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U.S. Securities and Exchange CommissionWashington, D.C. 20549

Form 10-KSB

(Mark One)

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|  |   | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 |

For the fiscal year ended December  31,  2006

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|  |   | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 |

For the transition period from                  to                 

Commission file number: 000-29169

Chinawe.com Inc.

(Name of small business issuer in its charter)

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| California                                                     |  |  | 95-4627285                           |
| (State or other jurisdiction of incorporation or organization) |  |  | (I.R.S. Employer Identification No.) |
|                                                                |

Room 1304-05, Dongbao Tower, 767 Dongfeng Road East, Guangzhou, China 510600

(Address of principal executive offices) (Zip Code)

Issuer’s telephone number: (8620) 3821-0119

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Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $.001 par value

(Title of Class)

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.    

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes       No   .

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes       No   

The issuer’s revenues for the fiscal year ended December  31,  2006 were $1,477,408.

The aggregate market value of the voting common equity held by non-affiliates (computed by reference to the closing price of such common equity) on March  29,  2007 was approximately $1,615,131.90.

The number of shares of common stock, par value $.001 per share, outstanding was 43,800,000 shares as of March  30,  2007.

DOCUMENTS INCORPORATED BY REFERENCE

None

Transitional Small Business Disclosure Format (check one):

Yes       No   

Forward Looking Statements:    This Form 10-KSB contains or incorporates by reference certain statements that may be deemed ‘‘forward-looking statements’’ within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, each as amended. All statements, other than statements of historical facts, that address activities, events or developments that the company intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Words such as ‘‘believe,’’ ‘‘anticipate,’’ ‘‘expect,’’ ‘‘intend,’’ ‘‘plan,’’ ‘‘may,’’ and other similar expressions identify forward-looking statements. Such statements are based on certain assumptions and assessments made by management of the company in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes to be appropriate.

The forward-looking statements included in this Form 10-KSB are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental and technological factors affecting the company’s operations, markets, services and prices, and other factors discussed in the company’s filings under the Securities Act and the Exchange Act. Stockholders and prospective investors should be aware that such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements.

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PART I

Item 1.    Description of Business.

Chinawe.com Inc. (the ‘‘Company’’, ‘‘Chinawe’’ or ‘‘we’’), formerly known as Neo Modern Entertainment Corp., was formed pursuant to the corporation laws of the State of California on March 19, 1997. Chinawe’s principal business is the provision of professional management services relating to non-performing loans (‘‘NPL’’ or ‘‘NPLs’’) in the People’s Republic of China (‘‘PRC’’). Due to this transformation, Guangzhou Welcon Information Limited, a subsidiary of the Company from which the Company previously derived a great proportion of its revenues from, terminated its operations in October 31, 2005. The Company’s professional service platform provides comprehensive solutions to NPL assets, either by expediting ownership transactions between the portfolio owners and their purchasers, or by negotiating with the relevant debtors to facilitate financial restructures. The Company is also actively seeking a wide scope of asset management opportunities among various industries located in the PRC.

During the year ended December 31, 2004, the Company entered into an interim Services Agreement (the ‘‘Agreement’’) with Citigroup Financial Products Inc., a subsidiary of Citigroup Inc. (‘‘CFP’’), to provide loan servicing and other services relating to NPLs in Huizhou, Guangdong Province, China purchased by CFP from Great Wall. The book value of the NPLs was $242 million. The Agreement was subject to the approval of the requisite PRC governmental agencies, which approval was received on April 1, 2005. It was the intention of CFP and the Company, upon such approval, that a definitive agreement be entered into pursuant to which the Company is to provide substantially the same services as under the Agreement for a period covering the resolution of the NPLs (the ‘‘Definitive Agreement’’). Pursuant to PRC law, the Company set up Chinawe Asset Management (PRC) Limited (‘‘CAM’’), a new PRC subsidiary, to service the NPLs under the Definitive Agreement. Subsequently, CAM also set up a branch office in Huizhou, Guangdong Province, primarily to render services related to this portfolio of NPLs. On April 20, 2005, the Definitive Agreement, between Huizhou One Limited (‘‘Owner’’), a subsidiary of CFP, and CAM, was executed.

On September 22, 2005, Owner entered into another similar Services Agreement with CAM to obtain loan servicing and other services concerning a pool of NPLs in Foshan, Guangdong Province, China purchased by CFP from Great Wall (the ‘‘Foshan Agreement’’). The book value of the NPL portfolio was $370 million. The transaction between CFP and Great Wall had been approved by the requisite PRC governmental agencies prior to the execution of the Foshan Agreement. Subsequently, CAM also set up a branch office in Foshan, Guangdong Province, primarily to render services related to this portfolio of NPLs.

Pursuant to the above Definitive Agreement and the Foshan Agreement (collectively, the ‘‘CFP Agreements’’), Owner appointed CAM to provide enumerated consulting services with regard to the NPLs (the ‘‘Consulting Services’’) pursuant to the laws of the PRC and the business scope of CAM as approved by the PRC government. CAM provides the Consulting Services in accordance with (a) applicable PRC law, (b) the terms of the CFP Agreements, (c) the directions given pursuant to the CFP Agreements from time to time by Owner, and (d) its responsible and reasonable judgment, within its agency authority and in the interest of Owner, as to other appropriate actions, subject to the approval of Owner.

As compensation for the Consulting Services received, Owner pays CAM a fixed monthly portion and a series of variable fees based on performance as follows: (i) a base consulting fee paid on signing of the CFP Agreements; (ii) a monthly consulting fee (the ‘‘Consulting Fee’’); (iii) a monthly collection fee (the ‘‘Collection Fee’’) based on a percentage of all actual collections and recoveries relating to the assets serviced (net of all costs and expenses incurred in the resolution of the assets) during the relevant month; and (iv) an incentive fee (the ‘‘Incentive Fee’’) if Owner receives from the resolution of the assets a cumulative amount equal to the aggregate of the purchase price of the assets and the costs and expenses incurred by Owner in the acquisition of the assets plus a specified internal rate of return.

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Each of the Consulting Fee, the Collection Fee and the Incentive Fee is payable by Owner to CAM only in respect of assets that are actually advised on by CAM and is not payable in respect of assets which are advised on behalf of Owner by a sub-consultant appointed by Owner in its sole discretion as contemplated by the CFP Agreements or which are not advised on by CAM for any other reason.

In addition to the servicing fees mentioned above, the servicing arrangement for the Huizhou and Foshan NPL portfolios transaction with CFP was structured to allow the Company to participate in profit sharing without investing in the pool of assets as previously contemplated by the Company. This arrangement allows the Company to defer any fund raising efforts to a later date when the benefits of such endeavors can be maximized. It is management’s belief that the CFP Agreements will substantially improve the Company’s operation and cash flows in the years to come.

Upon termination of the CFP Agreements (a) Owner shall pay all fees and expenses payable to CAM that have accrued up to and including the date of termination; and (b) CAM shall reimburse Owner for any fees and expenses prepaid to CAM and applicable to periods arising after the date of termination.

The Company expects to continue to add talented individuals to complement the existing staff which possesses a good mix of industry know-how and local knowledge. Management believes that the combination of in-depth knowledge of China and professional skills in the servicing industry will give the Company a competitive edge in servicing NPLs in China.

Management strongly believes that the new strategic direction of the Company and the servicing arrangements with CFP will gradually erase doubts on the Company’s operating as a going-concern and will form the basis of growth for the Company in the years to come. Though the Company had a net loss for the year ended December 31, 2006 after having net income in each of the two prior years, management is confident that the Company will improve its financial situation in the following year by better cost control and introducing new valuable clients, which also will mitigate the risk of its reliance on a single customer.

The CFP Agreements provide the basis for close cooperation between the Company and CFP for the investment and resolution of non-performing assets in the Chinese market. This close cooperation not only should help the Company improve its financial position, but also increase the likelihood of future expansion in other domains of asset management in China. We keep evaluating the Company’s involvement in a series of future NPL transactions.

During the year ended December 31, 2006, the Company has gradually and successfully continued to develop its core business to the NPL business. Its previous e-business is diminishing in importance with respect to revenue and profit. As a result, Guangzhou Welcon Information Limited, a subsidiary of the Company from which the Company previously derived a great proportion of its revenues from, terminated its operations in October 31, 2005.

Having entered into the CFP Agreements, the Company expects in the near future to issue an aggregate of five to ten million shares of its common stock to various finders as compensation for their efforts and contributions in connection with the transaction.

Now that the CFP Agreements have been executed, the Company has begun to receive fees on a regular basis. Net cash inflows from operating activities make management confident that despite incurring a net loss for the year ended December 31, 2006, the CFP Agreements should provide sufficient cash inflow to gradually improve the Company’s working capital and capital expenditure requirements going forward. However, we may need to raise additional funds in order to meet funding requirements of a more rapid expansion plan, potential acquisitions, as well as development of new or enhanced products or services in response to competitive pressures or to acquire technologies or complimentary products or businesses. However, there is no guarantee that we will be able to raise such funds.

The agreement with China Great Wall Asset Management Corporation, previously disclosed in the Company’s filings, expired in September 2006 without renewal. The Company did not receive any revenues in the fiscal year ended December 31, 2006 under such agreement.

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The Company had 26 employees as of December 31, 2006.

At present, there is limited competition in the provision of servicing NPLs in China. However, the number of small NPL servicing providers is increasing. Management of the Company does not see these providers as constituting serious competition to the Company. See ‘‘RISK FACTORS – Competition.’’

At present, CFP is the only client for whom the Company performs loan servicing and other services relating to NPLs.

Item 2.    Description of Property.

The Company’s headquarters occupy approximately 189 square meters at Dongbao Building, #767 Dongfeng Road East, Guangzhou, the provincial capital of Guangdong, China under a lease which expires on April 9, 2007. The rental amount, along with administrative surcharge, is approximately $2,108 per month. The Company also has a branch office in Hong Kong. There are two additional branch offices located in Foshan and Huizhou, two major cities of Guangdong province. The leases for these two offices expire on July 31, 2007 and April 6, 2008, respectively. The Foshan office occupies 201 square meters and the Huizhou office occupies 260 square meters, and their monthly rental amounts and administrative surcharges are $785 and $1,067, respectively.

Item 3.    Legal Proceedings.

We are not engaged in any litigation or governmental proceedings.

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

No matters were submitted to a vote of security holders during the quarter ended December 31, 2006.

Part II

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| Item 5.  | Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities. |

Market Information:

(a)    Our shares of common stock, par value $.001 per share (‘‘Common Stock’’), presently are traded on the OTC Bulletin Board under the symbol ‘‘CHWE’’.

The following table sets forth the range of high and low bids for our Common Stock for our two most recent fiscal years.

