UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-K



(Mark One)



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



For the fiscal year ended June 30, 2012



or



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



For the transition period from ___________
to ___________



Commission file number: 333-174198



CHINA UNITED INSURANCE SERVICE, INC.

(Exact name of registrant as specified in
its charter)



|Delaware                                               |  | 98-6088870                                  
|------------------------------------------------------ |  | --------------------------------------------
|(State or other jurisdiction
        of incorporation) |  | (I.R.S. Employer
        Identification No.)

Building 4F, Hesheng Plaza
No. 26 Yousheng S Rd. Jinshui District, Zhengzhou,
Henan People’s Republic of China 450057

(Address of principal executive offices,
with zip code)



+86371-63976529

(Registrant’s
telephone number, including area code)



Securities
registered pursuant to Section 12(b) of the Act:



|Title of each class | None
|------------------- | ----



|Securities registered under Section 12(g) of the Act:
|-----------------------------------------------------
|                                                     
|Title of each class                                  



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



Yes  ̈                                       No x



Indicate by check mark
if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.



Yes  ̈                                        No x



Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

Yes x                                        No  ̈



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

Yes x                                       No  ̈



Indicate by check
mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not 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-K or any amendment to this Form 10-K. x





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



|Large accelerated filer  ̈                     |  | Accelerated filer         |  ̈
|--------------------------------------------- |  | ------------------------- | -
|Non-accelerated filer  ̈                       |  | Smaller reporting company | x
|(Do not check if a smaller reporting company) |  |                           |  



Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act).

Yes  ̈                                       No x



The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant,
as of the last business day of the registrant’s most recently completed second fiscal quarter was $0.



As of September 28, 2012,
there were 29,100,503 shares of common stock issued and outstanding, and 1,000,000 preferred shares issued and outstanding.











TABLE OF CONTENTS



|Item Number and Caption |  | Page                                                                                                                
|----------------------- |  | --------------------------------------------------------------------------------------------------------------------
|                        |  |                                                                                                                     
|PART I                  |  |                                                                                                                     
|                        |  |                                                                                                                     
|Item 1.                 |  | Business                                                                                                            
|                        |  |                                                                                                                     
|Item 1A.                |  | Risk Factors                                                                                                        
|                        |  |                                                                                                                     
|Item 2.                 |  | Properties                                                                                                          
|                        |  |                                                                                                                     
|Item 3.                 |  | Legal Proceedings                                                                                                   
|                        |  |                                                                                                                     
|Item 4.                 |  | Mine Safety Disclosures                                                                                             
|                        |  |                                                                                                                     
|PART II                 |  |                                                                                                                     
|                        |  |                                                                                                                     
|Item 5.                 |  | Market for Registrant’s Common Equity, and Related Stockholder Matters and Issuer Purchases
    of Equity Securities
|                        |  |                                                                                                                     
|Item 6.                 |  | Selected Financial Data                                                                                             
|                        |  |                                                                                                                     
|Item 7.                 |  | Management’s Discussion and Analysis of Financial Condition and Results of Operations                               
|                        |  |                                                                                                                     
|Item 7A.                |  | Quantitative and Qualitative Disclosures About Market Risk                                                          
|                        |  |                                                                                                                     
|Item 8.                 |  | Financial Statements and Supplementary Data                                                                         
|                        |  |                                                                                                                     
|Item 9.                 |  | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                                
|                        |  |                                                                                                                     
|Item 9A.                |  | Controls and Procedures                                                                                             
|                        |  |                                                                                                                     
|Item 9B.                |  | Other Information                                                                                                   
|                        |  |                                                                                                                     
|PART III                |  |                                                                                                                     
|                        |  |                                                                                                                     
|Item 10.                |  | Directors, Executive Officers, and Corporate Governance                                                             
|                        |  |                                                                                                                     
|Item 11.                |  | Executive Compensation                                                                                              
|                        |  |                                                                                                                     
|Item 12.                |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                      
|                        |  |                                                                                                                     
|Item 13.                |  | Certain Relationships and Related Transactions, and Director Independence                                           
|                        |  |                                                                                                                     
|Item 14.                |  | Principal Accountant Fees and Services                                                                              
|                        |  |                                                                                                                     
|PART IV                 |  |                                                                                                                     
|                        |  |                                                                                                                     
|Item 15.                |  | Exhibits, Financial Statement Schedules                                                                             
|                        |  |                                                                                                                     
|SIGNATURES              |  |                                                                                                                     



2







CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION



This annual report contains forward-looking
statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results,
performance or achievements to be materially different from any future results, performances or achievements expressed or implied
by the forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described under
Item 1 “Description of Business,” Item 1A “Risk Factors” and Item 7 “Management’s Discussion
and Analysis of Financial Condition and Results of Operations.”  In some cases, you can identify forward-looking
statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,”
“intends,” “may,” “plans,” “potential,” “predicts,” “projects,”
“should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking
statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties.
Given these uncertainties, you should not place undue reliance on these forward-looking statements.



Forward-looking statements represent our
estimates and assumptions only as of the date of this annual report. You should read this annual report and the documents that
we reference in this annual report, or that we filed as exhibits to this annual report completely and with the understanding that
our actual future results may be materially different from what we expect.



3







Except as required by law, we assume no
obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially
from those anticipated in any forward-looking statements, even if new information becomes available in the future.



OTHER PERTINENT INFORMATION



References in this annual report to “we,”
“us,” “our” and the “Company” and words of like import refer to China United Insurance Service,
Inc., its subsidiaries and variable interest entities.



References to China or the PRC refer to
the People’s Republic of China (excluding Hong Kong, Macao and Taiwan). References to Taiwan refer to Republic of China.



Our business is conducted in Taiwan and
China using NT$, the currency of Taiwan and RMB, the currency of China, respectively, and our financial statements are presented
in United States dollars (“USD” or “$”).   In this annual report, we refer to assets, obligations,
commitments and liabilities in our financial statements in USD.   These dollar references are based on the exchange
rate of NT$ and RMB to USD, determined as of a specific date.   Changes in the exchange rate will affect the amount
of our obligations and the value of our assets in terms of USD which may result in an increase or decrease in the amount of our
obligations (expressed in USD) and the value of our assets, including accounts receivable (expressed in USD).



PART I



ITEM 1. BUSINESS



Corporate History and Structure



China United Insurance Service, Inc. (“China
United” or the “Company”) is a Delaware corporation organized on June 4, 2010 by Mao Yi Hsiao, a Taiwanese citizen,
and is quoted on the Over the Counter Bulletin Board (“OTCBB”). The Company’s operating companies are in Taiwan
and China. Unless context indicates otherwise, reference to the “Company” throughout this annual report refers to
China United and its subsidiaries.  Reference to Action Holdings Financial Limited (“AHFL”), refers to the
combined operations of AHFL and its Taiwan Subsidiaries. Reference to Henan Anhou refers to the combined operations of Henan Anhou
and its subsidiaries.



ZLI Holdings Limited (“CU Hong Kong”),
a wholly owned Hong Kong-based subsidiary of China United, was originally founded by China United, on July 12, 2010 under Hong
Kong laws. On October 20, 2010, CU Hong Kong founded a wholly foreign owned enterprise, Zhengzhou Zhonglian Hengfu Consulting
Co., Ltd. (“CU WFOE”) in Henan province in the PRC.



4







Henan Law Anhou Insurance Agency Co.,
Ltd. (“Henan Anhou”, formerly known as Zhengzhou Anhou Insurance Agency Co., Ltd.) was founded in Henan province of
the People’s Republic of China (the “PRC”) on October 9, 2003. Henan Anhou provides insurance agency services
in the PRC.



Henan Anhou’s wholly owned subsidiary
Sichuan Kangzhuang Insurance Agency Co., Ltd. (“Sichuan Kangzhuang”) was founded on September 4, 2006 in Sichuan province
of the PRC, and it provides insurance agency services in the PRC.  On August 23, 2010, at Sichuan Kangzhuang’s general
meeting of shareholders, its shareholders voted for transferring all of their equity interests in Sichuan Kangzhuang to Henan
Anhou for RMB532,622 ($83,444). On September 6, 2010, the equity transfer agreements were signed between Henan Anhou and each
shareholder of Sichuan Kangzhuang. Henan Anhou has complied with all of the applicable laws and regulations with respect to its
holding 100% equity interests in Sichuan Kangzhuang.



Jiangsu Law Insurance Brokers Co., Ltd.
(“Jiangsu Law” collectively with Henan Anhou, Sichuan Kangzhuang, the “Consolidated Affiliated Entities”,
each a “Consolidated Affiliated Entity”) was founded on September 19, 2005 in Jiangsu province of the PRC. Jiangsu
Law is allowed to provide insurance brokerage services. On August 12, 2010, at Jiangsu Law’s general meeting of shareholders,
its shareholders voted for transferring all of their shareholdings to Henan Anhou for RMB518,000 ($81,153). On September 28, 2010,
the equity transfer agreements were signed between Henan Anhou and each individual shareholder of Jiangsu Law. Pursuant to Provisions
on the Supervision and Administration of Insurance Brokerage Institutions, effective on October 1, 2009, if an insurance brokerage
entity fails to bring its registered capital to no less than RMB10,000,000 ($1,566,661) on or prior to October 1, 2012, CIRC or
its local counterpart, as applicable, may determine not to extend the insurance brokerage license. To meet such minimum registered
capital requirement, on February 11, 2011, Henan Anhou invested RMB4.82 million ($755,131) in Jiangsu Law to increase the registered
capital to RMB10 million ($1,566,661).  Henan Anhou has complied with all of the applicable laws and regulations with respect
to its holding 100% equity interests in Jiangsu Law.



On January 16, 2011, China United issued
20,000,000 shares of common stock, $0.00001 par value per share, to several non-US persons for their investment of $300,000 in
cash in the Company’s subsidiaries.  The issuance was made pursuant to an exemption from registration contained in
Regulation S under the Securities Act of 1933, as amended. The consideration was paid to the account of CU Hong Kong by May 6,
2011. All $300,000 was contributed into the bank account of CU WFOE as registered capital.



5







Reclassification of Certain Common Stock
into Preferred Shares



On January 28, 2011, the Company increased
the number of authorized shares from 30,000,000 shares of common stock to 100,000,000 shares of common stock and 10,000,000 shares
of preferred stock. On July 2, 2012, the Board of Directors and stockholders of the Company approved, in connection with a reclassification
of 1,000,000 issued and outstanding shares of common stock (the “Reclassified Shares”), par value $0.00001 per share
held by Mao Yi Hsiao (“Mr. Mao”) into 1,000,000 shares of Series A Convertible Preferred Stock, par value $0.00001
per share (the “Series A Preferred Stock”) on a share-for-share basis (the “Reclassification”), the issuance
of 1,000,000 shares of Series A Preferred Stock to Mr. Mao and cancellation of 1,000,000 common stock held and submitted by Mr.
Mao pursuant to the Reclassification. All of the 1,000,000 shares of Series A Preferred Stock are reclassified from the 1,000,000
common stock held by Mr. Mao and no additional consideration has been paid by Mr. Mao in connection with the Reclassification.
Each holder of common stock shall be entitled to one vote for each share of common stock held of record by such holder as of the
applicable record date on any matter that is submitted to a vote of the stockholders of the Company; while each holder of Series
A Preferred Stock shall be entitled to ten votes for each share of Series A Preferred Stock held of record by such holder as of
the applicable record date on any matter that is submitted to a vote of the stockholders of the Company.



Recent Acquisition of AHFL



On August 24, 2012, the Company acquired
all of the issued and outstanding shares of AHFL, a limited liability company (“LLC”) incorporated under the laws
of British Virgin Islands on April 30, 2012, together with its subsidiaries in Taiwan. Subsequent to the acquisition, AHFL becomes
a 100% subsidiary of the Company.



AHFL holds 65.95% of the issued and outstanding
shares of Law Enterprise Co., Ltd. (“Law Enterprise”), a company limited by shares incorporated under the laws of
Taiwan on January 30, 1996. Law Enterprise holds (i) 100% Law Insurance Broker Co., Ltd. (“Law Broker”), a company
limited by shares incorporated in Taiwan on October 9, 1992; (ii) 97.84% of Law Risk Management & Consultant Co., Ltd. (“Law
Management”), a company limited by shares incorporated in Taiwan on December 5, 1987; and (iii) 96% of Law Insurance Agent
Co., Ltd. (“Law Agent” collectively with “Law Enterprise”, “Law Broker” and “Law Agent”,
the “Taiwan Subsidiaries”, each a “Taiwan Subsidiary”), a LLC incorporated in Taiwan on June 3, 2000.



Law Enterprise acts as a holding company
of its operating subsidiaries in Taiwan. Law Broker primarily engages in insurance brokerage and insurance agency service business
across Taiwan, while Law Management and Law Agent are not in active operation. We operate our Taiwan business primarily through
Law Broker.



6







Due to PRC legal restrictions on foreign
ownership and investment in insurance agency and brokerage businesses in China, especially those on qualifications as well as
capital requirement of the investors, we operate our PRC business primarily through our Consolidated Affiliated Entities in China.
We do not hold equity interests in our Consolidated Affiliated Entities. However, through the VIE Agreements (as described in
more details below) with Henan Anhou and its shareholders, we effectively control, and are able to derive substantially all
of the economic benefits from, these Consolidated Affiliated Entities.



Our Consolidated Affiliated Entities in
China are variable interest entities through which all of our insurance services are operated. It is through the VIE Agreements
that we have effective control of the Consolidated Affiliated Entities, which allows us to consolidate the financial results of
the Consolidated Affiliated Entities in our financial statements.  If Henan Anhou and its shareholders fail to perform
their obligations under the VIE Agreements, we could be limited in our ability to enforce the VIE Agreements that give us effective
control. Furthermore, if we are unable to maintain effective control of our Consolidated Affiliated Entities, we would not be
able to continue to consolidate the Consolidated Affiliated Entities’ financial results with our financial results. During
each of the fiscal years ended June 30, 2011 and 2012, 100% of our revenues in our consolidated financial statements were derived
from our Consolidated Affiliated Entities. However, subsequent to the consummation of the acquisition of AHFL together with its
Taiwan Subsidiaries on August 24, 2012, we expect a substantial portion of our revenues in our future consolidated financial statements
will be derived from our Taiwan Subsidiaries.



On January 17, 2010, CU WFOE and Henan
Anhou and its shareholders entered into a series of agreements known as variable interest agreements (the “VIE Agreements”)
pursuant to which CU WFOE has executed effective control over Henan Anhou through these contractual arrangements. The VIE Agreements
included:



(1) An Exclusive Business Cooperation
Agreement through which CU WFOE is appointed the exclusive services provider to provide Henan Anhou with complete technical support,
business support and related consulting services (as described in the agreement) in exchange for 90% of the net profits (as defined
in the agreement) of Henan Anhou. The agreement does not provide that CU WFOE is responsible for the debts of the Consolidated
Affiliated Entities. The term of the Exclusive Business Cooperation Agreement began on January 17, 2011 and lasts ten years, unless
earlier terminated as provide in the agreement. The term of the agreement may be extended at CU WFOE’s discretion prior
to the expiration thereof. CU WFOE may terminate the agreement at any time with 30 days’ written notice but Henan Anhou
may only terminate the agreement if CU WFOE commits gross negligence or a fraudulent act against Henan Anhou;



7







(2) a Power of Attorney under which the
shareholders of Henan Anhou have vested their collective voting control over Henan Anhou to CU WFOE;



(3) an Option Agreement under which the
shareholders of Henan Anhou have granted to CU WFOE the irrevocable right and option to acquire all of their equity interests
in Henan Anhou, subject to applicable PRC laws and regulations. The term of the Option Agreement began on January 17, 2011 and
lasts ten years, but may be renewed at CU WFOE’s election; and



(4) a Share Pledge Agreement under which
the shareholders of Henan Anhou have pledged all of their equity interests in Henan Anhou to CU WFOE to guarantee Henan Anhou’s
performance of its obligations under the Exclusive Business Cooperation Agreement.



As a holding company with no business
other than holding equity interest of our operating subsidiary, CU WFOE in China and Law Broker in Taiwan, we rely principally
on dividends to be paid by CU WFOE in China and Law Broker in Taiwan. CU WFOE, being the exclusive service provider to Henan Anhou,
relies on the service fees to which it is entitled from Henan Anhou. Pursuant to the Exclusive Cooperation Agreement between CU
WFOE and Henan Anhou, CU WFOE has the right to collect 90% of the net profits of Henan Anhou. As Henan Anhou is still operating
at a loss, Henan Anhou has not paid any service fees to CU WFOE yet and CU WFOE has not paid any dividend to us to date.We
expect Henan Anhou to make a profit beginning in the fiscal year ending June 30, 2014, at which time it should start to pay service
fees to CU WFOE, although there can be no assurance that Henan Anhou will become profitable by that time or ever. Our capability
to receive dividends from CU WFOE, convert them into USD and make the repatriation out of China is subject to the applicable PRC
restrictions on the payment of dividends by PRC companies, laws and regulations on foreign exchange and restrictions on foreign
investment. Law Broker, being the only operating entity for our Taiwan business, is primarily focused on life and property insurance
brokerage and agency business. Through years of operation, Law Broker has become one of the leading insurance brokerage firms
in Taiwan and has expanded its business across Taiwan, with 22 sales and service outlets (including the headquarters) and 1,833
employees and insurance sales professionals.



Henan Anhou owns 100% equity interest
in both Sichuan Kangzhuang and Jiangsu Law. The shareholders of Henan Anhou are Zhu Shuqin, Chen Yanxia, Fang Qunlei and Wei Qun.
All of them are PRC citizens and none of them holds any shares in the Company. Pursuant to the VIE Agreements, CU WFOE becomes
the primary beneficiary of Henan Anhou and only leaves Henan Anhou shareholders nominal value therein. Please refer to the chart
below for detailed information of the Company’s shareholders who serve as a director or officer of the Company, the Company’s
subsidiaries, or the Consolidated Affiliated Entities.



8







|Name            |  | Position in the
    Company |  | Position
    in
    AHFL |  | Position in
    Law Enterprise |  | Position in
    Law Broker      |  | Position in
    Law Agent |  | Position in Law
    Management |  | Position in 
    CU Hong
    Kong |  | Position in CU
WFOE          |  | Position in
    Henan Anhou |  | Position in 
    Jiangsu Law        
|--------------- |  | --------------------------- |  | ------------------------ |  | ------------------------------ |  | ------------------------------- |  | ------------------------- |  | ------------------------------ |  | --------------------------------- |  | ---------------------------- |  | --------------------------- |  | ------------------------------------
|Mao Yi Hsiao    |  | Director                    |  | Director                 |  | Director                       |  | Director                        |  | Director                  |  | Director                       |  | General Manager and Chairman      |  | General Manager and Chairman |  |                             |  | Supervisor                          
|                |  |                             |  |                          |  |                                |  |                                 |  |                           |  |                                |  |                                   |  |                              |  |                             |  |                                     
|Li Chwan Hau    |  | Director                    |  |                          |  |                                |  |                                 |  |                           |  |                                |  |                                   |  |                              |  |                             |  |                                     
|Li Fu Chang     |  | Director                    |  |                          |  |                                |  |                                 |  |                           |  |                                |  |                                   |  |                              |  |                             |  |                                     
|Hsu Tzu En      |  | Director                    |  |                          |  |                                |  |                                 |  |                           |  |                                |  |                                   |  |                              |  |                             |  |                                     
|Lo Chung Mei    |  | Chief Executive Officer     |  |                          |  |                                |  |                                 |  |                           |  |                                |  |                                   |  |                              |  | General Manager             |  |                                     
|Chuang Yung Chi |  | Chief Financial Officer     |  |                          |  |                                |  | Manager of Financial Department |  |                           |  |                                |  |                                   |  |                              |  |                             |  |                                     
|                |  |                             |  |                          |  |                                |  |                                 |  |                           |  |                                |  |                                   |  |                              |  |                             |  |                                     
|Hsieh Tung Chi  |  | Chief Operating Officer     |  |                          |  |                                |  |                                 |  |                           |  |                                |  |                                   |  |                              |  |                             |  | Division
        Chief of Management
|                |  |                             |  |                          |  |                                |  |                                 |  |                           |  |                                |  |                                   |  |                              |  |                             |  |                                     
|Chiang Te Yun   |  | Chief Technology Officer    |  |                          |  |                                |  |                                 |  |                           |  |                                |  |                                   |  |                              |  |                             |  | Manager                             
|Chao Hui Hsien  |  |                             |  |                          |  |                                |  | Vice-General Manager            |  | Director                  |  |                                |  |                                   |  |                              |  |                             |  | Vice-General Manager                
|                |  |                             |  |                          |  |                                |  |                                 |  |                           |  |                                |  |                                   |  |                              |  |                             |  |                                     
|Lee Shu Fen     |  |                             |  |                          |  |                                |  | General Manager                 |  |                           |  |                                |  |                                   |  |                              |  |                             |  |                                     
|                |  |                             |  |                          |  |                                |  |                                 |  |                           |  |                                |  |                                   |  |                              |  |                             |  |                                     
|Tu Wen Ti       |  |                             |  |                          |  |                                |  | Assistant General Manager       |  |                           |  |                                |  |                                   |  |                              |  |                             |  |                                     
|                |  |                             |  |                          |  |                                |  |                                 |  |                           |  |                                |  |                                   |  |                              |  |                             |  |                                     
|Shen Wen Che    |  |                             |  |                          |  |                                |  | Assistant General Manager       |  |                           |  |                                |  |                                   |  |                              |  |                             |  |                                     



9







See “Related Party Transactions”
for further information on our contractual arrangements with these parties.



The following
flow chart illustrates our Company’s organizational structure:





Products and Services



Law Broker and Henan Anhou market and
sell to customers two broad categories of insurance products: life insurance products and property and casualty insurance products,
both focused on meeting the particular insurance needs of individuals. The insurance products that Law Broker and Henan Anhou sell
are underwritten by some of the leading insurance companies in Taiwan and China, respectively.



Through Henan Anhou’s wholly-owned
insurance brokerage firm Jiangsu Law, it also closely interacts with insurance companies and actively locates and introduces the
right customers in Henan Anhou’s database matching the insurance products offered by such insurance companies to them.



10







Life Insurance Products



The life insurance products Law Broker
distributes can be broadly classified into the categories set forth below. Due to constant product innovation by insurance companies,
some of the insurance products Law Broker distributes combine features of one or more of the categories listed below. Total net
revenues from life insurance products distributed by Law Broker accounted for approximately 96.5% of Law Broker’s total
net revenues in the fiscal year ended June 30, 2012.



| | • | Individual Whole Life Insurance.The individual whole life insurance products Law Broker distributes provide insurance for the insured person’s
        entire life in exchange for the periodic payment of fixed premiums over a pre-determined period, generally ranging from
        six to 20 years, or until the insured reaches a certain age. The face amount of the policy or, for some policies,
        the face amount plus accumulated interests is paid upon the death of the insured.                                                                                                                                                                 
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | Individual Term Life Insurance.The individual term life insurance products Law Broker distributes provide insurance for the insured for a specified
        time period or until the attainment of a certain age, in return for the periodic payment of fixed premiums over a pre-determined
        period, generally ranging from six to 20 years. Term life insurance policies generally expire without value if the
        insured survives the coverage period.                                                                                                                                                                                              
| | • | Individual Health Insurance.The individual health insurance products Law Broker distributes pay the insured amount of reasonable hospitalization
        cost, or certain death benefit in case of the death of the insured, due to sickness, accident or childbirth. Individual
        health insurance policies expire when the premium is not paid or a certain age is attained.                                                                                                                                                                                                                                                                               
| | • | Casualty Insurance.Accidental
        Injury Insurance is the kind of life insurance that insurance benefit is given when the insured is dead or disabled because
        of accidental injury, which is unforeseen by the injured or against his will. Casualty insurance policies expire when
        the premium is not paid or a certain age is attained.                                                                                                                                                                                                                                                                                                      
| | • | Investment-oriented Insurance. Investment-oriented insurance products are the market
    linked insurance plan which also provide life coverage. The premium amount (after deduction of certain charges) is invested
    into different funds. The performance of the fund will depend on the market. A growing upward trend in market will increase
    the fund value. Every investment-oriented insurance policy has market risk exposure depending on the fund invested and such
    investment risk is solely borne by the policyholder. Depending on the death benefit, Investment-oriented insurance policies
    are categorized into two broad categories:



11







| |   | Type I: The death benefit
        is equal to the higher of insured amount or fund value.
        
        Type II: The death benefit
        is equal to the insured amount plus fund value.                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | Foreign Currency Policy Commodity.It is a life insurance policy where policy benefit shall all be paid in foreign currencies. The foreign currency policy
        commodities provide insurance for the insured person’s life in exchange for the periodic payment of fixed premiums
        over a pre-determined period, generally ranging from six to 20 years, or until the insured reaches a certain age. The
        face amount of the policy or, for some policies, the face amount plus accumulated interests, is paid upon the death of
        the insured.
| | • | Travel Accident Insurance. It is a kind of casualty insurance. The travel accident
    insurance provides monetary compensation in case the insured dies or loses a limb in an accident while he or she is traveling.
    The premium is based on the days of traveling and the insured amount.                                                                                                                                                                                                                                                                       



The life insurance products Law Broker
distributed in the fiscal year ending June 30, 2012 were primarily underwritten by Fubon Life Insurance Co, Ltd., Farglory Life
Insurance Co, Ltd., TransGlobe Life Insurance Company, China Life Insurance Company and Kuo Hua Life Insurance Company.



The life insurance products Henan Anhou
distributes can be broadly classified into the categories set forth below. Due to constant product innovation by insurance companies,
some of the insurance products Henan Anou distributes combine features of one or more of the categories listed below. Total net
revenues from life insurance products accounted for approximately 68.6% of the Company’s total net revenues in the fiscal
year ended June 30, 2012.



| | • | Individual Whole Life Insurance. The individual whole life insurance products
    Henan Anhou distributes provide insurance for the insured person’s entire life in exchange for the periodic payment
    of fixed premiums over a pre-determined period, generally ranging from five to 20 years, or until the insured reaches
    a certain age. The face amount of the policy or, for some policies, the face amount plus accumulated interests is paid upon
    the death of the insured.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Individual Term Life Insurance. The individual term life insurance products
    Henan Anhou distributes provide insurance for the insured for a specified time period or until the attainment of a certain
    age, in return for the periodic payment of fixed premiums over a pre-determined period, generally ranging from five to 20 years.
    Term life insurance policies generally expire without value if the insured survives the coverage period.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



12







| | • | Individual Endowment Life Insurance. The individual endowment products
    Henan Anhou distributes generally provide maturity benefits if the insured reaches a specified age, and provide to a beneficiary
    designated by the insured guaranteed benefits upon the death of the insured within the coverage period. In return, the insured
    makes periodic payment of premiums over a pre-determined period, generally ranging from five to 25 years.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Individual Education Annuity. The individual annuity products Henan Anhou
    distributes are primarily education related products. They provide annual benefit payments after the insured attains a certain
    age, e.g., 18, for a fixed time period, or e.g., four years, and a lump payment at the end of the coverage period. In addition,
    the beneficiary designated in the annuity contract will receive guaranteed benefits upon the death of the insured during the
    coverage period. In return, the purchaser of the annuity products makes periodic payment of premiums during a pre-determined
    accumulation period.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Individual Health Insurance. The individual health insurance products Henan
    Anhou distributes primarily consist of dread disease insurance products, which provide guaranteed benefits for specified dread
    diseases during the coverage period. In return, the insured makes periodic payment of premiums over a pre-determined period.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The life insurance products Henan Anhou
distributed in the fiscal year ended June 30, 2012 were primarily underwritten by Sunshine Insurance Group Corporation Limited,
Taiping Life Insurance Co. Ltd., Taikang Life Insurance Company and Sino Life Insurance Co., Ltd.



In addition to the periodic premium payment
schedules described above, most of the individual life insurance products we distribute also allow the insured to choose to make
a single, lump-sum premium payment at the beginning of the policy term.If a periodic payment schedule is adopted by the
insured, a life insurance policy can generate periodic payment of fixed premiums to the insurance company for a specified period
of time. This means that once Henan Anhou or Law Broker sells a life insurance policy with a periodic premium payment schedule,
Henan Anhou or Law Broker will be able to derive commission and fee income from that policy for an extended period of time, sometimes
up to 25 years. Because of this attractive feature and the expected sustained growth of life insurance sales in China and
Taiwan, we have focused significant resources ever since the incorporation of Henan Anhou and Law Broker on developing our capability
to distribute individual life insurance products with periodic payment schedules. We expect that sales of life insurance products
will continuously be our primary source of revenue in the next several years.



13







Property and Casualty Insurance Products



Law Broker’s main property and casualty
insurance products are automobile insurance, casualty insurance and liability insurance. Law Broker commenced its sale of automobile
insurance, casualty insurance and liability insurance business since August 2003. Total net revenues from property and casualty
insurance products accounted for 3.5% of Law Broker’s total net revenues in the fiscal year ended June 30, 2012.



The property and casualty insurance products
Law Broker distributes can be further classified into the following categories:



| | • | Automobile Insurance.Law Broker distributes both standard automobile insurance
    policies and supplemental policies, which we refer to as riders. The standard automobile insurance policies Law Broker sells
    generally have a term of one year and cover damages caused to the insured vehicle by collision and other traffic accidents,
    falling or flying objects, fire, explosion and natural disasters. Law Broker also sells standard third party liability insurance
    policies, which cover bodily injury and property damage caused by an accident involving an insured vehicle to a person not
    in the insured vehicle. The riders Law Broker distributes cover additional losses, such as liability to passengers, losses
    arising from vehicle theft and robbery, broken glass and vehicle body scratches.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Casualty Insurance. Casualty insurance is made to insure any loss or damage
    to property. This is designed to cover loss that is made by direct accident. The policy period is usually one year. The premium
    is based on the insured amount.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Liability Insurance.When the insured is legally obligated to indemnify
    a third party and subject to a claim in connection therewith, the liability insurer is liable to provide such indemnification
    on behalf of the insured. The policy period is usually one year. The premium is based on the insured amount.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The property and casualty insurance products
Law Broker distributed in the fiscal year ended June 30, 2012 were primarily underwritten by Fubon Insurance Co, Ltd., Union Insurance
Company, ACE Insurance Company, Taian Insurance Co., Ltd. and Zurich Insurance Company.



14







Henan Anhou’s main property and
casualty insurance products are automobile insurance and commercial property insurance. Henan Anhou commenced its sale of commercial
property insurance since 2009 and developed automobile insurance business since 2010. Total net revenues from property and casualty
insurance products distributed by Henan Anhou accounted for 31.4% of the Company’s total net revenues in the fiscal year
ended June 30, 2012.



The property and casualty insurance products
Henan Anhou distributes can be further classified into the following categories:



| | • | Automobile Insurance. Automobile insurance is the largest segment of property and casualty
    insurance in the PRC in terms of gross written premiums. Henan Anhou distributes both standard automobile insurance policies
    and supplemental policies, which we refer to as riders. The standard automobile insurance policies Henan Anou sells generally
    have a term of one year and cover damages caused to the insured vehicle by collision and other traffic accidents, falling
    or flying objects, fire, explosion and natural disasters. Henan Anou also sells standard third party liability insurance policies,
    which cover bodily injury and property damage caused by an accident involving an insured vehicle to a person not in the insured
    vehicle. The riders Henan Anhou distributes cover additional losses, such as liability to passengers, losses arising from
    vehicle theft and robbery, broken glass and vehicle body scratches.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Commercial Property Insurance. The commercial property insurance products Henan Anhou
    distributes include basic, comprehensive and all risk policies. Basic commercial property insurance policies generally cover
    damage to the insured property caused by fire, explosion and thunder and lightning. Comprehensive commercial property insurance
    policies generally cover damage to the insured property caused by fire, explosion and certain natural disasters. All risk
    commercial property insurance policies cover all causes of damage to the insured property not specifically excluded from the
    policies.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The property and casualty insurance products
Henan Anhou distributed in the fiscal year ended June 30, 2012 were primarily underwritten by Cathay Insurance Co., Ltd., Tianan
Insurance Co., Ltd., China Pacific Insurance(Group) Co., Ltd., PICC Property and Casualty Co., Ltd., and SUMSUNG Property and
Casualty Insurance Company (China), Ltd.



Unified Operating Platform



Law Broker has its own self-developed
Unified Operating Platform. Since June 1991, Law Broker has successfully implemented the following components of its operating
platform across its branch offices in Taiwan through a hub center located in Taipei :



15







| | • | A centralized clients and insurance policy management and analysis system, which encompasses
    our life insurance unit and property and casualty insurance unit, that will better support business operations and facilitate
    risk control;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | An integrated administrative and information system, that increases the management efficiency
    among the subsidiaries, branches and sales departments;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | A centralized and computerized accounting and financial management system, that increases
    the commission distribution and enforcement;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



| | • | A human resources management and analysis system; and
| | - | -----------------------------------------------------



| | • | An e-learning system to provide online training to sales professionals.
| | - | -----------------------------------------------------------------------



Through years of operation, the Unified
Operating Platform has proved to be an efficient and streamlined operating system which contributes to the successful expansion
and growth of Law Broker into one of the leading companies in Taiwan, with 22 sales and service outlets (including the headquarter)
across Taiwan and 1,833 employees and insurance sales professionals.



In accordance with our growth strategy
in China, Henan Anhou has made significant effort to adapt the Unified Operating Platform utilized by Law Broker to better meet
the operational need in China. Since September 2010, Henan Anhou has successfully implemented the tailored operating platform
across the PRC subsidiaries through a hub center located in Nantong, Jiangsu province. We expect that this tailored operating
platform will make selling easier for sales agents in China, facilitate standardized business and financial management, enhance
risk control and increase operational efficiency for the PRC subsidiaries.



