UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, 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, 2011

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
Officer
Tel: +1 (604) 488-8878   Fax: +1 (604) 488-0868
Suite 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 | Name of each exchange on which registered
|------------------- | -----------------------------------------
|Not Applicable      | 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 | x
    No
|--------- | --------



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

| ̈
    Yes | x
    No
|--------- | --------



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).

| ̈
    Yes |  ̈
    No
|--------- | --------



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

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



Indicate
by check mark which 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 | x
    No
|--------- | --------













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                    | 4 
|                                                                    | 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                     | 33
|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                  | 43                                                   
|                                                                    | 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             | 49
|                                                                    | C. Material Contracts                                 | 50
|                                                                    | D. Exchange Controls                                  | 50
|                                                                    | E. Taxation                                           | 52
|                                                                    | F. Dividends and Paying Agents                        | 52
|                                                                    | 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                                                   





i







|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                   | 56
|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,
80% owned interest in ChineseWorldNet.com (Shanghai) Ltd. (“CWN China”), a company incorporated under the laws
of People’s Republic of China, and 80% 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 2011” are to our fiscal year ended December 31, 2011, 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.





-3-







Part I



| | Item 1. |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
| | ------- |  | -----------------------------------------------------



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



| | Item 2. |  | OFFER STATISTICS AND EXPECTED TIMETABLE
| | ------- |  | ---------------------------------------



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



|Item 3. |  | KEY INFORMATION
|------- |  | ---------------
|        |  |                

| | A. | Selected Financial Data
| | -- | -----------------------



The following table sets forth selected
consolidated financial information from our consolidated financial statements prepared in accordance with US GAAP for our five
most recently completed fiscal periods consisting of the years ended December 31, 2011, 2010, 2009, 2008 and 2007.  The information
for the last three fiscal years ended December 31, 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, 2008 and 2007 have been extracted
from audited consolidated financial statements not disclosed elsewhere and presented below.



|                                                           |  | Year ended December 31, |           
|---------------------------------------------------------- |  | ----------------------- | ----------
|                                                           |  | 2011                    |           
|Consolidated Statements of Operations:                     |  |                         |           
|Revenue                                                    |  | $                       | 1,675,875 
|Net income (loss) for the year                             |  |                         | 138,040   
|Net income (loss) attributable to non-controlling interest |  |                         | (60,926)  
|Net income (loss) attributable to common stockholders      |  |                         | 198,966   
|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       |  |                         | 11,404,862
|                                                           |  |                         |           
|Consolidated Balance Sheets:                               |  |                         |           
|Total assets                                               |  | $                       | 3,182,417 
|Equipment                                                  |  |                         | 36,519    
|Total current liabilities                                  |  |                         | 1,123,354 
|Total stockholders’ equity (deficiency)                    |  |                         | 2,059,063 



No dividends have
been declared or paid in Fiscal 2011.



| | 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.





-4-







| | 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.



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.





-5-







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, and www.gcff.ca,
as well as their associate brands are important aspects in our efforts to continue to attract clients and users.  Our planned
products and services may not be widely recognized, and we will need to increase awareness amongst potential users.  Despite
continued efforts to generate brand awareness, it may be ineffective or unsuccessful in reaching potential users.  Potential
users may not be receptive to our advertising campaigns and/or other efforts.  Accordingly, our efforts may be unsuccessful
in raising awareness of our websites and their associate brands or in persuading potential clients and users to purchase or use
our services.



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, and www.gcff.ca, 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 has accumulated a deficit of $2,226,158 as at December 31, 2011. 
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, 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 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 PRC’s securities markets.  Volatility in PRC’s securities
markets may dampen investors’ interest in such markets and adversely affect our revenue and profitability.



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



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, Globeinvestor.com, TheNewYorkTimes.com, DowJones.com,
SmartMoney.com, and The Motley Fool;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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

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

-12-





| |  | 
| |  | 

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

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

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

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

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



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



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



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.





-17-







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



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



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





-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 80% controlling interest in Weihai.



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%. 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, 2011, there were approximately eleven 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.





-22-







During Fiscal 2011, 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 2012 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 $5,500 for these services.  There is no fee being charged to individual registered members or readers of
the www.nai500.com website.





-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 expect to continue to expand our Road Show Business in
2012 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.



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 intend distribute
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.





-26-







Future Product / Service Offering



Currently, our IR/PR services are focused
on introducing and promoting North American client companies to the Chinese investor community in North America and recently also
in Greater China.  We plan to launch the China version of NAI in June of 2012 to service investors and industrial professionals
in the Greater China Region and provide them with in-depth information about the mining and resources markets outside of China.
We expect that NAI China will have a membership based model at the time of its launch and will be a platform for us to build a
more substantial Chinese industrial investor database which will, in turn, assist in our various businesses, including the GCFF
conferences and NAI Road Shows.  As we have already established a solid client base in the mining and resources sector, we
plan to further diversify into other sectors such as clean technology, information technology, life science, and manufacturing
in 2012.  The launch of NAI 500 in 2009 and the NAI 500 iPhone App in 2010 were successful milestones.  We are planning
for further development by adding new functionalities to our website including portfolio tracker and online video posting. 
We are also planning to offer specialized and in-depth IR/PR services to clients who require more day-to-day assistance on their
Investor Relations’ needs, such as filling an Account Manager position who has full understanding about our Company’s
businesses and to answer our Chinese investors’ inquiries.  We also plan to continue our focus on expanding the number
of our Road Show Business in 2012.



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 9 and 10, 2011, NAI successfully launched the first 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 2011, NAI
has successfully hosted GCFF events in Vancouver, Toronto, Shenzhen and Shanghai; we intend to expand our presence into more other
cities in the future and increase the scale of the event.



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.





-27-







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 2012.  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 2012, 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 plan to update 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. We plan to change the name of the Global Corporate Sponsorship
program to the Patron Sponsorship program and increase the price from $25,000 to $30,000. We also plan to create a lower tier,
multi-event, annual sponsorship program called the Premier Sponsorship program with the price set at USD$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, corporate delegate package
is charged $2,500 to $3,000 and individual delegate package is charged between $199 and $299.  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.



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.





-28-







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, 2011, 2010 and 2009 is as follows.



|                                                         |  | Year ended December 31,
|-------------------------------------------------------- |  | -----------------------
|Revenue Breakdown                                        |  | 2011                   
|GCFF Conference Business                                 |  | $                      
|Road Show Business                                       |  |                        
|Various IR/PR Service                                    |  |                        
|Chinese Webpage Design, Hosting and Maintenance          |  |                        
|Online Marketing Service                                 |  |                        
|Banner Advertising                                       |  |                        
|Publication Service                                      |  |                        
|CWN Membership and Online Service                        |  |                        
|Translation Service (Company Review, Company Newsletter) |  |                        
|Other Revenues                                           |  |                        
|Total                                                    |  | $                      



The breakdown of the revenue sources by
geographic market for the years ended December 31, 2011, 2010 and 2009 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 |  | 2011                   
|Canada            |  |                        
|China             |  |                        



Corporate
Strategy and Strategic Business Plan



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.





