UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
20-F





CHINESEWORLDNET.COM
INC.








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


OR





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


For the
fiscal year ended December 31,
2009


OR





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


For the
transition period from _______________to _______________


OR





o
            SHELL
      COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934


Date of
event requiring this shell company report _______________




Commission
file number 000-33051





CHINESEWORLDNET.COM
INC.


(Exact
name of registrant as specified in its charter)





CAYMAN
ISLANDS


(Jurisdiction
of incorporation or organization)





APPLEBY,
CLIFTON HOUSE, 75 FORT STREET, P.O. BOX 190, GRAND CAYMAN, CAYMAN


ISLANDS
KY1-1104


(Address
of principal executive offices)





Securities
      registered or to be registered pursuant to Section 12(b) of the
      Act.Not Applicable
            Not Applicable(Title
      of each class)
            (Name
      of each exchange on which registered)Securities
      registered or to be registered pursuant to Section 12(g) of the
      Act.Common Shares, U.S. $0.001 Par
      Value(Title
      of Class)Securities
      for which there is a reporting obligation pursuant to Section 15(d) of the
      Act.Not Applicable(Title
      of Class)


Indicate
the number of outstanding shares of each of the issuer’s classes of capital or
common stock as of the close of the period covered by the annual report: 10,700,000 common
shares




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


o Yes   x
No





If this
report is an annual or transaction report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.


o Yes   x
No


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




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for 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.


x Yes
   ̈
No




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.  See definition of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange
Act.


 ̈ Large accelerated
filer    ̈ Accelerated
filer   x
Non-accelerated filer





Indicate
by check mark which financial statement item the registrant has elected to
follow.


x Item
17   o Item 18





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


 ̈ Yes   x
No




(APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE
YEARS)


Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.


 ̈ Yes    ̈ No










TABLE
OF CONTENTS





INTRODUCTION
      AND USE OF CERTAIN TERMS
                    3CAUTIONARY
      NOTICE REGARDING FORWARD-LOOKING STATEMENTS
                    3PART
      IITEM
      1.
                    IDENTITY
      OF DIRECTORS, SENIOR MANAGEMENT, AND ADVISORS
                    4ITEM
      2.
                    OFFER
      STATISTICS AND EXPECTED TIMETABLE
                    4ITEM
      3.
                    KEY
      INFORMATION
                    4ITEM
      4.
                    INFORMATION
      ON THE COMPANY
                    23ITEM
      4A.
                    UNRESOLVED
      STAFF COMMENTS
                    35ITEM
      5.
                    OPERATING
      AND FINANCIAL REVIEW AND PROSPECTS
                    36ITEM
      6.
                    DIRECTORS,
      SENIOR MANAGEMENT AND EMPLOYEES
                    44ITEM
      7.
                    MAJOR
      SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
                    48ITEM
      8.
                    FINANCIAL
      INFORMATION
                    49ITEM
      9.
                    THE
      OFFER AND LISTING
                    49ITEM
      10.
                    ADDITIONAL
      INFORMATION
                    51ITEM
      11.
                    QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                    54ITEM
      12.
                    DESCRIPTION
      OF SECURITIES OTHER THAN EQUITY SECURITIES
                    54PART
      IIITEM
      13.
                    DEFAULTS,
      DIVIDEND ARREARAGES AND DELINQUENCIES
                    54ITEM
      14.
                    MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
      PROCEEDS
                    55ITEM
      15.
                    CONTROLS
      AND PROCEDURES
                    55ITEM
      16A.
                    AUDIT
      COMMITTEE FINANCIAL EXPERT
                    56ITEM
      16B.
                    CODE
      OF ETHICS
                    56ITEM
      16C.
                    PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
                    56ITEM
      16D.
                    EXEMPTIONS
      FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
                    57ITEM
      16E.
                    PURCHASES
      OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS
                    57ITEM
      16F.
                    CHANGES
      IN REGISTRANT’S CERTIFYING ACCOUNTANT
                    57ITEM
      16G.
                    CORPORATE
      GOVERNANCE
                    57PART
      III
                    
                    57ITEM
      17.
                    FINANCIAL
      STATEMENTS
                    57ITEM
      18.
                    FINANCIAL
      STATEMENTS
                    57ITEM
      19.
                    EXHIBITS
                    58EX-4.
      B-11
                    CONSULTING
      AGREEMENT BETWEEN CHINESEWORLDNET.COM INC. AND GOLDPAC INVESTMENTS LTD.
      DATED JANUARY 1, 2009EX-4.
      B-12
                    CONSULTING
      AGREEMENT BETWEEN CHINESEWORLDNET.COM INC. AND SILVER LAKE INVESTMENT
      PARTNERS, LTD. DATED JANUARY 1, 2009EX-31.
      1
                    CERTIFICATION
      OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
      ACT OF 2002EX-31.
      2
                    CERTIFICATION
      OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
      ACT OF 2002EX-32.
      1
                    CERTIFICATION
      OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
      PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002EX-32.
      2
                    CERTIFICATION
      OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
      PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002SIGNATURES
                    58INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS
                    59


2





INTRODUCTION
AND USE OF CERTAIN TERMS




ChineseWorldNet.Com
Inc. is a corporation incorporated under the Company Law (1998 revision)
of the Cayman Islands on January 12, 2000.  Except as the context
otherwise requires, all references in this annual report (the “Report”) on Form 20-F to
“we,” “us,” “our,” “CWN” and the “Company” are to
ChineseWorldNet.Com Inc. and our subsidiaries, including NAI Interactive Ltd.
(“NAI”), a company
incorporated under the laws of British Columbia, ChineseWorldNet.com (Hong Kong)
Ltd. (“CWNHK”), a
company incorporated under the laws of Hong Kong, 70% owned interest in
ChineseWorldNet.com (Shanghai) Ltd. (“CWN China”), a company
incorporated under the laws of People’s Republic of China, 70% owned interest in
Weihai Consulting Investment Ltd., (“Weihai”) a company incorporated under the
laws of People’s Republic of China and CWN Capital Inc. (“CWN Capital”), a company
incorporated under the laws of British Virgin Islands.  Our
consolidated financial statements are prepared in accordance with the United
States generally accepted accounting principles (“US GAAP”) and are presented
in United States dollars (“US
dollars”). All monetary amounts contained in this annual report are in US
dollars unless otherwise indicated.




Our
executive and registered office is located at Appleby, Clifton House, 75 Fort
Street, P.O. Box 190, Grand Cayman, Cayman Islands KY1-1104. Our North American
head office and principal place of business is located at Suite 368 –
1199 West Pender Street, Vancouver, British Columbia, Canada V6E
2R1.





CAUTIONARY
NOTICE REGARDING FORWARD-LOOKING STATEMENTS




The
information set forth in this Form 20-F is as of December 31, 2009 unless
otherwise indicated.




The
following discussion contains forward-looking statements that reflect
management’s current views and expectations with respect to our business,
strategies, products and services, future results and events and financial
performance.  All statements made in this Report other than statements
of historical fact, including statements that address operating performance,
events or developments that management expects or anticipates will or may occur
in the future, including statements related to channels, volume growth,
revenues, profitability, new products, adequacy of funds from operations,
statements expressing general optimism about future operating results and
non-historical information, are forward-looking statements are forward-looking.
In particular, the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” “will,” variations of such
words, and similar expressions identify forward-looking statements, but are not
the exclusive means of identifying such statements and their absence does not
mean that the statement is not forward-looking.




These
forward-looking statements are subject to risks and uncertainties that could
cause our actual results and financial position to differ materially from our
historical results, as well as those expressed in, anticipated or implied by
these forward-looking statements. These factors include, but are not limited to,
the fact that we are an Internet-based provider of news and information on small
and micro-cap public companies, will need additional financing to develop
our activities and will be subject to certain technological and risks doing
business in the People’s Republic of China (the “PRC” or“China”).  These
and other factors are set forth in more detail in the Section titled “Risk Factors” at “Item 3 – Key Information” and
“Item 5 – Operating and
Financial Review and Prospects”, as well as elsewhere in this Report. We
do not undertake any obligation to revise or update these forward-looking
statements to reflect any future events or circumstances.




3





PART
I





ITEM 1. IDENTITY OF DIRECTORS, SENIOR
MANAGEMENT, AND ADVISORS





This
Report on Form 20-F is being filed as an annual report under the Securities
Exchange Act of 1934 (the “Exchange Act”) and, as such,
there is no requirement to provide any information under this item.





ITEM 2. OFFER STATISTICS AND EXPECTED
TIMETABLE





This
Report on Form 20-F is being filed as an annual report under the Exchange Act
and, as such, there is no requirement to provide any information under this
item.





ITEM 3. KEY INFORMATION





A. Selected Financial
Data




The
following table sets forth selected consolidated financial information from our
consolidated financial statements prepared in accordance with US GAAP for our
five most recently completed fiscal periods consisting of the years ended
December 31, 2009, 2008, 2007, 2006 and 2005.  The information for the
last three fiscal years ended December 31, 2009, 2008 and 2007 have been
extracted from the Company’s audited consolidated financial statements and the
related notes included herein and should be read in conjunction with such in
“Item 5 – Operating and
Financial Review and Prospects”.  Information for the years
ended December 31, 2006 and 2005 have been extracted from audited consolidated
financial statements not disclosed elsewhere and presented below.





Year ended December 31,Selected Financial Data
                
                2009
                
                
                2008
                
                
                2007
                
                
                2006
                
                
                2005Consolidated
      Statements of Operations:Revenue
                
                $
                906,455
                
                
                $
                1,011,322
                
                
                $
                1,325,994
                
                
                $
                643,370
                
                
                $
                533,521Net
      income (loss) for the year
                
                
                (402,209
                )
                
                
                (1,004,835
                )
                
                
                108,354
                
                
                
                (209,883
                )
                
                
                (78,030
                )Net
      income (loss) attributable to non-controlling interest
      interest
                
                
                (72,977
                )
                
                
                (54,712
                )
                
                
                —
                
                
                
                —
                
                
                
                —Net
      income (loss) attributable to common stockholders
                
                
                (329,232
                )
                
                
                (950,123
                )
                
                
                108,354
                
                
                
                (209,883
                )
                
                
                (78,030
                )Earning
      (loss) per share – basic
                
                
                (0.03
                )
                
                
                (0.09
                )
                
                
                0.01
                
                
                
                (0.03
                )
                
                
                (0.01
                )Earning
      (loss) per share – diluted
                
                
                (0.03
                )
                
                
                (0.09
                )
                
                
                0.01
                
                
                
                (0.03
                )
                
                
                (0.01
                )Weighted
      average common shares outstanding – basic
                
                
                10,700,000
                
                
                
                10,700,000
                
                
                
                9,012,328
                
                
                
                8,200,000
                
                
                
                8,200,000Weighted
      average common shares outstanding – diluted
                
                
                10,700,000
                
                
                
                10,700,000
                
                
                
                9,103,713
                
                
                
                8,200,000
                
                
                
                8,200,000Consolidated
      Balance Sheets:Total
      assets
                
                $
                1,933,021
                
                
                $
                2,104,383
                
                
                $
                2,780,226
                
                
                $
                226,896
                
                
                $
                312,053Equipment
                
                
                73,012
                
                
                
                46,526
                
                
                
                22,001
                
                
                
                22,677
                
                
                
                16,767Total
      current liabilities
                
                
                583,959
                
                
                
                221,251
                
                
                
                373,870
                
                
                
                439,278
                
                
                
                170,469Total
      stockholders’ equity (deficiency)
                
                
                1,349,062
                
                
                
                1,646,205
                
                
                
                2,200,694
                
                
                
                (212,382
                )
                
                
                (8,416
                )




No
dividends have been declared or paid in Fiscal 2009.


4




B. Capitalization and
Indebtedness





This
Report on Form 20-F is being filed as an annual report under the Exchange Act
and, as such, there is no requirement to provide any information under this
item.




C. Reasons for the Offer and
Use of Proceeds




This
Report on Form 20-F is being filed as an annual report under the Exchange Act
and, as such, there is no requirement to provide any information under this
item.





D. Risk
Factors





The following discussion in this
Report on Form 20-F contains forward-looking statements regarding our business,
prospects and results of operations that involve risks and uncertainties. Our
actual results may differ materially from the results that may be anticipated by such
forward-looking statements and discussed elsewhere in this Report. Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed below, as well as those discussed under the heading “Item 4–Information on the
Company”and
“Item 5–Operating and Financial Review and
Prospects”and those
discussed elsewhere in this Report. In evaluating our business, prospects and
results of operations, readers should carefully consider the following factors in addition to other
information presented in this Report and in our other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect our business, prospects andresults of operations. See
“Cautionary Notice
Regarding Forward Looking Statements”above.





RISK
FACTORS RELATING TO OUR COMPANY AND OUR BUSINESSES





The
market turmoil arisen from the global financial crisis in 2008 may continue to
affect our financial performance, the demand of financial related services and
investor relation services, and our client and user base.




The
global financial crisis in 2008 has had a negative impact on our businesses as
shown in our declining revenues, client base and conference attendance and sales
since the latter half of 2008.  Despite signs of economic improvement
in the general financial market in 2009, we may continue to face difficulties in
our businesses if new strategies or business models are not developed and
implemented.





Our businesses are dependent on the
level of trading activity in PRC’s securities
markets.  Volatility in PRC’s securities markets may dampen
investors’interest in such markets and
adversely affect our revenue and profitability.




Our
businesses are dependent on user demand for market intelligence on various
securities markets, including PRC’s securities markets.  The demand
for investment in PRC’s securities markets has fluctuated with the level of
trading activity there.  In the last several years, PRC’s securities
markets have experienced significant fluctuation.  If the PRC’s
securities markets weaken, and if investors’ interest in PRC’s securities
markets declines, our businesses could be significantly and adversely
affected.





Our
limited operating history in certain activities makes it difficult to judge our
prospects.




Although
we have an operating history of 10 years, we may have a limited history in terms
of certain aspects of our operation.  This includes our institutional
conference business and those new strategies and business models we developed in
the face of the global financial crisis, such as the road show business and the
distribution of financial information to third parties.  Potential
investors should be aware of the risks associated with such, and expect that
most of our revenues in the foreseeable future be applied towards building and
growing the Company and its businesses.


5


We
may not be able to successfully implement our growth strategies.





We are
pursuing a number of growth strategies.  Internally, we require
constant development and expansion of our content and knowledge
base.  Externally, we endeavor to create sustainable partnerships,
joint ventures and acquisitions with providers of financial products and
services.  We seek out relationships with companies with customers in
North America and Asia, offering new services for which there are no strong and
well established markets, or new services where we lack experience and
expertise.  In light of this, we cannot guarantee that the new
services will be commercially viable or delivered in a timely
manner.





In
addition to revenues we generate from premium subscription and marketing
services, we intend to increase revenues of our Portal business through online
banner advertising and distribution of financial information to third
parties.  To date, we have had limited success with online banner
advertising, which we attribute to a low number of website content
contributors.  We intend to increase online banner advertisements by
increasing the number of website content contributors.  We also have
had limited success with distribution of financial information to third parties
as we are still new into the business and we have yet to build our client
base.  There is no guarantee we may be able to achieve what we
desire.  Furthermore, we intend to grow our IR/PR business and GCFF
investment seminars and conferences by increasing internal support staff and
other resources.  The increased associated costs may impede our
results of operations and financial condition, with no guarantee of success or
increase in revenue.





We
may not be able to maintain our existing or enter into new successful
partnerships or collaborations.





We offer
a suite of services which we rely on partnerships and collaborations with
external parties.  There is no guarantee that we will be able to
maintain our existing or enter into new successful partnerships or
collaborations.  As a result, we may not be able to maintain or
achieve profitability.





Our
future performance is dependent on our ability to retain senior management and
key personnel.




Our
performance is substantially dependent on the performance of our senior
management and key personnel.  In particular, our success depends on
the continued efforts of our senior management team.  We intend to
grant stock options to our senior management and key personnel in lieu of salary
raise.  Due to potential fluctuation of our future share price, our
employees may have their stock options at strike prices far above the then
current share price.  As a result, our employees may not consider
their stock options to be a valuable form of compensation, and we may need to
provide other forms of compensation such as salary increase, bonuses or equities
in an effort to retain them.  Our inability to retain employees,
particularly our senior officers, and key sales, technical, marketing and other
service personnel in our key revenue producing businesses could have a material
adverse effect on businesses, results of operations and financial
condition.




Our businesses may be adversely
affected if we do not continue to expand and maintain an effective customer
support force.




We offer
our clients and users customer support in English, Cantonese and Mandarin
through a North American toll free telephone number.  The purpose of
customer support is to resolve our clients’ and user’ issues and questions as
well as to explain our Company’s service offerings.  Most of our staff
members involved in the customer support function are relatively new to the
Company, and may not have sufficient training or experience to effectively serve
our clients and users.  We will need to increase our customer support
force as our businesses expand, as well as provide adequate training to
them.  We may not be able to hire and retain employees without
short-term disruptions to our operations, and locating multilingual workers may
post a challenge.  Failure to maintain a working customer support team
may have a material adverse effect on our businesses.




Difficulties
associated with our brand development may harm our ability to attract clients
and users.




We
believe that a general increase in competition for online financial services has
elevated the importance of brand building and brand awareness.  We
also believe that maintaining and generating awareness about our websites, www.chineseworldnet.com,
www.nai500.com,
www.gcff.ca and
www.rzto.com,
as well as their associate brands are important aspects in our efforts to
continue to attract clients and users.  Our planned products and
services may not be widely recognized, and we will need to increase awareness
amongst potential users.  Despite continued efforts to generate brand
awareness, it may be ineffective or unsuccessful in reaching potential
users.  Potential users may not be receptive to our advertising
campaigns and/or other efforts.  Accordingly, our efforts may be
unsuccessful in raising awareness of our websites and their associate brands or
in persuading potential clients and users to purchase or use our
services.


6




We
do not own the URLs for our principal websites.  If we lose the right
to use our principal website addresses or URLs, our businesses could be
seriously harmed.




Our
principal website addresses or Uniform Resource Locators (URLs), www.chineseworldnet.com,
www.nai500.com,
www.gcff.ca and
www.rzto.com,
are currently licensed from Register.com on a yearly basis.  As per
our services agreements with Register.com, there is no guarantee that we can
renew the services agreements with regard to our principal website addresses or
URLs.  If we lose the right to use the www.chineseworldnet.com,
www.nai500.com,
www.gcff.ca and
www.rzto.com
domain names, they may become the property of our competitors or other parties,
either of which could have a material adverse effect on our businesses, results
of operations and financial condition.





We
face significant competition which could adversely affect our businesses,
results of operations and financial condition.





The
markets for our Portal, IR/PR, Conference and Online Platform businesses are
extremely competitive and rapidly changing.  The number of competitors
competing for our potential clients and users’ attention and spending has
increased significantly since we commenced operations and we expect that
competition will continue to intensify.  As we continue to broaden our
range of product offerings, we expect increasing competition from established
players as well as less well-known players in the coming years.  Many
of these competitors have longer operating histories, better brand recognition,
larger customer bases and databases, and significantly greater financial,
technical and marketing resources.  In addition, certain companies,
especially early-stage venture-backed start-ups may be willing to compete for
market share at the expense of generating revenues.  Any of our
present or future competitors may provide products and services that provide
significant better performance, price, creativity or other advantages over those
offered by us.  Our competitors may be able to undertake more
extensive marketing campaigns, adopt more aggressive pricing policies and make
more attractive offers to qualified personnel, distribution partners,
advertisers and content providers.  Our ability to compete
successfully depends on many factors, including the quality of our content, the
breadth, depth and ease of use of services, sales and marketing efforts, and
performance of technology etc.  See Section titled “Competition” at “Item 4–Information on the
Company”.





We
currently compete, directly and indirectly, for paying subscribers and viewers
with companies in the business of providing financial data and information
services, including publishers and distributors of traditional media, Internet
portals providing information on business, finance and investing, dedicated
financial information websites, personal stock research software vendors and
stock brokerage companies, especially stock brokerage companies with online
trading capabilities.  We also compete, directly and indirectly, for
clients and users with companies specialized in providing IR/PR services and for
conference participants and attendees with companies specialized in hosting and
organizing conferences.




Many of
our existing competitors, as well as potential new competitors, may adopt our
business model and devote greater resources than we can to the development and
promotion of service offerings similar to or more advanced than our own. These
competitors may also engage in more extensive research and development,
undertake more far-reaching marketing campaigns, and adopt more aggressive
pricing policies and offer products and services that achieve greater market
acceptance than ours.  They may also undercut us by making more
attractive offers to our existing and potential employees, content providers,
sponsors, clients and users. New and increased competition could result in price
reductions for our research tools, reduced margin or loss of market share, any
of which could materially and adversely affect our businesses, results of
operations and financial condition.


7


Unforeseen
developmental difficulties with our technological infrastructure may hinder our
efforts.




We have
undertaken measures to enhance our design and technological infrastructure in
order to improve our portals and websites, and we intend to continue doing so in
the foreseeable future.  In the past, we have experienced unexpected
web traffic, leading to slow upload times or other problems.  While we
have worked towards resolving these problems, they can be expected to occur
again in the future, hence, the need of our continual efforts to upgrade and
improve our portals and websites.  Unforeseeable developmental
difficulties may prevent us from implementing improvements or lead to higher
than anticipated costs, and repeated problems in accessing our websites can
deter visitors from future use.  All of these, and possibly other
problems, will affect our businesses, operations and financial condition,
unfavorably.




If we are not able to
respond successfully to
technological or industry developments, our businesses may be materially and
adversely affected.





The
online financial data and information services market is characterized by rapid
advancements in technology, evolving industry standards and changes in customer
needs.  New services or technologies may render our existing services
or technologies less competitive or obsolete.  Responding and adapting
to technological developments and standard changes in our industry, the
integration of new technologies or industry standards, or the upgrading of
our networks may require substantial time, effort and capital
investment.  In the event that we are unable to respond successfully
to technological industry developments, this may materially and adversely affect
our businesses, results of operations and competitiveness.




Our
ability to maintain and increase our readership depends on the continued growth
in use and efficient operation of the Internet.




The
web-based information market is rapidly evolving.  Our businesses
would be adversely affected materially if web usage does not continue to grow or
grows slowly.  Web usage may be inhibited for a number of reasons
beyond our control, such as:





·
            inadequate
      network infrastructure;


·
            security
      and privacy concerns;


·
            inconsistent
      quality of service; and


·
            unavailability
      of cost-effective, high-speed access to the
  Internet.




Our users
depend on Internet service providers, online service providers and other website
operators for access to our websites.  Many of these companies
providing such services have experienced service outages in the past and could
experience service outages, delays and other difficulties unrelated to our
systems.  These occurrences could cause our users to perceive the web
in general or our websites in particular as an unreliable medium and, therefore,
cause them to use other media to obtain their financial news and
information.  We also depend on a number of information providers to
deliver information and data feeds on a timely basis.  Our websites
could experience disruptions or interruptions in service due to the failure or
delay in the transmission or receipt of this information, which could materially
and adversely affect our businesses, results of operations and financial
condition.




We
may be held liable for information retrieved from our website and such potential
liability could harm our businesses.




Because
our services can be used to download and distribute information to others, there
is a risk that claims may be made against us for defamation, negligence,
copyright or trademark infringement or other claims based on the nature and
content of that material, such as violation of censorship laws in the
PRC.  In addition, we do not carry any liability insurance to
indemnify us for all liability that may be imposed.  Any imposition of
liability could have a material adverse effect on our businesses, results of
operations and financial condition.




We
may be held liable for the content of our electronic and hard copy publishing
and such potential liability could harm our businesses.




We are
paid by companies to produce company profiles, translated fact sheet and
presentation materials, which are distributed to target investors by email, mail
and published on our website.  Our users may request and receive
directly from us a hard copy of any such review.  We make no
recommendation for the purchase of securities in any of our public company
clients’ securities and each report contains a disclaimer to that
effect.  We do not send out unsolicited copies of the reports on our
client companies’ behalf.  We receive a fee from the client company
for preparing the report but receive no underlying interest in the client
company’s securities nor do we take any position in those
securities.


8




Although
we have a disclaimer on each review, it may be perceived by users that we are
endorsing our client companies as an investment.  Potential liability
issues may arise should our users invest in these companies and lose money based
upon an inaccurate perception that we have endorsed such an
investment.  Liability issues include the defense of a lawsuit that
could be brought by a user seeking compensation for the losses it has suffered
which could involve us in costly and time-consuming litigation in defending such
a suit.  We have no liability insurance in place to protect us against
such a potential suit.





Failure
of our internal security measures or breach of our privacy protections may cause
us to lose users and subject us to liability.




Users who
subscribe to our premium subscription-based products are required to supply
certain personal information which we use to administer our
services.  We also require users of some of our free products and
features to provide us with certain personal
information.  Additionally, we rely on security and authentication
technology licensed from third parties to perform real-time credit card
authorization and verification, and at times rely on third parties, including
technology consulting firms, to help protect its infrastructure from security
threats.  In this regard, our users depend on us to keep their personal
information safe and private from third parties.  If users perceive
that we are not protecting their privacy, or if the technology developed by
these third parties does not function as anticipated and our information
security measures are breached, our users could be discouraged from registering
to use our services, which could have a material adverse effect on our
businesses, results of operations and financial condition.




We
may be involved in future litigation over our use of technology
rights.




We
currently own and license technology from third parties.  None of our
application technologies are proprietary to us.  As we continue to
introduce new services that require new technology, we anticipate that we may
need to license additional third-party technology.  These existing and
additional technology licenses may not be available to us on commercially
reasonable terms, if at all.  In addition, it is possible that in the
course of using new technology, we may inadvertently breach the technology
rights of third parties and face liability.  Our inability to obtain
these technology licenses or avoid breaching third party technology rights could
delay or compromise our introduction of new services and could materially and
adversely affect our businesses and financial condition.




We cannot
be certain that our website content and online services and tools do not or will
not infringe upon patents, valid copyrights or other intellectual property
rights held by third parties.  We may become subject to legal
proceedings and claims from time to time relating to the intellectual property
of others in the ordinary course of our business.  If we are found to
have violated the intellectual property rights of others, we may be banned from
using such intellectual property, and we may incur licensing fees or be forced
to develop alternatives.  In addition, we may incur substantial
expenses in defending against these third party infringement claims, regardless
of their merit.  Successful infringement or licensing claims against
us may result in substantial monetary liabilities, which may materially and
adversely affect our businesses.




We enter
into confidentiality agreements with our employees and consultants, and control
access to and distribution of our documentation and other licensed
information.  In spite of these precautions, it may be possible for
such persons to breach such precautions or controls or a third-party to copy or
otherwise obtain and use our licensed services or technology without
authorization, or to develop and apply similar technology
independently.  In addition, effective copyright, trademark and trade
secret protection may be unavailable or limited, and the global nature of the
Internet and the media makes it practically impossible to control the ultimate
destination of our products.  Policing the unauthorized use of our
licensed technology is difficult as are the steps necessary to prevent the
misappropriation or infringement of our licensed technology.  In
addition, litigation may be necessary to enforce our intellectual property
rights, to protect our trade secrets or to determine the validity and scope
of the proprietary rights of others, which could result in substantial cost to
us, divert our resources and have a material adverse effect on our businesses,
results of operations and financial condition.


9





Our
long-term liquidity and capital resources are uncertain.  Failure to
maintain profitability and positive cash flow may lead to failure of the
businesses.




We
anticipate the need to secure additional financing in order to maintain our
existing operations and to implement our planned expansions in North America and
Asia.  The Company has recurring losses from operations since
inception and has accumulated a deficit of $2,613,870 as at December 31,
2009.  The Company’s ability to continue as a going concern is
dependent upon its ability to obtain additional financing to maintain and to
expand its business operations.  Management has been able to finance
its business operations through equity and debt financing.  Management
will continue to seek additional capital to finance its business operations and
expansions through equity and debt financing.  However, there can be
no assurance that such financing will materialize on a timely basis or obtained
on favorable terms.  These conditions raise substantial doubt that the
Company will be able to continue as a going concern.




Our
strategy of expansion through acquisitions has been and will continue to be
costly and may not be effective, and we may realize losses on our
investments.  It may also affect our ability to receive favorable
financing terms.




We have
acquired, and intend to continue to acquire, companies and assets that we
believe will enhance our revenue growth, operations and
profitability.  Our acquisitions may result in the use of significant
amounts of cash, dilutive issuances of our common shares and amortization
expenses related to goodwill and other intangible assets, each of which could
materially and adversely affect our businesses.  These acquisitions
involve significant risks, including:




·
            the
      difficulties of integrating, assimilating and managing the operations,
      technologies, intellectual property, products and personnel of the
      acquired business;


·
            the
      diversion of management attention from other business
      concerns;


·
            the
      reduced availability of favorable financing for future
      acquisitions;


·
            the
      additional expense associated with acquired contingent
      liabilities;


·
            our
      inability to manage adequately the currency, interest rate and equity
      price fluctuations relating to our acquisitions and
      investments;


·
            the
      loss of key employees in acquired
businesses;


·
            the
      risk of being sued by terminated employees and contractors;
      and


·
            our
      lack of familiarity with local market and other conditions and business
      practices




If we
acquire another business, we would need to integrate, manage and protect our
interests in our acquired businesses successfully, and failure to do so could
have a material adverse effect on our businesses, results of operations and
financial condition.




If
economic and other conditions further deteriorate, or if market or other values
continue to fluctuate, we may need to provide for further decreases in value or
increased unrealized losses.  Our results of operations, financial
condition, prospects and share price could be adversely and materially affected,
particularly if we are unable to hedge or adequately hedge our exposure to
reduced valuations.