Henan Anhou has tailored and refined the
platform on the basis of Law Broker’s well-developed operating platform in Taiwan and believes that it is difficult for
our competitors in China, particularly new market entrants, to reproduce a similar platform without substantial financial resources,
time and operating experience.



Because the various systems, policies
and procedures under both of operating platforms utilized by Law Broker and Henan Anhou can be rolled out quickly as we enter
new regions or make acquisitions, we believe we can expand our distribution network rapidly and efficiently while maintaining
the quality of our services.



16







Distribution and Service Network and Marketing



Since Law Broker’s establishment
in 1992, it has devoted substantial resources in building up its distribution and service network. Law Broker currently has 22
sales and service outlets spread across Taiwan (including the headquarter), among which, 6 located in northern region, 11 located
in central region, 3 located in southern region and 2 located in eastern region. As of June 30, 2012, Law Broker had 1,309 full-time
sales professionals, 373 part-time sales professionals and 151 administrative staffs.



The following table sets forth some additional
information of Law Broker’s distribution and service network as of June 30, 2012, broken down by the four regions:



|Province        |  | Number of Sales and Service Outlets |    |  | Number of Full-time
    Sales Professionals |  |       | Number of Part-time
    Sales Professionals | 
|--------------- |  | ----------------------------------- | -- |  | ------------------------------------------- |  | ----- | ------------------------------------------- | 
|Northern region |  |                                     | 6  |  |                                             |  | 303   |                                             | 
|Southern region |  |                                     | 3  |  |                                             |  | 230   |                                             | 
|Central region  |  |                                     | 11 |  |                                             |  | 727   |                                             | 
|Eastern region  |  |                                     | 2  |  |                                             |  | 49    |                                             | 
|Total           |  |                                     | 22 |  |                                             |  | 1,309 |                                             | 



Law Broker markets and sells life insurance
products, property and casualty insurance products directly to the targeted customers through the sales professionals, who are
not its employees.



Since Henan Anhou’s establishment
in 2003, it has devoted substantial resources in building up its distribution and service network. Henan Anhou has targeted its
distribution and service network in provinces with most population in China, such as Henan, Jiangsu and Sichuan.As of
June 30, 2012, Henan Anhou has two insurance agencies and one insurance brokerage firm, with 1,075 full time sales professionals
and 37 part-time sales professionals and 67 administrative staffs operating across 37 cities within these three provinces.



The following table sets forth some additional
information of Henan Anhou’s distribution and service network as of June 30, 2012, broken down by provinces:



17







|Province |  | Number of Sales and Service Outlets |    |  | Number of Full-time
    Sales Agents |  |       | Number of Part-time
    Sales Agents | 
|-------- |  | ----------------------------------- | -- |  | ------------------------------------ |  | ----- | ------------------------------------ | 
|Henan    |  |                                     | 31 |  |                                      |  | 852   |                                      | 
|Sichuan  |  |                                     | 4  |  |                                      |  | 208   |                                      | 
|Jiangsu  |  |                                     | 2  |  |                                      |  | 15    |                                      | 
|Total    |  |                                     | 37 |  |                                      |  | 1,075 |                                      | 



Henan Anhou markets and sells life insurance
products, property and casualty insurance products directly to the targeted customers through the sales agents, who are not its
employees.



Customers



During the fiscal year ended June
30, 2012, Law Broker had approximately 500,000 customers, among which approximately 98% customers purchased life insurance products
and approximately 2% customers purchased property and casualty insurance products from Law Broker.



Due to its extensive line of insurance
products underwritten by the insurance companies in Taiwan, Law Broker managed to offer a variety of insurance products to customers
of different ages or professions. However, as aging population in Taiwan has gradually become a more recognized social issue,
despite of a relatively healthy government-sponsored retirement and medial programs, more and more Taiwanese, especially those
with stable financial means and aiming for high-end retirement and medical treatment, has been focusing on endowment and medical
type of commercial insurance products, while the investment type of insurance products have been playing a less significant role
since the economic downturn. In particular, approximately 18.7% of the revenues of Law Broker are generated from sale of endowment
insurance and approximately 40% of the revenues of Law Broker are generated from the sale of medical insurance.



In addition, from time to time, Law Broker
has been, either voluntarily or upon request of insurance companies, advising insurance companies or providing feedback on particular
type of insurance products before they are put on the market. This interaction with insurance companies has not only enhanced
the close cooperation between Law Broker and the insurance companies, but also gives it an edge in understanding the in-depth
feature of such insurance products for marketing and distribution purposes.



Law Broker sells automobile insurance
and casualty insurance primarily to individual customers. Law Broker sells liability insurance to institutional customers.



During the fiscal year ended June
30, 2012, Henan Anhou had approximately 51,722 customers, among which approximately 22,597 customers purchased life insurance
products and approximately 29,125 customers purchased property and casualty insurance products from Henan Anhou.



18







Henan Anhou sells automobile insurance
and individual accident insurance primarily to individual customers. Henan Anhou sells commercial property insurance to institutional
customers.



Henan Anhou targeted middle class individuals
and family members under 50 years age to be its priority clients, which represent 95% of its client base. The revenues of Henan
Anhou are primarily generated from the sale of life insurance products and we expect the continuous growth in this regard, as
more and more customers in China realized the insufficiency of the mandatory social insurance coverage and the necessity to supplement
it with commercial insurance. In particular, approximately 29% of the revenues of Henan Anhou are generated from sale of endowment
insurance and approximately 32% of the revenues of Henan Anhou are generated from the sale of medical insurance. With the implementation
of the national one-child policy in China, in fact, approximately 35% of the insurance policies distributed by Henan Anhou have
designated children under 14 years age as the beneficiary of such policies, Henan Anhou expects the continuous growth of insurance
market of these factors in the near future.



For the year ended June 30, 2012, no single
customer accounted for more than 3% of our net revenues.



Insurance Company Partners



We are selective in terms of choosing
insurance company as its partners. We takes into consideration of a variety of factors, such as the reputation and integrity of
the insurance company, the quality and competitiveness of insurance products offered, the prudence and health of the financial
standing of the insurance company as well as the complexity and efficiency of claim adjustment and settlement. During years of
operation, both Law Broker and Henan Anhou have formed strategic relationships with numerous insurance companies in Taiwan and
China, respectively, as of June 30, 2012, Law Broker had established business relationships with approximately 18 insurance companies
in Taiwan and Henan Anhou had established business relationships with approximately 34 insurance companies in China.



For the year ended June 30, 2012, Law
Broker’s top five insurance company partners, after aggregating the business conducted between Law Broker and the various
local branches of the insurance companies were Fubon Life Insurance Co., Ltd., Farglory Life Insurance Co., Ltd., China Life Insurance
Company, Chinatrust Life Insurance Company and TransGlobe Life Insurance Company. Among them, Fubon Life Insurance Company accounted
for 36% of Law Broker’s total net revenues from commissions and fees in the fiscal year ended June 30, 2012.



19







Henan Anhou’s top five insurance
company partners, after aggregating the business conducted between Henan Anhou and the various local branches of the insurance
companies were Sunshine Insurance Group Corporation Limited, Taiping Life Insurance Co., Ltd., Taikang Life Insurance Co., Ltd.,
Cathay Insurance Co., Ltd. and Tianan Insurance Co., Ltd. Among them, Sunshine Insurance Group Corporation Limited accounted for
26.67% of our total net revenues from commissions and fees in the fiscal year ended June 30, 2012.



Competition



A number of industry players are involved
in the distribution of insurance products in Taiwan and PRC. We compete for customers on the basis of product offerings, customer
services and reputation. Because we primarily distribute individual insurance products, our principal competitors include:



| | • | Professional insurance intermediaries. Life insurance is our core business and has
    a strong regional feature. Through years of business development, we believe that we can compete effectively with other insurance
    intermediary companies as we have a longer operational history and over the years have assembled a strong and stable team
    of managers and sales professionals. With the implementation of our unified operating platform, we believe that we could strengthen
    our lead in our developed local regions and expand our operation to our newly selected areas. However, with increasing consolidation
    expected in the insurance intermediary sector in the coming years, we expect competition within this sector to intensify.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Insurance companies. The distribution of individual life insurance products in Taiwan
    and China historically has been dominated by insurance companies, which usually use both in-house sales force and exclusive
    sales agents to distribute their own products. We believe that we can compete effectively with insurance companies because
    we focus only on distribution and offer our customers a broad range of insurance products underwritten by multiple insurance
    companies.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Other business entities. In recent years, business entities that distribute insurance
    products as an ancillary business, primarily commercial banks and postal offices have been playing an increasingly important
    role in the distribution of insurance products, especially life insurance products. However, the insurance products distributed
    by these entities are usually confined to those related to their main lines of business, such as investment-related life insurance
    products. We believe that we can compete effectively with these business entities because we offer our customers a broader
    variety of products.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



20







Law Broker is one of the leading insurance
brokerage firms in Taiwan. During the past two decades, Law Broker has expanded its business across Taiwan, with 22 sales and
service outlets (including the headquarter) and 1,309 full time sales professionals and 373 part-time sales professionals and
151 administrative staffs spread over the four regions of Taiwan. Other than insurance companies and commercial banks, Law Broker’s
primary competitors are Taiwan insurance brokerage companies of relatively large size, in particular, Everpro Insurance Brokers Co., Ltd.
and Genius Insurance Brokers Co., Ltd. Through years of operation, Law Broker has won numerous awards from various Taiwan
government authorities for its excellence in the insurance brokerage industry. Among which, from year 2005 to year 2008, Law Broker
has won the “Taiwan Insurance Excellence Award - Talent Training” for four consecutive years, the “Taiwan Insurance
Excellence Award - E-commerce” in 2009, and "Taiwan Insurance Excellence Award - Customer Service” in 2011. The
“Taiwan Insurance Excellence Award" is one of most prestigious as well as well-participated insurance events in Taiwan,
co-sponsored by the Taiwan Insurance Institute, Taiwan Financial Supervisory Committee and Taiwan Consumer Protection Committee,
to encourage the insurance industry participants to actively enhance insurance service quality as well as to improve customer
services.



During the past 10 years, Henan Anhou
has expanded its business across 37 cities within Henan, Sichuan and Jiangsu provinces with 1,075 full time sales professionals
and 37 part-time sales professionals and 67 administrative staffs. Based on the insurance products Henan Anhou is offering and
the geographic areas of its branch offices, Henan Anhou’s primary competitors are small-sized insurance agency companies.
Henan Anhou is relatively larger in terms of the number of salesmen as well as the sales revenue comparing to those competing
insurance agency companies. On April 20, 2012, Henan Anhou has obtained the nationwide license from China Insurance Regulatory
Commission (“CIRC”), pursuant to which Henan Anhou may set up its branch office across the PRC, to carry out the insurance
agency business, with no further approval requirement from CIRC other than filing with the local CIRC at the provincial level.



On March 26, 2012, CIRC issued the Notice
on Suspension of Market Entry Approval of Regional Insurance Agencies and Certain Part-time Insurance Agencies (“Notice”).
Pursuant to the Notice, CIRC and its local counterparts will suspend granting of any new license to full-time insurance agencies
operating on a regional basis (“Regional Insurance Agencies”) as well as to branch offices of existing Regional Insurance
Agencies. In addition, no new license for part-time insurance agency businesses will be granted unless such applicant is a financial
institution or a China Post office. However, CIRC emphasized in the Notice that its local counterparts shall continue to support
the establishment of insurance intermediary groups and full-time insurance agencies operating on a nationwide basis, as well as
continue to support their respective branch offices.



21







As indicated in the Notice, it appears
that CIRC is aiming to increase the entry thresholds of Regional Insurance Agencies and part-time insurance agencies with a view
to reducing the number, as well as, enhancing the quality of insurance agencies in the market. CIRC has also indicated in the
Notice that it intends to further amend related rules and regulations to improve the market entry and exit mechanism for insurance
agencies, and promote the professionalism as well as enhance the quality of insurance agencies in the market.



With the promulgation and
implementation of the Notice, we expect a better regulated insurance agency market in China with orderly competition
and pursuit for professional excellence, which will accentuate our competitive advantage due to our continuous commitment
to quality service. Also, as of the date of filing of this annual report on Form 10-K, Henan Anhou is one of the 7
insurance agencies with a PRC nationwide license, we believe that we are in a better position to obtain the full support
expressly provided in the Notice from the local CIRC on our expansion strategy nationwide.



Intellectual Property



To protect our intellectual property,
we rely on a combination of trademark, copyright and trade secret laws as well as confidentiality agreements with our employees,
sales agents, contractors and others.



Law Enterprise, Law Broker and Law Agent
jointly own the following registered trademarks in Taiwan:



(1) the Service Mark of Law Insurance
Broker Co., Ltd. , with a 10-year validity duration commencing from June 16, 2011 to June 15, 2021:









(2) the logo of Blue Magpie, with a 10-year
validity duration commencing from June 16, 2011 to June 15, 2021; and







(2) the logo of Law(定律), with a 10-year validity duration commencing from June 16, 2011 to June 15, 2021.



22











Law Broker has the following registered
trademarks in Taiwan:



(1) the logo of Blue Magpie Fleet, with
a 10-year validity duration commencing from December 1, 2008 to November 30, 2018:







(2) the logo of Law Insurance Broker,
with a 10-year validity duration commencing from December 1, 2008 to November 30, 2018:







(3) the logo of Law Blue Magpie, with
a 10-year validity duration commencing from December 1, 2008 to November 30, 2018:







(4) the logo of Symbiosis, Coculture,
Co-Prosperity and Law Blue Magpie Picture, with a 10-year validity duration commencing from July 1, 2008 to June 30, 2018:



23











(5) the logo of Education Training Blue
Magpie, with a 10-year validity duration commencing from June 1, 2008 to May 31, 2018;







(6) the logo of Cartoon Blue Magpie, with
a 10-year validity duration commencing from June 1, 2008 to May 31, 2018:







(7) the logo of Little Blue Magpie, with
a 10-year validity duration commencing from June 1, 2008 to May 31, 2018:



24













(8) the logo of Triumph Blue Magpie, with
a 10-year validity duration commencing from June 1, 2008 to May 31, 2018;







(9) the logo of Blue Magpie Fleet Picture,
with a 10-year validity duration commencing from May 1, 2008 to April 31, 2018; and







(10) the logo of Fighting Blue Magpie,
with a 10-year validity duration commencing from June 1, 2008 to May 31, 2018.



25











Jiangsu Law has one registered trademark
in China, the logo of Jiangsu Law.







Employees



As of June 30, 2012, Law Broker has a total
of 151 full-time employees and Henan Anhou has a total of 67 full-time employees. Our employees are not represented by any collective
bargaining agreement. We believe that we have good relations with our employees and we have never experienced a work stoppage.



Regulation



Taiwan Regulations of the Insurance
Industry



The insurance industry in Taiwan is highly
regulated. Financial Supervisory Committee of Republic of China, the FSC, is the regulatory authority responsible for the supervision
of the insurance industry in Taiwan. Insurance activities undertaken within Taiwan are primarily governed by the Insurance Law
and the related rules and regulations.



Insurance Law



The current principal regulation governing
insurance in Taiwan is Insurance Law, latest amended on June 6, 2012 by Legislative Yuan, which provided the initial framework
for regulating the insurance industry.



26







The Insurance Law defines several subjects
of insurance industry, such as insurer, insurance agency, insurance brokerage and insurance adjustor. It established requirements
for form of organization, and qualifications and procedures to establish an insurance organization as well as separation of property
insurance businesses and life insurance businesses. The Insurance Law distinguishes insurance between fire disaster insurance,
marine insurance, land and air insurance, liability insurance, surety insurance, and other casualty and property insurance businesses
on the one hand, and life insurance, health insurance, casualty insurance and annuity insurance businesses on the other. Unless
permitted by the FSC, insurance companies are not allowed to engage in both types of insurance businesses.



The insurers, insurance agencies, insurance
brokerages and insurance adjustors must join the related industry associations, or they are prohibited from conducting business
operation.



FSC



FSC is in charge of the financial market
and financial service industries, among which, insurance industry.



The FSC has the power to control the following
items:



| | 1. | Financial system and supervision policy.
| | -- | ----------------------------------------

| | 2. | The preparation, amendment and abolishment
                                                         of financial laws and regulations.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------

| | 3. | Supervision and management of the financial
                                                         institutions, include its establishment, revocation, abolishment, change,
                                                         merger, dissolution, business scope, etc.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | Development, supervision and management
                                                         of financial market.
| | -- | ---------------------------------------------------------------------------------------------------------------------

| | 5. | Inspection of financial institution.
| | -- | ------------------------------------

| | 6. | Inspection on public listing company
                                                         related to their securities market-related matters.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------

| | 7. | Foreign financial matters.
| | -- | --------------------------

| | 8. | Protection of financial customers.
| | -- | ----------------------------------

| | 9. | Dealing and penalizing the violation
                                                         of related laws and regulations of finance.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------

| | 10. | Collection of and analysis on relevant
                                                          statistic data related to financial supervision, management and inspection.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11. | Other matters related to financial supervision,
                                                          management and inspection.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------



27







Regulation of Insurance Agents and
Agencies



The current principal regulation governing
insurance agents and agencies is the Rules on the Administration of Insurance Agent latest amended on December 29, 2011 by Insurance
Bureau of FSC (the “Agent Rule”). An insurance agent stipulated under the Insurance Law refers to a person who is
on behalf of the insurer to conduct agency business pursuant to the agency contract or the power of attorney and charges fees
from the insurer. Depending on their focused insurance areas, i.e. property insurance and life insurance, insurance agents can
be divided into property insurance agents and life insurance agents. No matter what insurance industry an insurance agent is engaged
in, it must have one of the following qualifications: (1) having passed the insurance agency examination for professional and
technical staff; (2) having passed the insurance agency qualification test; or (3) having obtained the agency practitioner certificate
and practiced the same business. Those who have agent qualifications required by the Agent Rule may conduct business after they
obtain the practitioner certificates under the name of themselves or the company they work for. An agency company must hire more
than one agent to act as signatory (ies), and registered with the administrative authority, the number of whom can be adjusted
appropriately in accordance with the scale of business. If necessary, the administrative authority may, in its discretion, require
the company to add more signatories. An insurance agent may only work for one insurance agency company as signatory at one time.



There are special requirements for agency
companies, such as the name of an agent company must contain the words "insurance agency", and when an agency company
applies to operate agency business, the minimum registered capital must be at least NT$3 million ($100,603) fully paid up in cash.



The practitioner certificate



The practitioner certificate has a validation
duration of five years, and must be renewed before expiration. In case an agent has the qualifications for both of property insurance
and life insurance, unless otherwise approved by the administrative authority, only one kind of insurance agency practitioner
certificate may be obtained upon his selection.



Education and training



There’re two types of education
and training for an insurance agent, pre-vocational and on-the-job education and training. An insurance agent must attend in pre-vocational
education and training for at least 32 hours during the two years before applying for practicing insurance agency business and
on-the-job education and training for at least 24 hours during the two years before the renewal of the practitioner certificate.



28







Management of insurance agencies



The rules describing how to conduct insurance
agency business concentrate on the concept that the agencies must take care of customers' matters in good faith. In order to ensure
that this concept be properly carried out, the rules particularly stipulated that insurance agency companies must have legal compliance
officers with one of the following qualifications: (1) qualified to be insurance agents or brokers and having worked as actual
signatories; (2) having five years working experience in insurance industry, insurance agency or insurance brokerage; or (3) having
graduated from departments related to insurance or law department of colleges and universities with more than three years working
experience in insurance industry, insurance agency or insurance brokerage.



Regulation of Insurance Brokers and
Brokerage Companies



The current principal regulation governing
insurance brokers and brokerage companies is the Rules on the Administration of Insurance Broker latest amended on December 29,
2011 by Insurance Bureau of FSC (the “Broker Rule”). An insurance broker stipulated under the Insurance Law refers
to a person who negotiates to conclude an insurance contract on behalf of the insured and charges fees from the insured. Depending
on their focused insurance areas, i.e. property insurance and life insurance, insurance brokers can be divided into property insurance
brokers and life insurance brokers. No matter what insurance industry an insurance broker is engaged in, it must have one of the
following qualifications: (1) having passed the insurance brokerage examination for professional and technical staff; (2) having
passed the insurance brokerage qualification test; or (3) having obtained the insurance brokerage practitioner certificate and
practiced the same business. Those who have brokerage qualifications required by the Broker Rule may conduct business after they
obtain the practitioner certificates under the name of themselves or the company they work for. A brokerage company must hire
more than one broker to act as signatory(ies), and registered with the administrative authority, the number of whom can be adjusted
appropriately in accordance with the scale of business. If necessary, the administrative authority may, in its discretion, require
the company to add signatories. An insurance agent may only work for one insurance brokerage company as signatory at one time.



There are special requirements for brokerage
companies, such as the name of an brokerage company must contain the words "insurance broker"; when an brokerage company
applies to operate brokerage business, the minimum registered capital must be at least NT$3 million ($100,603) fully paid up in
cash.



The practitioner certificate



The insurance broker practitioner certificate
has a validation duration of five years, and must be renewed before expiration. In case a broker has the qualifications for
both property insurance and life insurance, he may obtain both insurance brokerage practitioner certificates.



29







Education and training



There’re two types of education
and training for an insurance broker, pre-vocational and on-the-job education and training. An insurance broker must attend in
pre-vocational education and training for at least 32 hours during the two years before applying for practicing insurance broker
business and on-the-job education and training for at least 24 hours during the two years before the renewal of the practitioner
certificate.



Management of insurance brokerages



The rules describing how to conduct brokerage
business concentrate on the concept that the brokerages must take care of customers' matters in good faith. In order to ensure
that this concept be properly carried out, the rules particularly stipulated that insurance brokerage companies must have legal
compliance officers who have one of the following qualifications: (1) qualified to be insurance agents or brokers and having worked
as actual signatories; (2) having five years working experience in insurance industry, insurance agency or insurance brokerage;
or (3) having graduated from departments related to insurance or law of colleges and universities with more than three years working
experience in insurance industry, insurance agency or insurance brokerage.



Regulation of Insurance Salespersons



The current principal regulation governing
individual insurance salespersons is the Rules on the Administration of Insurance Salespersons latest amended on September 14,
2010 by Insurance Bureau of FSC (the “Salesperson Rule”). An insurance salesperson stipulated under the Insurance
Law refers to a person who is engaged in attracting insurance business for insurance companies, insurance brokerage companies
and insurance agency companies. A salesperson is not allowed to attract business for the company he belongs unless he has completed
the registration in accordance to the Salesperson Rules and obtained the registration certificate. In order to obtain the registration
certificate, an insurance salesperson must be at least 20 years old and have graduated at least from a senior high school or a
senior vocational school or have an equivalent educational background, meeting one of the following requirements at the same time:
(1) having passed the salesperson qualification examination held by relevant associations; or (2) having a valid the registration
certificate. Once the salespersons passed the qualification examination, the relevant association will notify the company where
the salesperson works for, then the company will issue registration certificate for the salesperson and file with relevant authorities.
The registration certificate has validation duration of five years and must be renewed before expiration. The salesperson must
present the registration certificate before they start attracting insurance business. Unless approved by the company, the salesperson
may not work for any other insurance company, insurance brokerage company or insurance agency company. The company shall supervise
the work of the salesperson and is under the joint and several liabilities for any damage caused by its salesperson.



30







Education and training



Salespersons must attend in education
and training held by their companies every year, or the companies shall revoke the registration certificates of those who fail
to attend such education and training.



The Salesperson
Rule also stipulates the proper ways and manners to be followed by the salespersons in conducting their businesses and specifies
the penalties in case of their violation of the SalespersonRule.



Taiwan Regulations on Foreign Exchange



Foreign exchange regulation in Taiwan
is primarily governed by the Ordinance of Foreign Exchange Administration, latest amended on April 29, 2009 (the “Foreign
Exchange Ordinance”). Under the Foreign Exchange Ordinance, foreign exchange refers to foreign currency, bills and marketable
securities. The authority managing the administration of foreign exchange is Ministry of Finance of Republic of China, while the
authority managing the practical operation of foreign exchange business is Central Bank of Republic of China. The Foreign Exchange
Ordinance also specifies the allocated power of Ministry of Finance and Central Bank, respectively. To the extent that any foreign
exchange receipts, payments or transactions reaches the threshold of NT$500,000 (approximately $16,767) or equivalent in foreign
currency, it must be reported to the Central Bank or its designated authorities. Upon incurrence of any of the following events,
the State Council of Republic of China may determine and announce that for a period of time, to close the foreign exchange market,
suspend or restrict all or partial foreign exchange payment, order a mandatory sale or deposit of all or partial foreign exchange
into a designed bank, or dispose in any other manner as it deems necessary:



| | (1) | the disorder in domestic or international
                                                            economy to the detriment of the stability of Taiwan’s economy;
                                                            or
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Taiwan suffers serious trade deficit.
| | --- | -------------------------------------



31







Taiwan Regulation on Foreign Investment



The current principal regulation governing
foreign investment is Foreign Investment Regulation latest amended on November 19, 1997 (the “Investment Regulation”).
Under the Investment Regulation, investment refers to any activities involving (1) holding share capital of a company incorporated
in Taiwan; (2) establishing branches, wholly-owned or partnership enterprises in Taiwan; or (3) providing more than one-year term
loan to the above-mentioned investee enterprises. The authority in charge of foreign investment is Ministry of Economic Affairs
of Republic of China. The industries in Taiwan are categorized into permitted, restricted and prohibited foreign investment areas.
Investors may apply for settlement of exchange in accordance with the annual yield of their investment or the allocation of surplus.



Eminent domain



When the investment made by an investor
constitutes less than 45% of the total amount of capital of the investee enterprise, and the investee enterprise has been expropriated
or acquired by the government for the purpose of national defense, reasonable government compensation shall be paid to the investors.
However, if the capital contribution made by the investor constitutes equal to or more than 45% of the total amount of capital
of the investee enterprise and continues remaining above 45% for two decades since its establishment, then the government may
not exercise its eminent domain power over such investee enterprise.



Taiwan Regulations on Tax



The current principal regulations governing
tax in Taiwan include the following:





| ̈ | Income
                                                                                                               Tax Law, latest
                                                                                                               amended on August
                                                                                                               8, 2012;
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| ̈ | The
                                                                                                               Implementation
                                                                                                               Rules of Income
                                                                                                               Tax Law, latest
                                                                                                               amended on September
                                                                                                               7, 2011;
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| ̈ | Value-Added
                                                                                                               and Non-Value-Added
                                                                                                               Business Tax Law,
                                                                                                               latest amended
                                                                                                               on November 23,
                                                                                                               2011; and
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| ̈ | The
                                                                                                               Implementation
                                                                                                               Rules of Value-Added
                                                                                                               And Non-Value-Added
                                                                                                               Business Tax Law,
                                                                                                               latest amended
                                                                                                               on March 6, 2012.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Under the Income Tax Law, there are two
kinds of income tax, comprehensive income tax for individuals and income tax for enterprises operating for profit, respectively.



Individuals who have income with a source
within Taiwan must pay comprehensive income tax on their income sourced within Taiwan; while non-resident individuals having income
with a source within Taiwan, except otherwise provided in the Income Tax Law, shall pay tax based on the amount attributable to
the sources of their income.



32







The enterprise with head office located
in Taiwan shall pay profit-seeking income tax on its global income both within and outside Taiwan; while the enterprises with
head office outside Taiwan shall only pay profit-seeking income tax on its business income sourced from within Taiwan.



Rate of income tax



The individual comprehensive income
tax exemption threshold is NT$60,000 ($2,012) per person per year. Any income beyond such exemption threshold is subject to a
progressive tax rate ranging from 5% to 40%.



With respect to enterprise operating
for profit, the exemption threshold is NT$120,000 ($4,024). Any income beyond such exemption threshold is subject to 17% tax
rate on its taxable income.



Sale of goods or service, import of goods
in Taiwan shall be subject to Value-Added or Non-Value-Added Business Tax.



Rate of business tax



The rate of business tax, except otherwise
stipulated in the relevant tax law, ranges from 5% to 10% as determined by the State Council of Taiwan.



PRC Regulations of the Insurance
Industry



The insurance industry in the PRC is highly
regulated. CIRC is the regulatory authority responsible for the supervision of the Chinese insurance industry. Insurance activities
undertaken within the PRC are primarily governed by the Insurance Law and the related rules and regulations.



Initial Development of Regulatory Framework



The Chinese Insurance Law was enacted
in 1995. This original insurance law, which we refer to as the 1995 Insurance Law, provided the initial framework for regulating
the domestic insurance industry. Among the steps taken under the 1995 Insurance Law were the following:



| | (a) | Licensing
                                                                                                of insurance companies and insurance
                                                                                                intermediaries, such as agencies
                                                                                                and brokerages. The 1995 Insurance
                                                                                                Law established requirements for
                                                                                                minimum registered capital levels,
                                                                                                form of organization, qualification
                                                                                                of senior management and adequacy
                                                                                                of the information systems for
                                                                                                insurance companies, insurance
                                                                                                agencies and brokerages.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



33







| | (b) | Separation
                                                                                                of property and casualty insurance
                                                                                                businesses and life insurance
                                                                                                businesses. The 1995 Insurance
                                                                                                Law distinguished insurance between
                                                                                                property, casualty, liability
                                                                                                and credit insurance businesses,
                                                                                                on the one hand, and life, accident
                                                                                                and health insurance businesses
                                                                                                on the other, and prohibited insurance
                                                                                                companies from engaging in both
                                                                                                types of businesses.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Regulation
                                                                                                of market conduct by participants.
                                                                                                The 1995 Insurance Law prohibited
                                                                                                fraudulent and other unlawful
                                                                                                conduct by insurance companies,
                                                                                                agencies and brokerages.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Substantive
                                                                                                regulation of insurance products.
                                                                                                The 1995 Insurance Law gave insurance
                                                                                                regulators the authority to approve
                                                                                                the policy terms and premium rates
                                                                                                for certain insurance products.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e) | Financial
                                                                                                condition and performance of insurance
                                                                                                companies. The 1995 Insurance
                                                                                                Law established reserve and solvency
                                                                                                standards for insurance companies,
                                                                                                imposed restrictions on investment
                                                                                                powers and established mandatory
                                                                                                reinsurance requirements, and
                                                                                                put in place a reporting regime
                                                                                                to facilitate monitoring by insurance
                                                                                                regulators.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | Supervisory
                                                                                                and enforcement powers of the
                                                                                                principal regulatory authority.
                                                                                                The principal regulatory authority,
                                                                                                then the People’s Bank of
                                                                                                China, was given broad powers
                                                                                                under the 1995 Insurance Law to
                                                                                                regulate the insurance industry.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Establishment of the CIRC and 2002
Amendments to the Insurance Law



China’s insurance regulatory regime
was further strengthened with the establishment of the CIRC in 1998. The CIRC was given the mandate to implement reform in the
insurance industry, minimize insolvency risk for Chinese insurers and promote the development of the insurance market.



The 1995 Insurance Law was significantly
amended in 2002 and the amended insurance law, which we refer to as the 2002 Insurance Law, became effective on January 1, 2003.
The major amendments to the 1995 Insurance Law include:



| | (a) | Authorizing
                                                                                                the CIRC to be the insurance supervisory
                                                                                                and regulatory body nationwide.
                                                                                                The 2002 Insurance Law expressly
                                                                                                grants the CIRC the authority
                                                                                                to supervise and administer the
                                                                                                insurance industry nationwide.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Expanding
                                                                                                the permitted scope of business
                                                                                                of property and casualty insurers.
                                                                                                Under the 2002 Insurance Law,
                                                                                                property and casualty insurance
                                                                                                companies may engage in the short-term
                                                                                                health insurance and accident
                                                                                                insurance businesses upon the
                                                                                                CIRC’s approval.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



34







| | (c) | Providing
                                                                                                additional guidelines for the
                                                                                                relationship between insurance
                                                                                                companies and insurance agents.
                                                                                                The 2002 Insurance Law requires
                                                                                                an insurance company to enter
                                                                                                into an agent agreement with each
                                                                                                insurance agent that will act
                                                                                                as an agent for such insurance
                                                                                                company. The agent agreement sets
                                                                                                forth the rights and obligations
                                                                                                of the parties to the agreement
                                                                                                as well as other matters pursuant
                                                                                                to law. An insurance company is
                                                                                                responsible for the acts of its
                                                                                                agents when the acts are within
                                                                                                the scope authorized by the insurance
                                                                                                company.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Relaxing
                                                                                                restrictions on the use of funds
                                                                                                by insurance companies. Under
                                                                                                the 2002 Insurance Law, an insurance
                                                                                                company may use its funds to make
                                                                                                equity investments in insurance-related
                                                                                                enterprises, such as asset management
                                                                                                companies.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | Allowing
                                                                                                greater freedom for insurance
                                                                                                companies to develop insurance
                                                                                                products. The 2002 Insurance Law
                                                                                                allowed insurance companies to
                                                                                                set their own policy terms and
                                                                                                premium rates, subject to the
                                                                                                approval of, or a filing with,
                                                                                                the CIRC.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



2009 Amendments to the Insurance Law



The 2002 Insurance Law was significantly
amended again in 2009 and the amended insurance law, which we refer to as the 2009 Insurance Law, became effective on October
1, 2009. The major amendments to the 2009 Insurance Law include:



| | (a) | Strengthening
                                                                                                protection of the insured’s
                                                                                                interests. The 2009 Insurance
                                                                                                Law added a variety of clauses
                                                                                                such as incontestable clause,
                                                                                                abstained and estoppel clause,
                                                                                                common disaster clause and amending
                                                                                                immunity clause, claims-settlement
                                                                                                prescription clause, reasons for
                                                                                                claims rejection and contract
                                                                                                modification clause.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Strengthening
                                                                                                supervision on the qualification
                                                                                                of the shareholders of the insurance
                                                                                                companies and setting forth specific
                                                                                                qualification requirements for
                                                                                                the major shareholders, directors,
                                                                                                supervisors and senior managers
                                                                                                of insurance companies.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Expanding
                                                                                                the business scope of insurers
                                                                                                and further relaxing restriction
                                                                                                on the use of fund by insurers.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Strengthening
                                                                                                supervision on solvency of insurers
                                                                                                with stricter measures.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | Tightening
                                                                                                regulations governing the administration
                                                                                                of insurance intermediary companies,
                                                                                                especially those relating to behaviors
                                                                                                of insurance agents.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



35







According to the 2009 Insurance Law, the
minimum registered capital required to establish an insurance agency or insurance brokerage as a company must comply with the
PRC Company Law. The registered capital or the capital contribution of insurance agencies or insurance brokerages must be paid-up
capital in cash. The 2009 Insurance Law also sets forth some specific qualification requirements for insurance agency and brokerage
practitioners. The senior managers of insurance agencies or insurance brokerages must meet specific qualification requirements,
and their appointments are subject to approval of the CIRC. Personnel of an insurance agency or insurance brokerage engaging in
the sales of insurance products must meet the qualification requirements set by the CIRC and obtain a qualification certificate
issued by the CIRC. Under the 2009 Insurance Law, the parties to an insurance transaction may engage insurance adjusting firms
or other independent appraisal firms that are established in accordance with applicable laws, or persons who possess the requisite
professional expertise, to conduct assessment and adjustment of the insured subject matters. Additionally, the 2009 Insurance
Law specifies additional legal obligations for insurance agencies and brokerages.



