UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 20-F



CHINESEWORLDNET.COM INC.



| ̈ | REGISTRATION STATEMENT PURSUANT
    TO SECTION 12(b) OR 12(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, 2012

OR



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

For the transition period from
_______________ to _______________

OR



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

Date of event requiring this
shell company report _______________



Commission file number 000-33051



CHINESEWORLDNET.COM INC.

(Exact name of Registrant as specified
in its charter)



CAYMAN ISLANDS

(Jurisdiction of incorporation or organization)



Suite 368 – 1199 West Pender Street,
Vancouver, British Columbia, Canada V6E 2R1

(Address of principal executive offices)



Mr. Joe Tai, President and Chief Executive
OfficerTel: +1 (604) 488-8878   Fax: +1 (604) 488-0868Suite 368 – 1199 West Pender Street, Vancouver, British Columbia, Canada V6E 2R1

(Name, Telephone, Email and/or Facsimile
number and Address of Company Contact Person)





|Securities registered or to be registered pursuant
    to Section 12(b) of the Act.           
|----------------------------------------------------------------------------------------------
|Title of each class                                                                           
|Not Applicable                                                                                
|                                                                                              
|Securities registered or to be registered pursuant
    to Section 12(g) of the Act.           
|Common Shares, Par Value
    of US$0.001 Per Share                                            
|(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: 10,950,000
common shares



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

| ̈Yes | xNo
|---- | ---



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.

| ̈Yes | xNo
|---- | ---



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.

|xYes |  ̈No
|---- | ---



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).

|xYes |  ̈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 |  | xNon-accelerated filer
|------------------------ |  | ------------------ |  | ----------------------



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

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



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

| ̈Item 17 |  ̈Item
    18
|-------- | ------------



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

| ̈Yes | xNo
|---- | ---











TABLE OF CONTENTS



|Part I   |                                                            | 4 
|-------- | ---------------------------------------------------------- | --
|Item 1.  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS      | 4 
|Item 2.  | OFFER STATISTICS AND EXPECTED TIMETABLE                    | 4 
|Item 3.  | KEY INFORMATION                                            | 4 
|         | A.   Selected Financial Data                               | 4 
|         | B.   Capitalization and Indebtedness                       | 5 
|         | C.   Reasons for the Offer and Use of Proceeds             | 5 
|         | D.   Risk Factors                                          | 5 
|Item 4.  | INFORMATION ON THE COMPANY                                 | 22
|         | A.   History and Development of the Company                | 22
|         | B.   Business Overview                                     | 23
|         | C.   Organizational Structure                              | 33
|         | D.   Property, Plants and Equipment                        | 34
|Item 5.  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS               | 34
|         | A.   Results of Operations                                 | 34
|         | B.   Liquidity and Capital Resources                       | 42
|         | C.   Research and Development, Patents and Licenses        | 42
|         | D.   Trend Information                                     | 42
|         | E.   Off-Balance Sheet Arrangements                        | 42
|         | F.   Tabular Disclosure of Contractual Obligations         | 42
|Item 6.  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                 | 42
|         | A.   Directors and Senior Management                       | 42
|         | B.   Compensation                                          | 44
|         | C.   Board Practices                                       | 45
|         | D.   Employees                                             | 45
|         | E.   Share Ownership of Directors and Senior Management    | 45
|Item 7.  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS          | 47
|         | A.   Major Shareholders                                    | 47
|         | B.   Related Party Transactions                            | 47
|         | C.   Interests of Experts and Counsel                      | 48
|Item 8.  | FINANCIAL INFORMATION                                      | 48
|         | A.   Financial Statements                                  | 48
|         | B.   Significant Changes                                   | 48
|Item 9.  | THE OFFER AND LISTING                                      | 48
|         | A.   Offer and Listing Details                             | 48
|         | B.   Plan of Distribution                                  | 49
|         | C.   Markets                                               | 49
|         | D.   Selling Shareholders                                  | 49
|         | E.   Dilution                                              | 49
|         | F.   Expenses of the Issue                                 | 49
|Item 10. | ADDITIONAL INFORMATION                                     | 49
|         | A.   Share Capital                                         | 49
|         | B.   Memorandum and Articles of Association                | 50
|         | C.   Material Contracts                                    | 50
|         | D.   Exchange Controls                                     | 50
|         | E.   Taxation                                              | 52
|         | F.   Dividends and Paying Agents                           | 53
|         | G.  Statement by Experts                                   | 53
|         | H.  Documents on Display                                   | 53
|         | I.   Subsidiary Information                                | 53
|Item 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 53
|Item 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES     | 53











|Part II   |                                                                                  | 53
|--------- | -------------------------------------------------------------------------------- | --
|Item 13.  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                                  | 53
|Item 14.  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
    PROCEEDS | 53
|Item 15.  | CONTROLS AND PROCEDURES                                                          | 54
|Item 16.  | [RESERVED]                                                                       | 55
|ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT                                                 | 55
|ITEM 16b. | CODE OF ETHICS                                                                   | 55
|ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                           | 55
|ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                       | 55
|ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILAITED PURCHASERS           | 56
|ITEM 16f. | changes in registrant's certifying accountant                                    | 56
|ITEM 16G. | CORPORATE GOVERNANCE                                                             | 56
|ITEM 16H. | MINE SAFETY DISCLOSURE                                                           | 56
|          |                                                                                  |   
|Part III  |                                                                                  | 56
|Item 17.  | FINANCIAL STATEMENTS                                                             | 56
|Item 18.  | FINANCIAL STATEMENTS                                                             | 57
|Item 19.  | EXHIBITS                                                                         | 57



- ii -







INTRODUCTION AND USE OF CERTAIN TERMS



ChineseWorldNet.Com Inc. is a corporation
incorporated under theCompany 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. (“CWN HK”), a company incorporated under the laws of Hong Kong,
83% owned interest in ChineseWorldNet.com (Shanghai) Ltd. (“CWN China”), a company incorporated under the laws
of People’s Republic of China, and 83% owned interest in Weihai Consulting Investment Ltd. (“Weihai”),
a company incorporated under the laws of People’s Republic of China.



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 Report
are in US dollars unless otherwise indicated.  References to “Fiscal 2012” are to our fiscal year ended December
31, 2012, and other fiscal years of the Company are referred to in a corresponding manner.  References to “Common Shares”
are to our Common Shares, par value of US$0.001 per share.



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



CAUTIONARY NOTICE REGARDING FORWARD-LOOKING
STATEMENTS



This Report contains forward-looking statements
that reflect the management’s current expectations and assumptions with respect to the general economic and business conditions,
our operation and business strategies, products, services and competition, future financial position and results, and various
other factors, both referenced and not referenced in this Report.  All statements made in this Report other than statements
of historical fact, including, among others, statements that address operating performance, events, circumstances, or developments
that the management expects or anticipates will or may occur in the future, statements related to revenue and volume growth, profitability,
new sales and marketing channels, adequacy of and ability to raise additional funding for operations, and statements expressing
general optimism about future operating results and non-historical information, are forward-looking statements.  In particular,
the words“believe,” “expect,” “intend,” “anticipate,” “estimate,”
“plan,” “target,” “may,” 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 statements are
not forward-looking.



These forward-looking statements are subject
to risks and uncertainties that could cause our actual financial position and results to differ materially from those expressed
in, anticipated or implied by these forward-looking statements for many reasons, including the risks and statements described
in more detail under “Item 3. Key Information – D. Risk Factors”and“Item 5. Operating and
Financial Review and Prospects” included elsewhere in this Report.  We do not undertake any obligation to revise
or update these forward-looking statements to reflect new information, future events or circumstances unless required by applicable
legislation or regulation.  These forward-looking statements contained in this Report are expressly qualified by this cautionary
statement.











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, 2012, 2011, 2010, 2009 and 2008.  The information
for the last three fiscal years ended December 31, 2012, 2011, 2010 and 2009 have been extracted from our 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, 2009 and 2008 have
been extracted from audited consolidated financial statements not disclosed elsewhere and presented below.



|                                                           |  | Year ended December 31, |           
|---------------------------------------------------------- |  | ----------------------- | ----------
|                                                           |  | 2012                    |           
|Consolidated Statements of Operations:                     |  |                         |           
|Revenue                                                    |  | $                       | 1,243,638 
|Net income (loss) for the year                             |  |                         | (128,931  
|Net income (loss) attributable to non-controlling interest |  |                         | (43,843   
|Net income (loss) attributable to common stockholders      |  |                         | (85,088   
|Earning (loss) per share – basic                           |  |                         | (0.01     
|Earning (loss) per share – diluted                         |  |                         | (0.01     
|Weighted average common shares outstanding – basic         |  |                         | 10,950,000
|Weighted average common shares outstanding – diluted       |  |                         | 10,950,000
|                                                           |  |                         |           
|Consolidated Balance Sheets:                               |  |                         |           
|Total assets                                               |  | $                       | 2,571,264 
|Equipment                                                  |  |                         | 23,515    
|Total current liabilities                                  |  |                         | 546,060   
|Total stockholders’ equity (deficiency)                    |  |                         | 2,025,204 



No dividends have
been declared or paid in Fiscal 2012.



- 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 and results
of operations.  See “Cautionary Notice Regarding Forward Looking Statements” above.



Risk Factors
Relating to our Company and our Businesses



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



Although we have an operating history
of over 10 years, we may have a limited history in terms of certain aspects of our operation.  This includes those new strategies
and business models we developed, such as our development as a financial content and information provider targeting potential
investors in the Greater China in addition to building a network with various content and information distribution channels in
the region, our institutional conference business, and our road show business etc.  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 our company and our businesses.



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



We are pursuing a number of growth strategies.
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.



Internally, we require constant development
and expansion of our content and knowledge base.  We intend to increase revenues from our Portal business, IR/PR business,
Conference business, and financial content and information distribution business by increasing internal support staff and other
resources.  There is no guarantee we may be able to achieve what we desire.  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.



- 5 -







Our future
performance is dependent on the continuing and collaborative efforts of our senior management and key personnel, and our ability
to retain them.



Our future performance is substantially
dependent on the performance of our senior management and key personnel.  In particular, our success depends on the continued
services and efforts of our senior management team.  If a member in the senior management team is unable or unwilling to
continue in his or her position, we may not be able to replace the position easily, and our business may be disrupted, materially
and adversely affected.  If any member in the senior management team joins a competitor or forms a competing company, we
may lose customers, distributors and know-how.



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 users’ issues and questions as well as to explain our product and service offerings. 
Most of our staff members involved in the customer support function are relatively new to our 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.



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



The markets for our Portal, IR/PR, Conference,
and our financial content and information distribution 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
and service 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, content providers, distribution partners,
advertisers, sponsors, clients and users.  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 readers and subscribers 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 product and 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, distribution partners, advertisers, sponsors, clients and users. 
New and increased competition could result in price reductions in our product and service offerings, reduced margin or loss of
market share, any of which could materially and adversely affect our businesses, results of operations and financial condition.



- 6 -







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 products and services companies 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.griconference.com as well as their associated 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.



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.griconference.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, and www.gcff.ca 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.



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, websites and other product and service offerings,
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, websites and other product and
service offerings.  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.



In addition, changes in user behavior
resulting from technological developments may also adversely affect us. For example, the number of people accessing the Internet
through devices other than personal computers, including mobile phones and other hand-held devices, has increased in recent years,
and we expect this trend to continue while 3G and more advanced mobile communications technologies are broadly implemented. 
If we fail to develop products and technologies that are compatible with all mobile devices, or if the products and services we
develop are not widely accepted and used by users of various mobile devices, we may not be able to penetrate the mobile markets.



- 7 -







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.



Internet, technology and media companies
are frequently involved in litigation based on allegations of infringement of intellectual property rights, unfair competition,
invasion of privacy, defamation and other violations of other parties’ rights.  The validity, enforceability and scope
of protection of intellectual property in Internet-related industries are uncertain and still evolving.  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.  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 our client 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.



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 he or she 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.



- 8 -







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 our infrastructure from security threats. 
In this regard, our users depend on us to keep their personal information safe and private.  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.



Unauthorized use of, or interference
with, our network could disrupt service and increase our costs.



We may incur costs associated with the
unauthorized use of our network including administrative and capital costs associated with detecting, monitoring and reducing
the incidence of fraud. Fraudulent use of our network may impact interconnection costs, capacity costs, administrative costs,
fraud prevention costs and payments to other carriers for fraudulent use. Security breaches related to our physical facilities,
computer networks, and informational databases may cause harm to our business and reputation and result in a loss of customers.



Our physical facilities and information
systems may be vulnerable to physical break-ins, computer viruses, theft, attacks by hackers, or similar disruptive problems.
If hackers gain improper access to our databases, they may be able to steal, publish, delete or modify confidential personal information
concerning our subscribers. In addition, misuse of our customer information could result in more substantial harms perpetrated
by third parties. This could damage our business and reputation, and result in a loss of customers.



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



We currently 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. 
We have recurring losses from operations since inception and have accumulated a deficit of $2,311,246 as at December 31, 2012. 
Our ability to continue as a going concern is dependent upon our ability to obtain additional financing to maintain and to expand
our business operations.  Management has been able to finance our business operations through equity and debt financing. 
Management intends to continue to seek additional capital to finance our 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 we 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 deteriorate,
or if market or other values fluctuate, we may need to provide for 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.



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.



- 10 -







In addition, a number of companies and
websites 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 are 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.



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.



- 11 -







In addition, since 2011 our Conference
business had undergone changes to address the current financial environment.  Specifically, the repositioning of our conferences
away from the traditional focus on the capital markets and towards a more general partnering business and mergers and acquisitions
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 partnerships with local companies in PRC, such as agents, internet platform
partners, consulting companies, project event organizers etc., 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.



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



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, staff and outside
contributors, clients and users and many types of companies, including:



| | · | English
                                                                                                             Content:
| | - | -----------------------------------------------------------------------------------------------------------------------------

| | o | online
                                                                                                                               services
                                                                                                                               or
                                                                                                                               websites
                                                                                                                               focused
                                                                                                                               on
                                                                                                                               business,
                                                                                                                               finance
                                                                                                                               and
                                                                                                                               investing
                                                                                                                               news,
                                                                                                                               such
                                                                                                                               as
                                                                                                                               CBS.MarketWatch.com,
                                                                                                                               CNBC
                                                                                                                               on
                                                                                                                               MSN
                                                                                                                               Money,
                                                                                                                               CNNfn.com,
                                                                                                                               The
                                                                                                                               Wall
                                                                                                                               Street
                                                                                                                               Journal
                                                                                                                               Online,
                                                                                                                               TheStreet.com,
                                                                                                                               FinancialPost.comTheNewYorkTimes.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.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



- 12 -







| | · | Chinese
                                                                                                               Content:
| | - | -------------------------------------------------------------------------------------------------------------------------------

| | o | online
                                                                                                                               services
                                                                                                                               or
                                                                                                                               websites
                                                                                                                               focused
                                                                                                                               on
                                                                                                                               business,
                                                                                                                               finance
                                                                                                                               and
                                                                                                                               investing,
                                                                                                                               such
                                                                                                                               as
                                                                                                                               Chinesefn.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,
                                                                                                                               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.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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, has 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, staff or outside contributors,
clients and users 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, Canada, Asia and Europe with respect to our IR/PR and Conference
businesses.  We compete for our client companies’ limited marketing budgets on our various product and service offerings
in our IR/PR business.  There is also a growing trend for companies to put on trade shows and conferences related to investing
in China and Hong Kong, which competes with our businesses. 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.



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.



- 13 -







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.



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.



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.



- 14 -







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.



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.



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.



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.



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.



- 15 -







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 may 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 Hong Kong and Taiwan, 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                                                                                  |  | OECD               
|----------------------------------------------- |  | ------------------------------------------------------------------------------------ |  | -------------------
|Economic structure:                             |  | Planned economy, but in a slow process
    of transition to a market economy         |  | Market economy     
|                                                |  |                                                                                      |  |                    
|Level of government involvement in the economy: |  | Very high                                                                            |  | Low to moderate    
|                                                |  |                                                                                      |  |                    
|Level of economic development:                  |  | Developing country                                                                   |  | Developed countries
|                                                |  |                                                                                      |  |                    
|Methods 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. Relations between Taiwan and the People’s Republic of China,
also referred to as the PRC, and other factors affecting the political or economic conditions of Taiwan in the future could materially
adversely affect our business, financial condition and results of operations.



Taiwan has a unique international political
status. The PRC asserts sovereignty over all of China, including Taiwan, certain other islands and all of mainland China. The
PRC government does not recognize the legitimacy of the Taiwan government. Although significant economic and cultural relations
have been established during recent years between Taiwan and the PRC, the PRC government has indicated that it may use military
force to gain control over Taiwan in certain circumstances, such as the declaration of independence by Taiwan. Relations between
Taiwan and the PRC have on occasion adversely affected the market value of Taiwanese companies and could negatively affect our
operations in Taiwan in the future.



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 that 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.



- 20 -







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.



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 dividends
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.



Trading of
our common shares may be restricted by the Securities and Exchange Commission’s penny stock regulations which may limit
a shareholder’s ability to buy and sell our common shares



The Securities and Exchange Commission
has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as
defined) of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our common
shares are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to
persons other than established customers and “accredited investors”. The term “accredited investor” refers
generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by
the Securities and Exchange Commission which provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given
to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior
to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to
trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our
common shares.



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 the Company 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.



- 21 -







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 and/or other jurisdictions.  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.



