)
------------------------   ----   --------   -----   -----   -----   --------------   -------------    ------------    -------
<S>                        <C>    <C>                                                                                  <C>
Chi Keung Wong,            2007   $57,051                                                                              $57,051
Chief Executive Officer,
Chief Financial Officer
and Chief Operating
Officer
</TABLE>


Compensation of Directors

         The Company has no standard arrangements in place or currently
contemplated to compensate the Company's directors for their service as
directors or as members of any committee of directors.

                                    Page 16
<PAGE>


Employment Contracts and Termination Of Employment and Change-In-Control
Arrangements

         The Company does not have and currently is not planning to have any
written employment contracts with respect to any of its directors, officers or
other employees. The Company has no compensatory plan or arrangement that
results or will result from the resignation, retirement, or any other
termination of an executive officer's employment or from a change-in-control of
COL International or a change in an executive officer's responsibilities
following a change-in-control.

Employee Retirement Plans, Long-Term Incentive Plans, and Pension Plans

         Other than our stock option plan that is described below under "2000
Stock Option Plan", the Company has no employee retirement plan, pension plan,
or long-term incentive plan to serve as incentive for performance to occur over
a period longer than one fiscal year.

2000 Stock Option Plan

         Pursuant to the Company's 2000 Stock Option Plan, the Company may grant
options to purchase an aggregate of 4,000,000 shares of common stock to key
employees and other persons who have contributed, or are contributing, to the
Company's success. The options granted pursuant to the 2000 Plan may be either
incentive options qualifying for beneficial tax treatment for the recipient, or
non-qualified options. The terms of the 2000 Plan concerning incentive options
and non-qualified options are substantially the same except that only employees
or employees of subsidiaries are eligible for incentive options and employees
and other individuals who have contributed or are contributing to the Company's
success are eligible for non-qualified options. With respect to options granted
to persons other than outside directors, the 2000 Plan also is administered by
an option committee that determines the terms of the options subject to the
requirements of the 2000 Plan.

         All options granted under the 2000 Plan will become fully exercisable
on the date that the options are granted or other dates that the Option
Committee determines and will continue for a period up to a maximum of ten
years. Options granted pursuant to the 2000 Plan are not transferable during the
optionee's lifetime. Subject to the other terms of the 2000 Plan, the option
committee has discretion to provide vesting requirements and specific expiration
provisions with respect to the incentive options and non-qualified options
granted. As of September 15, 2007, no options had been granted under the 2000
Plan.

Item 11. Security Ownership of Certain Beneficial Owners and Management

Beneficial Ownership

         As of September 21, 2007, there were 50,155,000 shares of common stock
outstanding. The following table sets forth certain information as of September
21, 2007, by all executive officers and directors as a group, and by each other
person known by us to be the beneficial owner of more than five percent of the
common stock:

<TABLE>
<CAPTION>

                                                          No. of Shares               Percentage of
      Name and Address of Beneficial Owner           Beneficially Owned (1)        Shares Outstanding
      ------------------------------------           ----------------------        ------------------

<S>                                                       <C>
Kam Che Chan (2)
Flat D3, 5/F
36 Broadcast Drive
Kowloon, Hong Kong                                         22,849,680                      45.6%


                                                    Page 17

<PAGE>


                                                          No. of Shares               Percentage of
      Name and Address of Beneficial Owner           Beneficially Owned (1)        Shares Outstanding
      ------------------------------------           ----------------------        ------------------

Paul Wong (3)
32-2A Clovelly Court
12 May Road
Hong Kong                                                  22,849,680                      45.6%

Qi Yu Zhang (4)
2811 City E. Station
Lai Zhen Mansion
40 Fu Min Road, Fu Tian Area                               17,350,320                      34.6%
Shenzhen, PRC  518033

First Strike Securities Limited (5)
18/F, Kam Sang Building
255-257 Des Voeux Road Central                             17,350,320                      34.7%
Hong Kong

Honview International Limited (6)
Room 1408, Lippo Sun Plaza
28 Canton Road                                             22,849,680                      45.6%
Kowloon, Hong Kong

Anthony Ng
Apt. 305, 9015 Leslie Street
Richmond Hill, Ontario
Canada  L4B 4J8                                             6,000,000                      12.0%

All Executive Officers and Directors as a group
(five persons) (2)(3)(4)                                   46,200,000                      92.1%
</TABLE>

----------------

(1)      "Beneficial ownership" is defined in the regulations promulgated by the
         SEC as having or sharing, directly or indirectly (A) voting power,
         which includes the power to vote or to direct the voting, or (B)
         investment power, which includes the power to dispose or to direct the
         disposition, of shares of the common stock of an issuer. Unless
         otherwise indicated, the beneficial owner has sole voting and
         investment power.

(2)      Kam Che Chan may be considered a beneficial owner of the 22,849,680
         shares of which Honview International Limited is the record owner. Mr.
         Chan is a director of Honview International Limited and he also is the
         beneficial owner of 15.20 percent of the outstanding equity interests
         of Honview. The shares to be issued to Honview are included three times
         in the table. They are listed as being held beneficially by each of Kam
         Che Chan, Honview International Limited and Paul Wong. Mr. Chan is the
         Chairman of our Board of Directors. See also footnotes 3 and 6, below.

(3)      Paul Wong may be considered a beneficial owner of the 22,849,680 shares
         of which Honview International Limited is the record owner. Mr. Wong is
         a beneficial owner of 39.21 percent of the outstanding equity interests
         in Honview. The shares to be issued to Honview are included three times
         in the table. They are listed as being held beneficially by each of
         Paul Wong, Kam Che Chan and Honview International Limited. Mr. Wong is
         a director of COL International. See also footnotes 2 and 6.

(4)      Qi Yu Zhang may be considered a beneficial owner of the 17,350,320
         shares of which First Strike Securities Limited is the record owner.
         Mr. Zhang is the beneficial owner of 20 percent of the outstanding
         equity interests of First Strike. The shares to be issued to First
         Strike are included twice in the table. They are listed as being held
         beneficially by both Qi Yu Zhang and First Strike. Mr. Zhang is a
         director of COL International. See also footnote 5, below.

                                    Page 18
<PAGE>


(5)      First Strike Securities Limited owns 17,350,320 shares of our common
         stock. These shares are included twice in the table. They are listed as
         being held beneficially by both First Strike Securities Limited and Qi
         Yu Zhang. See also footnote 4, above.

(6)      Honview International Limited owns 22,849,680 shares of our common
         stock. These shares are included three times in the table. They are
         listed as being held beneficially by each of Honview International
         Limited, Paul Wong and Kam Che Chan. See also footnotes 2 and 3, above.

Item 12. Certain Relationships and Related Transactions

         Honview International Limited owns 22,849,680 shares of our common
stock, or 45.6 percent of our outstanding common stock, and First Strike
Securities Limited owns 17,350,320 shares of our common stock, or 34.6 percent
of our outstanding common stock. Paul Wong is a director of Honview and he also
is a beneficial owner of 39.2 percent of the outstanding equity interests in
Honview. Mr. Wong also is a director of COL International.

         Kam Che Chan is a director of Honview and he also is the beneficial
owner of 15.2 percent of the outstanding equity interests of Honview. Mr. Chan
also is the Chairman of our Board of Directors.

         Qi Yu Zang is a director of First Strike and he also is the beneficial
owner of 20.0 percent of the outstanding equity interests of First Strike. Mr.
Zhang also is a director of COL International.