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|---------------------------------------------------------------|--|--|------|--|--------|-----|--|--|--|--|--------|--|
|                                                          |  |  | High |  |        | Low |
| 2006                                                          |  |  |      |  |   |     |  |  |  |  |   |  |
| January 1, 2006 – March 31, 2006    |  |  |      |  | .16    |     |  |  |  |  | .09    |  |
| April 1, 2006 – June 30, 2006       |  |  |      |  | .16    |     |  |  |  |  | .10    |  |
| July 1, 2006 – September 30, 2006   |  |  |      |  | .15    |     |  |  |  |  | .08    |  |
| October 1, 2006 – December 31, 2006 |  |  |      |  | .12    |     |  |  |  |  | .08    |  |
| 2005                                                          |  |  |      |  |   |     |  |  |  |  |   |  |
| January 1, 2005 – March 31, 2005    |  |  |      |  | .18    |     |  |  |  |  | .09    |  |
| April 1, 2005 – June 30, 2005       |  |  |      |  | .15    |     |  |  |  |  | .09    |  |
| July 1, 2005 – September 30, 2005   |  |  |      |  | .35    |     |  |  |  |  | .10    |  |
| October 1, 2005 – December 31, 2005 |  |  |      |  | .16    |     |  |  |  |  | .11    |  |
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The foregoing quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

On March 29, 2007, the Common Stock was quoted at $0.09 per share.

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(b)    As of March 30, 2007, the Company had 43,800,000 shares of Common Stock outstanding and 101 stockholders computed by the number of record holders, not including holders for whom shares are being held in the name of brokerage houses and clearing agencies.

(c)    We have not paid any cash dividends with respect to our Common Stock, nor does our Board of Directors intend to declare cash dividends on our Common Stock in the foreseeable future, in order to conserve cash for working capital purposes.

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

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-KSB. The following discussion contains forward-looking statements. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those discussed in ‘‘Risk Factors’’ and elsewhere in this document.

Overview — Results of Operations

The Company’s financial statements for the year ended December 31, 2006 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. For the year ended December 31, 2006, the Company reported net loss of $95,924 and as of December 31, 2006 the Company had a shareholders’ deficit and a working capital deficit of $900,933 and $874,233, respectively.

Year Ended December 31, 2006 compared to the Year Ended December 31, 2005

Revenues.    Revenue for the year ended December 31, 2006 was $1,477,408 as compared to that of $1,220,543 for the year ended December 31, 2005, an increase of 21%. As a result of our focus on the business of providing management services for NPLs as discussed in ‘‘Liquidity and Capital Resources’’ below, revenue earned from the e-commerce business is no longer our major business and most of the income is derived from asset management business.

Expenses.    Administrative and general expenses for the year ended December 31, 2006 were $1,327,273 as compared to $704,839 for the year ended December 31, 2005, an increase of 88%. The increase in administrative and general expenses was mainly comprised of the increase in salary expense from $337,146 to $387,378, rental expense from $41,149 to $62,774, motor vehicle expense from $39,547 to $94,084, and professional fees from $29,829 to $393,578. The dramatic increase in professional fees is mainly due to retaining local law firms to handle NPL legal affairs in Foshan. As a result of loans advanced to the Company by a director in the third quarter of 2003, the Company has incurred interest expense of $31,117 and $31,194 payable to the director for the years ended December 31, 2006 and 2005, respectively.

Taxation.    Income tax expense for the year ended December 31, 2006 amounted to $164,079. The amount represents PRC enterprise income tax charged on the deemed profit from the asset management and related services earned in the PRC.

As a consequence of the foregoing, we had income from operations for the year ended December 31, 2006 of $100,329 as compared to income from operations of $467,961 for the year ended December 31, 2005. Our net loss for the year ended December 31, 2006 was $95,524 as compared to a net income of $212,884 for the year ended December 31, 2005.

Factors That May Affect Future Results

Management’s Discussion and Analysis and other parts of this Report contain information based on management’s beliefs and forward-looking statements that involve a number of risks, uncertainties, and assumptions. There can be no assurance that actual results will not differ materially from the forward-looking statements as a result of various factors, including but not limited to the following:

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The market for our professional management services relating to NPLs in the PRC is characterized by rapidly changing policies, laws and regulations, evolving industry standards, and increasing number of competitors. NPL management service is a new industry in China. Currently the government and the state-owned financial institutions are encouraging investors to acquire and process these assets, giving us a bright prospect in this industry. But since related policies, laws and regulations are still being improved and changed, we may face additional political risks. In addition, our service target clients, mainly the foreign NPL investment company, developed the NPL business stably but still below our prior estimates due to various factors, which may raise NPL market risk and adversely impact the market’s prospect. Our competitive advantage, in management’s opinion, mostly lies in our predominating professional platform. Recently, we have attracted and retained experienced legal and financial professionals. Compared to our competitors, we have more professionals who, in management’s opinion, are clearly more qualified and experienced in this business. However, like those of other financial service providers, our operating results will depend to a significant extent on the risks of the investment products involved, our capabilities to carry out demanded services, as well as the confidence of our customers. NPL assets, in nature, are risky financial products, and our actual management results may significantly differ from those we budgeted. Our success in providing desirable services is also dependent on our innovation and expertise, including proper identification of customers’ needs as well as the successful restructure and transfer of NPL assets. Differentiation from our competitors may derive from our quality services. Our ability to successfully provide better services could have an impact on future results of operations.

Fluctuations in Quarterly Results

We have incurred operating losses since inception, only achieving profitability in 2004 and 2005 but reverting to a net loss again in 2006. Therefore we believe that future operating results will be subject to quarterly fluctuations due to a variety of factors, including, but not limited to:

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|  | •  | Government regulation; |

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|  | •  | Fulfilling contractual obligations under the agreements with China Great Wall Asset Management Corporation, CFP and others |

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|  | •  | Pricing policies of competitors; and |

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|  | •  | The amount and timing of operating costs and capital expenditures relating to expansion of our business and infrastructure. |

In addition to the factors set forth above, the Company’s operating results will be impacted by the extent to which the Company incurs non-cash charges associated with stock-based arrangements with employees and non-employees, if such arrangements are entered into.

Liquidity and Capital Resources

The Company’s financial statements for the year ended December 31, 2006 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. For the year ended December 31, 2006 the Company reported a net loss of $95,524 and as of December 31, 2006 had a shareholders’ deficit and a working capital deficit of $900,933 and $961,601, respectively. Although the Company has experienced difficulty in meeting its liquidity needs, management is confident that the new strategic direction of the Company and the servicing arrangements with CFP will generate sufficient cash flows for operating activities, gradually improve its financial condition, and eventually erase doubts on the Company’s operating as a going-concern. Management believes that the focus on NPLs in China will form the basis of growth for the Company in the years to come.

Since the Company has concentrated on the NPL business as its core business, its previous core business, e-business, is diminishing in importance with respect to revenue and profit, As a result, Guangzhou Welcon Information Limited, a subsidiary of the Company from which the Company previously derived a great proportion of its revenues from, terminated its operations in October 31, 2005.

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According to the Agreements mentioned in ‘‘Description of Business’’ above, the Company now receives fees on a regular basis from asset management services. The service revenue, in management’s opinion, should be beneficial in meeting the Company’s working capital and capital expenditure requirements going forward. However, in response to the increasingly competitive pressures in this industry, we may still need to raise additional funds in order to meet the funding needs of more rapid expansion plans, potential acquisitions, and development of new or enhanced services. There is no guarantee that we will be able to raise the funds.

In addition to a loan to the Company made by Vivian Chu, a director and the Company’s Chief Financial Officer, Ms. Chu and other members of management have, from time to time, made unsecured, interest-free advances to the Company to provide working capital. The advances are repayable upon demand, however, the parties making the advances have indicated their intention to not demand repayment if such repayment would have a material adverse effect on the Company’s financial condition. In the event additional advances are required, such parties may, but are not obligated to, make further advances on an unsecured and interest-free basis. See ‘‘Item 12. Certain Relationships and Related Transactions, and Director Independence.’’

Quantitative and Qualitative Disclosures about Market Risk

We are not exposed to a material level of market risk due to changes in interest rates, since we have never registered or issued debt instruments. Our outstanding long term liabilities are mostly loans from a director or other related parties, which are unsecured and interest rate fixed. Currently we do not maintain a portfolio of interest-sensitive debt instruments or any fixed-income derivatives. Management has continuously paid great attention to the financial leverage in business development and interest expenses in operations.

However, as our asset management business is carried out more and more comprehensively, we may be exposed to a material level of market risk due to undeveloped financial and credit systems in China. These include risks associated with the political and economic environment, foreign currency exchange and the legal system, on which our business has strong reliance. The legal system of the PRC differs significantly from those of the industrialized nations. Laws, regulations and policies in China are insufficient to protect asset owners. Some policies by the PRC government in the future could have a significant adverse effect on our business development in China. As an asset management servicer, we are subject to this constraint.

Prior to the quarter ended September 30, 2005, we derived a significant portion of revenues in the form of USD. From October 2005 onwards, however, we derived a significant portion of revenues in the form of Chinese RMB. Therefore we may be exposed to significant currency risks between the RMB and major foreign currencies in the future. Previously, because the RMB was effectively pegged to the U.S. dollar, during the fiscal years ended December 31, 2004 and December 31, 2003, it was not significantly important for the Company to engage in hedging activities to mitigate the impact of changes in foreign exchange rates. However, on July 21, 2005, the RMB was revalued from 8.28 to 8.11 for US$1 following the removal of the peg to the US dollar. The People’s Bank of China also announced that the RMB would be pegged to a basket of foreign currencies, rather then being strictly tied to the US dollar. This quotation of exchange rates does not imply free convertibility of RMB to other foreign currencies. All foreign exchange transactions continue to take place either through the Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rate quoted by the People’s Bank of China. This revaluation is favorable for us and in 2006, the RMB was appreciated to 7.8 and currently we do not apply any hedging activities. In the future management may use foreign currency forward exchange contracts as a vehicle for hedging purposes if the PRC completely adopts a floating system and our management determines that the volatility of currency risks is material to the Company’s operations and financial performance. In this case we will disclose these activities in compliance with Statement of Financial Accounting Standards No. 133 ‘‘Accounting for Derivative Investments and Hedging Activity’’.

Critical Accounting Policies and Estimates

Our financial statements reflect the selection and application of accounting policies which require management to make significant estimates and assumptions. We believe that the following are some of 

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the more critical judgment areas in the application of our accounting policies that currently affect our financial condition and results of operations.

Revenue Recognition.    The Company generally recognizes asset management and related services income, as well as online subscription and service income when persuasive evidence of an arrangement exists, services are rendered, the fee is fixed or determinable, and collectibility is probable.

Asset management and related services income is recognized when services are rendered in accordance with the terms of agreements.

On-line services income represents subscription and service income receivable from members, which is recognized over the period of subscription and to the extent of services rendered in accordance with the terms of agreements.

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required which would result in an additional general and administrative expense in the period such determination was made.

We do not have any of the following:

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|  | •  | Trading activities that include non-exchange traded contracts accounted for at fair value. |

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|  | •  | Relationships and transactions with persons or entities that derive benefits from any non-independent relationships other than related party transactions discussed herein. |

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to the Company.

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RISK FACTORS

Set forth below are certain risks and uncertainties relating to our business. These are not the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business. If any of the following risks actually occur, our business, operating results or financial condition could be materially adversely affected.