-29-







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.  However,
our IR/PR business may have limited potential in the Hong Kong and the Greater China markets as these markets are different from
the North American markets and are more competitive.  Our Conference business, which we named Global Chinese Financial Forum
or GCFF, has evolved into a stand-alone business since 2006 and conferences are being hosted in major cities in North America and
Greater China. We provide a networking environment to companies and products and services providers and we connect them together
by the various services we offer.  As we have already established our presence in the North American market, our next milestone
is to penetrate deeper into the Greater China market and then gradually expand into other cities in Asia.  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, we
have established partnerships with a few local Chinese companies. One of which is our joint venture with Shanghai Compass Venture
Capital Investment Company Limited, which has resulted in the incorporation of CWN China in Shanghai, China.  CWN China serves
for three main purposes: (1) It helps building the necessary channels to capture the financial information business locally. 
(2) It offers assistance in the organization and coordination of regional marketing activities.  For instance, the Toronto
Conference 2010 in October 2010 relied on the networks we gained through the joint venture by means of bringing in governmental
agencies, public and private companies, industrial associations and other business professionals and experts in order to create
the Greater China portion of the cross-border partnering services for its industrial level event.  In addition, the Shanghai
Conference 2010 in December 2010 was largely through the coordination effort of the joint venture.  (3) It seeks other business
opportunities including the development of investor relations/public relations business, the creation of a basis for potential
acquisition opportunities, and for further the digital financial media business in the Greater China region.



Internet Content
Partners



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



|Company Name            |  | Services 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.                                                       





-30-







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, 2011, 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     |  |            | 1,336,718,015 |  |                |  | 513,100,000 |             |  |  | 38.4          | %
|Hong Kong |  |            | 7,122,508     |  |                |  | 4,894,913   |             |  |  | 68.7          | %
|Taiwan    |  |            | 23,071,779    |  |                |  | 16,147,000  |             |  |  | 70.0          | %



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



Internet Advertising Market



Internet advertising revenues in the United
States totaled $26 billion for the full year of 2010, up 15% from 2009, according to the Interactive Advertising Bureau (IAB). 
The report showed that as of April 2011, there have been five consecutive quarters of growth in the industry.





-31-







According to the Interactive Advertising
Bureau of Canada (IAB)’s 2009 Actual + 2010 Estimated Canadian Online Advertising Revenue Survey, Canadian online advertising
revenues topped $1.82 billion Canadian dollars in 2009, up 14% from the budgeted expectations for 2009 of $1.75 billion Canadian
dollars reported in 2008.  It was estimated to reach $2.1 billion Canadian dollars in 2010.



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,
Chinese net ODI from the period of 2006 to 2010 was $216.6 billion, exceeding government targets by 3.6 times.  Non-financial
ODI was $47.56 billion in the first 11 months of 2010.



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.



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.





-32-







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 99% owned by CWN and 1% owned
by Mr. Liu Chi Cheong, a director and a major shareholder of CWN.  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%. 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.



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, 2011, there were fourteen
employees in NAI and eleven 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, 2012.





-33-







As of December 31, 2011, we had leasehold
improvements of $nil (2010 – $nil and 2009 – $10,227), computer equipment and computer software of $10,606 (2010 –
$14,260 and 2009 – $17,030), office furniture of $7,530 (2010 – $10,217 and 2009 – $12,617), and vehicle of $18,383
(2010 – $26,044 and 2009 – $33,138).





| | 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, 2011, 2010 and 2009 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 generates 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, 2011, 2010 AND 2009



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.



For the year ended December 31, 2010 (“Fiscal
2010”), we recorded a net gain of $296,604 with a net income of $188,746 attributable to common stockholders ($0.02 per Common
Share), compared to a net loss of $402,209 of which $329,232 was attributable to common stockholders (($0.03) per Common Share)
for the year ended December 31, 2009 (“Fiscal 2009”).  The increase of net income of $698,813 was primarily due
to record the revenue from CWN Capital, the increase of sales revenue, the recognition of deferred income tax recovery, as well
as gain in foreign exchange transactions.  In Fiscal 2010, we recorded revenue of $1,733,329 compared to $906,455 in Fiscal
2009.  The increase of revenue of $826,874 was primarily due to the company recognized the revenue from consolidation of CWN
Capital from inception up to December 18, 2010.



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.





-34-







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.



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.





-35-







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.



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.





-36-







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.



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.





-37-







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.



Year Ended
December 31, 2010 Compared to Year Ended December 31, 2009



Revenues



The gradual recovery of the global financial
crisis and the weakened economy that was started in late 2008 has caused increased confidence and funding of client companies as
well as individual investors, and was the primary factor of the increase 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



The global financial crisis and the weakened
economy had had a negative impact on our businesses in Fiscal 2009 as shown in our declined revenues, client base and conference
attendance and sales.  But as the market continued to improve at an optimistic pace over in Fiscal 2010, all aspects of our
businesses showed positive growth in sales revenue, other than GCFF Conference Business and CWN Membership and Online Service. 
Going forward, with our focus in 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, we see
untapped opportunities in one of the fastest growing markets in the world and we expect our revenue to continue to grow as we attract
and retain new and existing clients and users.



GCFF
Conference Business



Revenue generated from GCFF Conference
Business was $312,781 in Fiscal 2010, compared to $414,098 in Fiscal 2009.  The decrease of $101,317 was due to the decrease
of presenting companies and exhibitors’ sponsorship in our conferences during Fiscal 2010 as compared to Fiscal 2009. 
We anticipate revenue from GCFF Conference Business will improve in 2011 as the market continues to improve.



Road Show
Business



Road Show Business was a new service offering
we started in Fiscal 2009, where we create and provide opportunities for public companies and their representatives to meet with
potential institutional and retail investors, and we charge participating companies for fees and expenses accordingly.  Revenue
generated from Road Show Business was $232,977 in Fiscal 2010, compared to $122,860 in Fiscal 2009.  The significant increase
of $110,117 was due to the increase of companies that participated for the events held in 2010.  We expect to continue our
focus in and expand on this new service offering in 2011 as we see positive feedback and results.



Various
IR/PR Service



Revenue from Various IR/PR Service was
$207,725 in Fiscal 2010, compared to $115,938 in Fiscal 2009.  The increase of $91,787 was primarily due to the recovery of
the financial market causing an increase of confidence and funding from our client companies as compared to Fiscal 2009.





-38-







Chinese
Webpage Design, Hosting and Maintenance



Revenue from Chinese Webpage Design, Hosting
and Maintenance was $130,032 in Fiscal 2010, compared to 80,396 in Fiscal 2009.  The increase of $49,636 was primarily due
to the recovery of the financial market causing more client companies interested in our Chinese micro-site development and hosting
services as compared to Fiscal 2009.



Online
Marketing Service



Revenue from Online Marketing Service was
$85,811 in Fiscal 2010, compared to $75,937 in Fiscal 2009.  The increase of $9,874 was primarily due to our added resources
on promoting our Online Marketing Service as compared to a year ago.



Banner
Advertising



Revenue we generated from Banner Advertising
increased $23,534 from $18,788 in Fiscal 2009 to $42,322 in Fiscal 2010.  This was primarily due to the increase in client
companies’ frequency of placing advertisements on our websites because of the improved financial market situation as compared
to a year ago.



Publication
Service



Revenue we generated from Publication Service
increased $4,305 from $16,794 in Fiscal 2009 to $21,099 in Fiscal 2010.  This was primarily due to the increase in sponsorship
of our client companies because of the weakened general financial market situation as compared to a year ago.



CWN Membership
and Online Service



Revenue we generated from CWN Membership
and Online Service decreased $2,511 from $7,377 in Fiscal 2009 to $4,866 in Fiscal 2010.  This was primarily due to the decrease
in the number of Premium Subscribers of our websites as compared to a year ago.



Translation
Service



Translation Service was $12,633 in fiscal
2010, compared to $4,406 in fiscal 2009.  The increase of $8,227 was due to more translation projects as compared to a year
ago.



Other Revenues



Other Revenues was $683,083 in fiscal 2010,
compared to $49,861 in fiscal 2009.  The large increase of $633,222 was mainly due to revenue recognition from consolidation
of CWN Capital with the Company in 2010.