         During the periods ended July 31, 1999 and July 31, 2000, Honview paid
Rmb 4.6 million (or US$555,690) and Rmb 10 million (or US$1,208,000),
respectively, on behalf of Migration for the Joint Venture to purchase certain
equipment. Also during the period ended July 31, 1999, Honview paid Rmb 10
million (or US$1,208,000) on behalf of Migration for the Joint Venture's capital
contribution required to purchase intangibles from Rayes Group. Honview loaned
Migration these amounts and other advances summing up to approximately US$3
million in the beginning of 2000 without interest or collateral. At that time,
Honview agreed not to call its advances earlier than March 1, 2001. On October
10, 2000, the parties agreed to revise the terms to provide for the loan to be
repayable only out of 20 percent of Migration's pre-tax profits, if any, for
each fiscal year of Migration that begins on or after July 1, 2001 with no other
right of Honview for repayment. As a result of Migration becoming a wholly-owned
subsidiary of COL International, the pre-tax profits and fiscal year described
in the preceding sentence shall be those of COL International, with the pre-tax
profits of COL International to be determined on a fully consolidated basis in
accordance with U.S. generally accepted accounting principles.

         Pursuant to a Loan Agreement, Honview 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 of June 30, 2004, advances from Honview
totaled Rmb71,059,244 (US$8,574,371). As a result of Migration becoming a
wholly-owned subsidiary of COL International, any amounts loaned from Honview
prior to February 8, 2001, the effective date of the registration statement
related to COL International's initial public offering, may be paid at the
option of Honview, by converting, at any time after October 10, 2001, part or
all the unpaid principal amount of the loan into shares of COL International'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 the effective date of that registration statement may be
paid, at the option of Honview, by converting, at any time after October 10,
2001, part or all the unpaid principal amount of the loan into shares of COL
International'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. Since 2001, there were additional
advances from Honview to COL. As of June 30, 2007, additional advances from
Honview totaled Rmb80,129,352 (US$10,509,098) and there were no conversion
rights for these advances.

                                    Page 19
<PAGE>


         In February 2000, we sold an aggregate of 7,050,000 shares of our
common stock at a purchase price of $.001 per share in connection with the
formation of COL International. Six million of these shares were sold to Anthony
Ng, a promoter of COL International and currently the Secretary and a director
of COL International. Mr. Ng also had paid cash expenses to professional service
firms in the amount of approximately $89,000 on behalf of COL International
prior to its incorporation. These amounts were recorded in the financial
statements as "capital contribution by major stockholder." Except for Mr. Ng
being an advisor of Migration, he is not affiliated with any other company with
which COL International has direct or indirect relationships.

         During the period ended September 30, 2000, Honview paid US$70,000 on
behalf of COL International in professional services and costs related to COL
International's initial public offering. Honview loaned COL International this
amount without interest or collateral. On December 21, 2000, COL International
and Honview agreed for the loan to be repayable only out of 20 percent of COL
International's pre-tax profits, if any, for each fiscal year of COL
International that begins on or after July 1, 2001 with no other right of
Honview for repayment. Pursuant to the loan agreement, Honview agreed to lend
COL International its cash needs, from time to time, at any time until October
10, 2001 up to an aggregate principal amount of US$8 million. Any amounts loaned
to COL International prior to February 8, 2001, the effective date of the
registration statement related to COL International's initial public offering,
may be paid at the option of Honview, by converting, at any time after October
10, 2001, part or all the unpaid principal amount of the loan into shares of COL
International'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 to COL International after February 8, 2001 may be paid, at the
option of Honview, by converting, at any time after October 10, 2001, part or
all the unpaid principal amount of the loan into shares of COL International'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. As of June 30, 2001, Honview had made additional
advances to COL International totaling US$247,000, and has made an additional
advance of $30,000 after that date. Since 2001, there were additional advances
from Honview to COL. As of June 30, 2007, other additional advances from Honview
totaled Rmb80,129,352 (US$10,509,098).

         The Joint Venture entered into various agreements with a minority
stockholder, Shenzhen Rayes Group Co., Ltd., whereby the Joint Venture provides
marketing and value added services in the operation of the minority
stockholder's internet business in Shanghai, PRC through July 2004, subject to
renewal at terms to be agreed between the minority stockholder and Migration.
Migration has the right of first refusal to purchase the minority stockholder's
ownership interest in the ISP in Shanghai. Currently, however, foreign entities
cannot own ISP operations in the PRC. One agreement stipulates that the Joint
Venture will provide marketing and technical services to the minority
stockholder's ISP operations in Shanghai and Wuhan, PRC, and will share the
related ISP revenues with the minority stockholder on a 50/50 basis. The Joint
Venture paid its minority stockholder Rmb3,000,000 for these rights. As of June
30, 2005, the Company had disposed of all its interests in ISP operations.

         A second agreement with the minority stockholder grants the Joint
Venture access to the "COL China Online" brand name and network to allow the
Joint Venture to provide enhanced and value added services related to the
Internet. Under this agreement, the Joint Venture is not required to share
revenues from these services with the minority stockholder. The Joint Venture
paid the minority stockholder Rmb7,000,000 for these rights.

         During the year, the Company received rental income from a company
subject to common significant influence for an amount of Rmb797,477 (US$104,591)
for the year ended June 30, 2007, and Rmb912,500 (US$113,562) for the year ended
June 30, 2006.

         Except as discussed above, since COL International's inception on
February 22, 2000, there were no transactions between COL International and its
directors, executive officers or known holders of more than five percent of the

                                    Page 20

<PAGE>


common stock, or transactions by COL International in which any of the foregoing
persons had a direct or indirect material interest, in which the amount involved
exceeded $120,000.

Item 13. Exhibits

         The following is a complete list of Exhibits filed as part of this
registration statement, which Exhibits are incorporated herein.
<TABLE>
<CAPTION>

Number      Description
------      -----------

<S>         <C>
2.1         Stock Exchange Agreement between and among Migration Developments Limited, the Company and the shareholders of
            Migration Developments Limited dated June 8, 2000 (1)

3.1         Certificate Of Incorporation filed with the Delaware Secretary Of State effective as of February 22, 2000 (1)

3.2         Certificate of Amendment to the Certificate of Incorporation filed with the Delaware Secretary of State effective as
            of April 3, 2000 (1)

3.3         Amended and Restated Bylaws (4)

3.4         Sino-Foreign Joint Venture Contract (2) (1)

3.5         Articles of Association of the Sino-Foreign Joint Venture (1)

4.1         Specimen Common Stock Certificate (1)

10.1        Joint Venture Business License (2) (1)

10.2        Cooperation Agreement Regarding China Online's Internet Connection Service Commercial Business dated July 15, 1998
            between Neihi Electronic Systems Co., Ltd. (now known as the JV) and Rayes Group (2) (1)

10.3        Cooperation Agreement Regarding China Online's Internet Content Service Commercial Business dated July 15, 1998
            between Neihi Electronic Systems Co., Ltd. (now known as the JV) and Rayes Group (2) (1)

10.4        Cooperation Agreement for Dissemination of Educational Resources between the JV and Wuhan City No.2 Secondary School
            to establish Education Net dated January 7, 2000 (2) (1)

10.5        Cooperation Agreement for Transmission of Education Materials between the JV and Wuhan Cable TV to provide Education
            Net infrastructure dated March 10, 2000 (2) (1)

10.6        Purchase Agreement between the JV, Shanghai Togji Construction Materials Technology Sales Service Co., Ltd. and
            other parties specified thereby dated October 22, 1999 (2) (1)

10.7        2000 Stock Option Plan* (1)

10.8        Form of Subscription Agreement (1)

10.9        Form of Escrow Agreement between the Company and American Securities Transfer and Trust, Inc. (1)

10.10       Form of Migration's Convertible Promissory Note (3)

10.11       Migration's Loan Agreement dated October 10, 2000 (3)

10.12       Sino-Foreign Joint Venture Agreement dated July 7, 2000 between Migration and Shanghai Dongyi Scientific Technology
            Engineering Co. (3)

10.13       Share Purchase Agreement dated July 17, 2000 between Shanghai Shangyi Science and Trade Information Consulting Co.,
            Ltd. and Shanghai Tongji Construction Materials Sales and Services Co., Ltd. (3)