The CIRC



The CIRC has extensive authority to supervise
insurance companies and insurance intermediaries operating in the PRC, including the power to:



| | (a) | promulgate
                                                                                                regulations applicable to the
                                                                                                Chinese insurance industry;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | investigate
                                                                                                insurance companies and insurance
                                                                                                intermediaries;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | establish
                                                                                                investment regulations;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------



| | (d) | approve
                                                                                                policy terms and premium rates
                                                                                                for certain insurance products;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | set
                                                                                                the standards for measuring the
                                                                                                financial soundness of insurance
                                                                                                companies and insurance intermediaries;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | require
                                                                                                insurance companies and insurance
                                                                                                intermediaries to submit reports
                                                                                                concerning their business operations
                                                                                                and condition of assets;order
                                                                                                the suspension of all or part
                                                                                                of an insurance company or an
                                                                                                insurance intermediary’s
                                                                                                business;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (g) | approve
                                                                                                the establishment, change and
                                                                                                dissolution of an insurance company,
                                                                                                an insurance intermediary or their
                                                                                                branches;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | review
                                                                                                and approve the appointment of
                                                                                                senior managers of an insurance
                                                                                                company, an insurance intermediary
                                                                                                or their branches; and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | punish
                                                                                                improper behaviors or misconducts
                                                                                                of an insurance company or an
                                                                                                insurance intermediary.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



36







Regulation of Insurance Agencies



The principal regulation governing insurance
agencies is the Provisions on the Supervision and Administration of Specialized Insurance Agencies (the “Agency Provisions”)
promulgated by the CIRC on September 25, 2009 and effective on October 1, 2009, which replaced the Provisions on the Administration
of Insurance Agencies issued by the CIRC on December 1, 2004 and effective on January 1, 2005. According to the Agency Provisions,
the establishment of an insurance agency is subject to minimum registered capital requirement and other requirements and the approval
of the CIRC. The term “insurance agency” refers to an entity that engages in insurance agency business within the
authorization of, and collects commissions from, insurance companies, including the professional insurance agency companies and
their branches. The insurance agency shall meet the qualification requirements specified by the CIRC, obtain the license to conduct
an insurance agency business with the approval of the CIRC. An insurance agency may take any of the following forms: (i) a LLC;
or (ii) a joint stock limited company. An insurance agency must have a registered capital of at least RMB2 million ($313,332).
Where it is established as a nationwide company, its registered capital must be at least RMB10 million ($1,566,661). The registered
capital must be paid up in cash. An insurance agency may engage in the following insurance agency businesses:



| | (a) | selling
                                                                                                insurance products on behalf of
                                                                                                the insurer principal;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | collecting
                                                                                                insurance premiums on behalf of
                                                                                                the insurer principal; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | conducting
                                                                                                loss surveys and handling claims
                                                                                                of insurance businesses on behalf
                                                                                                of the insurer principal; and•
                                                                                                other business activities specified
                                                                                                by the CIRC.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The name of an insurance agency must contain
the words “insurance agency” or “insurance sales.” The license of an insurance agency is valid for a period
of three years and may be renewed with due application 30 days prior to its expiration. An insurance agency must report to the
CIRC when it (i) changes its registered name or the name of its branches; (ii) changes its registered address or the operating
address of its branches; (iii) the sponsors or major shareholders change their respective name; (iv) changes its major shareholders;
(v) change its registered capital; (vi) materially change its equity structure; (vii) amends its articles of association; or (viii)
closes its branches. Personnel of an insurance agency, including those of its branches engaging in the sales of insurance products
or relevant loss survey and claim settlement, must pass a qualification examination for insurance agency practitioners organized
by the CIRC and obtain a “Qualification Certificate for Insurance Agency Practitioners.” The senior managers of an
insurance agency including its branches must meet specific qualification requirements set forth in the Agency Provisions. The
appointment of the senior managers of an insurance agency including its branches is subject to review and approval of the CIRC.



37







Regulation of Insurance Brokerages



The principal regulation governing insurance
brokerages is the Provisions on the Supervision and Administration of Insurance Brokerage Institutions (the “Brokerages
Provisions”) promulgated by the CIRC on September 25, 2009 and effective on October 1, 2009, which replaced the Provisions
on the Administration of Insurance Brokerages issued by the CIRC on December 15, 2004 and effective on January 1, 2005. According
to this Brokerages Provisions, the establishment of an insurance brokerage is subject to the approval of the CIRC. The term “insurance
brokerage” refers to an entity provides brokerages service on the execution of the insurance contract between the insured
and the insurance company based on the interests of the insured and collects commission as agreed, including the insurance brokerage
companies and their branches, The insurance brokerage shall meet the qualification requirements specified by the CIRC and obtain
the license to operate an insurance brokering business with the approval of the CIRC. Insurance brokering business includes both
direct insurance brokering, which refers to brokering activities on behalf of insurance applicants or the insured in their dealings
with the insurance companies, and reinsurance brokering, which refers to brokering activities on behalf of insurance companies
in their dealings with reinsurance companies. An insurance brokerage may take any of the following forms: (i) a LLC; or (ii) a
joint stock limited company. An insurance brokerage company must have a registered capital or capital contribution of at least
RMB10 million ($1,566,661). The registered capital must be paid up in cash.



An insurance brokerage may conduct the
following insurance brokering businesses:



| | (a) | making
                                                                                                insurance proposals, selecting
                                                                                                insurance companies and handling
                                                                                                the insurance application procedures
                                                                                                for the insurance applicants;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | assisting
                                                                                                the insured or the beneficiary
                                                                                                to claim compensation;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | reinsurance
                                                                                                brokering business; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------



| | (d) | providing
                                                                                                consulting services to clients
                                                                                                with respect to disaster and damage
                                                                                                prevention, risk assessment and
                                                                                                risk management; andother
                                                                                                business activities specified
                                                                                                by the CIRC.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



38









The name of an insurance brokerage must
contain the words “insurance brokerage.” The license of an insurance brokerage is valid for a period of three years
and may be renewed with due application 30 days prior to its expiration. An insurance brokerage must report to the CIRC when it
(i) changes its registered name or the name of its branches; (ii) change its registered address or the operating address of its
branches; (iii) the sponsors or the major shareholders change their respective name; (iv) changes its major shareholders; (v)
changes its registered capital; (vi) materially changes its equity structure; (vii) amends its articles of association; or (viii)
closes its branches. Personnel of an insurance brokerage, including those of its branches engaging in any of the insurance brokering
businesses described above, must pass a qualification examination for insurance brokering practitioners organized by the CIRC
and obtain a “Qualification Certificate for Insurance Brokerage Practitioners”. The senior managers of an insurance
brokerage including its branches must meet specific qualification requirements set forth in the Brokerages Provisions. Appointment
of the senior managers of an insurance brokerage including its branches is subject to review and approval by the CIRC.



Regulation of Insurance Salespersons



The principal regulation governing individual
insurance salespersons is the Provisions on the Administration of Insurance Salespersons issued by the CIRC on April 6, 2006 and
effective on July 1, 2006. Under this regulation, the term “insurance salesperson” refers to an individual who has
acquired a qualification certificate issued by the CIRC, sells insurance products and provides related services for an insurance
company and collects fees or commissions. In order to engage in insurance sales activities as an insurance salesperson, a person
first must pass the qualification examination for the insurance agency practitioners organized by the CIRC and obtain a “Qualification
Certificate of Insurance Agency Practitioners,” which is valid for three years and renewable upon fulfillment of certain
requirements. In addition to the qualification certificate, a person also must obtain a “Practice Certificate of Insurance
Salespersons” issued by the insurance company to which he or she belongs in order to conduct insurance sales activities.
Those who have obtained a “Practicing Certificate of Insurance Agency Practitioner,” “Practicing Certificate
of Insurance Brokerage Practitioner” or “Practicing Certificate of Insurance Adjustment Practitioners” are not
allowed to obtain a Practice Certificate for Insurance Salespersons. No insurance salesperson may concurrently sign agent agreements
with, or act on behalf of, two or more insurance companies.



On April 19, 2011, CIRC issued a draft
regulation of Regulatory Requirements of Insurance Salespersons, which sets forth a higher academic requirement for candidates
to take the qualification examination for the insurance agency practitioners organized by the CIRC; provided that the local counterpart
dispatched by CIRC may, based on the respective reality of such location and subsequent to the filing with CIRC, lower such academic
requirement; provided further, in any event, the academic requirement of any candidate may not be lower than junior high school
and such candidate who obtains the Qualification Certificate of Insurance Agency Practitioners with a lower academic requirement
may not practice beyond the area governed by such local counterpart of CIRC. The draft regulation, once formally promulgated,
will replace the Provisions on the Administration of Insurance Salespersons as described in the preceding paragraph.



39







Content Related to Insurance Industry
in the Legal Documents of China’s Accession to the WTO



According to the Circular of the CIRC
on Distributing the Content Related to Insurance Industry in the Legal Documents of China’s Accession to the WTO, for the
life insurance sector, within three years of China’s accession to the WTO on December 11, 2001, geographical restrictions
were to be lifted, equity joint venture companies allowed to provide health insurance, group insurance, and pension/annuity services
to Chinese citizens and foreign citizens, and no other restrictions allowed except those on the proportion of foreign investment
(no more than 50%) and establishment conditions. For the non-life insurance sector, within three years of China’s accession,
the geographical restrictions were to be lifted and no restrictions allowed other than establishment conditions. For the insurance
brokerage sector, within five years of China’s accession, the establishment of wholly foreign-funded subsidiary companies
was to be allowed, and no restrictions allowed other than establishment conditions and restrictions on business scope.



PRC Regulations on Foreign Exchange



Foreign Currency Exchange



Foreign exchange regulation in China is
primarily governed by the following rules:



 ̈	  Foreign
Currency Administration Rules (1996), as amended, or the Exchange Rules; and



 ̈	  Administration
Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules.



Under the Exchange Rules, the RMB is convertible
for current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange
transactions. Conversion of RMB for capital account items, such as direct investment, loan, security investment and repatriation
of investment, however, is still subject to the approval of the SAFE.



Under the Administration Rules, foreign-invested
enterprises may only buy, sell or remit foreign currencies at those banks authorized to conduct foreign exchange business after
providing valid commercial documents and, in the case of capital account item transactions, obtaining approval from the SAFE.
Capital investments by foreign-invested enterprises outside of China are also subject to limitations, which include approvals
by the Ministry of Commerce, the SAFE and the State Development and Reform Commission.



40







PRC Regulations on Dividend Distribution



The principal regulations governing dividend
distributions of wholly foreign-owned companies include:



 ̈	  Wholly
Foreign-Owned Enterprise Law (1986), as amended; and



 ̈	  Wholly
Foreign-Owned Enterprise Law Implementing Rules (1990), as amended.



Under these regulations, wholly foreign-owned
companies in the PRC may pay dividends only out of their accumulated profits as determined in accordance with PRC accounting standards.
In addition, these wholly foreign-owned companies are required to set aside at least 10% of their respective accumulated profits
each year, if any, to fund certain reserve funds, until the accumulative amount of such fund reaches 50% of its registered capital.
These reserve funds are not distributable as cash dividends.



PRC Regulations on Tax



PRC Enterprise Income Tax



The PRC EIT is calculated base on the
taxable income determined under the PRC accounting standards and regulations, as well as the EIT law. On March 16, 2007, the National
People’s Congress of China enacted the EIT Law, a new EIT law which became effective on January 1, 2008. On December 6,
2007, the State Council promulgated the Implementation Rules which also became effective on January 1, 2008. On December 26, 2007,
the State Council issued the Notice on Implementation of Enterprise Income Tax Transition Preferential Policy under the EIT Law,
or the Transition Preferential Policy Circular, which became effective simultaneously with the EIT Law. The EIT Law imposes a
uniform EIT rate of 25% on all domestic enterprises and foreign-invested enterprises unless they qualify under certain exceptions.
Under the EIT Law, as further clarified by the Implementation Rules, the Transition Preferential Policy Circular and other related
regulations, enterprises that were established and already enjoyed preferential tax treatments before March 16, 2007 will continue
to enjoy them in the following manners: (i) in the case of preferential tax rates, for a five-year period starting from January
1, 2008, during which the tax rate will gradually increase to 25%; or (ii) in the case of preferential tax exemption or reduction
for a specified term, until the expiration of such term. However, if such an enterprise has not enjoyed the preferential treatments
yet because of its failure to make a profit, its term for preferential treatment will be deemed to start from 2008.



PRC Business Tax



Taxpayers providing taxable services in
China are required to pay a business tax at a normal tax rate of 5% of their revenues, unless otherwise provided.



41







Dividend Withholding Tax



Under the PRC tax laws effective prior
to January 1, 2008, dividends paid to foreign investors by foreign-invested enterprises are exempt from PRC withholding tax. Pursuant
to the EIT Law and the Implementation Rules, dividends generated after January 1, 2008 and distributed to us by our PRC subsidiaries
are under a 5% withholding tax subject to PRC laws and regulations, provided that we are determined by the relevant PRC tax authorities
to be a “non-resident enterprise” under the EIT Law.



PRC regulations relating to the
establishment of offshore SPVs by PRC residents



SAFE has promulgated several regulations,
including the Notice on Issues Relating to the Administration of Foreign Exchange in Fund-Raising and Round-trip Investment Activities
of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Circular No. 75, effective on November 1, 2005,
and the Notice of the State Administration of Foreign Exchange on Printing and Distributing the Implementing Rules for Fund-Raising
and Round-trip Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies effective on July
1, 2011. These regulations require PRC residents and PRC corporate entities to register with local branches of SAFE in connection
with their direct or indirect offshore investment activities. These regulations apply to our shareholders who are PRC residents
and may apply to any offshore acquisitions that we make in the future.



Under these foreign exchange regulations,
PRC residents who make, or have previously made prior to the implementation of these foreign exchange regulations, direct or indirect
investments in Special Purpose vehicles or SPVs will be required to register those investments. In addition, any PRC resident
who is a direct or indirect shareholder of a SPV, is required to update the previously filed registration with the local branch
of SAFE, with respect to that SPV, to reflect any material change. Moreover, the PRC subsidiaries of that SPV are required to
urge the PRC resident shareholders to update their registration with the local branch of SAFE. If any PRC shareholder fails to
make the required registration or update the previously filed registration, the PRC subsidiaries of that SPV may be prohibited
from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to their SPV parent,
and the SPV may also be prohibited from injecting additional capital into its PRC subsidiaries. Moreover, failure to comply with
the various foreign exchange registration requirements described above could result in liabilities for such PRC subsidiaries under
PRC laws for evasion of applicable foreign exchange restrictions. Furthermore, the persons-in-charge and other persons at such
PRC subsidiaries who are held directly liable for the violations may be subject to administrative sanctions.



42







These foreign exchange regulations provide
that PRC residents include both PRC citizens, meaning any individual who holds a PRC passport or resident identification card,
and individuals who are non-PRC citizens but primarily reside in the PRC due to their economic ties to China. SAFE Circular No.
19 further defines individuals who are non-PRC citizens but primarily reside in the PRC due to their economic ties to the PRC.



ITEM 1A. RISK FACTORS.



You should carefully consider the risks
described below together with all of the other information included in this Form 10-K.  The statements contained in
or incorporated herein that are not historic facts are forward-looking statements that are subject to risks and uncertainties
that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. See “Cautionary
Statement Regarding Forward-Looking Statements.”  If any of the following risks actually occurs, our business,
financial condition or results of operations could be harmed. In that case, you may lose all or part of your investment.



Risks Relating to Our Business



The recent global macroeconomic
events could cause disruptions to our customers and their demand for insurance services. Demand for our products has been, and
will continue to be, adversely affected by overall macroeconomic conditions.



The recent global macroeconomic events
could have a negative impact on businesses around the world. For example, on August 5, 2011, Standard & Poor’s
lowered its long term sovereign credit rating on the United States of America from AAA to AA+. In addition, the ongoing European
sovereign debt crisis that started in 2009 has also had a negative impact on the credit ratings of several European countries
and general market sentiment. These downgrades could have material adverse impacts on financial markets and economic conditions
throughout the world. In general, the recent global economic crisis has caused weak consumer confidence and diminished consumer
and business spending, which have had a negative impact on the general market demand for insurance services around the world.



Volatility in the financial markets and
overall economic uncertainty increases the risk of substantial quarterly and annual fluctuations in our earnings. Given the current
economic environment, we remain cautious and we expect our customers to be cautious as well, which could affect our future results.
If the economic recovery slows down or dissipates, our business, financial condition, results of operations and cash flows could
be materially and adversely affected.



43







If we are unable to obtain and maintain
the licenses to operate our business, our business prospects and future results of operations would be adversely affected.



We operate our businesses with approvals
and licenses granted by the government. If these approvals or licenses are revoked or suspended or are not renewed, or if we are
unable to obtain any additional licenses that we may need to operate or expand our business in the manner we desire, then our
financial condition and results of operations, as well as our prospects, will suffer.



We face substantial political risks
associated with doing business in Taiwan, particularly due to domestic political events and the tense relationship between Taiwan
and the People’s Republic of China, which could adversely affect our financial condition and results of operations.



Law Broker’s executive office and
substantial assets are located in Taiwan and most of our revenues are derived from our operations in Taiwan currently. Accordingly,
our business, financial condition and results of operations and the market price of our common shares may be affected by changes
in Taiwan governmental policies, taxation, inflation or interest rates and by social instability and diplomatic and social developments
in or affecting Taiwan which are outside of our control. Taiwan has a unique international political status. Since 1949, Taiwan
and the Chinese mainland have been separately governed. The People’s Republic of China, or PRC, claims that it is the sole
government in China and that Taiwan is part of China. Although significant economic and cultural relations have been established
between Taiwan and the PRC, such as the engagement of Economic Cooperation Framework Agreement (ECFA) in 2010, relations may become
strained again. The PRC government has refused to renounce the use of military force to gain control over Taiwan. Past developments
in relations between the Taiwan and the PRC have on occasion depressed the market prices of the securities of companies in
Taiwan. Relations between the Taiwan and the PRC and other factors affecting military, political or economic conditions in Taiwan
could materially and adversely affect our financial condition and results of operations, as well as the market price and the liquidity
of our securities. In addition, the complexities of the relationship between the Taiwan and PRC require companies involved in
cross-strait business operations to carefully monitor its actions and manage its relationships with both Taiwan and PRC governments.
We cannot assure you that we will be able to successfully manage our relationships with the Taiwan and PRC governments for our
cross-strait business operations, which could have an adverse effect on our ability to expand our business and conduct cross-strait
business operations.



44







Any future outbreak of contagious
diseases may materially and adversely affect our business and operations, as well as our financial condition and results of operations.



Any future outbreak of contagious diseases,
such as severe acute respiratory syndrome or avian influenza, may disrupt our ability to adequately staff our business and may
generally disrupt our operations. If any of our employees is suspected of having contracted any contagious disease, we may under
certain circumstances be required to quarantine such employees and the affected areas of our premises. As a result, we may have
to temporarily suspend part or all of our operations. Furthermore, any future outbreak may restrict the level of economic activity
in affected regions, which may adversely affect our business and prospects. As a result, we cannot assure you that any future
outbreak of contagious diseases would not have a material adverse effect on our financial condition and results of operations.



If we fail to attract and retain
productive sales professionals or agents, our business could suffer.



Our entire sales of life, property and
casualty insurance products are conducted through its individual sales professionals oragents, who are not our employees.
Some of these sales professionals or sales agents are significantly more productive than others in generating sales. If we are
unable to attract and retain the core group of highly productive sales professionals or sales agents, our business could be materially
and adversely affected. Competition for sales personnel from insurance companies and other insurance intermediaries may also force
us to increase the compensation of our sales professionals or sales agents, which would increase operating costs and reduce our
profitability.



Our business and prospects could
be materially and adversely affected if we are not able to manage our growth successfully.



Law Broker commenced its insurance intermediary
business in 1992. During the past two decades, Law Broker has expanded its distribution and service networks across Taiwan, with
22 sales and service outlets (including the headquarters) and  1,833 employees and sales professionals. Henan Anhou commenced
its insurance intermediary business in 2003 and has expanded its operations substantially in recent years. Henan Anhou’s
distribution and service networks expanded from one company in one province to two insurance agencies and one brokerage in 3 provinces
and 37 service outlets as of September 30, 2012. Meanwhile, we broadened our service offerings from the distribution of only life
insurance products to cover a wide variety of property and casualty insurance and automobile insurance products. We anticipate
continued growth in the future through multiple means. Our expansion has placed, and will continue to place, substantial demands
on our managerial, operational, technological and other resources. To manage and support our continued growth, we must continue
to improve our operational, administrative, financial and technological systems, procedures and controls, and expand, train and
manage our growing employee and agent base. Furthermore, our management will be required to maintain and expand our relationships
with insurance companies, other insurance intermediaries, regulators and other third parties. We cannot assure you that our current
and planned personnel, systems, procedures and controls will be adequate to support our future operations. Any failure to effectively
and efficiently manage our expansion could materially and adversely affect our ability to capitalize on new business opportunities,
which in turn could have a material adverse effect on our results of operations.



45







We may be unsuccessful in identifying
and acquiring suitable acquisition candidates, which could adversely affect our growth.



We expect our future growth to come from
acquisitions of high-quality independent insurance agencies and brokerages as well as establishment of new insurance agencies
and brokerages. There is no assurance that we can successfully identify suitable acquisition candidates, especially in those areas
where we do not yet have a presence. Even if we identify suitable candidates, we may not be able to complete an acquisition on
terms that are commercially acceptable to us. In addition, we compete with other entities to acquire high-quality independent
insurance agencies and brokerages. Many of our competitors may have substantially greater financial resources than we do and may
be able to outbid us for these acquisition targets. If we are unable to complete acquisitions, our growth strategy may be impeded
and our earnings or revenue growth may be negatively affected.



If we fail to integrate acquired
companies efficiently, or if the acquired companies do not perform to our expectations, our business and results of operations
may be adversely affected.



Even if we succeed in acquiring other
insurance agencies and brokerages, our ability to integrate an acquired entity and its operations is subject to a number of factors.
These factors include difficulties in the integration of acquired operations and retention of personnel, especially the sales
professionals and sales agents who are not employees of the acquired company, entry into unfamiliar markets, unanticipated problems
or legal liabilities, and tax and accounting issues. The need to address these factors may divert management’s attention
from other aspects of our business and materially and adversely affect our business prospects. In addition, costs associated with
integrating newly acquired companies could negatively affect our operating margins.



46







Furthermore, the acquired companies may
not perform to our expectations for various reasons, including legislative or regulatory changes that affect the insurance products
in which a company specializes, the loss of key clients after the acquisition closes, general economic factors that impact a company
in a direct way and the cultural incompatibility of an acquired company’s management team with us. If an acquired company
cannot be operated at the same profitability level as our existing operations, the acquisition would have a negative impact on
our operating margin. Our inability to successfully integrate an acquired entity or its failure to perform to our expectations
may materially and adversely affect our business, prospects, results of operations and financial condition.



Because the commission and fee revenue
we earn on the sale of insurance products is based on premiums and commission and fee rates set by insurance companies, any decrease
in these premiums or commission and fee rates may have an adverse effect on our results of operations.



We are engaged
in the insurance agency and brokerage business and derives revenues primarily from commissions and fees paid by the insurance
companies whose policies our customers purchase. The commission and fee rates are set by insurance companies and are based on
the premiums that the insurance companies charge. Commission and fee rates and premiums can change based on the prevailing economic,
regulatory, taxation-related and competitive factors that affect insurance companies. These factors, which are not within our
control, include the ability of insurance companies to place new business, underwriting and non-underwriting profits of insurance
companies, consumer demand for insurance products, the availability of comparable products from other insurance companies at a
lower cost, the availability of alternative insurance products such as government benefits and self-insurance plans, as well as
the tax deductibility of commissions and fees and the consumers themselves. In addition, premium rates for certain insurance products,
such as the mandatory automobile liability insurance that each automobile owner in Taiwan and the PRC is legally required to purchase,
are tightly regulated by Insurance Bureau of Financial Supervisory Commission, Republic of China,
or the FSC in Taiwan and China Insurance Regulatory Commission, or the CIRC in China.



Because we do not determine, and cannot
predict, the timing or extent of premium or commission and fee rate changes, we cannot predict the effect any of these changes
may have on our operations. Intense competition among insurance companies has led to a gradual decline in premium rate levels
of some property and casualty insurance products. Although such decline may stimulate demand for insurance products and increase
our total sales volume, it also reduces the commissions and fees we earn on each policy sold. Any decrease in premiums or commission
and fee rates may significantly affect our profitability. In addition, our budget for future acquisitions, capital expenditures
and other expenditures may be disrupted by unexpected decreases in revenues caused by decreases in premiums or commission and
fee rates, thereby adversely affecting our operations.



47







Competition in our industry is intense
and, if we are unable to compete effectively, we may lose customers and our financial results may be negatively affected.



The insurance intermediary
industry in Taiwan and China is highly competitive, and we expect competition to persist and intensify. In insurance
product distribution, we face competition from insurance companies that use their in-house sales force and exclusive sales
agents to distribute their products, and from business entities that distribute insurance products on an ancillary basis,
such as commercial banks, postal offices and automobile dealerships, as well as from other professional insurance
intermediaries. We sell insurance products through our exclusive sales professionals and sales agents pursuant to agency
contracts entered into with our subsidiaries or Consolidated Affiliated Entitiies in Taiwan and China, as applicable. The
term of these agency contracts with Law Broker generally is for three years and will be re-signed upon expiration, while the
term of these agency contracts with Henan Anhou generally is for one year with automatic extension in case neither party
objects at the end of the term. These sales professionals and sales agents are not our employees and we can not assure you
that they will continue their services subsequent to the expiration of such agency contracts. We compete for customers on the
basis of product offerings, customer services and reputation. Many of our competitors have greater financial and marketing
resources than we do and may be able to offer products and services that we do not currently offer and may not offer in the
future. If we are unable to compete effectively against those competitors, we may lose customers and our financial results
may be negatively affected.



Quarterly and annual variations
in our commission and fee revenue may have unexpected impacts on our results of operations.



Our commission and fee revenue is subject
to both quarterly and annual fluctuations as a result of the seasonality of its business, the timing of policy renewals and the
net effect of new and lost business. Historically, Law Broker’s commission and fee revenue, particularly revenue derived
from distribution of life insurance products, for the second and fourth quarters of any given year have been higher than the first
and third quarters. Henan Anhou’s commission and fee revenue, particularly revenue derived from distribution of life insurance
products, for the fourth quarter of any given year has been the highest among all four quarters, while Henan Anhou’s commission
and fee revenue for the first quarter of any given year has been the lowest among all four quarters. The factors that cause the
quarterly and annual variations are not within our control. Specifically, consumer demand for insurance products can influence
the timing of renewals, new business and lost business, which generally includes policies that are not renewed, and cancellations.
As a result, you may not be able to rely on quarterly or annual comparisons of our operating results as an indication of our future
performance.



48







If our contracts with insurance
companies are terminated or changed, our business and operating results could be adversely affected.



We primarily acts as agents for insurance
companies in distributing their products to retail customers. Our relationships with the insurance companies are governed by agreements
between Law Broker or Henan Anhou and the insurance companies. See “Corporate History and Structure - Insurance Company
Partners.” These contracts establish, among other things, the scope of authority, the pricing of the insurance products
we distributes and its fee rates. These contracts typically have a term of one year and will be automatically extended for successive
one-year term unless terminated earlier with at least thirty (30) days or sixty (60) days advance notice prior to its expiration.



For the year ended June 30, 2012, Law
Broker’s top five insurance company partners, after aggregating the business conducted between Law Broker and the various
local branches of the insurance companies were Fubon Life Insurance Co., Ltd., Farglory Life Insurance Co., Ltd., China Life Insurance
Company, Chinatrust Life Insurance Company and TransGlobe Life Insurance Company. Among them, Fubon Life Insurance Company accounted
for 36% of Law Broker’s total net revenues from commissions and fees in 2012.



For the year ended June 30, 2012, Henan
Anhou’s top five insurance company partners, after aggregating the business conducted between Henan Anhou and the various
local branches of the insurance companies, were Sunshine Insurance Group Corporation Limited, Taiping Life Insurance Co., Ltd.,
Taikang Life Insurance Co., Ltd., Cathay Insurance Co., Ltd. and Tianan Insurance Co., Ltd. Among them, Sunshine Insurance Group
Corporation Limited accounted for 26.67% of Henan Anhou’s total net revenues from commissions and fees in 2012.



The termination of our contracts with
insurance companies that in aggregate account for a significant portion of our business, or changes to material terms of these
contracts, could adversely affect our business and operating results.



Our future success depends on the
continuing efforts of our senior management team and other key personnel, and our business may be harmed if we lose their services.



Our future success depends heavily upon
the continuing services of the members of our senior management team and other key personnel, in particular Mr. Lo Chung Mei,
the Chief Executive Officer, Ms. Chuang Yung Chi, the Chief Financial Officer, Mr. Hsu Wen Yuan, the Chief Marketing Officer,
Mr. Hsieh Tung Chi, the Chief Operating Officer, and Mr. Chiang Te-Yun, the Chief Technology Officer. If one or more of our
senior executives or other key personnel, are unable or unwilling to continue in their present positions, we may not be able to
replace them easily, or at all. As such, our business may be disrupted and our financial condition and results of operations may
be materially and adversely affected. Competition for senior management and key personnel is intense, the pool of qualified candidates
is very limited, and we may not be able to retain the services of our senior executives or key personnel, or attract and retain
high-quality senior executives or key personnel in the future. As is customary in the PRC and Taiwan, we do not have insurance
coverage for the loss of our senior management team or other key personnel.



49







In addition, if any member of our senior
management team or any of our other key personnel joins a competitor or forms a competing company, we may lose customers, sensitive
trade information and key professionals and staff members. Each of our executive officers and key employees has entered into an
employment agreement with our subsidiaries or Consolidated Affiliated Entities, respectively. If any disputes arise between any
of our senior executives or key personnel and us, we cannot assure you of the extent to which any of these agreements may be enforced.



Sales professionals or sales agent
and employee misconduct is difficult to detect and deter and could harm our reputation or lead to regulatory sanctions or litigation
costs.



Sales professionals or sales agent and
employee misconduct could result in violations of law by us, regulatory sanctions, litigation or serious reputational or financial
harm. Misconduct could include:



| |  ̈ | making misrepresentation when marketing or selling insurance
    products to customers;
| | - | ---------------------------------------------------------------------------------------



| |  ̈ | hindering insurance applicants from making full and accurate mandatory disclosures
    or inducing applicants into make misrepresentations;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------



| |  ̈ | hiding or falsifying material information in relation to the insurance contracts;
| | - | ---------------------------------------------------------------------------------



| |  ̈ | fabricating or altering insurance contracts without authorization from relevant
    parties, selling false policies, or providing false documents on behalf of the applicants;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  ̈ | falsifying insurance agency business or fraudulently returning insurance policies
    to obtain commissions;
| | - | ------------------------------------------------------------------------------------------------------------



| |  ̈ | colluding with applicants, insured, or beneficiaries to obtain insurance benefits;
| | - | ----------------------------------------------------------------------------------



50







| |  ̈ | engaging in false claims; or
| | - | ----------------------------



| |  ̈ | otherwise not complying with laws and regulations or our control policies or procedures.
| | - | ----------------------------------------------------------------------------------------



We cannot always deter sales professionals
or sales agent or employee misconduct, and the precautions we take to prevent and detect these activities may not be effective
in all cases. We cannot assure you, therefore, that sales professionals or sales agent or employee misconduct will not lead to
a material adverse effect on our business, results of operations or financial condition.



All of our personnel engaging in
insurance agency or brokering are required under relevant regulations to have a qualification certificate issued by the relevant
government authorities in Taiwan or PRC. If these qualification requirements are strictly enforced in the future, our business
may be materially and adversely affected.



All of Law Broker’s personnel who
engage in insurance agency and brokering are required under relevant Taiwan regulations to obtain a registration certificate.
In order to obtain the registration certificate, the sale professionals have to pass the insurance sales professionals qualification
test sponsored by the Life Insurance Association of the Republic of China or Property Insurance Association of the Republic of
China (collectively the “Associations”, each a “Association”). Once the applicants passed such test, the
Associations will notify Law Broker of those applicants who passed the test and Law Broker is obligated to issue the registration
certificate to them. The registration certificate is valid for 5 years and the holder shall renew the registration certificate
prior to its expiration date. See “Corporate History and Structure —Regulation.” As of June 30, 2012, all of
Law Broker’s sales professionals had received and is holding a valid registration certificate.