Expenses



For fiscal 2010, we recorded operating
expenses of $1,602,286 compared to operating expenses of $1,464,743 for fiscal 2009.  The increase of operating expenses of
$137,543 was primarily due to increase the consulting fees in 2010.  In Fiscal 2010, advertising and promotion, stock-based
compensation, depreciation, provision for bad and doubtful debts, and directors’ remuneration increased significantly, while
seminar operating expense, and printing expense decreased significantly, as compared to fiscal 2009.  Accretion on convertible
debenture and interest expense on long term debt also decreased substantially as the convertible debentures were matured and converted
into our Common Shares early on in Fiscal 2010.  As the market continues to improve and as we focus on expanding and diversifying
our core revenue generating products and services in 2011, 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
$217,519 in fiscal 2010, compared to $131,604 in Fiscal 2009.  The increase of $85,915 was primarily due to more resources
allocated in advertising and promotion during Fiscal 2010 for GCFF and Road Show events as compared to fiscal 2009.



Audit and
Legal



Audit and legal expenses were $67,322 in
fiscal 2010, compared to $60,731 in fiscal 2009.  The increase of $6,591 was primarily due to increased legal expenses as
compared to fiscal 2009.



Consulting
Fees



Consulting fees expenses were $215,918
in Fiscal 2010, compared to $104,841 in fiscal 2009.  The increase of $111,077 was primarily due to consultants’ services
recorded under CWN Capital during fiscal 2010.



Depreciation



Depreciation expenses were $26,620 in Fiscal
2010, compared to $16,453 in fiscal 2009.  The increase of $10,167 was due to certain new property purchased during Fiscal
2009.



Directors’
Remuneration



Directors’ remuneration expenses
were $12,000 in Fiscal 2010, compared to $8,000 in fiscal 2009.  The increase of $4,000 was due to the increase in directors’
fees paid to each director during Fiscal 2010.



Accretion
on convertible debenture



Accretion on convertible debenture expenses
were a credit of $8,772 in fiscal 2010, compared to $21,845 in fiscal 2009.  The decrease of $30,617 was primarily due to
the effective interest rate calculation, in addition to the maturity of the convertible debentures early in the year in February
2010.



Interest
Expense on Long Term Debt



Interest expense on long term debt was
$2,500 in Fiscal 2010, compared to $15,000 in Fiscal 2009.  The decrease of $12,500 was due to the maturity of the convertible
debentures early in the year in February 2010. Interest expense was recorded in the first 2 months in 2010.



Office
and Miscellaneous



Office and miscellaneous expenses were
$60,568 in Fiscal 2010, compared to $65,386 in Fiscal 2009.  The decrease of $4,818 was primarily due to management’s
effort in controlling operating expenditures.



Printing



Printing expenses were $11,533 in Fiscal
2010, compared to $34,481 in Fiscal 2009.  The decrease of $22,948 was primarily due to fewer resources allocated in printing
during Fiscal 2010 as compared to Fiscal 2009.



Provision
for bad and doubtful debts



Provision for bad and doubtful debts expenses
were $16,242 in Fiscal 2010, compared to $12,031 in Fiscal 2009.  The increase of $4,211 was due to the management’s
best estimation on accounts.





-40-







Rent and
Operating



Rent and operating expenses were $130,311
in Fiscal 2010, compared to $131,958 in Fiscal 2009.  The decrease of $1,647 was primarily due to an adjustment of property
taxes and reduction of rent in our Shanghai office.



Salaries
and Benefits



Salaries and benefits expenses were $514,508
in Fiscal 2010, compared to were $553,819 in Fiscal 2009.  The decrease of $39,311 was primarily due to the termination
of a senior management position offset by increased salary of two senior management positions during Fiscal 2010 and salary
increment for some employees during 2010.



Seminar
Operating Expense



Seminar operating expenses were $11,178
in Fiscal 2010, compared to $71,074 in Fiscal 2009.  The significant decrease of $59,896 was primarily due to reallocation
of most expenses to the account of advertising and promotion in 2010.



Stock-based
Compensation



Stock-based compensation expenses increased
$90,141 from $61,339 in Fiscal 2009 to $151,480 in Fiscal 2010, as new incentive stock options were granted in June 2010 and corresponding
stock-based compensation were recognized.



Telephone



Telephone expenses were $28,404 in Fiscal
2010, compared to $28,268 in Fiscal 2009.  Telephone expenses remained relatively at the same level over the 2 years.



Travel
and Entertainment



Travel and entertainment expenses were
$144,955 in Fiscal 2010, compared to $147,913 in Fiscal 2009.  Travel and entertainment expenses remained relatively
at the same level over the 2 years.



Other Income
(Loss)



We recorded other income of $58,126 in
Fiscal 2010 and $156,079 in Fiscal 2009.  The decrease of other income of $97,953 was primarily due to loss of $128,356
on ownership dilution of CWN Capital in 2010.  Our other income or loss line items primarily consist of interest and
sundry income from our liquid investments that are deposited with banks and other financial institutions, and foreign exchange
gain or loss derived from currency exchange transactions.  We generally deposit our excess cash in interest bearing or
mutual fund accounts and term deposits.  For Fiscal 2010, we recorded interest and sundry income of $30,274, compared
to interest and sundry income of $30,337 in Fiscal 2009.  We recorded foreign exchange gain of $100,996 in Fiscal 2010
and gain of $125,742 in Fiscal 2009.  The continuing gain on foreign exchange was a result of further depreciation of
the US dollar, in comparison with the Canadian dollar.



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.





-41-







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, 2011, the monthly average rate of inflation in Canada was 2.3%.



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



As of December 31, 2011, we had cash and
cash equivalents of $1,771,661 (December 31, 2010 – $938,010). We had a working capital of $1,752,173 at December 31, 2011,
compared to $1,571,460 at December 31, 2010.  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 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, 2011 |  | Total                      |        
|Long-Term Debt Obligations                      |  |                            | —      
|Capital (Finance) Lease Obligations             |  |                            | —      
|Operating Lease Obligations                     |  |                            | 898,000
|Purchase Obligations                            |  |                            | —      
|Other Long-Term Liabilities                     |  |                            | —      
|Total                                           |  |                            | 898,000





-42-







| | 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      |  | 48  |  | January 12, 2000  |  | Director, President and Chief Executive Officer        
|Chi Cheong Liu(1) |  | 52  |  | January 12, 2000  |  | Director and Treasurer                                 
|Chi Kong Liu(1)   |  | 51  |  | January 12, 2000  |  | Director                                               
|Andy S.W. Lam     |  | 62  |  | March 8, 2004     |  | Director                                               
|Kelvin Szeto(2)   |  | 51  |  | June 1, 2006      |  | Chief Financial Officer and Chief Operating Officer    
|Gilbert Chan(3)   |  | 36  |  | April 1, 2008     |  | Senior Vice President, Marketing and Investor Relations
|Terry Wong        |  | 29  |  | 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.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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.





-43-







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 CA$30 million.