RISK RELATED TO OUR BUSINESS

DEPENDENCE UPON A SINGLE CLIENT

Huizhou One Limited (‘‘Huizhou’’), an indirect subsidiary of Citigroup Inc., is currently the sole client for whom we provide loan servicing and other services relating to pools of non-performing loans in China. In the event one or both of the CFP Agreements is terminated, including termination by Huizhou at any time upon five business days’ prior written notice, our business, operating results and financial condition would be materially adversely affected.

IT IS DIFFICULT TO EVALUATE OUR BUSINESS AND PROSPECTS BECAUSE WE HAVE A LIMITED OPERATING HISTORY

If we do not successfully address these risks and uncertainties, our business, operating results and financial condition will be materially adversely affected.

WE HAVE A HISTORY OF LOSSES, WE HAVE ONLY RECENTLY ACHIEVED PROFITABILITY AND WE MAY NOT SUSTAIN PROFITABILITY

WE MAY REQUIRE ADDITIONAL FUNDS TO IMPLEMENT OUR CURRENT PLANS AND FINANCE FUTURE GROWTH

Our business model assumes that we will have substantial additional funds to implement the full range of products and services we plan to offer.

We may seek to obtain additional funds through sales of equity and/or debt, or other external financing in order to fund our current operations and to achieve our business plan. We cannot assure that any additional capital resources will be available to us, or, if available, will be on terms that will be acceptable to us. Any additional equity financing will dilute the equity interests of existing security holders. If adequate funds are not available or are not available on acceptable terms, our ability to execute our business plan and our business could be materially and adversely affected.

COMPETITION

At present, there is limited competition in the provision of servicing NPLs in the PRC. However, more and more small competitors are entering the NPL service industry, and their entrance may potentially lead to lower market share and profit margin for the Company. Although currently management of the Company does not see these providers as constituting serious competition to the Company, we cannot assure that the increasing competition will not undermine our competitive advantage, and if competition becomes fierce, we may be unable to acquire additional portfolios or the portfolios acquired will be less favorably priced.

OUR MANAGEMENT HAS LIMITED EXPERIENCE OPERATING A PUBLIC COMPANY. WE MAY FACE RISKS ASSOCIATED WITH POTENTIAL ACQUISITIONS, INVESTMENTS, STRATEGIC PARTNERSHIPS OR OTHER VENTURES, INCLUDING WHETHER SUCH TRANSACTIONS CAN BE LOCATED, COMPLETED AND THE OTHER PARTY INTEGRATED WITH OUR BUSINESS ON FAVORABLE TERMS

As part of our long-term growth strategy, we may seek to acquire or make investments in complementary businesses, technologies, services or products or enter into strategic relationships with parties who can provide access to those assets, if appropriate opportunities arise. From time to time, 

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we may enter into discussions and negotiations with companies regarding our acquiring, investing in, or partnering with their businesses, products, services or technologies. We may not identify suitable acquisition, investment or strategic partnership candidates, or if we do identify suitable candidates, we may not complete those transactions on commercially acceptable terms or at all. Acquisitions often involve a number of special risks, including the following:

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|--|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | we may be unable to retain acquired portfolio owners and subscribers; currently we only provide asset management service to CFP, and the retention of this sole portfolio owner is critical to our operation; |

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|--|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | we may experience difficulty integrating acquired operations, products, services and personnel, or the acquisition of these resources may adversely affect our ongoing business; |

|  |              |                                                                                                                                                                              |
|--|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | we may not be able to successfully incorporate acquired technology and rights into our service offerings and maintain uniform standards, controls, procedures, and policies; |

|  |              |                                                                         |
|--|--------------|-------------------------------------------------------------------------|
|  | •  | we may not be able to retain the key personnel of the acquired company; |

|  |              |                                                                                             |
|--|--------------|---------------------------------------------------------------------------------------------|
|  | •  | the businesses we acquire may fail to achieve the revenues and earnings we anticipated; and |

|  |              |                                                                                                                                     |
|--|--------------|-------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | we may ultimately be liable for contingent and other liabilities, not previously disclosed to us, of the companies that we acquire. |

We may not successfully overcome problems encountered in connection with potential future acquisitions. In addition, an acquisition could materially aversely affect our operating results by:

|  |              |                                                      |
|--|--------------|------------------------------------------------------|
|  | •  | diluting security holders’ ownership interest; |

|  |              |                                          |
|--|--------------|------------------------------------------|
|  | •  | causing us to incur additional debt; and |

|  |              |                                                                                                      |
|--|--------------|------------------------------------------------------------------------------------------------------|
|  | •  | total expenses may include goodwill impairment loss and accelerated depreciations of certain assets. |

Any of these factors could have a material adverse effect on our business. These difficulties could disrupt our ongoing business, distract our management and employees and increase our expenses. Furthermore, we may incur indebtedness or issue equity securities to pay for any future acquisitions.

MANAGEMENT LOAN AND ADVANCES

Members of management have made (i) a loan and (ii) unsecured, interest-free advances to the Company, from time to time, to provide working capital to the Company. In the event the Company cannot repay the loan when due, if an extension is not granted, or repay the advances when demand for payment is made, the Company’s business, operating results and financial condition will be materially adversely affected. In the event additional financing is required and the Company cannot obtain financing on acceptable terms from other sources, management may, but is not obligated to, make additional advances. Failure of management to make such additional advances would have a material adverse affect on the Company’s business, results and financial condition.

RISK RELATING TO DOING BUSINESS IN CHINA

THERE ARE ECONOMIC RISKS ASSOCIATED WITH DOING BUSINESS IN CHINA

The PRC economy has experienced significant growth in the past decade, but such growth has been uneven across geographic and economic sectors. There can be no assurance that such growth will continue or that any slow down will not have a negative effect on our business.

The PRC economy is also experiencing uncontrollable inflation or deflation intermittently. Unstable macroeconomic conditions may adversely affect our operation of carrying out asset management in China, and ultimately affect our market share, revenue and profitability. The achievement of certain Internal Rates of Return by the owners of the NPLs, the threshold to evaluate our portfolio management performance, is closely related to the cost of capital. The inflation rate is the decisive factor of the cost of capital.

9

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Since the laws, regulations and policies related to asset management are not sufficiently established, we may encounter legal and policy risks in carrying out asset management business. Portfolio owners’ interests are inadequately protected, and potentially they may partially or completely withdraw their investment from this niche if the returns are unable to meet their expectations. As our asset management business is carried out more and more comprehensively, the risks due to undeveloped financial and credit systems in China will become more and more prominent. These include risks associated with the political and economic environment, foreign currency exchange and the legal system, on which our business has strong reliance. Laws, regulations and policies in China are insufficient to protect investors, like our asset owners. Some policies by the PRC government in the future may have a significant adverse effect on our business development in China.

Due to the fluctuation of macroeconomic conditions and insufficient legal protection, some of the borrowers in the portfolios of NPLs we manage may default on their loans or even declare bankruptcy. As a result, actual collections may materially deviate from previous estimates. The consequence may adversely affect our business. In addition, the international financial markets in which the securities of the PRC government, agencies and private entities are traded also have experienced significant price fluctuations upon speculation that the PRC government may revalue the RMB which could increase our costs relative to our PRC revenues.

RESTRICTIONS ON CURRENCY EXCHANGE MAY LIMIT OUR ABILITY TO UTILIZE OUR REVENUES EFFECTIVELY

We expect to derive a significant portion of revenues in the form of RMB. Although Chinese governmental policies were introduced in 1996 to allow greater convertibility of the RMB, significant restrictions still remain. We can provide no assurance that the Chinese regulatory authorities will not impose greater restrictions on the convertibility of the RMB. Any future restrictions on currency exchanges may limit our ability to utilize revenue generated in RMB to fund our business activities outside the PRC.

A CHANGE IN CURRENCY EXCHANGE RATES COULD INCREASE OUR COSTS RELATIVE TO OUR REVENUES

We expect to generate a portion of our revenues and to incur expenses and liabilities in Chinese RMB and U.S. dollars. As a result, we are subject to the effects of exchange rate fluctuations with respect to any of these currencies. Any fluctuation on currency exchanges may risk our ability to utilize revenue generated in RMB to fund our business activities outside the PRC. On the other hand, the fluctuation may also risk our ability to fund our Chinese business activities with the capital raised from global capital markets. Previously it was not necessary for the Company to engage in hedging activities so as to neutralize the impact of foreign exchange rate fluctuations, and we have not entered into agreements or purchased instruments to hedge our exchange rate risks. However, we may do so in the future if China eventually adopts a floating system and the volatility of currency risks is material to the Company’s operation and financial performance.

RISKS RELATING TO OUR STOCK

POSSIBLE DELISTING OF OUR STOCK FROM TRADING ON THE ELECTRONIC BULLETIN BOARD

Our common stock is listed on the electronic bulletin board of the over-the-counter market. Once delisted, we cannot predict when, if ever, our class of common stock would be re-listed for trading on the electronic bulletin board or any other market or exchange as the approval to re-list the common stock is subject to review by the National Association of Securities Dealers, Inc. (‘‘NASD’’).

BECAUSE OUR COMMON STOCK PRICE IS BELOW $5.00, WE ARE SUBJECT TO ADDITIONAL RULES AND REGULATIONS.

The Securities and Exchange Commission (the ‘‘SEC’’) has adopted regulations which generally define a ‘‘penny stock’’ to be any equity security that has a market price (as defined) of less than $5.00 

10

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per share, subject to certain exceptions. Our Common Stock presently is a ‘‘penny stock’’. Because our Common Stock is a ‘‘penny stock’’, it is subject to rules that impose additional sales practice requirements on broker/dealers who sell our securities to persons other than established customers and accredited investors. There can be no assurance that the common stock will trade for $5.00 or more per share, or if so, when.

Although we desire to list the Common Stock on the NASDAQ SmallCap Market and intend to apply for a listing on the SmallCap market at such time as we meet the listing criteria, there can be no assurance that we will ever qualify.

Absent NASDAQ SmallCap Market or other NASDAQ or stock exchange listing, trading, if any, in the Common Stock will, as it presently is, continue in the ‘‘Electronic Bulletin Board’’ administered by the NASD. As a result, you may find it difficult to dispose of or to obtain accurate quotations as to the market value of the Common Stock.

CURRENTLY WE HAVE NO INTENTION TO PAY DIVIDENDS

We have never paid any cash dividends on our Common Stock. We currently intend to retain all future earnings, if any, for use in our business and do not expect to pay any dividends in the foreseeable future.

Item 7.    Financial Statements.

The financial statements required by this Item are set forth at pages indicated in Item 13 following page 17 of this Report.

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

Not applicable.

Item 8A.    Controls and Procedures.

(a)    Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure the reliability of financial statements and other disclosures included in this report. As of the end of the fiscal year ended December 31, 2006, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information required to be included in the Company’s periodic SEC filings.

(b)    Changes in Internal Controls

There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date the Company carried out its evaluation.

Item 8B.    Other Information.

Not applicable.