All of Henan Anhou’s personnel who
engage in insurance agency and brokering are required under relevant PRC regulations to obtain a qualification certificate from
the CIRC in order to conduct insurance agency or brokering. In order to obtain the qualification certificate, the sale professionals
have to pass the insurance agency or brokerage practitioner qualification test sponsored by the CIRC. Once the applicants passed
such test, the CIRC may, subject to certain other conditions set forth in Insurance Sales Professionals Management Regulation,
determine whether to grant such qualification certificate to the applicants. The qualification certificate is valid for 3 years
and the holder may file application to the CIRC to renew the qualification certificate at least 30 days prior to its expiration
date. See “Corporate History and Structure —Regulation.” In addition, we understand that the CIRC requires that
every individual agent carry the qualification certificate and other credentials showing specific information when conducting
agency business. Under the relevant PRC regulations, an insurance agency or brokerage that retains unqualified personnel to engage
in insurance intermediary activities may be imposed a fine up to RMB100,000 ($15,667). As of June 30, 2012, approximately 80%
of Henan Anhou’s sales professionals had received and is holding a valid qualification certificate.   The 20%
of Henan Anhou’s sales professionals who fail to obtain such a qualification certificate is due to their failure to participate
in or pass the qualification test. If more local CIRC agencies were to strictly enforce these regulations in the future, and if
a substantial number of our sales forces remain unqualified, our business may be adversely affected. Moreover, we may be subject
to fines and other administrative proceedings for the failure of our insurance professionals to obtain the necessary CIRC qualification
certificate. Any such fines or administrative proceedings could materially and adversely affect our business, financial condition
and results of operations.



51







If we fail to maintain an effective
system of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent
fraud.



As a public company, we are subject to
reporting obligations under U.S. securities laws. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and the related
rules adopted by the Securities and Exchange Commission, every public company is required to include a management report on the
Company’s internal controls over financial reporting (“ICFR”) in its annual report, which contains management’s
assessment of the effectiveness of the company’s internal controls over financial reporting. This annual report does not
include a report of management's assessment regarding internal control over financial reporting or an attestation report of the
company's registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission
for newly public companies.



There is no assurance we will be able
to maintain effective ICFR in the future. If we fail to do so, we may not be able to produce reliable financial reports and prevent
fraud. Moreover, if we were not able to conclude we have effective ICFR, investors may lose confidence in the reliability of our
financial statements, which would negatively impact the trading price of our shares. Our reporting obligations as a public company,
including our efforts to comply with Section 404 of the Sarbanes-Oxley Act, will continue to place a significant strain on
our management, operational and financial resources and systems for the foreseeable future.



52







Any significant failure in our information
technology systems could have a material adverse effect on our business and profitability.



Our business is highly dependent on the
ability of our information technology systems to timely process a large number of transactions across different markets and products
at a time when transaction processes have become increasingly complex and the volume of such transactions is growing rapidly.
The proper functioning of our financial control, accounting, customer database, customer service and other data processing systems,
together with the communication systems of our Taiwan Subsidiaries and Consolidated Affiliated Entities and our main offices in
Taiwan and Henan, are critical to our business and to our ability to compete effectively. We cannot assure you that our business
activities would not be materially disrupted in the event of a partial or complete failure of any of these primary information
technology or communication systems, which could be caused by, among other things, software malfunction, computer virus attacks
or conversion errors due to system upgrading. In addition, a prolonged failure of our information technology system could damage
our reputation and materially and adversely affect our future prospects and profitability.



If we are unable to respond in a
timely and cost-effective manner to rapid technological change in the insurance intermediary industry, there may be a resulting
adverse effect on business and operating results.



The insurance industry is increasingly
influenced by rapid technological change, frequent new product and service introductions and evolving industry standards. For
example, the insurance intermediary industry has increased use of the Internet to communicate benefits and related information
to consumers and to facilitate information exchange and transactions. We believe that our future success will depend on our ability
to continue to anticipate technological changes and to offer additional product and service opportunities that meet evolving standards
on a timely and cost-effective basis. There is a risk that we may not successfully identify new product and service opportunities
or develop and introduce these opportunities in a timely and cost-effective manner. In addition, product and service opportunities
that our competitors develop or introduce may render our products and services uncompetitive. As a result, we can give no assurances
that technological changes that may affect our industry in the future will not have a material adverse effect on our business
and results of operations.



The Company‘s affiliates have
significant control over matters requiring approval by shareholders.



The affiliates to the Company will hold
100% of the Company’s outstanding preferred shares, 43.68% of the Company’s outstanding common shares, and 58.08%
of the voting power of the Company as of September 30, 2012 (calculated in accordance with Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended).As a result, the Company’s affiliates, in view of their ownership percentage of
our common stock and voting power, have significant control over matters requiring approval by our shareholders, including the
selection of our Board of Directors, approval or rejection of mergers, sales or licenses of all or substantially all of our assets,
or other business combination transactions. The interests of the Company’s affiliates may not always coincide with the interests
of our other shareholders and as such the Company may take action in advancement of its affiliates’ interests to the detriment
of our other shareholders, including you. Accordingly, you may not be able to influence any action we take or consider taking,
even if it requires a shareholder vote.



53







Going Concern



The accompanying consolidated financial
statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. The Company has incurred net operating losses since inception. The Company faces the risks common
to companies that are relatively new, including capitalization and uncertainty of funding sources, high initial expenditure levels,
uncertain revenue streams, and difficulties in managing growth. At June 30, 2012, the Company had an accumulated deficit of $1,918,972.
The Company’s recurring losses raise substantial doubt about its ability to continue as a going concern. The Company’s
consolidated financial statements do not reflect any adjustments that might result from the outcome of this uncertainty.



On August 24, 2012, the
Company acquired an indirect 65.95% equity interest in a Taiwanese holding company which, through Law  Broker, one of its
subsidiaries,  carries our insurance brokerage business in Taiwan (See Note 16).



Management also plans to obtain funding
through loans and equity. In addition, management is seeking additional merger candidates. Management believes its current and
future plans enable it to continue as a going concern.



Risks Related to Our Corporate Structure
in the PRC



If the PRC government finds that
the agreements that establish the structure for operating our China business do not comply with applicable PRC laws and regulations,
we could be subject to severe penalties.



PRC laws and regulations place certain
restrictions on foreign ownership of companies that engage in insurance agencies and brokerages business, especially those on
qualifications as well as capital requirement of the investors. We conduct our operations in China principally through contractual
arrangements among our wholly-owned PRC subsidiary, CU WFOE and our operating company in the PRC, namely, Henan Anhou and its
shareholders, where Henan Anhou directly holds 100% equity interests in one PRC insurance agency, namely Sichuan Kangzhuang and
one insurance brokerage, namely Jiangsu Law. Henan Anhou, Sichuan Kangzhuang and Jiangsu Law hold the licenses and permits necessary
to conduct our insurance intermediary business and related businesses in China.



54







Our contractual arrangements with Henan Anhou,
its shareholders enable us to:



| |  ̈ | exercise effective control over Henan Anhou and its subsidiaries;
| | - | -----------------------------------------------------------------



| |  ̈ | receive a substantial portion of the economic benefits of Henan Anhou and its subsidiaries
    in consideration for the services provided by our wholly-owned subsidiary in China; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  ̈ | have an exclusive option to purchase all or part of the equity interests in Henan
    Anhou when and to the extent permitted by PRC law.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



Because of these contractual arrangements,
we are the primary beneficiary of Henan Anhou and its subsidiaries and have consolidated them into our consolidated financial
statements. Although we believe that these agreements are in compliance with current PRC regulations, we cannot assure you that
the PRC government would agree that these contractual arrangements comply with PRC licensing, registration or other regulatory
requirements, with existing policies or with requirements or policies that may be adopted in the future. PRC laws and regulations
governing the validity of these contractual arrangements are uncertain and the relevant government authorities have broad discretion
in interpreting these laws and regulations. If the PRC government determines that our contractual arrangements do not comply with
applicable laws and regulations, it could revoke our business and operating licenses, require us to discontinue or restrict our
operations, restrict our right to collect revenues, block our website, require us to restructure our operations, impose additional
conditions or requirements with which we may not be able to comply, or take other regulatory or enforcement actions against us
that could be harmful to our business. The imposition of any of these penalties would result in a material and adverse effect
on our ability to conduct our business.



If the PRC government finds that
we, our PRC subsidiary and Consolidated Affiliated Entities do not comply with applicable PRC laws and regulations, we could be
subject to severe penalties.



If we, our Consolidated Affiliated Entity,
Henan Anhou or any of the existing and future subsidiaries of Henan Anhou are found to be in violation of any existing or future
PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities,
including the CIRC, will have broad discretion in dealing with such violations, including:



55







| |  ̈ | revoking the business and operating licenses of our PRC subsidiary and Consolidated
    Affiliated Entities;
| | - | ------------------------------------------------------------------------------------------------------------



| |  ̈ | restricting or prohibiting any related-party transactions among our PRC subsidiary
    and Consolidated Affiliated Entities;
| | - | ----------------------------------------------------------------------------------------------------------------------------



| |  ̈ | imposing fines or other requirements with which we, our PRC subsidiary or our Consolidated
    Affiliated Entities may not be able to comply;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  ̈ | requiring us, our PRC subsidiary or our Consolidated Affiliated Entities to restructure
    the relevant ownership structure or operations; or
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  ̈ | restricting or prohibiting us from providing additional funding for our business
    and operations in China.
| | - | -------------------------------------------------------------------------------------------------------------



The imposition of any of these penalties
could result in a material and adverse effect on our ability to conduct our business in the PRC.



We rely on contractual arrangements
with Henan Anhou and its shareholders for our China operations, which may not be as effective in providing operational control
as direct ownership.



We have relied and expect to continue
to rely on contractual arrangements with our PRC Consolidated Affiliated Entity, Henan Anhou, and its shareholders to operate
our business in China. For a description of these contractual arrangements, see “Corporate History and Structure”
These contractual arrangements may not be as effective in providing us with control over Henan Anhou and its subsidiaries as direct
ownership. We have no direct or indirect equity interests in Henan Anhou or any of its subsidiaries.



Since PRC laws restrict foreign equity
ownership in companies engaged in insurance agencies and brokerages businesses in China, especially those on qualifications as
well as capital requirement of the investors, we rely on contractual arrangements with Henan Anhou to operate our business in
China. If we had direct ownership of Henan Anhou and its subsidiaries, we would be able to exercise our rights as a shareholder
to effect changes in the board of directors of Henan Anhou and its subsidiaries, which in turn could effect changes, subject to
any applicable fiduciary obligations, at the management level. However, under the current contractual arrangements, we rely on
Henan Anhou and its shareholders’ performance of their contractual obligations to exercise effective control. In addition,
our contractual arrangements generally have a term of ten-year with an automatic extension of another ten-year term unless our
PRC subsidiary, CU WFOE, determines otherwise. Though neither Henan Anhou nor its shareholders has any right under these agreements
to terminate such agreements prior to the expiration date, we may not be able to strictly enforce these agreements in case they
choose to do so, due to the uncertainty associated with PRC government’s determination on the validity of these contractual
arrangements or the lack of assets enforceable outside PRC.  Affiliates of the Company are also directors and executive officers
of our Consolidated Affiliated Entities. In addition, though Henan Anhou is under the effective control of CU WFOE through
these contractual arrangements, the shareholders and officers of Henan Anhou may not act in the best interests of our company
or may not perform their obligations under these agreements, including the obligation to renew these agreements when their initial
ten-year term expires. Furthermore, as all of Henan Anhou’s assets are located in China, if Henan Anhou or its shareholders
determine to terminate the VIE agreements, the unaffiliated investors will have little or no recourse against them. Such risks
exist throughout the period in which we intend to operate our business through the contractual arrangements with Henan Anhou.
Therefore, these contractual arrangements may not be as effective as direct ownership in providing us with control over these
Consolidated Affiliated Entities.



56







If Henan Anhou and its shareholders
fail to perform their obligations under these contractual arrangements, we may have to incur substantial costs and other
resources to enforce such arrangements and rely on legal remedies under PRC law, including seeking specific performance or injunctive
relief and claiming damages, which may not be effective. For example, if the shareholders and officers of Henan Anhou were to
refuse to transfer their equity interest in Henan Anhou to us or our designee when we exercise the call option pursuant to these
contractual arrangements, or if they were otherwise to act in bad faith toward us, then we may have to take legal action to compel
them to fulfill their contractual obligations. However, due to the uncertainty associated with PRC government’s determination
on the validity of these contractual arrangements or the lack of assets enforceable against Henan Anhou outside PRC, we may not
be able to effectively enforce our right under these agreements.



Neither Henan Anhou nor Sichuan Kangzhuang
has made any profits to date. The PRC taxable income of Jiangsu Law is calculated as the total revenue of Jiangsu times 10%. Jiangsu
Law shall pay enterprise income tax calculated as 25% times its PRC taxable income. No service fees has been paid to the
PRC subsidiary pursuant to the Exclusive Cooperation Agreement and it has not made any profit to date, thus, it has no accumulated
profits available for the purposes of dividend distribution. Even though we expect the PRC subsidiary to make profit in the year
of 2014, we intend to use all of the revenues and profits to fund our business operations or expansion in China.



57







All of our contractual arrangements with
Henan Anhou and shareholders are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC.
Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance
with PRC legal procedures. The legal environment in the PRC is not as developed as in some other jurisdictions, such as the United
States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements.
In the event we are unable to enforce these contractual arrangements, we may not be able to exert effective control over our Consolidated
Affiliated Entities, and our ability to conduct our business in the PRC may be negatively affected.



Contractual arrangements we have
entered into with Henan Anhou may be subject to scrutiny by the PRC tax authorities. A finding that we owe additional taxes could
substantially reduce our consolidated net income and the value of your investment.



Under PRC laws and regulations, arrangements
and transactions among related parties may be subject to audit or challenge by the PRC tax authorities. Since both of CU WFOE
and Henan Anhou are under our common control, either under direct ownership or through contractual arrangements, and certain our
officers and directors used to be and are currently the employees of Henan Anhou and its subsidiaries (for example, Lo Chung Mei,
our Chief Executive Officer, also act as the General Manager of Henan Anhou, Hsieh Tung Chi and Chiang Te Yun, our Chief Operating
Officer and Chief Technology Officer, also act as Chief Operating Officer and Chief Technology Officer of Jiangsu Law respectively,
and Hus Wen Yuan, our Chief Marketing Officer, also acts as the General Manager of Sichuan Kangzhuang), the VIE Agreements are
likely to be deemed as arrangements between related parties. In addition, CU WFOE has been granted substantial unilateral right
under the VIE Agreements. We could face material and adverse tax consequences if the PRC tax authorities determine that the contractual
arrangements between our PRC subsidiary and Henan Anhou are not on an arm’s-length basis and adjust the income of Henan
Anhou in the form of a transfer pricing adjustment, where the relevant PRC tax authorities may, in their discretion, disregard
the tax filing of Henan Anhou and impose a different tax amount payable by Henan Anhou. A transfer pricing adjustment could among
other things, result in a reduction, for PRC tax purposes, of expense deductions recorded by Henan Anhou, which could in turn
increase their respective tax liabilities. Moreover, the PRC tax authorities may impose interest and other penalties on Henan
Anhou for underpayment of taxes. Though we have not encountered any challenge or transfer pricing adjustment by the PRC tax authorities
so far, we could not assure you that the PRC tax authorities will not do so in the future. Our consolidated net income may be
materially and adversely affected by the occurrence of any of the foregoing.



58







PRC regulation of direct investment
by offshore holding companies to PRC entities may delay or prevent us from making additional capital contributions to our PRC
subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business.



We are an offshore holding company conducting
our operations in China through our PRC subsidiary and Consolidated Affiliated Entities. In order to provide additional funding
to our PRC subsidiary and Consolidated Affiliated Entities, we may make additional capital contributions to our PRC subsidiary.



Any capital contributions we make to our
PRC subsidiary, must be approved by the PRC Ministry of Commerce or its local counterparts, which usually takes approximately
30 days or longer, and registered with the SAFE or its local counterparts. Such applications and registrations could be time consuming
and their outcomes would be uncertain. The registered capital of CU WFOE is $300,000 has been contributed.



We cannot assure you that we will be able
to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all,
with respect to future capital contributions by us to our PRC subsidiary. If we fail to complete such registrations or obtain
such approvals, our ability to capitalize or otherwise fund our PRC operations may be negatively affected, which could adversely
and materially affect our liquidity and our ability to fund and expand our business.



Risks Related to Doing Business in
Taiwan



Extensive regulation of our industry
may limit our flexibility to respond to market conditions and competition, and our business may suffer.



Subsequent to our acquisition of AHFL
on August 24, 2012, we operate our insurance agency and brokerage business in Taiwan through our operating entity Law Broker.
As an insurance agency and brokerage service provider in Taiwan, Law Broker is subject to extensive regulation. See “Item
1.Business—Regulation” for a discussion of the regulatory environment applicable to Law Broker. As revenue generated
by Law Broker constitutes a substantial part of our revenue, any changes in the regulatory environment applicable to Law Broker
may adversely affect our business, financial condition and results of operations.



Currently, Law Broker’s principal
regulator is the Financial Supervisory Committee of Republic of China, or the FSC, which was formed on July 1, 2004 in accordance
with the Financial Supervisory Oganization Act, which was intended to grant regulatory authority over the Taiwan insurance industry
to the FSC.



59







Our operations and financial results
could be severely harmed by natural disasters.



Law Broker’s executive office is
located in Taiwan, which suffered a severe earthquake during fiscal year of 2000. We did not experience significant disruption
to our operations as a result of that earthquake. Taiwan is also exposed to typhoons and tsunamis. If a major earthquake, typhoon,
tsunami or other natural disaster were to affect our operations, which would seriously harm our business.



Stockholders may have more difficulty
protecting their interests under the laws of the Taiwan than they would under the laws of the United States.



Our corporate affairs are governed by
our articles of incorporation, the Company Law, and by the laws governing corporations incorporated in Taiwan. In addition, our
corporate affairs may remain governed by the Statute of Law Broker. The rights of stockholders and the responsibilities of management
and the members of the board of directors of Taiwan companies are different from those applicable to a corporation incorporated
in the United States. For example, controlling or major stockholders of Taiwan companies do not owe fiduciary duties to minority
stockholders. As a result, holders of our common shares may have more difficulty in protecting their interests in connection with
actions taken by our management or members of our board of directors than they would as public stockholders of a United States
corporation.



Fluctuation in the value of the
NT$ may have a material adverse effect on your investment.



The value of the NT$ against the US dollar
(“USD”) and other currencies may fluctuate and is affected by, among other things, changes in political and economic
conditions. As of September 28, 2012, the exchange rate of NT$ to the USD was 1NT$=0.03USD.



In Taiwan, our revenues and costs are
denominated in the NT$, and a significant portion of our financial assets are also denominated in NT$. We rely sustantially on
dividends and other fees paid to us by our Taiwan Subsidiary. Any significant appreciation or depreciation of the NT$ against
the USD may affect our cash flows, revenues, earnings and financial position, and the value of, and any dividends payable on,
our shares in USD. For example, a further appreciation of the NT$ against the USD would make any new NT$-denominated investments
or expenditures more costly to us, to the extent that we need to convert USD into the NT$ for such purposes. An appreciation of
the NT$ against the USD would also result in foreign currency translation losses for financial reporting purposes when we translate
our USD denominated financial assets into the NT$, as the NT$ is our reporting currency in Taiwan. Conversely, a significant depreciation
of the NT$ against the USD may significantly reduce the USD equivalent of our reported earnings, and may adversely affect the
price of our shares.



60







Risks Related to Doing Business in
China



Our limited operating history in
China, especially our limited experience in distributing property and casualty insurance products may not provide an adequate
basis to judge our future prospects and results of operations.



We have a limited operating history in
China. Henan Anhou commenced our insurance intermediary business in 2003 by distributing life insurance products and expanded
our offerings to other types of property and casualty insurance products in 2009. Henan Anhou started distributing automobile
insurance business in 2010. Life insurance products accounted for 65% and 68.6% of our total net revenues in 2011 and 2012, respectively.
Property and casualty insurance products accounted for 35% and 31.4% of our total net revenues in 2011 and 2012, respectively.
While life insurance and property and casualty insurance distribution are two major areas of our future growth strategy in China,
we cannot assure you that our efforts to further develop these businesses will be successful. If Henan Anhou’s life insurance
distribution and property and casualty insurance distribution fail to grow, our future growth in China will be significantly affected.
In addition, our limited operating history in China, especially our limited experience in selling property and casualty insurance
products, may not provide a meaningful basis for you to evaluate our business, financial performance and prospects.



PRC regulations relating to the
establishment of offshore SPVs by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiary to liability
or penalties, limit our ability to inject capital into our PRC subsidiary, limit our PRC subsidiary’s ability to increase
their registered capital or distribute profits to us, or may otherwise adversely affect us.



SAFE has promulgated several regulations,
including the Notice on Issues Relating to the Administration of Foreign Exchange in Fund-Raising and Round-trip Investment Activities
of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Circular No. 75, effective on November 1, 2005,
and the Notice of the State Administration of Foreign Exchange on Printing and Distributing the Implementing Rules for Fund-Raising
and Round-trip Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies effective on July
1, 2011. These regulations require PRC residents and PRC corporate entities to register with local branches of SAFE in connection
with their direct or indirect offshore investment activities. These regulations apply to our shareholders who are PRC residents
and may apply to any offshore acquisitions that we make in the future.



61







Under these foreign exchange regulations,
PRC residents who make, or have previously made prior to the implementation of these foreign exchange regulations, direct or indirect
investments in Special Purpose Vehicles or SPVs will be required to register those investments. In addition, any PRC resident
who is a direct or indirect shareholder of a SPV, is required to update the previously filed registration with the local branch
of SAFE, with respect to that SPV, to reflect any material change. Moreover, the PRC subsidiaries of that SPV are required to
urge the PRC resident shareholders to update their registration with the local branch of SAFE. If any PRC shareholder fails to
make the required registration or update the previously filed registration, the PRC subsidiaries of that SPV may be prohibited
from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to their SPV parent,
and the SPV may also be prohibited from injecting additional capital into its PRC subsidiaries. Moreover, failure to comply with
the various foreign exchange registration requirements described above could result in liabilities for such PRC subsidiaries under
PRC laws for evasion of applicable foreign exchange restrictions, including (i) the requirement by SAFE to return the foreign
exchange remitted overseas within a period specified by SAFE, with a fine of up to 30% of the total amount of foreign exchange
remitted overseas and deemed to have been evasive and (ii) in circumstances involving serious violations, a fine of no less than
30% of and up to the total amount of remitted foreign exchange deemed evasive. Furthermore, the persons-in-charge and other persons
at such PRC subsidiaries who are held directly liable for the violations may be subject to administrative sanctions.



These foreign exchange regulations provide
that PRC residents include both PRC citizens, meaning any individual who holds a PRC passport or resident identification card,
and individuals who are non-PRC citizens but primarily reside in the PRC due to their economic ties to China. SAFE Circular No.
19 further defines individuals who are non-PRC citizens but primarily reside in the PRC due to their economic ties to the PRC.



Li Fu Chang, Lo Chung Mei, Hsieh Tung
Chi and Chiang Te Yun, our shareholders, who do not directly hold any interests in the Consolidated Affiliated Entities, are permanent
residents of Taiwan, stay in mainland China for over 183 days per annum. However, as a result of our inquiries with the local
branch of SAFE responsible for our PRC subsidiary’s foreign exchange registrations, we were informed that, given the lack
of any publicly-available implementing rules or official interpretations issued by the SAFE regarding the issue of whether the
registration and amendment filing requirements under SAFE Circular No. 75 and related rules should apply to non-PRC citizens,
Li Fu Chang, Lo Chung Mei, Hsieh Tung Chi and Chiang Te Yun should not be deemed a PRC resident for these purposes, and any attempt
to submit an application to such local SAFE branch with respect to Li Fu Chang, Lo Chung Mei, Hsieh Tung Chi and Chiang Te Yun’s
investment and shareholdings in our offshore SPV will not be officially accepted or examined.



62







However, we cannot conclude that the SAFE
or the local branch responsible for our PRC subsidiary’s foreign exchange registrations will not later alter their position
on and interpretation of the applicability of these foreign exchange regulations to Mr. Li Fu Chang, Lo Chung Mei, Hsieh Tung
Chi and Chiang Te Yun. In the event that the registration procedures set forth in these foreign exchange regulations become applicable
to Mr. Li Fu Chang, Lo Chung Mei, Hsieh Tung Chi and Chiang Te Yun, we will urge these individuals to, and believe they will,
file necessary registrations and amendments as required under SAFE Circular No. 75 and related rules. However, as SAFE regulations
and policies have been evolving rapidly in the past few years, we cannot assure that all of these individuals can successfully
make or update any applicable registration or obtain the necessary approval required by these foreign exchange regulations as
these individuals may not be able to fully satisfy the new requirements or interpretations that SAFE or its local branch may impose
or adopt from time to time. The failure or inability of such individuals to comply with the registration procedures set forth
in these regulations may subject us to fines or legal sanctions, restrictions on our cross-border investment activities or our
PRC subsidiary’s ability to distribute dividends to, or obtain foreign-exchange-dominated loans from, the Company, or prevent
us from making distributions or paying dividends. As a result, our business operations and our ability to make distributions to
our stockholders could be materially and adversely affected.



Furthermore, as these foreign exchange
regulations are still relatively new and there is uncertainty concerning the reconciliation of the new regulations with the approval
requirements under other existing PRC laws and regulations, such as tax laws, it is unclear how these regulations, and any future
regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant government
authorities. We cannot predict how these regulations will affect our business operations or future strategy. For example, we may
be subject to a more stringent review and approval process with respect to our foreign exchange activities, such as remittance
of dividends and foreign-currency-denominated borrowings, which may adversely affect our financial condition and results of operations.
In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of such company, as the
case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the
foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our
business and prospects.



63







Our businesses in China are highly
regulated, and the administration, interpretation and enforcement of the laws and regulations currently applicable to us involve
uncertainties, which could materially and adversely affect our business and results of operations.



Henan Anhou operates in a highly regulated
industry. The CIRC has extensive authority to supervise and regulate the insurance industry in China. In exercising its authority,
the CIRC is given wide discretion, and the administration, interpretation and enforcement of the laws and regulations applicable
to us involve uncertainties that could materially and adversely affect our business and results of operations. For example, it
is not clear when the CIRC will start strictly enforcing the qualification requirements for sales professionals affiliated with
professional insurance intermediaries like our Consolidated Affiliated Entities. Although we have not had any material violations
to date, we cannot assure you that our operations will always be consistent with the interpretation and enforcement of the laws
and regulations by the CIRC from time to time.



The principal regulation governing insurance
agencies in China is the Provisions on the Supervision and Administration of Specialized Insurance Agencies (the “Agency
Provisions”) promulgated by the CIRC on September 25, 2009 and effective on October 1, 2009, which replaced the
Provisions on the Administration of Insurance Agencies issued by the CIRC on December 1, 2004 and effective on January 1,
2005. The Agency Provisions have not only set forth the market entrance standards for applicants to establish an insurance agency,
but also stipulate the qualification criteria of senior management for such insurance agency. The Agency Provisions have also
provided general rules on business operations as well as granted relatively broad supervision rights to the CIRC. The principal
regulation governing insurance brokerages in China is the Provisions on the Supervision and Administration of Insurance Brokerage
Institutions (the “Brokerages Provisions”) promulgated by the CIRC on September 25, 2009 and effective on October 1,
2009, which replaced the Provisions on the Administration of Insurance Brokerages issued by the CIRC on December 15, 2004
and effective on January 1, 2005. The Brokerages Provisions have not only set forth the market entrance standards for applicants
to establish a brokerage firm, but also stipulate the qualification criteria of senior management for such brokerage firm. The
Brokerages Provisions have also provided general rules on business operations as well as granted relatively broad supervision
rights to the CIRC. On April 19, 2011, CIRC issued a draft regulation of Regulatory Requirements of Insurance Salespersons, which
sets forth a higher academic requirement for candidates to take the qualification examination for the insurance agency practitioners
organized by the CIRC. The draft regulation, once formally promulgated, will replace the Provisions on the Administration of Insurance
Salespersons. The enactment of any new laws and regulations in replacement of the above-mentioned laws or the change of interpretations
of any such current laws and regulations may have a significant impact on the operation and financial results of the Company.



For an expanded discussion of the material
regulations affecting the Company, please review the discussion located under the “Regulation” heading in the “Corporate
History and Structure” section of this annual report.



64







Further development of regulations
in China may impose additional costs and restrictions on our activities.



China’s insurance regulatory regime
is undergoing significant changes. Some of these changes and the further development of regulations applicable to us may result
in additional restrictions on our activities or more intensive competition in this industry. For example, under the provisions
for administration of professional insurance agencies and brokerages promulgated on September 25, 2009, insurance agencies
and brokerage companies are required to increase their guaranty deposit, which generally cannot be withdrawn without the CIRC’s
approval, when they open any new branches. Furthermore, pursuant to the provisions, the minimum registered capital requirements
for insurance agencies and brokerages have been increased substantially. See “Corporate History and Structure—Regulation.”
Insurance agencies and brokerages that have been established before October 1, 2009 will be given a three-year phase-in period
until October 1, 2012 to meet the new minimum registered capital requirement. Such increase would reduce the amount of cash
available for other business purposes. In addition, according to the Insurance Law amended on February 28, 2009, sole-proprietor
insurance agencies are now allowed. This change may lead to intensified competition among insurance agencies. Such development
of regulations could materially and adversely affect our business and results of operations. In addition, the CIRC issued an Opinion
of CIRC on Reforming and Improving the Management System of Insurance Salespersons in September 2010, which requires the insurance
companies and insurance intermediaries to build up a clear legal relationship with the insurance salespersons, improve the fundamental
protection rights of the insurance salespersons, and encourage the insurance companies and insurance intermediaries to actively
explore new models and marketing channels for insurance sales system. As the opinion is relatively new and currently there are
no implementation rules, the implementation and interpretation of this opinion may involve substantial uncertainties.



Adverse changes in economic and
political policies of the PRC government could have a material adverse effect on the overall economic growth of China, which could
adversely affect our business.



We conduct our business in China primarily
through our PRC subsidiary and Consolidated Affiliated Entities. Accordingly, our results of operations, financial condition and
prospects are subject to a significant degree to economic, political and legal developments in China. China’s economy differs
from the economies of most developed countries in many respects, including with respect to the amount of government involvement,
level of development, growth rate, control of foreign exchange and allocation of resources. While the PRC economy has experienced
significant growth in the past 30 years or so, growth has been uneven across different regions and among various economic
sectors of China and has been slowed down during the past few years. The PRC government has implemented various measures to encourage
economic development and guide the allocation of resources. While some of these measures benefit the overall PRC economy, they
may also have a negative effect on us. For example, our financial condition and results of operations may be adversely affected
by government control over capital investments or changes in tax regulations that are applicable to us.



65







Although the PRC government has implemented
measures since the late 1970s emphasizing the utilization of market forces for economic reform, the reduction of state ownership
of productive assets and the establishment of improved corporate governance in business enterprises, the PRC government still
owns a substantial portion of productive assets in China. In addition, the PRC government continues to play a significant role
in regulating industry development by imposing industrial policies. The PRC government also exercises significant control over
China’s economic growth through the allocation of resources, controlling payment of foreign currency-denominated obligations,
setting monetary policy and providing preferential treatment to particular industries or companies. Actions and policies of the
PRC government could materially affect our ability to operate our business.



Uncertainties with respect to the
PRC legal system could adversely affect us.



We conduct our business in China primarily
through our PRC subsidiary and Consolidated Affiliated Entities. The business conducted by our PRC subsidiary and Consolidated
Affiliated Entities in China are governed by PRC laws and regulations. Our PRC subsidiary is generally subject to laws
and regulations applicable to foreign investments in China and, in particular, laws applicable to wholly foreign-owned enterprises.
The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential
value.



Although, since 1979, PRC legislation
and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China, China has
not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects
of economic activities in China. In particular, because these laws and regulations are relatively new, and because of the limited
volume of published decisions and their nonbinding nature, the interpretation and enforcement of these laws and regulations involve
uncertainties. In addition, the PRC legal system is based in part on government policies and internal rules (some of which are
not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not be aware of our violation
of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result
in substantial costs and diversion of resources and management attention.



66







Governmental control of currency
conversion may affect the value of your investment.



The PRC government imposes controls on
the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. Under existing
PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures
from trade-related transactions, can be made in foreign currencies without prior approval from the SAFE by complying with certain
procedural requirements. But approval from appropriate government authorities is required where RMB is to be converted into foreign
currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The
PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions.
Under our current corporate structure in the PRC, the primary source of our income at the holding company level from our PRC operations
is dividend payments from our PRC subsidiary. Shortages in the availability of foreign currency may restrict the ability of our
PRC subsidiary and our Consolidated Affiliated Entities to remit sufficient foreign currency to pay dividends or other payments
to us, or otherwise satisfy their foreign currency denominated obligations. If the foreign exchange control system in China prevents
us from obtaining sufficient foreign currency to satisfy our currency needs, we may not be able to pay dividends in foreign currencies
to our shareholders.



We rely principally on dividends
and other distributions on equity paid by our subsidiary to fund any cash and financing requirements we may have, and any limitation
on the ability of our subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business.