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 company. 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
2011.





|                                                                                                                         |  | Annual Compensation in Fiscal 2011 |       
|------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------- | ------
|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
        (Director and Secretary of NAI) |  |                                    | 52,994
|Gilbert Chan
        Senior Vice President, Sales and Marketing
        (President of NAI)                               |  |                                    | 50,657

|
|

-44-





| |     |                                                                                                                                                                                                                                                                                                                                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Mr. Tai is a shareholder and does not receive salary.  We paid Mr. Tai director
fee of $3,000 per year in 2011, $3,000 per year in 2010, and $2,000 per year in 2009.  We had consulting agreements with
Goldpac Investments Ltd. and paid consulting fees of $80,000 per year in 2011 and $72,000 per year in 2010 and 2009.  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 2011, $3,000 per year in 2010, and $2,000 per year in 2009.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                      

| | (3) | Mr. Liu is a shareholder and does not receive salary.  We paid Mr. Liu director
fee of $3,000 per year in 2011, $3,000 per year in 2010, and $2,000 per year in 2009.  We had consulting agreements with
Silver Lake Investment Partners, Ltd. and paid consulting fees of $24,000 per year in 2011 and $24,000 per year in 2010 and
2009.  Mr. Liu has a controlling interest in Silver Lake Investment Partners, Ltd.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                        

| | (4) | Mr. Lam is a director and does not receive salary. We paid Mr. Lam director fee of $3,000
per year in 2011 and $3,000 per year in 2010, and $2,000 per year in 2009.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



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, 2011, there were fourteen
employees in NAI and eleven employees in CWN China.



|Employee Breakdown     |  | NAI (Vancouver) |    |  | CWN China (Shanghai) | 
|---------------------- |  | --------------- | -- |  | -------------------- | 
|Management             |  |                 | 1  |  |                      | 
|Business Development   |  |                 | 4  |  |                      | 
|Editorial              |  |                 | 1  |  |                      | 
|Finance and Accounting |  |                 | 2  |  |                      | 
|IT                     |  |                 | 1  |  |                      | 
|Sales/Marketing        |  |                 | 5  |  |                      | 
|Total                  |  |                 | 14 |  |                      | 





|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, 2012.  The percentage owned is based on 10,950,000 shares outstanding as at March 31, 2012.





-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
        (Director and Secretary of NAI) |  |                 | 150,000   |  |                   | 
|Gilbert Chan(8)
        Senior Vice President, Sales and Marketing
        (President 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, 2011, we had 1,510,000
options issued and outstanding, of which 566,000 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,
2012.  The percentage owned is based on 10,950,000 shares outstanding as at March 31, 2012.



|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, 2012, there were four registered
shareholders in the U.S. with holdings of 1,920,833 Common Shares representing 17.54% 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 2011, the Company incurred $104,000
[2010 - $96,000 and 2009 - $96,000] in consulting fees to two companies related to a director of the Company, of which $20,000
was outstanding balance as at December 31, 2011.



During Fiscal 2011, the Company paid $103,651
[2010 - $124,951 and 2009 - $110,383] salary to the senior officers of the Company.



As at December 31, 2011, the Company has
non-interest bearing advances from a stockholder and director of $31,613 [2010 - $2,128].



Included in accounts payable, $13,287 [2010
- $12,252] was payable to directors and senior officers of the Company.



Included in accounts receivable, $387 [2010
- $4,601] 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 2011, the Company incurred
$12,000 [2010 - $12,000 and 2009 - $8,000] in director fees, of which $Nil [2010 - $2,000] was outstanding as at December 31, 2011.



During Fiscal 2011, the Company provided
service for a total of $202,280 [2010 - $139,091 and 2009 - $Nil] to CWN Capital, of which $202,280 [2010 - $139,091] was outstanding
and included in accounts receivable as at December 31, 2011.



Receivable from a related party in the
amount of $43,946 [2010 - $6,547] represents costs incurred on behalf of CWN Capital by 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, 2011, 2010 and 2009, including our consolidated
balance sheets as of December 31, 2011 and 2010, and the consolidated statements of shareholders’ equity, operations and
cash flows for the years ended December 31, 2011, 2010 and 2009, 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, 2011 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.



|Periods     |  | High |      |  | Low |  
|----------- |  | ---- | ---- |  | --- | -
|Fiscal 2011 |  | $    | 1.40 |  |     | $
|Fiscal 2010 |  | $    | 0.75 |  |     | $
|Fiscal 2009 |  | $    | 0.25 |  |     | $
|Fiscal 2008 |  | $    | 1.30 |  |     | $
|Fiscal 2007 |  | $    | 1.5  |  |     | $
|            |  |      |      |  |     |  
|Fiscal 2012 |  |      |      |  |     |  
|1Q-2012(1)  |  | $    | N/A  |  |     | $
|            |  |      |      |  |     |  
|Fiscal 2011 |  |      |      |  |     |  
|4Q-2011(1)  |  | $    | N/A  |  |     | $
|3Q-2011     |  | $    | 1.34 |  |     | $





-48-









|Periods                                                   |  | High |      |  | Low |  
|--------------------------------------------------------- |  | ---- | ---- |  | --- | -
|2Q-2011                                                   |  | $    | 1.40 |  |     | $
|1Q-2011                                                   |  | $    | 0.55 |  |     | $
|                                                          |  |      |      |  |     |  
|Fiscal 2010                                               |  |      |      |  |     |  
|4Q-2010                                                   |  | $    | 0.75 |  |     | $
|3Q-2010                                                   |  | $    | 0.50 |  |     | $
|2Q-2010                                                   |  | $    | 0.50 |  |     | $
|1Q-2010                                                   |  | $    | 0.25 |  |     | $
|                                                          |  |      |      |  |     |  
|Most Recent 6 months from October 2011 through March 2012 |  |      |      |  |     |  
|March 2012(1)                                             |  | $    | N/A  |  |     | $
|February 2012(1)                                          |  | $    | N/A  |  |     | $
|January 2012(1)                                           |  | $    | N/A  |  |     | $
|December 2011(1)                                          |  | $    | N/A  |  |     | $
|November 2011(1)                                          |  | $    | N/A  |  |     | $
|October 2011(1)                                           |  | $    | N/A  |  |     | $





| | (1) | There were no trades of our common shares during the
period from October 2011 to March 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.



| | Item 10. |  | ADDITIONAL INFORMATION
| | -------- |  | ----------------------





|A. | Share Capital
|-- | -------------



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



| | B. | Memorandum and Articles of Association
| | -- | --------------------------------------



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





-49-







| | 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, 2011.  The
monthly lease payment is RMB$22,467.88 plus applicable taxes and maintenance fees.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                     

| | · | Consulting agreements dated January 1, 2010 and January 1, 2011 with Goldpac Investments Ltd. See
Item 6.B. Compensation, Item 6.C. Board Practices and Item 7.B. Related Party Transactions.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                              

| | · | Consulting agreements dated January 1, 2010 and January 1, 2011 with Silver Lake Investment Partners,
Ltd. See Item 6.B. Compensation, Item 6.C. Board Practices and 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;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                  

| | 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
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   

-51-





| | 
| | 

| | 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.



| | 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.





-52-







| | 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”), 80% owned interest in ChineseWorldNet.com (Shanghai)
Ltd., a company incorporated under the laws of PRC (“CWN China”), and 80% 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, 2011 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, 2011, 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.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                            



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.





-54-







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, 2011 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 and Chang Lee LLP, a predecessor firm to MNP LLP, in 2011 and 2010.  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, |       
|--------------------- |  | ---------------------------- | ------
|                      |  | 2011                         |       
|Audit Fees(1)         |  | $                            | 50,000
|Audit-Related Fees(2) |  |                              | —     
|Tax Fees(3)           |  |                              | —     
|All Other Fees        |  |                              | —     
|Total                 |  | $                            | 50,000



| | (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



| | Item 17. |  | 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 80 of this Report:



|Reports of Independent Registered Public Accounting Firms                                                         | 60 to 61
|----------------------------------------------------------------------------------------------------------------- | --------
|Consolidated Balance Sheets as at December 31, 2011 and 2010                                                      | 62      
|Consolidated Statements of Stockholders’ Equity (Deficiency) for the years ended December 31, 2011, 2010 and 2009 | 63      
|Consolidated Statements of Operations for the years ended December 31, 2011, 2010 and 2009                        | 64      
|Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009                        | 65      
|Notes to Consolidated Financial Statements                                                                        | 66 to 79
|                                                                                                                  |         

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





|Exhibit No. |     | 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         | *   | Consulting Agreement between Chineseworldnet.Com Inc. and Goldpac Investments Ltd. dated January 1, 2011             
|            |     |                                                                                                                      
|4.7         | *   | Consulting Agreement between Chineseworldnet.Com Inc. and Silver Lake Investment Partners, Ltd. dated January 1, 2011
|            |     |                                                                                                                      
|8           | *   | List of Subsidiaries                                                                                                 
|            |     |                                                                                                                      
|11          | (3) | Code of Ethics                                                                                                       
|           