11

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Part III

|               |                                                                                                                                             |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------|
| Item 9.  | Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act. |

Management

The following sets forth information regarding our executive officers, directors and other key employees:

|                    |  |  |             |  |  |     |  |  |                                                               |
|--------------------|--|--|-------------|--|--|-----|--|--|---------------------------------------------------------------|
| Name               |  |  | Nationality |  |  | Age |  |  | Title                                                         |
| Man Keung Alan Wai |  |  | Hong Kong   |  |  | 46  |  |  | Chairman of the Board, Chief Executive Officer, and President |
| Man Ying Ken Wai   |  |  | Canadian    |  |  | 41  |  |  | Vice President, Director                                      |
| Barry Yiu          |  |  | Chinese     |  |  | 46  |  |  | Vice President, Director                                      |
| Vivian Wai Wa Chu  |  |  | Australian  |  |  | 36  |  |  | Chief Financial Officer, Secretary and Director               |
|                    |

The following is a brief account of the business experience of the above mentioned individuals. References to ‘‘our Company’’ and ‘‘since its incorporation’’ in the following description refer to Gonet Associates Limited and affiliates and not Neo Modern Entertainment Corp. (‘‘Neo Modern’’) as it existed prior to the merger of Chinawe.com Inc., a Delaware corporation, with and into Neo Modern on March 15, 2001.

Mr. Wai, Man Keung Alan — Chairman, Chief Executive Officer & President

Mr. Wai, Man Keung Alan is the founder of the Company, and the Chairman & CEO since its incorporation. He is responsible for identifying business opportunities, overall strategic planning and development of the Company. Under his leadership and management, the Company has grown and expanded quickly in Hong Kong and China. Mr. Wai has over 15 years of entrepreneur experience in business development and administration prior to founding Welcon Info-Tech in Hong Kong in 1997.

Mr. Wai, Man Ying Ken — Director and Vice President

Mr. Wai, Man Ying Ken is the co-founder, Director and Vice President of our Company since its incorporation. He takes comprehensive responsibilities of determining and developing its direction, establishing operation strategies, considering economic benefits, assets valuation and financial decision making. Prior to his current position, Mr Wai was a director in a Hong Kong-based company specializing in property development and construction. Having co-founded Chinawe with his elder brother Mr. Wai, Man Keung Alan, he has dedicated himself to the development and management of our Company ever since. He studied General Science at the University of Waterloo, Canada.

Ms. Chu, Vivian Wai Wa — Director, Chief Financial Officer & Secretary

Ms. Chu, Vivian Wai Wa has been our Secretary and Director since incorporation, taking responsibilities for the financial management as well as the Company’s various administrative affairs. Later she became our Chief Financial Officer. She has accumulated her skills from managing diversified areas before joining us. Ms. Chu takes charge of financial planning, overall cost controlling, and strategic planning. She also identifies and establishes the Company’s core competition. She obtained both her Bachelor of Economics and Bachelor of Arts in Asian Studies from The Australian National University in 1992. Ms. Chu is the spouse of Mr. Wai, Man Ying Ken.

Mr. Barry Yiu — Director and Vice President

Mr. Barry Yiu is responsible for fund raising. He has over 15 years of experience in business development, strategy planning, financing management. Prior to his current position, Mr. Yiu has been engaged in several companies in Hong Kong and China involving sizable developments and investments. Mr. Yiu obtained his Bachelor degree from the University of Toronto, Canada in 1983 and his MBA in Finance from McMaster University in Hamilton, Canada in 1985.

12

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Other employees

Mr. Edward Ziyi — Financial Manager

Mr. Edward Liang Ziyi is our Financial Manager and whose responsibilities include internal control and financial reporting. He began his career in the financial department of DHL Company, one of the biggest international express companies. Before joining the Company he was a financial manager in another multinational freight forwarding company. Mr. Liang is a CPA of China and CGA, Canada General Accountant. He received his bachelor degree in accounting from Guangdong Commercial College and has 8 years experience in the accounting field and more than 5 years experience in managerial positions.

Mr. Eugene Lin — Senior Manager

Mr. Lin has been the Legal Compliance Officer since he joined our Company. He is in charge of the Company’s comprehensive legal activities. His experiences include serving as a Legal Specialist specializing in international copyright protection in Tenwell Consulting Co., Ltd. Mr. Lin holds a Qualification Certificate of Law Practitioner in China. He obtained a LLB degree from International Law School, Guangdong University of Foreign Studies.

Mr. Li Yang — Senior Asset Manager

Mr. Li Yang joined our Company as Senior Asset Manager. He is mainly responsible for the asset management of NPL. Prior to his current position, he was a senior asset manager in Yuehai Group, an asset management company in Guangdong, China. Previously he accumulated ten years of asset management experience as a director of Great China Company Ltd, a subsidiary of Kwong Nam Group, a public company listed in Hong Kong. Mr. Yang graduated from Guangzhou International Trade College in 1986.

Mr. Yonghui Wu — Senior Asset Manager

Mr. Yonghui Wu joined our Company as Asset Manager. He was a judge in the People’s Court of Zhao’an County, Fujian province, adjudicating civil and commercial law cases. He graduated from Xiamen University in the law faculty and obtained the certificate of legal qualification issued by National Judiciary in China.

Each of the Company’s directors and executive officers is to serve until the next Annual Meeting of Shareholders or until his or her earlier resignation or removal.

Section 16(a) Beneficial Ownership Reporting Compliance

Under Federal securities laws, the Company’s directors, its executive officers and any person holding more than 10% of the Company’s common stock are required to report their ownership of the Company’s common stock and any changes in that ownership to the SEC on the SEC’s Forms 3, 4 and 5. Based on the Company not having received copies of any such forms, the

The Company believes that no officers, directors and owners of greater than 10% of the Company’s common stock engaged in any transactions in the Company’s common stock during the fiscal year ended December 31, 2006.

Code of Ethics

The Company has adopted a Code of Ethics that applies to all of its directors, officers (including its Chief Executive Officer, Chief Financial Officer, Controller and any person performing similar functions) and employees. The Company has filed a copy of this Code of Ethics as Exhibit 14 to its Annual Report on Form 10-KSB for the year ended December 31, 2003.

Audit Committee Financial Expert

The Company does not have a standing Audit Committee and, accordingly, does not have an ‘‘Audit Committee Financial Expert’’ within the meaning of the rules and regulations of the SEC.

13

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Item 10.    Executive Compensation.

The following table sets forth for the fiscal year indicated the compensation paid by our Company to the principal executive officer. No other executive officer received total annual salary and other compensation exceeding $100,000.

|                                                              |  |  |      |  |      |            |  |  |                          |  |        |          |  |  |  |  |         |         |  |  |  |  |        |  |
|--------------------------------------------------------------|--|--|------|--|------|------------|--|--|--------------------------|--|--------|----------|--|--|--|--|---------|---------|--|--|--|--|--------|--|
| Name and Principal Position                                  |  |  | Year |  |      | Salary ($) |  |  | All OtherCompensation($) |  |        | Total($) |
| Man Keung Alan Wai                                           |  |  |      |  | 2006 |            |  |  |                          |  | 48,000 |          |  |  |  |  | 3,000(1 | )  |  |  |  |  | 51,000 |  |
| Chairman of the Board, Chief Executive Officer and President |  |  |      |  | 2005 |            |  |  |                          |  | 41,250 |          |  |  |  |  | 2,000(1 | )  |  |  |  |  | 43,250 |  |
|                                                              |

|  |
|--|
|  |  |
|  |

| (1) | Consists of Company contributions to the Hong Kong Mandatory Provident Fund Schemes Ordinance for such person. |
|-----|----------------------------------------------------------------------------------------------------------------|

Director Compensation

The Company does not pay director’s fees or other compensation for services rendered as a director.

|                |                                                                                                 |
|----------------|-------------------------------------------------------------------------------------------------|
| Item 11.  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |

The following table sets forth information as of March 30, 2007, regarding the beneficial ownership of Common Stock of (1) each person or group known by us to beneficially own 5% or more of the outstanding shares of Common Stock, (2) each director and officer and (3) all executive officers and directors as a group. Unless otherwise noted, the persons named below have sole voting and investment power with respect to the shares shown as beneficially owned by them.

|                                                   |  |  |                              |  |            |                                            |  |  |  |  |      |  |
|---------------------------------------------------|--|--|------------------------------|--|------------|--------------------------------------------|--|--|--|--|------|--|
| Name of Beneficial Owner(1)                       |  |  | Amount ofBeneficialOwnership |  |            | Percent ofOutstanding Sharesof Class Owned |
| Gonet Associates Ltd.                             |  |  |                              |  | 22,054,090 |                                            |  |  |  |  | 50.4 |  |
| Man Keung Alan Wai(2)                             |  |  |                              |  | 22,054,090 |                                            |  |  |  |  | 50.4 |  |
| Man Ying Ken Wai                                  |  |  |                              |  | 0          |                                            |  |  |  |  | 0    |  |
| Barry Yiu                                         |  |  |                              |  | 3,800,000  | (3)                                   |  |  |  |  | 8.7  |  |
| Vivian Wai Wa Chu                                 |  |  |                              |  | 0          |                                            |  |  |  |  | 0    |  |
| Charter One Investments Limited(4)                |  |  |                              |  | 3,800,000  |                                            |  |  |  |  | 8.7  |  |
| All officers and directors as a group (4 persons) |  |  |                              |  | 25,854,090 | (2)(3)                                |  |  |  |  | 59.0 |  |
|                                                   |

|  |
|--|
|  |  |
|  |

| (1) | The address for each of the officers and directors of the Company is c/o our corporate headquarters in Guangzhou, China. |
|-----|--------------------------------------------------------------------------------------------------------------------------|

| (2) | Man Keung Alan Wai, through his control of Gonet Associates Ltd., beneficially owns the shares of Common Stock held by Gonet. |
|-----|-------------------------------------------------------------------------------------------------------------------------------|

| (3) | By virtue of his ownership interest in Charter One Investments Limited, Mr. Yiu may be deemed to beneficially own the shares of Common Stock owned by Charter One Investments Limited. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | The address for Charter One Investments Limited is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. Barry Yiu is a director of Charter One Investments Limited. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

14

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The following table sets forth information as of December 31, 2006 with respect to compensation plans (including individual compensation arrangements) under which shares of the Company’s Common Stock are authorized for issuance:

Equity Compensation Plan Information

|                                                            |  |  |                                                                                          |  |   |                                                                             |  |  |                                                                                                                                       |  |     |  |  |  |  |  |           |  |
|------------------------------------------------------------|--|--|------------------------------------------------------------------------------------------|--|---|-----------------------------------------------------------------------------|--|--|---------------------------------------------------------------------------------------------------------------------------------------|--|-----|--|--|--|--|--|-----------|--|
|                                                       |  |  | Number of securitiesto be issued uponexercise ofoutstanding options, warrants and rights |  |   | Weighted-average exercise price of outstanding options, warrants and rights |  |  | Number of securities remaining availablefor future issuanceunder equitycompensation plans(excluding securitiesreflected in column(a)) |
| Plan category                                              |  |  | (a)                                                                                      |  |   | (b)                                                                         |  |  | (c)                                                                                                                                   |
| Equity compensation plans approved by security holders     |  |  |                                                                                          |  | 0 |                                                                             |  |  |                                                                                                                                       |  | N/A |  |  |  |  |  | 0         |  |
| Equity compensation plans not approved by security holders |  |  |                                                                                          |  | 0 |                                                                             |  |  |                                                                                                                                       |  | N/A |  |  |  |  |  | 5,000,000 |  |
| Total                                                      |  |  |                                                                                          |  | 0 |                                                                             |  |  |                                                                                                                                       |  | N/A |  |  |  |  |  | 5,000,000 |  |
|                                                            |

On July 25, 2001, the Board of Directors adopted the 2001 Restricted Stock Plan (the ‘‘Plan’’). The purpose of the Plan is to promote the long-term growth of the Company by making awards of Common Stock to key employees and directors of the Company or its subsidiaries.