We are a holding company, and in PRC we
rely principally on dividends from our PRC subsidiary in China and service, license and other fees paid to our PRC subsidiary
by our Consolidated Affiliated Entities for our cash requirements, including any debt we may incur. Current PRC regulations permit
our PRC subsidiary to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting
standards and regulations. In addition, our PRC subsidiary is required to set aside at least 10% of its after-tax profits each
year as reported in its PRC statutory financial statements, if any, to fund a statutory reserve until such reserve reaches 50%
of its registered capital, and our PRC subsidiary that is considered foreign-invested enterprises is required to further set aside
a portion of its after-tax profits as reported in its PRC statutory financial statements to fund the employee welfare fund at
the discretion of the board. These reserves are not distributable as cash dividends. Furthermore, if our PRC subsidiary and Consolidated
Affiliated Entities in China incur debt on their own behalf in the future, the instruments governing the debt may restrict their
ability to pay dividends or make other payments to us. In addition, the PRC tax authorities may require us to adjust our taxable
income under the contractual arrangements we currently have in place in a manner that would materially and adversely affect our
PRC subsidiary’s ability to pay dividends and other distributions to us.



67







The PRC subsidiary has not made any profits
to date and as a result has no accumulated profits available for the purposes of dividend distribution. Even though we expect
the PRC subsidiary to become profitable in 2014, we intend to use all of the revenues and profits to fund our business operations
or expansion of our business.



Any limitation on the ability of our subsidiary
and Consolidated Affiliated Entities to distribute dividends or other payments to us could materially and adversely limit our
ability to grow, make investments or acquisitions that could be beneficial to our businesses, pay dividends, or otherwise fund
and conduct our business.



Fluctuation in the value of the
RMB may have a material adverse effect on your investment.



The value of the RMB against the USD and
other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions. On July 21,
2005, the PRC government changed its decade-old policy of pegging the value of the RMB to the USD. Under the new policy, the RMB
is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy
has resulted in an approximately 30% appreciation of the RMB against the USD between July 21, 2005 and September 28, 2012.
However, under the current global financial and economic conditions, it is impossible to predict with any certainty how the RMB
will move vis-à-vis the USD in the near future.  As of September 28, 2012, the exchange rate of RMB to the USD was
1RMB= 0.1591 USD.



In PRC, our revenues and costs are denominated
in the RMB, and a significant portion of our financial assets are also denominated in RMB. We rely substantially on dividends
and other fees paid to us by our subsidiary and Consolidated Affiliated Entities in China. Any significant appreciation or depreciation
of the RMB against the USD may affect our cash flows, revenues, earnings and financial position, and the value of, and any dividends
payable on, our ordinary shares in USD. For example, a further appreciation of the RMB against the USD would make any new RMB-denominated
investments or expenditures more costly to us, to the extent that we need to convert USD into the RMB for such purposes. An appreciation
of the RMB against the USD would also result in foreign currency translation losses for financial reporting purposes when we translate
our USD denominated financial assets into the RMB, as the RMB is our reporting currency in China. Conversely, a significant depreciation
of the RMB against the USD may significantly reduce the USD equivalent of our reported earnings, and may adversely affect the
price of our shares.



68







Sensitivity analysis



The following table indicates the instantaneous
change in the Company's (loss) / profit after tax (and accumulated losses) that would arise if foreign exchange rates at the reporting
date had changed at that date, assuming all other risk variables remained constant.

|For the year ended June 30, 2012 |   |   | For the year ended Jun 30, 2011 |  
|-------------------------------- | - | - | ------------------------------- | -
|Appreciation
    in RMB          |   |   | Decrease in
    net loss        |  
|                                 |   |   |                                 |  
|                                 | 3 | % |                                 | $



The weakening of the RMB against the above
currencies by the same percentages would have had the equal but opposite effect on the above currencies to the amounts shown above,
on the basis that all other variables remain constant.



The sensitivity analysis assumes that
the change in foreign exchange rates had been applied to re-measure those financial instruments held by the Company which expose
the Company to foreign currency risk at the reporting date. The analysis excludes differences that would result from the translation
of the financial statements of foreign operations into the Company's presentation currency.



The PRC Labor Contract Law and its
implementing rules may adversely affect our business and results of operations.



On June 29, 2007, the Standing Committee
of the National People’s Congress of China promulgated the Labor Contract Law, which became effective on January 1,
2008. On September 18, 2008, the State Council promulgated the implementing rules for the Labor Contract Law, which became
effective upon adoption. This new labor law and its implementing rules have reinforced the protection for employees, who, under
the existing PRC Labor Law, already have certain rights, such as the right to have written labor contracts, the right to enter
into labor contracts with indefinite terms under specific circumstances, the right to receive overtime wages when working overtime,
and the right to terminate in the labor contracts. In addition, the Labor Contract Law and its implementing rules have made some
amendments to the existing PRC Labor Law and added some clauses that could increase cost of labor to employers. As the Labor Contract
Law and its implementing rules are relatively new, there remains significant uncertainty as to their interpretation and application
by the PRC government authorities. In the event that we decide to significantly reduce our workforce, the Labor Contract Law and
its implementing rules could adversely affect our ability to effect these changes cost-effectively or in the manner we desire,
which could lead to a negative impact on our business and results of operations in the PRC.



69







We may have difficulty establishing
adequate management, legal and financial controls in the People’s Republic of China.



The PRC historically has been deficient
in Western style management and financial reporting concepts and practices, as well as in modern banking, computer and other control
systems. We may have difficulty in hiring and retaining a sufficient number of qualified employees to work in the PRC and Taiwan.
Currently, we do not have any employees that are formally trained in US GAAP or in ICFR in the PRC. As a result of these factors,
we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing
financial statements, books of account and corporate records and instituting business practices that meet Western standards.



It may be difficult to affect
service of process and enforcement of legal judgments upon us and our officers and directors because they reside outside the United
States.



To better operate our business in PRC,
some of our directors and officers reside in PRC, our service of process on such directors and officers may be difficult
to effect within the United States. Also, with respect to the assets for PRC operation located in PRC, any judgment obtained in
the United States against us may not be enforceable outside the United States.



The PRC legal system contains uncertainties
which could limit the legal protections available to us and you, or could lead to penalties on us.



The PRC legal system is a civil law system
based on written statutes. Unlike common law systems, it is a system in which decided legal cases have little precedential value.
In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general.
Our PRC subsidiary is subject to laws and regulations applicable to foreign investment in China. In addition, our PRC subsidiary
and Consolidated Affiliated Entities are incorporated in China and subject to all applicable PRC laws and regulations. Because
of the relatively short period for enacting such a comprehensive legal system, it is possible that the laws, regulations and legal
requirements are relatively recent, and their interpretation and enforcement involve uncertainties. These uncertainties could
limit the legal protections available to us and our stockholders, and may lead to penalties imposed on us because of the different
understanding between the relevant authority and us. In addition, we cannot predict the effect of future developments in the PRC
legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or
the preemption of local regulations by national laws.



70







We may have limited legal recourse
under the PRC laws if disputes arise under our contracts with parties in China.



The Chinese government has enacted significant
laws and regulations dealing with matters such as corporate organization and governance, foreign investment, commerce, taxation
and trade. However, their experience in implementing, interpreting and enforcing these laws and regulations is limited, and our
ability to enforce commercial claims or to resolve commercial disputes is unpredictable. The Company faces the risk that the parties
to contracts may seek ways to terminate the transactions.   For example, management of our Consolidated Affiliated
Entities may hinder or prevent us from accessing important information regarding the financial and business operations of the
Consolidated Affiliated Entities or refuse to pay us contractual consideration due under the VIE Agreements. The resolution of
these matters may be subject to the exercise of considerable discretion by agencies of the Chinese government, and forces unrelated
to the legal merits of a particular matter or dispute may influence their determination. Any rights we may have to specific performance,
or to seek an injunction under the PRC laws, in either of these cases, are severely limited, and without a means of recourse by
virtue of the Chinese legal system, we may be unable to prevent these situations from occurring. The occurrence of any such events
could have a material adverse effect on our business, financial condition and results of operations. Although legislation in China
over the past 30 years has significantly improved the protection afforded to various forms of foreign investment and contractual
arrangements in China, these laws, regulations and legal requirements are relatively new and their interpretation and enforcement
involve uncertainties, which could limit the legal protection available to us, and our stockholders. The inability to enforce
or obtain a remedy under any of our existing or future agreements could result in a significant loss of business, business opportunities
or capital and could have a material adverse impact on our operations.



Certain affiliates of ours are also directors
and executive officers of our Consolidated Affiliated Entities. PRC laws provide that a director or certain members of senior
management owes a fiduciary duty to the company he/ she directs or manages. These individuals must therefore act in good faith
and in the best interests of the relevant PRC company pursuant PRC laws and must not use their respective positions for personal
gains. These laws do not require them to consider our best interests when making decisions as a director or member of management
of the relevant PRC company.  For example, it may be possible for management of Henan Anhou to breach the VIE agreements
and while their actions may be in violation of US laws they could be legal in the PRC.  Any judgment for violation of fiduciary
duty under US law may not be enforceable outside the United States.  It may not be possible to effect service of process
within the United States or elsewhere outside China upon certain our directors or senior executive officers residing in China,
irrespective of matters arising under U.S. federal securities laws or applicable state securities laws. Any court judgment of
United States for violation of fiduciary duty under US law may not be enforceable in the PRC due to the lack of bilateral treaties
between PRC and the United States providing for the reciprocal recognition and enforcement of judgment of courts.



71







We may require additional funds
to continue our business plan.



On August 24, 2012, the Company acquired
all of the issued and outstanding shares of Action Holdings Financial Limited (“AHFL”), a LLC incorporated under the
laws of British Virgin Islands on April 30, 2012, together with its subsidiaries in Taiwan. Pursuant to the provisions of the
Acquisition Agreement and in exchange for all of the issued and outstanding shares of AHFL, the Company will pay NT$15 million
($500,815) on or prior to March 31, 2013 and NT$7.5 million ($250,095) subsequent to March 31, 2013 in cash in two installments,
subject to terms and conditions therein. In addition the Company agreed to (i) issue eight million shares of common stock of the
Company to the shareholders of AHFL; (ii) issue two million shares of common stock of the Company to certain employees of Law
Broker; and (iii) create an employee stock option pool, consisting of available options, exercisable for up to two million shares
of common stock of the Company. The Company plans to use future cash flows generated by future operations. However, if we cannot
generate enough cash flow from future operations, we may need to be dependent on the receipt of additional debt or equity capital
to fund our operations.



Regards to our business in the PRC, at
June 30, 2012, we had working capital of $353,654 and a stockholders’ equity of $700,671.  We incurred a net loss
of $103,468 and used net cash of $344,495 in our operations during the year ended June 30, 2012. If we continue use more
cash in the PRC’s business operations than we receive from the PRC’s business operations we, we will need to fund
our business in the PRC by cash flow generated in Taiwan.



Risks Relating to Ownership of Our
Shares



You may not be able to liquidate
your investment since there is no assurance that a public market will develop for our common stock or that our common stock will
ever be approved for trading on a recognized exchange.



There is no established public trading
market for our securities. Though we have engaged a market maker to apply for a quotation on the OTCBB in the United States and
obtained the approval for trading, our shares are not and have not been listed on any recognized exchange. We cannot assure you
that a regular trading market will develop or that if developed, will be sustained. In the absence of a regular trading market,
you may be unable to liquidate its investment, which will result in the loss of your investment.



72







Future sales by our stockholders
may negatively affect our stock price and our ability to raise funds in new stock offerings.



Sales of our common stock in the public
market could lower the market price of our common stock. Sales may also make it more difficult for us to sell equity securities
or equity-related securities in the future at a time and price that our management deems acceptable or at all. Of the 29,100,503
shares of common stock and 1,000,000 preferred shares outstanding as of September 28, 2012, 1,000,000 shares of common stock
are freely tradable without restriction, unless held by our “affiliates”. The remaining 28,100,503 shares of common
stock, which will be held by existing stockholders, including the officers and directors, are “restricted securities”
and may be resold in the public market only if registered or pursuant to an exemption from registration. Some of these shares
may be resold under Rule 144.



“Penny Stock” rules
may make buying or selling our common stock difficult.



Trading in our securities will be subject
to the “penny stock” rules. The SEC has adopted regulations that generally define a penny stock to be any equity security
that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer
who recommends our securities to persons other than prior customers and accredited investors, must, prior to the sale, make a
special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the
transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny
stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market.
In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and
current quotations for the securities they offer. The additional burdens imposed upon broker- dealers by such requirements may
discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity
of our securities. Broker-dealers who sell penny stocks to certain types of investors are required to comply with the Commission’s
regulations concerning the transfer of penny stocks. These regulations require broker- dealers to:



| |  ̈ | Make a suitability determination prior to selling a penny stock to the purchaser;
| | - | ---------------------------------------------------------------------------------



73







| |  ̈ | Receive the purchaser’s written consent to the transaction; and
| | - | ---------------------------------------------------------------



| |  ̈ | Provide certain written disclosures to the purchaser.
| | - | -----------------------------------------------------



These requirements may restrict the ability
of broker-dealers to sell our common stock and may affect your ability to resell our common stock.



If penny stocks are sold to investors
in violation of the rights listed above, or other federal or state securities laws, the investor may be able to cancel their purchase
and get their money back. If the stocks are sold in a fraudulent manner, the investor may be able to sue the persons and firms
that caused the fraud for damages or pursue their claims through arbitration if such investor entered into an arbitration agreement.
These remedies against resellers of penny stocks may make it more difficult for us to raise capital in the future through the
sale of our equity securities than those companies whose shares are not considered penny stocks.



We have no plans to declare any
dividends to shareholders in the near future.



We currently intend to retain our future
earnings, if any, to support our operations and to finance expansion. The declaration, and amount of any future dividends will
be made at the discretion of the board of directors, and will depend upon, among other things, the results of our operations,
cash flows and financial condition, operating and capital requirements, and other factors as the board of directors considers
relevant. There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect
to the amount of any such dividend.  If you require dividend income, you should not rely on an investment in the Company. 
Income received from an investment in the Company will only come from a rise in the market price in the Company’s stock,
which is uncertain and unpredictable.



ITEM 1B. UNRESOLVED STAFF COMMENTS.



Not Applicable.



ITEM 2. PROPERTIES.



Facilities



Law Enterprise, Law Broker, Law Management
and Law Agent shared the same address as their registered address, which is located at 5th Floor, No. 311 3rdSection, Nanjing East Road, Taibei City, Taiwan, with approximately 753.29 square meters of office space. The lease is between
Pengcheng Co., Ltd. and Law Broker, for a term of two years commencing from June 1, 2011 to May 31, 2013 and with a monthly rent
of $11,977 (NT$355,477). Law Broker has also entered into 26 leases for each of its sales and service outlets and training centers
(excluding its headquarter), with an aggregate office size of 14,859 square meters for an aggregate monthly fee of $104,000 (NT$3,086,665).



74







Henan Anhou has two principal offices:
(i) one is located at Building 4F, Hesheng Plaza, No. 26 Yousheng South Road, Jinshui District, Zhengzhou, Henan province, China,
with 6,157 square feet (572 square meters) of office space. The lease agreement is between Ma Rui and Henan Anhou. The original
lease term was from January 1, 2008 to December 30, 2010 for two years, with rent of approximately $4,032 (RMB25,739) per month
payable every three months. On January 10, 2011, the lease was renewed and the term was extended to December 30, 2013 on the same
terms as the original lease agreement; and (ii) the other office is located at Building 4K, Hesheng Plaza, No. 26 Yousheng South
Road, Jinshui District, Zhengzhou, Henan province, China, with 5,597 square feet (520 square meters) of office space. The lease
agreement is between Ma Rui and Henan Anhou. The original lease term was from January 1, 2008 to December 30, 2010 for two years,
with rent of approximately $1,880 (RMB12,000) per month payable every three months. On January 1, 2011, the lease was renewed
and the term extended to December 30, 2013 on the same terms as the original lease agreement.



Sichuan Kangzhuang’s office is located
at A and B areas, 14th Floor Renbao Building, No.57 Dongyu Street, Jinjiang District, Chengdu City, Sichuan province, China, with
8,353 square feet (776 square meters) of office space. The lease is between People's Insurance Company of China, Sichuan Branch
and Sichuan Kangzhuang. The lease term is from September 1, 2006 to August 31, 2011 for four years, with rent of approximately
$4,862 (RMB31,040) per month, to be increased by 8% per annum commencing from September 1, 2008, payable every three months. Upon
the expiration of the above lease, Sichuan Kangzhuang entered into a new lease with People's Insurance Company of China, Sichuan
Branch, which is located at B area, 14th Floor Renbao Building, No.57 Dongyu Street, Chengdu City, Sichuan province, China, with
6,672 square feet (611.85 square meters) of office space. The lease term is from September 1, 2011 to August 31, 2014 for three
years, with rent of $5,313 (RMB33,651.75 ) per month in the first year commencing from September 1, 2011, $5,844 (RMB37,016.62)
per month in the second year commencing from September 1, 2012, $6,429 (RMB40,718.61) per month in the third year commencing from
September 1, 2013, payable every three months.



Jiangsu Law’s office is located
at No. 888 Jintong Road, Xingren County, Tongzhou District, Nantong City, Jiangsu province, China, with 10,764 square feet (1,000
square meters) of office space. The lease is between Xiangriya Industrial (Nantong) Co., Ltd., which is an affiliate of Mao Yi
Hsiao. Jiangsu Law leases such office free of charge and no written agreement has been executed.



75







ITEM 3. LEGAL PROCEEDINGS.



From time to time, we may become involved
in various lawsuits and legal proceedings, which arise, in the ordinary course of business.  However, litigation is subject
to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.
 We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on
our business, financial condition or operating results.



ITEM 4. MINE SAFETY DISCLOSURES



Not applicable.



PART II



ITEM 5. MARKET FOR REGISTRANT’S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.



Market Information



Commencing from August 1, 2012, our common
stock is quoted on the Over the Counter Bulletin Board (“OTCBB”) under the symbol “CUII”. During
the fiscal year ended June 30, 2012, there was no transaction of our common stock. The latest available closed price of our common
stock prior to September 27, 2012 is $5.00.



Shareholders



As of September 28, 2012, there were 126
record owners of our common stock, 1 record owner of our prefer stock.



Transfer Agent



Our transfer agent is Glendale Securities,
Inc., at the address of 15233 Ventura Blvd., Suite 712, Sherman Oaks, CA 91403.



Dividends



We have never declared or paid any cash
dividends or distributions on our common stock. We have incurred operating loss in the past fiscal year. We currently intend to
retain our future earnings, if any, to support operations and to finance future growth and expansion and, therefore, do not anticipate
paying any cash dividends on our common stock in the foreseeable future.



76







Securities Authorized for Issuance under
Equity Compensation Plans



Pursuant to the provisions of the Acquisition
Agreement dated August 24, 2012, subsequent to the consummation of the share acquisition and within 3 months after August 24,
2012, the Company will set up an employee stock and option pool (the “ESOP”), consisting of options, upon exercise,
convertible into up to 2 million shares of common stock of the Company, for certain Law Broker key employees. Law Broker, being
the only actively operated subsidiary in Taiwan, primarily engages in insurance brokerage and insurance agency service business
across Taiwan. Upon satisfaction of respective performance criteria of Law Broker employees, the board of directors of Law Broker
may submit its recommendation to the Company for its approval and issuance of such options under the ESOP. Details of terms and
conditions on the said ESOP shall be set forth in separate ESOP documents duly approved by the Company. As of September 28, 2012,
the Company has not yet set up the ESOP.



Options and Warrants



As of September 28, 2012, we had no outstanding
options or warrants.



ITEM 6. SELECTED FINANCIAL DATA.



Not applicable.



ITEM 7. MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.



The following discussion contains forward-looking
statements. Forward-looking statements are identified by words and phrases such as “anticipate”, “intend”,
“expect”, and words and phrases of similar import. We caution investors that forward-looking statements are predictions
based on our current expectations about future events and are not guarantees of future performance. Actual results, performance
or achievements could differ materially from those expressed or implied by the forward-looking statements due to risks, uncertainties
and assumptions that are difficult to predict. We encourage you to read those risk factors carefully along with the other information
provided in this current report and in our other filings with the SEC before deciding to invest in our stock or to maintain or
change your investment. We undertake no obligation to revise or update any forward-looking statement for any reason, except as
required by law.



77







You should read this Management’s
Discussion and Analysis in conjunction with the Consolidated Financial Statements and Related Notes.



Overview



China United Insurance Service, Inc. (“China
United”) is a Delaware corporation organized on June 4, 2010 by Mao Yi Hsiao, a Taiwanese citizen, as a listing vehicle
for ZLI Holdings Limited (“CU Hong Kong”) to be quoted on the Over the Counter Bulletin Board (the “OTCBB”).
CU Hong Kong, a wholly owned Hong Kong-based subsidiary of China United, was founded by China United on July 12, 2010 under Hong
Kong laws. On October 20, 2010, CU Hong Kong founded a wholly foreign owned enterprise, Zhengzhou Zhonglian Hengfu Business Consulting
Co., Ltd. (“CU WFOE”) in Henan province in the PRC.



On January 16, 2011, China
United issued 20,000,000 shares of common stock, $0.00001 par value per share, to several non U.S. persons for their
investment of $300,000 in cash in the Company’s subsidiaries.  The issuance was made pursuant to an exemption from
registration contained in Regulation S under the Securities Act of 1933, as amended. The consideration was fully paid as of
June 30, 2012. On January 28, 2011, the Company increased the number of authorized shares from 30,000,000 shares of common
stock to 100,000,000 shares of common and 10,000,000 shares of preferred stock.



Henan Law Anhou Insurance Agency Co.,
Ltd. (“Henan Anhou”, formerly known as Zhengzhou Anhou Insurance Agency Co., Ltd.) was incorporated in the People’s
Republic of China (“the PRC”) on August 20, 2003. Henan Anhou provides insurance agency services in the PRC. On August
16, 2010, Ms. Zhu Shuqin contributed RMB8,000,000 ($1,175,440) in cash to Henan Anhou and controlled 80% of Henan Anhou shares.



Sichuan Kangzhuang Insurance Agency Co.,
Ltd. (“Sichuan Kangzhuang”) was founded on July 10, 2006 in Sichuan province in the PRC and provides insurance agency
services in the PRC.  On August 23, 2010, at Sichuan Kangzhuang’s general meeting of shareholders, its shareholders
voted to sell their shares in Sichuan Kangzhuang to Henan Anhou for RMB532,622 ($83,444). On September 6, 2010, the equity transfer
agreements were signed between Henan Anhou and each shareholder of Sichuan Kangzhuang.





78











Jiangsu Law Insurance Broker Co., Ltd.
(“Jiangsu Law”) was founded on September 19, 2005 in Jiangsu Province in the PRC and provides insurance brokerage services
in the PRC. On August 12, 2010, at Jiangsu Law’s general meeting of shareholders, its shareholders voted to sell their shares
to Henan Anhou for RMB518,000 ($81,153) and Henan Anhou increased Jiangsu Law’s paid-in capital to RMB10,000,000 ($1,566,661)
from RMB5,180,000 ($811,531) on January 18, 2011 to meet the PRC paid-in capital requirements for insurance brokerage companies.
On September 28, 2010, the equity transfer agreements were signed between Henan Anhou and each shareholder of Jiangsu Law.



Recent Acquisition of AHFL



On August 24, 2012, the Company acquired
all of the issued and outstanding shares of Action Holdings Financial Limited (“AHFL”), a limited liability company
incorporated under the laws of British Virgin Islands on April 30, 2012, together with its subsidiaries in Taiwan. Subsequent to
the acquisition, AHFL becomes a 100% subsidiary of the Company.



AHFL holds 65.95% of the issued and outstanding
shares of Law Enterprise Co., Ltd. (“Law Enterprise”), a company limited by shares incorporated under the laws of Taiwan
on January 30, 1996. Law Enterprise holds (i) 100% Law Insurance Broker Co., Ltd. (“Law Broker”), a company limited
by shares incorporated in Taiwan on October 9, 1992; (ii) 97.84% of Law Risk Management & Consultant Co., Ltd. (“Law
Management”), a company limited by shares incorporated in Taiwan on December 5, 1987; and (iii) 96% of Law Insurance Agent
Co., Ltd. (“Law Agent” collectively with “Law Enterprise”, “Law Broker” and “Law Agent”,
the “Taiwan Subsidiaries”, each a “Taiwan Subsidiary”), a limited liability company incorporated in Taiwan
on June 3, 2000.



Law Enterprise acts as a holding company
of its operating subsidiaries in Taiwan. Law Broker primarily engages in insurance brokerage and insurance agency service business
across Taiwan, while Law Management and Law Agent are not in active operation. We operate our Taiwan business primarily through
Law Broker.



Due to PRC legal restrictions on foreign
ownership and investment in insurance agency and brokerage businesses in China, especially those on qualifications as well as capital
requirement of the investors, we operate our business primarily through our Consolidated Affiliated Entities (“CAE”)
in China. We do not hold equity interests in our CAE. However, through the VIE Agreements with these CAE and their respective shareholders,
we effectively control, and are able to derive substantially all of the economic benefits from, these CAE.



Our CAE in China are variable interest
entities through which all of our insurance services are operated. It is through the VIE Agreements that we have effective control
of the CAE, which allows us to consolidate the financial results of the CAE in our financial statements.  If Henan Anhou and its
shareholders fail to perform their obligations under the VIE Agreements, we could be limited in our ability to enforce the VIE
Agreements that give us effective control. Furthermore, if we are unable to maintain effective control of our CAE, we would not
be able to continue to consolidate the CAE’s financial results with our financial results. During fiscal years ended June
30, 2011 and 2012, 100% of our revenues in our consolidated financial statements were derived from our CAE. For more information
see “Risk Factors-Risks Related to Our Corporate Structure.”





79











On January 17, 2011, CU WFOE and Henan
Anhou and its shareholders entered into a series of agreements known as variable interest agreements (the “VIE Agreements”)
pursuant to which CU WFOE has executed effective control over Henan Anhou through these contractual arrangements.



As of June 30, 2012,
through our CAE, we had 13 branches and 21 offices, and  1,179 individual sub-agents in Henan, Sichuan and
Jiangsu provinces.



Critical Accounting Policies



The preparation of financial statements
in conformity with Generally Accepted Accounting Principles in the United States of America (“US GAAP”) requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the dates of the consolidated financial statements and the amounts of revenues and expenses during the reporting
periods. Management makes these estimates using the best information available when the estimates are made.  However, actual
results could differ materially from those results. While there are a number of significant accounting policies affecting the Company’s
financial statements; the Company believes the following critical accounting policies involve the most complex, difficult and subjective
estimates and judgments The Company has not made any material changes in the methodology used in these accounting polices during
the past two years.





80







Principles of consolidation



The accompanying consolidated financial
statements include the balance sheets of China United, its wholly owned subsidiaries CU Hong Kong and CU WFOE, the variable interest
entity Henan Anhou and wholly owned subsidiaries Sichuan Kangzhuang and Jiangsu Law, as of June 30, 2012 and 2011. As Henan Anhou
acquired 100% of Sichuan Kangzhuang on September 6, 2010, for accounting convenience, its operating results from September 1, 2010
through June 30, 2011 and the balance sheet of Sichuan Kangzhuang as of June 30, 2011 were included in the consolidated financial
statements. As Henan Anhou acquired 100% of Jiangsu Law on September 30, 2010, the operating results of Jiangsu Law from October
1, 2010 through June 30, 2011 and the balance sheet as of June 30, 2011 were included in the consolidated financial statements.
All significant inter-company accounts and transactions were eliminated in consolidation.



Accounts receivable



The Company reviews its accounts receivable
on a regular basis to determine if a bad debt allowance is necessary. Management reviews the composition of accounts receivable
and analyzes the age of receivable outstanding, customer concentrations, customer credit worthiness, current economic trends and
changes in customer payment patterns to evaluate the necessity of making such allowance.



Revenue recognition



In accordance with US GAAP, the Company
recognizes revenue when the following have occurred: persuasive evidence of an agreement between the insurance companies and insured
exists, services were provided, the fees for such services are fixed or determinable and collectability of the fee is reasonably
assured. Insurance agency services are considered to be rendered and completed, and revenue is recognized, when an insurance policy
becomes effective, that is, when the signed insurance policy is in place and the premium is collected from the insured. The Company
has met all the four criteria of revenue recognition when the premiums are collected by the respective insurance companies and
not before, because collectability is not ensured until receipt of the premium. Any subsequent commission adjustments in connection
with policy cancellations which have been de minims to date are recognized upon notification from the insurance carriers.





81







The Company pays commissions to its sub-agents
when an insurance product is sold by the sub-agent. The Company recognizes commission revenue on a gross basis. The commissions
paid by the Company to its sub-agents are recorded as costs of services.



Income taxes



The Company utilizes ASC 740 “Income
Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of
events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized
for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting
amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences
are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the
amount expected to be realized.



When tax returns are filed, it is likely
some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about
the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position
is recognized in the financial statements in the period during which, based on all available evidence, management believes it is
more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes,
if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not
recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement
with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured
as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any
associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized
tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in
the statements of operations and other comprehensive income (loss).



The Company was not subjected to income
tax examinations by taxing authorities during the current and past fiscal years. During the years ended June 30, 2012 and 2011,
the Company did not recognize any interest or penalties.





82







Impairment of Long-Lived Assets



In accordance with ASC 360, “Property,
Plant and Equipment” the Company reviews the carrying values of long-lived assets whenever facts and circumstances indicate
that the assets may be impaired.  Recoverability of assets to be held and used is measured by a comparison of the carrying
amount of an asset to future net undiscounted cash flows expected to be generated by the asset.  If an asset is considered
impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair
value.  Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs of disposal.



Goodwill



Goodwill arose from the acquisition of
Sichuan Kangzhuang. Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired.
Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired,
using the prescribed two-step process under US GAAP. The first step screens for potential impairment of goodwill to determine if
the fair value of the reporting unit is less than its carrying value, while the second step measures the amount of goodwill impairment,
if any, by comparing the implied fair value of goodwill to its carrying value.



Results of Operations for the year ended
June 30,



|                                        |  |      |           |   |      |  |           | 2011 to  2012 | 
|--------------------------------------- |  | ---- | --------- | - | ---- |  | --------- | ------------- | 
|                                        |  |      |           |   |      |  |           | Percentage    | 
|                                        |  | 2012 |           |   | 2011 |  |           | Change        | 
|                                        |  | $    |           |   | $    |  |           | %             | 
|Revenues                                |  |      | 3,153,776 |   |      |  | 2,740,519 |               | 
|Cost of revenues                        |  |      | 2,363,581 |   |      |  | 1,897,359 |               | 
|Gross profit                            |  |      | 790,195   |   |      |  | 843,160   |               | 
|General and administrative expenses     |  |      | 1,166,841 |   |      |  | 1,095,869 |               | 
|Loss from operations                    |  |      | (376,646  | ) |      |  | (252,709  | )             | 
|Other income (expense), net:            |  |      |           |   |      |  |           |               | 
|Interest income                         |  |      | 4,756     |   |      |  | 12,760    |               | 
|Gain on acquisition of subsidiary       |  |      | -         |   |      |  | 267,156   |               | 
|Other, net                              |  |      | (18       | ) |      |  | (2,753    | )             | 
|Net income / (loss) before income taxes |  |      | (371,908  | ) |      |  | 24,454    |               | 
|Income tax expense                      |  |      | (268,440  | ) |      |  | 354,441   |               | 
|Net loss                                |  |      | (103,468  | ) |      |  | (329,987  | )             | 





83







Year June 30, 2012 Compared to Year
Ended June 30, 2011



Revenues



Revenues increased 15% from $2,740,519
for the year ended June 30, 2011 to $3,153,776 for the year ended June 30, 2012. The increase in commissions and fees was contributed
to the growth of our sub-agents team.



Cost of revenues and gross profit



The cost of revenues (“COR”)
for the year ended June 30, 2012 increased to $2,363,581, or 25%, compared with $1,897,359 for the year ended June 30, 2011. Over
90% of the COR is commissions paid to our sales agents. Therefore the COR increased as revenues grew.



The gross profit decreased to $790,195
for the year ended June 30, 2012, or 6%, compared with $843,160 for the year ended June 30, 2011. The gross margin decreased from
31% to 25% due to intensive competition. The decrease in our gross profit ratio is due to the need to pay a higher portion of commission
to sub-agents. As China’s economic growth slowed down, the incremental demand for insurance products decreased. As a result,
we were required to pay higher commission to individual sub-agents. We believe paying higher commission will help us to keep the
team stable in long term. The increase in sub-agent commissions affected our profitability.



General and administrative expenses



The general and administrative (“G&A”)
expenses principally comprise of salaries and benefits for our administrative staff, office rental expenses, travel expenses, depreciation
and amortization, entertainment expenses, and office supply expenses for our administrative staff.



For the year ended June 30, 2012, G&A
expenses were $1,166,841, and increased by $70,972 compared with the year ended June 30, 2011. The 6% increase is mainly due to
the increase of China’s price index and our expansion of our business.



Other income / (expenses)-net



For the year ended June 30, 2012, no material
other income and expenses such as gain on acquisition of subsidiary occurred.



Income tax



CU WFOE, the Company’s subsidiary,
and the VIEs in the PRC, are governed by the Income Tax Law of the PRC concerning the private-run enterprises, which are generally
subject to tax at 25% on income reported in the statutory financial statements after appropriated adjustments. Except for Jiangsu
Law, according to the requirement of local tax authorities, the tax basis is deemed as 10% its total revenue, instead of net income.
The tax rate of Jiangsu Law is also 25%.





84







According to tax regulations by Chinese
tax authorities effective January 1, 2008, commissions paid to sub-agents in excess of 5% of the commission revenue were not tax
deductible. Therefore, as of June 30 2011, Henan Anhou and Sichuan Kangzhuang accrued income tax payable of $658,344 for deductible
commissions occurred before June 30, 2011.