In
addition, there is no guarantee that acquisitions would actually enhance our
revenues, operations and profitability.  If those benefits do not
materialize as expected, our financial condition may worsen and we may have
lower cash balance, lower profitability, higher debt level and lower credit
rating.  These will likely affect our ability to receive favorable
terms on equity or debt financing.  As a result, we may need to accept
a less than favorable financing such as issuing common shares at below book
value or market value or issuing debt at a higher interest rate, should we
require additional capital for our operations.


10


Our
Portal business may be adversely affected if we fail to attract or retain
sufficient number of Premium Subscribers or if we fail to develop or introduce
new features and research tools.




Currently,
we offer Premium Subscribers a number of service packages with premium and
personalized features and functionalities.  If we fail to attract or
retain sufficient number of Premium Subscribers to our premium service packages,
or if our readers continue to use our free services rather than subscribing to
our Premium Services, our revenues may decline.  In addition, if we
fail to offer new features or tools on a regular basis, or if such features and
tools are not favorably received, our Premium Subscribers may choose to
discontinue their subscription.  Alternately, if we fail to offer
service packages that provide value, potential subscribers may turn to our
competitors that put more resources into innovation of their products rather
than using our services.  In developing new features and tools, it is
probable that we will experience challenges that may delay or prevent launching
these new services. Furthermore, the said new services may contain errors that
are discovered only after launch.  Our Portal business may be affected
adversely in the aforementioned scenarios.





In
addition, a number of companies in PRC offer stock quotes, economic and
company-specific news, historical stock performance statistics, online chatting
regarding individual securities and other features for free over the
Internet.  If users determine that the information available for free
over the Internet is sufficient for their investing needs, they would be
unlikely to pay for subscription to our services, thus reducing our revenues and
net income and forcing us to develop a new business
model.  Furthermore, the amount and quality of information available
for free over the Internet may expand in the future, reducing the attractiveness
of our services and forcing us to spend additional money to develop more
sophisticated services in order to compete.  There can be no assurance
that we would be successful in developing a new business model or more advanced
services in response to either of the above challenges.  Failure to do
so would lead to significant declines in our number of subscribers, revenues and
net income.




Failure
to establish and maintain strategic relationships with other companies,
including partnerships with content providers in Greater China,  may
negatively affect our subscriber and reader base, hence, our
businesses.




We depend
on establishing and maintaining content syndication and headline indexing
relationships with high-traffic websites for a portion of our current subscriber
and reader base.  There is intense competition for relationships with
these firms and placement on these sites, and we may have to pay substantial
fees to establish additional content syndication and headline indexing
relationships or maintain existing relationships in the future.  We
may be unable to enter into or successfully renew relationships with these firms
or sites on commercially reasonable terms.  Many companies that we may
approach for a strategic relationship or which already have strategic
relationships with us also receive financial news and information from other
sources.  As a result, these companies may be reluctant to enter into
or maintain strategic relationships with us.





We also
depend on establishing and maintaining the content of the financial markets,
economy and company trends in Greater China as a key aspect of our
businesses.  These content include blogs, expert analysis, news
articles and commentaries.  Failure to maintain the quality of such
content or to develop the content through partnerships may negatively affect our
client and readership base.





If we do
not establish additional and maintain existing strategic relationships on
commercially reasonable terms, or if any of our strategic relationships do not
result in an increase in the number of subscribers or readers of our websites,
our businesses may be negatively affected.





Certain
of our revenues from our Portal and IR/PR businesses are billed on a fixed-price
basis which may be subject to cost over-runs and we may incur a loss as a
result.




Certain
of our Portal and IR/PR businesses include individual and short-term projects
billed on a fixed-price basis as distinguished from a method of billing on a
time and materials basis.  Our failure to obtain new business in any
given quarter or estimate accurately the resources and time required for an
engagement, to manage client expectations effectively regarding the scope of
services to be delivered for the estimated fees or to complete fixed-price
engagements within budget, on time and to clients’ satisfaction could expose us
to risks associated with cost over-runs, which could have a material adverse
effect on our businesses.




11


Failure
to attract individual investor participants to our conferences or failure of
implementing the changes planned for the Conference business may decrease
attendance of presenting companies, corporate delegates, and in general, paying
participants for the conferences.




Our
Conference business represents a significant portion of our
revenue.  Presenting companies and exhibitors pay to attend our
conferences typically for the purpose of meeting individual investor
participants.  Failing to attract individual investor participants to
our conferences may result in a decline of presenting companies and exhibitors,
thereby affecting our overall revenue.  In the future, we may increase
the price we charge the presenting companies and exhibitors or we may begin
charging the individual investor participants, this may have a negative effect
on the attendance, thereby also affecting our overall revenue.





In
addition, our Conference business had undergone changes to address the current
financial environment.  Specifically, the repositioning of the Toronto
Conference 2009 and the Shanghai Conference 2009 away from the traditional focus
on the capital markets and towards a more general partnering business format for
selected industries in cross-border businesses between North America and Greater
China.  The success of the conferences is, by no means,
secure.  Problems may arise from inexperienced company personnel as
well as other factors which may have a negative effect on the revenue of our
Conference business.





Failure
to maintain strategic relationship with partner companies in organizing
financial seminars in PRC may adversely affect our business.




In
expanding our financial seminars in PRC, we may depend on establishing and
maintaining the partnerships with local companies in PRC, such as agents,
internet platform partners, consulting companies, project event organizers, in
various disciplines such as marketing our company and/or events, seminar
organization and coordination.  We may be unable to enter into
or successfully renew relationships with these companies or partners on
commercially reasonable terms.





Many
companies that we may approach for a strategic relationship or who already have
strategic relationships with us will have financial commitments and
responsibilities involved with our company.  Failure to establish or
maintain relationships with said companies would significantly affect our
businesses.





RISKS
RELATING TO OUR INDUSTRY





Intense
competition could reduce our market share and harm our financial
performance.




A number
of financial news and information sources compete for consumers’ and
advertisers’ attention and spending. We compete for advertisers, readers, staff
and outside contributors with many types of companies, including:




·
            English
      Content:


o
            online
      services or websites focused on business, finance and investing, such as
      CBS.MarketWatch.com, CNBC on MSN Money, CNNfn.com, The Wall Street Journal
      Online, TheStreet.com, Globeinvestor.com, TheNewYorkTimes.com,
      DowJones.com, SmartMoney.com, and The Motley
  Fool;


o
            publishers
      and distributors of traditional media, including print, radio and
      television, such as The Wall Street Journal, Fortune, Bloomberg Business
      Radio, and CNBC;


o
            web
      “portal” companies, such as Yahoo!, MSN.com, and America
      Online;


o
            online
      brokerage firms, many of which provide financial and investment news and
      information, such as Charles Schwab, E*TRADE, and TD Waterhouse;
      and


o
            providers
      of terminal-based financial news and data, such as Bloomberg Business
      News, Reuters News Service, and Dow Jones
  Markets.





·
            Chinese
      Content:


o
            online
      services or websites focused on business, finance and investing, such as
      Chinesefn.com, HKNasdaq.com, Chinese.wsj.com, www.cnyes.com, and
      www.jrj.com;


o
            publishers
      and distributors of traditional media, including print, radio and
      television, such as Apple Daily, MingPao Daily, SingTao Daily, ChinaByte,
      and Xinhua News Agency;


o
            web
      “portal” companies, such as Yahoo! China, Yahoo! Hong Kong, baidu.com,
      China.com, Taiwan.com, Sina.com, Sohu.com, HongKong.com, Tom.com, 36.com,
      Netease.com, Yam, and Hinet; and


o
            online
      brokerage firms, many of which provide financial and investment news and
      information, such as whsb.com, Cash Online, and
  Pt123.com.


12





Our
ability to compete depends on many factors, including the originality,
timeliness, insightfulness and trustworthiness of our content and that of our
competitors, the ease of use of services developed either by us or our
competitors and the effectiveness of our sales and marketing
efforts.




Many of
our existing competitors, as well as a number of potential new competitors, have
longer operating histories, greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources than we
do.  This may allow them to devote greater resources than we can to
the development and promotion of their services.  These competitors
may also engage in more extensive research and development, undertake more
far-reaching marketing campaigns, adopt more aggressive pricing policies
(including offering more of their financial news and commentary for free) and
make more attractive offers to existing and potential employees, outside
contributors, strategic partners and advertisers.  Our competitors may
develop content that is equal or superior to our content or that achieves
greater market acceptance than our content.  It is also possible that
new competitors may emerge and rapidly acquire significant market
share.  We may not be able to compete successfully for advertisers,
readers, staff or outside contributors, which could materially adversely affect
our businesses, results of operations and financial
condition.  Increased competition could result in price reductions,
reduced margins or loss of market share, any of which could materially and
adversely affect our businesses, results of operations and financial
condition.




We also
compete with other websites, television, radio and print media for a share of
advertisers’ total advertising budgets.  If advertisers perceive the
Internet or our websites to be a limited or an ineffective advertising medium,
they may be reluctant to devote a portion of their advertising budget to
Internet advertising or to advertising on our websites.




Furthermore,
we are experiencing increased competition with a growing number of companies in
the United States and Canada with respect to our IR/PR and Conference
businesses.  There is a growing trend for companies to put on trade
shows and conferences regarding investing in China, which competes with our
business. If we are not able to effectively compete with these companies for the
limited marketing budgets of participants, our business may be adversely
affected and our financial performance may be harmed.





Computer
equipment problems and failures could adversely affect our business.




Problems
or failures in our Internet-related equipment, including our file servers,
computers and software could result in interruptions or slow response times on
our websites, which could reduce the attractiveness of our websites to
advertisers and users. Equipment problems and failures could result from a
number of causes, including but not limited to an increase in the number of
users of our websites, computer viruses, outside programmers penetrating and
disrupting our software systems, human errors, fires, floods, power and
telecommunications failures, and internal breakdowns. In addition, any
disruption in Internet access provided by third parties could have an adverse
effect on our ability to provide the services that it proposes to offer to our
members which in turn may have an adverse effect on the number of members
we are able to attract to our websites.




Our computer
network is vulnerable to hacking, viruses and other
disruptions.




Inappropriate
use of our Internet services or errors or omissions in processing instructions
or data available in our computer system or databases could jeopardize the
security of confidential information stored in our computer system, which may
cause us to lose key clients, expose us to liability for our clients’ losses and
prevent us from securing future business, any of which could have a material
adverse effect on our prospects, business, financial condition, results of
operations and share price.




13


Inappropriate
use of the Internet includes attempting to gain unauthorized access to
information or systems – commonly known as cracking or hacking. Our current
policies, procedures and configurations for managing our systems, including our
computer servers, may not be adequate to protect our facilities and the
integrity of our user and customer information. Although we intend to
implement security measures to protect our facilities and the integrity of our
user and customer information, such measures could be ineffective or
circumvented. Alleviating problems caused by computer viruses or other
inappropriate uses or security breaches may require interruptions, delays or
cessation in our services, in addition to the outages that occur in our systems
from time to time for various reasons, including power interruptions, errors in
instructions, equipment inadequacy, capacity and other technical problems. We do
not carry errors and omissions or other insurance covering losses or liabilities
caused by computer viruses or security breaches. Compromises or breaches in the
security or integrity of our facilities or customer or user information, or
inappropriate use of our Internet services, could subject us to litigation and
could adversely affect our customer base, business, prospects, share price,
results of operation and financial condition.




Existing
and future laws and regulations may increase our costs of doing business and
legal compliance expenditures.




Existing
domestic and international laws or regulations and private industry guidelines
specifically regulate communications or commerce on the web. Furthermore, laws
and regulations that address issues such as user privacy, pricing, online
content regulations, taxation of electronic commerce transactions and the
characteristics and quality of online products and services are under
consideration by federal, state, local and foreign governments and agencies and
by private industry groups. Several telecommunications companies have petitioned
the Federal Communications Commission to regulate Internet service providers and
online services providers in a manner similar to the regulation of long distance
telephone carriers and to impose access fees on such companies. The governments
of other states or foreign countries might attempt to regulate our transmissions
or levy sales or other taxes relating to our activities. These regulations, if
imposed, could increase the cost of transmitting data over the web.




In
addition, the growth and development of the market for Internet commerce may
prompt calls for more stringent consumer protection laws, both in the United
States and abroad, that may impose additional burdens on companies conducting
business over the Internet. Our business, results of operations and financial
condition could be materially and adversely affected by the adoption or
modification of laws or regulations relating to the Internet.




The
interpretation and application of existing securities laws to web-based
financial news providers, including laws governing investment advisors,
investment companies and broker/dealers, by the Securities and Exchange
Commission and state securities regulators, is a developing area. If, as this
area matures, our activity is interpreted as subjecting it to regulation, we
could be subject to liability, and our business, results of operations and
financial condition could be materially and adversely affected.




We are
also subject to various federal and state regulations concerning the collection
and use of information regarding individuals. These laws include the Children’s
Online Privacy Protection Act, and state laws which limit or preclude the use of
voter registration and drivers’ license information, as well as other laws that
govern the collection and use of consumer credit and financial information,
including the Gramm-Leach-Bliley Act. Although our compliance with applicable
federal and state laws, regulations and industry guidelines has not had a
material adverse effect on our business, governments, trade associations and
industry self-regulatory groups may enact more burdensome laws, regulations and
guidelines, including antitrust and consumer privacy laws, for us and our
customers. The U.S. federal and various state governments have been
investigating certain Internet companies regarding their use of personal
information and have recently proposed limitations on the collection and use of
information regarding Internet users. The European Union has enacted its own
privacy regulations that may result in limits on the collection and use of
certain information from users in Europe. We could incur additional expenses if
any new regulations regarding the use of personal information are introduced or
if these agencies chose to investigate our privacy practices. Also, as a
consequence of governmental legislation or regulation or enforcement efforts or
evolving standards of fair information collection practices, we may be required
to make changes to our products or services in ways that could diminish the
effectiveness of the product or service or our attractiveness to potential
customers, which could materially and adversely affect our business, financial
condition or results of operations. Any new laws or regulations relating to the
web, or certain application or interpretation of existing laws, could decrease
the growth in the use of the web, decrease the demand for our websites or
otherwise materially and adversely affect our business.




14


Laws and
regulations directly applicable to Internet communications, commerce and
advertising are becoming more prevalent, and new laws and regulations are under
consideration by the U.S. Congress and state legislatures. Any legislation
enacted or restrictions arising from current or future government investigations
or policy could dampen the growth in use of the Internet generally and decrease
the acceptance of the Internet as a communication, commercial and advertising
medium. The laws governing the Internet remain largely unsettled, even in areas
where there has been some legislative action. Moreover, it may take years to
determine the extent to which existing laws relating to issues such as
intellectual property ownership and infringement, libel, obscenity and personal
privacy apply to the Internet and Internet advertising.




Concerns
about the security of electronic commerce transactions and confidentiality of
information on the Internet may reduce the use of our network and impede our
growth.




A
significant barrier to electronic commerce and communications over the Internet
in general has been a public concern over security and privacy, especially the
transmission of confidential information. If these concerns are not adequately
addressed, they may inhibit the growth of the Internet and other online services
generally, especially as a means of conducting commercial transactions. If a
well-publicized Internet breach of security were to occur, general Internet
usage could decline, which could reduce traffic to our destination sites and
impede our growth.




Doing business outside of the United
States may subject us to additional risks.





A
substantial portion of our business is conducted outside of the United States
and as a result, our operations could be subject to various risks such as the
possibility of the loss of revenue, property or equipment due to expropriation,
nationalization, war, insurrection, terrorism or civil disturbance, the
instability of foreign economies, currency fluctuations and devaluations,
adverse tax policies and governmental activities that may limit or disrupt
markets, restrict payments or the movement of funds or result in the deprivation
of contract rights. Additionally, our ability to compete could be adversely
affected by foreign governmental regulations that encourage or mandate the
hiring of local contractors, or by regulations that require foreign contractors
to employ citizens of, or purchase supplies from vendors in a particular
jurisdiction. We could also be subject to taxation in a number of jurisdictions,
and the final determination of our tax liabilities might involve the
interpretation of the statutes and requirements of various domestic and foreign
taxing authorities.





We may rely on
electronic commerce as a significant part of our future revenue, but the
Internet has not yet been proven as an effective commerce medium in the Greater
China region.




Our
revenue growth also depends on the increasing acceptance and use of electronic
commerce in the region comprised of the PRC, Hong Kong and Taiwan (referred in
this Report as “Greater
China”). The Internet may not become a viable commercial marketplace in
Asia for various reasons, many of which are beyond our control, including
inexperience with the Internet as a sales and distribution channel; inadequate
development of the necessary infrastructure to facilitate electronic commerce;
concerns about security, reliability, cost, ease of deployment, administration
and quality of service associated with conducting business over the Internet;
and inexperience with credit card usage or with other means of electronic
payment in the PRC.




If the
Internet does not become more widely accepted as a medium for electronic
commerce, our ability to generate increased revenue will be negatively
affected.




The
ability to block Internet advertising could prevent the expansion of online
advertising in Asia.




The
development of Web software that blocks Internet advertisements before they
appear on a user’s screen may hinder the growth of online
advertising.  The expansion of ad blocking on the Internet may
decrease our revenues because when an ad is blocked, it will not be downloaded
from our ad server, which means these advertisements will not be tracked as a
delivered advertisement.  In addition, advertisers may choose not to
advertise on the Internet or on our advertising network because of the use of
Internet advertisement blocking software.  The use of software
that blocks Internet advertisements may materially and adversely affect our
business.


15


The
Greater China and Asian Internet industry is a developing market and is not a
proven effective commercial medium.





The
market for Internet services in Greater China and Asia has only recently begun
to develop.  Since the Internet is an unproven medium for advertising
and other commercial services, our future operating results from online
advertising and electronic business solutions services will depend substantially
upon the increased use of the Internet for information, publication,
distribution and commerce and the emergence of the Internet as an effective
advertising medium in Greater China and Asia.  Many of our customers
will have limited experience with the Internet as an advertising medium or sales
and distribution channel, and will not have devoted a significant portion of
their advertising expenditures or other available funds to Web-based advertising
or website development and may not find the Internet to be effective for
promoting their products and services relative to traditional print and
broadcast media.




Critical
issues concerning the commercial use of the Internet in Greater China and
elsewhere in Asia, including:





·
            security;


·
            reliability;


·
            cost;


·
            ease
      of deployment;


·
            administration;
      and


·
            quality
      of service




may
affect the adoption of the Internet to solve business needs. For example, the
cost of access, penetration rate or availability of access to technology,
hardware and software may prevent potential users in Asia from using the
Internet. Also, the use of credit cards in sales transactions is not common in
parts of Asia. Until the use of credit cards, or another viable alternative
means of electronic payment, becomes more prevalent, the development of
electronic commerce through our portal network will be seriously impeded. In
addition, even if suitable payment methods are widely adopted in Asia, consumers
will have to be confident that adequate security measures are taken to protect
electronic sale transactions conducted over the Internet and prevent
fraud.





Our entry
into the Chinese Internet market depends on the establishment of an adequate
telecommunications infrastructure in the PRC by the Chinese
government




Unlike
Taiwan and Hong Kong, where the telecommunications infrastructure is comparable
to U.S. standards where private companies compete as ISPs, the
telecommunications infrastructure in PRC is not as well developed. In addition,
access to the Internet in PRC is accomplished primarily by means of the
government’s backbone of separate national interconnecting networks that connect
with the international gateway to the Internet. This gateway is owned and
operated by the Chinese government, and is the only means of connection to
the international Internet network. Although private sector ISPs exist in PRC,
almost all access to the Internet is accomplished through ChinaNet, PRC’s
primary commercial network, which is owned and operated by the Chinese
government. We will rely on this backbone enterprise and telecom companies to
provide data communications capacity primarily through local telecommunications
lines. As a result, we will continue to depend on the Chinese government to
establish and maintain a reliable Internet infrastructure to reach a broader
Internet user base in PRC. We will have no means of accessing alternative
networks and services in PRC, on a timely basis or at all, in the event of any
disruption or failure. The Internet infrastructure in PRC may not support the
demands associated with continued growth. If the necessary infrastructure
standards or protocols or complementary products, services or facilities are not
developed by the Chinese government, our business could be materially and
adversely affected.




Political
and economic conditions in Greater China are unpredictable and may disrupt our
operations if these conditions become unfavorable to our business.




We expect
to derive a substantial percentage of our revenues from the Greater China
market.  Changes in political or economic conditions in the region are
difficult to predict and could adversely affect our operations or cause the
Greater China market to become less attractive to advertisers, which could
reduce our revenues. We intend to maintain a strong local identity and presence
in each of the regions in the Greater China market, although we may not be able
to maintain effectively this local identity if political conditions were to
change.


16





In
addition, economic reforms in the region could affect our business in ways that
are difficult to predict. Since the late 1970s, the Chinese government has been
reforming the Chinese economic system to emphasize enterprise autonomy and the
utilization of market mechanisms. Although we believe that these reform measures
have had a positive effect on the economic development in PRC, they may not be
effective or benefit our business.





There
are economic risks associated with doing business in Greater China.





PRC.  The Chinese
government has been reforming its economic system since the late 1970s. The
economy of PRC has historically been a planned economy, subject to governmental
plans and quotas and has, in certain aspects, been transitioning to a more
market-oriented economy. Although we believe the economic reform and the
macroeconomic measures adopted by the Chinese government have had a positive
effect on the economic reform and the macroeconomic measures adopted by the
Chinese government have had a positive effect on the economic development of
PRC, we cannot predict the future direction of these economic reforms or the
effects these measures may have on our business, financial position or results
of operations. In addition, the Chinese economy differs from the economies of
most countries belonging to the Organization for Economic Cooperation and
Development, or OECD.





These
differences include:




PRC
              
              OECDEconomic
      structure:
              
              Planned
      economy, but in a slow process of transition to a market
      economy
              
              Market
      economyLevel
      of government involvement in the economy:
              
              Very
      high
              
              Low
      to moderateLevel
      of economic development:
              
              Developing
      country
              
              Developed
      countriesControl
      of foreign exchange:
              
              Government
      controlled
              
              Market
      drivenMethods
      of allocation resources:
              
              Government
      controlled, but in the slow process of transition to a market
      economy
              
              Market
      driven




As a
result of these differences, our business may not develop in the same way or at
the same rate as might be expected if the Chinese economy were similar to those
of the OECD member countries. Changes in the PRC’s political, economic and
social conditions, adjustments in policies of the Chinese government or changes
in the Chinese’s laws and regulations may adversely affect our results of
operations and financial condition. The Chinese economy has experienced
significant growth in the past decade, but this growth has been uneven across
geographic and economic sectors and has recently been slowing. Such growth may
not continue and any slow-down may have a negative effect on our business. The
international financial markets in which the securities of the Chinese
government, agencies and private entities are traded have experienced
significant price fluctuations upon speculation that the Chinese government may
devalue the Renminbi which could increase our costs relative to our Chinese
revenues.




Hong
Kong.  As part of our expansion plan, a small part of our
business will be generated from Hong Kong. Hong Kong is a Special Administrative
Region of the PRC (“SAR”) with its own government and legislature. Hong Kong
enjoys a high degree of autonomy from PRC under the principle of one country,
two systems, however, such autonomy may not continue. The Hong Kong dollar has
remained relatively constant due to the U.S. dollar peg and currency board
system that has been in effect in Hong Kong since 1983. However, in early 1999,
the Hong Kong dollar was subject to currency speculation and the SAR government
substantially supported the market for the Hong Kong dollar, both directly and
indirectly through the large-scale purchase of securities listed on the Hong
Kong Stock Exchange. The historical currency peg of the Hong Kong dollar to the
U.S. dollar may not be maintained, and accordingly may adversely affect our
business.


17


Taiwan.A small part of our
future revenues may be derived from the Taiwan market. Taiwan has a unique
international political status. The Chinese government asserts sovereignty over
Taiwan and does not recognize the legitimacy of the Taiwan government. Although
significant economic and cultural relations have been established in recent
years between Taiwan and PRC, PRC has refused to renounce the possibility that
it may at some point use force to gain control over Taiwan. Relations between
Taiwan and PRC have been strained since mid-1999 as a result of then-President
Lee Teng-Hui’s assertion that relations between the two sides should be
conducted on a special state-to-state basis. During the Macau handover ceremony
in 1999, President Jiang Zemin reiterated PRC position towards Taiwan, stating
that he was confident that Taiwan would soon be reunified with PRC in order to
complete PRC’s plans for national reunification. The election of
pro-independence candidate Chen Shui-bian as the new President of Taiwan in
early 2000, and Taiwan’s recent request to purchase strategic arms and defense
technology from the United States have created additional uncertainty to the
already tenuous relationship between PRC and Taiwan. Strained relations between
Taiwan and PRC could adversely affect our business, results of operations or
financial condition. Between late 1997 and early 1999, the NT dollar, the
currency of Taiwan, experienced considerable volatility and depreciation as a
result of the economic downturn in Asia. Continued volatility and depreciation
of the NT dollar could adversely affect our business, results of operations and
financial condition. Taiwan has recently experienced a recession primarily due
to a reduction in exports due to weakened demand for imported goods in many
Asian countries and a continued recession in Taiwan may materially affect
our business.




The
PRC’s regulation of content distributed on the Internet may adversely affect our
businesses.




PRC has
enacted regulations governing Internet access and the distribution of news and
other information. The Ministry of Information Industry (the “MII”) has published
implementing regulations that subject online information providers to potential
liability for content included on their portals and the actions of subscribers
and others using their systems, including liability for violation of Chinese
laws prohibiting the distribution of content deemed to be socially
destabilizing. Because many Chinese laws, regulations and legal requirements
with regard to the Internet are relatively new and untested, their
interpretation and enforcement of what is deemed to be socially destabilizing by
Chinese authorities may involve significant uncertainty. Under the PRC’s
regulations on telecommunications and Internet information services, Internet
information service providers are prohibited from producing, duplicating,
releasing or distributing any information which falls within one or more of nine
stipulated categories of “undesirable content”. These categories cover any
information which:





·
            contravenes
      the basic principles enshrined in the PRC
  Constitution;


·
            endangers
      the security or unity of the State;


·
            undermines
      the State’s religious policies;


·
            undermines
      public order or social stability;
or


·
            contains
      obscene, pornographic, violent or other illegal content or information
      otherwise prohibited by law.





Internet
information service providers found to be disseminating information that falls
under any of these categories must cease immediately, keep a record of the
relevant information, and report to the appropriate government
authority.




In
addition, the Chinese legal system is a civil law system based on written
statutes. Unlike common law systems, it is a system in which decided legal cases
have little precedential value. As a result, it is difficult to determine the
type of content that may result in liability. We cannot predict the effect of
further developments in the Chinese legal system, particularly with regard to
the Internet and the dissemination of news content, including the creation of
new laws, changes to existing laws or the interpretation or enforcement thereof,
or the pre-emption of local regulations by national laws.




Periodically,
the Ministry of Public Security has stopped the distribution of information over
the Internet which it believes to be socially destabilizing. The Ministry of
Public Security has the authority to cause any local ISP to block any website
maintained outside of PRC at our sole discretion. Websites that are blocked in
PRC include many major news-related websites such as www.cnn.com,
www.latimes.com, www.nytimes.com and www.appledaily.com.hk.  The Chinese
government has also expressed its intention to closely control possible new
areas of business presented by the Internet, such as Internet
telephony.




Violations
or perceived violations of Chinese laws arising from information displayed,
retrieved from or linked to our portals could result in significant penalties,
including a temporary or complete cessation of our business in PRC. Chinese
government agencies have recently announced restrictions on the transmission of
state secrets through the Internet. State secrets have been broadly interpreted
by Chinese governmental authorities in the past. We may be liable under these
new pronouncements for content and materials posted or transmitted by users on
our message boards, virtual communities, chat rooms or e-mails. If the Chinese
government were to take any action to limit or eliminate the distribution of
information through our portal network or to limit or regulate any current
or future applications available to users on our portal network, this action
could have a material adverse effect on our business, financial condition and
results of operations.


18




We
may be adversely affected by Chinese government regulation of Internet
companies.




The
Chinese government heavily regulates the Internet sector including the legality
of foreign investment in the Chinese Internet sector, the existence and
enforcement of content restrictions on the Internet and the licensing and permit
requirements for companies in the Internet industry. Because these laws,
regulations and legal requirements with regard to the Internet are relatively
new, their interpretation and enforcement may involve significant uncertainty.
In addition, the Chinese legal system is a civil law system in which decided
legal cases have limited binding force as legal precedents. As a result, in many
cases it is difficult to determine what actions or omissions may result in
liability.




Issues,
risks and uncertainties relating to the PRC government regulation of the Chinese
Internet sector include the following:





·
            The
      problems that foreign telecom service providers have faced in accessing
      China's market should improve as foreign companies will be permitted to
      establish joint venture operations in domestic or international data
      services without quantitative restrictions in Beijing, Guangzhou, and
      Shanghai—though the foreign investment share may not exceed 25 percent.
      Foreign companies will be able to invest up to 49 percent. Although, PRC
      was officially admitted to the World Trade Organization (the “WTO”), it is still not
      clear how this agreement may be changed in
  future.


·
            The
      numerous and often vague restrictions on acceptable content in the PRC
      subject us to potential civil and criminal liability, temporary blockage
      of our website or complete cessation of our website. For example, the
      State Secrecy Bureau, which is directly responsible for the protection of
      state secrets of all Chinese government and Chinese Communist Party
      organizations, is authorized to block any website it deems to be leaking
      state secrets or failing to meet the relevant regulations relating to the
      protection of state secrets in the distribution of online
      information.





The
interpretation and application of existing Chinese laws and regulations, the
stated positions of the MII and possible new laws or regulations have created
substantial uncertainties regarding the legality of existing and future foreign
investments in, and the businesses and activities of, Chinese Internet
businesses, including our business.




If
we do not comply with Chinese regulations relating to our scope of permitted
business, Chinese regulators could cause us to discontinue our operations in the
PRC.