The Plan is administered by the Board of Directors (the ‘‘Board’’). The Board is authorized, subject to the provisions of the Plan, to (i) select the participants; (ii) determine the number of shares of Common Stock to be awarded to each of the participants and the terms and conditions on which such awards will be made; (iii) establish from time to time regulations for the administration of the Plan; (iv) interpret the Plan; and (v) make all determinations deemed necessary or advisable for the administration of the Plan.

5,000,000 shares of Common Stock are reserved for award under the Plan. At the time of an award of restricted stock, the Board will establish for each participant one or more restricted periods during which shares of Common Stock awarded under the Plan may not be sold, assigned, transferred, pledged or otherwise disposed of or encumbered, except as described below; provided, however, that the Board may, in its discretion, accelerate such restricted periods with respect to outstanding awards of restricted stock. Except for such restrictions, the participant as owner of restricted stock shall have all the rights of a stockholder including but not limited to the right to receive all dividends paid on such shares and the right to vote such shares.

Upon the death, retirement or permanent disability of a participant, upon the involuntary termination by the Company or any subsidiary for reasons other than cause, or upon the sale of assets of the Company or the merger or consolidation of the Company with another corporation and the terms of such sale, merger or consolidation do not entitle the participant to shares of the purchasing, surviving or resulting corporation, all of such shares shall be free of such restrictions. If the participant ceases to be an employee of the Company or its subsidiaries for any other reason, then all unvested shares of restricted stock therefore awarded to him, will upon such termination of employment be forfeited and returned to the Company and available for award to another participant.

An award of restricted stock shall not be effective unless the participant enters into an agreement with the Company in a form specified by the Board agreeing to the terms, conditions and restrictions of the award and such other matters as the Board shall in its sole discretion determine.

At the expiration of a restricted period, the Company will deliver to the participant (or his legal representatives, beneficiaries or heir) the certificates of Common Stock held by the Company for which such restricted period has terminated.

The aggregate number of shares of Common Stock which may be awarded under the Plan will be appropriately adjusted for any increase or decrease in the total number of shares of the Company’s Common Stock resulting from a division or combination of shares or other capital adjustment; or resulting from the payment of a stock dividend, or other increase or decrease in such shares by the Company.

15

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The Board of Directors may amend the Plan from time to time in such respects as the Board of Directors may deem advisable, provided that no change may be made in any award theretofore granted which would impair the rights of a participant, without consent of the participant. The Board may amend agreements between participants and the Company from time to time as the Board may deem advisable, provided that no change may be made in any award theretofore granted which would impair the rights of a participant without the written consent of the Participant.

The Board of Directors may at any time terminate the Plan. Any such termination will not affect awards already in effect and such awards shall remain in full force and effect as if the Plan had not been terminated.

No awards may be made under the Plan subsequent to December 31, 2011. No awards have been made under the Plan as of the date of this Annual Report.

Item 12.    Certain Relationships and Related Transactions, and Director Independence.

Vivian Chu, a director and the Company’s Chief Financial Officer, made an unsecured loan to the Company in 2003 in an original principal amount of $154,400. The loan bears interest at 23% per annum. The maturity date of the loan has been extended through June 2007 and is now the obligation of Chinawe Asset Management Limited, a wholly-owned subsidiary of the Company. At January 1, 2006, the aggregate outstanding principal of the loan was $145,823. Giving effect to repayments of principal and payment of interest of $31,117 during the year ended December 31, 2006, the balance of principal and interest on this loan at December 31, 2006 was $137,723.

From time to time members of management or affiliates thereof have made unsecured, interest-free advances to the Company to provide working capital. As of December 31, 2006, the total outstanding advances were $369,307. During the year the Company received aggregate advances of $227,944 and repaid aggregate advances of $480,355.

The followings chart shows advances and repayments made in 2006:

|                          |  |  |               |   |            |                |  |  |         |   |            |  |  |  |  |   |            |  |
|--------------------------|--|--|---------------|---|------------|----------------|--|--|---------|---|------------|--|--|--|--|---|------------|--|
| Name                     |  |  | Advances Made |   |            | Repayment Made |  |  | Balance |
| Gonet Associates Ltd.(1) |  |  |               | $ | 0          |                |  |  |         | $ | 1,590.28   |  |  |  |  | $ | 294,826.58 |  |
| Man Keung Alan Wai       |  |  |               | $ | 206,947.04 |                |  |  |         | $ | 478,417.65 |  |  |  |  | $ | 6,319.35   |  |
| Man Ying Ken Wai         |  |  |               | $ | 0          |                |  |  |         | $ | 347.39     |  |  |  |  | $ | 31,505.07  |  |
| Vivian Wai Wa Chu        |  |  |               | $ | 20,997     |                |  |  |         | $ | 0          |  |  |  |  | $ | 26,474.85  |  |
|                          |

|  |
|--|
|  |  |
|  |

| (1) | Gonet Associates Ltd. is controlled by Man Keung Alan Wai. |
|-----|------------------------------------------------------------|

The Company’s Board of Directors consists of Man Keung Alan Wei, Man Ying Ken Wai, Barry Yiu and Vivian Wai Wa Chu. None of such directors are ‘‘independent’’ as such term is defined in the Marketplace Rules of the Nasdaq Stock Market.

Item 13.    Exhibits.

Documents filed as part of this Report:

|                                                                      |  |  |        |
|----------------------------------------------------------------------|--|--|--------|
| 1.     Financial Statements of Chinawe.com Inc.: |  |  |   |
| Report of Independent Registered Public Accounting Firm              |  |  | F2     |
| Consolidated Statements of Operations                                |  |  | F3     |
| Consolidated Balance Sheet                                           |  |  | F4     |
| Consolidated Statements of Changes in Stockholders’ Deficit    |  |  | F5     |
| Consolidated Statements of Cash Flows                                |  |  | F6     |
|                                                                      |

16

----

|                                                       |  |  |                |
|-------------------------------------------------------|--|--|----------------|
| Notes to and Forming Part of the Financial Statements |  |  | F7 – F13 |
|                                                       |

2.     Exhibits and Index:

|            |  |  |                                                                                                                                                    |
|------------|--|--|----------------------------------------------------------------------------------------------------------------------------------------------------|
| ExhibitNo. |  |  | Description                                                                                                                                        |
| 3.(i)      |  |  | Articles of Incorporation.(1)                                                                                                                      |
| 3.(ii)     |  |  | By-Laws.(1)                                                                                                                                        |
| 3.(iii)    |  |  | Merger Agreement & Plan of Reorganization dated as of October 17, 2000(2)                                                            |
| 10.1       |  |  | Chinawe.com Inc. 2001 Restricted Stock Plan(3)                                                                                                     |
| 10.2       |  |  | Services Agreement dated April 29, 2005, by and between Citigroup Financial Products Inc. and Chinawe.com Inc.(4)                        |
| 10.3       |  |  | Asset Consulting Agreement, dated as of April 20, 2005, by and between Huizhou One Limited and Chinawe Asset Management (PRC) Limited(5) |
| 10.4       |  |  | Agreement, dated May 6, 2003, between Chinawe.com Inc. and Vivian Wai Wa Chu                                                                       |
| 10.5       |  |  | Supplementary Agreement, dated January 1, 2007, between Chinawe.com Inc., Chinawe Asset Management Limited, and Vivian Wai Wa Chu                  |
| 14         |  |  | Code of Ethics(6)                                                                                                                                  |
| 21         |  |  | Subsidiaries                                                                                                                                       |
| 23.1       |  |  | Consent of Moores Rowland Mazars                                                                                                                   |
| 31.1       |  |  | Rule 13a-14(a)/15d-14(a) Certification                                                                                                             |
| 31.2       |  |  | Rule 13a-14(a)/15d-14(a) Certification                                                                                                             |
| 32.1       |  |  | Section 1350 Certification of Chief Executive Officer                                                                                              |
| 32.2       |  |  | Section 1350 Certification of Chief Financial Officer                                                                                              |
|            |

|  |
|--|
|  |  |
|  |

| (1) | Filed as an exhibit to our Company’s Form 10-SB, as filed with the Securities and Exchange Commission on May 19, 2000 and hereby incorporated by reference herein. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Filed as an exhibit to our Company’s Information Statement, as filed with the Securities and Exchange Commission on February 12, 2001 and hereby incorporated by reference herein. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Filed as an exhibit to our Company’s Form S-8, as filed with the Securities and Exchange Commission on October 17, 2001 and hereby incorporated by reference herein. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Filed as an exhibit to our Company’s Quarterly Report on Form 10-QSB, as filed with the Securities and Exchange Commission on August 23, 2005 and hereby incorporated by reference herein. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Filed as an exhibit to our Company’s Quarterly Report on Form 10-QSB, as filed with the Securities and Exchange Commission on May 23, 2005 and hereby incorporated by reference herein. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Filed as an exhibit to our Company’s Annual Report on Form 10-KSB, as filed with the Securities and Exchange Commission on April 14, 2005 and hereby incorporated by reference herein. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

17

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Item 14.    Principal Accountant Fees and Services.

Audit Fees.

The aggregate fees billed for the fiscal years ended December 31, 2006 and 2005 for professional services rendered by Moores Rowland Mazars for the audit of the annual financial statements and the review of the financial statements included in our quarterly reports on Form 10-QSB were $45,500 and $36,970, respectively.

Audit-Related Fees.

The aggregate fees billed for the fiscal years ended December 31, 2006 and 2005 for assurance and related services rendered by Moores Rowland Mazars related to the performance of the audit or review of our financial statements were $0 and $0, respectively.

Tax Fees.

The aggregate fees billed for the fiscal years ended December 31, 2006 and 2005 for services rendered by Moores Rowland Mazars in connection with the preparation of our tax returns were $0 and $0, respectively.

All Other Fees.

Moores Rowland Mazars did not provide any other services to the Company in either of the fiscal years ended December 31, 2006 and December 31, 2005.

18

----

INDEX TO FINANCIAL STATEMENTS

Years ended December 31, 2006 and 2005

CONTENTS

|                                                                   |  |  |                |
|-------------------------------------------------------------------|--|--|----------------|
| Report of Independent Registered Public Accounting Firm           |  |  | F2             |
| Consolidated Statements of Operations                             |  |  | F3             |
| Consolidated Balance Sheet                                        |  |  | F4             |
| Consolidated Statements of Changes in Stockholders’ Deficit |  |  | F5             |
| Consolidated Statements of Cash Flows                             |  |  | F6             |
| Notes to and Forming Part of the Financial Statements             |  |  | F7 – F13 |
|                                                                   |

F-1

----

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors ofCHINAWE.COM INC.