Item 4.          INFORMATION
ON THE COMPANY



| | A. | History and Development of the Company
| | -- | --------------------------------------



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



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, focusing on capital markets businesses.  CWN Capital
provides a vehicle for expanding the scope of our businesses into the capital markets.  On October 1, 2010, CWN Capital completed
a non-brokered private placement and issued 25,000 of its common shares at a subscription price of $0.01 per share to Silver Lake
Investment Partners, Ltd., resulted in CWN diluted down to a 50% ownership in CWN Capital.  On December 18, 2010, CWN Capital
completed another non-brokered private placement and issued 55,000 of its common shares at a subscription price of $1.00 per share
to Goldpac Investments Partners Ltd., resulted in CWN a diluted down to 23.8% ownership in CWN Capital. As a result we deconsolidated
CWN Capital on December 18, 2010 and recorded our interest in CWN Capital as an equity interest. Silver Lake Investment Partners,
Ltd. and Goldpac Investments Partners Ltd. are companies controlled by two directors of our company. In the future, we may consider
turning CWN Capital into a majority owned subsidiary, but there are no assurances that this event will occur.



On September 8, 2009, CWN China funded
and incorporated Weihai as a local entity for the purpose of carrying out certain business operations in the Greater China. 
Weihai has the same address as CWN China.  Through CWN China, we have a 83.67% controlling interest in Weihai.



- 22 -







On February 1, 2008, CWN HK and Shanghai
Compass Venture Capital Investment Company Limited (“Shanghai Compass”) 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 with CWN HK having a 70% controlling interest in CWN China. In March 2011, we completed substantially all of the
regulatory procedures and processes with Shanghai Compass, the other shareholder of CWN China and invested further 5,000,000 Renminbi
to CWN China. CWN HK is required to contribute the additional registered capital of 5,000,000 Renminbi by paying cash within two
years from August 19, 2011. During the year ended December 31, 2011, CWN HK paid cash of $400,000 which result of our financial
interest increased from 70% to 80%. During the year ended December 31, 2012, CWN HK further paid cash of $200,000 which result
of our financial interest increased from 80% to 83.67%. CWN China has an office located at #1003, Eton Place Tower B, 555 Pudong
Ave., Shanghai, PRC 200120.  CWN China provides us with the capabilities and resources to penetrate and expand particularly
in the Greater China markets.  As of December 31, 2012, there were approximately twelve employees in Shanghai, China, with
duties ranging from translations, web design and technical support, to sales, business development and marketing.  CWN China
also heads our efforts in hosting various events in the Greater China.



During Fiscal 2012, we made no purchases
of property and equipment. There are currently no major capital projects or divestitures in progress.



| | B. | Business Overview
| | -- | -----------------



We have four principal businesses: (1)
the financial web 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 financial
content and information distribution business.



Financial
Web Portal (“Portal”) Business



Overview



Our www.chineseworldnet.com website is
a web-based portal that provides up-to-date financial content and information and financial management tools in the Chinese language
targeting 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 major North American exchange markets, including New York Stock Exchange
(“NYSE”), American Stock Exchange (“AMEX”), NASDAQ Stock Market (“NASDAQ ”),
OTC Bulletin Board (“OTCBB”), Toronto Stock Exchange (“TSX”), and Toronto Venture Exchange
(“TSX-V”).  Our Portal business also provides certain coverage of the financial markets in China, Hong
Kong and Taiwan, which we intend to expand further in the near future through a combination of internal efforts as well as partnerships. 
All information and services we provided through our www.chineseworldnet.com website are free of charge, except certain premium
and personalized information and services such as premium articles and market commentary accessible only by “Premium
Subscribers” who are required to register as a subscriber and pay a subscription fee.



Current Product / Service Offering



Currently, our Portal business provides
an abundant of resources and investor’s tools on a variety of items including: Stocks, Forex, Options, Futures, ETF (exchange-traded
funds), Financial Services and Financial Products.  The following contents and features are provided free of charge on our
www.chineseworldnet.com website to all readers, other than the Premium Services described below for which we charge a subscription
fee.



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 statements summary.



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.



- 23 -







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.



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 or 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.



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.



During fiscal 2011, we have upgraded our
www.chineseworldnet.com website providing a new layout that focuses on user friendliness.  We are also planning to 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 2013 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



Premium Subscription Fees



All information and services we provided
through our www.chineseworldnet.com website are free of charge, except certain premium and personalized information and services
such as premium articles and market commentary accessible only by Premium Subscribers who are required to register as a subscriber
and pay a subscription fee.  Currently, Premium Subscribers pay a monthly subscription fee of $9.95 or an annual subscription
fee of $59.95.



Banner Advertising



We derive revenue from selling banner
advertising space on thewww.chineseworldnet.com website.  The fee for a six-month banner ad ranges from $750
to $1,980 per month.  The amount of fees charged depends on the size and the location of the banner ad on the website. 
There is no price adjustment to the monthly fees if the actual clicks differ from the estimated clicks.



- 24 -







Online Marketing and Intermediary Service



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



Our Portal business derives no revenue
from our subscribers through this service offering. We do 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.



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 fast growing public companies
trading on the North American exchange markets to reach the Chinese investor community in North America through various media
such as its www.nai500.com website, publications, and various web and online marketing services.  In May 2009, NAI rebranded
its business model and launched “NAI 500” which provides the 500 fastest growing companies from 10 different sectors
generated from NAI’s market intelligence and street-smart expertise accumulated through its 10 plus years of operations
and experience.  NAI also added a road show business component in 2009, providing face-to-face meeting opportunities for
public companies and institutional and retail investors.



Current Product / Service Offering



www.nai500.com and NAI 500



NAI operates the www.nai500.com website
(formerly www.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, TSX-V, NASDAQ and OTCBB.  The website offers
stock quotes, company reviews, newsletters and guide to investing of these client companies in the Chinese language to readers
in the Chinese investor community in North America.  Currently, there are over 64,000 registered members on the www.nai500.com
website which attracts over 1,800,000 viewers each month.



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



Also in May 2009, NAI rebranded its business
model and launched “NAI 500” which provides the 500 fastest growing companies from 10 different sectors including:
Mining and Resources; Oil and Gas; Clean Tech; Life Science; Industrial Products; Software and IT Services; Technology; Consumer
Products and Services; China-theme Stocks; and Special Industries.  This is generated from NAI’s market intelligence
and street-smart expertise accumulated through its 10 plus years of operations and experience, and is being updated monthly.



In October 2010, NAI launched the “NAI
500 iPhone App”, which is a mobile phone application designed for iPhone users to access our NAI 500 contents and information
from their iPhone including delayed stock quotes and updates, daily top stories, press releases etc., available in both Chinese
and English, downloadable from the Internet for free.



Unlike www.chineseworldnet.com, www.nai500.com
is not a financial portal for registered members or readers but an Internet-based medium for the dissemination of information
from fee-paying client companies to increase exposure in the Chinese investor community.  NAI charges its client companies
an annual fee of $4,500 to $6,800 for these services.  There is no fee being charged to individual registered members or
readers of the www.nai500.com website. The company is launching the new upgraded version of NAI500.com by middle of the year 2013
to accommodate the growing needs of investors in Asia to look for online investment info in North America. New version will add
more functionality and interactive capability to enhance the user experience at the platform of both the client companies and
individual members. This new version will be marketed to attract US listed client companies where such market is currently untapped
for the company.



- 25 -







Road Show Business



During fiscal 2010, NAI has started the
Road Show Business where it creates and provides face-to-face meeting opportunities for its North American public company clients
and their representatives to meet with potential institutional and high net worth individual investors in Greater China. 
NAI operates its Road Show Business in two separate models: firstly, multi-client road shows and secondly, tailor made road shows
for individual clients. NAI arranges everything from top to bottom and brings its client companies together in Greater China and
sets up an environment (e.g. private meetings, presentations, luncheons, dinners etc.) for them to meet with potential investors,
and charged the participating companies for fees and expenses accordingly, ranges from $20,000 to $25,000.  We operate this
through collaboration with various investment groups in China in addition to partnership with a top local brokerage firm that
has a client base and network of over 3 million potential investors.  We focused on working with Mining companies listed
on TSX or TSX Venture in the past 2 years but like to expand more to the Oil & Gas companies starting 2013. We expect to continue
to expand our Road Show Business in 2013 by continuing the same format, in addition to inviting Chinese listed companies over
to North America to meet with potential investors locally.



Design, Printing and Translation Services



NAI provides various IR/PR services to
its client companies such as the design and printing of promotional materials and financial reports.  NAI also provides translation
service to its client companies translating promotional materials and financial reports from English into Chinese.  NAI charges
$100 to $150 per page for its translation service.



Chinese Webpage Design, Hosting and
Maintenance



NAI offers assistance to client companies
to translate their English websites into Chinese.  These Chinese web pages are linked to the featured company section on
our www.nai500.com website.  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 scope of services as agreed with each client.



Online Marketing Service



This service aims to increase the publicity
and website traffic of our client 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, our “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 $800 to $1,500 per blast which reaches over 64,000 of our registered members.



- 26 -







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.  In 2010, we published the Resource Investment Guide 2010/2011, Vol. 8, selling for $29.95
each.  In 2011, we published the Resource Investment Guide Vol 9 - 2011/2012 selling for the same price again. For 2012,
we distributed the Resource Investment Guide through paid distribution channels, such as book stores, in both North America and
China, and we also intend to increase the price of our Resource Investment Guide to $39.95. We charge client companies ranged
at $500 to $2,000 each to be profiled in our publications.  Our publications are sold through our offices, online and in
selected bookstores. In 2013, the company will launch various investment guides with more sector focus: gold, uranium, specialty
metals and energy.



NAI Membership



NAI Membership program is a new feature
started in late 2012 as a result of growing interests from individual investors to gain more knowledge and attend more our private
investor meetings and luncheons. Each membership is sold at CDN$50 yearly to earn priority seating at our investor events, a copy
of our Resource investment Guide, and subscribe to our weekly newsletter “Resource Weekly”. This newsletter is a 6-8
page weekly summary of the market news and activities in the global resource market. It is written in English and translated then
into Chinese. Both versions were being distributed at the beginning of each week.



Future Product / Service Offering



We anticipate the business of NAI continues
to be driven by the demand of the investor activities from Greater China in the near future. Our products and services will likely
be built around serving better for companies that want to access Chinese capital. For instance, we are testing our advanced IR
services by arranging investor conference calls between the Chinese investor groups and the client companies from North America.



Revenue Model of the IR/PR Business



The IR/PR business is marketed via the
brand name of NAI 500.  Sources of revenue for the IR/PR business are from each of the current product / service offering
mentioned above.



Conference
(“Conference”) Business



Overview



Our conference business was originally
an integrated aspect of products and services provided by NAI under our IR/PR business model.  Because of the success of
our conference series in 2006, our conference business has grown to become an individual component of our business model.



NAI organizes and markets its conferences
in the name of Global Chinese Financial Forum (“GCFF”) in the North America and China and operates the investment
seminar and conference website www.gcff.ca. GCFF provides a networking environment for local private and public companies and
services providers in China.  Since 2008, GCFF has increased its focus and efforts on providing cross-border partnership
opportunities in the capital markets in North America and Greater China.  GCFF aims to be the largest series of bilingual
(Chinese/English) financial and business related functions connecting participants and client companies including individual potential
investors, public and private companies, service providers, and various industry associations.  Revenue generated through
GCFF is recorded under the revenue model of NAI 500. On December 2012, NAI successfully held its second Global Resource Investment
Conference in China at the city of Shenzhen held in partnership with a Canadian based event planning and investor relations company.
The strategy is to build GCFF series in different cities of Canada, US or Greater China to serve the local market. In 2012, NAI
has successfully hosted GCFF events in Vancouver, Toronto, Shenzhen, Shanghai, and Hong Kong; we intend to expand our presence
into more other cities in the future and increase the scale of the event.



- 27 -







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 respect 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, which took major spotlights in our previous conferences.



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 are expected to be held in Vancouver, Toronto, Shenzhen and Shanghai
in 2013.  We expect that GCFF will expand the number of events it will be holding and 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 2013, focusing on the natural resources, energy
and financial industries. We also plan to expand GCFF’s Retail Events with plans for increased services and marketing campaigns
for its conferences.



We updated the sponsorship structure of
the GCFF conferences in 2012. Currently, we are offering a premier, multi-event, annual sponsorship program called the Global
Corporate Sponsorship program. Current Global Corporate Sponsors include companies such as PwC, Fraser Milner Casgrain LLP, and
the Toronto Stock Exchange and TSX Venture Exchange, among others. In 2012, we changed the name of the Global Corporate Sponsorship
program to the Patron Sponsorship program and increased the price from $25,000 to $30,000. We also created a lower tier, multi-event,
annual sponsorship program called the Premier Sponsorship program with the price set at $15,000.



Revenue Model of the Conference
Business



We charge $3,000 for a standard exhibition
booth at GCFF retail level events.  With respect to the GCFF industrial, cross-border related events, individual delegate
pass is charged between $980 and $1680.  We also earn revenue from sponsorship. Conference specific sponsorship fees range
from $5,000 to $25,000.  More sponsorship packages will be implemented for industrial, cross-border related events 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 to 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.



- 28 -







FINANCIAL
CONTENT AND INFORMATION DISTRIBUTION BUSINESS



Overview



During fiscal 2010, we have restructured
our business model and focused our resources on the development as a financial content and information provider targeting potential
investors in the Greater China; in addition to building our network with various content and information distribution channels
in the region. Through the various products and services we offer, we have accumulated substantial and valuable corporate information
and financial data in our database, including companies publicly listed in North America, market news, investors’ tools
and commentaries etc. We translate such information and data into Chinese and collaborate with local Greater China distribution
channels to distribute and disseminate the contents and information. In March 2010, we have signed a Distributorship Agreement
with MegaHub Limited, a fast growing player in financial data distribution in the Greater China providing us with exposure to
various financial institutions and over 100 million active investors in the region. We are also actively engaging other joint
venture opportunities as part of our efforts in this new endeavor.



Current Product / Service Offering



We provide and license proprietary financial
content and data to clients electronically for publishing, distribution, and broadcasting. Our financial content includes North
American public company fundamental information, financial information, sector and industry analysis, stock information, and various
tools for assisting investors, all of which is produced in Chinese. Currently, our clients include online brokerages and online
financial information providers.



Future Product / Service Offering



We believe that with the growing number
of investors and financial institutions in China, the demand for North American financial information in the Greater China region
will increase in coming years. We intend to divert resources in our operations in Shanghai to develop relationships with potential
users of financial content.



Revenue Model of the Financial Content
and Information Distribution Business



We charge $2,000 to $4,000 per month for
clients of our financial content and information distribution business.



Revenue Breakdown



The breakdown of the revenue sources for
the years ended December 31, 2012, 2011 and 2010 is as follows.



|                                                         |  | Year ended December 31, |          
|-------------------------------------------------------- |  | ----------------------- | ---------
|Revenue Breakdown                                        |  | 2012                    |          
|GCFF Conference Business                                 |  | $                       | 513,715  
|Road Show Business                                       |  |                         | 153,461  
|Various IR/PR Service                                    |  |                         | 97,706   
|Chinese Webpage Design, Hosting and Maintenance          |  |                         | 137,911  
|Online Marketing Service                                 |  |                         | 73,135   
|Banner Advertising                                       |  |                         | 1,740    
|Publication Service                                      |  |                         | 11,478   
|CWN Membership and Online Service                        |  |                         | 2,844    
|Translation Service (Company Review, Company Newsletter) |  |                         | 9,464    
|Other Revenues                                           |  |                         | 242,184  
|Total                                                    |  | $                       | 1,243,638



The breakdown of the revenue sources by
geographic market for the years ended December 31, 2012, 2011 and 2010 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 |  | 2012                    |          
|Canada            |  |                         | 1,227,285
|China             |  |                         | 16,353   



- 29 -







Corporate
Strategy and Strategic Business Plan



Since fiscal 2011, global investment interest,
particularly from the Greater China region, has been focused on the natural resources sectors, including mining and oil and gas,
and our business model has reacted accordingly to capture the opportunities this global trend has brought to our Conferencing
and IR/PR business.  With regards to our Financial Content and Information business, our business model has been focused
on our development as a financial content and information provider targeting potential investors in the Greater China region. 
Through the various products and services we offer, we have accumulated substantial and valuable corporate information and financial
data in our database, including companies publicly listed in North America, market news, investors’ tools and commentaries
etc.  We translate such information and data into Chinese and collaborate with local Greater China distribution channels
to distribute and disseminate the contents and information.  In March 2010, we have signed a Distributorship Agreement with
MegaHub Limited, a fast growing player in financial data distribution in the Greater China providing us with exposure to various
financial institutions and over 100 million active investors in the region.  We are also actively engaging other joint venture
opportunities as part of our efforts in this new endeavor.



In addition, 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. 
Since fiscal 2010, with the growing interest in Asia and the Greater China region as a source of capital for North American companies,
our IR/PR business has seen growing potential in the Hong Kong and the Greater China markets, particularly with investors in the
natural resources industries.  Our Conference business, named the 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. Since fiscal
2011, our Conference business has also evolved to include a new brand within the GCFF, the Global Resource Investment Conference,
held specifically in China, in cities such as Shenzhen, for the purpose of capturing the increasing opportunities in the mining
and energy markets. 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, beyond our existing presence in major cities such as Shanghai, Shenzhen,
and Hong Kong, and then gradually expand into other cities in Asia, particularly Seoul and Taipei.  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.