                                    Page 21

<PAGE>


10.14       Lease Agreement for Rental of Office Premises dated April 25, 2000 (3)

10.15       COL International's Loan Agreement dated December 21, 2000 (4)

21          Subsidiaries of the Registrant (5)

31          Rule 13a-14(a)/15a-14(a) Certification of Chief Executive Officer and Chief Financial Officer

32          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

----------

*           Designates a management contract or compensatory plan required to be filed as an Exhibit to this Report on Form
            10-KSB

(1)         Incorporated by reference from the Company's Form SB-2 Registration Statement dated June 13, 2000 (File No.
            333-39208)

(2)         Translated into English from Chinese

(3)         Incorporated by reference from the Company's Amendment No. 2 to Form SB-2 Registration Statement dated October 19,
            2000 (File No. 333-39208)

(4)         Incorporated by reference from the Company's Amendment No. 3 to Form SB-2 Registration Statement dated January 17,
            2001 (File No. 333-39208)

(5)         Incorporated by reference from the Company's Form 10-KSB dated November 15, 2001 for the year ended June 30, 2001
            (File No. 333-39208)
</TABLE>

Item 14. Principal Accountant Fees and Services

Resignation of Independent Registered Public Accounting Firm.

         Effective August 1, 2007, Moores Rowland Mazars (the "Former Auditor")
resigned as the independent auditor of the Company in connection with the
reorganization of the Former Auditor on June 1, 2007, in which certain of its
partners resigned and joined Mazars CPA Limited and the Former Auditor changed
its name to Moores Rowland. The Former Auditor had been the Company's auditor
since November 14, 2001. The Company's Board of Directors approved the
resignation of the Former Auditor on August 1, 2007.

         The Former Auditor's audit report on the Company's consolidated
financial statements for each of the past two fiscal years, did not contain an
adverse opinion or disclaimer of opinion, and was not qualified or modified as
to uncertainty, audit scope or accounting principles, except that the Former
Auditor's report on the Company's financial statements for each of the fiscal
years ended June 30, 2006 and 2005 included an explanatory paragraph describing
the uncertainty as to the Company's ability to continue as a going concern.

         During the Company's two most recent fiscal years and through the
subsequent interim period on or prior to March 31, 2007, (a) there were no
disagreements between the Company and the Former Auditor on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
the Former Auditor, would have caused the Former Auditor to make reference to
the subject matter of the disagreement in connection with its report; and (b) no
reportable events as set forth in Item 304(a)(1)(iv)(A) through (E) of
Regulation S-B have occurred.

                                    Page 22
<PAGE>


Engagement of New Independent Registered Public Accounting Firm.

         As key members of the Former Auditor servicing the Company are now with
Mazars CPA Limited, the Board of Directors appointed Mazars CPA Limited as the
Company's new independent auditor (the "New Auditor"), effective from August 1,
2007.

         During the Company's two most recent fiscal years and subsequent
interim period on or prior to August 1, 2007, the Company has not consulted with
the New Auditor regarding the application of accounting principles to a
specified transaction, either completed or proposed, or any of the matters or
events set forth in Item 304(a)(2) of Regulation S-B.

Audit Fees

         The New Auditor billed the Company $28,846 for the year ended June 30,
2007 and the Former Auditor billed the Company $29,487 and $65,385 for the year
ended June 30, 2007 and June 30, 2006, respectively, for professional services
rendered for the audit of the Company's annual financial statements and review
of financial statements included in the Company's Forms 10-QSB and services
normally provided by independent accountants in connection with statutory and
regulatory filings or engagements for those fiscal years.

Audit-Related Fees

         For the years ended June 30, 2007 and June 30, 2006, neither the New
Auditor or the Former Auditor provided the Company with any services for
assurance and related services that are reasonably related to the performance of
the audit or review of the Company's financial statements and are not reported
above under "--Audit Fees."

Tax Fees

         For the years ended June 30, 2007 and June 30, 2006, neither the New
Auditor nor the Former Auditor provided the Company with professional services
for tax compliance, tax advice, and tax planning.


All Other Fees

         For the years ended June 30, 2007 and June 30, 2006, neither the New
Auditor nor the Former Auditor billed the Company for products and services
other than those described above.

Audit Committee Pre-Approval Policies

         The Board of Directors, which is performing the equivalent functions of
an audit committee, currently does not have any pre-approval policies or
procedures concerning services performed by the New Auditor or the Former
Auditor. All the services performed by the New Auditor or the Former Auditor
that are described above were pre-approved by the Board of Directors. Less than
50% of the hours expended on either the New Auditor's or the Former Auditor's
engagement to audit the Company's financial statements for the fiscal years
ended June 30, 2007 and June 30, 2006 were attributed to work performed by
persons other than the New Auditor's or the Former Auditor's full-time,
permanent employees, respectively.

                                    Page 23
<PAGE>


                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                            COL CHINA ONLINE INTERNATIONAL INC.


Date:  September 28, 2007                   By:      /s/ Chi Keung Wong
                                               -------------------------------
                                               Chi Keung Wong,
                                               Chief Executive Officer and
                                               Chief Financial Officer

         In accordance with the Exchange Act, this report has been signed by the
following persons on behalf of the registrant in the capacities and on the dates
indicated.

Date                                                Signatures



September 28, 2007                                         /s/ Kam Che Chan
                                                    ----------------------------
                                                    Kam Che Chan, Director



September 28, 2007                                         /s/ Anthony Ng
                                                    ----------------------------
                                                    Anthony Ng, Director



September 28, 2007                                        /s/ Paul Wong
                                                    ----------------------------
                                                    Paul Wong, Director



September 28, 2007                                        /s/ Qi Yu Zhang
                                                    ----------------------------
                                                    Qi Yu Zhang, Director

                                    Page 24

<PAGE>


            COL CHINA ONLINE INTERNATIONAL INC. AND ITS SUBSIDIARIES

                   Index to Consolidated Financial Statements

                                    --INDEX--


                                                                 Page(s)
                                                                 -------

Reports of Independent Registered Public Accounting Firm        F-2 - F-3

Consolidated Financial Statements:

Consolidated Balance Sheets
June 30, 2007 and 2006                                             F-4

Consolidated Statements of Operations
Years ended June 30, 2007 and 2006                                 F-5

Consolidated Statements of Changes in Stockholders' Deficiency
Years ended June 30, 2007 and 2006                                 F-6

Consolidated Statements of Cash Flows
Years ended June 30, 2007 and 2006                                 F-7

Notes to Consolidated Financial Statements                      F-8 - F-16



                                      F-1


<PAGE>


REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM


To the Stockholders and Directors
COL China Online International Inc.


We have audited the accompanying consolidated balance sheet of COL China Online
International Inc. (a Delaware corporation) and its subsidiaries as of June 30,
2007, and the related consolidated statements of operations, changes in
stockholders' deficiency and cash flows for the year then ended. 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 audit. The consolidated financial statements
of COL China Online International Inc. as of and for the year ended June 30,
2006 were audited by other auditors whose report dated October 13, 2006,
expressed an unqualified opinion on those statements.

We conducted our audit 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
financial statements are free of material misstatement. 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
audit provides 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 COL China Online
International Inc. and subsidiaries as of June 30, 2007, and the results of
their operations and their cash flows for the year then ended, in conformity
with U.S. generally accepted accounting principles.


/s/ Mazars CPA Limited

Certified Public Accountants
Hong Kong

26 September 2007


                                      F-2
<PAGE>


The following report is a copy of a report previously issued by Moores Rowland
Mazars which has changed its name to Moores Rowland on June 1, 2007.

REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Stockholders and Directors
COL China Online International Inc.