The
Chinese government regulates access to the Internet by imposing strict licensing
requirements and requiring ISPs in PRC to use the international inbound and
outbound Internet backbones. The Chinese government may require that we obtain a
license for Internet access in the future based on new legislation or otherwise.
We may not be able to obtain all necessary licenses required in the future, and
any future changes in Chinese government policies may impose additional
regulatory requirements on us or our service providers, intensify competition in
PRC information industry or otherwise have a material adverse effect on our
business, financial condition and results of operations.




We are
uncertain as to whether the Chinese government will reclassify our business as a
media or a retail company, due, among other things, to our acceptance of
Internet advertising and electronic commerce related services fees as sources of
revenue. Any reclassification could subject us to penalties or fines or
significant restrictions on our business. We are also uncertain whether the
Chinese government will reclassify our business as a telecommunications
business, potentially resulting in significant restrictions on our
business.




19


If we do not comply with Chinese
government regulations relating to foreign investment prohibitions, the Chinese
government could cause us to discontinue our operations in
China.





Chinese
government policy prohibits foreign investment in the telecommunications
services industry, which it has defined to include Internet-related businesses.
We may not be in compliance with current Chinese government policies and the
Chinese government may not view our intended business in the PRC as in
compliance with these policies or any policies that may be made in the future.
If we are not viewed as complying with these policies or any regulations that
may be created relating to foreign ownership of Internet- related businesses,
the Chinese government could block us from starting our development plan in PRC
or take other actions that could harm our business.





Even
if we are in compliance with Chinese governmental regulations relating to
licensing and foreign investment prohibitions, the Chinese government may
prevent us from distributing, and we may be subject to liability for, content
that it believes is inappropriate.




The PRC
has enacted regulations governing Internet access and the distribution of news
and other information. In the past, the Chinese government has stopped the
distribution of information over the Internet that it believes to violate
Chinese law, including content that it believes is obscene, incites violence,
endangers national security, is contrary to the national interest or is
defamatory. In addition, we may not publish certain news items, such as news
relating to national security, without permission from the Chinese government.
Furthermore, the Ministry of Public Security has the authority to cause any
local Internet service provider to block any website maintained outside PRC
at our sole discretion. Even if we comply with Chinese governmental regulations
relating to licensing and foreign investment prohibitions, if the Chinese
government were to take any action to limit or prohibit the distribution
of information through our network or to limit or regulate any current or
future content or services available to users on our network, our business would
be harmed.




We are
also subject to potential liability for content on our websites that is deemed
inappropriate and for any unlawful actions of our subscribers and other users of
our systems under regulations promulgated by the MII. Furthermore, are required
to delete content that clearly violates the laws of PRC and report content that
we suspect may violate Chinese law. It is difficult to determine the type of
content that may result in liability for us, and if we are wrong, we may be
prevented from operating our websites.




If
we do not comply with Chinese government regulations related to organizing
public business and investment seminars and conferences, the Chinese government
could cause us to discontinue our seminar services in China.




We
typically work with local event organizers in China to help us establish
seminars and conferences who we depend on to obtain proper permits in China for
these events. However, if the Chinese government found that we are not compliant
with their requirements to hold seminars and conferences in China, they may
prohibit us from holding future events which would result in a significant
restriction to our business and negatively impact our revenues.




Currency
fluctuations and restrictions on currency exchange may adversely affect our
business, including limiting our ability to convert Chinese Renminbi into
foreign currencies and, if Renminbi were to decline in value, reducing our
projected revenues in U.S. dollars.




We intend
to generate revenues and incur expenses and liabilities in Chinese Renminbi,
Taiwan dollars, Hong Kong dollars, Canadian dollars and U.S. dollars. As a
result, we are subject to the effects of exchange rate fluctuations with respect
to any of these currencies. For example, the value of the Renminbi depends to a
large extent on PRC’s domestic and international economic and political
developments, as well as supply and demand in the local market. Since July of
1995, the official exchange rate for the conversion of Renminbi to U.S. dollars
has been free floating and the Renminbi has appreciated slightly against the
U.S. dollar. So the Renminbi may not continue to remain stable against the U.S.
dollar or any other foreign currency. Our results of operations and financial
condition may be affected by changes in the value of Renminbi and other
currencies in which our earnings and obligations are denominated. We have not
entered into agreements or purchased instruments to hedge our exchange rate
risks, although we may do so in the future.




Although
Chinese governmental policies were introduced in 1996 to allow the
convertibility of Renminbi into foreign currency for current account items,
conversion of Renminbi into foreign exchange for capital items, such as foreign
direct investment, loans or security, requires the approval of the State
Administration of Foreign Exchange, or SAFE, which is under the
authority of the People’s Bank of China. These approvals, however, do not
guarantee the availability of foreign currency. We may not be able to obtain all
required conversion approvals for our operations, and Chinese regulatory
authorities may impose greater restrictions on the convertibility of the
Renminbi in the future. Because a significant amount of our future revenues may
be in the form of Renminbi, our inability to obtain the requisite approvals or
any future restrictions on currency exchanges will limit our ability to utilize
revenue generated in Renminbi to fund our business activities outside the
PRC.


20




Terrorist
activities and resulting military and other actions could adversely affect our
business.
  The
terrorist acts in New York, Washington, D.C. and Pennsylvania on September 11,
2001 have created an uncertain economic environment and we are unable to predict
the impact these events, or the responses thereto, will have on our business.
The continued threat of terrorism within the United States and abroad and
military action and heightened security measures in response to such threat may
cause significant economic disruptions throughout the world. Our business,
results of operations and financial condition could be materially and adversely
affected to the extent such disruptions result in our inability to effectively
market and sell our services and software.
 
 RISKS
RELATED TO OUR COMMON SHARES AND SHAREHOLDER RIGHTS
 
 We
do not intend to pay cash dividends, so any return on investment to an investor
must come from appreciation.
  To date,
we have not paid a dividend on our common shares and do not intend to do so in
the foreseeable future, as we expect any excess funds will be reinvested in
implementing our business plan. As a result, any return on investment in our
common shares must come from increases in the fair market value and trading
price of our common stock.
  Our
common shares became traded on the OTC Bulletin Board in October 2006 and it is
considered a “penny stock” and a shareholder’s ability to buy and sell shares in
the secondary market may be limited.
  On
September 25, 2006, we obtained the trading symbol of “CWNOF.OB” and began
trading on the OTC Bulletin Board in October 2006. The liquidity of our common
shares would continue to be limited, not only in the number of shares that are
bought and sold, but also through delays in the timing of transactions, and the
lack of coverage by security analysts and the news media of our company. In
addition, any shares quoted on the OTC Bulletin Board would be subject to
certain rules and regulations relating to “penny stock.” A “penny stock” is
generally defined as any equity security that has a price less than $5.00 per
share and that is not quoted on the Nasdaq Stock Market or a national securities
exchange. Being a penny stock generally would mean that any broker who
wanted to trade in our shares (other than with established customers and certain
institutional investors) must comply with certain “sales practice requirements,”
including delivery to the prospective purchaser of the penny stock a risk
disclosure document describing the penny stock market and the risks associated
therewith. In addition, broker-dealers must take certain steps prior to selling
a “penny stock,” which steps include:
 
 ·
              obtaining
      financial and investment information from the
  investor;
 ·
              obtaining
      a written suitability questionnaire and purchase agreement signed by the
      investor; and
 ·
              providing
      the investor a written identification of the shares being offered and the
      quantity of the shares.
  If these
penny stock rules are not followed by the broker-dealer, the investor has no
obligation to purchase the shares. The application of these comprehensive rules
could make it more difficult for broker-dealers to sell our common shares, and
as a practical matter, these requirements may mean that brokers would be less
likely to make recommendations on our shares to its general
customers.
  Shares
eligible for future
sale may have a substantial depressing effect on the stock
price.
 
 As of
December 31, 2009, we have an aggregate of 10,700,000 shares of common stock
outstanding, which includes 3,140,000 shares which were freely transferable
without restriction under the Securities Act (excluding any shares purchased in
the offering by any person who is or thereby becomes an “affiliate” of
us).  There were a total of 7,560,000 common shares which were
“restricted securities”, as defined in Rule 144 under the Securities
Act.
  21




We
are unable to predict the effect that sales of the shares offered hereby, or
sales under Rule 144 may have on the then prevailing market price of the shares,
but such sales may have a substantial depressing effect on such market
price.




All of
our officers, directors and 5% or more stockholders have agreed not to, directly
or indirectly, issue, agree or offer publicly to sell, grant an option for the
purchase or sale of, assign, transfer, pledge, hypothecate, distribute or
otherwise encumber or dispose of, any shares of the common stock or other equity
securities of ours or other securities convertible unto or exercisable for such
shares of the common stock or other equity securities except pursuant to an
effective registration statement under the Act, or pursuant to an exemption
from registration under the Act, the availability of which is to be established
to the satisfaction of the Company.





The absence of a
prior public market for the shares may lead to high volatility in the stock
price.




Prior to
our approval for trading there has been no public market for our common stock
and there can be no assurance that an active public trading market for our
common stock will develop or be sustained. The absence of an active trading
market would adversely affect the liquidity of the shares and existing
shareholders might have difficulty in selling their shares. In addition, the
stock market is subject to price and volume fluctuations affecting the market
price for public companies generally, which fluctuations maybe unrelated to the
operating results or other circumstances of a particular company. Such
fluctuations may adversely affect the liquidity of the shares, as well as the
price that holders may achieve for the securities upon any future
sale.




Our
shareholders may face difficulties in protecting their interests because we are
incorporated under Cayman Islands law




Our
corporate affairs are governed by our memorandum and articles of association, by
theCompany Law (1998
Revision) and the common law of the Cayman Islands. The rights of shareholders
to take action against our directors, actions by minority shareholders and the
fiduciary responsibilities of our directors under Cayman Islands law are to a
large extent governed by the common law of the Cayman Islands.




Under the
common law of the Cayman Islands, the fiduciary relationship of a director is to
us and a director therefore does not usually owe a fiduciary duty to individual
shareholders. As a result, it may be difficult for a shareholder to take action
against the directors for breach of fiduciary duty.




The
common law in the Cayman Islands is derived in part from comparatively limited
judicial precedent in the Cayman Islands and from English common law, the
decisions of whose courts are of persuasive authority but are not binding on a
court in the Cayman Islands. Cayman Islands law in this area may conflict with
jurisdictions in the United States. As a result, our public shareholders may
face more difficulties in protecting their interests in the face of actions
against the management, directors or our controlling shareholders than would
shareholders of a corporation incorporated in a jurisdiction in the United
States.




There
is uncertainty as to our shareholders’ ability to enforce civil liabilities in
the Cayman Islands, Canada and the Greater China.




We are a
Cayman Islands company and have no assets located in the United States. A
substantial portion of our current operations is conducted in Canada and the
Greater China. In addition, all of our directors and officers are nationals
and/or residents of countries other than the United States. All or a substantial
portion of the assets of these persons are located outside the United States. As
a result, it may be difficult to effect service of process within the United
States upon these persons. In addition, there is uncertainty as to whether the
courts of the Cayman Islands, Canada, Hong Kong, Taiwan and, PRC and other
jurisdictions would recognize or enforce judgments of United States courts
obtained against us or such persons predicated upon the civil liability
provisions of the securities laws of the United States or any state thereof, or
be competent to hear original actions brought in the Cayman Islands, Canada,
Hong Kong, Taiwan, PRC or other jurisdictions against us or such persons
predicated upon the securities laws of the United States or any of our
state.


22





ITEM 4. INFORMATION ON THE COMPANY





A. History
and Development of the Company




CWN was
incorporated on January 12, 2000 under theCompany Law (1998 revision) of
the Cayman Islands. We are principally based in the Cayman Islands and our
operations are primarily conducted in North America and Asia. The address of our
principal executive and registered office is that of our agent, Appleby, being:
Clifton House, 75 Fort Street, P.O. Box 190, Grand Cayman, Cayman Islands
KY1-1104, their telephone is (345) 949-4900. Our North American head office and
principal place of business is located at Suite 368 – 1199 West Pender Street,
Vancouver, British Columbia, Canada V6E 2R1, our telephone is (604)
488-8878.




On
January 15, 2000, we completed the acquisition of NAI, a company incorporated
under the Company Act
(British Columbia), from Ms. Tim Yee Lau, a related party to our President and
Chief Executive Officer, Mr. Joe Tai, for a purchase price of 112,500 of our
common shares valued at $5,625.  NAI has an office located at Suite
368 – 1199 West Pender Street, Vancouver, British Columbia, Canada V6E
2R1.





In
October 2000, we purchased 100,000 common shares of Technology City Holdings
Limited (“TCHL”), a
company incorporated and based in Hong Kong, representing 4.167% of the then
issued and outstanding common shares of TCHL, for $100,000.  TCHL is a
multi-media, Internet-based financial information provider focusing on listed
securities in Hong Kong.  A purpose of the investment was to establish
a business relationship with TCHL to provide us with market and content
information for our businesses.




On
November 2, 2000, we completed a private placement and issued 2,000,000 of our
common shares at a price of $0.40 per common share for total gross proceeds of
$800,000, which were used for general working capital purposes.





On May
31, 2004, we issued a 5% Unsecured Convertible Debenture for a term of three
years for total gross proceeds of $150,000.





On
October 29, 2004, we issued 200,000 of our common shares to acquire all of the
assets of TCHL, which included HK$540,000 in cash and equipment, from Marrick
Investments Limited (“Marrick”).  Marrick
nominated its sister company, Datacom Venture Limited (“Datacom”), to be the record
owner of the shares.  Datacom is one of the majority shareholders of
the Company.  See “Item 7–Major Shareholders and Related
Party Transactions”.





In
November 2004, we commenced operations in Hong Kong, China through our
subsidiary, CWNHK, at an office located at Room 1101, St. George’s Building, 2
Ice House Street, Central, Hong Kong. CWNHK provides us with a regional
operation base for CWN’s penetration and expansion plans in the Asian
markets.





In 2005,
we terminated our lease of the Business Center Space in Toronto, which was then
used by our employees in Vancouver when they travelled to Toronto. Subsequent to
the termination of the lease, we rented a P.O. Box at the Toronto Board of Trade
at P.O. Box 60, 1 First Canadian Place, Toronto, Ontario, Canada M5X 1C1 where
mails were being forwarded to our Vancouver office.  In 2008, we
cancelled our subscription to a P.O. Box.




On
September 25, 2006, we obtained the trading symbol of “CWNOF.OB” and our common
stock has been approved for trading on the OTC Bulletin Board in October
2006.





On
January 18, 2007, the 5% Unsecured Convertible Debenture we issued on May 31,
2004 was converted into 250,000 common shares of the Company, at a fair value of
$0.60 per common share.





On March
1, 2007, we issued a 6% Unsecured Convertible Note for a term of three years for
total gross proceeds of $250,000.





On
October 26, 2007, we completed a non-brokered private placement and issued
2,250,000 of our common shares at a price of $1.08 per common Share for total
net proceeds of $2,070,000 for the purpose of expanding all businesses into
China.


23





On
February 1, 2008, CWNHK and Shanghai Compass Venture Capital Investment Company
Limited signed an Agreement to Establish CWN China Co., Ltd., a Chinese-Foreign
Joint Venture Limited Liability Company.  In April 2008, the two
parties incorporated CWN China.  CWNHK has a 70% controlling interest
in CWN China.  CWN China has an office located at #1003, Eton Place
Tower B, 555 Pudong Ave., Shanghai, PRC 200120.  CWN China provides
the Company with the capabilities and resources to penetrate and expand
particularly in the Greater China markets.  As of December 31, 2009,
there were ten employees in Shanghai, China, with duties ranging from
translations, web design and technical support, to sales, business development
and marketing.  CWN China also heads the Company’s efforts in hosting
various events in the Greater China region.  On September 8, 2009, CWN
China funded and incorporated Weiahi Consulting Investment Ltd. (“Weihai”) under
the law of People’s Republic of China with intent to carry out other proposed
business operations.





In August
2009, we incorporated CWN Capital under the BVI Business Companies Act, with a
registered address at Morgan & Morgan Building, Pasea Estate, Road Town,
Tortola, British Virgin Islands.  CWN Capital is our wholly-owned
subsidiary for the purpose of providing a vehicle for expanding the scope of our
businesses into the capital markets, which is still in an early development
stage.





Subsequent
to the year end, on February 24, 2010, the 6% Unsecured Convertible Note we
issued on March 1, 2007 was converted into 250,000 common shares of the Company,
at contract price of $1.00 per common share.





During
Fiscal 2009, the Company made net purchases of property and equipment in the
amounts of $39,974 primarily relating to the purchase of equipment for business
development.  There are currently no major capital projects or
divestitures in progress.





B. Business
Overview





The
Company’s business model consists of four principal businesses: (1) the Internet
financial portal (“Portal”) business, conducted
under the ChineseWorldNet.com brand via the “www.chineseworldnet.com” website;
(2) the investor relations and public relations (“IR/PR”) business, conducted
under the NAI500 brand via a number of media channels including the
“www.nai500.com” and “en.nai500.com” websites, as well as certain other
promotional services; (3) the North America and Greater China cross-border
business partnering conferences (“Conference”) business,
conducted via the brand of Global Chinese Financial Forum and its ”www,gcff.ca”
website; and (4) the online platform (“Online Platform”) business,
conducted under the Rong Zhi Tong Online brand via the “www.rzto.com” website.
Our IR/PR business was the result of the acquisition of NAI for a purchase price
of 112,500 of our common shares valued at $5,625. Our Conference business was
segregated from our IR/PR business as it expanded in popularity and size. Our
Online Platform business was launched in October 2006 and primarily serves as an
online engine that connects professional service providers with small to medium
sized companies in the Greater China region.




INTERNET
FINANCIAL PORTAL (“PORTAL”) BUSINESS




Overview




Our www.chineseworldnet.com
website is a financial web-based portal that provides up-to-date financial
information and financial management tools in the Chinese language to our target
audience, the Chinese investor community in North America. Our Portal business
provides financial news and covers corporate information of more than 98% of the
listed stocks on the major North American exchanges including NYSE, AMEX,
NASDAQ, OTCBB, TSX, AND TSX-V. Furthermore, coverage for the Asian financial
market was also started a few years ago and would be further developed in the
near future through a combination of internal efforts as well as partnerships.
During the early development stage of the portal, all information and services
we provided through our www.chineseworldnet.com
website were free of charge, including certain premium information and services
such as premium articles and market commentary which were only accessible by
registered subscribers who paid no subscription fee. Since the launch of the
final phase of the www.chineseworldnet.com
website in October 2002, we have introduced a new level of subscribers called
“Premium Subscribers,”
who are required to register as subscribers and pay a fee to obtain and use
certain premium and personalized products and services.


24





Current
Product / Service Offering




Currently
the portal provides information, news, data, and investor’s tools on a variety
of financial products such as stocks, options, forex, futures, and ETF
(exchange-traded funds). The following contents and features are provided free
of charge on thewww.chineseworldnet.com website to all readers, other than the Premium
Services described below for which we charge a fee.




1.
Company Profile




This
section features a variety of interactive investment tools that enable users to
conduct their own financial research of companies, including delayed stock
quotes, summary company profiles, analysts’ buy/sell ratings, company news,
insider trading information, intraday and historical stock charts, and financial
statement summary.





2.
Headlines and Market News




Throughout
the day, we provide headlines and news stories in brief covering various
corporate announcements.  We also provide continuous update of market
news from 5 a.m. to 5 p.m. Pacific Time on each business day covering the latest
movements of the major indices, the most active stocks, news from foreign
markets, earnings news, mergers and acquisitions news, and other major market
events.




3.
Commentary




This
section features commentary prepared by our in-house editorial team and external
contributors who comment on topics such as money management, technical analysis,
currency issues, industry analysis, macroeconomics, fundamental analysis,
financial planning, mutual funds, initial public offerings, technology, and
international investing.





4.
 Premium Services




In
addition to the provision of financial news and corporate information of public
companies in North America and the Greater China region, our www.chineseworldnet.com
website also offers to our Premium Subscribers, through partnerships and
affiliations, personalized services such as online investment tools and
applications such as portfolio tracking.  The following Premium
Services are provided to Premium Subscribers, who currently pay a monthly
subscription fee of $9.95 and an annual subscription fee of $59.95.




a.
Personalized Financial Services “MyCWN”:




“MyCWN”
is a platform on our www.chineseworldnet.com
website that allows Premium Subscribers to create a personalized portal to
customize and manage their own personal stock portfolios. They can also easily
access and view news and information of companies in their particular
portfolios.




b. CWN
Research Reports




Premium
Subscribers get access to weekly in-depth research reports prepared by our
in-house editorial team on individual stocks, overall market trends, industry,
and other topics of interest.




c.
Real-Time Stock Quotes




We offer
real-time streaming stock quotes as an additional premium service for registered
users for which we charge a fee. This service is provided through a third-party
supplier. The current fee is $30 per month per user for Level 1 real-time quotes
and $40 per month per user for Level 2 real-time quotes. Level 1 represents
the basic real-time stock price while Level 2 quotes include market depth of
trading activities.




25




Future
Product / Service Offering





Readers
are not required to register as subscribers at this time although we may in the
future require registration before allowing access to our contents and
services.





We are
planning to upgrade our www.chineseworldnet.com
website providing a new layout that focuses on user friendliness.  We
would also strengthen our platform by covering additional content and investors’
tools in each of our featured financial products. We are not planning for any
additional features for our Premium Services in 2010 but we may do so in the
future, such as additional investment tools and premium research reports, on our
web portal.




Revenue
Model of the Portal Business




1. Premium
Subscription Fees





Until
October 2002, all information and services we provided through our www.chineseworldnet.com
website were offered free of charge, including certain premium information and
services such as premium articles and market commentary which were only
accessible by registered subscribers, who were not required to pay a
subscription fee. Since the launch of the final phase of the www.chineseworldnet.com
website in October 2002, we have introduced a new level of subscribers called
Premium Subscribers, who are required to register as subscribers and pay a
subscription fee to obtain access to certain premium and personalized products
and services.  Currently, Premium Subscribers pay a monthly
subscription fee of $9.95 or an annual subscription fee of
$59.95.  Premium Subscribers can further subscribe to Level 1 basic
real-time stock quotes for $30 per month per user or Level 2 real-time stock
quotes including information on market depth of trading activities for $40 per
month per user.




2. Banner
Advertising




CWN
derives revenue from selling banner advertising to companies on thewww.chineseworldnet.com
website. The fee for a six-month banner advertising ranges from $750 to
$1,200.  On a monthly basis, it is based on an estimated number
impressions of the www.chineseworldnet.com
website.  We charge up to $1,500 per month for the services we
provide, and revenue generated from banner advertising is recognized monthly,
based on the terms committed by our customers. The amount of fees charged
depends on the size and the location of the banner advertisement on our website.
There is no adjustment to the monthly flat fees if the actual clicks differ from
the estimated clicks.





3. Online
Marketing and Intermediary Service




It is our
intention that our subscribers will be able to access information on various
financial products and service providers such as online brokerage, mutual funds,
insurance and bonds by logging onto independent Internet-based trading platforms
of our partners through our web portal. However, we will not be involved in
executing any types of transactions for the account of others. All trading
transactions will be performed directly between our subscribers and partner
companies. In order to do so, our subscribers will have to independently
register with our partners.




Our
Portal business derives no revenue from our subscribers through this service
offering. We will not receive transaction-based compensation either from our
subscribers or partner companies. Instead, we charge our partner companies a
flat marketing fee based on the number of subscribers opening new accounts
through our efforts.





4.
Distribution of Financial Information to Third Parties





Through
the services we offer on our web portal, we gather and have accumulated
substantial and valuable corporate information and financial data in our
database, including the fundamental database of companies publicly listed in
North America, market news, investors’ tools and
commentaries.  We translate such information and data into Chinese and
package them for third parties who desire to have access to these information
and data in Chinese.  Our third party clients include financial
companies in North America and Greater China who use these packages themselves
as well as financial companies in Hong Kong who distribute our packages to their
own clients in Greater China.


26





INVESTOR
RELATIONS AND PUBLIC RELATIONS (“IR/PR”) BUSINESS





Overview




Our IR/PR
business was the result of the acquisition of NAI. NAI operates our IR/PR
business focusing on providing IR/PR services for small- and micro-cap public
companies targeting the Chinese investor community in North America through
various media such as the Internet (the www.nai500.com website),
publications and investment seminars.  In May 2009, NAI rebranded its
business model and launched the new “NAI500” brand.  The rebranded
business model has added a Road Show business in 2009, providing face-to-face
meetings for public companies and institutional and retail
investors.





Current
Product / Service Offering




1.
Internet website (www.nai500.com)





NAI
operates the www.nai500.com
website (formerly called na-investor.com) which provides IR/PR services to
fee-paying North American public company clients who are listed or quoted on the
small or micro public markets in North America, such as the TSX Venture
Exchange, the NASD OTC Bulletin Board and the Toronto Stock Exchange. The
website offers stock quotes, company reviews, newsletters and guide to investing
of these client companies to readers of the North American Chinese community in
Chinese. Currently, there are over 60,000 registered members on the www.nai500.com
website which attracts over 1,800,000 readers each month.




Unlike
www.chineseworldnet.com,
www.nai500.com
is not a financial portal for paying or non-paying subscribers but an
Internet-based medium for the dissemination of information from fee-paying
client companies that would like to increase their exposure in the Chinese
investor community. There is no fee being charged to individual registered
members of the www.nai500.com
website.





NAI has
also launched an English version of the www.nai500.com
website in May 2009, the en.nai500.com
website, in order to meet the needs of a broader reader base including those who
prefer the English language.




2. Road
Show Business





In 2009,
NAI started to offer a Road Show business where it creates and provides
opportunities for public companies and their representatives to meet with
potential institutional and retail investors.  We brought companies in
China over and set up an environment for them to meet with potential investors
from North America in Toronto and in Vancouver, and charged the participating
companies for fees and expenses accordingly.  We expect to focus on
and expand our Road Show business in 2010 by continuing the same format, in
addition to inviting North American listed companies over to China to meet with
potential investors locally.





3.
Various IR/PR Services





NAI
provides various IR/PR services to client companies such as the design and
printing of promotional materials and financial reports.





4.
Chinese Webpage Design, Hosting and Maintenance




NAI
offers assistance to client companies to create a Chinese version of their
existing English websites and to place as a link on their original English
websites. These Chinese web pages will also be linked to our www.nai500.com
website in the featured company section.  There are various demands of
our clients’ needs and customized services that we provide to our client
companies.  NAI charges a one-time set-up fee plus a 12-month
maintenance fee for our services ranging from $2,000 to $5,000 based on the
customized services as agreed with each client.




27




5. Online
Marketing Service




This
service aims to increase the publicity and website traffic of our clients
companies’ websites.  Our range of online marketing service includes
the creation of search criteria for Internet-based search engines to enable
quick access to client companies’ websites, e-mail blasts to NAI members and
other services such as online promotional events to help increasing Internet
traffic to client companies’ websites.  In particular, “Mining Search
Engine” was launched in November 2006 focusing on the promotion of client
companies from the mining sector. This service aims to provide and promote the
mining companies’ information and news to potential investors and at the same
time increasing such companies’ publicity in the community.  NAI
currently charges its e-mail blast service at $1,000 to $1,500 per blast which
reaches over 60,000 of our registered members.





6.
Publication Service





We
started to publish specialty investment publications in 2002. Our first
investment handbook was focused on the mining sector, selling for CDN$13.80
Canadian dollars each. In 2005, we published the Mining Investment Guide, Vol. 3
and the Chinese Theme Stocks Investment Guide, Vol. 1, both selling for
CDN$13.80 Canadian dollars each. In 2006, we published the Mining Investment
Guide, Vol. 4, selling at an increased price of CDN$29.50 Canadian dollars each
due to content increase. In 2007, we published the Mining Investment Guide, Vol.
5 and the Chinese Theme Stocks Investment Guide, Vol. 2 – A New Chapter of
Success, both selling for $29.95 each.  In 2008, we published the
Resource Investment Guide, Vol. 6, a renamed iteration of the Mining Investment
Guide, selling for $29.95 each.  In 2009, we published the Resource
Investment Guide, Vol. 7 and the China Theme Stocks Investment Guide 2009/2010,
both selling for $29.95 each.  We charge client companies $2,000 each
to be profiled in our publications.  Our publications are sold through
our offices, online and in selected bookstores.





7.
Translation Service





NAI
provides translation service for client companies which would like to translate
promotional or financial materials from English into Chinese. NAI charges $100
per page for its translation service.




Future
Product / Service Offering




Currently,
our IR/PR services are focused on introducing and promoting North American
client companies to the Chinese investor community in North America. NAI plans
to adopt the same model and expand it to other market segments, such as
promoting client companies from Asia to the Chinese investor community of
North America, and promoting Asian and North American client companies to the
Chinese investor community in Asia.  As we have already established a
solid client base in the mining / recourses sector, we plan to further diversify
into other sectors such as life science, technology, and industrials in
2010.  In May 2009, NAI rebranded itself as NAI followed with a
redesigned www.nai500.com
website.  We are planning for further development by adding new
functionalities in the latter half of 2010, such as creating Mobile phone
applications for NAI so mobile users can access our contents via their smart
phone devices globally.  Other functions will also be added to our
website including portfolio tracker and online video posting.  We are
also planning to offer specialized and in-depth IR/PR services to clients who
require more day-to-day assistance on their Investor Relations’ needs, such as
filling an Account Manager position who has full understanding about our
Company’s businesses and to answer our Chinese investors’
inquiries.  We also plan to focus on and expand our Road Show business
in 2010.





Revenue
Model of the IR/PR Business




The IR/PR
business is marketed via the brand name of NAI500.  Sources of revenue for
the IR/PR business are from each of the current product / service offering
mentioned above.