As part of our expansion into Asia, CWN
China is spearheading our efforts in establishing partnerships with local Chinese organizations and companies. One of which is
our exclusive partnership agreement with Shanghai International Mining Exchange, which has mandated CWN to become the exclusive
representative of the Shanghai International Mining Exchange in North America. The partnership with the Shanghai International
Mining Exchange is to assist that group to find potential clients with North American based mining and energy companies and will
allow CWN to access a new layer of investors from China.  CWN China currently has three main purposes: (1) It helps building
the necessary channels to capture the financial information, conference and IR/PR businesses locally.  (2) It offers assistance
in the organization and coordination of regional marketing activities.  For instance, the Shenzhen Conference 2012 in December
2012 relied on the networks we gained through CWN China in order to bring in local Chinese governmental agencies, public and private
companies, industrial associations and other business professionals and experts in order to provide the attendees, speakers and
partners for this industrial level event. In addition, the Toronto Conference 2012 and Hong Kong road show in December 2012
have greatly benefitted from the coordination, marketing and business development work done by CWN China.  (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.



- 30 -







Internet
Content Partners



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



|Company
    Name        |  | Services
    Provided                                                                                                                                                                                                                                  
|----------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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.



Technology
Infrastructure



None of our application technologies are
proprietary to us, other than the NAI 500 iPhone App.  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.  We have also added a new server
for handling the increased traffic from visitors in Asia.



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 December 31, 2012, the number of Internet users in the Asia has reached over 1 billion. 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 2011:



|          |  | Population |               |  | Internet Users |  |             | Penetration |  | Users in Asia |  
|--------- |  | ---------- | ------------- |  | -------------- |  | ----------- | ----------- |  | ------------- | -
|China     |  |            | 1,343,239,923 |  |                |  | 538,000,000 |             |  | 40.1          | %
|Hong Kong |  |            | 7,153,519     |  |                |  | 5,329,372   |             |  | 74.5          | %
|Taiwan    |  |            | 23,234,936    |  |                |  | 17,530,000  |             |  | 75.4          | %



- 31 -







According to the 2011 census, Statistics
Canada reports that there are 339,945 individuals with Chinese, or a Chinese dialect, as a mother tongue in the Greater Vancouver
regional district, representing 15% of the city’s population.  According to a report published by Statistics Canada
on March 9, 2010, the population of ethnically Chinese persons in Vancouver will 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 $31.7 billion for the full year of 2011, up 22% from 2010, according to the Interactive Advertising Bureau (IAB). 
The report showed that as of April 2012, there have been three consecutive quarters of growth in the industry.



According to the Interactive Advertising
Bureau of Canada (IAB)’s 2011 Actual + 2012 Estimated Canadian Online Advertising Revenue Survey, Canadian online advertising
revenues topped $2.593 billion Canadian dollars in 2011.  It was estimated to reach $2.8 billion Canadian dollars in 2012.



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



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 investors, financial institutions and 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 sustained trend of Chinese outward
direct investments (“ODI”).  According to the Ministry of Commerce of the People’s Republic of China, non-financial
ODI was $77.22 billion in 2012, a 28.6 percent year-on-year increase.



Competition



The markets for 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.



- 32 -







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 and especially those with online trading capabilities.  We face competition from those that 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) and Interactive Data Corporation (NYSE: IDC).



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)
and Aspermont UK (minesandmoney.com) which focus on the mining sector.



Our Road Show business faces competition
from Academy Finance.



Our new financial content and information
business faces competition from Imeigu.com Corporation (www.imeigu.com).



| | C. | Organizational Structure
| | -- | ------------------------



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



NAI Interactive Ltd. (“NAI”)
was incorporated under theCompany Act (British Columbia) on November 13, 1998.  NAI is 100% owned by CWN.  NAI
has an office located at Suite 368 – 1199 West Pender Street, Vancouver, British Columbia, Canada V6E 2R1. NAI is our main
operation base delivering our business products and services.



ChineseWorldNet.com (Hong Kong) Ltd. (“CWN
HK”) was incorporated under the laws of Hong Kong on December 22, 1999.  CWN HK is wholly owned by CWN (1% owned
by Mr. Liu Chi Cheong, a director and a major shareholder of CWN, on CWN’s behalf).  Since 2011, CWN HK’s office
has been located at 1902 Cheung Kong Center, 2 Queens Road, Central, Hong Kong.  CWN HK 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 People’s Republic of China in April 2008.  CWN China was previously
70% owned by CWN HK and 30% owned by our joint venture partner Shanghai Compass Venture Capital Investment Company Limited (“Shanghai
Compass”).  In March 2011, we completed substantially all of the regulatory procedures and processes and invested
further 5,000,000 Renminbi to CWN China. CWN HK is required to contribute the additional registered capital of RMB 5,000,000 by
paying cash within two years from August 19, 2011. During the year ended December 31, 2011, CWN HK paid cash of $400,000 which
result of our financial interest increased from 70% to 80%. During the fiscal year 2012, CWN HK further
invested an amount of $200,000 to CWN China and the Company now has an effective ownership of 83.67% equity interests in CWN China.CWN China has an office located at #1003, Eton Place Tower B, 555 Pudong Ave., Shanghai, PRC 200120.  CWN China provides
us with the capabilities and resources to penetrate and expand particularly in the Greater China markets.  On September 8,
2009, CWN China funded and incorporated Weihai Consulting Investment Ltd. (“Weihai”) under the law of People’s
Republic of China for the purpose of carrying out certain business operations in Greater China.  Weihai has the same address
as CWN China.



- 33 -







We also have a 23.8% ownership interest
in CWN Capital Inc. (“CWN Capital”), a company incorporated under the laws of British Virgin Islands in August 2009,
while two companies controlled by two directors of our company own the rest of the ownership interests in CWN Capital.



As of December 31, 2012, there were eleven
employees in NAI and twelve 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 a size of 3,032 square feet with an address at Suite 368 – 1199
West Pender Street, Vancouver, British Columbia, Canada V6E 2R1, for a term of 5 years expiring on July 31, 2011.  We have
renewed a lease agreement for the Vancouver office for a term of 5 years expiring on July 31, 2016.We have a lease agreement for
the Shanghai office with a size of 1,500 square feetwith an address at #1003, Eton Place Tower B, 555 Pudong Ave., Shanghai,
PRC 200120, for a term of 1 year expiring on May 31, 2013.



As of December 31, 2012, we had leasehold
improvements of $nil (2011 – $nil), computer equipment and computer software of $7,500 (2011 – $10,606), office furniture
of $6,195 (2011 – $7,530), and vehicle of $9,820 (2011 – $18,383).



ITEM 4A.          UNRESOLVED STAFF COMMENTS



Not applicable.



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, 2012, 2011 and 2010 should be read in conjunction
with the consolidated financial statements and the related notes thereto provided at “Item 18 – Financial Statements”.



| | A. | Results of Operations
| | -- | ---------------------



We currently generate revenue from our
Portal, IR/PR and Conference businesses.  Our annual and quarterly operating results are primarily affected by the level
of our 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 our operating performance and the volatility of our share price.  To management’s knowledge,
there are no known economic, political, and inflation that have materially affected, directly or indirectly our operations.



YEARS ENDED
DECEMBER 31, 2012, 2011 AND 2010



For the year ended December 31, 2012 (“Fiscal
2012”), we recorded a net loss of $128,931 with a net loss of $85,088 attributable to common stockholders (($0.01) per
Common Share), compared to a net income of $138,040 of which $198,966 was attributable to common stockholders ($0.01 per Common
Share) for the year ended December 31, 2011 (“Fiscal 2011”).  The decrease of net income of $266,971 was
primarily due to the decrease revenue and the increase of salary, office expenses and travelling & entertainment expenditures. In
Fiscal 2012, we recorded revenue of $1,243,638 compared to $1,675,875 in Fiscal 2011.  The decrease of revenue of $432,237
was primarily the large drop of core business in North American because of bad global economic conditions in 2012.



For the year ended December 31, 2011 (“Fiscal
2011”), we recorded a net income of $138,040 with a net income of $198,966 attributable to common stockholders ($0.01
per Common Share), compared to a net income of $296,604 of which $188,746 was attributable to common stockholders (($0.02) per
Common Share) for the year ended December 31, 2010 (“Fiscal 2010”).  The decrease of net income of $158,564
was primarily due to the increase of salary expenditures, the recognition of deferred income tax expenses as well as loss in foreign
exchange transactions.  In Fiscal 2011, we recorded revenue of $1,675,875 compared to $1,733,329 in Fiscal 2010.  The
decrease of revenue of $57,454 was primarily due to the consolidation of the operation result for CWN Capital in Fiscal 2010.



- 34 -







Year Ended
December 31, 2012 Compared to Year Ended December 31, 2011



The
continued weakened western economy in 2012 has impacted the western capital markets as well as the mining exploration industry,
which has caused weakened market demand for the Company’s conference business and NAI’s various products.  We
generate revenue from our Portal, IR/PR and Conference businesses.  Our 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 weakened western capital markets and
the lack of capitalization of Canadian junior mining exploration companies, which is the main clientele of the Company’s
products, have had a negative impact on our businesses in Fiscal 2012 as shown in our decreased revenues, client base and conference
attendance and sales.  Sales of conference exhibition spaces have been notably impacted as potential clients faced tighter
budgets.  Our business development strategies in the Greater China region, while showing success in terms of the attraction
of varied and sizable investors to our events, have not significantly impacted our revenues as these investors are not a major
client base for our products.  Going forward, given China’s growing role in funding international mining projects and
our networks with Asian investors, we expect increasing interest for our products and services.  We expect our revenues to
recover in 2013 as our client base continues to recognize China as a major source for financing.



Revenues



GCFF Conference
Business



Revenue generated from GCFF Conference
Business was $513,715 in Fiscal 2012, compared to $683,378 in Fiscal 2011.  The decrease of revenue by $169,663 was due to
the decrease of presenting companies and exhibitors’ sponsorship in our conferences in North American and China during Fiscal
2012 as compared to Fiscal 2011.  We anticipate revenue from GCFF Conference Business will be greatly affected by the market
condition.



Road Show Business



Revenue generated from Road Show Business
was $153,461 in Fiscal 2012, compared to $151,699 in Fiscal 2011.  No significant difference in Fiscal 2012 as compared with
Fiscal 2011 as the number of companies that participated for the events were same. We anticipate revenue will increase in
2013 as the companies were willing to invest more for meeting more potential investors.



Various IR/PR
Service



Revenue from Various IR/PR Service was
$97,706 in Fiscal 2012, compared to $323,736 in Fiscal 2011.  The substantial decrease of $226,030 was mainly due to great
drop on client companies participated our IR/PR services as compared to Fiscal 2011.



Chinese Webpage
Design, Hosting and Maintenance



Revenue from Chinese Webpage Design, Hosting
and Maintenance was $137,911 in Fiscal 2012, compared to $156,709 in Fiscal 2011.  The decrease of $18,798 was primarily
due to less client companies interested in our Chinese micro-site development and hosting services as compared to Fiscal 2011.



- 35 -







Online Marketing
Service



Revenue from Online Marketing Service
was $73,135 in Fiscal 2012, compared to $118,950 in Fiscal 2011.  The significant decrease of $45,815 was primarily due to
decrease of client companies subscribed our online data providing services and E-mail blast services in Fiscal 2011 as compared
to Fiscal 2011.



Banner Advertising



Revenue we generated from Banner Advertising
greatly reduced to $1,740 in Fiscal 2012 from $30,552 in Fiscal 2011.  This was primarily due to the significant decrease
in client companies’ frequency of placing advertisements on our websites.



Publication Service



Revenue we generated from Publication
Service decreased by $19,576 from $31,054 in Fiscal 2011 to $11,478 in Fiscal 2012.  This was primarily due to the decrease
in number of sponsorship of our client companies in Fiscal 2012 because of the weakened financial market situation as compared
to a year ago.



CWN Membership
and Online Service



Revenue we generated from CWN Membership
and Online Service decreased $443 from $3,287 in Fiscal 2011 to $2,844 in Fiscal 2012.  This was primarily due to further
decrease in the number of Premium Subscribers of our websites as compared to a year ago.



Translation Service



Translation Service was $9,464 in fiscal
2012, compared to $11,721 in fiscal 2011. The decrease of $2,257 was due to less translation projects as compared to a year
ago.



Other Revenues



Other Revenues was $242,184 in fiscal
2012, compared to $164,789 in fiscal 2011.  The large increase of $77,395 was mainly due to the increase of consulting fee
revenue and corporate office & secretarial service fee revenue as compared to a year ago.



Expenses



For fiscal 2012, we recorded operating
expenses of $1,613,282 compared to operating expenses of $1,678,976 for fiscal 2011.  The decrease of operating expenses
of $65,694 was primarily due to decrease of expenditures on consulting fee, stock based compensation, and seminar and conference
related expenses in Fiscal 2012 as compared to fiscal 2011. As we focus on expanding and diversifying our core revenue generating
products and services in 2013, we expect our operating expenditures, particularly in relation to salaries and benefits and travel
and entertainment and other related expenses, will increase accordingly to accommodate our growth strategies.



Advertising and
Promotion



Advertising and promotion expenses were
$212,930 in fiscal 2012, compared to $271,164 in Fiscal 2011.  The substantial decrease of $58,234 was primarily due to the
resources that were allocated in operating our conferencing events were relatively reduced in Fiscal 2012 as compared with Fiscal
2011. The size of events greatly contracted and the expenses, such as hotel rentals and advertisements, were diminished accordingly
in Fiscal 2012.



Audit and Legal



Audit and legal expenses were $84,354
in fiscal 2012, compared to $63,962 in fiscal 2011.  The increase of $20,392 was primarily due to the increase in legal fees
to review our filing documents in Fiscal 2012 as compared to fiscal 2011. The audit fee also increased in Fiscal 2012. The Company
also incurred expenses on filing of the XBRL required by the SEC starting from 2012.



- 36 -







Consulting Fees



Consulting fees expenses were $90,000
in Fiscal 2012, compared to $104,000 in fiscal 2011.  The decrease of $14,000 was primarily due to consultants’ service
provided was terminated in fiscal 2012.



Depreciation



Depreciation expenses were $15,216 in
Fiscal 2012, compared to $15,918 in fiscal 2011.  No significant difference in Fiscal 2012 as compared with Fiscal 2011.



Directors’
Remuneration



Directors’ remuneration expenses
were $12,000 in Fiscal 2012, which is the same as that in 2011.  There is no change on the directors’ fees paid to
each director during Fiscal 2012 and 2011.



Office and Miscellaneous



Office and miscellaneous expenses were
$82,316 in Fiscal 2012, compared to $74,077 in Fiscal 2011.  The increase of $8,239 was primarily due to increases on expenditures
of web site and server maintenance in Fiscal 2012.



Printing



Printing expenses were $17,579 in Fiscal
2012, compared to $26,245 in Fiscal 2011.  The decrease of $8,666 was primarily due to less promotional material being printed
for advertising and conferences in Fiscal 2012 as compared to Fiscal 2011. The number of mining investment guides printed in Fiscal
2012 was also reduced by 30% as compared to Fiscal 2011.



Provision for
bad and doubtful debts



Provision for bad and doubtful debts was
a credit of $30,472 in Fiscal 2012 as compared to expenses of $55,917 in Fiscal 2011. The decrease of $86,389 was mainly due to
the unexpected collection from a customer that provision for bad doubtful debts was partially set up in Fiscal 2011. Also, there
was no additional provision for bad and doubtful debts in Fiscal 2012.



Rent and Operating



Rent and operating expenses were $139,509
in Fiscal 2012, compared to $135,049 in Fiscal 2011. There is no significant change on the rent in Fiscal 2012, as compared
to Fiscal 2011.



Salaries and
Benefits



Salaries and benefits expenses were $695,639
in Fiscal 2012, compared to $635,260 in Fiscal 2011.  The increase of $60,379 was primarily due to the salary increment
of employees during Fiscal 2012.



Seminar Operating
Expense



Seminar operating expenses were $620 in
Fiscal 2012, compared to $763 in Fiscal 2011.  There is no significant change on the rent in Fiscal 2012, as compared
to Fiscal 2011.



Stock-based Compensation



Stock-based compensation expenses decreased
$80,638 from $140,042 in Fiscal 2011 to $59,404 in Fiscal 2012. There is no new stock incentive options granted during Fiscal
2012.



- 37 -







Telephone



Telephone expenses were $18,807 in Fiscal
2012, compared to $27,339 in Fiscal 2011.  The substantial decrease of $8,532 was primarily due to migration of internet
provider that charged at a cheaper rate in Fiscal 2012.



Travel and Entertainment



Travel and entertainment expenses were
$215,379 in Fiscal 2012, compared to $117,240 in Fiscal 2011.  The substantial increase of $98,139 was primarily due
to more travelling allowances spent on keynote speakers for our conferences in 2012 for the purpose of attracting more attendees
and investors. Also, management and business development teams travelled more often to Asia and met a greater number of potential
clients in Fiscal 2012 as compared to Fiscal 2011.



Other Income
(Loss)



We recorded other income of $289,997 in
Fiscal 2012 and $195,727 in Fiscal 2011.  The substantial increase of other income of $94,270 was primarily due to gain
of $35,294 on foreign exchange in Fiscal 2012, as compared with loss of $28,348 in Fiscal 2011. In Fiscal 2012, we recorded
a profit on short-term investment of $50,193, as compared loss of $5,995 in Fiscal 2011.