We have audited the accompanying consolidated balance sheets of COL China Online
International Inc. (a Delaware Corporation) and its subsidiaries as of June 30,
2006, and the related consolidated statements of operations, stockholders'
deficiency and cash flows for the year then ended. 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
financial statements are free of material misstatement. 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 COL China Online
International Inc. and subsidiaries as of June 30, 2006, and the results of
their operations and their cash flows for the year then ended, in conformity
with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, 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 major stockholder, raising additional
capital, increasing revenue, and achieving and maintaining profitable
operations. These factors raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 3. The consolidated financial statements do not include
any adjustments that might result from the outcome of these uncertainties.



Moores Rowland Mazars
Chartered Accountants
Certified Public Accountants
Hong Kong
13 October 2006


                                      F-3
<PAGE>

<TABLE>
<CAPTION>
                                             COL CHINA ONLINE INTERNATIONAL INC.
                                                 CONSOLIDATED BALANCE SHEETS


                                                               Note:          JUNE 30, 2007             JUNE 30, 2006
                                                              ----- ------------------------------      -------------
                                                                        (US$)                 (Rmb)            (Rmb)
                                                                    (Illustrative
ASSETS                                                                      only)
------
<S>                                                                    <C>                <C>               <C>

CURRENT ASSETS:
    Cash                                                                   24,995          190,579          200,238
    Accounts receivable, net of an allowance for doubtful
         accounts                                                  4        2,591           19,757           17,110
     Deposits and other receivables                                5       56,663          432,046          506,948
                                                                      -----------      -----------      -----------

             Total current assets                                          84,249          642,382          724,296


PROPERTY, OFFICE SPACE AND EQUIPMENT, net of accumulated
    depreciation and impairment of Rmb10,673,752
    (US$1,399,880) and Rmb1,862,370 (US$244,253),
    respectively                                                   6         --               --            230,716
                                                                      -----------      -----------      -----------

TOTAL ASSETS                                                               84,249          642,382          955,012
                                                                      ===========      ===========      ===========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
    Accounts payable and accrued expenses                                  94,212          718,341          943,184
    Business tax payable                                                   29,597          225,668          234,386
                                                                      -----------      -----------      -----------

             Total current liabilities                                    123,809          944,009        1,177,570
                                                                      -----------      -----------      -----------

NON-CURRENT LIABILITIES:
    Payable to Majority Stockholder                                7a  10,509,098       80,129,352       78,678,141
     Other loan                                                              --               --            150,000
                                                                      -----------      -----------      -----------

             Total non-current liabilities                             10,509,098       80,129,352       78,828,141
                                                                      -----------      -----------      -----------

Commitments and contingencies                                      8         --               --               --
                                                                      -----------      -----------      -----------

STOCKHOLDERS' DEFICIENCY:
    Common stock, US$0.001 par value, 100,000,000 shares
         authorized and 50,155,000 shares issued,
         outstanding                                                       50,155          408,864          408,864
    Additional paid-in capital                                            146,507        1,214,118        1,214,118
    Accumulated deficit                                               (10,922,666)     (83,282,716)     (81,131,250)
    Other comprehensive income                                            177,346        1,228,755          457,569
                                                                      -----------      -----------      -----------

             Total stockholders' deficiency                           (10,548,658)     (80,430,979)     (79,050,699)
                                                                      -----------      -----------      -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                             84,249          642,382          955,012
                                                                      ===========      ===========      ===========


                                                                F-4
<PAGE>


                                                  COL CHINA ONLINE INTERNATIONAL INC.
                                                CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                                           FOR THE YEAR
                                                                       FOR THE YEAR ENDED                 ENDED JUNE 30,
                                                                         JUNE 30, 2007                             2006
                                                                  --------------------------------        --------------
                                                                           (US$)              (Rmb)                (Rmb)
                                                                 (Illustrative
                                                                         only)
NET REVENUES:
     Telecommunication                                                 148,937           1,135,609           4,344,744
    Marketing fee - PIERS                                              100,472             766,072             963,516
                                                                   -----------         -----------         -----------

         Total revenues                                                249,409           1,901,681           5,308,260
                                                                   -----------         -----------         -----------

COST OF SALES:
    Telecommunication                                                   11,738              89,499           3,026,957
    Marketing fee - PIERS                                               19,267             146,905             334,388
                                                                   -----------         -----------         -----------

                                                                        31,005             236,404           3,361,345
                                                                   -----------         -----------         -----------

    Gross Margin                                                       218,404           1,665,277           1,946,915
                                                                   -----------         -----------         -----------

OPERATING EXPENSES:
    General and administrative                                         589,934           4,498,113           6,466,905
    Amortization and depreciation                                       10,998              83,855             417,365
    Provision for impairment loss on property, office space
        and equipment                                                   19,698             150,194             244,924
                                                                   -----------         -----------         -----------

         Total operating expenses                                      620,630           4,732,162           7,129,194
                                                                   -----------         -----------         -----------

OPERATING LOSS                                                        (402,226)         (3,066,885)         (5,182,279)

     Rental income from related companies (Note 11)                    104,590             797,477             912,500
    Waiver of  loans                                                     6,720              51,236             317,760
    Other income                                                         8,748              66,706               2,634
                                                                   -----------         -----------         -----------

LOSS BEFORE MINORITY INTEREST                                         (282,168)         (2,151,466)         (3,949,385)

    Minority interest                                                     --                  --                  --
                                                                   -----------         -----------         -----------

NET LOSS                                                              (282,168)         (2,151,466)         (3,949,385)

OTHER COMPREHENSIVE INCOME                                             177,346             771,186             490,160
                                                                   -----------         -----------         -----------

COMPREHENSIVE LOSS                                                    (104,822)         (1,380,280)         (3,459,225)
                                                                   ===========         ===========         ===========

BASIC AND FULLY DILUTED NET LOSS PER SHARE                               (0.01)              (0.04)              (0.08)
                                                                   ===========         ===========         ===========

WEIGHTED AVERAGE NUMBER OF COMMON STOCK                             50,155,000          50,155,000          50,155,000
                                                                   ===========         ===========         ===========

                                                                   F-5
<PAGE>


                                               COL CHINA ONLINE INTERNATIONAL INC.
                              CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
                                           FOR THE YEARS ENDED JUNE 30, 2006 AND 2007

                                                            ADDITIONAL                             OTHER
                                                             PAID-IN        ACCUMULATED    COMPREHENSIVE
                                     COMMON STOCK            CAPITAL          DEFICIT        INCOME/(LOSS)            TOTAL
                                 --------------------      ----------        -----------     -------------     ------------
                                     Number      (Rmb)          (Rmb)              (Rmb)             (Rmb)            (Rmb)

Balances, June 30, 2005          50,155,000    408,864      1,214,118       (77,181,865)          (32,591)     (75,591,474)

Net loss                                  -          -              -        (3,949,385)                 -      (3,949,385)

Other comprehensive income                -          -              -                  -           490,160          490,160
                                 ----------    -------      ---------       -----------          ---------       ----------

Balances, June 30, 2006          50,155,000    408,864      1,214,118       (81,131,250)           457,569     (79,050,699)

Net loss                                  -          -              -        (2,151,466)                 -      (2,151,466)

Other comprehensive income                -          -              -                  -           771,186          771,186
                                 ----------    -------      ---------       -----------          ---------       ----------

Balances, June 30, 2007          50,155,000    408,864      1,214,118       (83,282,716)         1,228,755       80,430,979
                                 ==========    =======      =========       ===========          =========       ==========