-57-





|        |    |                                                                                                   
|------- | -- | --------------------------------------------------------------------------------------------------
|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
|        |    |                                                                                                   
|15      | *  | Letter from Chang Lee LLP                                                                         
|        |    |                                                                                                   
|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 first 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.         
|    |                                                                                                                                      





-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, 2012



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





-59-











|
|
|









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, 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,
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 | /s/ MNP LLP          
|----------------- | ---------------------
|April  27, 2012   | 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 | /s/ Chang Lee LLP    
|----------------- | ---------------------
|May 2, 2011       | Chartered Accountants





-61-









Chineseworldnet.Com Inc. & Subsidiaries



CONSOLIDATED BALANCE SHEETS



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





|                                                                   |  | 2011 |            |   | 2010 | 
|------------------------------------------------------------------ |  | ---- | ---------- | - | ---- | 
|                                                                   |  | $    |            |   | $    | 
|                                                                   |  |      |            |   |      | 
|ASSETS                                                             |  |      |            |   |      | 
|Current assets                                                     |  |      |            |   |      | 
|Cash and cash equivalents                                          |  |      | 1,771,661  |   |      | 
|Available-for-sale securities[note 3]                              |  |      | 650,823    |   |      | 
|Accounts receivable[note 4]                                        |  |      | 306,718    |   |      | 
|Receivable from a related party[note 10i]                          |  |      | 43,946     |   |      | 
|Prepaid expenses and deposits                                      |  |      | 46,051     |   |      | 
|Deferred income tax assets[note 8]                                 |  |      | 56,328     |   |      | 
|Total current assets                                               |  |      | 2,875,527  |   |      | 
|                                                                   |  |      |            |   |      | 
|Equipment[note 5]                                                  |  |      | 36,519     |   |      | 
|Long term investments[note 6]                                      |  |      | 270,371    |   |      | 
|Deferred income tax assets[note 8]                                 |  |      | —          |   |      | 
|Total assets                                                       |  |      | 3,182,417  |   |      | 
|                                                                   |  |      |            |   |      | 
|LIABILITIES AND STOCKHOLDERS’ EQUITY                               |  |      |            |   |      | 
|Current liabilities                                                |  |      |            |   |      | 
|Accounts payable and accrued liabilities                           |  |      | 252,224    |   |      | 
|Due to related parties, non-interest bearing[note 10c]             |  |      | 31,613     |   |      | 
|Deferred revenue                                                   |  |      | 136,651    |   |      | 
|Bank loans[note 7]                                                 |  |      | 702,866    |   |      | 
|Total current liabilities                                          |  |      | 1,123,354  |   |      | 
|                                                                   |  |      |            |   |      | 
|Stockholders’ equity[note 9]                                       |  |      |            |   |      | 
|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                                         |  |      | 4,226,339  |   |      | 
|Accumulated other comprehensive income                             |  |      | (9,351     | ) |      | 
|Deficit                                                            |  |      | (2,226,158 | ) |      | 
|Equity attributable to shareholders of the Company                 |  |      | 2,001,780  |   |      | 
|Non-controlling interests                                          |  |      | 57,283     |   |      | 
|Total stockholders’ equity                                         |  |      | 2,059,063  |   |      | 
|Total liabilities and stockholders’ equity                         |  |      | 3,182,417  |   |      | 
|Commitments[note 13]                                               |  |      |            |   |      | 
|Subsequent events [note 14]                                        |  |      |            |   |      | 



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 |            |  | Additional
        paid-in |  |        |         |  |  | Accumulated
        other
        comprehensive |  |  | Total equity
        (deficiency)
        attributable
        to common |            |   | Non
        controlling |  |          |          | 
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- |  | -------------------------- |  | ------ | ------- |  |  | ----------------------------------------------- |  |  | ------------------------------------------------------------------------ | ---------- | - | ----------------------- |  | -------- | -------- | 
|                                                                                                                                                        |  | Shares       |            |  | Amount                     |  |        | capital |  |  | (Deficit)                                       |  |  | Income                                                                   |            |   | stockholders            |  |          | interest | 
|                                                                                                                                                        |  | #            |            |  | $                          |  |        | $       |  |  | $                                               |  |  | $                                                                        |            |   | $                       |  |          | $        | 
|Balance,
    December 31, 2009                                                                                                                          |  |              | 10,700,000 |  |                            |  | 10,700 |         |  |  | 3,778,308                                       |  |  |                                                                          | (2,613,870 | ) |                         |  | 81,481   |          | 
|                                                                                                                                                        |  |              |            |  |                            |  |        |         |  |  |                                                 |  |  |                                                                          |            |   |                         |  |          |          | 
|Stock
    based compensation                                                                                                                            |  |              | —          |  |                            |  | —      |         |  |  | 151,480                                         |  |  |                                                                          | —          |   |                         |  | —        |          | 
|Conversion
                                                                                                   common shares from convertible debentures |  |              | 250,000    |  |                            |  | 250    |         |  |  | 249,750                                         |  |  |                                                                          | —          |   |                         |  | —        |          | 
|Components
    of comprehensive income (loss):                                                                                                          |  |              |            |  |                            |  |        |         |  |  |                                                 |  |  |                                                                          |            |   |                         |  |          |          | 
|Foreign
    currency translation adjustment                                                                                                             |  |              | —          |  |                            |  | —      |         |  |  | —                                               |  |  |                                                                          | —          |   |                         |  | (85,267) |          | 
|Net
    income (loss) for the year                                                                                                                      |  |              | —          |  |                            |  | —      |         |  |  | —                                               |  |  |                                                                          | 188,746    |   |                         |  | —        |          | 
|Elimination
    of minority interest upon deconsolidation of CWN Capital                                                                                |  |              | —          |  |                            |  | —      |         |  |  | —                                               |  |  |                                                                          | —          |   |                         |  | —        |          | 
|                                                                                                                                                        |  |              |            |  |                            |  |        |         |  |  |                                                 |  |  |                                                                          |            |   |                         |  |          |          | 
|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)  |          | 



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)
|---------------------- | ---------------------------