According to China State Administration
of Taxation #15 Announcement in year 2012, effective from 2011 tax year, such commissions can be fully deducted. Therefore we reversed
the tax payable of $283,880 that was accrued in 2011 tax year for such deductible commission and credited as income tax benefit
in fiscal year 2012.



Income tax of $15,770 and nil was paid
during the year ended June 30, 2012 and 2011, respectively. The balance of income tax payable as of June 30, 2012 mainly represents
the income tax accrued for the un-deductible commission paid to sub-agents before tax year 2011 and is due upon written request
of the local tax bureau.



The income tax benefit was $268,440 for
the years ended June 30, 2012. The income tax benefit was because the reversed tax payable for the deductible commission was recorded
as negative income tax expense.



Liquidity and Capital Resources



On August 24, 2012, the Company acquired
all of the issued and outstanding shares of Action Holdings Financial Limited (“AHFL”), a LLC incorporated under the
laws of British Virgin Islands on April 30, 2012, together with its subsidiaries in Taiwan. Pursuant to the provisions of the Acquisition
Agreement and in exchange for all of the issued and outstanding shares of AHFL, the Company will pay NT$15 million ($500,815) and
NT$7.5 million ($250,095) in cash in two installments, subject to terms and conditions therein. The Company plan to use future
cash flow generated by future operation or advance from shareholders.



Off Balance Sheet Arrangements



As of June 30, 2012, the Company had no
off balance sheet arrangements.



ITEM 7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURE ABOUT MARKET RISK.



Not applicable.





85







ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA.



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



|Report of Independent Registered Public Accounting Firm                                                         |  | F-2
|--------------------------------------------------------------------------------------------------------------- |  | ---
|                                                                                                                |  |    
|Consolidated Balance Sheets as of June 30, 2012 and 2011                                                        |  | F-3
|                                                                                                                |  |    
|Consolidated Statements of Operations and Other Comprehensive Income for the years ended June 30, 2012 and 2011 |  | F-4
|                                                                                                                |  |    
|Consolidated Statements of Cash Flows for the years ended June 30, 2012 and 2011                                |  | F-5
|                                                                                                                |  |    
|Consolidated Statements of Changes in Stockholder's Equity/(Deficit) for the years ended June 30, 2012 and 2011 |  | F-6
|                                                                                                                |  |    
|Notes to the Consolidated Financial Statements                                                                  |  | F-7





86











Report
of Independent Registered Public Accounting Firm









To the Board of Directors and Shareholders of

China United Insurance Service, Inc.



We have audited the accompanying consolidated
balance sheets of China United Insurance Service, Inc. as of June 30, 2012, and 2011 and the related consolidated statements of
operations and comprehensive loss, stockholders’ equity and cash flows for the years then ended. 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 we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit procedures appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe our audits provide a reasonable basis
for our opinion.



In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the consolidated financial position of China United Insurance
Service, Inc. as of June 30, 2012 and 2011, and the consolidated results of its operations and its consolidated cash flows for
the years ended June 30, 2012 and 2011, in conformity with US generally accepted accounting principles.









Goldman Kurland and Mohidin LLP

September 26, 2012

Encino, California





F-2









CHINA UNITED INSURANCE SERVICE, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                   |  | June 30, 
2012 |            |   | June 30, 
2011 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | - | -------------- | -
|                                                                                                                                                   |  |                |            |   |                |  
|ASSETS                                                                                                                                             |  |                |            |   |                |  
|Current assets                                                                                                                                     |  |                |            |   |                |  
|Cash and equivalents                                                                                                                               |  | $              | 1,258,211  |   |                | $
|Accounts receivable, net                                                                                                                           |  |                | 184,767    |   |                |  
|Other current assets                                                                                                                               |  |                | 48,640     |   |                |  
|Total current assets                                                                                                                               |  |                | 1,491,618  |   |                |  
|                                                                                                                                                   |  |                |            |   |                |  
|Property, plant and equipment, net                                                                                                                 |  |                | 114,945    |   |                |  
|Restricted cash and deposits                                                                                                                       |  |                | 113,217    |   |                |  
|Goodwill                                                                                                                                           |  |                | 118,855    |   |                |  
|TOTAL ASSETS                                                                                                                                       |  | $              | 1,838,635  |   |                | $
|                                                                                                                                                   |  |                |            |   |                |  
|LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                               |  |                |            |   |                |  
|Current liabilities                                                                                                                                |  |                |            |   |                |  
|Taxes payable                                                                                                                                      |  | $              | 405,723    |   |                | $
|Other current liabilities                                                                                                                          |  |                | 286,909    |   |                |  
|Due to related parties                                                                                                                             |  |                | 445,332    |   |                |  
|TOTAL CURRENT LIABILITIES                                                                                                                          |  |                | 1,137,964  |   |                |  
|                                                                                                                                                   |  |                |            |   |                |  
|COMMITMENTS AND CONTINGENCIES                                                                                                                      |  |                | -          |   |                |  
|                                                                                                                                                   |  |                |            |   |                |  
|STOCKHOLDERS’ EQUITY                                                                                                                               |  |                |            |   |                |  
|Preferred stock, par value $0.00001, 10,000,000 authorized, none issued and outstanding                                                            |  |                | -          |   |                |  
|Common stock, par value $0.00001, 100,000,000 authorized, 20,100,503 and 20,000,000 issued and outstanding at June 30, 2012 and 2011, respectively |  |                | 201        |   |                |  
|Additional paid-in capital                                                                                                                         |  |                | 2,674,692  |   |                |  
|Accumulated other comprehensive loss                                                                                                               |  |                | (55,250    | ) |                |  
|Accumulated deficit                                                                                                                                |  |                | (1,918,972 | ) |                |  
|                                                                                                                                                   |  |                |            |   |                |  
|TOTAL STOCKHOLDERS’ EQUITY                                                                                                                         |  |                | 700,671    |   |                |  
|TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                         |  | $              | 1,838,635  |   |                | $



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





F-3







CHINA UNITED INSURANCE SERVICE, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS



|                                     |  | Year Ended June 30 |           
|------------------------------------ |  | ------------------ | ----------
|                                     |  | 2012               |           
|Revenues                             |  | $                  | 3,153,776 
|Cost of revenue                      |  |                    | 2,363,581 
|Gross profit                         |  |                    | 790,195   
|Operating expenses:                  |  |                    |           
|General and administrative           |  |                    | 1,166,841 
|Loss from operations                 |  |                    | (376,646  
|Other income / (expenses)            |  |                    |           
|Interest income                      |  |                    | 4,756     
|Gain on acquisition of subsidiary    |  |                    | -         
|Other - net                          |  |                    | (18       
|                                     |  |                    | 4,738     
|                                     |  |                    |           
|Income / (loss) before income taxes  |  |                    | (371,908  
|Income tax expense (benefit)         |  |                    | (268,440  
|Net loss                             |  |                    | (103,468  
|Other comprehensive income           |  |                    | 13,972    
|Comprehensive loss                   |  | $                  | (89,496   
|Weighted average shares outstanding: |  |                    |           
|Basic and diluted                    |  |                    | 20,100,503
|Loss per share:                      |  |                    |           
|Basic and diluted                    |  |                    | (0.00     



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





F-4









CHINA UNITED INSURANCE SERVICE, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                |  | Year Ended June 30 |          
|----------------------------------------------- |  | ------------------ | ---------
|                                                |  | 2012               |          
|Cash flows from operating activities:           |  |                    |          
|Net loss                                        |  | $                  | (103,468 
|Adjustments to reconcile net loss to net cash   |  |                    |          
|(used in) operating activities:                 |  |                    |          
|Depreciation                                    |  |                    | 39,366   
|Gain on bargain purchase of subsidiary          |  |                    | -        
|Share-based payment                             |  |                    | 1,508    
|Changes in operating assets and liabilities:    |  |                    |          
|Accounts receivable                             |  |                    | (102,830 
|Other current assets                            |  |                    | (7,051   
|Taxes payable                                   |  |                    | (295,807 
|Other current liabilities                       |  |                    | 123,787  
|Total Adjustments                               |  |                    | (241,027 
|Net cash (used) in operating activities         |  |                    | (344,495 
|                                                |  |                    |          
|Cash flows from investing activities:           |  |                    |          
|Cash paid on acquisition of subsidiaries        |  |                    | -        
|Cash increase due to acquisition                |  |                    | -        
|Purchase of property, plant and equipment       |  |                    | (24,557  
|Net cash (used in) investing activities         |  |                    | (24,557  
|                                                |  |                    |          
|Cash flows from financing activities:           |  |                    |          
|Contributed capital                             |  |                    | -        
|Repayment on borrowings from related parties    |  |                    | (18,157  
|Proceeds from related parties                   |  |                    | 323,029  
|Net cash provided by financing activities       |  |                    | 304,872  
|Foreign currency translation                    |  |                    | 25,178   
|Net increase/(decrease) in cash and equivalents |  |                    | (39,002  
|Cash and equivalents, beginning balance         |  |                    | 1,297,213
|Cash and equivalents, ending balance            |  | $                  | 1,258,211
|Interest paid                                   |  | $                  | -        
|Income tax paid                                 |  | $                  | 15,720   



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





F-5







CHINA UNITED INSURANCE SERVICE, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
EQUITY



|                                |  | Common shares |            |  | Amount |   |     | Additional  Paid -in Capital |  |   | Other  comprehensive loss |  |  | Accumulated Deficit |         |   | Total |  
|------------------------------- |  | ------------- | ---------- |  | ------ | - | --- | ---------------------------- |  | - | ------------------------- |  |  | ------------------- | ------- | - | ----- | -
|Balance July 1, 2010            |  |               | 20,000,000 |  |        |   | 200 |                              |  |   | 1,727,986                 |  |  |                     | (70,841 | ) |       |  
|                                |  |               |            |  |        |   |     |                              |  |   |                           |  |  |                     |         |   |       |  
|Related party debt cancellation |  |               | -          |  |        |   | -   |                              |  |   | 945,200                   |  |  |                     | -       |   |       |  
|Foreign currency translation    |  |               | -          |  |        |   | -   |                              |  |   | -                         |  |  |                     | 1,619   |   |       |  
|Net loss                        |  |               | -          |  |        |   | -   |                              |  |   | -                         |  |  |                     | -       |   |       |  
|Balance June 30, 2011           |  |               | 20,000,000 |  |        | $ | 200 |                              |  | $ | 2,673,186                 |  |  | $                   | (69,222 | ) |       | $
|Share-based payment             |  |               | 100,503    |  |        |   | 1   |                              |  |   | 1,506                     |  |  |                     | -       |   |       |  
|Foreign currency translation    |  |               | -          |  |        |   | -   |                              |  |   | -                         |  |  |                     | 13,972  |   |       |  
|Net loss                        |  |               | -          |  |        |   | -   |                              |  |   | -                         |  |  |                     | -       |   |       |  
|Balance June 30, 2012           |  |               | 20,100,503 |  |        | $ | 201 |                              |  | $ | 2,674,692                 |  |  | $                   | (55,250 | ) |       | $









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





F-6







CHINA UNITED INSURANCE SERVICE, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011



NOTE 1 - ORGANIZATION AND PRINCIPAL
ACTIVITIES



Organization and nature of operations



China United Insurance Service, Inc. (“China
United” or the “Company”) is a Delaware corporation organized on June 4, 2010 by Mao Yi Hsiao, a Taiwanese citizen,
as a listing vehicle for ZLI Holdings Limited (“CU Hong Kong”) to be quoted on the United States Over the Counter Bulletin
Board (the “OTCBB”). CU Hong Kong, a wholly owned Hong Kong-based subsidiary of China United, was founded by China
United, on July 12, 2010 under Hong Kong law. On October 20, 2010, CU Hong Kong founded a wholly foreign owned enterprise, Zhengzhou
Hongliang Hengfu Business Consulting Co., Ltd. (“CU WFOE”) in Henan province in the People’s Republic of China
(“PRC”).



On January 16, 2011, the Company issued
20,000,000 shares of common stock, $0.00001 par value, to several non U.S. persons for $300,000. As of June 30, 2012, the $300,000
was paid to the accounts of CU WFOE. The issuance was made pursuant to an exemption from registration in Regulation S under the
Securities Act of 1933, as amended. As a result of the issuance of 20,000,000 shares, the owners of Henan Anhou (accounting acquirer)
owned 100% of the Company. Accordingly, this transaction was accounted for as a recapitalization of Henan Anhou. The historical
financial statements presented are those of the accounting acquirer for all periods presented. On January 28, 2011, the Company
increased the number of authorized shares from 30,000,000 to 100,000,000 and 10,000,000 shares of preferred stock.



Henan Law Anhou Insurance Agency Co., Ltd.
(“Henan Anhou”, formerly known as Zhengzhou Anhou Insurance Agency Co., Ltd.) was incorporated in the PRC on August
20, 2003. Henan Anhou provides insurance agency services in the PRC.



Sichuan Kangzhuang Insurance Agency Co.,
Ltd. (“Sichuan Kangzhuang”) was founded on July 10, 2006 in the Sichuan province in the PRC and provides insurance
agency services in the PRC.  On August 23, 2010, at Sichuan Kangzhuang’s general meeting of shareholders, its shareholders
voted to sell their shares in Sichuan Kangzhuang to Henan Anhou for RMB532,622 ($78,318). On September 6, 2010, the equity transfer
agreements were signed between Henan Anhou and each shareholder of Sichuan Kangzhuang. Sichuan Kangzhuang then had net liabilities
of RMB219,123 ($32,134). Goodwill of RMB751,745 ($110,452) was therefore recorded. Goodwill in the balance sheet differs from the
acquisition date amount due to changes in exchange rates.



Jiangsu Law Insurance Broker Co., Ltd.
(“Jiangsu Law”) was founded on May 18, 2005 in Jiangsu Province in the PRC. Jiangsu Law provides insurance brokerage
services in the PRC. On August 12, 2010, at Jiangsu Law’s general meeting of shareholders, its shareholders voted to sell  their
shares in Jiangsu Law to Henan Anhou for RMB518,000 ($75,475) and Henan Anhou increased Jiangsu Law’s paid-in capital
to RMB10,000,000 ($1,355,150) from RMB5,180,000 ($625,113), on January 18, 2011, to meet the PRC paid-in capital requirements for
insurance brokerage companies. On September 28, 2010, the equity transfer agreements were signed between Henan Anhou and each shareholder
of Jiangsu Law. The consideration is due upon request and had not been paid as at June 30, 2012. On acquisition date, Jiangsu Law
had net assets of RMB2,286,842 ($341,425). Based on the purchase price allocation, the fair value of the identifiable assets and
liabilities assumed exceeded the fair value of the consideration paid. As a result, the Company recorded a gain on acquisition
of RMB1,768,842 ($267,156).



F-7







On January 17, 2011, CU WFOE and Henan
Anhou and its shareholders entered into a series of agreements known as variable interest agreements (the “VIE Agreements”)
pursuant to which CU WFOE has effective control over Henan Anhou. The corporate structure after the series of VIE agreements is
as follows:







The carrying amount of the total assets
and total liabilities of the VIEs as of June 30, 2012 was $1,646,207 and $1,135,927, respectively. There was no pledge or collateralization
of the VIEs' assets. Creditors of China United have no recourse to the general credit of the VIEs. Currently there is
no contractual arrangement that could require the Company to provide additional financial support its consolidated VIEs. As the
Company conducts substantial business in the PRC mainly through the VIEs, the Company may provide such support on a discretionary
basis in the future, which could expose the Company to a loss.



On August 24, 2012 (the “Closing
Date”), the Company entered into an Acquisition Agreement with Action Holdings Financial Limited (“AHFL”), a
British Virgin Islands company, and stockholders of AHFL. AHFL holds 65.95% of the issued and outstanding shares of Law Enterprise
Co., Ltd. (“Law Enterprise”), a company limited by shares incorporated under the laws of Taiwan on January 30, 1996.
Law Enterprise holds (i) 100% Law Insurance Broker Co., Ltd. (“Law Broker”), a company limited by shares incorporated
in Taiwan on October 9, 1992; (ii) 97.84% of Law Risk Management & Consultant Co., Ltd. (“Law Management”), a company
limited by shares incorporated in Taiwan on December 5, 1987; and (iii) 96% of Law Insurance Agent Co., Ltd. (“Law Agent”
collectively with “Law Enterprise”, “Law Broker” and “Law Agent”, the “Taiwan Subsidiaries”,
each a “Taiwan Subsidiary”), a LLC incorporated in Taiwan on June 3, 2000.



Pursuant to the provisions of the Acquisition
Agreement and in exchange for all of the issued and outstanding shares of AHFL, the Company will (i) issue eight million shares
of common stock of the Company to the shareholders of AHFL; (ii) issue two million shares of common stock of the Company to certain
employees of Law Broker; (iii) create an employee stock option pool, consisting of available options, exercisable for up to two
million shares of common stock of the Company; and (iv) pay NT$15 million ($500,815) and NT$7.5 million ($250,095) in cash in two
installments, subject to terms and conditions therein. Upon the completion of the acquisition, the former shareholders of AHFL
and certain employees of Law Broker will receive a total of 10,000,000 shares of common stock of the Company. This will constitute
34.36% of the common stock and 25.58% of the voting power of the Company.





F-8







Going Concern



The accompanying consolidated financial
statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. The Company has incurred net operating losses since inception. The Company faces the risks common
to companies that are relatively new, including capitalization and uncertainty of funding sources, high initial expenditure levels,
uncertain revenue streams, and difficulties in managing growth. At June 30, 2012, the Company had an accumulated deficit of $1,918,972.
The Company’s recurring losses raise substantial doubt about its ability to continue as a going concern. The Company’s
consolidated financial statements do not reflect any adjustments that might result from the outcome of this uncertainty.



On August 24, 2012, the Company acquired
an indirect 65.95% equity interest in a Taiwanese Holding Company which carries our insurance brokerage business in Taiwan (See
Note 16).



Management also plans to obtain funding
through loans and equity. In addition, management is seeking additional merger candidates. Management believes its current and
future plans enable it to continue as a going concern.



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES



Principles of Consolidation



The accompanying consolidated financial
statements include the accounts of China United and its subsidiaries. All significant intercompany transactions and balances were
eliminated in consolidation.



Reclassification



Certain prior period account descriptions
were reclassified to conform to the consolidated balance sheet as of June 30, 2012.



Basis of Presentation



The Company’s consolidated financial
statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US
GAAP").   The functional currency for all our subsidiaries in the PRC is Chinese Renminbi (“RMB”); the
functional currency of our subsidiary in Hong Kong is the Hong Kong dollar (“HKD”); the functional currency of China
United is the US dollar. The accompanying consolidated financial statements were translated and presented in US dollars (“USD”
or “$”).



F-9







Use of Estimates



The preparation of the consolidated financial
statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements
and the amounts of revenues and expenses during the reporting periods.



Management makes these estimates using
the best information available at the time the estimates are made; however, actual results could differ materially from those results.



Risks and Uncertainties



The Company is subject to substantial risks
from, among other things, intense competition associated with the industry in general, other risks associated with financing, liquidity
requirements, rapidly changing customer requirements, limited operating history, and foreign currency exchange rates.



Comprehensive Income



The Company follows Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 220 (“ASC 220”), “Reporting
Comprehensive Income”, which establishes standards for the reporting and display of comprehensive income, its components
and accumulated balances in a full set of general purpose financial statements. ASC 220 defines comprehensive income as net income
and all changes to the statements of stockholders' equity, except those due to investments by stockholders, changes in paid-in
capital and distributions to stockholders, including adjustments to minimum pension liabilities, accumulated foreign currency translation,
and unrealized gains or losses on marketable securities.



Foreign Currency Transactions



The consolidated financial statements were
translated into USD in accordance with FASB ASC Topic 830 "Foreign Currency Transaction".  According to the statement,
all assets and liabilities were translated at the exchange rate on the balance sheet dates; stockholders’ equity is translated
at historical rates and statement of operations items are translated at the weighted average exchange rate for the period. The
resulting translation adjustments are reported under other comprehensive income in accordance with ASC 220 “Comprehensive
Income". Gains and losses resulting from the translations of foreign currency transactions are reflected in the consolidated
statements of operations.



Cash and Equivalents



For Statements of Cash Flows purposes,
the Company considers cash on hand and in banks, including certificates of deposit and other highly-liquid investments with maturities
of three months or less when purchased, to be cash and equivalents.



F-10







The Company maintains cash with various
banks in China and Hong Kong.  Cash accounts are not insured or otherwise protected.  Should any bank holding cash become
insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose the cash with that bank; however, the
Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in
bank accounts.



Accounts Receivable



The Company reviews its accounts receivable
regularly to determine if a bad debt allowance is necessary at each period-end. Management reviews the composition of accounts
receivable and analyzes the age of receivables outstanding, customer concentrations, customer credit worthiness, current economic
trends and changes in customer payment patterns to evaluate the necessity of making such allowance.



Property, Plant and Equipment



Property, plant and equipment are recorded
at cost.  Gain or loss on disposal of property, plant or equipment will be recorded in income at disposal. Expenditures for
betterments, renewals and additions are capitalized. Repairs and maintenance expenses are expensed as incurred.



Depreciation for financial reporting purposes
is provided using the straight-line method over a useful life of five years.



Impairment of Long-Lived Assets



In accordance with ASC 360, “Property,
Plant and Equipment”, the Company reviews the carrying values of long-lived assets whenever facts and circumstances indicate
an asset may be impaired.  Recoverability of assets to be held and used is measured by comparing the carrying amount of an
asset to future net undiscounted cash flows expected to be generated by it. If an asset is considered impaired, the impairment
recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value.  Assets to be disposed
of are reported at the lower of the carrying amount or fair value, less costs of disposal. No impairment was recognized for the
year ended June 30, 2012 or 2011.



Goodwill



Goodwill arose from the acquisition of
Sichuan Kangzhuang (Note 7). Goodwill represents the excess of the cost of an acquisition over the fair value (“FV”)
of the net assets acquired. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances
indicate it might be impaired, using the prescribed two-step process under US GAAP. The first step screens for potential impairment
of goodwill to determine if the FV of the reporting unit is less than its carrying value, while the second step measures the amount
of goodwill impairment, if any, by comparing the implied FV of goodwill to its carrying value. As of June 30, 2012, there are no
indications of any impairment.



F-11







Revenue Recognition



The Company’s revenue is derived
from insurance agency and brokerage services. The Company, through its VIEs in the PRC, sells insurance products to customers,
and obtains commissions from the respective insurance companies according to the terms of each insurance company service agreement.
The Company recognizes revenue when the following have occurred: persuasive evidence of an agreement between the insurance company
and insured exists, services were provided, the fee for such services is fixed or determinable and collectability of the fee is
reasonably assured. Insurance agency services are considered complete, and revenue is recognized, when an insurance policy becomes
effective, that is, when the signed insurance policy is in place and the premium is collected from the insured. The Company has
met all the four criteria of revenue recognition when the premiums are collected by the respective insurance companies and not
before because collectability is not ensured until receipt of the premium. Accordingly, the Company does not accrue commissions
and fees prior to the receipt of the related commissions from the respective insurance companies. No allowance for cancellation
was recorded, as the management of the Company estimates, based on its past experience, the cancellation of policies rarely occurs.
Any subsequent commission adjustments in connection with policy cancellations have been de minims to date are recognized upon notification
from the insurance carriers.



The Company pays commissions to its sub-agents
when an insurance product is sold by the sub-agent. The Company recognizes commission revenue on a gross basis. The commissions
paid by the Company to its sub-agents are recorded as costs of services.



Income Taxes



The Company utilizes ASC 740, “Income
Taxes”, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events
included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences
in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period
end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be
realized.



When tax returns are filed, it is likely
some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about
the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position
is recognized in the financial statements in the period during which, based on all available evidence, management believes it is
more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes,
if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not
recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement
with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured
as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any
associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized
tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in
the statements of operations and other comprehensive income (loss). As of June 30, 2012, the Company did not have any uncertain
tax positions.



F-12







The Company was not subjected to income
tax examinations by taxing authorities during the current or past fiscal years. During the years ended June 30, 2012 and 2011,
the Company did not recognize any interest or penalties.



Fair Values of Financial Instruments



ASC 820, “Fair Value Measurements
and Disclosures”, defines fair value, establishes a three-level valuation hierarchy for disclosures of FV measurement and
enhances disclosures requirements for FV measures. The carrying amounts reported in the balance sheets for receivables and current
liabilities each qualify as financial instruments and are reasonable estimates of FV because of the short period of time between
the origination of such instruments and their expected realization and their current market rate of interest. The three levels
are defined as follows:



• Level 1 inputs to the valuation
methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.



• Level 2 inputs to the valuation
methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the
assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.



• Level 3 inputs to the valuation
methodology are unobservable and significant to the FV.



As of June 30, 2012 and 2011, the Company
did not identify any assets or liabilities required to be presented on the balance sheets at FV.



Concentration of Risk



Financial instruments that potentially
subject the Company to significant concentrations of credit risk consist principally of cash and equivalents and accounts receivable.
As of June 30, 2012 and 2011, substantially all of the Company’s cash and equivalents and restricted cash was held by major
financial institutions in the PRC, which management believes are of high credit quality. With respect to accounts receivable, the
Company generally does not require collateral and does not have an allowance for doubtful accounts.



The Company has two principal clients,
Taiping Insurance Co., Ltd. (“Taiping Insurance”) and Sunshine Insurance Co., Ltd. (“Sunshine”), for which
it acts as an insurance agent.



For the years ended June 30, 2012 and 2011,
the Company’s revenue from sale of insurance policies underwritten by these two companies was:



|                  |  | 2012 |         |  | 2011 |  
|----------------- |  | ---- | ------- |  | ---- | -
|Taiping Insurance |  | $    | 751,126 |  |      | $
|Sunshine          |  |      | 830,954 |  |      |  



As of June 30, 2012 and 2011, the Company’s
receivables due from these two companies were:



|                  |  | 2012 |        |  | 2011 |  
|----------------- |  | ---- | ------ |  | ---- | -
|Taiping Insurance |  | $    | 21,618 |  |      | $
|Sunshine          |  |      | 73,812 |  |      |  





F-13







The Company's operations are in the PRC.
Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic,
foreign currency exchange and legal environments in the PRC, and by the general state of the PRC's economy. The Company’s
results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental
policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.



Operating Leases



Leases, where substantially all the rewards
and risks of ownership of assets remain with the leasing company that do not meet the capitalization criteria of ASC 840 “Leases”,
are accounted for as operating leases. Rentals under operating leases are expensed on the straight-line basis over the lease term.



Segment Reporting



The Company follows ASC 280, “Segment
Reporting”, for its segment reporting.  For the years ended June 30, 2012 and 2011, the Company’s chief operating
decision maker managed and reviewed its business as a single operating segment providing insurance brokerage and agency services
across the PRC. All revenues are derived from the PRC and all long-lived assets are in the PRC.



Contingencies



Certain conditions may exist as of the
date the financial statements are issued, which could result in a loss to the Company but which will be resolved when one or more
future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment
inherently involves judgment. In assessing loss contingencies arising from legal proceedings pending against the Company or unasserted
claims that may rise from such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings
or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.



If the assessment of a contingency indicates
it is probable that a material loss will be incurred and the amount of the liability can be reasonably estimated, then the estimated
liability is accrued in the Company’s financial statements. If the assessment indicates a potential material loss contingency
is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability,
together with an estimate of the range of possible loss if determinable and material would be disclosed.



Statement of Cash Flows



In accordance with ASC 230, “Statement
of Cash Flows”, cash flows from the Company's operations are calculated based upon the local currencies and an average exchange
rate is used. As a result, amounts related to assets and liabilities reported on the consolidated statements of cash flows may
not necessarily agree with changes in the corresponding balances on the consolidated balance sheets.



F-14







Variable Interest Entities



The Company follows ASC 810-10-05-8”,
"Consolidation of VIEs” which states that a VIE is a corporation, partnership, limited liability corporation, trust
or any other legal structure used to conduct activities or hold assets that either (1) has an insufficient amount of equity to
carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are
unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the obligation
to absorb losses or the right to receive returns generated by its operations.



Due to PRC legal restrictions on foreign
ownership and investment in insurance agency and brokerage businesses in China, especially those on qualifications as well as capital
requirement of the investors, the Company operates its insurance agency and brokerage business primarily through Henan Anhou, a
VIE owned by four individual shareholders, and two subsidiaries of Henan Anhou.



On January 17, 2011, CU WFOE and Henan
Anhou and its shareholders entered into VIE Agreements which included:



| | £ | Exclusive Business Cooperation Agreement (“EBCA”) through which: (1) CU WFOE has the right to provide Henan Anhou with complete technical support, business support and related consulting services during the term of this Agreement; (2) Henan Anhou agrees to accept all the consultations and services provided by CU WFOE. Henan Anhou further agrees that unless with CU WFOE's prior written consent, during the term of this Agreement, Henan Anhou shall not directly or indirectly accept the same or any similar consultations and/or services provided by any third party and shall not establish similar cooperation relationship with any third party regarding the matters contemplated by this Agreement; (3) Henan Anhou shall pay CU WFOE fees equal to 90% of the net income of Henan Anhou, and the payment is quarterly, and (4) CU WFOE retains all exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual properties arising out of or created during the performance of this Agreement.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The term of this Agreement is 10 years.
Subsequent to the execution of this Agreement, both CU WFOE and Henan Anhou shall review this Agreement on an annual basis to determine
whether to amend or supplement the provisions. The term of this Agreement may be extended if confirmed in writing by CU WFOE prior
to the expiration thereof. The extended term shall be determined by CU WFOE, and Henan Anhou shall accept such extended term unconditionally.



During the term of this Agreement, unless
CU WFOE commits gross negligence, or a fraudulent act, against Henan Anhou, Henan Anhou may not terminate this Agreement prior
to its expiration date. Nevertheless, CU WFOE shall have the right to terminate this Agreement upon giving 30 days' prior written
notice to Henan Anhou at any time.





F-15







| | £ | Power of Attorney under which each shareholder of Henan Anhou executed an irrevocable power of attorney to authorize CU WFOE to act on behalf of the shareholder to exercise all of his/her rights as equity owner of Henan Anhou, including without limitation to: (1) attend shareholders' meetings of Henan Anhou; (2) exercise all the shareholder's rights and shareholder's voting rights that he/she is entitled to under the laws of PRC and Henan Anhou's Articles of Association, including but not limited to the sale or transfer or pledge or disposition of the shareholder’s shareholding in part or in whole, and (3) designate and appoint on behalf of the shareholder the legal representative, the director, supervisor, the chief executive officer and other senior management members of Henan Anhou.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | £ | Option Agreement under which the shareholders of Henan Anhou irrevocably granted CU WFOE or its designated person an exclusive and irrevocable right to acquire, at any time, the entire portion of Henan Anhou’s equity interest held by each shareholder of Henan Anhou, or any portion thereof, to the extent permitted by PRC law.  The purchase price for the shareholders’ equity interests in Henan Anhou shall be the lower of (i) RMB 1 ($0.15) and (ii) the lowest price allowed by relevant laws and regulations.   If appraisal is required by the laws of PRC when CU WFOE exercises the Equity Interest Purchase Option (as defined in the Option Agreement), the Parties shall negotiate in good faith and based on the appraisal result make necessary adjustment to the Equity Interest Purchase Price (as defined in the Option Agreement) so that it complies with any and all then applicable laws of PRC. The term of this Agreement is 10 years, and may be renewed at CU WFOE's election.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | £ | Share Pledge Agreement under which the owners of Henan Anhou pledged their equity interests in Henan Anhou to CU WFOE to guarantee Henan Anhou’s performance of its obligations under the EBCA. Pursuant to this agreement, if Henan Anhou fails to pay the exclusive consulting or service fees in accordance with the EBCA, CU WFOE shall have the right, but not the obligation, to dispose of the owners of Henan Anhou’s equity interests in Henan Anhou. This Agreement shall be continuously valid until all payments due under the EBCA have been repaid by Henan Anhou or its subsidiaries.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As a result of the agreements among CU
WFOE, the shareholders of Henan Anhou and Henan Anhou, CU WFOE is considered the primary beneficiary of Henan Anhou, CU WFOE has
effective control over Henan Anhou. Therefore, CU WFOE consolidates the results of operations of Henan Anhou and its subsidiaries.
Accordingly the results of operations, assets and liabilities of Henan Anhou and its subsidiaries are consolidated in Company’s
financial statements from the earliest period presented. However, the VIE is monitored by the Company to determine if any events
have occurred that could cause its primary beneficiary status to change. These events include:



| | a. | The legal entity's governing documents or contractual arrangements are changed in a manner that changes the characteristics or adequacy of the legal entity's equity investment at risk.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | The equity investment or some part thereof is returned to the equity investors, and other interests become exposed to expected losses of the legal entity.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| | c. | The legal entity undertakes additional activities or acquires additional assets, beyond those that were anticipated at the later of the inception of the entity or the latest reconsideration event, that increase the entity's expected losses.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d. | The legal entity receives an additional equity investment that is at risk, or the legal entity curtails or modifies its activities in a way that decreases its expected losses.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-16







Recent Accounting Pronouncements



In October 2010, the FASB issued ASU 2010-26,
Financial Services—Insurance (Topic 944), to address diversity in practice regarding the interpretation of which costs relating
to the acquisition of new or renewal insurance contracts qualify for deferral. ASU 2010-26 specifies that the incremental direct
costs of contract acquisition and certain costs related directly to the acquisition activities, such as underwriting, Policy issuance
and processing, Medical and inspection, Sales force contract selling, which are  performed by the insurer  in
the acquisition of new and renewal contracts should be capitalized.  This update is effective for fiscal years, and interim
periods within those fiscal years, beginning after December 15, 2011. The Company does not expect the provisions of ASU 2010-11
to have a material effect on its consolidated financial statements.