                                                                F-6

<PAGE>


                                               COL CHINA ONLINE INTERNATIONAL INC.
                                              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                                         FOR THE YEAR
                                                                         FOR THE YEAR ENDED             ENDED JUNE 30,
                                                                            JUNE 30, 2007                        2006
                                                                  ------------------------------        -------------
                                                                           (US$)            (Rmb)              (Rmb)
                                                                 (Illustrative
                                                                         only)
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                           (282,168)        (2,151,466)        (3,949,385)
  Adjustments to reconcile net loss to net cash used
   in operating activities:
     Loss on written off of Property, Office Space and
       Equipment                                                         --                 --              417,567
     Amortization and depreciation                                     10,998             83,855            417,365
     Provision for impairment loss on Property, Office Space
        and Equipment                                                  19,698            150,194            244,924
     Waiver of loans                                                   (6,720)           (51,236)          (317,760)
     Change in operating assets and liabilities:
       Decrease (increase) in:
       Accounts receivable and other receivables                        9,477             72,255           (161,712)
       (Decrease) Increase in:
          Accounts payable and accrued expenses                       (29,489)          (224,843)           190,339
          Business tax payable                                         (1,143)            (8,718)            34,497
       Exchange difference                                              6,153             46,915             19,487
                                                                   ----------         ----------         ----------

     Net cash used in operating activities                           (273,194)        (2,083,044)        (3,104,678)
                                                                   ----------         ----------         ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of Property, Office Space and Equipment                       (437)            (3,333)           (39,980)
                                                                   ----------         ----------         ----------

     Net cash used in investing activities                               (437)            (3,333)           (39,980)
                                                                   ----------         ----------         ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Other loan (repaid) raised                                          (12,953)           (98,764)           150,000
  Advances from Majority Stockholder                                  285,750          2,178,772          2,598,169
                                                                   ----------         ----------         ----------

     Net cash provided by financing activities                        272,797          2,080,008          2,748,169
                                                                   ----------         ----------         ----------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                  (431)            (3,290)            (1,927)
                                                                   ----------         ----------         ----------

NET DECREASE IN CASH                                                   (1,265)            (9,659)          (398,416)

CASH, beginning of year                                                26,262            200,238            598,654
                                                                   ----------         ----------         ----------

CASH, end of year                                                      24,997            190,579            200,238
                                                                   ==========         ==========         ==========


                                                           F-7
</TABLE>

<PAGE>


                       COL CHINA ONLINE INTERNATIONAL INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       Company Organization and Operations
         -----------------------------------

         Nature of Operations - COL China Online International Inc. ("COL
         International" or the "Company") was incorporated as a Delaware
         corporation on February 22, 2000, for the purpose of acquiring and
         conducting the engineering services and the internet related business
         of Migration Developments Limited, a British Virgin Islands company
         ("Migration") and raising equity capital to be utilized in the business
         of Migration. Prior to the acquisition of Migration, the Company was
         considered to be in the development stage, due to its limited
         operations and lack of revenues.

         In July 2001, the Company completed its initial public offering of
         common stock. The Company issued 1,655,000 shares of common stock in
         this offering at US$0.05 per share (approximately US$83,000). All net
         proceeds from this offering were used to pay costs associated with the
         offering.

         On September 24, 2001, the Company acquired all the outstanding shares
         of common stock of Migration in exchange for 40.2 million shares of the
         Company's common stock. As a result of the acquisition, Migration
         became a wholly owned subsidiary of the Company.

         For financial reporting purposes, the acquisition of Migration by the
         Company on September 24, 2001 has been treated as a reverse
         acquisition. Migration is the continuing entity for financial reporting
         and the acquisition of the Company is considered a recapitalization and
         restructuring of Migration. On this basis, the historical financial
         statements prior to September 24, 2001 represent with par value of the
         financial statements of Migration. The historical shareholders' equity
         accounts of the Company have been retroactively restated to reflect the
         issuance of 40,200,000 shares of common stock with par value of
         US$0.001 each since inception of Migration and the issuance of
         9,955,000 shares of common stock with par value of US$0.001 each upon
         the merger with the Company.

         Migration was formed on May 18, 1998 and has two subsidiaries, Shenzhen
         Knowledge & Communications Co., Ltd. ("Joint Venture") and Shanghai
         Shangyi Science and Trade Information Consulting Co., Ltd. ("Shangyi"),
         in which it has 90% and 70% equity interests, respectively. The Joint
         Venture and Shangyi are Sino-foreign equity joint ventures in the
         People's Republic of China (PRC). Most of the operations of Migration
         are through the Joint Venture, which did not commence substantive
         operations until the Spring of 1999. The acquisitions of Joint Venture
         and Shangyi had been accounted for as purchases by Migration. Shangyi
         had ceased operation since 2003 and subsequently de-registered in PRC
         on 3 December 2004. In view of insignificant operation incurred by
         Shangyi since incorporation to deregistration, the Company accounted
         for the written off of investment in Shangyi in the year ended June 30,
         2006.

         Migration initially provided marketing and technical services for
         Internet Service Providers (ISP) and value-added services generally
         related to the installation of computer network systems (i.e., Local
         Area Networks or LANs) in the PRC.

         Because the Company's past business model of attempting to be the IT
         department for small and medium-sized business by offering a broad
         range of IT services and providing electronic commerce services had not
         been successful, the Company has developed a new business model that
         focused on the provision of internet and telecommunication convergence
         solutions to its customers.


                                      F-8

<PAGE>


                       COL CHINA ONLINE INTERNATIONAL INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.      Significant Accounting Policies
        -------------------------------

        Principles of Consolidation - The consolidated financial statements
        include the accounts of the Company and its subsidiaries. All
        significant intercompany accounts and transactions have been eliminated
        in consolidation.

        Basis of Accounting - The amounts included in the financial statements
        are presented in Renminbi ("Rmb") which is COL International's
        functional currency, unless otherwise indicated as US dollars, because
        the Company's major operations are primarily located in the PRC. For
        illustrative purposes, the consolidated balance sheet as of June 30,
        2007, consolidated statement of operations, consolidated statement of
        changes in stockholders' deficiency and consolidated statement of cash
        flows for the year then ended have been translated into US dollars at
        approximately Rmb7.62476 to the dollar, which was the prevailing
        exchange rate at June 30, 2007.

        Concentration of Credit Risk - Credit risk represents the accounting
        loss that would be recognized at the reporting date if counterparties
        failed completely to perform as contracted. Concentrations of credit
        risk (whether on or off balance sheet) that arise from financial
        instruments exist for groups of customers or counterparties when they
        have similar economic characteristics that would cause their ability
        to meet contractual obligations to be similarly affected by changes in
        economic or other conditions. COL International's accounts receivable
        include a limited number of customers. Financial instruments that
        subject the Company to credit risk consist principally of accounts
        receivable. The Company generally does not require collateral from its
        customers. Accounts receivable totaled Rmb17,110 and Rmb19,757
        (US$2,591) as at June 30, 2006 and 2007, respectively and the Company
        has made no allowance for doubtful accounts for the year ended June
        30, 2006 and 2007. The management of the Company performs periodic
        credit evaluations on its customers' financial condition and believes
        that the allowance for doubtful accounts is sufficient.

       As COL International's primary operations are in the PRC, the Company is
       exposed to certain foreign company risks not normally associated with
       entities operating solely in the United States. These risks include,
       among others, the political, economic and legal environments, and foreign
       currency exchange. The Company's results may be adversely affected by
       changes in the political and social conditions in the PRC, and by changes
       in governmental policies with respect to laws and regulations,
       anti-inflationary measures, currency conversion and remittance abroad,
       and rates and methods of taxation, among other things. COL
       International's management does not believe these risks to be
       significant. There can be no assurance, however, that changes in
       political, social, and other conditions will not result in any adverse
       impact.

       During the fiscal year 2007, most of COL International's operations were
       focused in Shanghai.

       Cash Equivalents - COL International considers all highly liquid debt
       instruments with original maturities of three months or less to be cash
       equivalents.