|                                                          |  | 2011 |             |  | 2010 |  |             | 2009 | 
|--------------------------------------------------------- |  | ---- | ----------- |  | ---- |  | ----------- | ---- | 
|                                                          |  | $    |             |  | $    |  |             | $    | 
|                                                          |  |      |             |  |      |  |             |      | 
|Revenue                                                   |  |      | 1,675,875   |  |      |  | 1,733,329   |      | 
|                                                          |  |      |             |  |      |  |             |      | 
|Expenses                                                  |  |      |             |  |      |  |             |      | 
|Advertising and promotion                                 |  |      | 271,164     |  |      |  | 217,519     |      | 
|Audit and legal                                           |  |      | 63,962      |  |      |  | 67,322      |      | 
|Consulting fees                                           |  |      | 104,000     |  |      |  | 215,918     |      | 
|Depreciation                                              |  |      | 15,918      |  |      |  | 26,620      |      | 
|Directors’ remuneration                                   |  |      | 12,000      |  |      |  | 12,000      |      | 
|Accretion on convertible debenture                        |  |      | —           |  |      |  | (8,772      | )    | 
|Interest expense on long-term debt                        |  |      | —           |  |      |  | 2,500       |      | 
|Office and miscellaneous                                  |  |      | 74,077      |  |      |  | 60,568      |      | 
|Printing                                                  |  |      | 26,245      |  |      |  | 11,533      |      | 
|Provision  for bad and doubtful debts                     |  |      | 55,917      |  |      |  | 16,242      |      | 
|Rent and operating                                        |  |      | 135,049     |  |      |  | 130,311     |      | 
|Salaries and benefits                                     |  |      | 635,260     |  |      |  | 514,508     |      | 
|Seminar operating expense                                 |  |      | 763         |  |      |  | 11,178      |      | 
|Stock based compensation                                  |  |      | 140,042     |  |      |  | 151,480     |      | 
|Telephone                                                 |  |      | 27,339      |  |      |  | 28,404      |      | 
|Travel and entertainment                                  |  |      | 117,240     |  |      |  | 144,955     |      | 
|                                                          |  |      | (1,678,976) |  |      |  | (1,602,286) |      | 
|Other income (loss)                                       |  |      |             |  |      |  |             |      | 
|Interest and sundry income                                |  |      | 37,671      |  |      |  | 30,274      |      | 
|Gain (loss) on short term investment                      |  |      | (5,995)     |  |      |  | 41,315      |      | 
|Foreign exchange gain (loss) and other losses             |  |      | (28,348)    |  |      |  | 100,996     |      | 
|Equity pick up                                            |  |      | 192,399     |  |      |  | 13,897      |      | 
|Loss on dilution of CWN Capital                           |  |      | —           |  |      |  | (128,356    | )    | 
|Other income (loss), net                                  |  |      | 195,727     |  |      |  | 58,126      |      | 
|Income (loss) before income taxes                         |  |      | 192,626     |  |      |  | 189,169     |      | 
|                                                          |  |      |             |  |      |  |             |      | 
|Deferred income tax recovery (expense)                    |  |      | (54,586)    |  |      |  | 107,435     |      | 
|Net income (loss) for the year                            |  |      | 138,040     |  |      |  | 296,604     |      | 
|Other comprehensive income                                |  |      |             |  |      |  |             |      | 
|Unrealized gain or loss on available –for-sale securities |  |      | (3,015)     |  |      |  | -           |      | 
|Currency translation adjustments                          |  |      | (2,550)     |  |      |  | (85,111     | )    | 
|Comprehensive income (loss)                               |  |      | 132,475     |  |      |  | 211,493     |      | 
|                                                          |  |      |             |  |      |  |             |      | 
|Net income (loss) attributable to:                        |  |      |             |  |      |  |             |      | 
|Common stockholders                                       |  |      | 198,966     |  |      |  | 188,746     |      | 
|Non-controlling interests                                 |  |      | (60,926)    |  |      |  | 107,858     |      | 
|                                                          |  |      | 138,040     |  |      |  | 296,604     |      | 
|Net comprehensive income (loss) attributable to:          |  |      |             |  |      |  |             |      | 
|Common stockholders                                       |  |      | 173,194     |  |      |  | 103,479     |      | 
|Non-controlling interests                                 |  |      | (40,719)    |  |      |  | 108,014     |      | 
|                                                          |  |      | 132,475     |  |      |  | 211,493     |      | 
|                                                          |  |      |             |  |      |  |             |      | 
|Earning (loss) per share – basic                          |  |      | 0.01        |  |      |  | 0.02        |      | 
|Earning (loss) per share – diluted                        |  |      | 0.01        |  |      |  | 0.02        |      | 
|Weighted average number of common shares outstanding      |  |      |             |  |      |  |             |      | 
|- basic                                                   |  |      | 10,950,000  |  |      |  | 10,873,288  |      | 
|- diluted                                                 |  |      | 11,404,862  |  |      |  | 10,873,288  |      | 



See accompanying notes







-64-













Chineseworldnet.Com Inc. & Subsidiaries



CONSOLIDATED STATEMENTS OF CASH FLOWS



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





|                                                                           |  | 2011    |           |   | 2010 |         |           | 2009 | 
|-------------------------------------------------------------------------- |  | ------- | --------- | - | ---- | ------- | --------- | ---- | 
|                                                                           |  | $       |           |   | $    |         |           | $    | 
|                                                                           |  |         |           |   |      |         |           |      | 
|OPERATING ACTIVITIES                                                       |  |         |           |   |      |         |           |      | 
|Net income (loss) for the year                                             |  |         | 138,040   |   |      |         | 296,604   |      | 
|Adjustment to reconcile net loss to net cash used in operating activities: |  |         |           |   |      |         |           |      | 
|Depreciation                                                               |  |         | 15,918    |   |      |         | 26,620    |      | 
|Accretion on convertible debenture                                         |  |         | —         |   |      |         | (8,772    | )    | 
|Deferred income tax recovery                                               |  |         | 54,586    |   |      |         | (107,435  | )    | 
|Stock based compensation                                                   |  |         | 140,042   |   |      |         | 151,480   |      | 
|Finder’s fee revenue                                                       |  |         | —         |   |      |         | (109,696  | )    | 
|Equity interest pick up                                                    |  |         | (144,257  | ) |      |         | (13,897   | )    | 
|Gain on short term investment                                              |  |         | —         |   |      |         | (41,315   | )    | 
|Loss on dilution of CWN Capital                                            |  |         | —         |   |      |         | 128,356   |      | 
|Changes in non-cash working capital items:                                 |  |         |           |   |      |         |           |      | 
|Accounts receivable                                                        |  |         | (91,634   | ) |      |         | (109,805  | )    | 
|Prepaid expenses and deposits                                              |  |         | (18,166)  |   |      |         | 8,391     |      | 
|Accounts payable and accrued liabilities                                   |  |         | 33,270    |   |      |         | 34,823    |      | 
|Income taxes                                                               |  |         | -         |   |      |         | 254       |      | 
|Deferred revenue                                                           |  |         | 34,213    |   |      |         | 57,724    |      | 
|Net cash provided by (used in) operating activities                        |  |         | 162,012   |   |      |         | 313,332   |      | 
|                                                                           |  |         |           |   |      |         |           |      | 
|FINANCING ACTIVITIES                                                       |  |         |           |   |      |         |           |      | 
|Short term loan                                                            |  |         | 702,866   |   |      |         | —         |      | 
|Due to related parties                                                     |  | 130,417 |           |   |      | (8,365) |           |      | 
|Net cash provided by financing activities                                  |  | 833,283 |           |   |      | (8,365) |           |      | 
|                                                                           |  |         |           |   |      |         |           |      | 
|INVESTING ACTIVITIES                                                       |  |         |           |   |      |         |           |      | 
|Cash eliminated upon dilution of a subsidiary                              |  |         | —         |   |      |         | (436,805  | )    | 
|Purchase of equipment                                                      |  |         | (1,084    | ) |      |         | (1,786    | )    | 
|Short term investments                                                     |  |         | (172,886) |   |      |         | (500,821) |      | 
|Net cash provided by (used in) investing activities                        |  |         | (173,970  | ) |      |         | (939,412  | )    | 
|                                                                           |  |         |           |   |      |         |           |      | 
|Effect of exchange rate changes on cash and cash equivalents               |  |         | 12,326    |   |      |         | (86,628   | )    | 
|                                                                           |  |         |           |   |      |         |           |      | 
|Increase (decrease) in cash and cash equivalents                           |  |         | 833,651   |   |      |         | (721,073  | )    | 
|Cash and cash equivalents, beginning of year                               |  |         | 938,010   |   |      |         | 1,659,083 |      | 
|Cash and cash equivalents, end of year                                     |  |         | 1,771,661 |   |      |         | 938,010   |      | 
|                                                                           |  |         |           |   |      |         |           |      | 
|Supplemental disclosure of cash flow information                           |  |         |           |   |      |         |           |      | 
|Cash paid for interest, net of interest capitalized                        |  |         | —         |   |      |         | 2,500     |      | 
|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 2011, the Company’s ownership interests in CWN China increased
from 70% to 80% after CWN HK invested an amount of $400,000 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 fund is still
required to fund the Company’s anticipated business expansion.