Year Ended
December 31, 2011 Compared to Year Ended December 31, 2010



The continued weakened western economy
has caused increased demand for access to Chinese sources of funding for our targeted client companies as well as increased demand
for information by individual investors was the primary factor of our continued increases of overall revenue.  We generate
revenue from our Portal, IR/PR and Conference businesses.  Our 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



China’s emergence as a global economic
power and the continued weakness of the North American capital markets have had a positive impact on our businesses in Fiscal
2010 and Fiscal 2011 as shown in our increased revenues, client base and conference attendance and sales.  As our business
development strategies in the Greater China region continued to mature, we have significantly increased the revenues from our
GCFF Conference Business and all other aspects of our businesses showed positive growth in sales revenue, other than the CWN Membership
and Online Service.  Going forward, with our established networks of partners and sponsors in both North America and China
and our continued successful implementation of our various strategies and models, we see continued growth in our overall revenue.



Revenues



GCFF Conference
Business



Revenue generated from GCFF Conference
Business was $683,378 in Fiscal 2011, compared to $312,781 in Fiscal 2010.  The increase of $370,597 was due to the increase
of presenting companies and exhibitors’ sponsorship in our conferences in China during Fiscal 2011 as compared to Fiscal
2010.  We anticipate revenue from GCFF Conference Business will be greatly affected by the market



Road Show Business



Revenue generated from Road Show Business
was $151,699 in Fiscal 2011, compared to $232,977 in Fiscal 2010.  The significant decrease of $81,278 was due to the decrease
of companies that participated for the events held in 2011.  We expect to continue our focus in and expand on this service
offering in 2012 as we see positive feedback and results.



- 38 -







Various IR/PR
Service



Revenue from Various IR/PR Service was
$323,736 in Fiscal 2011, compared to $207,725 in Fiscal 2010.  The increase of $116,011 was primarily due to more client
companies participated our IR/PR services as compared to Fiscal 2010.



Chinese Webpage
Design, Hosting and Maintenance



Revenue from Chinese Webpage Design, Hosting
and Maintenance was $156,709 in Fiscal 2011, compared to $130,032 in Fiscal 2010.  The increase of $26,677 was primarily
due to more client companies interested in our Chinese micro-site development and hosting services as compared to Fiscal 2010.



Online Marketing
Service



Revenue from Online Marketing Service
was $118,950 in Fiscal 2011, compared to $85,811 in Fiscal 2010.  The increase of $33,139 was primarily due to increases
on price of our online data providing services in 2011.



Banner Advertising



Revenue we generated from Banner Advertising
decreased $11,770 from $42,322 in Fiscal 2010 to $30,552 in Fiscal 2011.  This was primarily due to the decrease in client
companies’ frequency of placing advertisements on our websites.



Publication Service



Revenue we generated from Publication
Service increased $9,955 from $21,099 in Fiscal 2010 to $31,054 in Fiscal 2011.  This was primarily due to the increase in
sponsorship of our client companies in Fiscal 2011.



CWN Membership
and Online Service



Revenue we generated from CWN Membership
and Online Service decreased $1,579 from $4,866 in Fiscal 2010 to $3,287 in Fiscal 2011.  This was primarily due to further
decrease in the number of Premium Subscribers of our websites as compared to a year ago.



Translation Service



Translation Service was $11,721 in fiscal
2011, compared to $12,633 in fiscal 2010.  There is no major change of revenue on this non-core business in Fiscal 2011 as
compared with Fiscal 2010.



Other Revenues



Other Revenues was $164,789 in fiscal
2011, compared to $683,083 in fiscal 2010.  The significant decrease of $518,294 was mainly due to revenue recognition from
consolidation of CWN Capital with the Company in 2010.



Expenses



For fiscal 2011, we recorded operating
expenses of $1,678,976 compared to operating expenses of $1,602,286 for fiscal 2010.  The increase of operating expenses
of $76,690 was primarily due to increase of expenditures on salary, provision for bad and doubtful debts and advertising and promotion
in Fiscal 2011 as compared to fiscal 2009. As we focus on expanding and diversifying our core revenue generating products
and services in 2012, we expect our operating expenditures, particularly in relation to salaries and benefits and seminar and
conference related expenses, will increase accordingly to accommodate our growth strategies.



- 39 -















Advertising and
Promotion



Advertising and promotion expenses were
$271,164 in fiscal 2011, compared to $217,519 in Fiscal 2010.  The increase of $53,645 was primarily due to more resources
allocated in advertising and promotion during Fiscal 2011 for GCFF in China as compared to fiscal 2010.



Audit and Legal



Audit and legal expenses were $63,963
in fiscal 2011, compared to $67,322 in fiscal 2010.  The decrease of $3,360 was primarily due to decreased legal expenses
in Fiscal 2011, as compared to fiscal 2010.



Consulting Fees



Consulting fees expenses were $104,000
in Fiscal 2011, compared to $215,918 in fiscal 2010.  The significant drop of $111,918 was primarily due to consultants’
services recorded from consolidation of operation results under CWN Capital during fiscal 2010. There are no such fees recorded
in Fiscal 2011.



Depreciation



Depreciation expenses were $15,918 in
Fiscal 2011, compared to $26,620 in fiscal 2010.  There is no new property or equipment purchased during Fiscal 2011.



Directors’
Remuneration



Directors’ remuneration expenses
were $12,000 in Fiscal 2011, which is the same as that in 2010.  There is no change on the directors’ fees paid to
each director during Fiscal 2011 and 2010.



Accretion on
convertible debenture



Accretion on convertible debenture expenses
were $nil in fiscal 2011, as compared to a credit balance of $8,772 in fiscal 2010.  All convertible debentures were converted
in the early in February 2010.



Interest Expense
on Long Term Debt



Interest expense on long term debt was
$Nil in Fiscal 2011, compared to $2,500 in Fiscal 2010.  The decrease of $2,500 was due to the maturity of the convertible
debentures early in the year in February 2010. No interest expense was recorded in Fiscal 2011.



Office and Miscellaneous



Office and miscellaneous expenses were
$74,077 in Fiscal 2011, compared to $60,568 in Fiscal 2010.  The increase of $13,509 was primarily due to increases on expenditures
of translation for China Conference 2011.



Printing



Printing expenses were $26,245 in Fiscal
2011, compared to $11,533 in Fiscal 2010.  The increase of $14,712 was primarily due to more resources allocated in printing
for promotion in conferences during Fiscal 2011 as compared to Fiscal 2010.



Provision for
bad and doubtful debts



Provision for bad and doubtful debts expenses
were $55,917 in Fiscal 2011, compared to $16,242 in Fiscal 2010.  The increase of $39,675 was due to the provision of bad
debt allowance for one client in Fiscal 2011.



- 40 -







Rent and Operating



Rent and operating expenses were $135,049
in Fiscal 2011, compared to $130,311 in Fiscal 2010. There is no significant change on the rent in Fiscal 2011, as compared
to Fiscal 2010.



Salaries and
Benefits



Salaries and benefits expenses were $635,260
in Fiscal 2011, compared to $514,508 in Fiscal 2010.  The increase of $120,752 was primarily due to the increases of
number of employees hired and salary increment during Fiscal 2011 and increase on premium of group benefits during 2011.



Seminar Operating
Expense



Seminar operating expenses were $763 in
Fiscal 2011, compared to $11,178 in Fiscal 2010.  The significant decrease of $10,415 was primarily due to reallocation
of most expenses to the account of advertising and promotion in 2011.



Stock-based Compensation



Stock-based compensation expenses decreased
$11,438 from $151,480 in Fiscal 2010 to $140,042 in Fiscal 2011. There is no new stock incentive options granted during Fiscal
2011.



Telephone



Telephone expenses were $27,339 in Fiscal
2011, compared to $28,404 in Fiscal 2010.  Telephone expenses remained relatively at the same level over the 2 years.



Travel and Entertainment



Travel and entertainment expenses were
$117,241 in Fiscal 2011, compared to $144,955 in Fiscal 2010.  The decrease of $27,714 was primarily due to significant
decrease of travel expenses claimed by key management in Fiscal 2011, as compared in Fiscal 2010.



Other Income
(Loss)



We recorded other income of $195,727 in
Fiscal 2011 and $58,126 in Fiscal 2010.  The increase of other income of $137,601 was primarily due to gain on equity
pick up from CWN Capital of $192,399 in Fiscal 2011, as compared with $13,897 in Fiscal 2010 and loss of $128,356 on ownership
dilution of CWN Capital in 2010.   For Fiscal 2011, we recorded interest and sundry income of $37,671, as compared $30,274
in Fiscal 2010.  We recorded foreign exchange loss of $28,348 in Fiscal 2011 while the company recorded a profit of
$100,996 in Fiscal 2010.



Currency



We maintain our accounting records in
US dollars.  The functional currency of NAI is Canadian dollar, of CWN HK and CWN Capital is Hong Kong dollar, and of
CWN China and Weihai is Chinese Renminbi, 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 in the
shareholders’ equity (deficiency).



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 a country that experienced
a substantial increase in inflation.  As of December 31, 2012, the monthly average rate of inflation in Canada was 1.52%.



- 41 -







| | B. | Liquidity and Capital Resources
| | -- | -------------------------------



As of December 31, 2012, we had cash and
cash equivalents of $805,874 (December 31, 2011 – $1,771,661). We had a working capital of $1,628,829 at December 31, 2012,
compared to $1,752,173 at December 31, 2011.  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 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 a 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.



| | F. | Tabular Disclosure of Contractual Obligations
| | -- | ---------------------------------------------



|                                                    |  | Payments due by period ($) |        
|--------------------------------------------------- |  | -------------------------- | -------
|Contractual Obligations
    as of December 31, 2012 |  | Total                      |        
|Long-Term Debt Obligations                          |  |                            | —      
|Capital (Finance) Lease Obligations                 |  |                            | —      
|Operating Lease Obligations                         |  |                            | 406,471
|Purchase Obligations                                |  |                            | —      
|Other Long-Term Liabilities                         |  |                            | —      
|Total                                               |  |                            | 406,471



| | Item 6. | DIRECTORS,
                                                                                                                                SENIOR
                                                                                                                                MANAGEMENT
                                                                                                                                AND
                                                                                                                                EMPLOYEES
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | A. | Directors and Senior Management
| | -- | -------------------------------



The following table sets forth all directors
and executive officers of CWN.  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 CWN                  
|----------------- |  | --- |  | ----------------- |  | -------------------------------------------------------
|Joe K.F. Tai      |  | 49  |  | January 12, 2000  |  | Director, President and Chief Executive Officer        
|Chi Cheong Liu(1) |  | 53  |  | January 12, 2000  |  | Director and Treasurer                                 
|Chi Kong Liu(1)   |  | 52  |  | January 12, 2000  |  | Director                                               
|Andy S.W. Lam     |  | 63  |  | March 8, 2004     |  | Director                                               
|Kelvin Szeto(2)   |  | 52  |  | June 1, 2006      |  | Chief Financial Officer and Chief Operating Officer    
|Gilbert Chan(3)   |  | 37  |  | April 1, 2008     |  | Senior Vice President, Marketing and Investor Relations
|Terry Wong        |  | 30  |  | January 1, 2012   |  | Financial Expert                                       





| | (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 appointed permanently to the positions
                                                           on June 1, 2006.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Gilbert Chan was appointed as acting Secretary
                                                           effective April 1, 2008 until June 1, 2011.  Gilbert Chan
                                                           was also appointed as Senior Vice President, Marketing and Investor
                                                           Relations effective April 1, 2008.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





- 42 -







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



Joe K.F. Tai



Mr. Tai has been a director, President
and Chief Executive Officer of CWN since January 12, 2000.  Mr. Tai is an entrepreneur with over 20 years experience
in investment, finance, and the capital markets of Canada, the US, and China. Mr. Tai has worked closely with companies and professionals
within the finance, mining, energy, and life sciences industries and has built a strong network throughout North America and Asia.
He has extensive expertise in facilitating cross-border transactions and strategic partnerships, building cross-cultural business
relationships and reaching Asian industrial groups, high net-worth investors and financial institutions. Mr. Tai serves as director
for numerous publicly listed companies, including Medifocus Inc. and China Goldcorp Ltd., both of which are listed on the TSX
Venture Exchange. In addition, Mr. Tai is the founder, director, president and chief executive officer of ChineseWorldNet.com
Inc., a US listed company. Mr. Tai also serves as executive director for Goldpac Investments Ltd. and as a managing director for
CWN Capital Inc., a Hong Kong based capital market consultation firm specializing in cross-border transactions.



Chi Cheong Liu



Mr. Liu has been a director and treasurer
of CWN since January 2000.  Mr. Liu has been President of Chigo Engineering Company, a security engineering firm, for
the last 18 years.  Mr. Liu is a venture capitalist specializing in biotechnology and technology investments.



Chi Kong Liu



Mr. Liu has been a director of CWN since
January 2000.  Mr. Liu is 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 CWN HK.  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 is also a director and Secretary of NAI
since November 2001 and was President of NAI from November 2001 to December 31, 2010.  Prior to his appointment as President
of NAI, Mr. Szeto was a director, Secretary and Vice President, Operation since January 2000.  Mr. Szeto was involved
in the 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 CDN$30 million.



- 43 -







Gilbert Chan



Mr. Chan was appointed as Senior Vice
President, Marketing and Investor Relations of CWN in April 2008.  Mr. Chan has also served as President of NAI since
January 1, 2011 and was Vice President, Marketing and Project Development of NAI from June 2000 to December 31, 2010. Mr. Chan’s
expertise is in the field of mining, resources and China-related industries and he has established a broad network and relationships
within the financial and investment community.  Mr. Chan holds a Bachelor Degree in Applied Sciences majoring in Metals
& Materials Engineering from the University of British Columbia.



Terry Wong



Ms. Wong was appointed as a Financial
Expert in January 2012.  Ms. Wong’s expertise is in the field of accounting and finance, and has developed expertise
in business valuation, public company accounting practices, financial strategic planning through past roles as financial controller
and senior accountant at a publicly-traded, natural resources focused investment companies. Ms. Wong is a Certified Management
Accountant since 2008, holds a Bachelor of Commerce from the University of British Columbia, and is enrolled in the advanced level
Chartered Business Valuator Program.



| | 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
2012.





|                                                                                                         |  | Annual Compensation in Fiscal 2012 |       
|-------------------------------------------------------------------------------------------------------- |  | ---------------------------------- | ------
|Name and Respective Office and Position Held                                                             |  | Salary 
    ($)                    |       
|Joe K.F. Tai(1) 
Director, President and Chief Executive Officer                                         |  |                                    | Nil   
|Chi Cheong Liu(2) 
Director and Treasurer                                                                |  |                                    | Nil   
|Chi Kong Liu(3)
                                 Director                                                |  |                                    | Nil   
|Andy S.W. Lam(4) 
Director                                                                               |  |                                    | Nil   
|Kelvin Szeto 
Chief Operating Officer and Chief Financial Officer                                        |  |                                    | 56,475
|Gilbert Chan 
Senior Vice President, Sales and Marketing 
(President, Director and Secretary of
    NAI) |  |                                    | 54,248





| | (1) | Mr. Tai is a shareholder and does
                                                           not receive salary.  We paid Mr. Tai director fee of $3,000
                                                           per year in 2012, $3,000 per year in 2011, and $3,000 per year in 2010.  We
                                                           had consulting agreements with Goldpac Investments Ltd. and paid consulting
                                                           fees of $90,000 per year in 2012 and $80,000 per year in 2011 and $72,000
                                                           in 2010.  Mr. Tai is Managing Director of Goldpac Investments
                                                           Ltd.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Mr. Liu is a shareholder and does
                                                           not receive salary.  We paid Mr. Liu director fee of $3,000
                                                           per year in 2012, 2011 and 2010.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (3) | Mr. Liu is a shareholder and does
                                                           not receive salary.  We paid Mr. Liu director fee of $3,000
                                                           per year in 2012, $3,000 per year in 2011, and $3,000 per year in 2010.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Mr. Lam is a director and does
                                                           not receive salary. We paid Mr. Lam director fee of $3,000 per
                                                           year in 2012 and $3,000 per year in 2011, and $3,000 per year in 2010.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





- 44 -







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 our company since January 12, 2000, other than Mr. Andy S.W. Lam, who was appointed to the board on March 8, 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 with Goldpac Investments Ltd. was renewed in 2012 and expires on December 31, 2012 and our consulting agreement with
Silver Lake Investment Partners, Ltd. expired on December 31, 2011 and was not renewed.



We do not have an audit committee or remuneration
committee, but our entire board of directors acts in such capacities.



| | D. | Employees
| | -- | ---------



As of December 31, 2012, there were eleven
employees in NAI and twelve employees in CWN China.



|Employee Breakdown     |  | NAI (Vancouver) |    |  | CWN China (Shanghai) | 
|---------------------- |  | --------------- | -- |  | -------------------- | 
|Management             |  |                 | 1  |  |                      | 
|Business Development   |  |                 | 4  |  |                      | 
|Editorial              |  |                 | 0  |  |                      | 
|Finance and Accounting |  |                 | 1  |  |                      | 
|IT                     |  |                 | 0  |  |                      | 
|Sales/Marketing        |  |                 | 5  |  |                      | 
|Total                  |  |                 | 11 |  |                      | 



| | E. | Share Ownership of Directors and Senior Management
| | -- | --------------------------------------------------



The following table sets forth certain
information regarding the ownership of our Common Shares by each of the directors and members of senior management as of March
31, 2013.  The percentage owned is based on 10,950,000 shares outstanding as at March 31, 2013.