In December 2010, the FASB issued ASU 2010-28,
Intangibles—Goodwill and Other (Topic 350), to modify Step 1 of the goodwill impairment test for reporting units with zero
or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test
if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that goodwill
impairment exists, an entity should consider whether there are any adverse qualitative factors indicating impairment may exist,
and the qualitative factors are consistent with the existing guidance. The amendments in this update are effective for fiscal years,
and interim periods within those years, beginning after December 15, 2010 and 2011 for public and nonpublic entities, respectively.
The adoption of ASU 2010-28 did not have a material effect on the Company’s consolidated financial statements.



In December 2010, the FASB issued ASU 2010-29,
Business Combinations (Topic 805), to address diversity in practice about the interpretation of the pro forma revenue and earnings
disclosure requirements for business combinations. The amendments in this update specify that if a public entity presents comparative
financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s)
that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The
amendments in this update are effective prospectively for business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December 15, 2010. The adoption of ASU 2010-29 did not have
a material effect on the Company’s consolidated financial statements.



F-17







In January 2011, the FASB issued ASU
2011-01, Receivables (Topic 310), to temporarily delay the effective date of the disclosures about troubled debt
restructurings (“TDR”) in ASU 2010-20 (Receivables (Topic 310): Disclosures about the Credit Quality of Financing
Receivables and the Allowance for Credit Losses) for public entities. The delay is intended to allow the Board time to
complete its deliberations on what constitutes a TDR.  Under the existing effective date in Update 2010-20,
public-entity creditors would have provided disclosures about TDR for periods beginning on or after December 15, 2010. The
deferral in this update will result in more consistent disclosures about TDR. This amendment does not apply to nonpublic
entities and does not defer the effective date of the other disclosure requirements in Update 2010-20. The deferral in this
amendment is effective upon issuance. The adoption of ASU 2011-01 did not have a material effect on the Company’s
consolidated financial statements.



In January 2011, the FASB issued ASU 2011-02
Receivables Topic 310 "A Creditor's Determination of Whether a Restructuring is a Troubled Debt Restructuring". The amendments
in ASU 2011-02 provide additional guidance to clarify when a loan modification or restructuring is considered a TDR to address
current diversity in practice and lead to more consistent application of US GAAP for debt restructurings. In evaluating whether
a restructuring constitutes a TDR, a creditor must separately conclude that both of the following exist:



| | 1. | The restructuring constitutes a concession.
| | -- | -------------------------------------------



| | 2. | The debtor is experiencing financial difficulties.
| | -- | --------------------------------------------------



The amendments to Topic 310 clarify the
guidance regarding the evaluation of both considerations above. Additionally, the amendments clarify that a creditor is precluded
from using the effective interest rate test in the debtor's guidance on restructuring of payables (paragraph 470-60-55-10) when
evaluating whether a restructuring constitutes a TDR. ASU No. 2011-02 is effective for fiscal years beginning on or after June
15, 2011. The adoption of ASU 2011-02 did not have a material effect on the Company’s consolidated financial statements.



In April, 2011, the FASB issued ASU 2011-03
Transfers and Servicing (Topic 860), “Reconsideration of Effective Control for Repurchase Agreements”. The amendments
in this ASU 2011-03 remove from the assessment of effective control:



| | 1. | The criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on the substantially agreed terms, even in the event of default by the transferee, and
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | The collateral maintenance implementation guidance related to that criterion.
| | -- | -----------------------------------------------------------------------------



Other criteria applicable to the assessment
of effective control are not changed by the amendments in this Update. The guidance in this Update is effective for the first interim
or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications
of existing transactions that occur on or after the effective date. Early adoption is not permitted. The adoption of this ASU did
not have a material effect on the Company’s consolidated financial statements.



F-18







In June 2011, the FASB issued ASU 2011-04
Fair Value Measurement (Topic 820), “Amendments to achieve Common Fair Value Measurement and Disclosure Requirements in US
GAAP and International Financial Reporting Standards (“IFRS”)”. The amendments in this Update change the wording
used to describe the requirements in US GAAP for measuring FV and for disclosing information about FV measurements. The amendments
include the following:



| | 1. | Those that clarify the Board’s intent about the application of existing FV measurement and disclosure requirements.
| | -- | -------------------------------------------------------------------------------------------------------------------



| | 2. | Those that change a particular principle or requirement for measuring FV or for disclosing information about fair value measurements.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------



In addition, to improve consistency in
application across jurisdictions some changes in wording are necessary to ensure that US GAAP and IFRS FV measurement and disclosure
requirements are described in the same way (for example, using the word shall rather than should to describe the requirements in
US GAAP).



The amendments in this Update are to be
applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December
15, 2011. Early application by public entities is not permitted. The adoption of this ASU did not have a material effect on the
Company’s consolidated financial statements.



In June 2011, the FASB issued ASU 2011-05
Comprehensive Income (Topic 220), “Presentation of Comprehensive Income”. In this Update, an entity has the option
to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either
in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity
is required to present each component of net income along with total net income, each component of other comprehensive income along
with a total for other comprehensive income, and a total amount for comprehensive income. Regardless of whether an entity chooses
to present comprehensive income in a single continuous statement or in two separate but consecutive statements, the entity is required
to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive
income to net income in the statement(s) where the components of net income and the components of other comprehensive income are
presented.



The amendments in this Update should be
applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years,
beginning after December 15, 2011, and early adoption is permitted. The adoption of this ASU did not have a material impact on
the Company's consolidated financial statements.



NOTE 3 – RESTRICTED CASH AND DEPOSITS



Restricted cash is a deposit in bank by
the Company in conformity with Provisions on the Supervision and Administration of Specialized Insurance Agencies, and cannot be
withdrawn without the permission of the China Insurance Regulatory Commission.   Deposits include long-term leasing deposits.



NOTE 4 – ACCOUNTS RECEIVABLE



As of June 30, 2012 and 2011, the Company
had no allowance for doubtful accounts.





F-19







NOTE 5 – OTHER CURRENT ASSETS



The Company’s other current assets
consisted of the following, as of June 30, 2012 and 2011:



|                           |  | 2012 |        |  | 2011 |  
|-------------------------- |  | ---- | ------ |  | ---- | -
|Prepaid rent               |  | $    | -      |  |      | $
|Deposit for rent           |  |      | 34,371 |  |      |  
|Other                      |  |      | 14,270 |  |      |  
|Total other current assets |  | $    | 48,640 |  |      | $



NOTE 6– PROPERTY, PLANT AND EQUIPMENT



Property, plant and equipment consisted
of the following, as of June 30, 2012 and 2011:



|                                         |  | 2012 |          |   | 2011 |  
|---------------------------------------- |  | ---- | -------- | - | ---- | -
|Office equipment                         |  | $    | 29,647   |   |      | $
|Office furniture                         |  |      | 57,018   |   |      |  
|Computers                                |  |      | 73,975   |   |      |  
|Electronic equipment                     |  |      | 183,195  |   |      |  
|Machinery                                |  |      | 17,692   |   |      |  
|Transportation equipment                 |  |      | 99,467   |   |      |  
|Total                                    |  |      | 460,994  |   |      |  
|Less: Accumulated Depreciation           |  |      | (346,049 | ) |      |  
|Total property, plant and equipment, net |  | $    | 114,945  |   |      | $



NOTE 7 – GOODWILL AND ACQUISITIONS



On September 6, 2010, Henan Anhou paid
RMB532,622 ($78,318) to acquire 100% of Sichuan Kangzhuang from its previous shareholders. Sichuan Kangzhuang then had net liabilities
of RMB219,123 ($32,134). Goodwill of RMB751,745 ($110,452) was therefore recorded. Goodwill in the balance sheet differs from the
acquisition date amount due to changes in exchange rates. As of June 30, 2012, there are no indications of any impairment. No intangible
assets are identified in the acquisition date. At the date of acquisition, Sichuan Kangzhuang has no unfulfilled customer contract
or software. Sichuan Kangzhuang’s business process and accounting system are not unique and the management planned to use
unified operating platform after the acquisition. Sichuan Kangzhuang’s business is mainly with retailing customers, and the
management considered there is no customer relationship or customer list that will probably create future business opportunities
for the Company.



On September 28, 2010, Henan Anhou acquired
100% of Jiangsu Law for RMB518,000 ($75,475). Jiangsu Law then had net assets of RMB2,286,842 ($341,425). Based on the purchase
price allocation, the FV of the identifiable assets and liabilities assumed exceeded the FV of the consideration paid. As a result,
the Company recorded a gain on acquisition of RMB1,768,842 ($267,156). We believe the gain on acquisition resulted from the sellers’
intent to exit the insurance business. To comply with the PRC requirements for the insurance brokerage companies, Henan Anhou contributed
cash to increase the paid-in capital of Jiangsu Law to RMB10,000,000 ($1,355,150) from RMB5,180,000 ($625,113) on January
18, 2011.



F-20







The summary of assets and liabilities acquired
as of the dates of acquisition is presented below:



|                                    |  | Jiangsu
 Law  September
 30, 2010 |         |  | Sichuan
 Kangzhuang  August 31,
 2010 |  
|----------------------------------- |  | --------------------------------- | ------- |  | ------------------------------------- | -
|Current assets                      |  |                                   |         |  |                                       |  
|Cash and equivalents                |  | $                                 | 269,090 |  |                                       | $
|Accounts receivable, net            |  |                                   | 12,482  |  |                                       |  
|Other current assets                |  |                                   | -       |  |                                       |  
|Total current assets                |  |                                   | 281,572 |  |                                       |  
|Property, plant and equipment, net  |  |                                   | 78,418  |  |                                       |  
|TOTAL ASSETS                        |  |                                   | 359,990 |  |                                       |  
|Accounts payable                    |  |                                   | -       |  |                                       |  
|Accrued expenses and other payables |  |                                   | 10,861  |  |                                       |  
|Taxes payable                       |  |                                   | 5,637   |  |                                       |  
|Due to related party                |  |                                   | 2,067   |  |                                       |  
|TOTAL LIABILITIES                   |  |                                   | 18,565  |  |                                       |  
|NET ASSETS / (LIABILITIES)          |  | $                                 | 341,425 |  |                                       | $



NOTE 8 –OTHER CURRENT LIABILITIES



Other current liabilities are summarized
as follows, as of:



|                                            |  | 2012 |         |  | 2011 |  
|------------------------------------------- |  | ---- | ------- |  | ---- | -
|Due to previous shareholders of Jiangsu Law |  | $    | 81,899  |  |      | $
|Salary & welfare payables                   |  |      | 16,604  |  |      |  
|Other                                       |  |      | 188,406 |  |      |  
|Total other current liabilities             |  | $    | 286,909 |  |      | $



Due to previous shareholders of Jiangsu
Law is the remaining balance of the acquisition cost. The acquisition agreement between the parties has not specified the exact
time for payment of the acquisition price or imposed any interest for late payment.



NOTE 9 - TAXES PAYABLE



Taxes payable consisted of the following
as of June 30, 2012 and 2011:



|       |  | 2012 |         |  | 2011 |  
|------ |  | ---- | ------- |  | ---- | -
|Income |  | $    | 386,543 |  |      | $
|Other  |  |      | 19,180  |  |      |  
|Total  |  | $    | 405,723 |  |      | $



F-21







NOTE 10 - RELATED PARTY TRANSACTIONS



Due to related parties



The related parties listed below loaned
money to the Company for working capital. Due to related parties consisted of the following as of June 30, 2012 and 2011:



|                                                      |  | 2012 |         |  | 2011 |  
|----------------------------------------------------- |  | ---- | ------- |  | ---- | -
|Due to Mr. Mao (Principal Shareholder of the Company) |  | $    | 1,871   |  |      | $
|Due to Ms. Zhu (Shareholder of Henan Anhou)           |  |      | 441,272 |  |      |  
|Due to Mr. Zhu (Legal Representative of Jiangsu Law)  |  |      | 2,189   |  |      |  
|Total                                                 |  | $    | 445,332 |  |      | $



The amounts are interest-free, unsecured
and repayable on demand.



F-22







NOTE 11 – ADDITIONAL PAID-IN CAPITAL



On August 16, 2010, Ms. Zhu Shuqin contributed
capital of RMB8,000,000 ($1,175,440) in cash to Henan Anhou and controlled 80% of the shares of Henan Anhou.



On March 31, 2011, Mr. Li forgave $945,200
that Henan Anhou owed him.



NOTE 12– INCOME TAX



CU WFOE, the Company’s subsidiary,
and the VIEs in the PRC, are governed by the Income Tax Law of the PRC concerning the private-run enterprises, which are generally
subject to tax at 25% on income reported in the statutory financial statements after appropriated adjustments. Except for Jiangsu
Law, according to the requirement of local tax authorities, the tax basis is deemed as 10% of total revenue, instead of net income.
The tax rate of Jiangsu Law is also 25%.



According to tax regulations by Chinese
tax authorities effective January 1, 2008, commissions paid to sub-agents in excess of 5% of the commission revenue were not tax
deductible. Therefore, as of June 30 2011, Henan Anhou and Sichuan Kangzhuang accrued income tax payable of $658,344 for deductible
commissions occurred before June 30, 2011.



According to China State Administration
of Taxation #15 Announcement in year 2012, effective from 2011 tax year, such commissions can be fully deducted. Therefore we reversed
the tax payable of $283,880 that was accrued in 2011 tax year for such deductible commission and credited as income tax benefit
in fiscal year 2012.



The balance of income tax payable as of
June 30, 2012 mainly represents the income tax accrued for the un-deductible commission paid to sub-agents before tax year 2011
and is due upon written request of the local tax bureau.



The income tax benefit was $268,440 for
the years ended June 30, 2012, representing the effect of change in tax rules relating to deductibility of commission expense.
The income tax benefit was because the reversal of tax payable for the deductible commission relating to 2011 which was accounted
for in the year of the change in the tax rule.



The following table reconciles the US statutory
rates to the Company’s effective tax rate for the years ended June 30, 2012 and 2011:



|                                       |  | 2012 |     |    | 2011 | 
|-------------------------------------- |  | ---- | --- | -- | ---- | 
|US statutory rate (benefit)            |  |      | (34 | )% |      | 
|Tax rate difference                    |  |      | 9   | %  |      | 
|Tax basis difference                   |  |      | 3   | %  |      | 
|Non-deductible commission expense      |  |      | 33  | %  |      | 
|Gain on bargain purchase of subsidiary |  |      | -   | %  |      | 
|Tax (benefit) per financial statements |  |      | (72 | )% |      | 



F-23







NOTE 13 – COMMITMENTS



Operating Leases



The Company has operating leases for its
offices in Henan, Sichuan and Jiangsu provinces. The rental expenses for the years ended June 30, 2012 and 2011 are $124,226 and
$183,469, respectively. At June 30, 2012, total future minimum lease payments under operating leases were as follows, by years:



|June 30, 2013 |  | $ | 119,539 | 
|------------- |  | - | ------- | 
|June 30, 2014 |  |   | 14,883  | 
|              |  |   |         | 
|Total         |  | $ | 134,422 | 



F-24







NOTE 14 – FINANCIAL RISK MANAGEMENT
AND FAIR VALUES



The Company has exposure to credit, liquidity
and market risks which arise from the normal course of the Company's business. This note presents information about the Company's
exposure to each of these risks, the Company's objectives, policies and processes for measuring and managing risk, and the Company's
management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.



The Board of Directors (“BOD”)
has overall responsibility for the establishment and oversight of the Company's risk management framework. The Company's risk management
policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and
to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market
conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to develop
a disciplined and constructive control environment in which all employees understand their roles and obligations.



The Company's BOD oversees how management
monitors compliance with the Company's risk management policies and procedures and reviews the adequacy of the risk management
framework in relation to the risks faced by the Company.



F-25







|(a) | Credit risk
|--- | -----------



The Company's credit risk arises principally
from accounts and other receivables, pledged deposits and cash and equivalents. Management has a credit policy in place and the
exposures to these credit risks are monitored on an ongoing basis. The carrying amounts of trade and other receivables, pledged
deposits and cash and cash equivalents represent the Company's maximum exposure to credit risks. Accounts receivable are due within
30 days from the date of billing.



|(b) | Liquidity risk
|--- | --------------



The BOD of the Company is responsible for
the Company's overall cash management and raising borrowings to cover expected cash demands. The Company regularly monitors its
liquidity requirements, to ensure it maintains sufficient reserves of cash and readily realizable marketable securities and adequate
committed lines of funding from major financial institutions to meet its liquidity requirements in the short and longer term.



|(c) | Currency risk
|--- | -------------



The functional currency for the VIEs of
the Company is RMB and the financial statements of the Company are in USD. The fluctuation of RMB will affect our operating results
expressed in USD. The Company reviews its foreign currency exposures. The management does not consider its present foreign exchange
risk to be significant.



NOTE 15– CONDENSED FINANCIAL INFORMATION
OF US PARENT



China United is a holding company and owns
no operating assets and has no significant operations independent of its subsidiaries. Set forth below are condensed financial
statements for China United on a stand-alone, unconsolidated basis as of June 30, 2012 and 2011, and for the years ended June 30,
2012 and 2011.



F-26







CHINA UNITED INSURANCE SERVICE, INC.

BALANCE SHEETS

June 30, 2012 and 2011



|                                                                                                                                                   |  | 2012 |            |   | 2011 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | -
|ASSETS                                                                                                                                             |  |      |            |   |      |  
|Investment in subsidiaries                                                                                                                         |  | $    | 641,254    |   |      | $
|TOTAL ASSETS                                                                                                                                       |  | $    | 641,254    |   |      | $
|                                                                                                                                                   |  |      |            |   |      |  
|LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                               |  |      |            |   |      |  
|Due to related party                                                                                                                               |  | $    | 583        |   |      | $
|TOTAL LIABILITIES                                                                                                                                  |  | $    | 583        |   |      | $
|                                                                                                                                                   |  |      |            |   |      |  
|STOCKHOLDERS’ EQUITY                                                                                                                               |  |      |            |   |      |  
|                                                                                                                                                   |  |      |            |   |      |  
|Common stock, par value $0.00001, 100,000,000 authorized, 20,100,503 and 20,000,000 issued and outstanding at June 30, 2012 and 2011, respectively |  |      | 201        |   |      |  
|Additional paid-in capital                                                                                                                         |  |      | 2,614,692  |   |      |  
|Accumulated other comprehensive loss                                                                                                               |  |      | (55,250    | ) |      |  
|Accumulated deficit                                                                                                                                |  |      | (1,918,972 | ) |      |  
|TOTAL STOCKHOLDERS’ EQUITY                                                                                                                         |  |      | 640,671    |   |      |  
|TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                         |  | $    | 641,254    |   |      | $



F-27







CHINA UNITED INSURANCE SERVICE, INC.

STATEMENTS OF OPERATIONS

Years Ended June 30, 2012 and 2011



|                              |  | 2012 |         |   | 2011 |  
|----------------------------- |  | ---- | ------- | - | ---- | -
|Revenues                      |  | $    | -       |   |      | $
|Cost of service               |  |      | -       |   |      |  
|Gross profit                  |  |      | -       |   |      |  
|Operating expenses:           |  |      |         |   |      |  
|General and administrative    |  |      | 1,508   |   |      |  
|Loss from operations          |  |      | (1,508  | ) |      |  
|Other expenses                |  |      |         |   |      |  
|Equity loss from subsidiaries |  |      | (87,988 | ) |      |  
|Loss before income taxes      |  |      | (87,988 | ) |      |  
|Income tax expense            |  |      | -       |   |      |  
|Net loss                      |  | $    | (89,496 | ) |      | $



F-28









CHINA UNITED INSURANCE SERVICE, INC.

STATEMENTS OF CASH FLOWS

Years Ended June 30, 2012 and 2011



|                                                                            |  | 2012 |         |   | 2011 |  
|--------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | -
|CASH FLOWS FROM OPERATING ACTIVITIES:                                       |  |      |         |   |      |  
|Net loss                                                                    |  | $    | (89,496 | ) |      | $
|Adjustments to reconcile net loss to net cash used in operating activities: |  |      |         |   |      |  
|Share-based payment                                                         |  |      | 1,508   |   |      |  
|Equity loss in subsidiaries                                                 |  |      | 87,988  |   |      |  
|Net cash used in operating activities                                       |  |      | -       |   |      |  
|                                                                            |  |      |         |   |      |  
|NET INCREASE IN CASH & EQUIVALENTS                                          |  |      | -       |   |      |  
|                                                                            |  |      |         |   |      |  
|CASH & EQUIVALENTS, BEGINNING BALANCE                                       |  |      | -       |   |      |  
|                                                                            |  |      |         |   |      |  
|CASH & EQUIVALENTS, ENDING BALANCE                                          |  | $    | -       |   |      | $
|                                                                            |  |      |         |   |      |  
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                           |  |      |         |   |      |  
|Interest paid                                                               |  | $    | -       |   |      | $
|Income taxes paid                                                           |  | $    | -       |   |      | $



F-29







NOTE 16 – SUBSEQUENT EVENT
- Unaudited



On August 24, 2012 (the “Closing
Date”), the Company entered into an Acquisition Agreement with Action Holdings Financial Limited (“AHFL”), a
British Virgin Islands company, and its stockholders. In exchange for all issued and outstanding shares of AHFL, the Company will
(i) issue eight million shares of common stock of the Company to the shareholders of AHFL; (ii) issue two million shares of common
stock of the Company to certain employees of Law Insurance Broker Co., Ltd. (“Law Broker”); (iii) create an employee
stock option pool, consisting of available options, exercisable for up to two million shares of common stock of the Company; and
(iv) pay NT$15 million ($500,815) and NT$7.5 million ($250,095) in cash in two installments, due on or prior to March 31, 2013,
subject to terms and conditions therein. Upon completion of the acquisition, the former shareholders of AHFL and certain employees
of Law Broker (defined below) will receive a total of 10 million shares of common stock of the Company. This will constitute 34.36%
of the common stock and 25.58% of the voting power of the Company.



As of August 24, 2012, AHFL holds 65.95%
of the issued and outstanding shares of Law Enterprise Co., Ltd. (“Law Enterprise”), a company limited by shares incorporated
under the laws of Taiwan on January 30, 1996. Law Enterprise holds (i) 100% of Law Broker, a company limited by shares incorporated
in Taiwan on October 9, 1992; (ii) 97.84% of Law Risk Management & Consultant Co., Ltd. (“Law Management”), a company
limited by shares incorporated in Taiwan on December 5, 1987; and (iii) 96% of Law Insurance Agent Co., Ltd. (“Law Agent”
collectively with “Law Enterprise”, “Law Broker” and “Law Agent”, the “Taiwan Subsidiaries”,
each a “Taiwan Subsidiary”), a LLC incorporated in Taiwan on June 3, 2000.



Law Broker primarily engages in insurance
brokerage and insurance agency service business across Taiwan, while Law Enterprise, Law Management and Law Agent are not active.



AHFL was a LLC incorporated under the laws
of British Virgin Islands on April 30, 2012. On July 4,2012, a meeting of the Board of Director of AHFL approved AHFL
to:



| | · | Enter into a loan agreement with Taipei
Fubon Commercial Bank to obtain up to NT$180,000,000 ($6,138,000)
| | - | ---------------------------------------------------------------------------------------------------------



| | · | Use the proceeds to purchase
                                                                                                               13,593,015 shares of common stock at Law Enterprise from certain shareholders at a price of NT$12.8 ($0.44) per share, where the
                                                                                                               aggregate amount of the transaction is NT$173,990,602 ($5,933,000)
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Issue 13,593,015 new shares at a price
of USD equivalent of NT$12.8 ($0.44) per share
| | - | -------------------------------------------------------------------------------------



| | · | Repay the loan by the cash raised from
the issued shared
| | - | --------------------------------------------------------



Such transactions
were completed on August 24, 2012.



F-30









The pro forma consolidated balance sheet
of the Company as if the Acquisition Agreement were signed on June 30, 2012 is presented below. The pro forma balance sheet was
derived from the audited balance sheet of CUIS as of June 30, 2012 and the audited statement of operations for the years ended
June 30, 2012 and 2011, and the unaudited balance sheet of AHFL and subsidiaries as of June 30, 2012 and their unaudited statements
of operations for the years ended June 30, 2012 and 2011. The purchase price allocation in the pro forma financial statements is
preliminary pending final determination of fair values of assets and liabilities acquired.



|                                                                                                             |  |      |            |   |      |   |            | Pro Forma  |  |   | Pro Forma     |  
|------------------------------------------------------------------------------------------------------------ |  | ---- | ---------- | - | ---- | - | ---------- | ---------- |  | - | ------------- | -
|                                                                                                             |  | CUIS |            |   | AHFL |   |            | Adjustment |  |   | Balance Sheet |  
|                                                                                                             |  |      |            |   |      |   |            |            |  |   |               |  
|ASSETS                                                                                                       |  |      |            |   |      |   |            |            |  |   |               |  
|Current assets                                                                                               |  |      |            |   |      |   |            |            |  |   |               |  
|Cash and equivalents                                                                                         |  | $    | 1,258,211  |   |      | $ | 12,840,215 |            |  | $ | -             |  
|                                                                                                             |  |      |            |   |      |   |            | (a)        |  |   | 6,000,000     |  
|                                                                                                             |  |      |            |   |      |   |            | (b)        |  |   | 5,800,000     |  
|                                                                                                             |  |      |            |   |      |   |            | (c)        |  |   | (6,000,000    | )
|                                                                                                             |  |      |            |   |      |   |            | (d)        |  |   | (5,800,000    | )
|Accounts receivable, net                                                                                     |  |      | 184,767    |   |      |   | 3,030,225  |            |  |   | -             |  
|Other current assets                                                                                         |  |      | 48,640     |   |      |   | 1,674,257  |            |  |   | -             |  
|Total current assets                                                                                         |  |      | 1,491,618  |   |      |   | 17,544,697 |            |  |   | -             |  
|                                                                                                             |  |      |            |   |      |   |            |            |  |   |               |  
|Property, plant and equipment, net                                                                           |  |      | 114,945    |   |      |   | 715,606    |            |  |   | -             |  
|Restricted cash and deposits                                                                                 |  |      | 113,217    |   |      |   | 776,128    |            |  |   | -             |  
|Goodwill                                                                                                     |  |      | 118,855    |   |      |   | -          |            |  |   | -             |  
|TOTAL ASSETS                                                                                                 |  | $    | 1,838,635  |   |      | $ | 19,036,431 |            |  | $ | -             |  
|                                                                                                             |  |      |            |   |      |   |            |            |  |   |               |  
|LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                         |  |      |            |   |      |   |            |            |  |   |               |  
|Current liabilities                                                                                          |  |      |            |   |      |   |            |            |  |   |               |  
|Taxes payable                                                                                                |  | $    | 405,723    |   |      | $ | 369,805    |            |  | $ | -             |  
|Other current liabilities                                                                                    |  |      | 286,909    |   |      |   | 6,232,570  | (e)        |  |   | 751,062       |  
|Due to related parties                                                                                       |  |      | 445,332    |   |      |   | -          |            |  |   | -             |  
|TOTAL CURRENT LIABILITIES                                                                                    |  |      | 1,137,964  |   |      |   | 6,602,375  |            |  |   | 751,062       |  
|                                                                                                             |  |      |            |   |      |   |            |            |  |   |               |  
|STOCKHOLDERS’ EQUITY                                                                                         |  |      |            |   |      |   |            |            |  |   |               |  
|Preferred stock, par value $0.00001, 10,000,000 authorized, 1,000,000 issued and outstanding                 |  |      | -          |   |      |   | -          |            |  |   | -             |  
|Common stock, par value $0.00001, 100,000,000 authorized, 30,100,503 issued and outstanding at June 30, 2012 |  |      | 201        |   |      |   | -          |            |  |   | 100           |  
|Additional paid-in capital                                                                                   |  |      | 2,674,692  |   |      |   | 12,227,011 | (e)        |  |   | (10,227,111   | )
|Accumulated other comprehensive loss                                                                         |  |      | (55,250    | ) |      |   | 200,370    |            |  |   | -             |  
|Non-controlling interest                                                                                     |  |      | 0          |   |      |   | 6,675      | (e)        |  |   | 4,233,796     |  
|Retained earnings                                                                                            |  |      | (1,918,972 | ) |      |   | -          | (e)        |  |   | 5,242,153     |  
|                                                                                                             |  |      |            |   |      |   |            |            |  |   |               |  
|TOTAL STOCKHOLDERS’ EQUITY                                                                                   |  |      | 700,671    |   |      |   | 12,434,056 |            |  |   | (751,062      | )
|TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                   |  | $    | 1,838,635  |   |      | $ | 19,036,431 |            |  | $ | -             |  



| | (a) | AHFL borrowed NT$ 180,000,000 ( US $ 6 million) as bridge loan from Taipei Fubon Commercial Bank
bank
| | --- | -----------------------------------------------------------------------------------------------------

| | (b) | AHFL issued 13.6 million new shares for NT$ 174,000,000 million ( US$5.8 million)
| | --- | ---------------------------------------------------------------------------------

| | (c) | AHFL repaid NT$ 180,000,000 bridge loan to bank from the proceeds of issuance of shares
| | --- | ---------------------------------------------------------------------------------------

| | (d) | AHFL acquired 13.6 million shares (65.95 %) of Law Enterprise Limited, A Taiwanese Holding Company
conducting insurance brokerage business through subsidiaries in Taiwan
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e) | CUIS acquired 100% of AHFL ( see details in footnote 16) resulting in bargain purchase gain of
$5.4 million and non-controlling interest in Law Enterprise and subsidiaries
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-31







The pro forma consolidated statements of
operations of the Company as if the Acquisition Agreement were signed on July 1, 2010 and 2011 are presented below:



|                                     |  |      |           |   | Year Ended June 30 2012 |   |            |                      | 
|------------------------------------ |  | ---- | --------- | - | ----------------------- | - | ---------- | -------------------- | 
|                                     |  |      |           |   |                         |   |            | Pro Forma            | 
|                                     |  | CUIS |           |   | AHFL                    |   |            | Pro Forma Adjustment | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Revenues                             |  | $    | 3,153,776 |   |                         | $ | 37,812,492 |                      | 
|Cost of revenue                      |  |      | 2,363,581 |   |                         |   | 26,122,202 |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Gross profit                         |  |      | 790,195   |   |                         |   | 11,690,290 |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Operating expenses:                  |  |      |           |   |                         |   |            |                      | 
|Selling expenses                     |  |      | -         |   |                         |   | 1,046,457  |                      | 
|General and administrative           |  |      | 1,166,841 |   |                         |   | 6,889,690  |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Income from operations               |  |      | (376,646  | ) |                         |   | 3,754,143  |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Other income / (expenses)            |  |      |           |   |                         |   |            |                      | 
|Interest income                      |  |      | 4,756     |   |                         |   | 3,643      |                      | 
|Gain on acquisition of subsidiary    |  |      | -         |   |                         |   | -          |                      | 
|Other – net                          |  |      | (19       | ) |                         |   | 477,542    |                      | 
|                                     |  |      | 4,737     |   |                         |   | 481,185    |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Income before income taxes           |  |      | (371,909  | ) |                         |   | 4,235,328  |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Income tax expense                   |  |      | (268,440  | ) |                         |   | 846,507    |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Net income                           |  |      | (103,469  | ) |                         |   | 3,388,821  |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Other comprehensive income           |  |      | 13,972    |   |                         |   | 96,480     |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Comprehensive income                 |  | $    | (89,497   | ) |                         | $ | 3,485,301  |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Weighted average shares outstanding: |  |      |           |   |                         |   |            |                      | 
|Basic and diluted                    |  |      |           |   |                         |   |            |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Earning per share:                   |  |      |           |   |                         |   |            |                      | 
|Basic and diluted                    |  |      |           |   |                         |   |            |                      | 



|                                     |  |      |           |   | Year Ended June 30 2011 |   |            |                      | 
|------------------------------------ |  | ---- | --------- | - | ----------------------- | - | ---------- | -------------------- | 
|                                     |  |      |           |   |                         |   |            |                      | 
|                                     |  | CUIS |           |   | AHFL                    |   |            | Pro Forma Adjustment | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Revenues                             |  | $    | 2,740,519 |   |                         | $ | 31,878,568 |                      | 
|Cost of revenue                      |  |      | 1,897,359 |   |                         |   | 20,916,173 |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Gross profit                         |  |      | 843,160   |   |                         |   | 10,962,395 |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Operating expenses:                  |  |      |           |   |                         |   |            |                      | 
|                                     |  |      | -         |   |                         |   | 1,435,315  |                      | 
|                                     |  |      | 1,095,869 |   |                         |   | 6,776,622  |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Income from operations               |  |      | (252,709  | ) |                         |   | 2,750,458  |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Other income / (expenses)            |  |      |           |   |                         |   |            |                      | 
|                                     |  |      | 12,760    |   |                         |   | 5,929      |                      | 
|                                     |  |      | 267,156   |   |                         |   | -          |                      | 
|                                     |  |      | (2,753    | ) |                         |   | 570,078    |                      | 
|                                     |  |      | 277,163   |   |                         |   | 576,007    |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Income before income taxes           |  |      | 24,454    |   |                         |   | 3,326,465  |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Income tax expense                   |  |      | 354,441   |   |                         |   | 710,378    |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Net income                           |  |      | (329,987  | ) |                         |   | 2,616,087  |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Other comprehensive income           |  |      | 13,972    |   |                         |   | 103,889    |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Comprehensive income                 |  | $    | (316,015  | ) |                         | $ | 2,719,976  |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Weighted average shares outstanding: |  |      |           |   |                         |   |            |                      | 
|Basic and diluted                    |  |      |           |   |                         |   |            |                      | 
|                                     |  |      |           |   |                         |   |            |                      | 
|Earning per share:                   |  |      |           |   |                         |   |            |                      | 
|Basic and diluted                    |  |      |           |   |                         |   |            |                      | 



We believe the gain on acquisition resulted
from the sellers' strategic intent to enter PRC market, which has a higher growth rate than Taiwan, and to become the shareholder
of an OTCBB company.