28




CONFERENCE
(“CONFERENCE”) BUSINESS




Overview





Our
conference business was originally an integrated aspect of the products and
services provided by our IR/PR business. However, because of the success and
growth of our conference series in 2006, our conference business was made into a
separate individual aspect of the business model.





During
2000 to 2002, NAI organized and marketed two to four Chinese investment seminars
each year in Vancouver, Toronto, and/or San Francisco, where participating
private and public companies paid NAI a sponsorship fee to present their
companies to individual Chinese investors who attended the seminars free of
charge.   While NAI continued the focus of its conference
business in the North American cities, in 2003, it started to organize its
conferences in larger scale and they were named the Chinese Financial
Forum.  In 2004, the name was changed to the Global Chinese Financial
Forum (“GCFF”) to
reflect the international nature of the event. In the same year, we filed for
trademark protection for the name Global Chinese Financial Forum in Canada and
launched the investment seminar and conference website www.gcff.ca.  In
2006, GCFF was segregated from the IR/PR business and became a separate business
model on its own.  In 2007, GCFF successfully launched its first
China-focus conference in Shanghai, China and provided a networking environment
for the local companies and services providers in China.  In 2008 and
2009, GCFF increased its focus on providing cross-border partnership
opportunities between North American and Greater Chinese companies.





GCFF aims
to be the largest series of bilingual (Chinese/English) financial and business
related functions in North America with the purpose of providing networking
environment and opportunities between client companies and participants. 
Revenue generated through GCFF is recorded under the revenue model of
NAI500.





Current
Product / Service Offering




The
format of GCFF is conducted through exhibition booths and presentation sessions,
held in various cities in North America and China. While client companies can
pay a fee to rent an exhibition booth area to showcase and promote their
companies, they can also conduct corporate presentations in the industry related
topics determined beforehand.  Since 2008, GCFF has established itself
to serve for two distinctive purposes: (1) the retail investment services to
bring together the Chinese-speaking retail investors and the players in the
financial markets at its Retail Events, and (2) the cross-border (North America
and Greater China) capital market and strategic investment services at its
Institutional Events.  With regards to its Institutional Events, GCFF
offers its client companies the Privately Arranged Meetings service, which
provides them and the participants the opportunities to meet together through
the arrangement of GCFF based on criteria set upon by all parties prior to the
events.    The Privately Arranged Meetings service has
become a major pillar of the GCFF business, taking a major spotlight in the
Toronto Conference 2009 and the Shanghai Conference 2009.




General
sponsorship opportunities are available for all conferences for a fee. There are
several categories of sponsorship for interested parties to participate and
sponsor our conferences. These categories include Platinum, Gold, Silver,
Corporate and Media, in addition to the Global Corporate Sponsorship program.
Conference specific sponsorship opportunities are also available for a fee with
a focus on specific functions and themes of the events.





Future
Product / Service Offering




We plan
to continue improving the format of the GCFF conferences, to have a major focus
on institutional clients, in addition to further establish our brand name in
both North America and Asia.  GCFF will continue its conferences
efforts in various cities in North America and China servicing clientele from
both North America and China, in addition to focusing on
providing cross-border partnership opportunities between North American and
Greater Chinese companies.  Conferences will be held in new locations
such as Los Angeles, US and Calgary, Canada, in addition to Vancouver, Toronto
and Shanghai in 2010.  GCFF will continue to offer Institutional
Events and its Privately Arranged Meetings service focused on capital market and
strategic investment services among public companies, capital market
institutions, services providers and institutional investors in 2010, focusing
on the natural resources, energy and life sciences
industries.  GCFF will also expand its Retail Events with plans for
increased services and marketing campaigns for its conferences.




29




Revenue
Model of the Conference Business





In 2009,
we charged a new rate of $2,800 for a standard exhibition booth at GCFF retail
level events.  Also in 2009, new revenue models were implemented for
the GCFF industrial, cross-border related event in Toronto, with corporate
delegate package fees at $6,000 and individual delegate package fees at
$399.  The Company also earns revenue from
sponsorship.  While the Media category of sponsorship is offered
without any fee, the other four levels of sponsorship are charged for fees
ranging from $4,000 to $25,000. Conference specific sponsorship fees range
from $4,000 to $10,000.  More sponsorship packages will be implemented
for industrial, cross-border related events with fees ranging from $4,000 to
$10,000 in the future.  Currently, complimentary admission is offered
for individual investors pre-registering for the conferences. Drop-in
attendees are required to pay an admission fee ranging from $15-25 depending on
the conferences. We might be turning our conferences into a fully paid model for
all individual investors when the conferences have grown and reached a certain
size and scale.





ONLINE
PLATFORM (“ONLINE PLATFORM”) BUSINESS




Overview




Rong Zhi
Tong Online and its www.rzto.com website
(“RZTO”) is an online
platform serving the fast-growing number of private companies in China seeking
listing and access to capital in North American markets. The launch of RZTO in
October 2006 has marked our entry to the Greater China market. RZTO is based on
a membership model where both Chinese companies and North American financial
service providers register as members to connect, access new projects, and share
ideas and business opportunities free of charge.





Members
of RZTO range from private and public companies, investment bankers, research
analysts, investor relations, stockbrokers, lawyers, accountants, as well as
professionals from various exchanges and other sectors. Members are required to
register by providing their company information through an online registration
form and their company profile will be automatically generated from the imputed
data. Basic membership information including names, locations and brief company
descriptions is available to the general public; while contact information,
personnel, financial and detailed business information are kept confidential and
only registered members have access to the database. The Company believes that
the development stage for the RZTO platform is completed at the moment and could
be fully launched to the market once sufficient resources and manpower could be
allocated to this platform.




Current
Product / Service Offering




Our
Online Platform business offers search functions, news update, events
announcement, and knowledge exchange to help members network with each other and
to build an online financing community. RZTO offers the following search
functions free of charge.





1.
Service Providers





This
section provides the search of financial service firms and financial service
professionals in North America and Greater China.





2. China
Companies





This
section provides search functions: “Search Companies Seeking Financing”, “Search
Investors”, and “Search Public Companies”. Members can narrow their search of
China companies by selecting certain criteria, such as, net assets, sales,
financing scale, and 3-year sales growth in percentage.




30




3.
Projects





This
section provides search functions: “Financing Projects” and “Investment
Projects”. Members can narrow their search of projects based on the kind of
financing strategies as well as the financing or investing scale.





4.
Professional Candidates





This
search function provides members to search for professional
resources.  Our database is built upon the registration information
provided by our members.  We do not undertake verification or
investigation of such information.





5.
Knowledge





This
section provides articles and links on industry knowledge. Members as well as
our in-house editorial team post articles on the website
periodically.





Revenue
Model of the Online Platform Business




Memberships
with RZTO and all services offered are free of charge.   The
Company does not expect any change in this revenue model in the foreseeable
future.





REVENUE
BREAKDOWN




The
breakdown of the revenue sources for the years ended December 31, 2009, 2008 and
2007 is as follows. A majority of our revenues is generated from our
wholly-owned subsidiary NAI based in Vancouver in Canada, and partly is
generated from CWN China based in Shanghai in China.





Year ended December 31,Revenue Breakdown
                    
                    2009
                    
                    
                    2008
                    
                    
                    2007GCFF
      Conference Business
                    
                    $
                    414,098
                    
                    
                    $
                    602,538
                    
                    
                    $
                    775,738Road  Show
      Business
                    
                    
                    122,860
                    
                    
                    
                    —
                    
                    
                    
                    —Various
      IR/PR Service
                    
                    
                    115,938
                    
                    
                    
                    100,147
                    
                    
                    
                    223,006Chinese
      Webpage Design, Hosting and Maintenance
                    
                    
                    80,396
                    
                    
                    
                    130,107
                    
                    
                    
                    169,097Online
      Marketing Service
                    
                    
                    75,937
                    
                    
                    
                    39,427
                    
                    
                    
                    25,826Banner Advertising
                    
                    
                    18,788
                    
                    
                    
                    28,570
                    
                    
                    
                    26,436Publication
      Service
                    
                    
                    16,794
                    
                    
                    
                    60,822
                    
                    
                    
                    85,245CWN
      Membership and Online Service
                    
                    
                    7,377
                    
                    
                    
                    9,473
                    
                    
                    
                    15,556Translation
      Service (Company Review, Company Newsletter)
                    
                    
                    4,406
                    
                    
                    
                    20,878
                    
                    
                    
                    5,090Other
      Revenues
                    
                    
                    49,861
                    
                    
                    
                    19,360
                    
                    
                    
                    —Total
                    
                    $
                    906,455
                    
                    
                    $
                    1,011,322
                    
                    
                    $
                    1,325,994





CORPORATE
STRATEGY AND STRATEGIC BUSINESS PLAN




Our goal
is to become a global leader in communication and information gateways between
investors and products and services providers worldwide. We offer an
Internet-based financial community by providing a diverse range of financial
news and corporate information on public companies targeting the Chinese
investors in North America and Asia. Through our infrastructure and client and
user base, we form partnerships and collaborations with various providers of
financial products and services and market them to Chinese investors in North
America and Asia. We believe we have already built a strong foundation of our
Portal and IR/PR businesses in North America. However, our IR/PR business may
have limited potential in the Hong Kong and the Greater China markets as these
markets are different from the North American markets and are more competitive.
Our Conference business, which we named Global Chinese Financial Forum or GCFF,
has evolved into a stand-alone business since 2006 and conferences are being
hosted in major cities in North America and Greater China. We provide a
networking environment to companies and products and services providers and we
connect them together by the various services we offer. As we have already
established our presence in the North American market, our next milestone is to
penetrate deeper into the Greater China market and then gradually expand into
other cities in Asia. The launch of RZTO, an online platform serving the
fast-growing number of private companies in China seeking listing and access to
capital in North American markets, has increased the range of products and
services that our Company can offer to our clients and
users.  Together, our four principal businesses enable us to further
expand our businesses and services to reach the users in Asia with a focus on
the Greater China region. We believe that one of the biggest competitive
advantages of operating an Internet-based business is that we are able to
leverage our existing infrastructure to reach a broad range of target customers
without a significant capital requirement.  Based on this principle,
we intend to maintain the operation of our businesses in our Vancouver office in
Canada.  However, we may consider other means of expansion such as
partnering with local companies or services providers, or establishing a direct
presence in certain markets.


31





As part
of our expansion into Asia, we have established partnerships with a few local
Chinese companies. Our joint venture with Shanghai Compass Venture Capital
Investment Company Limited has resulted in the incorporation of CWN China in
Shanghai, China. CWN China serves for three main purposes: (1) It helps building
the necessary channels to capture the financial information business locally.
(2) It offers assistance in the organization and coordination of regional
marketing activities.  For instance, the Toronto Conference 2009 in
October 2009 relied on the networks we gained through the joint venture by means
of bringing in governmental agencies, public and private companies, industrial
associations and other business professionals and experts in order to create the
Greater China portion of the cross-border partnering services for its
industrial level event.  In addition, the Shanghai Conference 2009 in
December 2009 was largely through the coordination effort of the joint venture.
(3) It seeks other business opportunities including the development of investor
relations/public relations business, the creation of a basis for potential
acquisition opportunities, and for further the digital financial media business
in the Greater China region.




INTERNET
CONTENT PARTNERS




Through
NAI, we currently have agreements in place with the following Internet content
partners:





Company
      Name
                      
                      Services
      ProvidedALPHATRADE.COM
                      
                      ALPHATRADE.COM
      provides real-time streaming stock information for a monthly
      fee.Daily
      FX
                      
                      Daily
      FX provides foreign exchange data, news, and articles on our
      website.FMFOREX
                      
                      FMFOREX
      provides foreign exchange data, news, and articles on our
      website.InterFax
                      
                      InterFax
      is a news agency in China that provides business news and stories to
      various different publications and media worldwide.  We publish
      its contents to a section of our www.chineseworldnet.com
      website in return for RMB$8,000 per year.IRAsia
                      
                      IRAsia
      provides financial news and articles of the stock market in Hong
      Kong.PR
      Newswire
                      
                      PR
      Newswire provides news releases of companies in North America, China, Hong
      Kong, and Taiwan which we disseminate on our www.chineseworldnet.com
      website.Quote123.com
                      
                      Quote123.com
      provides news and market commentaries in North America on our
      website.Tanrich
      Financial Group
                      
                      Tanrich
      Financial Group provides us information on the future market and stock
      market in Hong Kong in exchange for our news and market commentaries on
      the North American stock
markets.





Our
agreements with PR Newswire, Tanrich Financial Group and FMFOREX are all
service-to-service connections which do not incur any direct fees on us. We
provide a channel to PR Newswire for dissemination of press releases in return
for PR Newswire’s content and trademark to be provided on our website. Tanrich
Financial Group provides us with the Hong Kong market sector news for
our marketing purposes and in return we provide a link to access the
Tanrich Financial Group website on our website. FMFOREX provides foreign
exchange data and news in exchange for complimentary ad space on our
website.




32




TECHNOLOGY
INFRASTRUCTURE




None of
our application technologies are proprietary to us. The technologies used by us
are sourced from different commercially available software programs. CWN’s
application technologies, including its communication applications and content
management applications, are under a collaborative authoring environment
allowing different users such as our various in-house programmers to work
together on creating and managing the contents of our websites.  All
users have their own accounts and can belong to any number of
sites.




We own
two servers to serve our websites in North America, with one acting as a
backup.If one of the servers malfunctions, all traffic will be re-directed
to the other server. The two servers synchronize with each other every 30
seconds.





Furthermore,
new server has been in place to be ready to handle all traffic created from the
visitors coming from Asian region in 2010.





INTELLECTUAL
PROPERTY, GOVERNMENT APPROVALS AND REGULATIONS




Our
application technologies are not protected by any patents or copyrights nor do
we intend to seek any such protection. Without patent or copyright protection,
we may not be able to prevent duplication or use of our technology by
competitors.





There are
currently no material effects of government regulations on our
businesses.




OUR
PRIMARY MARKETS




Chinese
Internet Users





According
to data published by Internet World Stats in March 2009, the number of Internet
users in the Asia-Pacific region has continued to increase at an unprecedented
rate and has reached nearly 657 million.  This already surpassed that
of the whole of North America.  The following table represents the
estimates provided by Internet World Stats in relation to the uses of Internet
in China, Hong Kong and Taiwan in 2009:




Population
                  
                  
                  Internet Users
                  
                  
                  Penetration
                  
                  
                  Growth
                  
                  
                  Users in AsiaChina
                  
                  
                  1,338,612,968
                  
                  
                  
                  360,000,000
                  
                  
                  
                  26.9
                  %
                  
                  
                  1,500
                  %
                  
                  
                  48.8
                  %Hong
      Kong
                  
                  
                  7,055,071
                  
                  
                  
                  4,878,713
                  
                  
                  
                  69.2
                  %
                  
                  
                  113.7
                  %
                  
                  
                  0.7
                  %Taiwan
                  
                  
                  22,917,347
                  
                  
                  
                  15,143,000
                  
                  
                  
                  66.1
                  %
                  
                  
                  141.9
                  %
                  
                  
                  2.1
                  %





According
to a report published by Statistics Canada on March 9, 2010, there are 396,000
of Chinese ethnicity in Vancouver, representing 18% of the city’s
population.  It is expected to reach 809,000 or 23% of the city’s
population in two decades.  We believe this may indicate a similar
growing trend of Chinese immigrants in the major cities in North
America.





Internet
Advertising Market




Internet
advertising revenues in the United States totaled $23.4 billion for the full
year of 2008, up 10.6% from the $21.2 billion reported in 2007, according to the
Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) in their
Full Year ’08 Internet Advertising Revenue Report released on March 8,
2009.  The report showed an ongoing shift from traditional to online
media as marketers recognized that advertising dollars invested in interactive
media were effective at influencing consumers and delivering measurable
results.





According
to the Interactive Advertising Bureau of Canada (IAB)’s 2008 Actual + 2009
Estimated Canadian Online Advertising Revenue Survey, Canadian online
advertising revenues topped CA$1.6 billion in 2008, up 29% from the CA$1.24
billion reported in 2007.  It was estimated to reach CA$1.75 billion
in 2009.





Based on
these data, we believe that our services and offerings are well positioned in a
market that is continuing to grow.




33




IR/PR
Market




The IR/PR
market in Greater China is not well-established yet. However, this represents a
potential for us to grow due to our existing infrastructure. With an increasing
number of listed companies in China and the already well-established financial
systems and markets in Hong Kong and Taiwan, we believe the potential of the
IR/PR business in the Greater China region is favorable.





Conference
Market





Because
our Conference business targets those Chinese companies seeking to invest in
North America and to establish business connections with North American
servicing firms, we believe our market will grow substantially with the
increasing number of Chinese outward direct investments (“ODI”).  According
to the Ministry of Commerce of the People’s Republic of China, Chinese net ODI
in 2008 was $55.91 billion, up 111% from the previous year. Non-financial ODI
was $41.86 billion in 2008, up 68.5% year on year and financial ODI was $14.05
billion in 2008, up 741% year on year.





COMPETITION




The
markets for our Portal, IR/PR, Conference and Online Platform businesses are
extremely competitive and rapidly changing. The number of competitors competing
for our potential clients and users’ attention and spending has increased
significantly since we commenced operations and we expect that competition will
continue to intensify.  As we continue to broaden our range of product
offerings, we expect increasing competition from established players as well as
less well-known players in the coming years.  Many of these
competitors have longer operating histories, better brand recognition, larger
customer bases and databases, and significantly greater financial, technical and
marketing resources.  In addition, certain companies, especially
early-stage venture-backed start-ups may be willing to compete for market share
at the expense of generating revenues.  Any of our present or future
competitors may provide products and services that provide significant better
performance, price, creativity or other advantages over those offered by
us.  Our competitors may be able to undertake more extensive marketing
campaigns, adopt more aggressive pricing policies and make more attractive
offers to qualified personnel, distribution partners, advertisers and content
providers.  Our ability to compete successfully depends on many
factors, including the quality of our content, the breadth, depth and ease of
use of services, sales and marketing efforts, and performance of technology
etc.





In terms
of our Portal business, we currently compete, directly and indirectly, for
paying subscribers and users with companies in the business of providing
financial data and information services, including publishers and distributors
of traditional media, Internet portals providing information on business,
finance and investing, dedicated financial information websites, personal stock
research software vendors and stock brokerage companies, especially stock
brokerage companies with online trading capabilities.  We face
competition from those which are data providers in addition to operating their
own financial portals, such as SINA Corporation (NASDAQ: SINA), Quote123
(www.quote123.com), and Chineseinvestors.com Inc.
(www.chinesefn.com).  Our Portal business also faces competition from
pure data providers, such as QuoteMedia, Inc. (OTCBB: QMCI), Interactive Data
Corporation (NYSE: IDC), and Morningstar, Inc. (NASDAQ: MORN).





The IR/PR
market is well established and very competitive.  Our IR/PR business
faces competition from across the continent, including Chinese Investment Club
Inc. (www.nafinance.com) which targets Chinese investors, Agora Enterprises
International Inc. (www.agoracom.com) which targets the mainstream market, the
Equicom Group (www.equicomgroup.com) which is an IR services group based in
Canada, and CCG Investor Relations Strategic Communications (www.ccgir.com)
which is an IR services group based in the US.





Our
Conference business faces competition from DealFlow Media, Inc.
(www.dealflowmedia.com) and Zero2IPO Group (www.zero2ipo.com.cn) which focus on
institutions, MoneyShow.com, LLC (www.moneyshow.com) which focuses on the
financial sector and Cambridge House International Inc. (www.cambridgehouse.ca)
which focuses on the mining sector.





34





C. Organizational
Structure





ChineseWorldNet.Com
Inc. (“CWN”) was
incorporated under theCompany
Law (1998 revision) of the Cayman Islands on January 12, 2000. Our
principal executive and registered office is located at Appleby, Clifton House,
75 Fort Street, P.O. Box 190, Grand Cayman, Cayman Islands KY1-1104. Our North
American head office and principal place of business is located at Suite
368 – 1199 West Pender Street, Vancouver, British Columbia, Canada V6E
2R1.





NAI
Interactive Ltd. (“NAI”) was incorporated under
the Company Act
(British Columbia) on November 13, 1998. We completed the acquisition of NAI on
January 15, 2000 from Ms. Tim Yee Lau, the wife of our President and Chief
Executive Officer, Mr. Joe Tai, for a purchase price of 112,500 of our common
shares valued at $5,625. NAI is 100% owned by CWN.  NAI has an office
located at Suite 368 – 1199 West Pender Street, Vancouver, British Columbia,
Canada V6E 2R1.





ChineseWorldNet.com
(Hong Kong) Ltd. (“CWNHK”) was incorporated
under the laws of Hong Kong on December 22, 1999. CWNHK is 99% owned by CWN and
1% owned by Mr. Lui Chi Cheong, a director and a major shareholder of CWN. Since
June 2004, CWNHK’s office has been located at Room 1101, St. George’s Building,
2 Ice House Street, Central, Hong Kong. CWNHK provides us witha local operation base
for CWN’s penetration and expansion plans in the Asian market.





ChineseWorldNet.com
(Shanghai) Ltd. (“CWN
China”) was incorporated under the law of the PRC in April
2008.  CWN China is 70% owned by CWNHK and 30% owned by our joint
venture partner Shanghai Compass Venture Capital Investment Company
Limited.  CWN China has an office located at #1003, Eton Place Tower
B, 555 Pudong Ave., Shanghai, PRC 200120.  CWN China provides the
Company with the capabilities and resources to penetrate and expand particularly
in the Greater China markets.   On September 8, 2009, CWN China
funded and incorporated Weiahi Consulting Investment Ltd. (“Weihai”) under the
law of People’s Republic of China with intent to carry out other proposed
business operations.




In August
2009, we incorporated CWN Capital Inc. (“CWN Capital”) under the BVI
Business Companies Act, with a registered address at Morgan & Morgan
Building, Pasea Estate, Road Town, Tortola, British Virgin
Islands.  CWN Capital is our wholly-owned subsidiary for the purpose
of providing a vehicle for expanding the scope of our businesses into the
capital markets, which is still in an early development stage.





As of
December 31, 2009, there were fourteen employees in NAI and ten employees in CWN
China.





D. Property,
Plants and Equipment





We do not
own any real property.  We have a lease agreement for the Vancouver
office with an address at #368 – 1199 West Pender Street, Vancouver, British
Columbia, Canada V6E 2R1, for a term of 5 years expiring on Jul 31,
2011.  We have a lease agreement for the Shanghai office with an
address at #1003, Eton Place Tower B, 555 Pudong Ave., Shanghai, PRC 200120, for
a term of 2 years expiring on May 31, 2010.  We also have a lease
agreement for an automobile for a term of 4 years expiring on September 30,
2013.





As of
December 31, 2009, we had leasehold improvements of $10,227 (2008: $17,764 and
2007: $nil), computer equipment and computer software of $17,030 (2008: $18,533
and 2007: $14,235), office furniture of $12,617 (2008: $10,229 and 2007:
$7,766), and vehicle of $33,138 (2008: $nil and 2007: $nil).





ITEM 4A. UNRESOLVED STAFF COMMENTS





Not
applicable.





35





ITEM 5. OPERATING AND FINANCIAL REVIEW AND
PROSPECTS





This
discussion and analysis is of our operating results and our financial position
for the fiscal years ended December 31, 2009, 2008 and 2007 should be read in
conjunction with the consolidated financial statements and the related notes
thereto provided at “Item 17 –
Financial Statements”.





A.
Results of
Operations





The
Company currently generates revenue from its Portal, IR/PR and Conference
businesses.  The Company does not generate revenue from its Online
Platform business.  The Company’s annual and quarterly operating
results are primarily affected by the level of its sales and costs of operations
over these three businesses.  Economic factors such as the general
global economic and political environment, foreign exchange fluctuations, as
well as market prices of similar products and services may also play an
important role to affect the Company’s operating performance and the volatility
of its share price.  To management’s knowledge, there are no known
economic, political, and inflation that have materially affected, directly or
indirectly the Company’s operations.





YEARS
ENDED DECEMBER 31, 2009, 2008 AND 2007




For the
year ended December 31, 2009 (“Fiscal 2009”), we recorded a
net loss of $402,209 which $329,232 was attributable of common stockholders
($0.03 per common share), compared to a net loss of $1,004,835 which $950,123
was attributable to common stockholders ($0.09 per common share) for the year
ended December 31, 2008 (“Fiscal 2008”).  The
decrease of net loss of $602,626 was primarily due to management’s effort in
reducing operating expenditures as well as gain in foreign exchange
transactions.  In Fiscal 2009, we recorded revenue of $906,455,
compared to $1,011,322 in Fiscal 2008.  The decrease of revenue of
$104,867 was primarily due to the effects of the global financial crisis and the
weakened economy in 2009.





For the
year ended December 31, 2007 (“Fiscal 2007”), we recorded a
net income of $108,354 which $108,354 was attributable to common stockholders
($0.01 per common share) and revenue of $1,325,994.  The decrease of
net income of $1,113,189 was primarily due to lower revenue and higher operating
expenditures from the expansion of our businesses.  The decrease of
revenue of $314,672 was primarily due to the effects of the global financial
crisis and the weakened economy that started in 2008.





YEAR
ENDED DECEMBER 31, 2009 COMPARED TO YEAR ENDED DECEMBER 31, 2008





Revenues





The
global financial crisis and the weakened economy leading to lack of confidence
and funding of client companies as well as individual investors, and fewer
conferences we organized and hosted in Fiscal 2009 were the primary factors of
the decrease in our overall revenue.  The Company currently generates
revenue from its Portal, IR/PR and Conference businesses.  Our core
revenue sources come from these products and services we offer – GCFF Conference
Business, Road Show Business, Various IR/PR Service, Chinese Webpage Design,
Hosting and Maintenance, and Online Marketing Service.  Other revenue
sources include Banner Advertising, Publication Service, CWN Membership and
Online Service, Translation Service, and others.





Revenue
Growth Trend





The
global financial crisis in 2008 has had a negative impact on our businesses as
shown in our declining revenues, client base and conference attendance and sales
since the latter half of 2008.  Despite signs of economic improvement
in the general financial market, we continued to face difficulties in our
businesses in 2009.  But as the market continues to improve at an
optimistic pace and the general public’s adaptation to the current financial
environment, in addition to our focus on expanding and diversifying our core
revenue generating products and services, we expect our revenue to grow as we
attract and retain new and existing clients and users.





GCFF
Conference Business





Revenue
we generated from GCFF Conference Business was $414,098 in Fiscal 2009, compared
to $602,538 in Fiscal 2008.  The decrease of $188,440 was due to fewer
conferences we organized and hosted during Fiscal 2009 as compared to Fiscal
2008, as well as the decrease of presenting companies and exhibitors’
sponsorship in our conferences.  We anticipate revenue from GCFF
Conference Business will improve in 2010 and we will be organizing and hosting
more conferences in 2010 than in 2009.


36





Road
Show Business





Road Show Business was a brand new
service offering we started in Fiscal 2009, where we create and provide
opportunities for public companies and their representatives to meet with
potential institutional and retail investors, and we charge participating
companies for fees and expenses accordingly.  Revenue we generated
from Road Show Business was $122,860 in Fiscal 2009.  We expect to
focus on and expand our Road Show Business in 2010.





Various
IR/PR Service





Revenue
from Various IR/PR Service was $115,938 in Fiscal 2009, compared to $100,147 in
Fiscal 2008.  The increase of $15,791 was primarily due to the minor
increase of funding and confidence of our client companies as compared to Fiscal
2008.





Chinese
Webpage Design, Hosting and Maintenance





Revenue
from Chinese Webpage Design, Hosting and Maintenance was 80,396 in Fiscal 2009,
compared to $130,107 in Fiscal 2008.  The decreased of $49,711 was
primarily due to fewer client companies interested in our Chinese micro-site
development and hosting services as compared to Fiscal 2008.





Online
Marketing Service





Revenue from Online Marketing Service
was $75,937 in Fiscal 2009, compared to $39,427 in Fiscal 2008.  The
increase of $36,510 was primarily due to our added resources on promoting our
Online Marketing Service as compared to a year ago.





Banner
Advertising





Revenue
we generated from Banner Advertising decreased $9,782 from $28,570 in Fiscal
2008 to $18,788 in Fiscal 2009.  This was primarily due to the
decrease in client companies’ frequency of placing advertisements on our
websites because of the general financial market situation as compared to a year
ago.





Publication
Service





Revenue
we generated from Publication Service decreased $44,028 from $60,822 in Fiscal
2008 to $16,794 in Fiscal 2009.  This was primarily due to the
decrease in sponsorship of our client companies because of the weakened general
financial market situation as compared to a year ago.





CWN
Membership and Online Service





Revenue
we generated from CWN Membership and Online Service decreased $2,096 from $9,473
in Fiscal 2008 to $7,377 in Fiscal 2009.  This was primarily due to
the decrease in the number of Premium Subscribers of our websites as compared to
a year ago.





Translation
Service





Translation
Service was $4,406 in Fiscal 2009, compared to $20,878 in Fiscal
2008.  The decrease of $16,472 was due to our switch away of our focus
in providing Translation Service and fewer translation projects as compared to a
year ago.





Other
Revenues





Other
Revenues was $49,861 in Fiscal 2009, compared to $19,360 in Fiscal
2008.  The increase of $30,501 was due to certain added corporate
finance services we provided to our client companies as compared to a year
ago.




37




Expenses





For Fiscal 2009, we recorded operating
expenses of $1,464,743, compared to operating expenses of $1,791,091 for Fiscal
2008.  The decrease of operating expenses of $326,348 was primarily
due to management’s effort in reducing operating expenditures in the face of
weakened economy leading to weakened sales and fewer conferences we organized
and hosted in Fiscal 2009.  In Fiscal 2009, stock-based compensation
and seminar operating expense dropped significantly, while accretion on
convertible debenture, audit and legal, and travel and entertainment also
dropped substantially, as compared to Fiscal 2008.  But as the market
continues to improve and as we focus on expanding and diversifying our core
revenue generating products and services in 2010, we expect our operating
expenditures, particularly in relation to salaries and conferences, will
increase accordingly to accommodate our growth.