- 45 -







|Name and Respective Office
    and Position Held                                                        |  | Share Ownership |           |  | % Share Ownership | 
|------------------------------------------------------------------------------------------------------- |  | --------------- | --------- |  | ----------------- | 
|Joe K.F. Tai(1)(2) Director, President and Chief Executive Officer                                      |  |                 | 250,000   |  |                   | 
|Chi Cheong Liu(3)(4) Director and Treasurer                                                             |  |                 | 1,730,000 |  |                   | 
|Chi Kong Liu(5) Director                                                                                |  |                 | 580,000   |  |                   | 
|Andy S.W. Lam(6) Director                                                                               |  |                 | —         |  |                   | 
|Kelvin Szeto(7) Chief Operating Officer and Chief Financial Officer                                     |  |                 | 150,000   |  |                   | 
|Gilbert Chan(8) Senior Vice President, Sales and Marketing President, Director and
    Secretary of NAI |  |                 | 50,000    |  |                   | 
|Terry Wong Financial Expert                                                                             |  |                 | —         |  |                   | 
|Total                                                                                                   |  |                 | 2,760,000 |  |                   | 



| | (1) | Ms. Tim Yee Lau, a related party to
                                                           Mr. Tai, owned 112,500 Common Shares of our company. Goldpac Investments
                                                           Ltd., for which Mr. Tai is Managing Director, owned 200,000 Common
                                                           Shares of our company.  Total direct and indirect share ownership
                                                           was 562,500 Common Shares or 5.14% of the total Common Shares of our
                                                           company.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Mr. Tai owns 205,000 stock options
                                                           exercisable at an exercise price of $1.08 per share until October 11,
                                                           2012 and 300,000 stock options exercisable at an exercise price of
                                                           $0.60 per share until June 10, 2015.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Goldpac Investment Partners Ltd., for
                                                           which Mr. Liu is principal, owned 1,166,667 Common Shares of our company.  Total
                                                           direct and indirect share ownership was 2,896,667 Common Shares or
                                                           26.45% of the total Common Shares of our company.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Mr. Liu owns 25,000 stock options exercisable
                                                           at an exercise price of $1.08 per share until October 11, 2012 and
                                                           100,000 stock options exercisable at an exercise price of $0.60 per
                                                           share until June 10, 2015.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Mr. Liu owns 25,000 stock options exercisable
                                                           at an exercise price of $1.08 per share until October 11, 2012 and
                                                           100,000 stock options exercisable at an exercise price of $0.60 per
                                                           share until June 10, 2015.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Mr. Lam owns 25,000 stock options exercisable
                                                           at an exercise price of $1.08 per share until October 11, 2012 and
                                                           100,000 stock options exercisable at an exercise price of $0.60 per
                                                           share until June 10, 2015.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (7) | Mr. Szeto owns 100,000 stock options
                                                           exercisable at an exercise price of $1.08 per share until October 11,
                                                           2012 and 180,000 stock options exercisable at an exercise price of
                                                           $0.60 per share until June 10, 2015.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (8) | Mr. Chan owns 50,000 stock options
                                                           exercisable at an exercise price of $1.08 per share until October 11,
                                                           2012 and 140,000 stock options exercisable at an exercise price of
                                                           $0.60 per share until June 10, 2015.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Stock Options



Our board of directors (the “Board”)
adopted the 2007 Stock Option Plan (the “2007 Plan”) on October 11, 2007, under which we issued incentive stocks
options with the right to purchase up to 550,000 Common Shares to our directors, officers, and employees.  All of these
options granted on October 11, 2007 have an exercise price of $1.08 per share and a vesting period of 1 to 5 years, and a term
of 5 years expiring on October 11, 2012.  We had not grant options to individual consultants or advisors.



The Board further adopted the 2010 Stock
Option Plan (the “2010 Plan”) on June 10, 2010, under which we issued incentive stocks options with the right
to purchase up to 1,090,000 Common Shares to our directors, officers, and employees.  All of these options granted on
June 10, 2010 have an exercise price of $0.60 per share and a vesting period of 1 to 5 years, and a term of 5 years expiring on
June 10, 2015.  We had not grant options to individual consultants or advisors.



- 46 -







As at December 31, 2012, we had 1,040,000
options issued and outstanding, of which 419,000 optionswere fully vested.



| | Item 7. | MAJOR
                                                                                                                                SHAREHOLDERS
                                                                                                                                AND
                                                                                                                                RELATED
                                                                                                                                PARTY
                                                                                                                                TRANSACTIONS
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | A. | Major Shareholders
| | -- | ------------------



To the knowledge of our directors and
senior officers, 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 as at
March 31, 2013.  The percentage owned is based on 10,950,000 shares outstanding as at March 31, 2013.



|Name of Shareholder          |  | Number of Common Shares |           |  | Percentage of Shares
    Beneficially Owned | 
|---------------------------- |  | ----------------------- | --------- |  | ------------------------------------------- | 
|Chi Cheong Liu(1)            |  |                         | 2,896,667 |  |                                             | 
|Vcanland China Holdings Ltd. |  |                         | 1,500,000 |  |                                             | 
|Datacom Venture Limited      |  |                         | 600,000   |  |                                             | 
|Chi Kong Liu                 |  |                         | 580,000   |  |                                             | 
|Monica Law                   |  |                         | 570,000   |  |                                             | 
|Joe K.F. Tai (2)             |  |                         | 562,500   |  |                                             | 
|Total                        |  |                         | 6,709,167 |  |                                             | 



| | (1) | Mr. Liu owns 1,730,000 Common
                                                                Shares.  Goldpac Investment Partners Ltd., for which
                                                                Mr. Liu is principal, owned 1,166,667 Common Shares.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Mr. Tai owns 250,000 Common Shares.  Ms.
                                                                Tim Yee Lau, a related party to Mr. Tai, owns 112,500 Common Shares.  Goldpac
                                                                Investments Ltd., for which Mr. Tai is Managing Director, owns
                                                                200,000 Common Shares.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As at March 31, 2013, there were five
registered shareholders in the U.S. with holdings of 2,170,833 Common Shares representing 19.82% of the total issued and outstanding
Common Shares.



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 us, 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
| | -- | --------------------------



In 2012, the Company incurred $90,000
[2011 - $104,000 and 2010 - $96,000] in consulting fees to two companies related to a director of the Company, of which $22,500
was outstanding balance as at December 31, 2012.



During Fiscal 2012, the Company paid $110,723
[2011 - $103,651 and 2010 - $124,951] salary to the senior officers of the Company.



As at December 31, 2012, the Company has
non-interest bearing advances from a stockholder and director of $9,500 [2011 - $31,613].



Included in accounts payable, $74,836
[2011 - $13,287] was payable to directors and senior officers of the Company.



Included in accounts receivable, $Nil
[2011 - $387] was receivable from senior officers of the Company.



- 47 -







As at December 31, 2011, the Company provided
an advance of $2,574 [2010 - $2,572] to a director as a prepaid expenses.



During Fiscal 2012, the Company incurred
$12,000 [2011 - $12,000 and 2010 - $12,000] in director fees, of which $12,000 [2011 - $Nil] was outstanding as at December 31,
2012.



During Fiscal 2012, the Company provided
service for a total of $270,810 [2011 - $202,280 and 2010 - $139,091] to CWN Capital, of which $270,810 [2010 - $139,091] was
outstanding and included in accounts receivable as at December 31, 2012. The balance of receivable from a related party in the
amount of $215,644 [2011 - $43,946] represents costs incurred on behalf of CWN Capital by the Company.



In 2012, the Company provided service
for a total of $14,043 [2011and 2010 - $Nil] to CWN Mining Acquisition, a company has significantly influenced by CEO of the Company.



| | 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, 2012, 2011 and 2010, including our consolidated
balance sheets as of December 31, 2012 and 2011, and the consolidated statements of shareholders’ equity, operations and
cash flows for the years ended December 31, 2012, 2011 and 2010, and the related notes to those statements and the auditors’
reports thereon.  Reference is made to these documents commencing at Page 60 of this Report.



| | B. | Significant Changes
| | -- | -------------------



There have been no significant changes
in our businesses in the period from December 31, 2012 until the date of this document.



| | Item 9. | THE
                                                                                                                                OFFER
                                                                                                                                AND
                                                                                                                                LISTING
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | A. | Offer and Listing Details
| | -- | -------------------------



Our common shares 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 market 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.



- 48 -









|Periods                                                   |  | High |      |  | Low |  
|--------------------------------------------------------- |  | ---- | ---- |  | --- | -
|Fiscal 2012                                               |  | $    | 1.34 |  |     | $
|Fiscal 2011                                               |  | $    | 1.40 |  |     | $
|Fiscal 2010                                               |  | $    | 0.75 |  |     | $
|Fiscal 2009                                               |  | $    | 0.25 |  |     | $
|Fiscal 2008                                               |  | $    | 1.30 |  |     | $
|Fiscal 2007                                               |  | $    | 1.50 |  |     | $
|                                                          |  |      |      |  |     |  
|Fiscal 2013                                               |  |      |      |  |     |  
|1Q-2013                                                   |  | $    | 0.55 |  |     | $
|                                                          |  |      |      |  |     |  
|Fiscal 2012                                               |  |      |      |  |     |  
|4Q-2012                                                   |  | $    | 1.16 |  |     | $
|3Q-2012                                                   |  | $    | 1.34 |  |     | $
|2Q-2012(1)                                                |  | $    | N/A  |  |     | $
|1Q-2012(1)                                                |  | $    | N/A  |  |     | $
|                                                          |  |      |      |  |     |  
|Fiscal 2011                                               |  |      |      |  |     |  
|4Q-2011                                                   |  | $    | N/A  |  |     | $
|3Q-2011                                                   |  | $    | 1.34 |  |     | $
|2Q-2011                                                   |  | $    | 1.40 |  |     | $
|1Q-2011                                                   |  | $    | 0.55 |  |     | $
|                                                          |  |      |      |  |     |  
|Most Recent 6 months from October 2012 through March 2013 |  |      |      |  |     |  
|March 2013                                                |  | $    | 0.25 |  |     | $
|February 2013                                             |  | $    | 0.40 |  |     | $
|January 2013                                              |  | $    | 0.55 |  |     | $
|December 2012                                             |  | $    | 1.16 |  |     | $
|November 2012(1)                                          |  | $    | N/A  |  |     | $
|October 2012(1)                                           |  | $    | N/A  |  |     | $





| | (1) | There were no trades of our common
                                                                shares during the period from January to June 2012 and August
                                                                to November 2012.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 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 operated by the Financial Industry Regulatory Authority 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.



| | Item10. | 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.



- 49 -







| | 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
us during the last two years, other than those contracts entered into in the ordinary course of business, are as follows:



| | · | On
                                                                                                             April 20, 2010, we
                                                                                                             renewed 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 1 year expiring
                                                                                                             on June 8, 2013.  The
                                                                                                             monthly lease payment
                                                                                                             is RMB$22,467.88
                                                                                                             plus applicable taxes
                                                                                                             and maintenance fees.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Consulting
                                                                                                                           agreements
                                                                                                                           dated
                                                                                                                           January
                                                                                                                           1,
                                                                                                                           2011
                                                                                                                           and
                                                                                                                           January
                                                                                                                           1,
                                                                                                                           2012
                                                                                                                           with
                                                                                                                           Goldpac
                                                                                                                           Investments
                                                                                                                           Ltd.
                                                                                                                           See
                                                                                                                           Item
                                                                                                                           6.B.
                                                                                                                           Compensation,
                                                                                                                           Item
                                                                                                                           6.C.
                                                                                                                           Board
                                                                                                                           Practicesand
                                                                                                                           Item
                                                                                                                           7.B.
                                                                                                                           Related
                                                                                                                           Party
                                                                                                                           Transactions.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Consulting
                                                                                                                           agreements
                                                                                                                           dated
                                                                                                                           January
                                                                                                                           1,
                                                                                                                           2011
                                                                                                                           with
                                                                                                                           Silver
                                                                                                                           Lake
                                                                                                                           Investment
                                                                                                                           Partners,
                                                                                                                           Ltd.
                                                                                                                           See
                                                                                                                           Item
                                                                                                                           6.B.
                                                                                                                           Compensation,
                                                                                                                           Item
                                                                                                                           6.C.
                                                                                                                           Board
                                                                                                                           Practicesand
                                                                                                                           Item
                                                                                                                           7.B.
                                                                                                                           Related
                                                                                                                           Party
                                                                                                                           Transactions.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 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 Association or Memorandum of Association or under Cayman
Islands law as 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.



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 our 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.



- 50 -







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. 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.



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;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



- 51 -







| | 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.  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.



Before 2009, Renminbi had little to no
exposure in the international markets due to strict government controls by the central Chinese government that prohibited almost
all forms of Renminbi holdings or transactions.  Transactions between Chinese companies and a foreign entity would have
to be denominated in US dollars.  With Chinese company unable to hold US dollars and foreign companies unable to hold
Chinese Renminbi, all transactions would go through the People's Bank of China.  In June 2009, the Chinese officials
announced a pilot scheme where business and trade transactions were allowed between limited businesses in Guangdong and Shanghai
municipalities and only counterparties in Hong Kong, Macau, and select ASEAN nations.  Proving a success, the program
was further extended to 20 Chinese provinces and counterparties internationally in July 2010.  In steps intended to
establish the Renminbi as an international reserve currency, China has agreements with Russia, Vietnam, and Thailand allowing
trade with those countries to be settled directly in Renminbi instead of requiring conversion to US dollars.



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.



- 52 -







| | 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.



Our 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
| | -- | ----------------------



We have 4 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 (“CWN HK”), 83.67% owned interest in ChineseWorldNet.com
(Shanghai) Ltd., a company incorporated under the laws of PRC (“CWN China”), and 83.67% owned interest in Weihai
Consulting Investment Ltd., a company incorporated under of PRC (“Weihai”).



| | Item 11. | QUANTITATIVE
                                                                                                                                 AND
                                                                                                                                 QUALITATIVE
                                                                                                                                 DISCLOSURES
                                                                                                                                 ABOUT
                                                                                                                                 MARKET
                                                                                                                                 RISK
| | -------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We are a small business issuer as defined
in Section 230.405 of the Securities Act of 1933 and Section 240.12b-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.



| | 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 our registered securities.  There has been no modification
or qualification of the rights evidenced by any class of our registered securities by issuing or modifying any other class of
securities.  There are no assets securing any class of our registered securities.  There has been no change
in the last financial year to the trustee of our registered securities.



- 53 -







| | Item 15. | CONTROLS
                                                                                                                                 AND
                                                                                                                                 PROCEDURES
| | -------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Disclosure
Controls and Procedures



As required by Rule 13a-15 under the Securities
Exchange Act of 1934, our management, with the participation of our principal executive officer and principal financial officer,
evaluated 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 annual report.



Disclosure controls and procedures are
controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted
under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in
the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures
designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is
accumulated and communicated to our principal executive officer and principal financial officer to allow timely decisions regarding
required disclosure.



Based on its evaluation, our management,
with the participation of our principal executive officer and principal financial officer concluded that as of December 31, 2011,
our disclosure controls and procedures were not effective. The ineffectiveness of our disclosure controls and procedures was due
to a material weakness described below.



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, 2012 based on criteria
for effective internal control over financial reporting described inInternal Control-Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission .  Based on its evaluation, our management concluded that
our internal control over financial reporting was not effective as of December 31, 2012, 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 believes 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 our 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.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 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.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



- 54 -







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.



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, 2012 that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.



| | Item 16. | [RESERVED]
| | -------- | ----------



| | ITEM 16A | AUDIT
                                                                                         COMMITTEE FINANCIAL EXPERT
| | -------- | -------------------------------------------------------------------------------------------------------------------------



Our board of directors serves as our audit
committee.  The board has determined that Mr. Andy S.W. Lam is an audit committee financial expert.  Mr. Lam
is independent, as defined by the rules of the Securities Exchange Commission.



| | ITEM 16B. | CODE
                                                                                          OF ETHICS
| | --------- | --------------------------------------------------------------------------------------------------------



On October 29, 2004, we 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 3, 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, MNP LLP, in 2012 and 2011.  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, |       
|--------------------- |  | ---------------------------- | ------
|                      |  | 2012                         |       
|Audit Fees(1)         |  | $                            | 54,000
|Audit-Related Fees(2) |  |                              | —     
|Tax Fees(3)           |  |                              | 1,500 
|All Other Fees        |  |                              | —     
|Total                 |  | $                            | 55,500



| | (1) | Audit Fees consist of fees for the
                                                           audit of our annual 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”.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (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.



- 55 -







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



Neither our company, nor any affiliated
purchaser of our company, has purchased any of our securities during Fiscal 2011.



| | ITEM 16F. | CHANGES
                                                                                          IN REGISTRANT’S CERTIFYING ACCOUNTANT
| | --------- | ---------------------------------------------------------------------------------------------------------------------------------------



Resignation
of Independent Accountant



On June 1, 2011, Chang Lee LLP resigned
as our independent accountant as a result of its merger with MNP LLP. Chang Lee LLP merged its operations with MNP LLP and certain
professional staff and partners of Chang Lee LLP joined MNP LLP either as employees or partners of MNP LLP and continued to practice
as members of MNP LLP.



The report of Chang Lee LLP regarding
our financial statements for the fiscal years ended December 31, 2010 and 2009 did not contain any adverse opinion or disclaimer
of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles, except that such report
on our financial statements for the years ended December 31, 2010 and 2009 contained an explanatory paragraph in respect to uncertainty
as to our ability to continue as a going concern. During the years ended December 31, 2010 and 2009 and during the period from
January 1, 2011 through June 1, 2011, the date of resignation, there were no disagreements with Chang Lee LLP on any matter of
accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not
resolved to the satisfaction of Chang Lee LLP would have caused it to make reference to such disagreements in its reports.