       Property, Office Space and Equipment - Property, office space and
       equipment are recorded at cost less accumulated depreciation and
       amortization less any impairment loss. Depreciation is computed using the
       straight-line method over the estimated useful life of the assets,
       generally twenty years for property, three years for computer equipment
       and five years for office space and other equipment. Repairs and
       maintenance are charged to expense as incurred. Material expenditures,
       which increase the life of an asset, are capitalized and depreciated over
       the estimated remaining useful life of the asset. The cost of equipment
       sold, or otherwise disposed of, and the related accumulated depreciation
       or amortization is removed from the accounts, and any gains or losses are
       reflected in current operations. Amortization and depreciation expense
       charged to operations were Rmb83,855 (US$10,998) and Rmb417,365 and
       provision for impairment loss on property, office space and equipment was
       Rmb150,194 (US$19,698) and Rmb244,924 for the year ended June 30, 2007
       and 2006 respectively.

                                      F-9
<PAGE>


                       COL CHINA ONLINE INTERNATIONAL INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


        Income Taxes - COL International accounts for income taxes under the
        liability method of Statement of Financial Accounting Standard (SFAS)
        No. 109, Accounting for Income Taxes, whereby current and deferred tax
        assets and liabilities are determined based on tax rates and laws
        enacted as of the balance sheet date. Deferred tax expense or benefit
        represents the change in the deferred tax asset/liability balance.

        Revenue Recognition - COL International recognizes revenue at the time
        the service is rendered or product is delivered and collection is
        reasonably assured, which generally approximates the time it is accepted
        by the customer.

        Telecommunication income represents the services commission revenues
        from ISP service and selling IP phone. The Company contracted with
        telecommunication services companies selling IDD (IP phone) to end-users
        and receives telecommunication services commission income from the
        agents, which is a percentage of the fees paid by the end users for
        monthly usage of the phones. Services commission revenue is recognized
        in the period in which the service is rendered.

        Marketing fee is derived from sales of trade data products from
        Commonwealth Business Media, Inc. ("CBM"). The Company contracted with
        CBM on revenue sharing basis to promote and market their trade data
        products to end users in the region of Eastern China. Marketing fee is
        recognized upon referring customer sales orders to CBM and is recognized
        on a net basis.

        Impairment of Long-Lived Assets - COL International has adopted SFAS No.
        121, Accounting for the Impairment of Long-Lived Assets and for
        Long-Lived Assets to be Disposed Of. In the event that facts and
        circumstances indicate that the carrying value of long-lived assets may
        be impaired, an evaluation of recoverability would be performed. If an
        evaluation is required, the estimated future undiscounted cash flows
        associated with the asset would be compared to the asset's carrying
        amount to determine if a write-down to market value or discounted cash
        flow value is required.

        Foreign Currency Transaction - Foreign currency transactions during the
        period are translated into Renminbi at approximately the market exchange
        rates ruling at the transaction dates. Monetary assets and liabilities
        denominated in foreign currencies are translated into Renminbi at
        approximately the market exchange rates ruling at the balance sheet
        date. Differences arising from foreign currency translation are included
        in the net profit or loss for the period.

        The consolidated financial statements consolidate the financial
        statements of the Company and its subsidiaries. Some of these companies
        use their local currencies other than Renminbi as the functional
        currency. For Group consolidation purposes, assets and liabilities whose
        functional currency is not Renminbi are translated into Renminbi at the
        rate in effect at the balance sheet date. Revenue and expenses are
        translated at the average exchange rate during the year. The effects of
        translation adjustments are recorded in accumulated other comprehensive
        income.

        Use of Estimates - The preparation of financial statements in conformity
        with accounting principles generally accepted in the United States
        requires management to make estimates and assumptions that affect the
        reported amounts of assets and liabilities and the 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. Such estimates include provisions for doubtful
        accounts, sales returns and allowances, long-lived assets, deferred
        income taxes and warranty provisions. Actual results could differ from
        those estimates.

        Fair Value of Financial Instruments - The estimated fair values for
        financial instruments under SFAS No.107, Disclosures about Fair Value of
        Financial Instruments, are determined at discrete points in time based
        on relevant market information. These estimates involve uncertainties
        and cannot be determined with precision. The estimated fair values of
        COL International's financial instruments, which includes cash, accounts
        receivable and accounts payable, approximates their carrying value in

                                      F-10

<PAGE>


                       COL CHINA ONLINE INTERNATIONAL INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


        the financial statements. The fair value of advances from COL
        International's majority stockholder, which are without interest, cannot
        be estimated due to the relationship between the entities.

        Comprehensive Income (Loss) - The Company accounts for comprehensive
        income in accordance with SFAS No. 130, Reporting Comprehensive Income.
        SFAS No. 130 establishes standards for reporting comprehensive income
        and its components in financial statements. 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 year ended June
        30, 2007 represented gain from foreign currency translation adjustments.

        Net Loss Per Share - Basic and diluted net loss per share is computed by
        dividing net loss by the weighted average number of common stock
        outstanding.

        Pursuant to the Company's 2000 Stock Option Plan, options may be granted
        to purchase an aggregate of 4,000,000 shares of common stock to key
        employees and other persons who have or are contributing to the
        Company's success. As of June 30, 2007, no options had been granted
        under the 2000 plan.

        Accumulated Deficit - The acquisition of Migration by COL International
        on September 24, 2001 had been treated as a reverse acquisition. As a
        result, accumulated deficit prior to the acquisition should reflect that
        of Migration only. However, no goodwill was recorded on this acquisition
        as COL International had limited operations and was formed for the sole
        purpose of merging with Migration and raising limited funding prior to
        the acquisition. Therefore, accumulated deficit of COL International of
        Rmb3,630,010 (US$438,016) at the date of acquisition has also been
        recorded in the accumulated deficit of the Company.

        Capital leases - Leases are classified as capital lease whenever the
        terms of the lease transfer substantially all the risks and rewards of
        ownership to the leasee.

        Amounts due from leasees under capital leases are recorded as
        receivables at the amount of the Company's net investment in the leases.
        Capital lease income is allocated to accounting periods so as to reflect
        to a constant periodic rate of return on the Company's net investment
        outstanding in respect of the leases.

        No capital lease exists as of June 30, 2007.

        Operating leases - Leases where substantially all the rewards and risks
        of ownership of assets remain with the leasing company are accounted for
        as operating leases. Rental receivables and payables under operating
        leases are recognized as income and expenses, respectively, on the
        straight-line basis over the lease terms.

       Recent Accounting Pronouncements -

       Fin 48

       In July 2006, the Financial Accounting Standards Board ("FASB") issued
       FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -
       an interpretation of FASB Statement 109" ("FIN No. 48"). FIN No. 48
       clarifies the accounting for uncertainty in income taxes recognized in
       accordance with SFAS No. 109, "Accounting for Income Taxes." FIN No. 48
       requires the use of a two-step approach for recognizing and measuring tax
       benefits taken or expected to be taken in a tax return and disclosures
       regarding uncertainties in income tax positions. The first step is
       recognition, whereby a determination is made whether it is
       more-likely-than-not that a tax position will be sustained upon
       examination based on the technical merits of the position. The second
       step is to measure a tax position that meets the recognition threshold to
       determine the amount of benefit to be recognized. FIN No. 48 also
       provides guidance on derecognition, classification, interest and

                                      F-11

<PAGE>


                       COL CHINA ONLINE INTERNATIONAL INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


       penalties, accounting in interim periods, disclosure and transition. FIN
       No. 48 will apply to fiscal years beginning after December 15, 2006, with
       earlier adoption permitted. The Company considers that the adoption of
       FIN No. 48 will not have significant impact on its financial statements.
       In May 2007, FASB Staff Position (FSP) amends FIN No. 48, to provide
       guidance on how an enterprise should determine whether a tax position is
       effectively settled for the purpose of recognizing previously
       unrecognized tax benefits.

       SFAS 157

       In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
       ("SFAS 157"), to define fair value, establish a framework for measuring
       fair value in accordance with U.S. GAAP and expand disclosures about fair
       value measurements. SFAS 157 requires quantitative disclosures using a
       tabular format in all periods (interim and annual) and qualitative
       disclosures about the valuation techniques used to measure fair value in
       all annual periods. The Company is required to adopt the provisions of
       this statement as of January 1, 2008. The Company is currently evaluating
       the impact of adopting SFAS 157.