Advertising
and Promotion





Advertising
and promotion expenses were $131,604 in Fiscal 2009, compared to $144,906 in
Fiscal 2008.  The decrease of $13,302 was primarily due to fewer
resources allocated in advertising and promotion as we hosted and organized
fewer conferences during Fiscal 2009 as compared to Fiscal 2008.





Audit
and Legal





Audit and
legal expenses were $60,731 in Fiscal 2009, compared to $75,289 in Fiscal
2008.  The decrease of $14,558 was primarily due to less legal
expenses as compared to Fiscal 2008.





Consulting
Fees





Consulting
fees expenses were $104,841 in Fiscal 2009, compared to $95,900 in Fiscal
2008.  The increase of $8,941 was primarily due to the increase in
consulting fees paid to Goldpac Investments Ltd., where one of our senior
management was Managing Director.





Depreciation





Depreciation
expenses were $16,453 in Fiscal 2009, compared to $14,229 in Fiscal
2008.  The increase of $2,224 was primarily due to certain new
property purchased during Fiscal 2009.





Accretion
on convertible debenture





Accretion
on convertible debenture expenses were $21,845 in Fiscal 2009, compared to
$31,265 in Fiscal 2008.  The decrease of $9,420 was primarily due to
the effective interest rate calculation.





Provision
for bad and doubtful debts





Provision
for bad and doubtful debts expenses were $12,031 in Fiscal 2009, compared to
$13,410 in Fiscal 2008.  The decrease of $1,379 was due to the
management’s best estimation on accounts.





Rent
and Operating





Rent and
operating expenses were $131,958 in Fiscal 2009, compared to $114,428 in Fiscal
2008.  The increase of $17,530 was primarily due to an adjustment of
property taxes and increased rent as we leased a new office space in Shanghai,
China since the second half of 2008.




38




Salaries
and Benefits





Salaries
and benefits expenses were $553,819 in Fiscal 2009, compared to $599,354 in
Fiscal 2008.  The decrease of $45,535 was primarily due to the
termination of a certain junior positions offset by the increased staff in our
office in Shanghai, China.





Seminar
Operating Expense





Seminar
operating expenses were $71,074 in Fiscal 2009, compared to $152,843 in Fiscal
2008.  The decrease of $81,769 was primarily due to the smaller scale
of conferences we organized and hosted in China in Fiscal 2009 as compared to
Fiscal 2008.





Stock-based
Compensation





Stock-based
compensation expenses decreased $161,406 from $222,745 in Fiscal 2008 to $61,339
in Fiscal 2009, as most stock-based compensation for the previous stock option
grants have already been recognized in prior periods.





Telephone





Telephone
expenses increased $6,699 from $21,569 in Fiscal 2008 to $28,268 in Fiscal 2009,
primarily due to increased levels of cross-border business development related
activities.





Travel
and Entertainment





Travel
and entertainment expenses decreased $35,456 from $183,369 in Fiscal 2008 to
$147,913 in Fiscal 2009, primarily due to increased levels of cross-border
business development related activities offset by management’s preference of
using telecommunication over travelling as a way to reduce operating
expenditures.





Other
Income (Loss)





We
recorded other income of $156,079 in Fiscal 2009 and other loss of $170,454 in
Fiscal 2008.  The increase of other income of $326,533 was primarily
due to a much higher foreign exchange gain compared to a year
ago.  Our other income or loss line items primarily consist of
interest and sundry income from our liquid investments that are deposited with
banks and other financial institutions, and foreign exchange gain or loss
derived from currency exchange transactions.  We generally deposit our
excess cash in interest bearing or mutual fund accounts and term
deposits.  For Fiscal 2009, we recorded interest and sundry income of
$30,337, compared to interest and sundry income of $60,584 in Fiscal
2008.  The decrease of $30,247 was a result of less deposit made
during the year.  We recorded foreign exchange gain of $125,742 in
Fiscal 2009 and foreign exchange loss of $231,038 in Fiscal 2008.  The
increase of $356,780 was a result of depreciation of the US dollar, in
comparison with the Canadian dollar.





YEAR
ENDED DECEMBER 31, 2008 COMPARED TO YEAR ENDED DECEMBER 31, 2007





Revenues





The
decreasing number of publicly listed companies from the mining industry sector
in 2008 due to an adverse market condition, and our business environment towards
conference business are the main factors for the decrease in our overall
revenues. Our core services includes: Banner Advertisements, Chinese Webpage
Design and Hosting, Miscellaneous IR/PR Service, and GCFF Conference Services,
from which we derived most of our revenues in 2008. As compared with the
performance in 2007, revenues were down for our core services due to a lack of
funds by our corporate clients, the unfavorable financial markets giving
potential clients doubt over the ability of any IR/PR service to raise funds and
companies and investors being less willing to expend their funds.




39




Revenue
Growth Trend


With the
improvement and recovery of overall economic markets after the Global Financial
Crisis, we expect our revenue will turn to grow as we focus on core services
expansion and adaptation to the current financial environment. Primarily, we
intend to concentrate our resources on expanding our sales and marketing force
with respect to our Conference service in China and IR/PR services as well as
diversify the services and content provided by our events and online financial
portals to attract new client markets, which we anticipate will produce
increased revenue growth for our operations.





GCFF
Conference Business





The
revenues generated from Conference business had decreased from $775,738 in
Fiscal 2007 to $602,538 in Fiscal 2008. This is due to the significant decrease
of exhibitors’ sponsorship in our conferences due to the financial crisis in
2008. Companies are willing to spend money on promoting their companies and
cancelled to attend after they registered. We anticipate the revenues generated
from the Conference service will improve and rise once the economy recovers from
the global financial crisis.





Various
IR/PR Service





Revenues
from IR/PR services substantially decreased from $223,006 in Fiscal 2007 to
$100,147 in Fiscal 2008. The drop in revenues is due to the decreasing number of
our feature companies having subscribed to our premium services under the
establishment of NAI Interactive Ltd. This group of high-profile clients was not
willing to spend more in fees in order to market their companies to the Chinese
market due to the adverse market condition in 2008.





Chinese
Webpage Design, Hosting and Maintenance





The
revenues for Chinese Webpage Design - Hosting and Maintenance decreased
substantially from $169,097 in Fiscal 2007 to $130,107 in Fiscal 2008. This is
primarily due to the significant decrease of client companies involved in
Chinese micro-site development and hosting in 2008. An appreciation of US
currency also affects the drop of revenue quoted in US Dollars.





Banner
Advertising





The
slight increase in revenues for Banner Advertisement from $26,436 for Fiscal
year 2007 to $28,570 for the Fiscal year 2008 is due to the increase in
frequency of placing advertising on our website.





Publication
Service





The
decrease in revenues of our Investment Guides business from $85,245 in Fiscal
2007 to $60,822 in Fiscal 2008 is due to the appreciation of US currency in 2008
and the decrease of business generated from sponsorship of investment guides in
2008.





CWN
Membership and Online Service





CWN
Membership & Online service revenues substantially decreased from $15,556
from Fiscal 2007 to $9,473 in Fiscal 2008. This is due to the great decrease in
number of membership subscribers of our website in 2008.





Translation
Service





The
number of translation projects had much increased for the Fiscal 2008, thus
revenue increased from $5,090 from year 2007 to $20,878 for year 2008. More
customers are using our services in 2008.





Other
Revenues





Other
revenue items were $19,360 in Fiscal 2008 compared to $0 in Fiscal 2007 for
online marketing service and interest and others, respectively.




40




Expenses





Total
expenses for Fiscal 2008 were $1,791,091 and increase from $1,269,431 in Fiscal
2007. Expenses related to travel and entertainment and operating increased
greatly. The substantial increase in our operating expenses is principally from
an increase in our advertising and promotion of our GCFF event fees such as
speakers’ fees, consulting fees, salaries and travel & entertainment fees,
bad provision cost and stock based compensation. We expect our operating
expenses will continue to increase for the foreseeable future, while the rate of
increase will depend on our business expansion in advertising and promotion, as
well as our human resource requirements. Since we intend to focus on expanding
our sales and marketing staff for our Conference business in Canada & China
and our promotional efforts for our IP/PR Services, we expect that it will be
these specific expenses which will have the largest increases.





Advertising
and Promotion





Our
advertising and promotional expenses decreased greatly from $286,439 in Fiscal
2007 to $144,906 in Fiscal 2008 mainly due to the decreased sales in GCFF
conferences in 2008.





Audit
and Legal





Our
accounting and legal fees slightly increased from $58,022 in Fiscal 2007 to
$75,289 in Fiscal 2008. The increase resulted from the increase of auditor fees
in Fiscal 2008 and a decrease in seeking the services from our legal
firm.





Printing





Printing
expenses decreased to $33,688 for Fiscal 2008 from $39,972 for Fiscal 2007
primarily associated with the printing of publication and promotional materials.
Our printing expenses mainly involved printing of Mining Investment Guide, as
well as the promotional materials for conference business expansion such as
brochures and pamphlets.





Rent
and Operating





The
office rental cost increased from $72,427 in Fiscal 2007 to $114,428 Fiscal 2008
mainly due to the lease of office space for CWN China in Shanghai in
2008.





Salaries
and Benefits





Salaries
and benefit expenses increased substantially to $599,354 in Fiscal 2008 from
$465,494 in Fiscal 2007 primarily due to the increase in the number of staffs
and compensation payments in NAI and the setup of China team in our CWN China
office in Shanghai, China during 2008.





Travel
and Entertainment





Travel
expenses greatly increased to $183,369 in Fiscal 2008 from $136,344 in Fiscal
2007 due to business development activity expansion in Asia for the purpose of
increasing our business overseas, and management making numerous associated
trips to Asia and within North America in 2008. The cost of travel expenses was
increased much in 2008.





Other
Expenses





Other
expenses, such as consulting fees, office and miscellaneous, and telephone fees
increased from $172,695 in Fiscal 2007 to $182,565 in Fiscal 2008. This is
mainly due to the increased levels of business development activity and greater
expenditures on information technology. Consulting fees paid to Goldpac
Investments Limited increased from a yearly charge of $60,000 in 2007 to $72,000
in 2008. The Company incurred accretion expenses of $31,265 in Fiscal 2008
increased from $13,755 in Fiscal 2007. Stock based compensation from stock
options granted to directors and employees during 2007 substantially increased
from $22,222 in Fiscal 2007 to $222,745 in Fiscal 2008.


41





Other
Income (Loss)





Our other
income (loss) line items primarily consist of interest and sundry income from
our liquid investments that are deposited with banks and other financial
institutions; as well as foreign exchange gain or loss derived from currency
exchange transactions. We generally deposit our excess cash in interest bearing
or mutual fund accounts and term deposits. As a result, the other loss in our
income statement greatly increased from $2,430 in Fiscal 2007 to $170,454 in
Fiscal 2008. We recorded a loss of $231,038 in 2008 (compared to a loss of
$35,522 in 2007) due to the appreciation of US currency during
2008.





For year ending December 31,2009
                  
                  
                  2008RevenueGCFF
      Conference Business
                  
                  $
                  414,098
                  
                  
                  $
                  602,538Road
      Show Business
                  
                  
                  122,860
                  
                  
                  
                  —Various
      IR/PR Service
                  
                  
                  115,938
                  
                  
                  
                  100,147Chinese
      Webpage Design, Hosting and Maintenance
                  
                  
                  80,396
                  
                  
                  
                  130,107Online
      Marketing Service
                  
                  
                  75,937
                  
                  
                  
                  39,427Banner
      Advertising
                  
                  
                  18,788
                  
                  
                  
                  28,570Publication
      Service
                  
                  
                  16,794
                  
                  
                  
                  60,822CWN
      Membership and Online Service
                  
                  
                  7,377
                  
                  
                  
                  9,473Translation
      Service (Company Review, Company Newsletter)
                  
                  
                  4,406
                  
                  
                  
                  20,878Other
      Revenues
                  
                  
                  49,861
                  
                  
                  
                  19,360Total
      revenue
                  
                  $
                  906,455
                  
                  
                  $
                  1,011,322ExpensesAdvertising
      and promotion
                  
                  $
                  131,604
                  
                  
                  $
                  144,906Audit
      and legal
                  
                  
                  60,731
                  
                  
                  
                  75,289Consulting
      fees
                  
                  
                  104,841
                  
                  
                  
                  95,900Depreciation
                  
                  
                  16,453
                  
                  
                  
                  14,229Directors’
      remuneration
                  
                  
                  8,000
                  
                  
                  
                  8,000Accretion
      on convertible debenture
                  
                  
                  21,845
                  
                  
                  
                  31,265Interest
      expense on long term debt
                  
                  
                  15,000
                  
                  
                  
                  15,000Office
      and miscellaneous
                  
                  
                  65,386
                  
                  
                  
                  65,096Printing
                  
                  
                  34,481
                  
                  
                  
                  33,688Provision
      for bad and doubtful debts
                  
                  
                  12,031
                  
                  
                  
                  13,410Rent
      and operating
                  
                  
                  131,958
                  
                  
                  
                  114,428Salaries
      and benefits
                  
                  
                  553,819
                  
                  
                  
                  599,354Seminar
      operating expense
                  
                  
                  71,074
                  
                  
                  
                  152,843Stock
      based compensation
                  
                  
                  61,339
                  
                  
                  
                  222,745Telephone
                  
                  
                  28,268
                  
                  
                  
                  21,569Travel
      and entertainment
                  
                  
                  147,913
                  
                  
                  
                  183,369Total
      expenses
                  
                  $
                  1,464,743
                  
                  
                  $
                  1,791,091Income
      (loss) before other items
                  
                  
                  (558,288
                  )
                  
                  
                  (779,769
                  )Other
      income (loss)
                  
                  
                  156,079
                  
                  
                  
                  (170,454
                  )Income
      (loss) before income taxes
                  
                  $
                  (402,209
                  )
                  
                  $
                  (950,223
                  )Deferred
      income tax recovery (expense)
                  
                  
                  —
                  
                  
                  
                  (54,612
                  )Net
      income (loss) for the year
                  
                  $
                  (402,209
                  )
                  
                  $
                  (1,004,835
                  )Net
      income (loss) attributable to non controlling interest
                  
                  
                  (72,977
                  )
                  
                  
                  (54,712
                  )Net
      income (loss) attributable to common stockholders
                  
                  $
                  (329,232
                  )
                  
                  $
                  (950,123
                  )





CURRENCY




We
maintain our accounting records in US dollars. The functional currency of NAI,
CWNHK and CWN China is in Canadian dollar, Hong Kong dollar and Chinese
Renminbi, respectively, and the current rate method of translation was used. We
translate our assets and liabilities at the exchange rate prevailing as of the
balance sheet date. Revenues and expenses are translated at the average exchange
rate for the year. Foreign exchange gains and losses are deferred and shown
separately the in shareholders’ equity (deficiency).


42





Foreign
currency fluctuations may have an impact on our financial condition. However, we
do not engage in any foreign currency hedge transactions.




INFLATION




We do not
believe that inflation will have a material adverse effect on our financial
condition. Traditionally, Canada has not been countries that experienced a
substantial increase in inflation.  As of December 31, 2009, the
annual rate of inflation in Canada was 1.3%.





B. Liquidity and Capital
Resources





As of
December 31, 2009, we had cash and cash equivalents of $1,420,486 (December 31,
2008 – $684,232) and short-term investments of $238,597 (December 31, 2008 –
$1,291,726).  We had a working capital of $1,276,050 at December 31,
2009, compared to $1,836,606 at December 31, 2008.  We are currently
seeking additional capital to finance our business operations and expansions,
even though we believe our cash and cash equivalents, and cash flow are
sufficient to satisfy our current requirements to operate and further expand our
businesses and other future development in Asia for the next twelve
months.  Our principal sources of funding consist of advances from
related parties in fiscal 2003 and fiscal 2005, and advances from non-related
parties in fiscal 2004.  In November 2000, the Company completed a
non-brokered private placement offering of common shares and received gross
proceeds of $800,000.  In May 2004, the Company issued a convertible
debt in the amount of $150,000 at an interest rate of 5%.  More
recently, in March 2007, the Company issued a convertible debt in the amount of
$250,000 at an interest rate of 6%.  In October 2007, the Company
completed a non-brokered private placement offering of common shares and
received net proceeds of $2,070,000.  Our primary cash requirements
relate to our operating expenditures.  Our operating expenditures have
been, and are expected to continue to be, funded through our operations and
capital financing resources.





C. Research and Development,
Patents and Licenses





We have
not engaged in research and development activities for the last three fiscal
years, and have no patents and licenses.





D. Trend
Information





The
global financial crisis affecting the world capital markets, particularly with
public companies and investors, may have a positive material impact on our
business operations including – the general financial market turnaround, which
will increase demand for financial information services and spending on investor
relations and public relations; increasing interest of Asian companies looking
to enter North American financial markets; and the increased attention to
corporate governance and disclosure.  We believe these trends may
lead to an increase in demand for our services, which could lead to increase in
sales of our services.  However, the investor relations and public
relations area in Asia is still in its development stage, which may affect
our investor relations and public relations services in
Asia.  Continued growth in China and interest in the Chinese markets
is key to our future profitability and to increasing revenues.  There
are no known trends with relation to the production of our
services.





E. Off-Balance Sheet
Arrangements





We do not
have any off-balance sheet arrangements.




43




F. Tabular Disclosure of
Contractual Obligations





Payments due by period ($)Contractual Obligations
                    
                    Total
                    
                    
                    Less than
                      1 year
                    
                    
                    1-3 years
                    
                    
                    3-5 years
                    
                    
                    More than
                      5 yearsLong-Term
      Debt Obligations
                    
                    
                    250,000
                    
                    
                    
                    250,000
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —Capital
      (Finance) Lease Obligations
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —Operating
      Lease Obligations
                    
                    
                    153,273
                    
                    
                    
                    86,274
                    
                    
                    
                    66,999
                    
                    
                    
                    —
                    
                    
                    
                    —Purchase
      Obligations
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —Other
      Long-Term Liabilities
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —Total
                    
                    
                    403,273
                    
                    
                    
                    336,274
                    
                    
                    
                    66,999
                    
                    
                    
                    —
                    
                    
                    
                    —




ITEM
6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES





A. Directors and Senior
Management




The
following table sets forth all directors and executive officers of CWN as of
December 31, 2009.  Each director’s term of office expires at the next
annual general meeting of shareholders.




Name
                  
                  Age
                  
                  Office Held Since
                  
                  Offices and Positions Held in CWNJoe
      K.F. Tai
                  
                  46
                  
                  January
      12, 2000
                  
                  Director,
      President and Chief Executive OfficerChi
      Cheong Liu(1)
                  
                  50
                  
                  January
      12, 2000
                  
                  Director
      and TreasurerChi
      Kong Liu(1)
                  
                  49
                  
                  January
      12, 2000
                  
                  DirectorAndy
      S.W. Lam
                  
                  60
                  
                  March
      8, 2004
                  
                  DirectorKelvin
      Szeto(2)
                  
                  49
                  
                  June
      1, 2006
                  
                  Chief
      Financial Officer and Chief Operating OfficerGilbert
      Chan(3)
                  
                  34
                  
                  April
      1, 2008
                  
                  Acting Corporate
      SecretaryFornia
      Lau
                  
                  28
                  
                  May
      25, 2009
                  
                  Vice
      President, Business
Development





(1)
            Chi
      Cheong Liu and Chi Kong Liu are related parties.(2)
            Kelvin
      Szeto was appointed as acting Chief Operating Officer and acting Chief
      Financial Officer of the Company on April 1, 2005.  He was
      permanently appointed to the positions on June 1, 2006.(3)
            Vivien
      Leung was appointed as Corporate Secretary on February 1, 2007 and
      resigned effective April 1, 2008.  Gilbert Chan was appointed as
      acting Corporate Secretary until a replacement is
  found.





The
following table sets forth all directors and executive officers of our
subsidiary NAI as of December 31, 2009.  Each director’s term of
office expires at the next annual general meeting of shareholders.





Name
                  
                  Age
                  
                  Office Held Since
                  
                  Offices and Positions Held in NAIKelvin
      Szeto
                  
                  49
                  
                  November
      2001
                  
                  Director,
      President and SecretaryGilbert
      Chan
                  
                  34
                  
                  June
      2000
                  
                  Vice
      President, Marketing and Project
Development





The
business background and principal occupations of each of CWN and NAI’s director
and executive officer for the preceding five years are as follows:




Joe
K.F. Tai


Mr. Tai
has served as a director, President and Chief Executive Officer of CWN since
January 12, 2000.  Mr. Tai is Managing Partner of Goldpac Investments
Ltd., a venture capital company.  He is also a director of Medifocus
Inc. and China Goldcorp Ltd., both of which are TSX Venture Exchange listed
companies.  Mr. Tai was involved with a startup of an international
computer manufacturing company with offices in Vancouver and Calgary and
manufacturing facilities in Hong Kong and China with annual sales exceeding
CA$30 million.  Mr. Tai has over 15 years of experience in
international business.




Chi
Cheong Liu


Mr. Liu
has been a director of CWN since January 2000.  Mr. Liu has served as
President of Chigo Engineering Company, a security engineering firm, for the
last 17 years.  Mr. Liu is a venture capitalist specializing in
biotechnology and technology investments.


44


Chi
Kong Liu


Mr. Liu
has been a director of CWN since January 2000.  Mr. Liu was President
and owner of S & B Trading Company Limited, a diamond and jewelry
wholesaler.  Mr. Liu is a venture capitalist specializing in
biotechnology and technology investments.





Andy
S.W. Lam


Mr. Lam
has been a director of CWN since March 2004.  Mr. Lam is also a
director of CWNHK.  Mr. Lam is a Justice of the Peace appointed by the
Hong Kong Government.  He is a successful businessman with over 19
years of experience in strategic investment and planning.  Mr. Lam has
sat on the board of a number of publicly listed companies on the Hong Kong Stock
Exchange and served on several government committees and tribunals in Hong
Kong.  Mr. Lam is a CPA and holds a MBA degree from Oklahoma City
University.





Kelvin
Szeto


Mr. Szeto
has served as Chief Operating Officer and Chief Financial Officer of CWN since
June 2006.  Prior to his appointment, Mr. Szeto was acting Chief
Operating Officer and acting Chief Financial Officer of CWN since April
2005.  Mr. Szeto has served as NAI’s director, President and Secretary
since November 2001. Prior to the appointment as President of NAI, Mr. Szeto was
a director, Secretary and Vice President, Operation since January
2000.  Mr. Szeto was involved with a startup of an international
computer manufacturing company with offices in Vancouver and Calgary and
manufacturing facilities in Hong Kong and China with annual sales exceeding
CA$30 million.




Gilbert
Chan


Mr. Chan
has been Acting Corporate Secretary of CWN since April 2008. Mr. Chan has served
as Vice President, Marketing and Project Development of NAI since June
2000.  Mr. Chan has extensive experience as Project Manager for
various websites.  Mr. Chan holds a Bachelor Degree in Applied Science
from the University of British Columbia.





Fornia
Lau


Ms. Lau
has joined the Company since 2005.  Ms. Lau has served as Vice
President, Business Development since May 2009.  Ms. Lau is involved
in the strategic development of the Company. She is the key coordinator of our
conference series – Global Chinese Financial Forum (GCFF) where she is
responsible for the planning of the conferences such as marketing initiatives,
content building, as well as establishing sponsorship/partnership program with
various function groups.  Ms. Lau holds a Bachelor of Commerce degree
majoring in Finance from the University of British Columbia – Sauder School of
Business.





B. Compensation




The
following table provides information regarding direct and indirect remuneration
paid to the directors and executive officers of CWN and its subsidiaries during
Fiscal 2009.





Annual Compensation in Fiscal 2009Name and Respective Office and Position Held
                        
                        Salary
                          ($)
                        
                        Bonus
                          ($)
                        
                        Other Annual
                          Compensation
                          ($)Joe
      K.F. Tai(1)
                          Director,
      President and Chief Executive Officer
                        
                        Nil
                        
                        Nil
                        
                        
                        74,000Chi
      Cheong Liu(2)
                          Director
      and Treasurer
                        
                        Nil
                        
                        Nil
                        
                        
                        2,000Chi
      Kong Liu(3)
                          Director
                        
                        Nil
                        
                        Nil
                        
                        
                        26,000Andy
      S.W. Lam(4)
                          Director
                        
                        Nil
                        
                        Nil
                        
                        
                        2,000Kelvin
      Szeto
                          Chief
      Operating Officer and Chief Financial Officer
                          (Director,
      President and Secretary of NAI)
                        
                        
                        37,837
                        
                        Nil
                        
                        NilGilbert
      Chan
                          Acting
      Corporate Secretary
                          (Vice
      President, Marketing and Project Development of NAI)
                        
                        
                        37,336
                        
                        Nil
                        
                        NilFornia
      Lau
                          Vice
      President, Business Development
                        
                        
                        35,210
                        
                        Nil
                        
                        NilTotal
                        
                        
                        110,383
                        
                        Nil
                        
                        
                        104,000


45





(1)
            Mr.
      Tai is a shareholder and does not receive salary. Starting 2008, the
      Company paid Mr. Tai director fee of $2,000 per year. The Company had
      consulting agreements with Goldpac Investments Ltd. and paid consulting
      fees of $72,000 per year in 2009 and $60,000 per year in 2008 and 2007.
      Mr. Tai is Managing Director of Goldpac Investments
  Ltd.


(2)
            Mr.
      Liu is a shareholder and does not receive salary. Starting 2008, the
      Company paid Mr. Liu director fee of $2,000 per
  year.


(3)
            Mr.
      Liu is a shareholder and does not receive salary. Starting 2008, the
      Company paid Mr. Liu director fee of $2,000 per year. The Company had
      consulting agreements with Silver Lake Investment Partners, Ltd. and
      paid consulting fees of $24,000 per year in 2009 and 2008. Mr. Liu has a
      controlling interest in Silver Lake Investment Partners,
    Ltd.


(4)
            Mr.
      Lam is a director and does not receive salary. Starting 2008, the
      Company paid Mr. Lam director fee of $2,000 per
  year.





PENSION
PLANS




We do not
provide pension, retirement or similar benefits for directors, senior management
or employees.





C. Board
Practices




Directors
hold office for a term of one year or until the next annual general meeting of
shareholders at which directors are elected. All of the current directors have
served the Company since January 12, 2000, other than Mr. Andy S.W. Lam, who was
appointed to the board on March 8, 2004 following the resignation of Mr. Ken Cai
in January 2004.  Our officers are appointed by the board and serve at
the board’s discretion.




We have
not entered into service contracts with any of our directors. However, we have
entered into and renewed consulting agreements with Goldpac Investments Ltd and
Silver Lake Investment Partners, Ltd., which are managed or controlled by
directors of our Company.  Our consulting agreement Goldpac
Investments Ltd expires on December 31, 2010 and our consulting agreement with
Silver Lake Investment Partners, Ltd. expires on December 31, 2010.





D. Employees





As of
December 31, 2009, there were fourteen employees in NAI and ten employees in CWN
China.





Employee Breakdown
                                
                                NAI (Vancouver)
                                
                                CWN China (Shanghai)Management
                                
                                0
                                
                                0Business
      Development
                                
                                5
                                
                                3Editorial
                                
                                2
                                
                                3Finance
      and Accounting
                                
                                2
                                
                                2IT
                                
                                2
                                
                                2Sales/Marketing
                                
                                3
                                
                                0Total
                                
                                14
                                
                                10


46





E. Share Ownership of Directors
and Senior Management





The
Company’s authorized capital consists of 100,000,000,000 common shares, at a par
value of $0.001, of which 10,700,000 common shares were issued and outstanding
as at December 31, 2009.  During Fiscal 2009, there had been no
issuance of common shares, exercises in stock options, or change in the
percentage of shares beneficially owned.  Subsequent to the year end, on
February 24, 2010, the Company issued an aggregate of 250,000 common shares upon
the conversion of a 6% Unsecured Convertible Note, resulting in a total of
10,950,000 common shares issued and outstanding.


The
following table sets forth certain information regarding the ownership of our
common shares by each of the directors and members of senior management in
office as at December 31, 2009.  The percentage owned is based on
10,700,000 shares outstanding as at December 31, 2009.





Name and Respective Office
      and Position Held
                    
                    Share Ownership
                    
                    
                    % Share OwnershipJoe
      K.F. Tai(1)
                      Director,
      President and Chief Executive Officer
                    
                    
                    250,000
                    
                    
                    
                    2.34
                    %Chi
      Cheong Liu(2)
                      Director
      and Treasurer
                    
                    
                    1,730,000
                    
                    
                    
                    16.17
                    %Chi
      Kong Liu
                      Director
                    
                    
                    580,000
                    
                    
                    
                    5.42
                    %Andy
      S.W. Lam
                      Director
                    
                    
                    —
                    
                    
                    
                    —Kelvin
      Szeto
                      Chief
      Operating Officer and Chief Financial Officer
                      (Director,
      President and Secretary of NAI)
                    
                    
                    150,000
                    
                    
                    
                    1.40
                    %Gilbert
      Chan
                      Acting
      Corporate Secretary
                      (Vice
      President, Marketing and Project Development of NAI)
                    
                    
                    50,000
                    
                    
                    
                    0.47
                    %Fornia
      Lau
                      Vice
      President, Business Development
                    
                    
                    —
                    
                    
                    
                    —Total
                    
                    
                    2,760,000
                    
                    
                    
                    25.80
                    %




(1)
            As
      at December 31, 2009, Ms. Tim Yee Lau, a related party to Mr. Tai, owned
      112,500 common shares of the Company. Goldpac Investments Ltd., for which
      Mr. Tai is Managing Director, owned 200,000 common shares of the
      Company. Total direct and indirect share ownership was 562,500 common
      shares or 5.26% of the total common shares of the
  Company.