We provided Chang Lee LLP with a copy
of the disclosure in this Item 16F prior to the filing of the Report with the Securities and Exchange Commission and requested
that Chang Lee LLP furnish our company with a letter addressed to the Securities and Exchange Commission stating whether it agrees
with the above statements and, if it does not agree, the respects in which it does not agree. A copy of such letter, dated April
30, 2012, is filed as Exhibit 15 to this Report.



Engagement
of Independent Accountant



Concurrent with the resignation of Chang
Lee LLP, we engaged MNP LLP, as our independent accountant. Prior to engaging MNP LLP, we did not consult with MNP LLP regarding
the application of accounting principles to a specific completed or contemplated transaction or regarding the type of audit opinion
that might be rendered by MNP LLP on our financial statements, and MNP LLP did not provide any written or oral advice that was
an important factor considered by our company in reaching a decision as to any such accounting, auditing or financial reporting
issue. The engagement of MNP LLP was approved by our board of directors.



| | ITEM 16G. | CORPORATE
                                                                                          GOVERNANCE
| | --------- | --------------------------------------------------------------------------------------------------------------



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



| | ITEM 16H. | MINE
                                                                                          SAFETY DISCLOSURE
| | --------- | ----------------------------------------------------------------------------------------------------------------



Not applicable.



Part III



| | Item17. | FINANCIAL STATEMENTS
| | ------- | --------------------



Not applicable.



- 56 -







| | Item 18. | FINANCIAL
                                                                                                                                 STATEMENTS
| | -------- | -----------------------------------------------------------------------------------------------------------------------------------------------------



The following Consolidated Financial Statements
and the related Notes thereto are filed as part of this Report, commencing at Page 60 to 79 of this Report:



|Reports of Independent Registered Public Accounting Firms                                                             | 60 to 61
|--------------------------------------------------------------------------------------------------------------------- | --------
|                                                                                                                      |         
|Consolidated Balance Sheets as at December 31, 2012 and 2011                                                          | 62      
|                                                                                                                      |         
|Consolidated Statements of Stockholders’ Equity (Deficiency) for the years ended December
    31, 2012, 2011 and 2010 | 63      
|                                                                                                                      |         
|Consolidated Statements of Operations for the years ended December 31, 2012, 2011 and 2010                            | 64      
|                                                                                                                      |         
|Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010                            | 65      
|                                                                                                                      |         
|Notes to Consolidated Financial Statements                                                                            | 66 to 77



| | Item 19. | EXHIBITS
| | -------- | --------



|ExhibitNo. |     | Document
    Description                                                                                                 
|---------- | --- | -------------------------------------------------------------------------------------------------------------------------
|           |     |                                                                                                                          
|1          | (1) | Articles of Association, Memorandum
    of Association and Certificate of Incorporation of CWN                           
|           |     |                                                                                                                          
|2.1        | (2) | Form of Convertible Debenture dated May
    31, 2004                                                                     
|           |     |                                                                                                                          
|4.1        | (4) | Stock Option Plan Agreement dated October
    1, 2007                                                                    
|           |     |                                                                                                                          
|4.2        | (6) | Stock Option Plan Agreement dated June
    10, 2010                                                                      
|           |     |                                                                                                                          
|4.3        | (5) | Agreement to Establish [CWN China Co.,
    Ltd.], a Chinese – Foreign Joint Venture Ltd. Liability Company               
|           |     |                                                                                                                          
|4.4        | (6) | Consulting Agreement between Chineseworldnet.Com
    Inc. and Goldpac Investments Ltd. dated January 1, 2010             
|           |     |                                                                                                                          
|4.5        | (6) | Consulting Agreement between Chineseworldnet.Com
    Inc. and Silver Lake Investment Partners, Ltd. dated January 1, 2010
|           |     |                                                                                                                          
|4.6        | (7) | Consulting Agreement between Chineseworldnet.Com
    Inc. and Goldpac Investments Ltd. dated January 1, 2011             
|           |     |                                                                                                                          
|4.7        | (7) | Consulting Agreement between Chineseworldnet.Com
    Inc. and Silver Lake Investment Partners, Ltd. dated January 1, 2011
|           |     |                                                                                                                          
|4.8        | *   | Consulting Agreement between Chineseworldnet.Com
    Inc. and Goldpac Investments Ltd. dated January 1, 2012             
|           |     |                                                                                                                          
|8          | *   | List of Subsidiaries                                                                                                     



- 57 -







|11      | (3) | Code of Ethics                                                                                        
|------- | --- | ------------------------------------------------------------------------------------------------------
|        |     |                                                                                                       
|12.1    | *   | Certification of Chief Executive Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|        |     |                                                                                                       
|12.2    | *   | Certification of Chief Financial Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|        |     |                                                                                                       
|13.1    | *   | Certification of Chief Executive Officer
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|        |     |                                                                                                       
|13.2    | *   | Certification of Chief Financial Officer
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|        |     |                                                                                                       
|101.INS | **  | XBRL Instance Document                                                                                
|        |     |                                                                                                       
|101.SCH | **  | XBRL Taxonomy Extension Schema Document                                                               
|        |     |                                                                                                       
|101.CAL | **  | XBRL Taxonomy Extension Calculation Linkbase
    Document                                             
|        |     |                                                                                                       
|101.DEF | **  | XBRL Taxonomy Extension Definition Linkbase
    Document                                              
|        |     |                                                                                                       
|101.LAB | **  | XBRL Taxonomy Extension Label Linkbase
    Document                                                   
|        |     |                                                                                                       
|101.PRE | **  | XBRL Taxonomy Extension Presentation Linkbase
    Document                                            



|*  | Filed herewith                                                                                                                                                                                                                                                                   
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|** | Pursuant to a grace period for our XBRL submission, we plan
    to file our financial statements in XBRL format by filing an amendment to this annual report on Form 20-F within 30 days after
    the earlier of the due date or filing date of this annual report on Form 20-F.



|(1) | Incorporated by reference to Exhibits
    of Registrant’s Registration Statement on Form 20-F (file no. 000-33051) filed on July 3, 2002.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                          
|(2) | Incorporated by reference to Exhibits of Registrant’s
    Annual Report on Form 20-F (file no. 000-33051) filed on December 3, 2004.     
|    |                                                                                                                                          
|(3) | Incorporated by reference to Exhibits of Registrant’s
    Annual Report on Form 20-F (file no. 000-33051) filed on June 30, 2005.        
|    |                                                                                                                                          
|(4) | Incorporated by reference to Exhibits of Registrant’s
    Annual Report on Form 20-F (file no. 000-33051) filed on June 30, 2008.        
|    |                                                                                                                                          
|(5) | Incorporated by reference to Exhibits of Registrant’s Annual Report
    on Form 20-F (file no. 000-33051) filed on June 30, 2009.        
|    |                                                                                                                                          
|(6) | Incorporated by reference to Exhibits of Registrant’s Annual Report
    on Form 20-F (file no. 000-33051) filed on May 13, 2011.         
|    |                                                                                                                                          
|(7) | Incorporated by reference to Exhibits of Registrant’s Annual Report
    on Form 20-F (file no. 000-33051) filed on April 30, 2012.       



- 58 -







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.



Dated: April 30, 2013



|ChineseWorldNet.com Inc.,                       | 
|----------------------------------------------- | 
|a Cayman Islands Corporation                    | 
|                                                | 
|/s/ Joe Kin Foon Tai                            | 
|JOE KIN FOON TAI                                | 
|Director, President and Chief Executive Officer | 



- 59 -







v343185\Draft\03-Production





REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM



To the Board of Directors and Stockholders
of



Chineseworldnet.Com
Inc.



We have audited the consolidated balance
sheet of Chineseworldnet.Com Inc. (the “Company”) as at December 31, 2012 and 2011 and the related consolidated
statements of stockholders’ equity, operations and comprehensive income (loss) and cash flows for the year then ended. These
consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit. We did not audit the Company’s consolidated financial
statements as of and for the year ended December 31, 2010, and the cumulative data from January 12, 2000 (date of inception) to
December 31, 2010 in the consolidated statements of stockholders’ equity, operations and cash flows, which were audited
by other auditors whose report, dated May 2, 2011 which expressed an unqualified opinion, has been furnished to us. Our opinion,
insofar as it relates to the amounts included for cumulative data from January 1, 2010 to December 31, 2010, is based solely on
the report of the other auditors.



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.  The
Company is not required to have, nor were we engaged to perform, an audit of its 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 includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We
believe that our audit provides a reasonable basis for our opinion.



In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of the Company as at December 31,
2012 and 2011 and the result of its operations and its cash flow for the year then ended in conformity with accounting principles
generally accepted in the United States of America.



The accompanying consolidated financial
statements refer to above have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to
the consolidated financial statements, the Company had recurring losses and requires additional funds to maintain its planned
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 consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.



|Vancouver, Canada |  |                      
|----------------- |  | ---------------------
|April 26, 2013    |  | Chartered Accountants



|                                                                  | ACCOUNTING  ›  CONSULTING  ›  TAX
|----------------------------------------------------------------- | ---------------------------------
|2300, 1055 DUNSMUIR STREET, BOX 49148, VANCOUVER,
    BC  V7X 1J1
|1.877.688.8408  P: 604.685.8408  F:
    604.685.8594  mnp.ca     
|                                                                 



- 60 -









|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, 2010 and 2009
and the related consolidated statements of stockholders’ equity (deficiency), operations and comprehensive income (loss)
and cash flows for the years ended December 31, 2010, 2009 and 2008. 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,
2010 and 2009 and the results of its operations and its cash flows for the years ended December 31, 2010, 2009 and 2008 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, Canada |                      
|----------------- | ---------------------
|                  |                      
|May 2, 2011       | Chartered Accountants



- 61 -







Chineseworldnet.Com Inc. & Subsidiaries



CONSOLIDATED BALANCE SHEETS



As at December 31

(Expressed in U.S. Dollars)



|                                                                       |  | 2012 |            |   | 2011 | 
|---------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | 
|                                                                       |  | $    |            |   | $    | 
|                                                                       |  |      |            |   |      | 
|ASSETS                                                                 |  |      |            |   |      | 
|Current assets                                                         |  |      |            |   |      | 
|Cash and cash equivalents [note 2]                                     |  |      | 805,874    |   |      | 
|Available-for-sale securities[note 3]                                  |  |      | 761,888    |   |      | 
|Accounts receivable[note 4]                                            |  |      | 66,219     |   |      | 
|Receivable from a related party[note 9h]                               |  |      | 486,454    |   |      | 
|Prepaid expenses and deposits                                          |  |      | 50,597     |   |      | 
|Deferred income tax assets[note 10]                                    |  |      | 3,857      |   |      | 
|Total current assets                                                   |  |      | 2,174,889  |   |      | 
|                                                                       |  |      |            |   |      | 
|Equipment[note 5]                                                      |  |      | 23,515     |   |      | 
|Long term investments[note
    6]                                      |  |      | 372,860    |   |      | 
|Deferred
    income tax assets[note 10]                                |  |      | —          |   |      | 
|Total assets                                                           |  |      | 2,571,264  |   |      | 
|                                                                       |  |      |            |   |      | 
|LIABILITIES AND STOCKHOLDERS’ EQUITY                                   |  |      |            |   |      | 
|Current liabilities                                                    |  |      |            |   |      | 
|Accounts payable and accrued liabilities                               |  |      | 324,414    |   |      | 
|Due to related parties, non-interest bearing[note
    9c]              |  |      | 24,150     |   |      | 
|Deferred revenue                                                       |  |      | 97,240     |   |      | 
|Bank loans[note 7]                                                     |  |      | 100,256    |   |      | 
|Total current liabilities                                              |  |      | 546,060    |   |      | 
|                                                                       |  |      |            |   |      | 
|Stockholders’
    equity[note 8]                                       |  |      |            |   |      | 
|Common stock                                                           |  |      |            |   |      | 
|Authorized                                                             |  |      |            |   |      | 
|100,000,000,000 common shares with a par value of $0.001
    per share |  |      |            |   |      | 
|Issued and outstanding 10,950,000 common shares                        |  |      | 10,950     |   |      | 
|Additional paid-in capital                                             |  |      | 4,255,550  |   |      | 
|Accumulated other comprehensive income                                 |  |      | 26,015     |   |      | 
|Deficit                                                                |  |      | (2,311,246 | ) |      | 
|Equity attributable to shareholders of the Company                     |  |      | 1,981,269  |   |      | 
|Non-controlling interests                                              |  |      | 43,935     |   |      | 
|Total stockholders’ equity                                             |  |      | 2,025,204  |   |      | 
|Total liabilities and stockholders’
    equity                         |  |      | 2,571,264  |   |      | 
|Nature of operation [note 1]                                           |  |      |            |   |      | 
|Commitments[note 12]                                                   |  |      |            |   |      | 
|Subsequent events [note 13]                                            |  |      |            |   |      | 



See accompanying notes



- 62 -







Chineseworldnet.Com Inc. & Subsidiaries



CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
EQUITY (DEFICIENCY)



Years ended December 31

(Expressed in U.S. Dollars)



|                                                             |  | Common stock |            |  | Additionalpaid-in |  |        |         |  |  | Accumulatedothercomprehensive |   |  | Total equity(deficiency)attributableto common |            |   | Noncontrolling |  |        |          | 
|------------------------------------------------------------ |  | ------------ | ---------- |  | ----------------- |  | ------ | ------- |  |  | ----------------------------- | - |  | --------------------------------------------- | ---------- | - | -------------- |  | ------ | -------- | 
|                                                             |  | Shares       |            |  | Amount            |  |        | capital |  |  | (Deficit)                     |   |  | Income                                        |            |   | stockholders   |  |        | interest | 
|                                                             |  | #            |            |  | $                 |  |        | $       |  |  | $                             |   |  | $                                             |            |   | $              |  |        | $        | 
|Balance,
    December 31, 2010                               |  |              | 10,950,000 |  |                   |  | 10,950 |         |  |  | 4,179,538                     |   |  |                                               | (2,425,124 | ) |                |  | (3,786 | )        | 
|                                                             |  |              |            |  |                   |  |        |         |  |  |                               |   |  |                                               |            |   |                |  |        |          | 
|Stock based compensation                                     |  |              | —          |  |                   |  | —      |         |  |  | 140,042                       |   |  |                                               | —          |   |                |  | —      |          | 
|Change of ownership in CWN china                             |  |              |            |  |                   |  |        |         |  |  | (93,241                       | ) |  |                                               |            |   |                |  |        |          | 
|Components
    of comprehensive income (loss):               |  |              |            |  |                   |  |        |         |  |  |                               |   |  |                                               |            |   |                |  |        |          | 
|Unrealized
    gain or loss on Available-for-sale securities |  |              |            |  |                   |  |        |         |  |  |                               |   |  |                                               |            |   |                |  | (2,550 | )        | 
|Foreign
    currency translation adjustment                  |  |              | —          |  |                   |  | —      |         |  |  | —                             |   |  |                                               | —          |   |                |  | (3,015 | )        | 
|Net income (loss) for
    the year                           |  |              | —          |  |                   |  | —      |         |  |  | —                             |   |  |                                               | 198,966    |   |                |  | —      |          | 
|                                                             |  |              |            |  |                   |  |        |         |  |  |                               |   |  |                                               |            |   |                |  |        |          | 
|Balance,
    December 31, 2011                               |  |              | 10,950,000 |  |                   |  | 10,950 |         |  |  | 4,226,339                     |   |  |                                               | (2,226,158 | ) |                |  | (9,351 | )        | 
|                                                             |  |              |            |  |                   |  |        |         |  |  |                               |   |  |                                               |            |   |                |  |        |          | 
|Stock
    based compensation                                 |  |              | —          |  |                   |  | —      |         |  |  | 59,404                        |   |  |                                               | —          |   |                |  | —      |          | 
|Change of ownership in CWN china                             |  |              |            |  |                   |  |        |         |  |  | (30,193                       | ) |  |                                               |            |   |                |  |        |          | 
|Components of comprehensive income (loss):                   |  |              |            |  |                   |  |        |         |  |  |                               |   |  |                                               |            |   |                |  |        |          | 
|Unrealized
    gain or loss on Available-for-sale securities |  |              |            |  |                   |  |        |         |  |  |                               |   |  |                                               |            |   |                |  | 22,309 |          | 
|Foreign
    currency translation adjustment                  |  |              | —          |  |                   |  | —      |         |  |  | —                             |   |  |                                               | —          |   |                |  | 13,057 |          | 
|Net
    income (loss) for the year                           |  |              | —          |  |                   |  | —      |         |  |  | —                             |   |  |                                               | (85,088    | ) |                |  | —      |          | 
|Balance,
    December 31, 2012                               |  |              | 10,950,000 |  |                   |  | 10,950 |         |  |  | 4,255,550                     |   |  |                                               | (2,311,246 | ) |                |  | 26,015 |          | 



See accompanying notes



- 63 -







Chineseworldnet.Com Inc. & Subsidiaries



CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)