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



2. SIGNIFICANT ACCOUNTING POLICIES



Basis of consolidation



These consolidated financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America and include the
accounts of the Company and its wholly owned subsidiaries and subsidiaries which the Company owns 80% 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 now has an effective ownership of 80% equity interests
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, 2011, the Company held $1,771,661 [2010 - $938,010] in cash equivalents.



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, 2011, 2010 and 2009 were $271,164, $217,519 and $131,604 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.  As at December 31, 2011, the Company had $Nil (2010 - $Nil) in a bank beyond insured limits.



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



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





-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, 2011
and 2010, 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 2011, the Company incurred an expense for bad debt
and provision for allowance for doubtful accounts receivable in the amount of $55,917 (2010 - $16,242; 2009 – $12,031).



Newly adopted accounting pronouncements
and new accounting pronouncements



In October 2009, the Financial Accounting
Standards Board (the “FASB”) issued guidance related to revenue arrangements with multiple deliverables. Under the
new guidance, when vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be determined,
a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration using the relative
selling price method. Such guidance is to be applied on a prospective basis for revenue arrangements entered into or materially
modified in fiscal years beginning on or after June 15, 2010, with early adoption permitted. The adoption of this guidance did
not have any effect on our consolidated financial statements.





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Chineseworldnet.Com Inc. & Subsidiaries



2. SIGNIFICANT ACCOUNTING POLICIES (cont’d.)



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



In February 2010, the FASB issued Accounting
Standards Update (“ASU”) 2010-09Subsequent Event (Topic 855) Amendments to Certain Recognition and Disclosure Requirements
.. ASU 2010-09 removes the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in
both issued and revised financial statements. Revised financial statements include financial statements revised as a result of
either correction of an error or retrospective application of GAAP. All of the amendments in ASU 2010-09 are effective upon issuance
of the final ASU, except for the use of issued date for conduit debt obligors. The Company adopted this guidance in the fiscal
year 2010.  The adoption of this guidance did not have a material impact on the Company’s financial statements.



In December 2010, the FASB amended its
guidance related to Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those
reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more-likely-than-not that a goodwill
impairment exists. In determining whether it is more-likely-than-not that a goodwill impairment exists, consideration should be
made as to whether there are any adverse qualitative factors indicating that an impairment may exist. The adoption of the new accounting
guidance is not expected to have a material impact on our consolidated financial statements.



In December 2010, the FASB amended its
guidance related to business combinations entered into by an entity that is material on an individual or aggregate basis. These
amendments clarify existing guidance that if an entity presents comparative financial statements that include a material business
combination, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred
during the current year had occurred as of the beginning of the comparable prior annual reporting period. The amendments also expand
the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments
directly attributable to the business combination included in the reported pro forma revenue and earnings. The requirements of
the amended guidance are effective for us December 31, 2011 and early adoption is permitted. This disclosure-only guidance will
not have a material impact on our results of operations, financial position or cash flows.



Management does not believe that any other
recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements.
As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.



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.



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.





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Chineseworldnet.Com Inc. & Subsidiaries

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d.)





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.





3. AVAILABLE-FOR-SALE SECURITIES



Available –for –sale securities
consist of marketable funds, marketable securities and stock options. On January 26, 2011, the Company received 300,000 stock options
from Argex Mining Inc., 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, provide
that the Company still provide consultant services to the optioner.



During the fiscal year 2011, the Company
exercised 75,000 stock options. As at December 31, 2011, the Company has 225,000 stock options outstanding. 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
|                         |  |                 |                



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



|                         |  | 2011           |         | 2010
|------------------------ |  | -------------- | ------- | ----
|                         |  |                |         |     
|                         |  |                |         |     
|                         |  | Cost
        $ |         |     
|                         |  |                |         |     
|Public traded securities |  |                | 30,560  |     
|Marketable funds         |  |                | 609,234 |     
|Stock options            |  |                | 7,302   |     
|Total                    |  |                | 647,096 |     



The fair market value are measured using
quoted prices in active market for the identical assets, the total fair market value is the published market price per unit multiplied
by the number of units held without consideration of transaction costs.





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4. ACCOUNTS RECEIVABLE



|                                |  | December 31,
        2011 |         |   | December 31,
        2010 | 
|------------------------------- |  | ------------------------- | ------- | - | ------------------------- | 
|Accounts receivable             |  |                           | 362,635 |   |                           | 
|Allowance for doubtful accounts |  |                           | (55,917 | ) |                           | 
|Total                           |  |                           | 306,718 |   |                           | 



5. EQUIPMENT



|                       |  |                |         |  | Accumulated            |  |         | Net book        | 
|---------------------- |  | -------------- | ------- |  | ---------------------- |  | ------- | --------------- | 
|                       |  | Cost
        $ |         |  | amortization
        $ |  |         | value
        $ | 
|                       |  |                |         |  |                        |  |         |                 | 
|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 |                 | 
|2010                   |  |                |         |  |                        |  |         |                 | 
|Furniture and fixtures |  |                | 35,830  |  |                        |  | 25,613  |                 | 
|Computer equipment     |  |                | 98,309  |  |                        |  | 84,049  |                 | 
|Leasehold improvement  |  |                | 25,674  |  |                        |  | 25,674  |                 | 
|Vehicle                |  |                | 35,066  |  |                        |  | 9,022   |                 | 
|                       |  |                | 194,879 |  |                        |  | 144,358 |                 | 



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.





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Chineseworldnet.Com Inc. & Subsidiaries



6. LONG TERM INVESTMENTS (cont’d)



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 $270,371as of December 31, 2011.



7. BANK LOANS



Bank loans consisted of the following:



|                            | 2011        |          | 2010
|--------------------------- | ----------- | -------- | ----
|From Financial institutions | Rate        | Balance  |     
|EFG Bank of HongKong        | 1.27%-1.39% | $702,866 |     
|Total                       |             | $702,866 |     



The above bank loans are secured by the
Company’s total assets. As at December 31, 2011, all of the bank loans are fixed term and mature at various date within one
year. These bank loans contain automatically renewal terms.





8. CONVERTIBLE DEBENTURES



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



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



On February 24, 2010, the Company issued
250,000 common shares at the price of US$1.00 to the holder of a convertible note for the conversion of the convertible note.





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Chineseworldnet.Com Inc. & Subsidiaries



9. STOCKHOLDERS’ EQUITY



Common Stocks



On April 22, 2010, the Company issued 250,000
common stocks for the settlement of convertible debentures of $250,000.



Stock Options



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



As at December 31, 2011, the Company has
1,510,000 stock options outstanding:



|                           |  | Number of Options |           |   | Weighted Average Exercise Price |  
|-------------------------- |  | ----------------- | --------- | - | ------------------------------- | -
|Balance, December 31, 2009 |  |                   | 495,000   |   |                                 | $
|Forfeited                  |  |                   | (45,000   | ) |                                 |  
|Granted                    |  |                   | 1,090,000 |   |                                 |  
|Balance, December 31, 2010 |  |                   | 1,540,000 |   |                                 |  
|Forfeited                  |  |                   | (30,000   | ) |                                 |  
|Granted                    |  |                   | -         |   |                                 |  
|Balance, December 31, 2011 |  |                   | 1,510,000 |   |                                 | $





|Exercise price |      |  | Outstanding as at December 31, 2011 |  |           | Exercisable as at December 31, 2011 | 
|-------------- | ---- |  | ----------------------------------- |  | --------- | ----------------------------------- | 
|               |      |  | Number of Options                   |  |           | Weighted Average Exercise Price     | 
|               |      |  |                                     |  |           |                                     | 
|$              | 1.08 |  |                                     |  | 450,000   |                                     | 
|               | 0.60 |  |                                     |  | 1,060,000 |                                     | 
|               |      |  |                                     |  | 1,510,000 |                                     | 
|               |      |  |                                     |  |           |                                     | 



|Exercise price |      |  | Outstanding as at December 31,2010 |  |           | Exercisable as at December 31, 2010 |  |   |                                                     | 
|-------------- | ---- |  | ---------------------------------- |  | --------- | ----------------------------------- |  | - | --------------------------------------------------- | 
|               |      |  | Number of Options                  |  |           | Weighted Average Exercise Price     |  |   | Weighted Average Remaining Contractual Life (years) | 
|               |      |  |                                    |  |           |                                     |  |   |                                                     | 
|$              | 1.08 |  |                                    |  | 450,000   |                                     |  | $ | 1.08                                                | 
|               | 0.60 |  |                                    |  | 1,090,000 |                                     |  |   | 0.60                                                | 
|               |      |  |                                    |  | 1,540,000 |                                     |  | $ | 0.74                                                | 