(1)
            As
      at December 31, 2009, Goldpac Investment Partners Ltd., for which Mr. Liu
      is Principal, owned 1,166,667 common shares of the Company. Total
      direct and indirect share ownership was 2,896,667 common shares or 27.07%
      of the total common shares of the
Company.





STOCK
OPTIONS




We
adopted the ChineseWorldNet.com Inc. 2007 Stock Incentive Plan (the “Plan”), on October 11, 2007,
under which we issued share options with the right to purchase up to 550,000
ordinary shares to our directors, officers, and key employees. We did not grant
options to individual consultants and advisors.




As at
December 31, 2009, we had a total number of 297,000 options that are
unvested.  All of the options we granted on October 11, 2007, with an
exercise price of $1.08 per share, will expire on October 11,
2012.  All of the options granted under the Plan to our directors and
officers have a vesting period of 1 to 5 years.




47





Optionees
                                    
                                    Position
                                    
                                    Share
      Options GrantedJoe
      Tai
                                    
                                    Director
                                    
                                    25,000Chi
      Cheong Liu
                                    
                                    Director
                                    
                                    25,000Chi
      Kong Liu
                                    
                                    Director
                                    
                                    25,000Andy
      Lam
                                    
                                    Director
                                    
                                    25,000Joe
      Tai
                                    
                                    Officer
                                    
                                    180,000Kelvin
      Szeto
                                    
                                    Officer
                                    
                                    100,000Gilbert
      Chan
                                    
                                    Officer
                                    
                                    50,000Fornia
      Lau
                                    
                                    Officer
                                    
                                    20,000Kwok
      Keung Pang
                                    
                                    Employee
                                    
                                    10,000Karl
      Por So
                                    
                                    Employee
                                    
                                    10,000Kai
      Bei Yang
                                    
                                    Employee
                                    
                                    15,000Mary
      Weixin Zhang
                                    
                                    Employee
                                    
                                    10,000Frank
      Feng Feng
                                    
                                    Employee
                                    
                                    20,000(Forfeited)Vivien
      Ka Ki Leung
                                    
                                    Employee
                                    
                                    10,000
      (Forfeited)Jin
      Xu
                                    
                                    Employee
                                    
                                    10,000(Forfeited)Lixin
      Yang
                                    
                                    Employee
                                    
                                    15,000(Forfeited)Total
                                    
                                    
                                    
                                    550,000





ITEM
7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS





A. Major
Shareholders




The
Company’s authorized capital consists of 100,000,000,000 common shares with a
par value of $0.001, of which 10,700,000 common shares were issued and
outstanding as at December 31, 2009.  During Fiscal 2009, there had
been no issuance of common shares, exercises in stock options, or change in the
percentage of shares beneficially owned.  Subsequent to the year end, on
February 24, 2010, the Company issued an aggregate of 250,000 common shares upon
the conversion of a 6% Unsecured Convertible Note, resulting in a total of
10,950,000 common shares issued and outstanding.





There
were four registered shareholders in the U.S. with holdings of 1,920,833 common
shares representing 17.95% of the total outstanding common shares as at December
31, 2009.





To the
knowledge of the directors and senior officers of the Company, the following
table sets forth the persons or companies who beneficially own, directly or
indirectly, or exercise control or direction over shares carrying 5% or more of
the voting rights attached to the total outstanding common shares of the Company
as at December 31, 2009.  The percentage owned is based on 10,700,000
shares outstanding as at December 31, 2009.




Name of Shareholder
                      
                      Number of
                        Common
      Shares
                      
                      
                      Percentage of Shares
                        Beneficially OwnedChi
      Cheong Liu(1)
                      
                      
                      2,896,667
                      
                      
                      
                      27.07
                      %CEDE&Co
                      
                      
                      1,817,000
                      
                      
                      
                      16.98
                      %Vcanland
      China Holdings Ltd.
                      
                      
                      1,500,000
                      
                      
                      
                      14.02
                      %Datacom
      Venture Limited(2)
                      
                      
                      600,000
                      
                      
                      
                      5.61
                      %Chi
      Kong Liu
                      
                      
                      580,000
                      
                      
                      
                      5.42
                      %Monica
      Law
                      
                      
                      570,000
                      
                      
                      
                      5.32
                      %Joe
      K.F. Tai(3)
                      
                      
                      562,500
                      
                      
                      
                      5.26
                      %Total
                      
                      
                      8,526,167
                      
                      
                      
                      79.68
                      %





(1)
            As
      at December 31, 2009, Mr. Liu owned 1,730,000 common shares. Goldpac
      Investment Partners Ltd., for which Mr. Liu is Principal, owned 1,166,667
      common shares of the Company.


(2)
            On
      October 29, 2004, we issued 200,000 of our common shares to acquire all of
      the assets of TCHL, which included HK$540,000 in cash and equipment, from
      Marrick. Marrick nominated its sister company, Datacom, to be the
      record owner of the shares.


(3)
            As
      at December 31, 2009, Mr. Tai owned 250,000 common shares. Ms. Tim
      Yee Lau, a related party to Mr. Tai, owned 112,500 common
      shares. Goldpac Investments Ltd., for which Mr. Tai is Managing
      Director, owned 200,000 common
shares.


48





Unless
otherwise indicated by footnote, we believe that the beneficial owners of the
common shares listed above, based on information furnished by such owners, have
sole investment and voting power with respect to such common shares, subject to
community property laws where applicable.  Beneficial ownership is
determined in accordance with the rules of the United States Securities and
Exchange Commission and generally includes voting or investment power with
respect to securities.  As far as it is known to the Company, except
as disclosed herein, we are not directly or indirectly owned or controlled by
another corporation, by any foreign government or any other person or entity.
The shareholders, who own five percent or more of our common shares, do not have
voting rights which are different than our other shareholders who own our common
shares.





B. Related Party
Transactions




During
Fiscal 2009, we had a consulting agreement with Goldpac Investments Ltd. and we
paid consulting fees of $72,000 ($6,000 per month).  Mr. Joe Tai, a
director, President and Chief Executive Officer of the Company, is Managing
Director of Goldpac Investments Ltd.





During
Fiscal 2009, we had a consulting agreement with Silver Lake Investment Partners,
Ltd. and we paid consulting fees of $24,000 ($2,000 per month).  Mr.
Chi Kong Liu, a director of the Company, has a controlling interest in Silver
Lake Investment Partners, Ltd.





None of
our directors, senior officers, associates or affiliates of any of them is or
has been indebted to us or our subsidiaries at any time.





C. Interests of Experts and
Counsel




This
Report on Form 20-F is being filed as an annual report under the Exchange Act
and, as such, there is no requirement to provide any information under this
item.





ITEM
8. FINANCIAL INFORMATION





A. Financial
Statements




This
Report on Form 20-F includes our audited consolidated financial statements
for the years ended December 31, 2009, 2008 and 2007, including our consolidated
balance sheets as of December 31, 2009 and 2008, and the consolidated statements
of shareholders’ equity, operations and cash flows for the years ended December
31, 2009, 2008 and 2007, and the related notes to those statements and the
auditors’ reports thereon.  Reference is made to these documents
commencing at Page F-1 of this Report.





B. Significant
Changes




There
have been no significant changes in our businesses in the period from December
31, 2009 until the date of this document.





ITEM
9. THE OFFER AND LISTING





A. Offer and Listing
Details




Shares of
our common stock are currently quoted on the OTC Bulletin Board under the symbol
“CWNOF.OB”.  For the periods
indicated, the following table sets forth the high and low bid prices of our
common shares, as reported by the OTC Bulletin Board. These prices represent
inter-dealer quotations without retail markup, markdown, or commission and may
not necessarily represent actual transactions. As at March 31, 2010, the closing
bid price per share of our common stock was $0.25.


49





Periods
                          
                          High
                          
                          
                          LowFiscal 20101Q-2010
                          
                          $
                          0.25
                          
                          
                          $
                          0.25Fiscal 20094Q-2009
                          
                          $
                          0.25
                          
                          
                          $
                          0.253Q-2009
                          
                          $
                          0.25
                          
                          
                          $
                          0.152Q-2009
                          
                          $
                          0.25
                          
                          
                          $
                          0.251Q-2009
                          
                          $
                          0.25
                          
                          
                          $
                          0.13Fiscal 20084Q-2008
                          
                          $
                          0.53
                          
                          
                          $
                          0.203Q-2008
                          
                          $
                          0.79
                          
                          
                          $
                          0.352Q-2008
                          
                          $
                          1.25
                          
                          
                          $
                          0.501Q-2008
                          
                          $
                          1.30
                          
                          
                          $
                          1.25Most Recent 6 months from October 2009 through
      March 2010March
      2010
                          
                          $
                          0.25
                          
                          
                          $
                          0.25February
      2010
                          
                          $
                          0.25
                          
                          
                          $
                          0.25January
      2010
                          
                          $
                          0.25
                          
                          
                          $
                          0.25December
      2009
                          
                          $
                          0.25
                          
                          
                          $
                          0.25November
      2009
                          
                          $
                          0.25
                          
                          
                          $
                          0.25October
      2009
                          
                          $
                          0.25
                          
                          
                          $
                          0.25





B. Plan of
Distribution




This
Report on Form 20-F is being filed as an annual report under the Exchange Act
and, as such, there is no requirement to provide any information under this
item.





C. Markets




Our
common shares are quoted on the OTC Bulletin Board of the National Association
of Securities Dealers, Inc. under the symbol “CWNOF.OB”.





D. Selling
Shareholders




This
Report on Form 20-F is being filed as an annual report under the Exchange Act
and, as such, there is no requirement to provide any information under this
item.





E. Dilution




This
Report on Form 20-F is being filed as an annual report under the Exchange Act
and, as such, there is no requirement to provide any information under this
item.





F. Expenses of the
Issue




This
Report on Form 20-F is being filed as an annual report under the Exchange Act
and, as such, there is no requirement to provide any information under this
item.


50





ITEM
10. ADDITIONAL INFORMATION





A. Share
Capital




This
Report on Form 20-F is being filed as an annual report under the Exchange Act
and, as such, there is no requirement to provide any information under this
item.





B. Memorandum and Articles of
Association




There
have been no changes to the Memorandum, Articles of Association, or Cayman
Islands Law with respect to rights and powers of directors and shareholders
since our 20-F Registration Statement (SEC file no. 000-33051) filed on July 3,
2002.  Such discussion is hereby incorporated by reference into this
Report.





C. Material
Contracts




The
material contracts entered into by the Company, other than those contracts
entered into during the ordinary course of business, are as
follows:





In April
2004, we entered into an Exchange Agreement with Marrick Investments Limited to
acquire all of the assets of Technology City Holdings Ltd., which included
HK$540,000 in cash and equipment.  Pursuant to the agreement, we
issued 200,000 of our common shares to Datacom Venture Limited, a nominee of
Marrick Investments Limited, on October 29, 2004.





On June
6, 2006, we entered into an office lease agreement for our current premises
located at Suite 368 – 1199 West Pender Street, Vancouver, British Columbia,
Canada V6E 2R1.  The term of the lease is for 5 years expiring on July
31, 2011.  The monthly lease payment is CA$6,871.63.





On
February 1, 2008, our subsidiary ChineseWorldNet.com (Hong Kong) Ltd. entered
into a Agreement to Establish CWN China Co., Ltd., a Chinese-Foreign Joint
Venture Limited Liability Company with Shanghai Compass Venture Capital
Investment Company Limited to establish ChineseWorldNet.com (Shanghai)
Ltd.





On May 7,
2008, we entered into an office lease agreement for our current premises located
at #1003, Eton Place Tower B, 555 Pudong Ave., Shanghai, PRC
200120.  The term of the lease is for 2 years expiring on June 30,
2010.  The monthly lease payment is RMB$21,702.5 plus applicable taxes
and maintenance fees.





D. Exchange
Controls




CAYMAN
ISLANDS




We are
organized under the laws of the Cayman Islands. We do not believe there are any
decrees or regulations under the laws of the Cayman Islands applicable to us
restricting the import or export of capital or affecting the remittance of
dividends or other payments to non-resident holders of our common stock. There
are no restrictions under CWN’s Articles of Incorporation or Memorandum of
Association or under Cayman Islands law as currently in effect that limit the
right of non-resident owners to hold or vote our common shares or to receive
dividends thereon. There is uncertainty as to whether the Courts of Cayman
Island would (i) enforce judgments of United States Courts obtained against
us or our directors and officers predicated upon the civil liability provisions
of the federal securities laws of the United States or (ii) entertain original
actions brought in Cayman Island Courts against us or such persons predicated
upon the federal securities laws of the United States. There is no treaty in
effect between the United States and Cayman Island providing for such
enforcement.


51





CANADA




There are
no governmental laws, decrees or regulations in Canada relating to restrictions
on the export or import of capital, or affecting the remittance of interest,
dividends or other payments to non-residents. Dividends paid to US residents,
however, are subject to a 15% withholding tax or a 5% withholding tax for
dividends if the shareholder is a corporation owning at least 10% of the
outstanding voting shares of the Company pursuant to Article X of the reciprocal
tax treaty between Canada and the US.




Except as
provided in the Investment Canada Act (the "ICA"), which has provisions
that restrict the holding of voting shares by non-Canadians, there are no
limitations specific to the rights of non-Canadians to hold or vote the common
shares under the laws of Canada, or in the charter documents of the Company or
its subsidiaries.




The ICA
requires a person who is not a Canadian resident (a "non-Canadian") making an
investment, which would result establish a new Canadian business or which would
result in the acquisition of control of a Canadian business (i.e. the gross
value of the assets of which exceed a certain monetary threshold), to identify,
notify, or file an application for review with the Investment Review Division of
Industry Canada ("IRD"). The notification
procedure involves a brief statement of information about the investment on a
prescribed form to be filed by the investor within 30 days following
implementation of the investment. Specific investments are subject to review
under the ICA. It is intention of the IRD that investments requiring only
notification will proceed without government intervention.





The
following investments by non-Canadians are subject to review under the
ICA:





1.
            An
      investment is reviewable if there is an acquisition of a Canadian business
      and the asset value of the Canadian business being acquired equals or
      exceeds the following thresholds:





(a)
            For
      non-WTO investors, the threshold is $5 million for a direct acquisition
      and $50 million for an indirect acquisition; the $5 million threshold will
      apply however for an indirect acquisition if the asset value of the
      Canadian business being acquired exceeds 50% of the asset value of the
      global transaction;





(b)
            Except
      as specified in paragraph (c) below, a threshold is calculated annually
      for reviewable direct acquisitions by or from WTO investors. The threshold
      for 2005 is $250 million. Pursuant to Canada's international commitments,
      indirect acquisitions by or from WTO investors are not
      reviewable;





(c)
            The
      limits set out in paragraph (a) above apply to all investors for
      acquisitions of a Canadian business
that:





(i)
            engages
      in the production of uranium and owns an interest in a producing uranium
      property in Canada;


(ii)
            provides
      any financial service;


(iii)
            provides
      any transportation services; or


(iv)
            is
      a cultural business.





2.
            Notwithstanding
      the above, any investment which is usually only notifiable, including the
      establishment of a new Canadian business, and which falls within a
      specific business activity, including the publication and distribution of
      books, magazines, newspapers, film or video recordings, audio or video
      music recordings, or music in print or machine-readable form may be
      reviewed if an Order-in-Council directing a review is made and a notice is
      sent to the Investor within 21 days following the receipt of a certified
      complete notification.




With
reference to 1(a) above, generally speaking, an acquisition is direct if it
involves the acquisition of control of the Canadian business or of its direct or
indirect Canadian parent and an acquisition is indirect if it involves the
acquisition of control of a non-Canadian direct or indirect parent of an entity
carrying on the Canadian business. No change of voting control will be deemed to
have occurred if an investor acquires less than one-third of the voting control
of a Canadian corporation.




With
reference to 1(a) above, a WTO investor, as defined in the ICA, includes an
individual who is a national of a member country of the WTO or who has the right
of permanent residence in relation that WTO member, a government or government
agency of a WTO investor-controlled corporation, a limited partnership, trust or
joint venture that is neither WTO-investor controlled or Canadian
controlled of which two-thirds of its board of directors, general partners or
trustees, as the case may be, are any combination of Canadians and WTO
investors.


52





The ICA
exempts certain transactions from notification and review, including, among
others:





1.
              An
      acquisition of voting shares if the acquisition were made in the ordinary
      course of that persons' business as a trader or dealer in
      securities;





2.
              An
      acquisition of control of the Company in connection with the realization
      of a security interest granted for a loan or other financial assistance
      and not for any purpose related to the provisions of the
    ICA;





3.
              The
      acquisition of voting interests by any person in the ordinary course of a
      business carried on by that person that consists of providing, in Canada,
      venture capital on terms and conditions not inconsistent with such terms
      and conditions as may be fixed by the Minister;
  and





4.
              Acquisition
      of control of the Company by reason of an amalgamation, merger,
      consolidation or corporate reorganization, following which the ultimate
      direct or indirect control in fact of the Company, through the ownership
      of voting interests, remains
unchanged.





The
Management estimates approximately eighty percent of our operations are in
Canadian dollars.




CHINESE
CURRENCY




The
Chinese currency is the Renminbi (“RMB”). It is not freely
convertible although the Chinese government has emphasized that full
convertibility is the long-term goal.  As of 2007, the currency trades
within a narrow band specified by the Chinese central government.  The
PRC’s central banking authority, publishes the Renmini exchange rate against the
U.S. dollar every day based on the trading price between the two currencies of
the previous day on the Inter-Bank Foreign Exchange Market established in
Shanghai in 1994. In addition, the People’s Bank of China publishes the Renminbi
exchange rates against other major foreign currencies. Designated
banks participate on the Inter-Bank Foreign Exchange Market through a
computer network connected with major cities in the PRC.





Foreign
exchange is administered by the State Administration of Foreign Exchange (“SAFE”), and its local branch
offices, all of which are subject to the supervision of the People’s Bank of
China. SAFE has established regulations relating to outward remittance by
foreign investors of their share of net profit or dividends and final
repatriation of their investments, in foreign currency. Subject to payment
of applicable taxes, foreign investors may remit out of PRC, in foreign
exchange, profit or dividends derived from a source within PRC. Swap centers
have been established to assist foreign investment enterprises to balance their
foreign currency income and expenses by converting surplus local currency
earnings into foreign exchange and vice versa without their having to wait for
central allocation. The central foreign exchange adjustment centre is in Beijing
and other centers have been established in the coastal cities, Special Economic
Zones and other major cities, municipalities and autonomous regions. Remittances
by foreign investors of any other amounts (including, for instance, principal
and interest on debt and proceeds of sale arising from a disposal by a foreign
investor of any of our or his investments in PRC) out of PRC is subject to the
approval of the SAFE.





E. Taxation




CAYMAN
ISLAND INCOME TAX CONSEQUENCES




CWN is
organized under the laws of Cayman Islands.  At present, there is no
Cayman Islands profit tax, withholding tax, capital gains tax, capital transfer
tax, estate duty or inheritance tax payable by our United States shareholders,
except shareholders ordinarily resident in the Cayman Islands. There is
currently no reciprocal tax treaty between Cayman Islands and the United States
regarding withholding taxes.


53





F. Dividends and Paying
Agents




This
Report on Form 20-F is being filed as an annual report under the Exchange Act
and, as such, there is no requirement to provide any information under this
item.





G. Statement by
Experts




This
Report on Form 20-F is being filed as an annual report under the Exchange Act
and, as such, there is no requirement to provide any information under this
item.





H. Documents on
Display




Any
documents referred to in this Report on Form 20-F may be inspected at our
principal office located at Suite 368 – 1199 West Pender Street, Vancouver,
British Columbia, Canada V6E 2R1 during normal business hours.




The
Company's filings with the Securities and Exchange Commission, and the exhibits
thereto, are available for inspection and copying at the public reference
facilities maintained by the Securities and Exchange Commission in 100 F. St.,
NE, Washington, D.C., 20549.  Copies of these filings may be obtained
from these offices after the payment of prescribed fees.  Please call
the Securities and Exchange Commission at 1-800-SEC-0330 for further information
on the public reference rooms. These filings are also available on the
Securities and Exchange Commission's website at www.sec.gov.





I. Subsidiary
Information




The
Company has 5 subsidiaries, including NAI Interactive Ltd., a company
incorporated under the laws of British Columbia (“NAI”), ChineseWorldNet.com
(Hong Kong) Ltd., a company incorporated under the laws of Hong Kong (“CWNHK”), 70% owned interest
in ChineseWorldNet.com (Shanghai) Ltd., a company incorporated under the laws of
PRC (“CWN China”), 70%
owned interest in Weihai Consulting Investment Ltd. (ShangHai), a company
incorporated under of PRC (“ Weihai”) and CWN Capital Inc., a company
incorporated under the laws of British Virgin Islands (“CWN Capital”).





ITEM
11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





The
Company is a small business issuer as defined in Section 230, 405 and Section
240, 23b-2 of the Exchange Act and, as such, there is no requirement to provide
any information under this item.





ITEM
12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES





This
Report on Form 20-F is being filed as an annual report under the Exchange Act
and, as such, there is no requirement to provide any information under this
item.





PART
II


ITEM
13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES





There has
not been a material default in the payment of principal, interest, a sinking or
purchase fund installment, or any other material default not cured within 30
days, relating to any indebtedness of us or any of our significant
subsidiaries.  No payment of dividends is in arrears.


54





ITEM
14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS





There has
been no modification of the instruments defining the rights of holders of any
class of the Company’s registered securities.  There has been no
modification or qualification of the rights evidenced by any class of the
Company’s registered securities by issuing or modifying any other class of
securities.  There are no assets securing any class of the Company’s
registered securities.  There has been no change in the last financial
year to the trustee of the Company’s registered securities.





ITEM
15. CONTROLS AND PROCEDURES





DISCLOSURE
CONTROLS AND PROCEDURES




Disclosure
controls and procedures are designed to provide reasonable assurance that all
relevant information is gathered and reported to senior management, including
the Chief Executive Officer (“CEO”) and the Chief
Financial Officer (“CFO”) on a timely basis so
that appropriate decisions can be made regarding public disclosure.





Our CEO
and our CFO have evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934)
as of the end of the period covered by this report, and have concluded that our
disclosure controls and procedures were not effective as of December 31, 2009 to
ensure that (i) information required to be disclosed in reports that are filed
or submitted under Canadian securities legislation and the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in those rules and forms; or (ii) material information relating to the Company
is accumulated and communicated to the Company’s management, including the CEO
and CFO, or persons performing similar functions.





MANAGEMENT’S REPORT ON INTERNAL
CONTROLS OVER FINANCIAL REPORTING




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as defined in Rules 13a-15(f) under the
Exchange Act.  Our management evaluated the effectiveness of our
internal control over financial reporting as of December 31, 2009 based on
criteria for effective internal control over financial reporting described in
Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission.  Based on its evaluation, our management concluded
that we did not maintain effective internal control over financial reporting as
of December 31, 2009, as per the five components of the Framework: Control
Environment, Risk Assessment, Control Activities, Information and Communication
and Monitoring.





During
its assessment of internal control over financial reporting, management
identified the following deficiencies.  Based on the context in which
the deficiencies occur, management and the auditor agreed that these
deficiencies individually represent significant deficiencies:





1.
            Inadequate
      segregation of duties over certain information system access
      controls.  Although there were no major error or incident noted
      during the evaluation, the control deficiency carries significant risk of
      management overrides and unauthorized and approved
      transactions.





2.
            There
      was no human resources department in the Company; the monthly salary
      calculations were conducted by the accounting department instead of human
      resources.  The lack of segregation of duties would not ensure
      the calculation of salary’s accuracy, and possibilities for staff
      receiving payment for work not attended.  There was also the
      potential risk of management
override.





3.
            Purchase
      requisitions and purchase orders were not prepared, only oral indication
      was given by management.  Purchases could be initiated and
      executed for other uses or purchased goods or services could be
      misappropriated for other uses.  There was also the potential
      risk of fraud for these
purchases.


55




4.
            Several
      instances of sales agreements were not properly numbered, some agreements
      were missing and cancelled agreements were destroyed.  Without
      written sales orders, it was difficult to ensure the completeness of
      sales, which might result in the risk of errors of record in the financial
      statement.





Based
only on these facts, management has determined that the combination of these
significant deficiencies represents a material
weakness.  Individually, these deficiencies were evaluated as
representing a more than remote likelihood that a misstatement that was more
than inconsequential, but less than material, could occur. However, each of
these significant deficiencies affects the same set of accounts. Taken together,
these significant deficiencies represent a more than remote likelihood that a
material misstatement could occur and not be prevented or
detected.  Therefore, in combination, these significant deficiencies
represent a material weakness.




This
Report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting.  Our management’s report was not subject to attestation by
our registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit us to provide only the
management’s report in this Report.




CHANGES
IN INTERNAL CONTROL OVER FINANCIAL REPORTING




There
were no changes to our internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as
amended) during the year ended December 31, 2009 that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.





ITEM
16A. AUDIT COMMITTEE FINANCIAL EXPERT





The
Company’s board of directors also serves as its audit committee.  The
board has designated Mr. Andy S.W. Lam as its audit committee financial
expert.  Mr. Lam is an independent audit committee member, as defined
by the rules of the Securities Exchange Commission.





ITEM
16B. CODE OF ETHICS





On
October 29, 2004, the Company adopted a Code of Ethics (the “Code of
Ethics”).  A copy of our Code of Ethics was filed as an exhibit
to the Report on Form 20-F filed with the Securities Exchange Commission on
December 4, 2004. Our Code of Ethics will be made available in print, free of
charge, to any person requesting a copy in writing from our secretary at our
North American headquarters in Vancouver, British Columbia, Canada.





ITEM
16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES





The
following table sets forth the aggregate fees billed by our auditors, Chang Lee
LLP, in 2009 and 2008.  Our board of directors has considered these
fees and professional services rendered compatible with maintaining the
independence of that firm.





For year ending December 31,2009
                            
                            
                            2008Audit
      Fees(1)
                            
                            $
                            41,000
                            
                            
                            $
                            45,000Audit-Related
      Fees(2)
                            
                            
                            —
                            
                            
                            
                            —Tax
      Fees(3)
                            
                            
                            —
                            
                            
                            
                            —All
      Other Fees
                            
                            
                            —
                            
                            
                            
                            —Total
                            
                            $
                            41,000
                            
                            
                            $
                            45,000




(1)
            Audit
      Fees consist of fees for the audit of our annual financial statements,
      review of our interim financial statements and review in connection with
      our statutory and regulatory
filings.


(2)
            Audit-Related
      Fees consist of fees related to assurance and related services that are
      reasonably related to the performance of the audit or review of our
      financial statements and are not reported under “Audit
    Fees”.


56


(3)
            Tax
      Fees consist of fees related to tax compliance, tax advice and tax
      planning.





ITEM
16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEES





There are
no applicable disclosures required by Exchange Act Rule 10a-3(d) regarding an
exemption from the listings standards for audit committees.





ITEM
16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS





Neither
the Company, nor any affiliated purchaser of the Company, has purchased any of
the Company’s securities during Fiscal 2009.





ITEM
16F. CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT





The
Company did not change its principal accountant for the three most recent fiscal
years and, as such, there is no requirement to provide any information under
this item.





ITEM
16G. CORPORATE GOVERNANCE





The
Company is not listed on a national securities exchange and, as such, there is
no requirement to provide any information under this item.





PART
III





ITEM
17. FINANCIAL STATEMENTS





The
following Consolidated Financial Statements and the related Notes thereto are
filed as part of this Report, commencing at Page 59 to 78 of this
Report:





Report
      of Independent Registered Public Accounting Firm
                
                60Consolidated
      Balance Sheets as at December 31, 2009 and 2008
                
                61Consolidated
      Statements of Stockholders’ Equity (Deficiency) for the years
      ended
                  December
      31, 2009, 2008 and 2007
                
                62Consolidated
      Statements of Operations for the years ended
                  December
      31, 2009, 2008 and 2007
                
                63Consolidated
      Statements of Cash Flows for the years ended
                  December
      31, 2009, 2008 and 2007
                
                64Notes
      to Consolidated Financial Statements
                
                65 to 78





ITEM
18. FINANCIAL STATEMENTS





We have
elected to provide financial statements pursuant to “Item 17 – Financial
Statements”.


57





ITEM
19. EXHIBITS





Exhibit No.
              
              Document DescriptionEX-4.
      B-11
              **
              Consulting
      Agreement between Chineseworldnet.Com Inc. and Goldpac Investments Ltd.
      dated January 1, 2009EX-4.
      B-12
              **
              Consulting
      Agreement between Chineseworldnet.Com Inc. and Silver Lake Investment
      Partners, Ltd. dated January 1, 2009EX-31.
      1
              **
              Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002EX-31.
      2
              **
              Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002EX-32.
      1
              **
              Certification
      Of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002EX-32.
      2
              **
              Certification
      Of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002





(1)
            Incorporated
      by reference to the Report on Form 20-F (commission file number 000-33051)
      filed with the Commission on July 3,
2002.