       SFAS 159

       In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
       Financial Assets and Financial Liabilities ("SFAS 159"). SFAS 159 expands
       opportunities to use fair value measurements in financial reporting and
       permits entities to choose to measure many financial instruments and
       certain other items at fair value. SFAS 159 is effective for us on
       January 1, 2008, although the Company can chose to adopt it on January 1,
       2007 if the Company also adopts SFAS 157 at that time. The Company has
       not decided if it will adopt SFAS 159 early or if it will choose to
       measure any eligible financial assets and liabilities at fair value.

3.      Future Plan of Operations
        -------------------------

        The accompanying consolidated financial statements have been prepared
        assuming COL International will continue operating as a going concern.
        After the end of the 2007 fiscal year, the Company's Board of Directors
        decided to consider discontinuing the Company's current operations upon
        expiration of the business license of the Joint Venture on December 10,
        2007. Most of the Company's business has been suspended as of July 2007.
        If the Company discontinues its business operations, the Company expects
        to use any amounts collected from its accounts receivable and deposits
        paid to pay any outstanding liabilities or accounts payable, and does
        not expect that there will be any assets left to distribute to the
        parties of the Joint Venture of shareholders of the Company. If the
        business of the Joint Venture is discontinued, the Company will become a
        "shell company" after the expiration of the Joint Venture's business
        license in December 2007. After becoming a shell company, the Company
        will likely seek to enter into a business combination with one or more
        yet to be identified privately held businesses.

        In view of the above-mentioned plan, COL International's ability to
        continue as a going concern is dependent upon several factors,
        including, but not limited to, continued financial support by the Major
        Stockholder, the realization of assets and liquidation of liabilities
        that would not result in a substantial deficit, 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.

        COL International believes its Major Stockholder will continue to
        provide funding during the forthcoming year.

<PAGE>


                       COL CHINA ONLINE INTERNATIONAL INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


4.     Accounts Receivable
       -------------------
       The following information summarizes accounts receivable at:
<TABLE>
<CAPTION>

                                                                              June 30, 2007                 June 30,
                                                                                                             2006
                                                                   --------------------------------      -------------
                                                                           (US$)              (Rmb)              (Rmb)
                                                                   (Illustrative
                                                                           Only)

<S>                                                                      <C>                 <C>                <C>
       Trade receivables                                                 2,591               19,757             17,110
       Less: Allowance for doubtful accounts                                 -                    -                  -
                                                                  --------------      -------------      -------------

                                                                         2,591               19,757             17,110
                                                                  ==============      =============      =============

5.      Deposits and other receivables
        ------------------------------

        The following information summarizes deposits and other receivables at:

                                                                              June 30, 2007                June 30,
                                                                                                              2006
                                                                   --------------------------------       ------------
                                                                            (US$)              (Rmb)             (Rmb)
                                                                   (Illustrative
                                                                           Only)

       Rental deposits                                                  27,402              208,932           211,232
       Trade deposit paid                                               26,178              199,600           208,000
       Other receivables                                                 3,083               23,514           281,516
                                                                   -----------         ------------      ------------

                                                                        56,663              432,046           700,748

       Less: Allowance for doubtful accounts                                 -                    -          (193,800)
                                                                   -----------         ------------      ------------

                                                                        56,663              432,046           506,948
                                                                   ===========         ============      ============



                                                              F-13

<PAGE>


                       COL CHINA ONLINE INTERNATIONAL INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


6.     Property, Office Space and Equipment
       -------------------------------------

       Property, office space and equipment consist of the following:

                                                                          June 30, 2007                 June 30, 2006
                                                              ----------------------------------        -------------
                                                                       (US$)               (Rmb)                (Rmb)
                                                               (Illustrative
                                                                       Only)

      Vehicles                                                        43,996             335,458             335,458
      Computer equipment                                             724,230           5,522,076           5,518,743
      Computer software                                              604,966           4,612,721           4,612,721
      Office furniture                                                29,447             224,530             224,530
      Other equipment                                                241,494           1,841,337           1,841,337
                                                              --------------      --------------        ------------

                                                                   1,644,133          12,536,122          12,532,789
      Less :   Accumulated depreciation and
                 amortization                                     (1,399,880)        (10,673,752)        (10,589,897)
      Less :   Impairment loss                                      (244,253)         (1,862,370)         (1,712,176)
                                                              --------------      --------------        ------------

                                                                           -                   -             230,716
                                                              ==============      ==============        ============


7.      Payable To/(Receivable From) Related Parties
        --------------------------------------------
                                                                            June 30, 2007               June 30, 2006
                                                                   -----------------------------        -------------
                                                                            (US$)          (Rmb)               (Rmb)
                                                                   (Illustrative
                                                                           Only)

       Minority stockholder of Joint Venture                                   -               -             (27,505)
       Majority stockholder of COL International (Note a)             10,509,098      80,129,352          78,678,141
</TABLE>

       All payables with related parties are without interest or collateral.

Note:
-----

     a.   Pursuant to the Loan Agreement, Honview International Limited, the
          ultimate holding company 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 COL International, any
          amounts loaned from Honview prior to February 8, 2002, the effective
          date of the registration statement related to COL International'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 COL International'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 the effective date
          of this registration statement 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 COL International'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 the year
          to June 30, 2007. In addition, during the year, Honview has undertaken
          to make available adequate funds to COL International as and when
          required to maintain COL International as a going concern.

8.       Commitments and Contingencies
         -----------------------------
       i)       Operating Leases Payable - As of June 30, 2007, COL
                International has the following non-cancellable lease
                commitments for the year ending June 30:


                                      F-14
<PAGE>


                       COL CHINA ONLINE INTERNATIONAL INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                        June 30, 2007
                                            ---------------------------------
                                                     (US$)               (Rmb)
                                            (Illustrative
                                                     Only)

                2008                              129,382             986,508
                                              ===========         ===========

               Rent expense charged to operations was Rmb1,175,261 and
               Rmb1,053,493 (US$138,167) for the year ended June 30, 2006 and
               2007 respectively.

          ii)  Operating Leases Receivable - As of June 30, 2007, COL
               International has the following non-cancellable lease commitment
               which will be recorded as rental income for the year ending June
               30:

                                                   As of June 30, 2007
                                            ---------------------------------
                                                    (US$)                (Rmb)
                                            (Illustrative
                                                    Only)

               2008                                95,444             727,737
                                               ==========         ===========

          iii) Stock Option Plan - The Company has set up a stock option plan
               (the "Stock Option plan"), which the Company may grant options to
               key employees and other persons to purchase an aggregate of
               4,000,000 shares of common stock. The options granted pursuant to
               the Stock Option Plan may be either incentive options qualifying
               for beneficial tax treatment for the recipient, or non-qualified
               options. The terms of the Stock Option Plan concerning incentive
               options and non-qualified options are substantially the same
               except that only the Company's or its subsidiaries' employees are
               eligible for incentive options, and other individuals are
               eligible for non-qualified options. With respect to options
               granted to persons other than outside directors, the Stock Option
               Plan is administered by an Option Committee that determines the
               terms of the options subject to the requirements of the Stock
               Option Plan.

               All options granted under the Stock Option Plan will become fully
               exercisable on the date that the options are granted or other
               dates that the Option Committee determines and will continue for
               a period up to a maximum of ten years. Options granted pursuant
               to the Stock Option Plan are not transferable during the
               optionee's lifetime. Subject to the other terms of the Stock
               Option Plan, the Option Committee has discretion to provide
               vesting requirements and specific expiration provisions with
               respect to the incentive options and non-qualified options
               granted. No options had been granted under the Stock Option Plan
               since its establishment.