We have audited the accompanying consolidated balance sheet of Chinawe.com Inc. (the ‘‘Company’’) as of December 31, 2006 and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the years ended December 31, 2006 and 2005. 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 audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2006 and the results of its operations and its cash flows for the years ended December 2006 and 2005, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2(b) to the financial statements, the Company had negative working capital and stockholders’ deficit as of December 31, 2006 of US$961,601 and US$900,933, respectively, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 2(b). The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MOORES ROWLAND MAZARS

Chartered AccountantsCertified Public AccountantsHong KongApril 16, 2007

F-2

----

CHINAWE.COM INC.CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                               |  |  |        |  |        |                              |  |  |              |  |            |            |  |  |  |  |            |         |
|---------------------------------------------------------------|--|--|--------|--|--------|------------------------------|--|--|--------------|--|------------|------------|--|--|--|--|------------|---------|
|                                                          |  |  |   |  |        | Year ended December 31, |
|                                                          |  |  | NOTE   |  |        | 2006                         |  |  | 2005         |
|                                                          |  |  |   |  |        | US$                          |  |  | US$          |
| OPERATING REVENUES                                            |  |  |        |  |   |                              |  |  |              |  |       |            |  |  |  |  |       |         |
| On-line services                                              |  |  |        |  |   |                              |  |  |              |  | 55         |            |  |  |  |  | 26,049     |         |
| Asset management and related services                         |  |  |        |  |   |                              |  |  |              |  | 1,477,353  |            |  |  |  |  | 1,194,494  |         |
|                                                          |  |  |        |  |   |                              |  |  |              |  | 1,477,408  |            |  |  |  |  | 1,220,543  |         |
| Depreciation                                                  |  |  |        |  |   |                              |  |  |              |  | (49,386    | )     |  |  |  |  | (47,743    | )  |
| Administrative and general expenses                           |  |  |        |  |   |                              |  |  |              |  | (1,327,693 | )     |  |  |  |  | (704,839   | )  |
| INCOME FROM OPERATIONS                                        |  |  |        |  |   |                              |  |  |              |  | 100,329    |            |  |  |  |  | 467,961    |         |
| NON-OPERATING INCOME (EXPENSE)                                |  |  |        |  |   |                              |  |  |              |  |       |            |  |  |  |  |       |         |
| Interest                                                      |  |  |        |  |   |                              |  |  |              |  | (33,562    | )     |  |  |  |  | (32,216    | )  |
| Other income                                                  |  |  |        |  |   |                              |  |  |              |  | 1,788      |            |  |  |  |  | 2,244      |         |
| INCOME BEFORE INCOME TAXES                                    |  |  |        |  |   |                              |  |  |              |  | 68,555     |            |  |  |  |  | 437,989    |         |
| Income tax expense                                            |  |  |        |  | 5      |                              |  |  |              |  | (164,079   | )     |  |  |  |  | (225,105   | )  |
| NET INCOME                                                    |  |  |        |  |   |                              |  |  |              |  | (95,524    | )     |  |  |  |  | 212,884    |         |
| Basic and diluted net income per share of common stock        |  |  |        |  | 2      | (i)                     |  |  | (0.22) cents |  |            | 0.49 cents |
| Weighted average number of shares of common stock outstanding |  |  |        |  |   |                              |  |  |              |  | 43,800,000 |            |  |  |  |  | 43,800,000 |         |
|                                                               |

The accompanying notes are an integral part of these financial statements.

F-3

----

CHINAWE.COM INC.CONSOLIDATED BALANCE SHEET

|                                                                                                                   |  |  |        |  |        |                             |  |  |  |  |            |         |
|-------------------------------------------------------------------------------------------------------------------|--|--|--------|--|--------|-----------------------------|--|--|--|--|------------|---------|
|                                                                                                              |  |  | NOTE   |  |        | As ofDecember 31, 2006 |
|                                                                                                              |  |  |   |  |        | US$                         |
|                                                                                                              |  |  |        |  |   |                             |  |  |  |  |       |         |
| ASSETS                                                                                                            |  |  |        |  |   |                             |  |  |  |  |       |         |
| Current assets:                                                                                                   |  |  |        |  |   |                             |  |  |  |  |       |         |
| Cash and cash equivalents                                                                                         |  |  |        |  |   |                             |  |  |  |  | 116,102    |         |
| Accounts receivable, net of allowance for doubtful accounts of US$2,215                                           |  |  |        |  |   |                             |  |  |  |  | 156,630    |         |
| Prepayment, deposits and other debtors                                                                            |  |  |        |  |   |                             |  |  |  |  | 413,058    |         |
| Total current assets                                                                                              |  |  |        |  |   |                             |  |  |  |  | 685,790    |         |
| Property, plant and equipment, net                                                                                |  |  |        |  | 3      |                             |  |  |  |  | 87,368     |         |
| TOTAL ASSETS                                                                                                      |  |  |        |  |   |                             |  |  |  |  | 773,158    |         |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                       |  |  |        |  |   |                             |  |  |  |  |       |         |
| Current liabilities:                                                                                              |  |  |        |  |   |                             |  |  |  |  |       |         |
| Customer deposits received                                                                                        |  |  |        |  |   |                             |  |  |  |  | 360,519    |         |
| Accrued expenses and other current liabilities                                                                    |  |  |        |  |   |                             |  |  |  |  | 214,090    |         |
| Current portion of long-term debt                                                                                 |  |  |        |  | 4      |                             |  |  |  |  | 12,323     |         |
| Due to related parties                                                                                            |  |  |        |  | 6      |                             |  |  |  |  | 507,030    |         |
| Income tax payable                                                                                                |  |  |        |  |   |                             |  |  |  |  | 553,429    |         |
| Total current liabilities                                                                                         |  |  |        |  |   |                             |  |  |  |  | 1,647,391  |         |
| Long term liabilities:                                                                                            |  |  |        |  |   |                             |  |  |  |  |       |         |
| Non-current portion of long-term debt                                                                             |  |  |        |  | 4      |                             |  |  |  |  | 26,700     |         |
| Contingencies and commitments                                                                                     |  |  |        |  |   |                             |  |  |  |  |       |         |
| Stockholders’ deficit:                                                                                      |  |  |        |  |   |                             |  |  |  |  |       |         |
| Preferred stock, par value $0.001 per share; authorized 20,000,000 shares; none issued                            |  |  |        |  |   |                             |  |  |  |  | 43,800     |         |
| Common stock, par value $0.001 per share; authorized 100,000,000 shares; issued and outstanding 43,800,000 shares |  |  |        |  |   |                             |  |  |  |  |       |         |
| Capital in excess of par                                                                                          |  |  |        |  |   |                             |  |  |  |  | 85,948     |         |
| Accumulated losses                                                                                                |  |  |        |  |   |                             |  |  |  |  | (1,028,361 | )  |
| Accumulated other comprehensive income                                                                            |  |  |        |  |   |                             |  |  |  |  | (2,320     | )  |
| Total stockholders’ deficit                                                                                 |  |  |        |  |   |                             |  |  |  |  | (900,933   | )  |
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                 |  |  |        |  |   |                             |  |  |  |  | 773,158    |         |
|                                                                                                                   |

The accompanying notes are an integral part of these financial statements.

F-4

----

CHINAWE.COM INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

|                                           |  |  |                  |  |            |        |  |  |                          |  |         |                    |  |  |                                               |  |         |                                     |  |  |  |  |            |         |  |  |  |  |         |         |  |  |  |  |            |         |
|-------------------------------------------|--|--|------------------|--|------------|--------|--|--|--------------------------|--|---------|--------------------|--|--|-----------------------------------------------|--|---------|-------------------------------------|--|--|--|--|------------|---------|--|--|--|--|---------|---------|--|--|--|--|------------|---------|
|                                      |  |  | Number of shares |  |            | Amount |  |  | Capital in excess of par |  |         | Accumulated losses |  |  | Accumulated other comprehensive income (loss) |  |         | Total Stockholders’ (deficit) |
|                                      |  |  |             |  |            | US$    |  |  | US$                      |  |         | US$                |  |  | US$                                           |  |         | US$                                 |
| Balance as of January 1, 2005   |  |  |                  |  | 43,800,000 |        |  |  |                          |  | 43,800  |                    |  |  |                                               |  | 85,948  |                                     |  |  |  |  | (1,145,721 | )  |  |  |  |  | (325    | )  |  |  |  |  | (1,016,298 | )  |
| Comprehensive income:                     |  |  |                  |  |       |        |  |  |                          |  |    |                    |  |  |                                               |  |    |                                     |  |  |  |  |       |         |  |  |  |  |    |         |  |  |  |  |       |         |
| Net income for the year                   |  |  |                  |  | —    |        |  |  |                          |  | — |                    |  |  |                                               |  | — |                                     |  |  |  |  | 212,884    |         |  |  |  |  | — |         |  |  |  |  | 212,884    |         |
| Currency translation adjustment           |  |  |                  |  | —    |        |  |  |                          |  | — |                    |  |  |                                               |  | — |                                     |  |  |  |  | —    |         |  |  |  |  | (5,084  | )  |  |  |  |  | (5,084     | )  |
| Total comprehensive income                |  |  |                  |  |       |        |  |  |                          |  |    |                    |  |  |                                               |  |    |                                     |  |  |  |  |       |         |  |  |  |  |    |         |  |  |  |  | 207,800    |         |
| Balance as of December 31, 2005 |  |  |                  |  | 43,800,000 |        |  |  |                          |  | 43,800  |                    |  |  |                                               |  | 85,948  |                                     |  |  |  |  | (932,837   | )  |  |  |  |  | (5,409  | )  |  |  |  |  | (808,498   | )  |
| Comprehensive loss:                       |  |  |                  |  |       |        |  |  |                          |  |    |                    |  |  |                                               |  |    |                                     |  |  |  |  |       |         |  |  |  |  |    |         |  |  |  |  |       |         |
| Net loss for the year                     |  |  |                  |  | —    |        |  |  |                          |  | — |                    |  |  |                                               |  | — |                                     |  |  |  |  | (95,524    | )  |  |  |  |  | — |         |  |  |  |  | (95,524    | )  |
| Currency translation adjustment           |  |  |                  |  | —    |        |  |  |                          |  | — |                    |  |  |                                               |  | — |                                     |  |  |  |  | —    |         |  |  |  |  | 3,089   |         |  |  |  |  | 30,890     |         |
| Total comprehensive loss                  |  |  |                  |  |       |        |  |  |                          |  |    |                    |  |  |                                               |  |    |                                     |  |  |  |  |       |         |  |  |  |  |    |         |  |  |  |  | (92,435    | )  |
| Balance as of December 31, 2006 |  |  |                  |  | 43,800,000 |        |  |  |                          |  | 43,800  |                    |  |  |                                               |  | 85,948  |                                     |  |  |  |  | (1,028,361 | )  |  |  |  |  | 2,320   |         |  |  |  |  | (900,933   | )  |
|                                           |

The accompanying notes are an integral part of these financial statements.