Year ended December 31

(Expressed in U.S. Dollars)



|                                                          |  | 2012 |            |   | 2011 |  |            | 2010 | 
|--------------------------------------------------------- |  | ---- | ---------- | - | ---- |  | ---------- | ---- | 
|                                                          |  | $    |            |   | $    |  |            | $    | 
|                                                          |  |      |            |   |      |  |            |      | 
|Revenue                                                   |  |      | 1,243,638  |   |      |  | 1,675,875  |      | 
|                                                          |  |      |            |   |      |  |            |      | 
|Expenses                                                  |  |      |            |   |      |  |            |      | 
|Advertising and promotion                                 |  |      | 212,930    |   |      |  | 271,164    |      | 
|Audit and legal                                           |  |      | 84,354     |   |      |  | 63,962     |      | 
|Consulting fees                                           |  |      | 90,000     |   |      |  | 104,000    |      | 
|Depreciation                                              |  |      | 15,216     |   |      |  | 15,918     |      | 
|Directors’ remuneration                                   |  |      | 12,000     |   |      |  | 12,000     |      | 
|Accretion on convertible debenture                        |  |      | —          |   |      |  | —          |      | 
|Interest expense on long-term debt                        |  |      | —          |   |      |  | —          |      | 
|Office and miscellaneous                                  |  |      | 82,316     |   |      |  | 74,077     |      | 
|Printing                                                  |  |      | 17,579     |   |      |  | 26,245     |      | 
|Provision  for bad and doubtful debts                     |  |      | (30,472    | ) |      |  | 55,917     |      | 
|Rent and operating                                        |  |      | 139,509    |   |      |  | 135,049    |      | 
|Salaries and benefits                                     |  |      | 695,639    |   |      |  | 635,260    |      | 
|Seminar operating expense                                 |  |      | 620        |   |      |  | 763        |      | 
|Stock based compensation                                  |  |      | 59,404     |   |      |  | 140,042    |      | 
|Telephone                                                 |  |      | 18,808     |   |      |  | 27,339     |      | 
|Travel and entertainment                                  |  |      | 215,379    |   |      |  | 117,240    |      | 
|                                                          |  |      | (1,613,282 | ) |      |  | (1,678,976 | )    | 
|Other income (loss)                                       |  |      |            |   |      |  |            |      | 
|Interest and sundry income                                |  |      | 37,775     |   |      |  | 37,671     |      | 
|Gain (loss) on available-for-sale securities              |  |      | 50,193     |   |      |  | (5,995     | )    | 
|Foreign exchange gain (loss) and other losses             |  |      | 35,294     |   |      |  | (28,348    | )    | 
|Equity pick up                                            |  |      | 166,735    |   |      |  | 192,399    |      | 
|Loss on dilution of CWN Capital                           |  |      | —          |   |      |  | —          |      | 
|Other income (loss), net                                  |  |      | 289,997    |   |      |  | 195,727    |      | 
|Income (loss) before income taxes                         |  |      | (79,647    | ) |      |  | 192,626    |      | 
|                                                          |  |      |            |   |      |  |            |      | 
|Deferred income tax recovery (expense)                    |  |      | (49,284    | ) |      |  | (54,586    | )    | 
|Net income (loss) for the year                            |  |      | (128,931   | ) |      |  | 138,040    |      | 
|Other comprehensive income                                |  |      |            |   |      |  |            |      | 
|Unrealized gain or loss on available –for-sale securities |  |      | 22,309     |   |      |  | (3,015     | )    | 
|Currency translation adjustments                          |  |      | 13,359     |   |      |  | (2,550     | )    | 
|Comprehensive income (loss)                               |  |      | 35,668     |   |      |  | (5,565     | )    | 
|                                                          |  |      |            |   |      |  |            |      | 
|Net income (loss) attributable to:                        |  |      |            |   |      |  |            |      | 
|Common stockholders                                       |  |      | (85,088    | ) |      |  | 198,966    |      | 
|Non-controlling interests                                 |  |      | (43,843    | ) |      |  | (60,926    | )    | 
|                                                          |  |      | (128,931   | ) |      |  | 138,040    |      | 
|Net comprehensive income (loss) attributable to:          |  |      |            |   |      |  |            |      | 
|Common stockholders                                       |  |      | (49,722    | ) |      |  | 173,194    |      | 
|Non-controlling interests                                 |  |      | (43,541    | ) |      |  | (40,719    | )    | 
|                                                          |  |      | (93,263    | ) |      |  | 132,475    |      | 
|                                                          |  |      |            |   |      |  |            |      | 
|Earning (loss) per share – basic                          |  |      | (0.01      | ) |      |  | 0.01       |      | 
|Earning (loss) per share – diluted                        |  |      | (0.01      | ) |      |  | 0.01       |      | 
|Weighted average number of common shares outstanding      |  |      |            |   |      |  |            |      | 
|- basic                                                   |  |      | 10,950,000 |   |      |  | 10,950,000 |      | 
|- diluted                                                 |  |      | 10,950,000 |   |      |  | 11,404,862 |      | 



See accompanying notes



- 64 -







Chineseworldnet.Com Inc. & Subsidiaries



CONSOLIDATED STATEMENTS OF CASH FLOWS



Year ended December 31

(Expressed in U.S. Dollars)



|                                                                               |  | 2012      |           |   | 2011 |         |           | 2010 | 
|------------------------------------------------------------------------------ |  | --------- | --------- | - | ---- | ------- | --------- | ---- | 
|                                                                               |  | $         |           |   | $    |         |           | $    | 
|                                                                               |  |           |           |   |      |         |           |      | 
|OPERATING ACTIVITIES                                                           |  |           |           |   |      |         |           |      | 
|Net income (loss) for the year                                                 |  |           | (128,931) |   |      |         | 138,040   |      | 
|Adjustment to reconcile net loss to net cash used in operating
    activities: |  |           |           |   |      |         |           |      | 
|Depreciation                                                                   |  |           | 15,216    |   |      |         | 15,918    |      | 
|Accretion on convertible debenture                                             |  |           | —         |   |      |         | —         |      | 
|Deferred income tax recovery                                                   |  |           | 49,284    |   |      |         | 54,586    |      | 
|Stock based compensation                                                       |  |           | 59,404    |   |      |         | 140,042   |      | 
|Finder’s fee revenue                                                           |  |           | —         |   |      |         | —         |      | 
|Equity interest pick up                                                        |  |           | (166,735  | ) |      |         | (144,257  | )    | 
|Gain on short term investment                                                  |  |           | (50,193)  |   |      |         | —         |      | 
|Loss on dilution of CWN Capital                                                |  |           | —         |   |      |         | —         |      | 
|Changes in non-cash working capital items:                                     |  |           |           |   |      |         |           |      | 
|Accounts receivable                                                            |  |           | 46,825    |   |      |         | (91,634   | )    | 
|Prepaid expenses and deposits                                                  |  |           | (3,767)   |   |      |         | (18,166)  |      | 
|Accounts payable and accrued liabilities                                       |  |           | 69,656    |   |      |         | 33,270    |      | 
|Income taxes                                                                   |  |           | -         |   |      |         | -         |      | 
|Deferred revenue                                                               |  |           | (42,449)  |   |      |         | 34,213    |      | 
|Net cash provided by (used in) operating activities                            |  |           | (151,690) |   |      |         | 162,012   |      | 
|                                                                               |  |           |           |   |      |         |           |      | 
|FINANCING ACTIVITIES                                                           |  |           |           |   |      |         |           |      | 
|Short term loan                                                                |  |           | (602,610) |   |      |         | 702,866   |      | 
|Due to related parties                                                         |  | (190,448) |           |   |      | 130,417 |           |      | 
|Net cash provided by financing activities                                      |  | (793,058) |           |   |      | 833,283 |           |      | 
|                                                                               |  |           |           |   |      |         |           |      | 
|INVESTING ACTIVITIES                                                           |  |           |           |   |      |         |           |      | 
|Cash eliminated upon dilution of a subsidiary                                  |  |           | —         |   |      |         | —         |      | 
|Purchase of equipment                                                          |  |           | (1,726)   |   |      |         | (1,084    | )    | 
|Short term investments                                                         |  |           | (19,944)  |   |      |         | (172,886) |      | 
|Net cash provided by (used in) investing activities                            |  |           | (21,670   | ) |      |         | (173,970  | )    | 
|                                                                               |  |           |           |   |      |         |           |      | 
|Effect of exchange rate changes on cash and cash equivalents                   |  |           | 631       |   |      |         | 12,326    |      | 
|                                                                               |  |           |           |   |      |         |           |      | 
|Increase (decrease) in cash and cash equivalents                               |  |           | (965,787) |   |      |         | 833,651   |      | 
|Cash and cash equivalents, beginning of year                                   |  |           | 1,771,661 |   |      |         | 938,010   |      | 
|Cash and cash equivalents, end of year                                         |  |           | 805,874   |   |      |         | 1,771,661 |      | 
|                                                                               |  |           |           |   |      |         |           |      | 
|Supplemental disclosure of cash flow information                               |  |           |           |   |      |         |           |      | 
|Cash paid for interest, net of interest capitalized                            |  |           | —         |   |      |         | —         |      | 
|Cash paid for income taxes                                                     |  |           | —         |   |      |         | —         |      | 



See accompanying notes



- 65 -







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.  ChineseWorldNet.com (Shanghai) Ltd. (“CWN China”) was incorporated under the laws of People’s
Republic of China in April 2008. During the fiscal year 2012, the Company’s ownership interests in CWN China increased
from 80% to 83% after CWN HK invested an amount of $200,000 to CWN China’s registered capital. CWN China 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’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. The Company, through its subsidiary, NAI, is also in the
business of providing investor relations and public relations (IR/PR) services to public companies.  The IR/PR services are
comprised of investment conferences in North America and China, company road shows, investor outreach events, publication of industry
related handbooks, online marketing through its proprietary website, and e-mail marketing.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 accumulated 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 and additional
funds 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 83% interests and its investment
in CWN Capital Inc. All material inter-company accounts and transactions have been eliminated upon consolidation.



During the fiscal year 2011, CWN HK invested
an amount of $400,000 to CWN China. As a result, through CWN HK, the Company had an effective ownership of 80% equity interests
in CWN China. During the fiscal year 2012, CWN HK further invested an amount of $200,000 to CWN China and the Company‘s
effective ownership of equity interest increased from 80% to 83% in CWN China. The transaction was accounted for as an equity
transaction and the non-controlling interest was adjusted to reflect the changes in the interest in CWN China.



- 66 -







Chineseworldnet.Com Inc. & Subsidiaries



2. SIGNIFICANT ACCOUNTING POLICIES
(cont’d.)



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.



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 | %
|Vehicle                |  |  | 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, 2012, the Company held a $504,107 [2011 - $Nil] term deposit, which is due on January 3, 2012 with an annual yield of
3.2%.



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 and Chinese Renminbi, 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, 2012, 2011 and 2010 were $212,930, $271,164 and $217,519 respectively.



- 67 -







Chineseworldnet.Com Inc. & Subsidiaries



2. SIGNIFICANT ACCOUNTING POLICIES
(cont’d.)



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 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,
available for sale securities, accounts receivable, receivable from related parties, accounts payable and accrued liabilities,
due to related parties and bank loans approximates their fair value because of the short-term nature of these instruments. The
Company is exposed to interest rates risk on its cash and cash equivalents, marketable funds and bank loans. Management does not
believe that the impact of interest rate fluctuate will be significant.



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.



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.



- 68 -







Chineseworldnet.Com Inc. & Subsidiaries



2. SIGNIFICANT ACCOUNTING POLICIES
(cont’d.)



Available-for-sale securities



Available-for-sale securities represent
securities and other financial instruments that are non- strategic and neither held for trading, nor held to maturity. Available-for-sale
securities 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.



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 with ASC 845 (formerly Accounting Principles Board
No. 29)Nonmonetary Transactions and with ASC 605-20 (formerly Emerging 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.



Revenue recognition



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 show and 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 when all 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 whenever events or changes in circumstances indicate that their carrying value has become impaired, in accordance
with the guidance established in ASC 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 by ASC 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 value of 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.



- 69 -







Chineseworldnet.Com Inc. & Subsidiaries



2. SIGNIFICANT ACCOUNTING POLICIES
(cont’d.)



Fair value of financial instruments



The Company has 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:



|· | 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 are developed by the reporting entity and reflect those assumptions that a market participant
    would use.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



For the period ended December 31, 2012
and 2011, the fair value of cash and cash equivalents and public traded securities, marketable funds and bank loans are recognized
on the balance sheets as level one per the fair value hierarchy; and the fair value of share options are recognized in the balance
sheets as level two per the fair value hierarchy.



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 adopted ASC 260 (formerly SFAS128),
Earnings Per Share . Diluted earning (loss) per share is equal to basic loss per share because there is no 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, terminations
or 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 account
may 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 2012, the Company recorded bad debt recovery of $30,472
from allowance for doubtful accounts. The company incurred an expense for bad debt and provision for allowance for doubtful accounts
receivable in the amount of $55,917 in 2011 (2010 – $16,242).



Newly adopted accounting pronouncements
and new accounting pronouncements



In
May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement
and Disclosure Requirements in U.S. GAAP and IFRSs”, which is effective for annual reporting periods beginning after December
15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure
requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs
used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements
to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s
highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure
of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure
of all transfers between Level 1 and Level 2 of the fair value hierarchy. The Company is currently evaluating the impact of the
adoption.



- 70 -







Chineseworldnet.Com Inc. & Subsidiaries



2. SIGNIFICANT ACCOUNTING POLICIES
(cont’d.)



In June 2011, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive
Income, which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 will become effective for
the Company on January 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as
part of the statement of changes in stockholders’ equity. In addition, items of other comprehensive income that are reclassified
to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to
increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either
in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive
income. The adoption of ASU 2011-05 is not expected to have a material impact on the Company’s financial position or results
of operations.



In September 2011, the Financial Accounting
Standards Board (“FASB”) issued an Update to simplify how public entities test goodwill for impairment. The amendments
in the Update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair
value of a reporting unit is less than its carrying amount on a basis for determining whether it is necessary to perform the two-step
goodwill impairment test described in Topic 350. The more-likely than-not threshold is defined as having a likelihood of more
than 50 percent. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning
after December 15, 2011. Early adoption is permitted including for annual and interim impairment tests performed as of a date
before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet
been issued. We will adopt the amendment effective beginning in the first quarter of 2012. The adoption of the new amendments
is not expected to have a significant impact on our consolidated financial statements.



In December
2011, the FASB issued ASU 2011-11 "Disclosures about offsetting assets and liabilities". Under the new guidance entities
must disclose both gross information and net information on instruments and transactions eligible for offset on the balance sheet
in accordance with the offsetting guidance in ASC 210-20-45 or ASC 815-10-45, and instruments and transactions subject to an agreement
similar to a master netting arrangement. The new guidance will be effective for ASMI beginningJanuary 1, 2013.
The adoption of the new amendments is not expected to have a significant impact on our consolidated financial statements.



In July, 2012, the FASB issued ASU 2012-02,
“Intangibles – Goodwill and Other (Topic). ASU 2012-02 amends the required annual impairment testing of indefinite-lived
intangible assets by providing an entity an option to first assess qualitative factors to determine whether it is more likely
than not that the fair value of the indefinite-lived asset is less than its carrying amount. If, after assessing the totality
of events and circumstances, an entity determines it is not more likely than not that the fair value of the indefinite-lived asset
is less than its carrying amount, then performing the two-step impairment test under Topic 350-30 is unnecessary. However, if
an entity concludes otherwise, then it is required to perform the impairment testing under Topic 350-30-35-18F by calculating
the fair value of the reporting unit and comparing the results with the carrying amount. If the fair value exceeds the carrying
amount, then the entity must perform the second step test of measuring the amount of the impairment test under Topic 350-30-35-19.
An entity has the option to bypass the qualitative assessment and proceed directly to the two step goodwill impairment test. Additionally,
the entity has the option to resume with the qualitative testing in any subsequent period. The pronouncement is effective for
annual and interim impairment tests performed for fiscal years beginning after September 15, 2012 and early adoption is permitted.
The Company’s adoption of the new standard is not expected to have a material effect on the Company’s consolidated
financial position or results of operations.



In October
2012, the FASB issued ASU 2012-04 "Technical corrections and improvements". This ASU makes certain technical correction
to the FASB Accounting Standards Codification. The new guidance will be effective for fiscal years beginning afterDecember
15, 2012.The adoption of the new amendments is not expected to have a significant impact on our consolidated
financial statements.



In February 2013, the FASB issued ASU
2013-02, "Comprehensive Income (Topic 220), Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income".
The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements.
However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive
income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented
or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of
net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in
the same reporting period. For other amounts that are not required under U.S.GAAP to be reclassified in their entirety to net
income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail
about those amounts. The pronouncement is effective for fiscal years and interim periods ending after December 15, 2012.The adoption
of this pronouncement is not expected to have a material effect on the Company's consolidated financial position or results of
operations.



- 71 -







Chineseworldnet.Com Inc. & Subsidiaries





3. AVAILABLE-FOR-SALE SECURITIES



Available –for –sale securities
consist of marketable funds, marketable securities and stock options and are summarized as follows:



|                         |  | 2012   |         |  | 2011    | 
|------------------------ |  | ------ | ------- |  | ------- | 
|                         |  |        |         |  | Fair    | 
|                         |  |        |         |  | Market  | 
|                         |  | Cost $ |         |  | value $ | 
|                         |  |        |         |  |         | 
|Public traded securities |  |        | 1,177   |  |         | 
|Marketable funds         |  |        | 735,215 |  |         | 
|Stock options            |  |        | -       |  |         | 
|Total                    |  |        | 736,392 |  |         | 



The fair market value of public traded
securities and marketable funds are measured using quoted prices in active market for the identical assets, the total fair market
value is the published market price per share/unit multiplied by the number of shares/units held without consideration of transaction
costs.