**
            Filed
      herewith





SIGNATURES





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





April
      29, 2010Dated:
                ____________________





ChineseWorldNet.com Inc.,a Cayman Islands Corporation/s/
      Joe Kin Foon TaiJOE KIN FOON TAIDirector,
      President and Chief Executive Officer


58





Consolidated
Financial Statements





Chineseworldnet.com
Inc. & Subsidiaries


(Expressed
in U.S. Dollars)


December
31, 2009 and 2008


59





Chang
Lee LLP


Chartered Accountants





606-815
Hornby Street


Vancouver,
B.C., V6Z 2E6


Tel:
604-687-3776


Fax:  604-688-3373





REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
the Board of Directors and Stockholders of




CHINESEWORLDNET.COM
INC. & SUBSIDIAIRES




We have
audited the accompany consolidated balance sheets of Chineseworldnet.com Inc. &
Subsidiaries (“the Company”) as at December 31, 2009 and 2008 and the
related consolidated statements of stockholders’ equity (deficiency), operations
and comprehensive income (loss) and cash flows for the years ended December 31,
2009, 2008 and 2007. These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on
these financial statements based on our audits.




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 an audit to obtain reasonable assurance whether the financial
statements are free of material misstatement.  We were not engaged to
perform an audit of the Company’s internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstance, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting.  Accordingly, we express no such opinion.  An
audit also includes examining, on a test basis, evidence supporting the amounts
and disclosure in the financial statements, 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, these consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as at
December 31, 2009 and 2008 and the results of its operations and its cash flows
for the years ended December 31, 2009, 2008 and 2007 in conformity with
generally accepted accounting principles in the United States of
America.




The
accompanying consolidated financial statements referred to above have been
prepared assuming that the Company will continue as a going
concern.  As discussed in Note 1 to the consolidated financial
statements, the Company has incurred recurring losses from inception and
requires additional financing for its intended business
operations.  These factors raise substantial doubt about its ability
to continue as a going concern.  Management’s plans in regard to these
matters are also described in Note 1.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.





Vancouver,
      CanadaApril
      19, 2010
            Chartered
      Accountants


60




Chineseworldnet.Com
Inc. & Subsidiaries




CONSOLIDATED
BALANCE SHEETS





As at December 31
            (Expressed in U.S. Dollars)




2009
                          
                          
                          2008$
                          
                          
                          $ASSETSCurrent
      assetsCash
      and cash equivalents
                          
                          
                          1,420,486
                          
                          
                          
                          684,232Short
      term investments
                          
                          
                          238,597
                          
                          
                          
                          1,291,726Available-for-sale
      securities[note
      3]
                          
                          
                          4
                          
                          
                          
                          3Accounts
      receivable [note
      4]
                          
                          
                          165,253
                          
                          
                          
                          35,381Prepaid
      expenses and deposits
                          
                          
                          35,669
                          
                          
                          
                          46,515Total
      current assets
                          
                          
                          1,860,009
                          
                          
                          
                          2,057,857Equipment[note5]
                          
                          
                          73,012
                          
                          
                          
                          46,526Total
      assets
                          
                          
                          1,933,021
                          
                          
                          
                          2,104,383LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilitiesAccounts
      payable and accrued liabilities
                          
                          
                          246,970
                          
                          
                          
                          159,841Due
      to related parties, non-interest bearing [note
9]
                          
                          
                          128
                          
                          
                          
                          128Deferred
      revenue
                          
                          
                          78,089
                          
                          
                          
                          61,282Convertible
      debentures (current) [note6]
                          
                          
                          258,772
                          
                          
                          
                          -Total
      current liabilities
                          
                          
                          583,959
                          
                          
                          
                          221,251Convertible
      debentures[note6]
                          
                          
                          —
                          
                          
                          
                          236,927Total
      liabilities
                          
                          
                          583,959
                          
                          
                          
                          458,178Commitments[note10]Subsequent
      event [note 11]Stockholders’equity[note8]Common
      stockAuthorized100,000,000,000
      common shares with a par value of $0.001 per shareIssued
      and outstanding 10,700,000 (2008 – 10,700,000) common
    shares
                          
                          
                          10,700
                          
                          
                          
                          10,700Additional
      paid-in capital
                          
                          
                          3,778,308
                          
                          
                          
                          3,716,969Accumulated
      other comprehensive income
                          
                          
                          81,481
                          
                          
                          
                          40,280Deficit
                          
                          
                          (2,613,870
                          )
                          
                          
                          (2,284,638
                          )Non-controlling
      interests
                          
                          
                          92,443
                          
                          
                          
                          162,894Total
      stockholders’ equity
                          
                          
                          1,349,062
                          
                          
                          
                          1,646,205Total
      liabilities and stockholders’ equity
                          
                          
                          1,933,021
                          
                          
                          
                          2,104,383





See
accompanying notes


61





Chineseworldnet.Com
Inc. & Subsidiaries




CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)




Year
      ended December 31
            (Expressed
      in U.S. Dollars)





Common stock
                              
                              
                              Additional
                              
                              
                              (Deficit)
                              
                              
                              Accumulated
                              
                              
                              Total equityShares
                              
                              
                              Amount
                              
                              
                              paid-in
                                capital
                              
                              
                              
                              
                              
                              other
                                comprehensive
                                income
                              
                              
                              (deficiency)
                                attributable
                                to common
                                stockholders
                              
                              
                              Non
                                controlling
                                interest
                              
                              
                              Total#
                              
                              
                              $
                              
                              
                              $
                              
                              
                              $
                              
                              
                              $
                              
                              
                              $
                              
                              
                              $
                              
                              
                              $Balance,
      December 31, 2007
                              
                              
                              10,700,000
                              
                              
                              
                              10,700
                              
                              
                              
                              3,494,224
                              
                              
                              
                              (1,334,515
                              )
                              
                              
                              30,285
                              
                              
                              
                              2,200,694
                              
                              
                              
                              —
                              
                              
                              
                              2,200,694Stock
      based compensation
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              222,745
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              222,745
                              
                              
                              
                              
                              
                              
                              
                              222,745Non
      controlling interest contribution
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              215,448
                              
                              
                              
                              215,448Components
      of comprehensive income (loss):Net
      income (loss) for the year
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              (950,123
                              )
                              
                              
                              
                              
                              
                              
                              (950,123
                              )
                              
                              
                              (54,712
                              )
                              
                              
                              (1,004,835
                              )Foreign
      currency translation adjustment
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              9,995
                              
                              
                              
                              9,995
                              
                              
                              
                              2,158
                              
                              
                              
                              12,153Balance,
      December 31, 2008
                              
                              
                              10,700,000
                              
                              
                              
                              10,700
                              
                              
                              
                              3,716,969
                              
                              
                              
                              (2,284,638
                              )
                              
                              
                              40,280
                              
                              
                              
                              1,483,311
                              
                              
                              
                              162,894
                              
                              
                              
                              1,646,205Stock
      based compensation
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              61,339
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              61,339
                              
                              
                              
                              
                              
                              
                              
                              61,339Components
      of comprehensive income (loss):Net
      income (loss) for the year
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              (329,232
                              )
                              
                              
                              
                              
                              
                              
                              (329,232
                              )
                              
                              
                              (72,977
                              )
                              
                              
                              (402,209
                              )Foreign
      currency translation adjustment
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              41,201
                              
                              
                              
                              41,201
                              
                              
                              
                              2,526
                              
                              
                              
                              43,727Balance,
      December 31, 2009
                              
                              
                              10,700,000
                              
                              
                              
                              10,700
                              
                              
                              
                              3,778,308
                              
                              
                              
                              (2,613,870
                              )
                              
                              
                              81,481
                              
                              
                              
                              1,256,619
                              
                              
                              
                              92,443
                              
                              
                              
                              1,349,062





See
accompanying notes


62


Chineseworldnet.Com
Inc. & Subsidiaries





CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)





Year
      ended December 31
            (Expressed
      in U.S. Dollars)







2009
                                                  
                                                  
                                                  2008
                                                  
                                                  
                                                  2007$
                                                  
                                                  
                                                  $
                                                  
                                                  
                                                  $Revenue
                                                  
                                                  
                                                  906,455
                                                  
                                                  
                                                  
                                                  1,011,322
                                                  
                                                  
                                                  
                                                  1,325,994ExpensesAdvertising
      and promotion
                                                  
                                                  
                                                  131,604
                                                  
                                                  
                                                  
                                                  144,906
                                                  
                                                  
                                                  
                                                  286,439Audit
      and legal
                                                  
                                                  
                                                  60,731
                                                  
                                                  
                                                  
                                                  75,289
                                                  
                                                  
                                                  
                                                  58,022Consulting
      fees
                                                  
                                                  
                                                  104,841
                                                  
                                                  
                                                  
                                                  95,900
                                                  
                                                  
                                                  
                                                  84,000Depreciation
                                                  
                                                  
                                                  16,453
                                                  
                                                  
                                                  
                                                  14,229
                                                  
                                                  
                                                  
                                                  6,923Directors’
      remuneration
                                                  
                                                  
                                                  8,000
                                                  
                                                  
                                                  
                                                  8,000
                                                  
                                                  
                                                  
                                                  —Accretion
      on convertible debenture
                                                  
                                                  
                                                  21,845
                                                  
                                                  
                                                  
                                                  31,265
                                                  
                                                  
                                                  
                                                  13,755Interest
      (non-cash imputed interest – related parties)
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  63Interest
      expense on long-term debt
                                                  
                                                  
                                                  15,000
                                                  
                                                  
                                                  
                                                  15,000
                                                  
                                                  
                                                  
                                                  12,500Office
      and miscellaneous
                                                  
                                                  
                                                  65,386
                                                  
                                                  
                                                  
                                                  65,096
                                                  
                                                  
                                                  
                                                  69,622Printing
                                                  
                                                  
                                                  34,481
                                                  
                                                  
                                                  
                                                  33,688
                                                  
                                                  
                                                  
                                                  39,972Provision
      (recovery) for bad and doubtful debts
                                                  
                                                  
                                                  12,031
                                                  
                                                  
                                                  
                                                  13,410
                                                  
                                                  
                                                  
                                                  (17,425
                                                  )Rent
      and operating
                                                  
                                                  
                                                  131,958
                                                  
                                                  
                                                  
                                                  114,428
                                                  
                                                  
                                                  
                                                  72,427Salaries
      and benefits
                                                  
                                                  
                                                  553,819
                                                  
                                                  
                                                  
                                                  599,354
                                                  
                                                  
                                                  
                                                  465,494Seminar
      operating expense
                                                  
                                                  
                                                  71,074
                                                  
                                                  
                                                  
                                                  152,843
                                                  
                                                  
                                                  
                                                  —Stock
      Based Compensation
                                                  
                                                  
                                                  61,339
                                                  
                                                  
                                                  
                                                  222,745
                                                  
                                                  
                                                  
                                                  22,222Telephone
                                                  
                                                  
                                                  28,268
                                                  
                                                  
                                                  
                                                  21,569
                                                  
                                                  
                                                  
                                                  19,073Travel
      and entertainment
                                                  
                                                  
                                                  147,913
                                                  
                                                  
                                                  
                                                  183,369
                                                  
                                                  
                                                  
                                                  136,3441,464,743
                                                  
                                                  
                                                  
                                                  1,791,091
                                                  
                                                  
                                                  
                                                  1,269,431Other
      income (loss)Interest
      and sundry income
                                                  
                                                  
                                                  30,337
                                                  
                                                  
                                                  
                                                  60,584
                                                  
                                                  
                                                  
                                                  34,761Foreign
      exchange gain (loss) and other losses
                                                  
                                                  
                                                  125,742
                                                  
                                                  
                                                  
                                                  (231,038
                                                  )
                                                  
                                                  
                                                  (35,522
                                                  )Gain
      (loss) on sale of available for sale securities
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  (1,669
                                                  )Other
      income (loss), net
                                                  
                                                  
                                                  156,079
                                                  
                                                  
                                                  
                                                  (170,454
                                                  )
                                                  
                                                  
                                                  (2,430
                                                  )Income
      (loss) before income taxes
                                                  
                                                  
                                                  (402,209
                                                  )
                                                  
                                                  
                                                  (950,223
                                                  )
                                                  
                                                  
                                                  54,133Deferred
      income tax recovery (expense)
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  (54,612
                                                  )
                                                  
                                                  
                                                  54,221Net
      income (loss) for the year
                                                  
                                                  
                                                  (402,209
                                                  )
                                                  
                                                  
                                                  (1,004,835
                                                  )
                                                  
                                                  
                                                  108,354Other
      comprehensive incomeCurrency
      translation adjustments
                                                  
                                                  
                                                  43,727
                                                  
                                                  
                                                  
                                                  12,153
                                                  
                                                  
                                                  
                                                  4,344Comprehensive
      income (loss)
                                                  
                                                  
                                                  (358,482
                                                  )
                                                  
                                                  
                                                  (992,682
                                                  )
                                                  
                                                  
                                                  112,698Net
      income (loss) attributable to:Common
      stockholders
                                                  
                                                  
                                                  (329,232
                                                  )
                                                  
                                                  
                                                  (950,123
                                                  )
                                                  
                                                  
                                                  108,354Non-controlling
      interests
                                                  
                                                  
                                                  (72,977
                                                  )
                                                  
                                                  
                                                  (54,712
                                                  )
                                                  
                                                  
                                                  —(402,209
                                                  )
                                                  
                                                  
                                                  (1,004,835
                                                  )
                                                  
                                                  
                                                  108,354Net
      comprehensive income (loss) attributable to:Common
      stockholders
                                                  
                                                  
                                                  (288,031
                                                  )
                                                  
                                                  
                                                  (940,128
                                                  )
                                                  
                                                  
                                                  112,698Non-controlling
      interests
                                                  
                                                  
                                                  (70,451
                                                  )
                                                  
                                                  
                                                  (52,554
                                                  )
                                                  
                                                  
                                                  -(358,482
                                                  )
                                                  
                                                  
                                                  (992,682
                                                  )
                                                  
                                                  
                                                  112,698Earning
      (loss) per share – basic
                                                  
                                                  
                                                  (0.03
                                                  )
                                                  
                                                  
                                                  (0.09
                                                  )
                                                  
                                                  
                                                  0.01Earning
      (loss) per share – diluted
                                                  
                                                  
                                                  (0.03
                                                  )
                                                  
                                                  
                                                  (0.09
                                                  )
                                                  
                                                  
                                                  0.01Weighted
      average number of common shares outstanding – basic
                                                  
                                                  
                                                  10,700,000
                                                  
                                                  
                                                  
                                                  10,700,000
                                                  
                                                  
                                                  
                                                  9,012,328Weighted
      average number of common shares outstanding – diluted
                                                  
                                                  
                                                  10,700,000
                                                  
                                                  
                                                  
                                                  10,700,000
                                                  
                                                  
                                                  
                                                  9,103,713





See
accompanying notes


63


Chineseworldnet.Com
Inc. & Subsidiaries





CONSOLIDATED
STATEMENTS OF CASH FLOWS





Year
      ended December 31
            (Expressed
      in U.S. Dollars)





2009
                      
                      
                      2008
                      
                      
                      2007$
                      
                      
                      $
                      
                      
                      $OPERATING
      ACTIVITIESNet
      income (loss) for the year
                      
                      
                      (402,209
                      )
                      
                      
                      (1,004,835
                      )
                      
                      
                      108,354Adjustment
      to reconcile net loss to net cash used in operating
      activities:Provision
      for bad and doubtful debts
                      
                      
                      12,031
                      
                      
                      
                      13,410
                      
                      
                      
                      24,459Depreciation
                      
                      
                      16,453
                      
                      
                      
                      14,229
                      
                      
                      
                      6,923Accretion
      on convertible debenture
                      
                      
                      21,845
                      
                      
                      
                      31,265
                      
                      
                      
                      13,755Interest
      (imputed) – related parties
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      63Deferred
      income tax recovery
                      
                      
                      —
                      
                      
                      
                      54,612
                      
                      
                      
                      (54,221
                      )Stock
      based compensation
                      
                      
                      61,339
                      
                      
                      
                      222,745
                      
                      
                      
                      22,222Foreign
      exchange gain and loss
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      22,014Changes
      in non-cash working capital items:Accounts
      receivable
                      
                      
                      (130,116
                      )
                      
                      
                      (20,068
                      )
                      
                      
                      (19,139
                      )Prepaid
      expenses and deposits
                      
                      
                      14,445
                      
                      
                      
                      (27,717
                      )
                      
                      
                      (10,013
                      )Accounts
      payable and accrued liabilities
                      
                      
                      62,672
                      
                      
                      
                      47,601
                      
                      
                      
                      (29,839
                      )Deferred
      revenue
                      
                      
                      6,140
                      
                      
                      
                      (116,264
                      )
                      
                      
                      69,867Due
      to shareholders/directors
                      
                      
                      —
                      
                      
                      
                      (27,318
                      )
                      
                      
                      (3,787
                      )Net
      cash provided by (used in) operating activities
                      
                      
                      (337,400
                      )
                      
                      
                      (812,340
                      )
                      
                      
                      150,658FINANCING
      ACTIVITIESConvertible
      debenture issuance
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      250,000Non
      controlling interest
                      
                      
                      —
                      
                      
                      
                      215,446
                      
                      
                      
                      —Proceed
      of private placement
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      2,070,000Net
      cash provided by financing activities
                      
                      
                      —
                      
                      
                      
                      215,446
                      
                      
                      
                      2,320,000INVESTING
      ACTIVITIESPurchase
      of equipment
                      
                      
                      (39,974
                      )
                      
                      
                      (42,451
                      )
                      
                      
                      (2,413
                      )Short
      term investments
                      
                      
                      1,053,129
                      
                      
                      
                      (1,291,726
                      )
                      
                      
                      —Net
      cash provided by (used in) investing activities
                      
                      
                      1,013,155
                      
                      
                      
                      (1,334,177
                      )
                      
                      
                      (2,413
                      )Effect
      of exchange rate changes on cash and cash equivalents
                      
                      
                      60,499
                      
                      
                      
                      (23,311
                      )
                      
                      
                      13,451Increase
      (decrease) in cash and cash equivalents
                      
                      
                      736,254
                      
                      
                      
                      (1,954,382
                      )
                      
                      
                      2,481,696Cash
      and cash equivalents, beginning of year
                      
                      
                      684,232
                      
                      
                      
                      2,638,614
                      
                      
                      
                      156,918Cash
      and cash equivalents, end of year
                      
                      
                      1,420,486
                      
                      
                      
                      684,232
                      
                      
                      
                      2,638,614Supplemental
      disclosure of cash flow informationCash
      paid for interest, net of interest capitalized
                      
                      
                      15,000
                      
                      
                      
                      15,000
                      
                      
                      
                      12,500Cash
      paid for income taxes
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —





See
accompanying notes


64


Chineseworldnet.Com
Inc. & Subsidiaries




1.
NATURE OF OPERATIONS





The
Company was incorporated under the laws of Cayman Islands on January 12, 2000.
On January 15, 2000 the Company acquired 100% of the issued and outstanding
shares of NAI Interactive Ltd. (“NAI”), a company incorporated under the laws of
British Columbia, Canada. The Company also has a dormant wholly-owned subsidiary
ChineseWorldNet.com HK Limited (“CWN HK”) incorporated under the laws of Hong
Kong.  During the fiscal year 2008, the Company invested and owned 70%
interest in ChineseWorldNet.com (Shanghai) Ltd. (“CWN China”), a company
incorporated under the laws of People’s Republic of China in April
2008.  ChineseWorldNet.com (Shanghai) Ltd. has a wholly-owned
subsidiary, Weihai Consulting Investment Ltd (“Weihai”), a company incorporated
under the laws of People’s Republic of China in September 2009. The Company also
has a wholly-owned subsidiary CWN Capital Inc. (“CWN Capital”), a company
incorporated under the laws of British Virgin Islands in August
2009.





The
Company’s business is to provide online internet services through its Chinese
world-wide website. The online internet services comprise banner advertisements,
web page hosting and maintenance, online promotion for customers, translation
services, investment seminars, investment handbooks, website contest events, and
subscription fees. These services are considered as one segment based upon the
Company’s organizational structure, the way in which these operations are
managed and evaluated by management, the availability of separate financial
results and materiality considerations.





These
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in the United States of America
applicable to a going concern, which contemplates the realization of assets and
the satisfaction of liabilities and commitments in the normal course of
business. The Company has recurring losses since its inception and requires
additional funds to maintain and expand its intended business
operations.  Management’s plans in this regard are to raise debt or
equity financing as required which the Company has been able to finance the
operations through a series of equity and debt financings.  From August to
October 2007, the Company received net proceeds of $2,070,000 in connection with
the private placement. In March 2007, the Company issued a convertible debt in
the amount of $250,000 at an interest rate of 6%. However, additional fund is
still required to fund the Company’s anticipated business
expansion.





These
conditions raise substantial doubt about the Company’s ability to continue as a
going concern.  These consolidated financial statements do not include
any adjustments that might result from this uncertainty.





2.
SIGNIFICANT ACCOUNTING POLICIES





Basis
of consolidation





These
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America and
include the accounts of the Company and its wholly owned subsidiaries and
subsidiaries which the Company owns 70% interests. All material inter-company
accounts and transactions have been eliminated upon consolidation.





Use
of estimates





The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amount of revenues and expenses during
the reporting period. Significant areas requiring the use of management
estimates relate to the determination of the net recoverable value of assets,
fair value of financial instruments, allowance for doubtful accounts, asset
impairment, deferred income tax assets and liabilities and stock based
compensation. Management makes its best estimate of the ultimate outcome of
these items based on historical trends and other information available when the
financial statements are prepared. Actual amounts may ultimately differ
from those estimates.


65





Chineseworldnet.Com
Inc. & Subsidiaries





2.
SIGNIFICANT ACCOUNTING POLICIES (cont’d.)





Equipment





Equipment
is recorded at cost, net of accumulated amortization.





Depreciation
on equipment is provided on a declining-balance basis over its expected useful
lives at the following annual rates:





Furniture
      and fixtures
                  
                  
                  20
                  %Computer
      equipment
                  
                  
                  30
                  %Leasehold
      improvement
                  
                  over
      the term of the leaseVehicle
                  
                  
                  25
                  %





Cash
equivalents





Cash
equivalents usually consist of highly liquid investments which are readily
convertible into cash with maturity of three months or less when purchased. As
at December 31, 2009, the Company held $418,659 [2008 - $221,070] in cash
equivalents.





Short-term
investments





The
Company’s short-term investments include one month Canadian dollar term
deposits deposited in a financial institution, which earn interests at rate of
5.3% per annum and mature on January 29, 2010 and subject to conversion to USD
on fixing date January 28, 2010, if CAD/USD at 1.0235 or below (Tokyo Close),
the Company have to convert CAD to USD at 1.0235.  Subsequent to the
year end, the related short term investment has been renewed and later converted
into $240,848.





Foreign
currency translations





The
Company, NAI, CWN HK, CWN China and Weihai maintain their accounting records in
their functional currencies of U.S. dollars, Canadian dollars, HK dollars,
Chinese Renminbi for two Chinese entities, respectively. However, the Company
reports in U.S. dollars. Foreign currency transactions in the foreign
subsidiaries are translated into their functional currency using the exchange
rate in effect at that date for assets, liabilities, revenues and expenses. At
the period end, monetary assets and liabilities denominated in the foreign
currency are re-evaluated into the functional currency by using the exchange
rate in effect for the period end. The resulting foreign exchange gains and
losses are included in operations.





Assets
and liabilities of the foreign subsidiaries are translated into the reporting
U.S. dollars at exchange rates in effect at the balance sheet date. Revenues and
expenses are translated at the average exchange rates. Gain and losses from such
translations are included in stockholders’ equity, as a component of other
comprehensive income.





Advertising
expenses





The
Company expensed advertising costs as incurred. Advertising expenses for the
years ended December 31, 2009, 2008 and 2007 were $131,604, $144,906 and
$286,439 respectively.




Income
taxes





The
Company accounts for income taxes under the provisions of Accounting Standards
Codification (“ASC”) 740 (formerly Statement of Financial Accounting Standards
(“SFAS”) No. 109),Accounting
for Income Taxes, which requires the Company to recognize deferred tax
liabilities and assets for the expected future tax consequences of events that
have been recognized in the Company’s financial statements or tax returns using
the liability method. Under this method, deferred tax liabilities and assets are
determined based on the temporary differences between the


66


Chineseworldnet.Com
Inc. & Subsidiaries





2.
SIGNIFICANT ACCOUNTING POLICIES (cont’d.)





financial
statement and tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to reverse. The effect
on deferred income tax assets and liabilities of a change in income tax rates is
included in the period that includes the enactment date. Valuation allowances
are established when necessary to reduce deferred income tax assets to the
amount expected to be realized.





On January 1, 2007 the
Company adopted FAS Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes—an interpretation of FASB
Statement No. 109 ("FIN 48")”, codified into ASC 740. FIN
48 clarifies the
accounting for uncertainty in income taxes recognized in an enterprise's
financial statements in accordance with SFAS No. 109, Accounting for Income
Taxes. FIN 48 describes a recognition threshold and measurement attribute for
the recognition and measurement of tax positions taken
or expected to be taken in a tax return and also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition.





Comprehensive
income





The
Company accounts for comprehensive income under the provisions of ASC 220
(formerly SFAS 130),Reporting
Comprehensive Income, which establishes standards for reporting and
display of comprehensive income, its components and accumulated balances. The
Company is disclosing this information on its Statement of Stockholders’ Equity.
The Company’s comprehensive income (loss) consists of net earnings (loss) for
the year, foreign currency translation adjustments and unrealized gain (loss) on
available-for-sale securities.





Financial
instruments and concentration of risks





Fair
value of financial instruments is made at a specific point in time, based on
relevant information about financial markets and specific financial instruments.
As these estimates are subjective in nature, involving uncertainties and matters
of significant judgment, they cannot be determined with precision. Changes in
assumptions can significantly affect estimated fair values.





The
carrying value of cash and cash equivalents, short-term investments, available
for sale securities, accounts receivable, accounts payable and accrued
liabilities and due to related parties approximates the fair value because of
the short-term nature of these instruments. Management is of the opinion that
the Company is not exposed to significant interest risk arising from these
financial instruments.





The
Company has cash and cash equivalents with various financial institutions, which
may exceed insured limits throughout the year. The Company is exposed to credit
loss for amounts in excess of insured limits in the event of non-performance by
the institution. However, the Company does not anticipate
non-performance.  As at December 31, 2009, the Company had $nil (2008
- $nil) in a bank beyond insured limits.





Concentration
of credit risk with respect to trade receivables is limited due to the Company’s
large number of diverse customers. The Company does not require collateral or
other security to support financial instruments subject to credit
risk.





The
Company operates and incurs significant expenditures outside of the United
States of America and is exposed to foreign currency risks due to the currency
exchange fluctuation between the subsidiaries’ functional currency and the
Company’s reporting currency.





Available-for-sale
securities





Marketable
securities are classified as available-for-sale securities and are recorded at
market value. Unrealized holding gains and losses on available-for-sale
securities are excluded from income and charged toAccumulated other comprehensive
income as a separate component of stockholders’ equity until
realized.


67


Chineseworldnet.Com Inc. &
Subsidiaries





2. SIGNIFICANT ACCOUNTING POLICIES
(cont’d.)





Non-monetary
transactions





The Company entered into agreements for
the supply of content for the Company’s websites in exchange for advertising,
consisting primarily of links to the supplier’s websites.  The Company
accounted for these transactions in accordance withASC 845 (formerlyAccounting Principles Board No.
29)Nonmonetary
Transactionsand
withASC 605-20
(formerlyEmerging Issues Task Force No.
99-17)Revenue
Recognition.No cash was exchanged between the
parties in any of these transactions.  These transactions have been
recorded at a zero value, being the carrying amount of the content
supplied.





Revenuerecognition





Revenue consists of two main
sources:





1.
            fees from banner advertisement,
      webpage hosting and maintenance, on-line promotion and translation
      services, advertising and promotion fees for customers in the
      Company’s Chinese Investment Guides,
      sponsorship fees from
      investment seminars,
      road showand forums,
      all of which sales prices are fixed and determinable at the time the
      contracts are signed and there are no provisions for refunds contained in
      the contracts. These revenues are recognized whenall significant contractual
      obligations have been satisfied and collection of the resulting receivable
      is reasonably assured.





2.
            fees from membership
      subscriptions. These revenues are recognized over the term of the
      subscription.





Fees received in advance and require continuing performance
obligation are deferred and recognized as revenue systematically over the period
of services provided to customers.





Long-lived assets
impairment





Long-term assets of the Company are
reviewed for impairment wheneverevents or changes in circumstances
indicate that their carrying value has become impaired, in accordance with the
guidance established inASC
360 (formerly SFAS144),Property, Plant and
Equipment. An impairment
loss would be recognized when the carrying amount of an asset exceeds the estimated
undiscounted future cash flows expected to result from the use of the asset and
its eventual disposition. The amount of the impairment loss to be recorded is
calculated by the excess of the asset’s carrying value over its fair value. Fair value is
generally determined using a discounted cash flow analysis.





Stock-based
compensation





The Company has adopted the fair value
method of accounting for stock-based compensation as recommended byASC 718 (formerly SFAS 123R)Compensation–Stock
Compensation.The Company has granted stock options to
directors and certain employees for services provided to the Company under
this method. The Company recognizes compensation expense for stock options
awarded based on the fair valueof the options at the grant date using
the Black-Scholes option pricing model. The fair value of the options is
amortized over the vesting period.





Fair value of financial
instruments




The Companyhas adopted the provisions of ASC Topic
820,Fair Value
Measurements, which defines
fair value, establishes a framework for measuring fair value in GAAP, and
expands disclosures about fair value measurements. ASC 820 does not require any new
fair value measurements, but provides guidance on how to measure fair value by
providing a fair value hierarchy used to classify the source of the information.
The fair value hierarchy distinguishes between assumptions based on market data (observable
inputs) and an entity’s own assumptions (unobservable inputs).
The hierarchy consists of three levels:




68


Chineseworldnet.Com Inc. &
Subsidiaries





2. SIGNIFICANT ACCOUNTING POLICIES
(cont’d.)





•
            Level one–Quoted market prices in active markets for
      identical assets or
liabilities;


•
            Level two–Inputs other than level one
      inputs that are either directly or indirectly observable;
      and


•
            Level three–Unobservable inputs developed
      using estimates and assumptions, which aredeveloped by the reporting entity
      and reflect those assumptions that a marketparticipant would
      use.