F-5

----

CHINAWE.COM INC.CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                          |  |  |       |  |          |         |  |  |  |  |          |         |
|------------------------------------------------------------------------------------------|--|--|-------|--|----------|---------|--|--|--|--|----------|---------|
|                                                                                     |  |  | 2006  |  |          | 2005    |
|                                                                                     |  |  | (US$) |  |          | (US$)   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                     |  |  |       |  |     |         |  |  |  |  |     |         |
| Net (loss) income                                                                        |  |  |       |  | (95,524  | )  |  |  |  |  | 212,884  |         |
| Adjustments to reconcile net (loss) income to net cash provided by Operating activities: |  |  |       |  |     |         |  |  |  |  |     |         |
| Depreciation                                                                             |  |  |       |  | 49,386   |         |  |  |  |  | 47,743   |         |
| Changes in operating assets and liabilities:                                             |  |  |       |  |     |         |  |  |  |  |     |         |
| Accounts receivable, net                                                                 |  |  |       |  | (106,509 | )  |  |  |  |  | (36,535  | )  |
| Prepayments, deposits and other debtors                                                  |  |  |       |  | (357,851 | )  |  |  |  |  | (49,661  | )  |
| Customer deposits received                                                               |  |  |       |  | 353,082  |         |  |  |  |  | (8,226   | )  |
| Accrued expenses and other current liabilities                                           |  |  |       |  | (2,871   | )  |  |  |  |  | 66,863   |         |
| Income tax payable                                                                       |  |  |       |  | 316,196  |         |  |  |  |  | 225,105  |         |
| NET CASH PROVIDED BY OPERATING ACTIVITIES                                                |  |  |       |  | 155,909  |         |  |  |  |  | 458,173  |         |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                     |  |  |       |  |     |         |  |  |  |  |     |         |
| Purchase of property, plant and equipment                                                |  |  |       |  | (6,648   | )  |  |  |  |  | (108,166 | )  |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                     |  |  |       |  |     |         |  |  |  |  |     |         |
| Repayment of long-term debt                                                              |  |  |       |  | (12,324  | )  |  |  |  |  | (18,117  | )  |
| Advance from related parties                                                             |  |  |       |  | 227,944  |         |  |  |  |  | 58,903   |         |
| Repayment to related parties                                                             |  |  |       |  | (480,355 | )  |  |  |  |  | (174,872 | )  |
| (Repayment to) Loan from a director                                                      |  |  |       |  | (7,997   | )  |  |  |  |  | 6,047    |         |
| NET CASH USED IN FINANCING ACTIVITIES                                                    |  |  |       |  | (272,732 | )  |  |  |  |  | (128,039 | )  |
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                     |  |  |       |  | (123,471 | )  |  |  |  |  | 221,968  |         |
| Cash and cash equivalents, beginning of year                                             |  |  |       |  | 237,310  |         |  |  |  |  | 14,929   |         |
| Effect of exchange rate changes                                                          |  |  |       |  | 2,263    |         |  |  |  |  | 413      |         |
| CASH AND CASH EQUIVALENTS, END OF YEAR                                                   |  |  |       |  | 116,102  |         |  |  |  |  | 237,310  |         |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                         |  |  |       |  |     |         |  |  |  |  |     |         |
| Cash paid for interest                                                                   |  |  |       |  | 33,562   |         |  |  |  |  | 32,216   |         |
| NON-CASH TRANSACTION                                                                     |  |  |       |  |     |         |  |  |  |  |     |         |
| Purchase of property, plant and equipment through a capital lease arrangement            |  |  |       |  | —  |         |  |  |  |  | 62,994   |         |
|                                                                                          |

The accompanying notes are an integral part of these financial statements.

F-6

----

CHINAWE.COM INC.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

|          |                                                    |
|----------|----------------------------------------------------|
| 1.  | DESCRIPTION OF BUSINESS AND ORGANIZATION STRUCTURE |

Chinawe.com Inc. (‘‘Chinawe’’ or the ‘‘Company’’) was incorporated under the laws of the State of California. Chinawe’s principal business activity is providing professional management services relating to non-performing loans (‘‘NPLs’’) in the People’s Republic of China (‘‘PRC’’), as well as other consulting services. Guangzhou Welcon Information Limited (‘‘WIT (GZ)’’), a subsidiary of Chinawe from which the Company previously derived substantially all of its revenues, terminated operations on October 31, 2005. The activities of WIT (GZ) for the year ended December 31, 2005 were insignificant and immaterial to the financials of the Company.

The consolidated financial statements include the accounts of Chinawe and the following subsidiaries:

Officeway Technology Limited; incorporated in the British Virgin Islands in December 1999, formed for the purpose of acquiring (in March 2000) its wholly-owned subsidiary, Chinawe Asset Management Limited (‘‘CAM (HK)’’).

CAM (HK); a company incorporated in Hong Kong in June 1997, which provides subscriber services for the production of website images and a business-to-business e-marketplace for small-to-medium size businesses.

WIT (GZ) is a joint venture formed in the PRC in March 2000. CAM (HK) entered into a joint venture agreement with Guangzhou Welcon Info-Tech Limited (the ‘‘PRC Party’’) to establish a Sino-foreign co-operative joint venture in Guangzhou for a period of 10 years which was principally engaged in providing subscriber services for the development of computer software and networking, website design, technical consulting and a business-to-business e-marketplace for small-to-medium size businesses prior to its ceasation of business on October 31, 2005.

Chinawe Asset Management (PRC) Limited (‘‘CAM (PRC)’’) was established in the PRC in April 2005 to service the NPLs under services agreements with Huizhou One Limited, a subsidiary of Citigroup Financial Products Inc. (‘‘CFP’’).

|          |                                            |
|----------|--------------------------------------------|
| 2.  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |

|  |           |                     |
|--|-----------|---------------------|
|  | (a)  | Basis of accounting |

The financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (‘‘US’’). The financial statements are presented in US dollars.

|  |           |                              |
|--|-----------|------------------------------|
|  | (b)  | Going concern considerations |

The Company’s financial statements for the year ended December 31, 2006 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As of December 31, 2006, the Company had negative working capital and stockholders’ deficit of US$961,601 and US$900,933, respectively, which raise substantial doubt about its ability to continue as a going concern.

Management is of the view that although the Company has experienced difficulty in meeting its liquidity needs, such difficulty has been greatly alleviated recently due to the change in the Company’s business. Management of the Company is confident that the new strategic direction of the Company and the servicing arrangements with CFP will generate sufficient cash flows for operation then gradually improve its financial condition, and eventually erase doubts as to the Company’s operating as a going concern.

F-7

----

CHINAWE.COM INC.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

|          |                                                                     |
|----------|---------------------------------------------------------------------|
| 2.  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES    (CONTINUED) |

|  |           |                             |
|--|-----------|-----------------------------|
|  | (c)  | Principles of consolidation |

The financial statements include the accounts of Chinawe and its subsidiaries. All material inter-company balances and transactions have been eliminated in consolidation.

|  |           |                           |
|--|-----------|---------------------------|
|  | (d)  | Cash and cash equivalents |

The Company considers all highly liquid investments purchased with an original maturity of three months or less that are readily convertible into a known amount of cash to be cash equivalents.

|  |           |                               |
|--|-----------|-------------------------------|
|  | (e)  | Property, plant and equipment |

Property, plant and equipment are stated at cost less accumulated depreciation.

Depreciation is calculated on a straight-line basis to write off the cost of each asset using annual percentage rates as follows:

|                        |  |  |  |  |    |         |
|------------------------|--|--|--|--|----|---------|
| Office equipment       |  |  |  |  | 30 | %  |
| Computer equipment     |  |  |  |  | 30 | %  |
| Leasehold improvements |  |  |  |  | 20 | %  |
| Motor vehicles         |  |  |  |  | 30 | %  |
|                        |

|  |           |                                                    |
|--|-----------|----------------------------------------------------|
|  | (f)  | Accounting for the impairment of long-lived assets |

The long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

|  |           |                     |
|--|-----------|---------------------|
|  | (g)  | Revenue recognition |

The Company generally recognizes online subscription and service income and asset management and related services income when persuasive evidence of an arrangement exists, services are rendered, the fee is fixed or determinable, and collectibility is probable.

On-line services income represents subscription and service income receivable from members, which is recognized over the period of subscription and to the extent of services rendered in accordance with the terms of agreements.

Asset management and related services income is recognized when services are rendered in accordance with the terms of agreements.

|  |           |              |
|--|-----------|--------------|
|  | (h)  | Income taxes |

Provision for income and other taxes has been made in accordance with the tax rates and laws of the countries in which the Company operates.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

F-8

----

CHINAWE.COM INC.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

|          |                                                                     |
|----------|---------------------------------------------------------------------|
| 2.  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES    (CONTINUED) |

|  |           |                           |
|--|-----------|---------------------------|
|  | (i)  | Earnings per common share |

Basic earnings per share amounts are based on the weighted average shares of common stock outstanding. Diluted earnings per share assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share. The Company had no potential common stock instruments which would result in diluted earnings per share in 2006 or 2005.

|  |           |                              |
|--|-----------|------------------------------|
|  | (j)  | Foreign currency translation |

The Company’s functional currency is Renminbi, which is the currency of the primary economic environment in which the Company operates. For group reporting purposes, the amounts shown in the financial statements are presented in US dollars (‘‘reporting currency’’).

For translation of financial statements into the reporting currency, assets and liabilities for each balance sheet presented are translated at the rates of exchange existing at the year end. Income and expenses for each income statement presented are translated at the average rates during the year. Resulting exchange differences are recognized in accumulated other comprehensive income within stockholders’ equity.

|  |           |                  |
|--|-----------|------------------|
|  | (k)  | Use of estimates |

The preparation of financial statements in conformity with accounting principles generally accepted in the US requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates includes provisions for doubtful accounts, sales returns and allowances, impairment of long-lived assets and incomes taxes. Actual results could differ from those estimates.

|  |           |                                     |
|--|-----------|-------------------------------------|
|  | (l)  | Fair value of financial instruments |

The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair values of the Company’s financial instruments, which include cash, accounts receivable, accounts payable, long-term debt and related party balances, approximate their carrying value in the financial statements.

|  |           |                      |
|--|-----------|----------------------|
|  | (m)  | Comprehensive income |

SFAS No. 130, ‘‘Reporting Comprehensive Income’’, establishes requirements for disclosure of comprehensive income which includes certain items previously not included in the statements of operations, including minimum pension liability adjustments and foreign currency translation adjustments, among others. The Company’s components of comprehensive income include net income for the year and a foreign currency translation adjustment.

|  |           |                 |
|--|-----------|-----------------|
|  | (n)  | Related parties |

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence.

|  |           |                               |
|--|-----------|-------------------------------|
|  | (o)  | New accounting pronouncements |

There are no new accounting pronouncements for which adoption is expected to have a material effect on the Company’s financial statements.