On January 26, 2011, the Company received
300,000 stock options from Argex Mining Inc.(the “Argex”), which expire on July 26, 2012 with each stock option entitling
to its holder to purchase one common share at C$0.495 which are vested 25% immediately and remaining 75% shall become vested on
every 6 month from the grant date.



During the fiscal year 2011, the Company
exercised 75,000 stock options. As at December 31, 2011, Argex cancelled 75,000 stock options and the Company has 150,000 stock
options outstanding. During the fiscal year 2012, the Company exercised all remaining 150,000 stock options, sold all Argex’s
shares for net proceeds of $156,267, and recognized the gain in the amount of $43,409.



The fair value of the above options granted
is estimated on the date of the grant and the date of the year end by using Black-Scholes option pricing model with weights average
assumptions for grants as follows:





|                         | 2011            |  
|------------------------ | --------------- | -
|Stock price              | $0.41-$0.50     |  
|Risk-free interest rate  | 1.64%-0.97      | %
|Expected life of options | 1.17-0.25 years |  
|Annualized volatility    | 93.26%-65.84    | %
|Dividend rate            | 0               | %
|Calculated fair value    | $0.0026-$0.1975 |  





4. ACCOUNTS RECEIVABLE



|                                |  | December 31, 
    2012 |         |   | December 31, 
    2011 | 
|------------------------------- |  | ---------------------- | ------- | - | ---------------------- | 
|Accounts receivable             |  |                        | 153,970 |   |                        | 
|Allowance for doubtful accounts |  |                        | (87,751 | ) |                        | 
|Total                           |  |                        | 66,219  |   |                        | 



- 72 -







Chineseworldnet.Com Inc. & Subsidiaries



5. EQUIPMENT



|                       |  |      |         |  | Accumulated  |  |         | Net book | 
|---------------------- |  | ---- | ------- |  | ------------ |  | ------- | -------- | 
|                       |  | Cost |         |  | amortization |  |         | value    | 
|                       |  | $    |         |  | $            |  |         | $        | 
|2012                   |  |      |         |  |              |  |         |          | 
|Furniture and fixtures |  |      | 37,137  |  |              |  | 30,942  |          | 
|Computer equipment     |  |      | 100,132 |  |              |  | 92,632  |          | 
|Leasehold improvement  |  |      | 25,674  |  |              |  | 25,674  |          | 
|Vehicle                |  |      | 36,683  |  |              |  | 26,863  |          | 
|                       |  |      | 199,626 |  |              |  | 176,111 |          | 
|2011                   |  |      |         |  |              |  |         |          | 
|Furniture and fixtures |  |      | 35,419  |  |              |  | 27,889  |          | 
|Computer equipment     |  |      | 97,773  |  |              |  | 87,167  |          | 
|Leasehold improvement  |  |      | 26,642  |  |              |  | 26,642  |          | 
|Vehicle                |  |      | 36,387  |  |              |  | 18,004  |          | 
|                       |  |      | 196,221 |  |              |  | 159,702 |          | 



6. LONG TERM INVESTMENTS



The Company previously had a wholly-owned
subsidiary CWN Capital Inc. (“CWN Capital”), a company incorporated under the laws of British Virgin Islands in August
2009.  On December 18, 2010, the Company’s ownership interests were diluted to 23.8% upon CWN Capital Inc. issued
80,000 common shares to two companies controlled by two directors of the Company.  As the dilution has resulted in the
Company losing a controlling interest, the Company deconsolidated CWN Capital on December 18, 2010 and recorded its interest in
CWN Capital as an equity investment.



The dilution occurred on October 1, 2010
and December 18, 2010 when CWN Capital issued 25,000 and 55,000 common stocks at a price of $0.01 and $1.00 per share of its common
stock to a company controlled by a director of the Company and another company controlled by another director of the Company,
respectively.  The above issuance of CWN Capital common stocks diluted the Company’s ownership interest in CWN
Capital down to 50% and 23.8%, respectively. Upon the issuance of 55,000 common stocks of CWN Capital on December 18, 2010, the
Company has become a non-controlling shareholder, which the Company (the former parent) deconsolidated CWN Capital from its consolidated
financial statements in accordance with ASC 810-10-65 (formerly SFAS 160 Non-controlling Interests in Consolidated Financial Statements
– an amendment of ARB No. 51), and subsequently the Company accounts for its investment in the CWN Capital under the equity
method.



Pursuant to ASC 810-10-65 (formerly SFAS
160 Non-controlling Interests in Consolidated Financial Statements – an amendment of ARB No. 51), upon the deconsolidation
of CWN Capital, the Company’s retained non-controlling equity investment in the CWN Capital (former subsidiary) was initially
measured at the estimated fair value of $112,218 as of December 18, 2010. As a result, the Company recognized a dilution loss
of $128,356.



For the fiscal year 2010 consolidated
financial statements, the Company included the operations of CWN Capital for the period from January 1, 2010 to December 17, 2010
and recorded an equity income of $13,897 for the period from December 18, 2010 to December 31, 2010, which resulted in a net investment
of $126,115.



For the fiscal year 2011 consolidated
financial statements, the Company recorded an equity income of $192,399 for the period from January 1, 2011 to December 31, 2011,
which resulted in a net investment of $270,371 as of December 31, 2011.



For the fiscal year 2012 consolidated
financial statements, the Company recorded an equity income of $166,735 for the year from January 1, 2012 to December 31, 2012,
which resulted in a net investment of $372,860 as of December 31, 2012.



7. BANK LOANS



Bank loans consisted of the following:



- 73 -







Chineseworldnet.Com Inc. & Subsidiaries



7. BANK LOANS (cont’d.)



|                            |  | 2012 |     |   | 2011    |  
|--------------------------- |  | ---- | --- | - | ------- | -
|From Financial institutions |  | Rate |     |   | Balance |  
|EFG Bank of HongKong        |  |      | 1.5 | % |         | $
|Total                       |  |      |     |   |         | $



The above bank loans are secured by the
Company’s total assets and matured at January 3, 2013. The bank loan has been paid back subsequent to year end.



8. STOCKHOLDERS’ EQUITY



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 purchase one common share at $1.08, which are vested 20% on the first anniversary of the grant date and remaining 80% shall
become vested in four equal yearly installments on each of the four anniversary dates of the grant date subsequent to the first
anniversary of the grant date.



On June 10, 2010, the Company granted
key officers and directors 1,090,000 stock options, which expire on June 10, 2015 with each stock option entitling its holder
to purchase one common share at $0.60, which are vested 20% on the first anniversary of the grant date and remaining 80% shall
become vested in four equal yearly installments on each of the four anniversary dates of the grant date subsequent to the first
anniversary of the grant date.



|                           |  | Number of Options |           |   | Weighted Average  Exercise Price |  
|-------------------------- |  | ----------------- | --------- | - | -------------------------------- | -
|Balance, December 31, 2010 |  |                   | 1,540,000 |   |                                  | $
|Forfeited                  |  |                   | (30,000   | ) |                                  |  
|Balance, December 31, 2011 |  |                   | 1,510,000 |   |                                  |  
|Forfeited                  |  |                   | (20,000   | ) |                                  |  
|Expired                    |  |                   | (450,000  | ) |                                  |  
|Balance, December 31, 2012 |  |                   | 1,040,000 |   |                                  | $



As at December 31, 2012, the Company has
1,040,000 stock options outstanding:



|Exercise price |      |  | Outstanding as at December 31, 2012 |  |           | Exercisable as at December 31, 2012 | 
|-------------- | ---- |  | ----------------------------------- |  | --------- | ----------------------------------- | 
|               |      |  | Number of Options                   |  |           | Weighted Average Exercise Price     | 
|               |      |  |                                     |  |           |                                     | 
|$              | 1.08 |  |                                     |  | -         |                                     | 
|               | 0.60 |  |                                     |  | 1,040,000 |                                     | 
|               |      |  |                                     |  | 1,040,000 |                                     | 



|Exercise price |      |  | Outstanding as at December 31,2011 |  |           | Exercisable as at December 31, 2011 |  |   |                                                         | 
|-------------- | ---- |  | ---------------------------------- |  | --------- | ----------------------------------- |  | - | ------------------------------------------------------- | 
|               |      |  | Number of Options                  |  |           | Weighted Average Exercise Price     |  |   | Weighted Average Remaining Contractual
    Life (years) | 
|               |      |  |                                    |  |           |                                     |  |   |                                                         | 
|$              | 1.08 |  |                                    |  | 450,000   |                                     |  | $ | 1.08                                                    | 
|               | 0.60 |  |                                    |  | 1,060,000 |                                     |  |   | 0.60                                                    | 
|               |      |  |                                    |  | 1,510,000 |                                     |  | $ | 0.74                                                    | 



- 74 -







Chineseworldnet.Com Inc. & Subsidiaries



8. STOCKHOLDERS EQUITY (cont’d.)



The fair value of each stock option granted
in the fiscal year 2010 was calculated as $0.30. The Company recorded stock based compensation expense of $59,404 in fiscal year
2012 (2011- $140,042 and 2010-$151,480) for options granted in the previous years. The fair value of each option granted is estimated
on the date of the grant using the Black-Scholes option pricing model with weighted average assumptions for grants as follows:



|                         |  | 2010    |      
|------------------------ |  | ------- | -----
|Risk-free interest rate  |  |         | 2.65 
|Expected life of options |  | 5 years |      
|Annualized volatility    |  |         | 76.71
|Dividend rate            |  |         | 0    



9. RELATED PARTY TRANSACTIONS



|[a] | In 2012, the Company incurred $90,000 [2011 - $104,000
    and 2010 - $96,000] in consulting fees to a company related to a director of the Company, of which $22,500 was outstanding
    balance as at December 31, 2012.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|[b] | In 2012, the Company paid $110,723 [2011 - $103,651
    and 2010 - $124,951] salary to the senior officers of the Company.
|--- | --------------------------------------------------------------------------------------------------------------------------



|[c] | As at December 31, 2012, the Company has non-interest
    bearing advances from a stockholder and director of $9,500 [2011 - $31,613].
|--- | --------------------------------------------------------------------------------------------------------------------------------------



|[d] | Included in accounts payable, $74,836 [2011 - $13,287]
    was payable to directors and senior officers of the Company.
|--- | -----------------------------------------------------------------------------------------------------------------------



|[e] | Included in accounts receivable, $nil [2011 - $387]
    was receivable from senior officers of the Company.
|--- | -----------------------------------------------------------------------------------------------------------



|[f] | As at December 31, 2011, an advance of $2,574 provided
    by the Company to a director as prepaid expenses had been settled during 2012.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------



|[g] | In 2012, the Company incurred $12,000 [2011 - $12,000
    and 2010 - $12,000] in director fees, of which $12,000 [2011 - $Nil] was outstanding and included in accounts payable and
    accrued liabilities as at December 31, 2012.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|[h] | In 2012, the Company provided service for a total of
    $270,810 [2011 - $202,280 and 2010 - $139,091] to CWN Capital, of which $270,810 [2011 - $202,280] was outstanding and included
    in receivable from a related party as at December 31, 2012. The balance of receivable from a related party in the amount of
    $215,644 [2011 - $43,946] represents costs incurred on behalf of CWN Capital by the Company.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|[i] | In 2012, the Company provided service for a total of
    $14,043 [2011and 2010 - $Nil] to CWN Mining Acquisition, a company has significantly influenced by CEO of the Company.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Also see note 6.



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.



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Chineseworldnet.Com
Inc. & Subsidiaries



10. INCOME TAXES



The parent
company is subject to the tax laws of Cayman Islands and the tax rate is 0%.NAI is a Canadian company and its income
tax expense varies from the amount that would be computed from applying the combined Canadian federal and provincial income tax
rate at 25%. CWN HK and CWN China are taxed at 16.5% and 25% based on the Hong Kong and Chinese tax laws. The reconciliation of
the income tax expense is as follows:



|                                              |  | 2012
    $ |         |   | 2011
    $ |  |         | 2010
    $ | 
|--------------------------------------------- |  | ---------- | ------- | - | ---------- |  | ------- | ---------- | 
|                                              |  |            |         |   |            |  |         |            | 
|Net Income (loss) for the year                |  |            | (79,646 | ) |            |  | 192,626 |            | 
|Statutory Cayman Islands corporate tax rate   |  |            | 0       | % |            |  | 0       | %          | 
|Anticipated tax recovery                      |  |            | —       |   |            |  | —       |            | 
|                                              |  |            |         |   |            |  |         |            | 
|Change in tax rates resulting from:           |  |            |         |   |            |  |         |            | 
|Non-deductible items                          |  |            | 15,250  |   |            |  | —       |            | 
|Change in estimates                           |  |            | (7,259  | ) |            |  | -       |            | 
|Change enacted of tax rate                    |  |            | -       |   |            |  | 6,818   |            | 
|Functional currency adjustments               |  |            | (2,022  | ) |            |  | -       |            | 
|Foreign tax rate differential                 |  |            | (84,074 | ) |            |  | 8,477   |            | 
|Others                                        |  |            | -       |   |            |  | (11,461 | )          | 
|Deferred tax assets not previously recognized |  |            | -       |   |            |  | -       |            | 
|Change in valuation allowance                 |  |            | 127,389 |   |            |  | 50,752  |            | 
|Income tax expense (recovery)                 |  |            | (49,284 | ) |            |  | 54,586  |            | 



Deferred taxes reflect the tax effects
of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. Deferred tax
assets (liabilities) at December 31, 2012 and 2011 are comprised of the following:



|                               |  | 2012
    $ |          |   | 2011
    $ | 
|------------------------------ |  | ---------- | -------- | - | ---------- | 
|                               |  |            |          |   |            | 
|Non-capital loss carryforwards |  |            | 357,624  |   |            | 
|Capital losses                 |  |            | 744      |   |            | 
|Equipment and furniture        |  |            | 1,219    |   |            | 
|Others                         |  |            | (5,539   | ) |            | 
|                               |  |            | 354,048  |   |            | 
|Valuation allowance            |  |            | (350,191 | ) |            | 
|Net deferred income tax assets |  |            | 3,857    |   |            | 



The Company has non operating loss carryforwards
of approximately $288,000 (2011: $223,000) which may be carried forward to apply against future year income tax for Canadian income
tax purposes, subject to the final determination by taxation authorities, expiring in the following years:



|     |  | $ |        
|---- |  | - | -------
|2028 |  |   | 158,000
|2029 |  |   | 67,000 
|2030 |  |   | 63,000 
|     |  |   | 288,000



In addition, the Company has Canadian
capital loss of $5,928, which may be carryfoward indefinitely and apply to reduce further capital gains.



The Company has net operating loss carryforwards
of approximately $45,473 (2011: $45,582) which may be carried forward indefinitely to apply against future year income tax for
HongKong income tax purposes, subject to the final determination by taxation authorities.



The Company has net operating loss carryforwards
of approximately $1,109,400 (2011: $863,108) which may be carried forward to



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Chineseworldnet.Com Inc. & Subsidiaries



10. INCOME TAXES (cont’d.)



apply against future year income tax for
Chinese income tax purposes, subject to the final determination by taxation authorities, expiring in 2017.



11.  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, 2012    |  | Canada |           |  | China |   |          | Total | 
|------------------------------- |  | ------ | --------- |  | ----- | - | -------- | ----- | 
|                                |  |        |           |  |       |   |          |       | 
|Revenue from external customers |  | $      | 1,227,285 |  |       | $ | 16,353   |       | 
|Net income (loss)               |  |        | 90,283    |  |       |   | (219,214 | )     | 
|Total assets                    |  | $      | 2,439,206 |  |       | $ | 132,058  |       | 



|Year ended December 31, 2011    |  | Canada |           |  | China |   |          | Total | 
|------------------------------- |  | ------ | --------- |  | ----- | - | -------- | ----- | 
|                                |  |        |           |  |       |   |          |       | 
|Revenue from external customers |  | $      | 1,661,061 |  |       | $ | 14,814   |       | 
|Net income (loss)               |  |        | 341,127   |  |       |   | (203,087 | )     | 
|Total assets                    |  | $      | 2,874,902 |  |       | $ | 307,515  |       | 



12. COMMITMENTS



Operating leases



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



|      |  | $ |        
|----- |  | - | -------
|2013  |  |   | 141,407
|2014  |  |   | 115,008
|2015  |  |   | 96,532 
|2016  |  |   | 53,524 
|Total |  |   | 406,471



Capital Commitments



According to the approval of the Administration
Committee of Zhangjiang High-Tech Park of Shanghai on February 18, 2011, the total registered capital to ChineseWorldNet.com (Shanghai)
Ltd. increased from RMB 5,000,000 to RMB 10,000,000. CWN HK is required to contribute the additional registered capital of RMB
5,000,000 by paying cash within two years from August 19, 2011. During the year ended December 31, 2011 and 2012, CWN HK paid
cash of $400,000 (RMB 2,581,573) and $200,000 (RMB 1,257,675) respectively. As at December 31, 2012, the Company has capital commitment
of RMB 1,160,752 ($184,214) to ChineseWorldNet.com (Shanghai) Ltd.



13.  SUBSEQUENT EVENTS



|[a] | Subsequent to the year end, the Company entered into
    a new consulting agreement with Goldpac Investments Ltd., a company controlled by a director of the Company.  The
    Company will pay $22,500 per quarter to Goldpac Investments Ltd. for the consulting services from January 1 to December 31,
    2013.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Also see note 2 and note 7.



14.  COMPARATIVE FIGURES



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



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