Earning (Loss) per
share





Earning (loss) per share is computed
using the weighted average number of common shares outstanding during the
period.The Company has
adoptedASC 260 (formerly
SFAS128),EarningsPer Share. Diluted earning (loss) per share is
equal to basic loss per share because there isno potential dilutive
security.





Accounts receivable





Accounts receivable are recorded at face
value,less an allowance
for doubtful accounts. The allowance for doubtful accounts is an estimate
calculated based on an analysis of current business and economic risks, customer
credit-worthiness, specific identifiable risks such as bankruptcies,
terminationsor discontinued customers, or other
factors that may indicate a potential loss. The allowance is reviewed on a
regular basis, at least annually, to ensure that it adequately provides for all
reasonably expected losses in the receivable balances. An accountmay be determined to be uncollectible
if all collection efforts have been exhausted, the customer has filed for
bankruptcy and all recourse against the account is exhausted, or disputes are
unresolved and negotiations to settle are exhausted. This uncollectible amount is written off against the
allowance.  For the fiscal year 2009, the Company incurred an expense
for baddebtandprovision for allowance fordoubtful accounts receivable in the
amount of $12,031 (2008 - $13,410; 2007–($17,425).





Newly adopted accounting pronouncements and new
accounting pronouncements




In December 2007, the FASB issuedASC 805 (formerly SFAS No.
141R)Business
Combinations. SFAS 141
(Revised) replaces SFAS 141 "Business Combination" and establishes principles
and requirements for how
the acquirer of a business recognizes and measures in its financial statements
the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree. The statement also provides guidance
for recognizing andmeasuring the goodwill acquired in the
business combination and determines what information to disclose to enable users
of the financial statements to evaluate the nature and financial effects of the
business combination. The guidance will become effectivefor the fiscal year beginning after
December 15, 2008.The
Company adopted ASC 805 on January 1, 2009 and the adoption of this guidance did
not have a materialimpact
on our historical financial statements.





In
December 2007, the FASB issuedASC
810-10-65(formerlySFAS
160)Noncontrolling
Interests in Consolidated Financial Statements.ASC
810amends
Accounting Research Bulletin 51,Consolidated
Financial Statements,
to establish accounting and reporting standards for the noncontrolling interest
in a subsidiary
and for the deconsolidation of a subsidiary. It also clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements.ASC
810-10-65also
changes the way the consolidated income statement is presented by requiring
consolidated net income to be reported at amounts that include the amounts
attributable to both the parent and the noncontrolling interest. It also
requires disclosure, onthe
face of the consolidated statement of income, of the amounts of consolidated net
income attributable to the parent and to the noncontrolling interest.ASC
810-10-65requires
that a parent recognize a gain or loss in net income when a subsidiary is
deconsolidated
and requires expanded disclosures in the consolidated financial statements that
clearly identify and distinguish between the interests of the parent owners and
the interests of the noncontrolling owners of a subsidiary.ASC
810-10-65is
effective
for fiscal periods, and interim periodswithin
those fiscal years, beginningon
or afterDecember
15, 2008.The
Company adopted ASC 810-10-65 onJanuary
1, 2009 and the adoption of this guidance did not have a materialimpact
on our historical financial
statements except the presentation and disclosure changes for years end priorto
January 1, 2009.




69


Chineseworldnet.Com Inc. &
Subsidiaries





2. SIGNIFICANT ACCOUNTING POLICIES
(cont’d.)





Newly adopted accounting pronouncements
and new accounting pronouncements(cont’d.)








In March 2008, the FASB issued FASB
StatementASC 815-10-15
(formerlySFAS 161),Disclosures about
Derivative Instruments and Hedging Activities.ASC 815requires companies with derivative
instruments to disclose information that should enable financial-statement users to
understand how and why a company uses derivative instruments, how derivative
instruments and related hedged items are accounted for underformerly SFAS 133Accounting for
Derivative Instruments and Hedging Activitiesand how derivative instruments and
related hedged items affect a company's financial position, financial
performance and cash flows.ASC 815is effective for financial statements
issued for fiscal years and interim periods beginning after November 15,
2008.TheCompany adopted ASC 815-10-15 on
January 1, 2009 and theadoption of thisguidance
did nothave a material
effect on the Company's financial position or results of
operations.





In April, 2008, the FASB issuedASC 350-30 (formerlyFSP142-3Determination of the Useful
Life of Intangible Asset).
In determining the useful life of acquired intangible assets,ASC 350-30removes the requirement to consider
whether an intangible asset can be renewed without substantial cost of material
modifications to the existing terms and conditions and,
instead, requires an entity to consider its own historical experience in
renewing similar arrangements.ASC 350-30also requires expanded disclosure
related to the determination of intangible asset useful lives. ASC
350-30is effective for fiscal years beginning
after December 15, 2008. The guidance for determining the useful life of a
recognized intangible asset must be applied prospectively to intangible assets
acquired after the effective date. Early adoption is prohibited. TheCompany adopted ASC 350-30 on January
1, 2009 and theadoption ofASC 350-30did nothave a material impact on the
Company’s consolidated financial position or
result of operations.





In May 2008, the FASB issuedASC 470-20 (FSP APB 14-1Accounting
for
Convertible Debt Instruments That May Be Settled in Cash Upon Conversion
(Including Partial Cash Settlements)), which will change the accounting
treatment for convertible securities which the issuer may settle fully or
partially in cash. Under the finalFSP, cash settled convertible
securities will be separated into their debt and equity components. The value
assigned to the debt component will be the estimated fair value, as of the
issuance date, of a similar debt instrument without the conversion
feature, and the difference between the
proceeds for the convertible debt and the amount reflected as a debt liability
will be recorded as additional paid-in capital. As a result, the debt will be
recorded at a discount reflecting its below market coupon interest rate. The debt will subsequently be
accreted to its par value over its expected life, with the rate of interest that
reflects the market rate at issuance being reflected on the income statement.
This change in methodology will affect the calculations ofnet income and earnings per share for
many issuers of cash settled convertible securities. The FSP is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years. TheCompanyadopted ASC 470-20 on January 1, 2009
and theadoptiondid nothave a material effect on the
Company’s consolidated financial
statements.





In
June 2008, the FASB issuedASC
260-10 (formerly FSP EITF 03-6-1Determining
Whether Instruments Granted in Share-Based
Payment Transactions are Participating Securities).ASC
260-10addresses
whether instruments granted in share-based payment transactions are
participating securities prior to vesting and affects entities that accrue cash
dividends on share-based payment
awards during the awards’service
period when the dividends do not need to be returned if the employees forfeit
the awards.ASC
260-10states
that all outstanding unvested share-based payment awards that contain rights to
nonforfeitable dividends participate
in undistributed earnings with common shareholders and, therefore, need to be
included in the earnings allocation in computing earnings per share under the
two-class method.ASC
260-10is
effective for fiscal years beginning after December 15, 2008,
and interim periodswithin
those fiscal years.  TheCompany
adopted ASC 260-10on
January 1, 2009 and theadoption
ofthis
guidance did not havea
material impact on its consolidated financial
statements.




70


Chineseworldnet.Com Inc. &
Subsidiaries





2. SIGNIFICANT ACCOUNTING POLICIES
(cont’d.)





Newly adopted accounting pronouncements
and new accounting pronouncements(cont’d.)





In October 2008, the FASB
issuedASC 820-10-35
(formerlyFSP FAS 157-3,Determining the
Fair Value of a Financial Asset When theMarket for That
Asset Is Not Active),which addressesthe application of SFAS157 for illiquid financial
instruments.ASC
820-10-35clarifies that
approaches to determining fair value other than the market approach may be
appropriate when the market for afinancial asset is not
active.TheCompany adopted ASC 820-10-35 on
January 1, 2009 and theadoption ofthis guidance
did nothave a material
effect on the Company’s consolidated financial
statements.





In November 2008, the Emerging
Issues Task Force issuedASC 323-10 (formerlyEITF No. 08-6Equity
Method Investment Accounting Considerations”) that addresses how the initial
carrying value of an equity method investment should be determined, how an
impairment assessment of an underlying indefinite-lived intangible asset of an equity method
investment should be performed, how an equity method investee’s issuance of shares should be accounted
for, and how to account for a change in an investment from the equity method to
the cost method. EITF 08-6 shall be effective in fiscal years beginning on or
after December 15, 2008, and interim periods within those fiscal years.
EITF 08-6 shall be applied prospectively with early application prohibited.
TheCompany adopted ASC
323-10 on January 1, 2009 and theadoptionof this guidance did nothave a material impact on our
consolidated financial condition or results
of operations.





In April 2009, the FASB issuedASC 825-10-65 (formerly FSP
107-1 and APB 28-1Interim Disclosures
about Fair Value of Financial Instruments).The guidanceamends SFAS 107, "Disclosure about Fair
Value of Financial Instruments," and APB No. 28,Interim Financial
Reporting, to require
disclosures about fair value of financial instruments for interim reporting
periods of publicly traded companies as well as in annual financial
statements. The adoptionofthisguidance did not havea material impact on the
Company’s consolidated financial
statements.





In April 2009, the FASB issuedASC 320 (formerlyFSP FAS 115-2 and FAS 124-2Recognition and
Presentation of
Other-Than-Temporary Impairments). Theguidanceamends the other-than-temporary
impairment guidance in U.S. GAAP for debt securities to make the guidance more
operational and to improve the presentation and disclosure of
other-than-temporary impairments on debt and equity securities in
the financial statements. Thisguidancedoes not amend existing recognition and
measurement guidance related to other-than-temporary impairments of equity
securities. The Company adoptedASC 320in the fiscal year 2009.  The adoptionofthisguidance did nothave a material impact on the
Company’s consolidated financial
statements.





In April 2009, the FASB
issuedASC 820-10-65
(formerlyFSP FAS
157-4Determining Fair
Value When the Volume and Level of Activity for theAsset or Liability
Have Significantly Decreased and Identifying Transactions That Are Not
Orderly). Theguidanceprovides additional guidance for
estimating fair value in accordance withSFAS157,Fair Value
Measurements, when the
volume and level of activity for the asset or liability have
significantly decreased,
andincludes guidance on
identifying circumstances that indicate a transaction is not orderly. The
Company adoptedthis guidancein the fiscal year 2009.  Theadoption of this guidance
did nothave a material impact on the
Company’s financial
statements.





In June 2009, the FASB amended ASC 860,
(formerly SFAS No. 166, Accounting for Transfers of Financial Assets, an
amendment to SFAS No. 140). ASC 860 eliminates the concept of a qualifying
special-purpose entity,
changes the requirements for derecognizing financial assets, and requires
additional disclosures in order to enhance information reported to users of
financial statements by providing greater transparency about transfers of
financial assets, including securitization
transactions, and an entity’s continuing involvement in and exposure
to the risks related to transferred financial assets. ASC 860 is effective for
fiscal years beginning afterNovember 15, 2009.The Companywill adopt ASC 860 in fiscal 2010. We
do not expect that the
adoption of ASC 860 will have a material impact on our financial
statements.


71


Chineseworldnet.Com Inc. &
Subsidiaries





2. SIGNIFICANT ACCOUNTING POLICIES
(cont’d.)





Newly adopted accounting pronouncements
and new accounting pronouncements(cont’d.)





In June 2009, the FASB amended ASC 810
(formerly SFAS No.167, Amendments to FASB Interpretation No. 46). The amendments
include: (1) the elimination of the exemption for qualifying special purpose
entities, (2) a new approach for determining who should consolidate a variable-interest
entity, and (3) changes to when it is necessary to reassess who should
consolidate a variable-interest entity. ASC 810 is effective for the first
annual reporting period beginning afterNovember 15, 2009and for interim periods within that
first annual reporting period. We will adopt ASC 810 in fiscal 2010. We do not
expect that the adoption of ASC 810 will have a material impact on our financial
statements.





InJuly2009,the Companyadopted the FASB Accounting Standards
CodificationTM(“Codification”). The Codification is the source of
authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental
entities. The content of the Codification carries the same level of
authority, thereby modifying the previous
GAAP hierarchy to include only two levels of GAAP: authoritative and
nonauthoritative. The Codification is
effective for financial statements issued for interim and annual periods ending
afterSeptember 15,
2009. Adoption of the
Codification did not result in a change in current accounting
practice





In October 2009, the FASB issued
guidance on revenue arrangements with multiple deliverables stating that
when vendor specific
objective evidence or third party evidence for deliverables in an arrangement
cannot be determined, a best estimate of the selling price is required to
separate deliverables and allocate arrangement consideration using the relative
selling price method. The new guidance
includes new disclosure requirements on how the application of the relative
selling price method affects the timing and amount of revenue recognition. This
guidance was effective for usJanuary 1, 2011. We do not expect the application of
this guidance will have a material impact on our financial position, cash flows
or operating results.





In January 2010, the FASB issued new
standards in the ASC 820, Fair Value Measurements and Disclosures, which
requires reporting entities to make new disclosures about recurring or
nonrecurring fair-value measurements including significant transfers into and
out of Level 1 and Level 2 fair-value measurements and informationon purchases, sales, issuances, and
settlements on a gross basis in the reconciliation of Level 3 fair- value
measurements. ASU 2010-6 is effective for annual reporting periods beginning
afterDecember 15, 2009, except for Level 3 reconciliation
disclosures which are effective for annual periods beginning afterDecember 15, 2010. We do not anticipate that this update
will have a material impact
on our consolidated financial statements.





In February 2010, the FASB issued
Accounting Standards Update (“ASU”) 2010-09Subsequent
Event(Topic 855)
Amendments to Certain Recognition and Disclosure Requirements. ASU 2010-09 removes the
requirement for an SEC
filer to disclose a date through which subsequent events have been evaluated in
both issued and revised financial statements. Revised financial statements
include financial statements revised as a result of either correction of an
error orretrospective application of GAAP. All
of the amendments in ASU 2010-09 are effective upon issuance of the final ASU,
except for the use of issued date for conduit debt obligors.We do not anticipate that this update
will have a material impact on our consolidated financial
statements.


72


Chineseworldnet.Com Inc. &
Subsidiaries





3. AVAILABLE-FOR-SALE SECURITIES





Available-for-sale securities consist of marketable
securities and are summarized as follows:





Gross
                
                
                Gross
                
                
                Accumulatedunrealized
                
                
                unrealized
                
                
                unrealized
                
                
                MarketCost
                  $
                
                
                gains
                  $
                
                
                losses
                  $
                
                
                losses
                  $
                
                
                value
                  $December
      31, 2007
                
                
                1,009
                
                
                
                —
                
                
                
                (1,005
                )
                
                
                (1,005
                )
                
                
                4Change
      during the year
                
                
                —
                
                
                
                —
                
                
                
                (1
                )
                
                
                (1
                )
                
                
                (1
                )December
      31, 2008
                
                
                1,009
                
                
                
                —
                
                
                
                (1,006
                )
                
                
                (1,006
                )
                
                
                3Change
      during the year
                
                
                —
                
                
                
                —
                
                
                
                1
                
                
                
                1
                
                
                
                1December
      31, 2009
                
                
                1,009
                
                
                
                —
                
                
                
                (1,005
                )
                
                
                (1,005
                )
                
                
                4





4. ACCOUNTS
RECEIVABLE





December 31,
                  2009
                
                
                December 31,
                  2008Accounts
      receivable
                
                
                217,406
                
                
                
                79,179Allowance for doubtful
      accounts
                
                
                (52,153
                )
                
                
                (43,798
                )Total
                
                
                165,253
                
                
                
                35,381





5. EQUIPMENT




Accumulated
                
                
                Net bookCost
                  $
                
                
                amortization
                  $
                
                
                value
                  $2009Furniture and
      fixtures
                
                
                34,154
                
                
                
                21,537
                
                
                
                12,617Computer
      equipment
                
                
                91,849
                
                
                
                74,819
                
                
                
                17,030Leasehold
      improvement
                
                
                24,753
                
                
                
                14,526
                
                
                
                10,227Vehicle
                
                
                33,807
                
                
                
                669
                
                
                
                33,138184,563
                
                
                
                111,551
                
                
                
                73,0122008Furniture and
      fixtures
                
                
                26,054
                
                
                
                15,825
                
                
                
                10,229Computer
      equipment
                
                
                78,205
                
                
                
                59,672
                
                
                
                18,533Leasehold
      improvement
                
                
                24,691
                
                
                
                6,927
                
                
                
                17,764128,950
                
                
                
                82,424
                
                
                
                46,526





6. CONVERTIBLE
DEBENTURES





In fiscal year 2004, the convertible
debentures were issued to an investor and a related company owned by a director as a
working capital credit facility of $50,000 and $100,000 respectively with
advances secured by two unregistered three-year convertible debentures, which
are due on May 31, 2007. Simple interest accrues at 5% per annum onthe


73


Chineseworldnet.Com Inc. &
Subsidiaries





6. CONVERTIBLE DEBENTURES(cont’d.)





amount of principal outstanding. The
debentures are convertible into common shares of the Company upon the Company
completing its registration statement with the relevant securities commission. The amount of the
debenture remaining outstanding is convertible into one fully paid and
non-assessable common share of the Company at a price per share that is equal to
the higher of: 1) the 30-day closing average price of its commonshares on its principal market which
shall initially be the OTC Bulletin Board discounted at 20% calculated from the
date the conversion notice is received by the Company, or 2) US$0.60 per share,
prior to maturity.





At any time during the term of the
debenture, should the
common shares of the Company trade for a period of 30 consecutive trading days
at an average closing price exceeding $0.80 per common share, the Company shall
have the option, exercisable by providing the subscriber with written notice,of shortening the subscriber’s right to convert the outstanding
amount to a period of thirty (30) days from the date of such notice. If the
subscriber does not exercise his right of conversion, the debenture will no
longer be convertible to common shares.The entire $150,000 of convertible
debenture has been classified as a liability.





In accordance withASC 470-20 (formerlyEITF No. 00-27),Debt with Conversion
and Other Option,no beneficial conversion feature was
calculated on the issuance of the convertible debenture.





In January 2007, the Company issued
250,000 common stocks of the Company for the settlements of the above
convertible debentures at $0.60 per share.





On March 1, 2007, convertible debentures
were issued to an investor as a working capital of $250,000 with advances secured by an
unregistered three-year convertible debenture, which are due on February 28,
2010. Simple interest accrues at 6% per annum on the amount of principal
outstanding. The debentures are convertible into common shares ofthe Company upon the Company completing
its registration statement with the relevant securities commission. The
principal amount of this note may be converted at a conversion price to US$1.00
per share, in whole or in part, by the Holder at any time untilthe note is repaid in full by the
Company. In connection with the issuance of the convertible debenture, the
investor also received 75,000 warrants which are exercisable at any time between
March 1, 2007 and February 28, 2010 at a price of $1.30 per
share.Each
warrant converts into one common stock of the Company.





In accordance withASC 470-20 (formerlyEITF No. 00-27),Debt with Conversion
and Other Options,the Company recorded $29,046, $29,047
and $191,907 to the share purchase warrants, beneficial conversion feature and convertible debt,
respectively.





During the fiscal year 2009, $21,845
(2008 - $31,265) was accreted to the convertible debenture.  A summary
of convertible debenture as follows:





December 31,
                
                
                December 31,2009
                
                
                2008Convertible debentures - face
      valueDue February 28, 2010 - unsecured
      and interest bearing at 6%
                
                
                250,000
                
                
                
                250,000250,000
                
                
                
                250,000Less interest (effective interest
      rate: 16.4%)
                
                
                (58,093
                )
                
                
                (58,093
                )Accretion
                
                
                66,865
                
                
                
                45,020Total
                
                
                258,772
                
                
                
                236,927Less current
      portion
                
                
                258,772
                
                
                
                —$
                -
                
                
                $
                236,927




Subsequent
to the year end, the convertible debenture has been converted into common share
of the company; please refer to Note 11 Subsequent Events.


74


Chineseworldnet.Com Inc. &
Subsidiaries





7. INCOME TAXES





The parent company is not subject to
income taxes.





Income tax expense varies from the
amount that would be computed from applying the combined federal and provincial income tax
rate to loss before taxes as follows:





2009
                  $
                
                
                2008
                  $
                
                
                2007
                  $Net
      loss for the year
                
                
                (402,209
                )
                
                
                (950,223
                )
                
                
                51,133Statutory
      Cayman Islands corporate tax rate
                
                
                0
                %
                
                
                0
                %
                
                
                0
                %Anticipated
      tax recovery
                
                
                —
                
                
                
                —
                
                
                
                —Change
      in tax rates resulting from:Impact
      of foreign exchange movement
                
                
                (2,437
                )
                
                
                (896
                )
                
                
                12,238Impact
      of BC rate change
                
                
                —
                
                
                
                —
                
                
                
                —Foreign
      tax rate differential
                
                
                (80,125
                )
                
                
                (118,032
                )
                
                
                64,176Others
                
                
                4,451
                
                
                
                4,495
                
                
                
                4,583Recognition
      of  non- capital loss
carryforwards
                
                
                —
                
                
                
                —
                
                
                
                (82,686
                )Change
      in valuation allowance
                
                
                78,111
                
                
                
                169,045
                
                
                
                (52,532
                )Income
      tax expense (recovery)
                
                
                —
                
                
                
                54,612
                
                
                
                (54,221
                )





The significant components of the
Company’s deferred tax assets are as
follows:





2009
                  $
                
                
                2008
                  $
                
                
                2007
                  $Non-capital
      loss carryforwards
                
                
                298,000
                
                
                
                291,000
                
                
                
                191,601Equipment
      and furniture
                
                
                6,700
                
                
                
                2,000
                
                
                
                17,223Others
                
                
                (4,600
                )
                
                
                5,000
                
                
                
                —300,100
                
                
                
                298,000
                
                
                
                208,824Valuation
      allowance
                
                
                (300,100
                )
                
                
                (298,000
                )
                
                
                (149,501
                )Net
      deferred income tax assets
                
                
                —
                
                
                
                —
                
                
                
                59,323





The Company has available non-capital
losses for Canadian income tax purposes which may be carried forward to reduce
taxable income in future years. If not utilized, the non-capital losses in theamount of $623,612 expireas follows:





$2010
                
                
                149,7352014
                
                
                15,8412015
                
                
                2,9772026
                
                
                151,4992029
                
                
                235,7272030
                
                
                67,833623,612





The Company also has available
non-capital losses for
Chinese income tax purposes which may be carried forward to reduce taxable
income in future years.If
not utilized, the non-capital losses in the amount of $419,926 expire from 2012
($182,557) to 2013 ($237,369).


75


Chineseworldnet.Com Inc.
&Subsidiaries





8. STOCKHOLDERS
EQUITY





Common Stocks





On January 28, 2007, the Company issued
250,000 common stocks for the settlement of convertible debentures of
$150,000.





On October 26, 2007, 2,250,000 common
stocks were issued in connection of a private placement at a price of $1.08 for a
total of $2,070,000.





Stock Options





On October 11, 2007, the Company granted
key officers and directors 550,000 stock options, which expire on October 11,
2012 with each stock option entitling its holder to purchaseone common share at
$1.08.





As at December 31, 2009, the Company has 495,000 stock options
outstanding:





Number of Options
                
                
                Weighted
                  Average Exercise
                  PriceBalance,
      December 31, 2006
                
                
                —
                
                
                $
                —Granted
                
                
                550,000
                
                
                
                1.08Forfeited
                
                
                (10,000
                )
                
                
                1.08Balance,
      December 31, 2007
                
                
                540,000
                
                
                
                1.08Forfeited
                
                
                (45,000
                )
                
                
                1.08Balance,
      December 31, 2008
                
                
                495,000
                
                
                
                1.08Forfeited
                
                
                —
                
                
                
                1.08Balance,
      December 31, 2009
                
                
                495,000
                
                
                $
                1.08




Exercise price
                        
                        Outstanding
                        
                        
                        ExercisableNumber of
                          Options
                        
                        
                        Weighted
                          Average
                          Exercise
                          Price
                        
                        
                        Weighted
                          Average
                          Remaining
                          Contractual
                          Life (years)
                        
                        
                        Number of
                          Options
                        
                        
                        Weighted
                          Average
                          Exercise
                          Price$
                        1.08
                        
                        
                        495,000
                        
                        
                        $
                        1.08
                        
                        
                        
                        2.78
                        
                        
                        
                        198,000
                        
                        
                        $
                        1.08495,000
                        
                        
                        $
                        1.08
                        
                        
                        
                        2.78
                        
                        
                        
                        198,000
                        
                        
                        $
                        1.08




The weighted average fair value of stock
options grantedon the date
of the grantwas $0.93 andthe Company recorded stock
basedcompensation expense of$61,339 for fiscal year 2009 (2008 -
$222,745 and 2007 -$22,222). The fair value of each option granted
is estimated on the date ofthegrant using the Black-Scholes option
pricing model with weighted average assumptions for grants as
follows:





2007Risk-free interest
      rate
                  
                  
                  4.36
                  %Expected life of
      options
                  
                  5 yearsAnnualized
      volatility
                  
                  
                  90.6
                  %Dividend
    rate
                  
                  
                  0
                  %


76


Chineseworldnet.Com Inc. &
Subsidiaries




8. STOCKHOLDERS EQUITY
(cont’d.)





Share purchase
warrants





A summary of share purchase warrants is as
follows:





Expiry Date
                  
                  Exercise Price
                  
                  
                  NumberFebruary 28,
      2010
                  
                  $
                  1.30
                  
                  
                  
                  75,000





Subsequent
to the year end, on February 28, 2010, all warrants expired.





9. RELATED PARTY
TRANSACTIONS





[a]
            In 2009, the Company incurred $96,000 [2008 -
      $84,000, 2007 - $84,000] in consulting fees to two companies related to a
      director of the Company, of which there were no outstanding balance as at
      December 31, 2009.





[b]
            In 2009, the Company paid
      $110,384[2008 - $80,360,2007 - $86,400] salary to senior
      officers of the Company.





[c]
            As at December 31, 2009, the
      Company has non-interest bearing advances from a stockholder and director
      of $128 [2008 - $128]. In 2009, the Company recorded imputed interest of
      $nil [2007 - $nil,
      2007 - $63] at an interest rate of 4% per annum on these
      advances.





[d]
            Included in accounts payable,$23,160[2008 - $36,136] was payable to
      directors and senior officers of the
  Company.





[e]
            As at December 31, 2009, the
      Company provided an advance of $2,579 [2008 - $2,580] to a
      director as a prepaid
expenses.





[f]
            In 2009, the Company provided
      service for a total of $144,956.73[2008-$Nil, 2007- $Nil]to a company whose director and
      shareholder is also a director and shareholder of the company, of
      which $40,523[2008- $ Nil]was outstanding as at December
      31, 2009.





[g]
            In 2009, the Company incurred $8,000
      [2008 - $8,000, 2007
      - $Nil] indirector fees, of which there were no
      outstanding balance as at December 31, 2009.





All related party transactions were entered into in the normal
course of business and are recorded at the exchange amount established and
agreed to between the related parties.





10. COMMITMENTS





The Company has entered into operating
leases for automobile and office space. Minimumfuture rental payments under these
leases are as follows:





$2010
                  
                  
                  86,2742011
                  
                  
                  53,5322012
                  
                  
                  7,6962013
                  
                  
                  5,771Total
                  
                  
                  153,273




77


Chineseworldnet.Com Inc. &
Subsidiaries




10. COMMITMENTS(cont’d.)





During the fiscal year 2008,the Company entered into a license
agreement which the Company was granted a license to use and distribute the
licensor’s products and service described in the
agreement for a term of 3 years for a total consideration of $54,624 and payable
$17,139, $18,285 and $19,200 at the beginning of year
one, two and three, respectively.





11.  SUBSEQUENT
EVENTS




[a]
            Subsequent to the year end, the
      Company entered a new consulting agreement with Silver Lake Investment
      Partners, Limited controlled by a director of the Company.  The Company
      will be charged $2,000 per month for the consulting fee from January 1 to
      December 31, 2010. Also, the Company entered a new consulting agreement
      with Goldpac Investments Ltd. controlled by a director of the
      Company.  The Company will be charged $6,000 per month for
      the consulting fee from January 1, 2010 to December 31,
      2010.




[b]
            Subsequent to the year end, on
      February 24, 2010, the Company issued 250,000 common sharesat the price of US$ 1.00to the holder of a
      convertible notefor
      the conversion of the convertible note, resulting in a total of 10,950,000
      common shares issued and
outstanding.





12.  COMPARATIVE
FIGURES





Certain of comparative figures have been
reclassified to conform with the presentation adopted in the current period.





13.GEOGRAPHIC
INFORMATION





The Company’s head office is located in Vancouver,
British Columbia, Canada. The operations of the Company are primarily in two
geographic areas: Canada and China. A summary of geographical information for
the Company’s assets and net loss for the years is
as follows:





Year ended December 31, 2009
                
                Canada
                
                
                China
                
                
                TotalRevenue
      from external customers
                
                $
                728,098
                
                
                $
                178,357
                
                
                $
                906,455Net
      income (loss)
                
                
                (154,710
                )
                
                
                (247,499
                )
                
                
                (402,209
                )Total
      assets
                
                
                1,581,601
                
                
                
                351,420
                
                
                
                1,933,021





Year ended December 31, 2008
                
                Canada
                
                
                China
                
                
                TotalRevenue
      from external customers
                
                $
                881,633
                
                
                $
                129,689
                
                
                $
                1,011,322Net
      income
      (loss)
                
                
                (819,324
                )
                
                
                (185,511
                )
                
                
                (1,004,835
                )Total
      assets
                
                
                1,523,879
                
                
                
                580,504
                
                
                
                2,104,383




78