9.     Taxes
       -----

       COL International and its subsidiaries are subject to income taxes on an
       entity basis on income arising in or derived from the tax jurisdiction in
       which they operate.

       The Joint Venture, which was established in the PRC, is subject to the
       PRC income taxes at a rate of 33%. However, the Shenzhen head office of
       the Joint Venture is entitled to full exemption from income tax for one
       year starting from the first profit making year and 50% tax reduction in
       the subsequent two years. No provision for PRC income tax has been
       provided for in the financial statements as the Joint Venture in the PRC
       was operating at a loss for the periods presented.

       Migration operates in Hong Kong where the statutory tax rate is 17.5%
       (2006: 17.5%) on assessable income arising in Hong Kong. Migration is
       exempt from any BVI income taxes under BVI International Business Act for
       its operations being located only in Hong Kong.

                                      F-15

<PAGE>


                       COL CHINA ONLINE INTERNATIONAL INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


       COL International has a net operating loss (NOL) carryforward for tax
       reporting purposes in the PRC of approximately Rmb19,000,000 and
       Rmb15,000,000 (US$1,967,000) for the year ended June 30, 2006 and 2007,
       respectively.

       Under PRC taxation laws, NOL of each year can only be carried forward for
       a maximum of 5 years.

       Deferred income taxes are provided for differences between the tax and
       book basis of assets and liabilities as a result of temporary differences
       in the recognition of revenues or expenses for tax and financial
       reporting purposes, which relates primarily to certain items not
       currently deductible for tax purposes until paid.

       Deferred tax assets resulting from these differences, consist of the
following:
<TABLE>
<CAPTION>

                                              Hong Kong                                    PRC
                                       ----------------------    -----------------------------------------------------
                                              June 30,                                   June 30,
                                       ----------------------    -----------------------------------------------------
                                         2007          2006                 2007         2007               2006
                                         (Rmb)        (Rmb)                (US$)         (Rmb)              (Rmb)
                                                                   (Illustrative
                                                                           only)

<S>                                   <C>           <C>           <C>                <C>                <C>
      Net operating loss carry
          forwards                             -            -          592,570          4,518,206          5,643,262
      Other                                    -            -           52,111            397,334            391,283
                                      ----------    ---------    -------------       ------------      -------------

      Total deferred tax assets                -            -          644,681          4,915,540          6,034,545

      Less: Valuation allowance                -            -         (644,681)        (4,915,540)        (6,034,545)
                                      ----------    ---------    -------------       ------------      -------------

                                               -            -                -                  -                  -
                                      ==========    =========    =============       ============      =============
</TABLE>

       The valuation allowances on COL International's ability to utilize its
       net operating loss has reduced the Company's expected tax benefit in PRC
       from 16.5% (first profit making year) to 0%.

       In addition, the Joint Venture is subject to business taxes in the PRC
       and are required to pay 5% of revenues generated from marketing and value
       added services, computer software, and network development.

10.     Major Customers
        ---------------

       The following customers totaled more than 10% of sales:

                                                        Year ended June 30
                                                        ------------------
                                                       2007           2006

       A                                               23%             0%
       B                                               13%            48%
       C                                                9%            10%
       D                                                0%            18%


11.    Rental Income
       -------------

       During the year, the Company received rental income from three related
       companies subject to common significant influence for an amount of
       Rmb912,500 and Rmb797,477 (US$104,591) for the year ended June 30, 2006
       and 2007 respectively.

                                      F-16
<PAGE>


                      COL CHINA ONLINE INTERNATIONAL INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


12.    Pension Costs
       -------------

       As stipulated by PRC regulations, the Company maintains a defined
       contribution retirement plan for all of its employees who are residents
       of PRC. All retired employees of the Company are entitled to an annual
       pension equal to their basic annual salary upon retirement. The Company
       contributed to state sponsored retirement plan approximately 32.5% - 48%
       of the basic salary of its employees and has no further obligations for
       the actual pension payments or post-retirement benefits beyond the annual
       contributions. The state sponsored retirement plan is responsible for the
       entire pension obligation payable to all employees. The pension expenses
       were Rmb335,475 and Rmb275,769 (US$36,168) for the years ended June 30,
       2006 and 2007, respectively.


                                      F-17
<PAGE>


                                  EXHIBIT INDEX
                                  -------------
<TABLE>
<CAPTION>


Number    Description
------    -----------
<S>     <C>

2.1       Stock Exchange Agreement between and among Migration Developments Limited, the Company and the shareholders of
          Migration Developments Limited dated June 8, 2000 (1)

3.1       Certificate Of Incorporation filed with the Delaware Secretary Of State effective as of February 22, 2000 (1)

3.2       Certificate of Amendment to the Certificate of Incorporation filed with the Delaware Secretary of State effective as
          of April 3, 2000 (1)

3.3       Amended and Restated Bylaws (4)

3.4       Sino-Foreign Joint Venture Contract (2) (1)

3.5       Articles of Association of the Sino-Foreign Joint Venture (1)

4.1       Specimen Common Stock Certificate (1)

10.1      Joint Venture Business License (2) (1)

10.2      Cooperation Agreement Regarding China Online's Internet Connection Service Commercial Business dated July 15, 1998
          between Neihi Electronic Systems Co., Ltd. (now known as the JV) and Rayes Group (2) (1)

10.3      Cooperation Agreement Regarding China Online's Internet Content Service Commercial Business dated July 15, 1998
          between Neihi Electronic Systems Co., Ltd. (now known as the JV) and Rayes Group (2) (1)

10.4      Cooperation Agreement for Dissemination of Educational Resources between the JV and Wuhan City No.2 Secondary School
          to establish Education Net dated January 7, 2000 (2) (1)

10.5      Cooperation Agreement for Transmission of Education Materials between the JV and Wuhan Cable TV to provide Education
          Net infrastructure dated March 10, 2000 (2) (1)

10.6      Purchase Agreement between the JV, Shanghai Togji Construction Materials Technology Sales Service Co., Ltd. and
          other parties specified thereby dated October 22, 1999 (2) (1)

10.7      2000 Stock Option Plan* (1)

10.8      Form of Subscription Agreement (1)

10.9      Form of Escrow Agreement between the Company and American Securities Transfer and Trust, Inc. (1)

10.10     Form of Migration's Convertible Promissory Note (3)

10.11     Migration's Loan Agreement dated October 10, 2000 (3)

10.12     Sino-Foreign Joint Venture Agreement dated July 7, 2000 between Migration and Shanghai Dongyi Scientific Technology
          Engineering Co. (3)

10.13     Share Purchase Agreement dated July 17, 2000 between Shanghai Shangyi Science and Trade Information Consulting Co.,
          Ltd. and Shanghai Tongji Construction Materials Sales and Services Co., Ltd. (3)

10.14     Lease Agreement for Rental of Office Premises dated April 25, 2000 (3)

10.15     COL International's Loan Agreement dated December 21, 2000 (4)


<PAGE>


21        Subsidiaries of the Registrant (5)

31        Rule 13a-14(a)/15a-14(a) Certification of Chief Executive Officer and Chief Financial Officer

32        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

----------



*          Designates a management contract or compensatory plan required to be filed as an Exhibit to this Report on Form
           10-KSB

(1)        Incorporated by reference from the Company's Form SB-2 Registration Statement dated June 13, 2000 (File No.
           333-39208)

(2)        Translated into English from Chinese

(3)        Incorporated by reference from the Company's Amendment No. 2 to Form SB-2 Registration Statement dated October 19,
           2000 (File No. 333-39208)

(4)        Incorporated by reference from the Company's Amendment No. 3 to Form SB-2 Registration Statement dated January 17,
           2001 (File No. 333-39208)

(5)        Incorporated by reference from the Company's Form 10-KSB dated November 15, 2001 for the year ended June 30, 2001
           (File No. 333-39208)
</TABLE>