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Chineseworldnet.Com Inc. & Subsidiaries



9. 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 $140,042 in fiscal year
2011 (2010- $151,480 and 2009-$61,339) 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    



Share Purchase Warrants



A summary of share purchase warrants is
as follows:



|                           |  | Exercise Price |      |  | Number | 
|-------------------------- |  | -------------- | ---- |  | ------ | 
|Balance, December 31, 2009 |  |                | 1.30 |  |        | 
|Expired                    |  |                | 1.30 |  |        | 
|Balance, December 31, 2010 |  | $              | -    |  |        | 



On February 28, 2010, all warrants expired
unexercised.



10. RELATED PARTY TRANSACTIONS



|[a] | In 2011, the Company incurred $104,000 [2010 - $96,000 and 2009 - $96,000] in consulting fees to two companies related to a director of the Company, of which $20,000 was outstanding balance as at December 31, 2011.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|[b] | In 2011, the Company paid $103,651 [2010 - $124,951 and 2009 - $110,383] salary to the senior officers of the Company.
|--- | ----------------------------------------------------------------------------------------------------------------------



|[c] | As at December 31, 2011, the Company has non-interest bearing advances from a stockholder and director of $31,613 [2010 - $2,128].
|--- | ----------------------------------------------------------------------------------------------------------------------------------



|[d] | Included in accounts payable, $13,287 [2010 - $12,252] was payable to directors and senior officers of the Company.
|--- | -------------------------------------------------------------------------------------------------------------------



|[e] | Included in accounts receivable, $387 [2010 - $4,601] was receivable from senior officers of the Company.
|--- | ---------------------------------------------------------------------------------------------------------



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





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Chineseworldnet.Com Inc. & Subsidiaries



|[g] | In 2011, the Company incurred $12,000 [2010 - $12,000 and 2009 - $8,000] in director fees, of which $Nil [2010 - $2,000] was outstanding as at December 31, 2011.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



|[h] | In 2011, the Company provided service for a total of $202,280 [2010 - $139,091 and 2009 - $Nil] to CWN Capital, of which $202,280 [2010 - $139,091] was outstanding and included in accounts receivable as at December 31, 2011.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|[i] | Receivable from a related party in the amount of $43,946 [2010 - $6,547] represents costs incurred on behalf of CWN Capital by 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.



11. 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 26.5%. 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:



|                                              |  | 2011
        $ |          |  | 2010
        $ |  |           | 2009
        $ | 
|--------------------------------------------- |  | -------------- | -------- |  | -------------- |  | --------- | -------------- | 
|                                              |  |                |          |  |                |  |           |                | 
|Net Income (loss) for the year                |  |                | 192,626  |  |                |  | 189,168   |                | 
|Statutory Cayman Islands corporate tax rate   |  |                | 0%       |  |                |  | 0%        |                | 
|Anticipated tax recovery                      |  |                | —        |  |                |  | —         |                | 
|                                              |  |                |          |  |                |  |           |                | 
|Change in tax rates resulting from:           |  |                |          |  |                |  |           |                | 
|Impact of foreign exchange movement           |  |                | —        |  |                |  | —         |                | 
|Foreign tax rate differential                 |  |                | 8,477    |  |                |  | 1,678     |                | 
|Effect of tax change                          |  |                | 6,818    |  |                |  | 15,032    |                | 
|Others                                        |  |                | (11,461) |  |                |  | 1,715     |                | 
|Deferred tax assets not previously recognized |  |                |          |  |                |  | (63,623)  |                | 
|Change in valuation allowance                 |  |                | 50,752   |  |                |  | (62,237)  |                | 
|Income tax expense (recovery)                 |  |                | 54,586   |  |                |  | (107,435) |                | 



Deferred income taxes arise from temporary
differences in the recognition of income and expenses for financial reporting and tax purposes. The significant components of deferred
income tax assets (liabilities) are as follows:



|                               |  | 2011
        $ |           |  | 2010
        $ |  |          | 2009
        $ | 
|------------------------------ |  | -------------- | --------- |  | -------------- |  | -------- | -------------- | 
|                               |  |                |           |  |                |  |          |                | 
|Non-capital loss carryforwards |  |                | 278,658   |  |                |  | 272,084  |                | 
|Equipment and furniture        |  |                | 472       |  |                |  | 918      |                | 
|Others                         |  |                | —         |  |                |  | (2,376   | )              | 
|                               |  |                | 279,130   |  |                |  | 270,626  |                | 
|Valuation allowance            |  |                | (222,803) |  |                |  | (159,712 | )              | 
|Net deferred income tax assets |  |                | 56,327    |  |                |  | 110,914  |                | 





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The Company has non-capital losses available
for Canadian income tax purposes which may be carried forward to reduce taxable income in future years. If not utilized, the non-capital
losses in the amount of $223,000 expire as follows:



|     |  | $ |        
|---- |  | - | -------
|2028 |  |   | 156,000
|2029 |  |   | 67,000 
|     |  |   | 223,000



The Company also has non-capital losses
available for Chinese income tax purposes which may be carried forward to reduce taxable income in future years. If not utilized,
the non-capital losses in the amount of $898,000 expire as follows:



|     |  | $ |        
|---- |  | - | -------
|2012 |  |   | 196,000
|2013 |  |   | 257,000
|2014 |  |   | 234,000
|2015 |  |   | 211,000
|     |  |   | 898,000



12.  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, 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  |       | 





|Year ended December 31, 2010    |  | Canada |           |  | China |   |          | Total | 
|------------------------------- |  | ------ | --------- |  | ----- | - | -------- | ----- | 
|                                |  |        |           |  |       |   |          |       | 
|Revenue from external customers |  | $      | 1,684,766 |  |       | $ | 48,563   |       | 
|Net income (loss)               |  |        | 686,113   |  |       |   | (389,509 | )     | 
|Total assets                    |  | $      | 1,988,406 |  |       | $ | 182,813  |       | 



13. 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:



|      |  | $ |        
|----- |  | - | -------
|2012  |  |   | 112,737
|2013  |  |   | 95,236 
|2014  |  |   | 89,918 
|Total |  |   | 297,881



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 RMB5,000,000 to RMB10,000,000. 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, CWN HK paid cash of $400,000 (RMB
2,581,573). As at December 31, 2011, the Company has capital commitment of RMB 2,418,427 ($380,717) to ChineseWorldNet.com (Shanghai)
Ltd.



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14.  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 be charged $22,500 per quarter for the consulting services from January 1 to December 31, 2012.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|[b] | Subsequent to the year end, 150,000 stock options from Argex Mining Inc. have been exercised at C$0.495 and 75,000 stock options have been cancelled. As at April 11, 2012, the Company sold all exercised shares at an average price of C$0.883 with a proceed of C$130,975.00
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



15.  COMPARATIVE FIGURES



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





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