F-9

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CHINAWE.COM INC.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

|          |                                    |
|----------|------------------------------------|
| 3.  | PROPERTY, PLANT AND EQUIPMENT, NET |

Property, plant and equipment are summarized as follows:

|                                 |  |  |                            |  |         |         |
|---------------------------------|--|--|----------------------------|--|---------|---------|
|                            |  |  | As ofDecember 31,2006 |
|                            |  |  | US$                        |
| Office equipment           |  |  |                            |  | 10,379  |         |
| Computer equipment              |  |  |                            |  | 10,962  |         |
| Leasehold improvements          |  |  |                            |  | 57,446  |         |
| Motor vehicles                  |  |  |                            |  | 99,119  |         |
|                            |  |  |                            |  | 177,906 |         |
| Accumulated depreciation        |  |  |                            |  | (90,537 | )  |
| Currency translation adjustment |  |  |                            |  | (1      | )  |
| Net                             |  |  |                            |  | 87,368  |         |
|                                 |

|          |                |
|----------|----------------|
| 4.  | LONG TERM DEBT |

Long term debt consists of an obligation under capital lease with US$26,700 outstanding as of December 31, 2006. The debt is secured by a motor vehicle with a net book value of US$24,264, bearing interest at 3-5% per annum and is repayable in monthly installments of US$1,234, with the final installment due in February 2010. Maturity of the debt is as follows:

|                                             |  |  |                            |  |        |         |
|---------------------------------------------|--|--|----------------------------|--|--------|---------|
|                                        |  |  | As ofDecember 31,2006 |
|                                        |  |  | US$                        |
| Payable during the following periods   |  |  |                            |  |   |         |
| Within 1 year                          |  |  |                            |  | 14,808 |         |
| Over 1 year but not exceeding 2 years       |  |  |                            |  | 14,808 |         |
| Over 2 years but not exceeding 3 years      |  |  |                            |  | 14,808 |         |
| Over 3 years but not exceeding 4 years      |  |  |                            |  | 2,468  |         |
|                                        |  |  |                            |  | 46,892 |         |
| Less: Amount representing interest          |  |  |                            |  | (7,869 | )  |
| Present value of net minimum lease payments |  |  |                            |  | 39,023 |         |
|                                             |

|          |              |
|----------|--------------|
| 5.  | INCOME TAXES |

It is management’s intention to reinvest all the income attributable to the Company earned by its operations outside the US. Accordingly, no US corporate income taxes are provided for in these financial statements.

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

Under the current laws of the British Virgin Islands (the ‘‘BVI’’), dividends and capital gains arising from the Company’s investments in the BVI are not subject to income taxes and no withholding tax is imposed on payments of dividends to the Company.

Companies that carry on business and derive income in Hong Kong are subject to Hong Kong income tax at 17.5%. Companies that carry on business and derive income in the PRC are subject to national income tax at 30% and local income tax at 3%. The income tax expense for the year represents the PRC enterprise income tax charged on the profit earned in the PRC.

F-10

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CHINAWE.COM INC.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

|          |                                       |
|----------|---------------------------------------|
| 5.  | INCOME TAXES    (CONTINUED) |

No income taxes have been provided for the Hong Kong subsidiary as it has incurred losses since commencement of its operations.

The reconciliation between the effective tax rate and the statutory US federal income tax rate is as follows:

|                                                                         |  |  |                         |  |     |                       |  |  |  |  |                |         |
|-------------------------------------------------------------------------|--|--|-------------------------|--|-----|-----------------------|--|--|--|--|----------------|---------|
|                                                                    |  |  | YEAR ENDED DECEMBER 31, |
|                                                                    |  |  | 2006% ofPre-TaxIncome   |  |     | 2005% ofPre-TaxIncome |
| Computed ‘‘expected’’ tax expense (benefit)     |  |  |                         |  | 34  |                       |  |  |  |  |   34 |         |
| Differences in tax rates in the countries in which the Company operates |  |  |                         |  | 63  |                       |  |  |  |  | 9              |         |
| Deferred tax asset valuation allowance                                  |  |  |                         |  | 52  |                       |  |  |  |  | 10             |         |
| Non-deductible expenses / Tax-exempt revenue                            |  |  |                         |  | 89  |                       |  |  |  |  | (4             | )  |
| Others                                                                  |  |  |                         |  | 1   |                       |  |  |  |  | 2              |         |
|                                                                    |  |  |                         |  | 239 |                       |  |  |  |  | 51             |         |
|                                                                         |

The Company’s deferred tax asset is as follows:

|                                        |  |  |                       |  |          |         |
|----------------------------------------|--|--|-----------------------|--|----------|---------|
|                                   |  |  | AS OFDECEMBER 31,2006 |
|                                   |  |  | US$                   |
| Hong Kong operating loss carry forward |  |  |                       |  | 165,833  |         |
| Deferred tax asset valuation allowance |  |  |                       |  | (165,833 | )  |
| Net deferred tax asset                 |  |  |                       |  | —  |         |
|                                        |

As of December 31, 2006, the Company had Hong Kong operating losses carry forward of approximately US$947,616 which may be carried forward indefinitely. Management has provided a full allowance for the deferred tax asset as it is more likely than not that the asset will not be realized.

|          |                                         |
|----------|-----------------------------------------|
| 6.  | RELATED PARTY BALANCES AND TRANSACTIONS |

The balances with related parties are as follows:

|                                               |  |  |        |  |  |                       |  |         |  |
|-----------------------------------------------|--|--|--------|--|--|-----------------------|--|---------|--|
|                                          |  |  | NOTE   |  |  | December 31,2006 |
|                                          |  |  |   |  |  | US$                   |
| Loan from a director, including interest |  |  | (a)    |  |  |                       |  | 137,723 |  |
| Advances from stockholders                    |  |  | (b)    |  |  |                       |  | 369,307 |  |
|                                          |  |  |   |  |  |                       |  | 507,030 |  |
|                                               |

|  |
|--|
|  |  |
|  |

| Note: |
|-------|

| (a) | The loan from a director is unsecured, interest bearing at 23% per annum and originally agreed to be repaid on June 30, 2005. Interest expense charged for the years ended December 31, 2006 and 2005 was US$31,117 and US$31,194, respectively. The maturity date of this loan was extended until June 2007. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | The amounts due are unsecured, interest-free and repayable on demand. |
|-----|-----------------------------------------------------------------------|

During the year ended December 31, 2006, the Company received advances from related parties of US$227,944. The Company also repaid advances of US$480,355.

F-11

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CHINAWE.COM INC.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

|          |                             |
|----------|-----------------------------|
| 7.  | OPERATING LEASE COMMITMENTS |

At the balance sheet date, the Company had total future minimum lease payments under non-cancelable operating leases, which are payable as follows:

|                                        |  |  |                            |  |         |  |
|----------------------------------------|--|--|----------------------------|--|---------|--|
|                                   |  |  | As ofDecember 31,2006 |
|                                   |  |  | US$                        |
| Within one year                        |  |  |                            |  | 71,403  |  |
| In the second to fifth years inclusive |  |  |                            |  | 35,826  |  |
|                                   |  |  |                            |  | 107,229 |  |
|                                        |

|          |                                              |
|----------|----------------------------------------------|
| 8.  | RETIREMENT PLAN AND POST-EMPLOYMENT BENEFITS |

Following the introduction of the Mandatory Provident Fund Schemes Ordinance (‘‘MPFO’’) in Hong Kong, the subsidiary in Hong Kong has participated in the defined contribution mandatory provident fund since December 1, 2000. Both the Company and its employees make monthly contributions to the fund at 5% of the employees’ earnings as defined under the MPFO. The contributions of the Company and the employees are subject to a cap of HK$1,000 ($129) per month and thereafter contributions are voluntary.

As stipulated by the rules and regulations in the PRC, the Company is required to contribute to a state-sponsored social insurance plan for all of its employees at 11% of the basic salary of its employees. The state-sponsored retirement plan is responsible for the actual pension payments or post-retirement benefits beyond the annual contributions.

During the years ended December 31, 2006 and 2005, the aggregate amount of the Company’s contributions amounted to US$44,806 and US$10,636, respectively.

|          |               |
|----------|---------------|
| 9.  | CONTINGENCIES |

One of the subsidiaries of Chinawe in the PRC is subject to the PRC enterprise income tax and business tax. However, up to December 31, 2006, the Company only submitted tax returns and made payments for a portion of the total tax liabilities, which is not in compliance with the tax laws and regulations in the PRC. The Company has made full provision for all tax liabilities in accordance with the relevant tax laws and regulations.

Despite the fact that the Company has fully accrued the taxes in the financial statements, the Company may be subject to penalties ranging from 50% to 500% of the underpaid tax amounts. The exact amount of the penalty cannot be estimated with any reasonable degree of certainty.

The Company is currently suspended in the State of California due to failure to file tax reports with the Franchise Tax Board. The Company is in the process of preparing the required reports and expects to be back in good standing shortly. The Company does not believe that the amount of taxes and penalties owed will be material.

|           |            |
|-----------|------------|
| 10.  | STOCK PLAN |

On July 25, 2001 the Board of Directors approved the Chinawe.com Inc. 2001 Restricted Stock Plan (the ‘‘Plan’’), under which 5,000,000 shares of the Company’s common stock have been reserved for award under the Plan. Pursuant to the Plan, stock awards may be granted to eligible officers, directors, employees and consultants of the Company. Through 2006, no awards have been made under the Plan.

F-12

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CHINAWE.COM INC.NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

|           |                     |
|-----------|---------------------|
| 11.  | RISK CONSIDERATIONS |

As a majority of the Company’s operations are conducted in the PRC, the Company is subject to special considerations and significant risks not typically associated with investments in equity securities of North American and Western European companies. The Company’s operations may be adversely affected by significant political, economic and social uncertainties in the PRC.

Although the PRC government has been pursuing economic reform policies for the past several years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC’s political, economic and social life. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective.

F-13

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SIGNATURES

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

|  | CHINAWE.COM INC. |
|--|------------------|

|  | By: /s/ Man Keung Wai                                        Man Keung Wai        Chairman of the Board |
|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Date: April 17, 2007

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

|                       |  |                                                                                         |  |                     |
|-----------------------|--|-----------------------------------------------------------------------------------------|--|---------------------|
| SIGNATURES            |  | TITLE                                                                                   |  | DATE                |
|                       |
| /s/ Man Keung Wai     |  | Chairman of the Board,Chief Executive Officer and Director(Principal Executive Officer) |  | April 17, 2007 |
|                       |
| Man Keung Wai         |
|                       |
| /s/ Man Ying Ken Wai  |  | Vice President of Marketing,Director                                                    |  | April 17, 2007 |
|                       |
| Man Ying Ken Wai      |
|                       |
| /s/ Vivian Wai Wa Chu |  | Chief Financial Officer,Secretary and Director(Principal Financial Officer)             |  | April 17, 2007 |
|                       |
| Vivian Wai Wa Chu     |
|                       |
| /s/ Barry Yiu         |  | Vice President and Director                                                        |  | April 17, 2007 |
|                       |
| Barry Yiu             |
|                       |

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