On July 2, 2012, the Board of Directors
and stockholders of the Company approved, in connection with a reclassification of 1,000,000 issued and outstanding shares of common
stock (the “Reclassified Shares”), par value $0.00001 per share held by Mao Yi Hsiaoo (“Mr. Mao”) into
1,000,000 shares of Series A Convertible Preferred Stock, par value $0.00001 per share (the “Series A Preferred Stock”)
on a share-for-share basis (the “Reclassification”), the issuance of 1,000,000 shares of Series A Preferred Stock to
Mr. Mao and cancellation of 1,000,000 common stock held and submitted by Mr. Mao pursuant to the Reclassification. All of the 1,000,000
shares of Series A Preferred Stock are reclassified from the 1,000,000 common stock held by Mr. Mao and no additional consideration
has been paid by Mr. Mao in connection with the Reclassification. Each holder of common stock shall be entitled to one vote for
each share of common stock held of record by such holder as of the applicable record date on any matter that is submitted to a
vote of the stockholders of the Company; while each holder of Series A Preferred Stock shall be entitled to ten votes for each
share of Series A Preferred Stock held of record by such holder as of the applicable record date on any matter that is submitted
to a vote of the stockholders of the Company.





F-32







ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.



None.



ITEM 9A. CONTROLS AND PROCEDURES.



(a) Evaluation of Disclosure Controls
and Procedures



Our management,
with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure
controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required
to be disclosed by a company in the reports, such as this report, that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by
a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s
management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding
required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit
relationship of possible controls and procedures. Based on that evaluation, Lo Chung Mei, our Chief Executive Officer, and
Chuang Yung Chi, our Chief Financial Officer, concluded that as of June 30, 2012, our disclosure
controls and procedures were effective to satisfy the objectives for which they are intended.



87







(b) Management’s annual report
on internal control over financial reporting



This annual report does not include a report
of management's assessment regarding internal control over financial reporting or an attestation report of the company's registered
public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public
companies.



ITEM 9B. OTHER INFORMATION.



None.



PART III



ITEM 10. DIRECTORS, EXECUTIVE OFFICERS
AND CORPORATE GOVERNANCE.



Executive Officers and Directors



The following table sets forth, as of September
28, 2012, the names and ages of our directors and executive officers. The directors will hold such office until the next annual
meeting of shareholders and until his or her successor has been elected and qualified.



|Name            |  | Age |  | Position                
|--------------- |  | --- |  | ------------------------
|                |  |     |  |                         
|Mao Yi Hsiao    |  | 53  |  | Director                
|Li Fu Chang     |  | 56  |  | Director                
|Li Chwan Hau    |  | 51  |  | Director                
|Hsu Tzu En      |  | 40  |  | Director                
|Lo Chung Mei    |  | 55  |  | Chief Executive Officer 
|Chuang Yung Chi |  | 40  |  | Chief Financial Officer 
|Hsieh Tung Chi  |  | 37  |  | Chief Operating Officer 
|Hsu Wen Yuan    |  | 42  |  | Chief Marketing Officer 
|Chiang Te Yun   |  | 34  |  | Chief Technology Officer



Business Experience



The following summarizes the occupation and
business experience for our officers, directors, key employees and consultants.



88







Mao Yi Hsiao, Director

Mr. Mao has served as a director of the
Company since June 2010. Mr. Mao, with 25 years of insurance industry experience, is the founder as well as the Chairman of Taiwan
Law Broker Co., Ltd., the biggest insurance broker company in Taiwan. In addition, Mr. Mao has served as a supervisor for the Company’s
Consolidated Affiliated Entity Jiangsu Law since March 2005 to the present, also serve as the chairman of Law Enterprise, Law Agent
and Law Management. He received his Bachelor’s degree from Taiwan Soochow University School of Law and acquired a Taiwan
lawyer's practice certificate. Mr. Mao was selected as a director because of his experience in both the insurance industry and
the Company’s PRC operations.



Li Fu Chang, Director

Mr. Li has served as a director of the
Company since January 2011.  Mr. Li has 30 years of insurance industry experience, including 17 years in the insurance agency
industry.  From 1980 to 1992, he worked as a manager for Guohua Life Insurance Co., Ltd. From 1992 to 1993 Mr. Li worked as
General Manager for Gongxin insurance brokers Co., Ltd. or KHIB. Mr. Li served as a president to Time Insurance Brokers Co., Ltd.
from1993 to 2003. Mr. Li served as a consultant to the Company’s affiliated entity Henan Anhou from October 2003 to October
2009 and as the Chairman of Henan Anhou from October 2009 to May, 2012.  Mr. Li received a Bachelor degree in Mass Communication
from Fu Jen Catholic University. He is one of the primary insurance brokers in Taiwan.   Mr. Li was selected as a director
because of his experience in both the insurance industry and the Company’s PRC operations.



Li Chwan Hau, Director

Mr. Li has served as a director of the
Company since January 2011.  Mr. Li has 20 years of insurance industry experience.  Mr. Li has served as a service manager
at Taiwan Life Insurance from 1987 to 2000. In addition Mr. Li founded Genius Insurance Brokers Co., Ltd., and has served as its
Chairman from April 2000 to the present.  Mr. Li has also served as Chairman of Genius Financial Consultants Co., Ltd., a
Taiwan company from February 2001 to the present.  Mr. Li has served as a director to the Company’s affiliated entity
Sichuan Kangzhuang from 2006 to 2010.  He received a M.S. Degree in Actuarial Science in The University of Iowa and acquired
North American actuarial qualification. Mr. Li was selected as a director because of his experience in both the insurance industry
and the Company’s PRC operations.



Hsu Tzu En, Director

Mr. Hsu has served as a director of the
Company since January 2011. Mr. Hsu has over ten years of experience in investment banking. From 2003 to 2008 he served as a Manager
at Han De Investment Management Company, an investment company focusing on real estate, art and mining resources investment. From
2008 to 2010 he served as a Manager at Tao Zhu Capital, an investment company, and he has not taken any job after this position
till present due to personal reasons. Mr. Hsu was selected as a director because of his experience in the investment banking field.



89







Lo Chung Mei, Chief Executive Officer

Mr. Lo has served as the Company’s
Chief Executive Officer since January 2011.  Mr. Lo has served as the General Manager of the Company’s Consolidated
Affiliated Entity Henan Anhou from October 2003 to the present. Mr. Lo has 24 years of insurance industry experience, including
13 years working as a manager at Cathay Life Insurance Co., Ltd., from 1983 to1996, 4 years working as a insurance consultant at
Guangzhou Life Insurance Co., Ltd., China Life Insurance Co., Ltd. from 1996 to 1997, TaiKang Life insurance Co., Ltd. from 1997
to 2001, and 3 years working as a vice general manager at TaiKang Life Insurance Co., Ltd. from 2001 to 2003.



Chuang Yung Chi, Chief Financial Officer

Ms. Chuang has served as the Company’s
Chief Financial Officer since July 2012.  Ms. Chuang has served as financial manager of Law Insurance Broker Co., Ltd. in
Taiwan for 16 years, where she has been responsible for overall financial management of such company, including financial and strategic
planning, auditing and reporting, and communications to the investors. Prior to her joining Law Insurance Broker Co., Ltd., Ms.
Chuang served as business secretary in Pacific Realtor, Inc. since 1996. Ms. Chuang graduated from the Ming Chuan University in
Taiwan in the year of 2000, where she received a Bachelor degree of risk management and insurance.



Hsieh Tung Chi, Chief Operating Officer

Mr. Hsieh has served as the Chief
Operating Officer of the Company since January 2011.  Mr. Hsieh has served as Chief Operating Officer and Division
Chief of Management of the Company’s Consolidated Affiliated Entity Jiangsu Law from January 2005 to the present. Mr. Hsieh
has worked at First Bank, Head Office, as an Asset Management Specialist in 2000. He has worked at Taiwan Law brokers Co., Ltd.,
Operating Department, as an Administrative Personnel from 2000 to 2001, officer from 2001 to 2002, Assistant Manager in 2003 and
Manager from 2004 to 2005.



Hsu Wen Yuan, Chief Marketing Officer

Mr. Hsu has served as the Company’s
Chief Marketing Director since January 2011.  Mr. Hsu has 17 years of insurance industry experience. From February 2001 to
May 2006, Mr. Hsu served as a Vice Business Executive at Alexander Leed Risks Service Inc., an insurance brokerage company. 
From September 2006 to May 2009, Mr. Hsu served as General Manager of Kunshan Woma Insurance Agency Co., Ltd., an insurance agency
company. From June 2009 to the present, Mr. Hus served as General Manager of the Company’s affiliated entity Sichuan Kangzhuang. 
Mr. Hsu graduated from Feng Chia University with a major in Risk Management and Insurance.



90







Chiang Te Yun, Chief Technology Officer

Mr. Chiang has served as the Company’s
Chief Technology Officer since January 2011.  Mr. Chiang graduated from insurance department of Shih Chien University and
has ten years of experience in the insurance industry. From January 2004 to the present, Mr. Chiang has served as the Manager of
the Company’s affiliated entity Jiangsu Law.



Code of Ethics



We have not adopted a code of ethics that
applies to our officers, employees and directors, including our Chief Executive Officer and senior executives. However, we plan
to adopt one in the near future.



Family relationships



There are no family relationships by and
between or among the members of the Board or other executives. None of our directors and officers is directors or executive officers
of any company that files reports with the SEC.



Involvement in certain legal proceedings



No bankruptcy petition has been filed by
or against any business of which any of our executive officers was a general partner or executive officer either at the time of
the bankruptcy or within two years prior to that time.



No director has been convicted in a criminal
proceeding and is not subject to a pending criminal proceeding (excluding traffic violations and other minor offenses).



No director has been subject to any order,
judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities.



No director has been found by a court of
competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal
or state securities or commodities law, that has not been reversed, suspended, or vacated.



91







Audit Committee and Audit Committee Financial
Expert



Our board of directors functions as an
audit committee and performs some of the same functions as an audit committee including: (1) selection and oversight of our independent
accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls
and auditing matters; and (3) engaging outside advisors. We are not a "listed company" under SEC rules and is therefore
not required to have an audit committee comprised of independent directors. Our board of directors has determined that its members
do not include a person who is an "audit committee financial expert" within the meaning of the rules and regulations
of the SEC. Our board of directors has determined that each of its members is able to read and understand fundamental financial
statements and has substantial business experience that results in that member's financial sophistication. Accordingly, the
board of directors believes that each of its members have the sufficient knowledge and experience necessary to fulfill the duties
and obligations that an audit committee would have.



Indemnification



Under Delaware law and pursuant to our
articles of incorporation and bylaws, we may indemnify our officers and directors for various expenses and damages resulting from
their acting in these capacities. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted
to our officers or directors pursuant to those provisions, our counsel has informed us that, in the opinion of the SEC, this indemnification
is against public policy as expressed in the Securities Act, and is therefore unenforceable.



ITEM 11. EXECUTIVE COMPENSATION.



The following table reflects the compensation
paid to our principal executive officer during each of our fiscal years ended June 30, 2012 and 2011.No executive officer’s
total annual compensation exceeds $100,000.



SUMMARY COMPENSATION TABLE



|                        |  |        |      |  |        |  |        |       |  |  |        |  |  |        |   |  |                |  |   | Nonqualified |  |  |              |  |  |       |  
|----------------------- |  | ------ | ---- |  | ------ |  | ------ | ----- |  |  | ------ |  |  | ------ | - |  | -------------- |  | - | ------------ |  |  | ------------ |  |  | ----- | -
|                        |  |        |      |  |        |  |        |       |  |  |        |  |  |        |   |  | Non-Equity     |  |   | Deferred     |  |  |              |  |  |       |  
|                        |  |        |      |  |        |  |        |       |  |  | Stock  |  |  | Option |   |  | Incentive Plan |  |   | Compensation |  |  | All Other    |  |  |       |  
|Name and                |  | Fiscal |      |  | Salary |  |        | Bonus |  |  | Awards |  |  | Awards |   |  | Compensation   |  |   | Earnings     |  |  | Compensation |  |  | Total |  
|principal position      |  | Year   |      |  | ($)    |  |        | ($)   |  |  | ($)    |  |  | ($)    |   |  | ($)            |  |   | ($)          |  |  | ($)          |  |  | ($)   |  
|                        |  |        |      |  |        |  |        |       |  |  |        |  |  |        |   |  |                |  |   |              |  |  |              |  |  |       |  
|Lo Chung Mei            |  |        | 2011 |  |        |  | 15,980 |       |  |  | –      |  |  |        | – |  |                |  | – |              |  |  | –            |  |  |       | –
|Chief Executive Officer |  |        | 2012 |  |        |  | 20,886 |       |  |  | –      |  |  |        | – |  |                |  | – |              |  |  | –            |  |  |       | –



92







In the year 2012 and 2011, Mr. Lo Chung
Mei also served as the general manager of Henan Anhou and received all of his compensation from Henan Anhou. The above table identifies
all compensation received by the named officer directly or indirectly from the Company, its subsidiaries, and its Consolidated
Affiliated Entities.



Outstanding Equity Awards At Fiscal Year
End



None.



Director Compensation



Our directors do not currently receive
compensation for their service as directors of the Company, and have not received compensation in the last two fiscal years.



Set forth below is the compensation paid
to each of our directors during the fiscal year ended June 30, 2012.



2012 DIRECTOR COMPENSATION TABLE



|             |  | Fees     |   |  |              |  |        |           | 
|------------ |  | -------- | - |  | ------------ |  | ------ | --------- | 
|             |  | Earned   |   |  |              |  |        |           | 
|             |  | or       |   |  | All Other    |  |        |           | 
|             |  | Paid in  |   |  | Compensation |  |        |           | 
|Name         |  | Cash ($) |   |  | ($)(1)       |  |        | Total ($) | 
|Mao Yi Hsiao |  |          | 0 |  |              |  | 0      |           | 
|Li Fu Chang  |  |          | 0 |  |              |  | 14,683 |           | 
|Li Chwan Hau |  |          | 0 |  |              |  | 0      |           | 
|Hsu Tzu En   |  |          | 0 |  |              |  | 0      |           | 



(1) Li Fu Chang used to act as the executive
director (not an employee) of Henan Anhou. Pursuant to the articles of association of Henan Anhou, the executive director also
serves as the legal representative. Pursuant to an agreement with Henan Anhou, Li Fu Chang earned RMB6,000 ($940) per month for
serving as the legal representative of Henan Anhou from January 1, 2011 to May 10, 2012. If Li Fu Chang is terminated as the
Company’s Legal Representative, he is entitled to RMB100,000 ($15,667) in compensation. The Company does not consider this
engagement as making Li Fu Chang an employee of the Company or its subsidiaries and has determined that the amount paid to Li Fu
Chang does not disqualify him from independent director status.  Prior to January 1, 2011 Mr. Li was compensated RMB5,000
($783) per month for serving as the Legal Representative of Henan Anhou pursuant to the terms of a previous agreement with Henan
Anhou. In addition Mr. Li was paid $1,689 for travel to Taiwan as an additional benefit. On July 1, 2012, Henan Anhou has terminated
the agreement with Li Fu Chang and appointed Hu Chang Rong as the new executive director and legal representative of Henan Anhou.
Li Fu Chang has waived the RMB100,000 ($15,667) compensation for the termination.



93







Employment Agreements



Pursuant to an employment agreement between
Henan Anhou and Lo Chung Mei, dated January 1, 2011 (the “Lo Agreement”), Lo Chung Mei earns a salary of RMB9,000 (approximately
$1,410) per month to serve as General Manager of Henan Anhou.   The Lo Agreement terminates on December 31, 2012. 
The Lo Agreement also provides for reimbursement of four trips by Mr. Lo to Taiwan per year, an official car and gas subsidy, 20
days paid vacation, and reimbursement for business related travel and expenses.  The Agreement initially provided for the
performance targets with the total first year premium, or FYP, in 2010 must reach RMB10,000,000 ($1,566,661).  The 2011 performance
target is again set at an FYP equal to RMB10,000,000 ($1,566,661).  Mr. Lo has met the above-mentioned performance targets.
Considering the slow-down of general economic environment in China, no FYP target has been set for the year of 2012. Mr. Lo is
subject to a non-compete which prohibits him from competing with Henan Anhou during the term of the Lo Agreement and for two years
following the termination of his employment with Henan Anhou.  If Mr. Lo violates the non-compete provisions of the Lo Agreement,
he is subject to a penalty fee of RMB50,000 ($7,833).  Either party may terminate the Lo Agreement prior to the expiration
date of the agreement if such party (i) provides the non-terminating party 30 days notice and (ii) pays the non-terminating party
RMB50,000 ($7,833). In addition, Mr. Lo and Henan Anhou may terminate the contract for enumerated reasons listed in the Lo Agreement
without payment of the termination fee, such as Henan Anhou’s ability to terminate the Lo Agreement if Mr. Lo does not reach
the performance targets described above.



Pursuant to an employment agreement between
Chuang Yung Chi and the Company, dated July 2, 2012 (the “Chuang Agreement”), Ms. Chuang earns a salary of $2,300 per
month to serve as Chief Financial Officer of the Company and will be eligible for other monetary rewards based on her performance
evaluations. The term of the Chuang Agreement is indefinite.



Pursuant to an employment agreement between
Chuang Yung Chi and the Company, dated July 2, 2012 (the “Chuang Agreement”), Ms. Chuang earns a salary of $2,300 per
month to serve as Chief Financial Officer of the Company and will be eligible for other monetary rewards based on her performance
evaluations. The term of the Chuang Agreement is indefinite. Chuang Yung Chi also serves as the manager of financial department
of Law Broker.



94







Pursuant to an employment agreement between
Hsieh Tung Chi and Jiangsu Law, dated December 30, 2009 (the “Hsieh Agreement”), Mr. Hsieh earns a salary of RMB3,000
($470) per month to serve as Division Chief of Management.  The original term of the Hsieh Agreement expires on December 29,
2011, with an automatic extension of the Hsieh Agreement if neither party terminates the Hsieh Agreement. After the expiration
date, Mr. Hsieh may terminate the Hsieh Agreement at any time and Jiangsu Law may terminate the contract with 30 days notice to
Mr. Hsieh.



Jiangsu Law may immediately terminate the
Hsieh Agreement under any of the following circumstances: (1) Mr. Hsieh’s failure to meet the recruitment requirements during
the probation period; (2) Mr. Hsieh’s serious violation of the internal disciplines or rules of Jiangsu Law; (3) Mr. Hsieh’s
negligent or intentional act causing significant loss to Jiangsu Law; and (4) criminal investigation against Mr. Hsieh.



Under any of the following circumstances,
Jiangsu Law may terminate the Hsieh Agreement with at least 30 days advance written notice to Mr. Hsieh: (1) where Mr. Hsieh fails
to perform after medical treatment and recovery from illness or non-work-related injury; (2) where Mr. Hsieh fails to perform after
training or reassignment of work; and (3) no modification to the Hsieh Agreement can be agreed upon in case of frustration of purposes,
where the basis for the original contract have changed substantially and the purposes of such original contract can no longer be
carried out.



Mr. Hsieh may terminate the Hsieh Agreement
with at least 30 days prior notice at any time during the term of the Hsieh Agreement, or may immediately terminate such labor
contract under any of the following circumstances: (1) within the probation period; (2) where Mr. Hsieh is illegally forced to
work under violence, intimidation or illegal restriction of personal freedom; or (3) upon employer’s failure to make remuneration
payment or to provide appropriate working conditions.



95







Pursuant to an employment agreement between
Hsu Wen Yuan and Sichuan Kangzhuang, dated October 1, 2010 (the “Hsu Agreement”), Mr. Hsu earns a salary of RMB13,000
($2,037) per month to serve as General Manager of Marketing for Sichuan Kangzhuang, the Hsu Agreement is not a fixed term employment
agreement, it has no expiration date. The Hsu Agreement also provides for reimbursement of four trips by Mr. Hsu to Taiwan per
year, an official car and gas subsidy, 20 days paid vacation, and reimbursement for business related travel and expenses. 
The Hsu Agreement initially provided for the performance targets with the total first year premium, or FYP, in 2011 must reach
RMB10,000,000 ($1,566,661). Though Mr. Hsu failed to achieve the performance target, considering depressing general business environment
as well as the extensive managerial experience of Mr. Hsu, Sichuan Kangzhuang continued the employment relationship with Mr. Hsu.
Considering the slow-down of general economic environment in China, no FYP target has been set for the year of 2012. Mr. Hsu is
subject to a non-compete which prohibits him from competing with Sichuan Kangzhuang during the term of the Hsu Agreement and for
two years following the termination of his employment with Sichuan Kangzhuang.  If Mr. Hsu violates the non-compete provisions
of the Hsu Agreement, he is subject to a penalty fee of RMB100,000 ($15,666). Either party may terminate the Hsu Agreement prior
to the expiration date of the agreement if such party (i) provides the non-terminating party 30 days notice and (ii) pays the non-terminating
party RMB100,000 ($15,666). In addition, Mr. Hsu and Sichuan Kangzhuang may terminate the contract for enumerated reasons listed
in the Hsu Agreement without payment of the termination fee, such as Sichuan Kangzhuang’s ability to terminate the Hsu Agreement
if Mr. Hsu does not reach the performance targets described above.



Pursuant to an employment agreement between
Jiangsu Law and Chiang Te Yun, dated December 30, 2009 (the “Chiang Agreement”), Mr. Chiang earns a salary of RMB2,250
($352.00) per month to serve as Manager of Jiangsu Law. The original term of the Chiang Agreement expires on December
29, 2011, with an automatic extension of the Chiang Agreement if neither party terminates the Chiang Agreement. After the expiration
date Mr. Chiang may terminate the Chiang Agreement at any time and Jiangsu Law may terminate the contract with 30 days notice to
Mr. Chiang. Prior to the expiration date, the Chiang Agreement may be terminated by either party subject to applicable PRC labor
laws and regulations, among which:



Jiangsu Law may immediately terminate the
Chiang Agreement under any of the following circumstances: (1) Mr. Chiang’s failure to meet the recruitment requirements
during the probation period; (2) Mr. Chiang’s serious violation of the internal disciplines or rules of Jiangsu Law; (3)
Mr. Chiang’s negligent or intentional act causing significant loss to Jiangsu Law; and (4) criminal investigation against
Mr. Chiang.



Under any of the following circumstances,
Jiangsu Law may terminate the Chiang Agreement with at least 30 days advance written notice to Mr. Chiang: (1) where Mr. Chiang
fails to perform after medical treatment and recovery from illness or non-work-related injury; (2) where Mr. Chiang fails to perform
after training or reassignment of work; and (3) no modification to the Chiang Agreement can be agreed upon in case of frustration
of purposes, where the basis for the original contract have changed substantially and the purposes of such original contract can
no longer be carried out.



96







Mr. Chiang may terminate the Chiang Agreement
with at least 30 days prior notice at any time during the term of the Chiang Agreement, or may immediately terminate such labor
contract under any of the following circumstances: (1) within the probation period; (2) where Mr. Chiang is illegally forced to
work under violence, intimidation or illegal restriction of personal freedom; or (3) upon employer’s failure to make remuneration
payment or to provide appropriate working conditions.



ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.



The following table
sets forth information, as of September 28, 2012, concerning, except as indicated by the footnotes below:



| | • | Each person whom we know beneficially owns more than 5% of our common stock or Series A Preferred
Stock.
| | - | --------------------------------------------------------------------------------------------------------



| | • | Each of our directors.
| | - | ----------------------



| | • | Each of our named executive officers (see the section titled “Executive Compensation”).
| | - | ---------------------------------------------------------------------------------------



| | • | All of our directors and executive officers as a group.
| | - | -------------------------------------------------------



Unless otherwise noted
below, the address of each beneficial owner listed in the table is Unless otherwise specified, the address of each of the persons
set forth below is in care of China United Insurance Service, Inc., Building 4F, Hesheng Plaza No. 26 Yousheng S. Rd., Jinshui
District, Zhengzhou, Henan, People’s Republic of China.



We have determined
beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on
the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with
respect to all shares of common stock that they beneficially own, subject to applicable community property laws.



Applicable percentage
ownership is based on 29,100,503 shares of common stock and 1,000,000 shares of Series A Preferred Stock outstanding at September
28, 2012. Beneficial ownership representing less than 1% is denoted with an asterisk (*).



97







The information provided
in the table is based on our records, information filed with the SEC, and information provided to us, except where otherwise noted.



|                                                                                           |  |        |           |     |        |  |      |              |  |  | Owned     |  |  |              |    
|------------------------------------------------------------------------------------------ |  | ------ | --------- | --- | ------ |  | ---- | ------------ |  |  | --------- |  |  | ------------ | ---
|                                                                                           |  |        |           |     | Shares |  |      | Beneficially |  |  | Preferred |  |  | % Total      |    
|                                                                                           |  | Common |           |     | Stock  |  |      | Series A     |  |  | Stock     |  |  | Voting Power |    
|Name                                                                                       |  | Shares |           |     | %      |  |      | Shares       |  |  | %         |  |  | (1)          |    
|Executive Officers and Directors                                                           |  |        |           |     |        |  |      |              |  |  |           |  |  |              |    
|Mao Yi Hsiao                                                                               |  |        | 4,540,234 | (2) |        |  | 15.6 |              |  |  | 1,000,000 |  |  |              | 100
|Li Fu Chang                                                                                |  |        | 800,000   |     |        |  | 2.7  |              |  |  | -         |  |  |              | -  
|Li Chwan Hau                                                                               |  |        | 1,000,000 |     |        |  | 3.4  |              |  |  | -         |  |  |              | -  
|Hsu Tzu En                                                                                 |  |        | 15,000    |     |        |  | *    |              |  |  | -         |  |  |              | -  
|Lo Chung Mei                                                                               |  |        | 800,000   | (3) |        |  | 2.7  |              |  |  | -         |  |  |              | -  
|All executive officers and directors as a group (5 persons)                                |  |        | 7,155,234 |     |        |  | 24.6 |              |  |  | 1,000,000 |  |  |              | 100
|Other 5% Beneficial Owners                                                                 |  |        |           |     |        |  |      |              |  |  |           |  |  |              |    
|Chang Pi Hui
198 Chung Cheng East Road, Linbei village, Linnei town, Yunlin County, Taiwan |  |        | 2,620,000 |     |        |  | 9.0  |              |  |  | -         |  |  |              | -  



| | (1) | Percentage total voting power represents voting power with respect to all shares of our common stock
and Series A Preferred Stock, voting together as a single class. Each holder of common stock is entitled to one vote per share
of common stock and each holder of Series A Preferred Stock is entitled to 10 votes per share of Series A Preferred Stock on all
matters submitted to our stockholders for a vote.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Includes 200,000 shares of common stock held by Lee Shu Fen, Mao Yi Hsiao’s spouse,
                                                                 200,000 shares of common stock held by Mao Li Chieh, Mao Yi Hsiao’s daughter and 969,322 shares of common stock
                                                                 held by U-Li Investment Consulting Enterprise Co., Ltd.  solely owned by Lee Shu Fen, Mao Yi Hsiao’s
                                                                 spouse.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Includes 400,000 shares of common stock held by Liu Shu Ching, Mr. Lo Chung Mei’s spouse and
400,000 shares of common stock held by Liu Chia Tzu, Mr. Lo Chung Mei’s daughter.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE.



Related Party Loans



The related parties below loaned money
to Henan Anhou for working capital.  As of the dates below, the following amounts were due to the related parties.



98







|                                                     |  | June 30, |         |  | June 30, |   |         | September 28, | 
|---------------------------------------------------- |  | -------- | ------- |  | -------- | - | ------- | ------------- | 
|                                                     |  | 2011     |         |  | 2012     |   |         | 2012          | 
|                                                     |  |          |         |  |          |   |         |               | 
|Due to Mr. Mao (Shareholder of China United)         |  |          | 64,266  |  |          |   | 1,871   |               | 
|Due to Ms. Zhu (Shareholder of Henan Anhou)          |  | $        | 71,080  |  |          | $ | 441,272 |               | 
|Due to Mr. Zhu (Legal representative of Jiangsu Law) |  |          | 2,139   |  |          |   | 2,189   |               | 
|Total                                                |  | $        | 137,485 |  |          | $ | 445,332 |               | 



The amounts are interest-free, unsecured and
repayable on demand.



Henan Anhou borrowed from Mr. Jin Yongguang
(“Mr. Jin”), a third party, for working capital. On March 31, 2011, Mr. Jin and Mr. Li Fu Chang (“Mr. Li”),
the legal representative of Henan Anhou and a principal shareholder of China United, signed a debt transfer agreement, which transferred
the RMB3,370,000 ($512,914) Henan Anhou owed Mr. Jin to Mr. Li.   Therefore, Henan Anhou no longer owes anything to Mr.
Jin.  Subsequent to the debt transfer agreement, Mr. Li and Henan Anhou signed a debt cancellation agreement on the same day,
upon which Mr. Li gave up his right to claim for repayment of his lending to Henan Anhou. As a result, Henan Anhou no longer owed
any monies to Mr. Li.



Mr. Mao, Ms. Zhu and Mr. Zhu
also lend money to Henan Anhou and Jiangsu Law during the two years ended June 30, 2011 and 2012. The amounts are interest-free,
unsecured and repayable on demand.



VIE Agreements



On January 17, 2011, CU WFOE and Henan
Anhou and its shareholders entered into a series of agreements known as variable interest agreements (the “VIE Agreements”)
pursuant to which CU WFOE has executed effective control over Henan Anhou through these contractual arrangements. The VIE Agreements
included:



(1) An Exclusive Business Cooperation Agreement
through which CU WFOE is appointed the exclusive services provider to provide Henan Anhou with complete technical support, business
support and related consulting services (as described in the agreement) in exchange for 90% of the net profits (as defined in the
agreement) of Henan Anhou. The agreement does not provide that CU WFOE is responsible for the debts of the Consolidated Affiliated
Entities. The term of the Exclusive Business Cooperation Agreement began on January 17, 2011 and lasts ten years, unless earlier
terminated as provide in the agreement. The term of the agreement may be extended at CU WFOE’s discretion prior to the expiration
thereof. CU WFOE may terminate the agreement at any time with 30 days’ written notice but Henan Anhou may only terminate
the agreement if CU WFOE commits gross negligence or a fraudulent act against Henan Anhou;



99







(2) a Power of Attorney under which the
shareholders of Henan Anhou have vested their collective voting control over Henan Anhou to CU WFOE;



(3) an Option Agreement under which the
shareholders of Henan Anhou have granted to CU WFOE the irrevocable right and option to acquire all of their equity interests in
Henan Anhou, subject to applicable PRC laws and regulations. The term of the Option Agreement began on January 17, 2011 and lasts
ten years, but may be renewed at CU WFOE’s election; and



(4) a Share Pledge Agreement under which
the owners of Henan Anhou have pledged all of their equity interests in Henan Anhou to CU WFOE to guarantee Henan Anhou’s
performance of its obligations under the Exclusive Business Cooperation Agreement.



The foregoing description of the terms
of the Exclusive Business Cooperation Agreement, the Power of Attorney, the Option Agreement and the Share Pledge Agreement is
qualified in its entirety by reference to the provisions of the agreements filed as Exhibits 10.2 – 10.14 to this report
which are incorporated by reference herein.



Henan Anhou owns 100% equity interest in
both Sichuan Kangzhuang and Jiangsu Law. The shareholders of Henan Anhou are Zhu Shuqin (80%), Chen Yanxia (11%), Fang Qunlei (4.5%)
and Wei Qun (4.5%). All of them are PRC citizens and none of them holds any shares in the Company. Pursuant to the VIE Agreements,
CU WFOE becomes the primary beneficiary of Henan Anhou and only leaves Henan Anhou shareholders nominal value therein. Please refer
to the chart below for detailed information on any of the Company’s shareholders being a director or officer of the Company,
the Company’s subsidiaries or our Consolidated Affiliated Entities.



100







|Name            |  | Position in the          |  | Position |  | Position in |  | Position                        |  | Position in |  | Position in Law |  | Position in                  |  | Position in CU                |  | Position in     |  | Position in                 
|--------------- |  | ------------------------ |  | -------- |  | ----------- |  | ------------------------------- |  | ----------- |  | --------------- |  | ---------------------------- |  | ----------------------------- |  | --------------- |  | ----------------------------
|                |  | Company                  |  | in AHFL  |  | Law         |  | in Law                          |  | Law Agent   |  | Management      |  | CU Hong                      |  | WFOE                          |  | Henan Anhou     |  | Jiangsu Law                 
|                |  |                          |  |          |  | Enterprise  |  | Broker                          |  |             |  |                 |  | Kong                         |  |                               |  |                 |  |                             
|                |  |                          |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|Mao Yi Hsiao    |  | Director                 |  | Director |  | Director    |  | Director                        |  | Director    |  | Director        |  | General Manager
and Chairman |  | General Manager 
and Chairman |  |                 |  | Supervisor                  
|Li Chwan Hau    |  | Director                 |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|                |  |                          |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|Li Fu Chang     |  | Director                 |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|                |  |                          |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|Hsu Tzu En      |  | Director                 |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|                |  |                          |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|Lo Chung Mei    |  | Chief Executive Officer  |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  | General Manager |  |                             
|                |  |                          |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|Chuang Yung Chi |  | Chief Financial Officer  |  |          |  |             |  | Manager of Financial Department |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|                |  |                          |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|Hsieh Tung Chi  |  | Chief Operating Officer  |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  | Division Chief of Management
|                |  |                          |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|Chiang Te Yun   |  | Chief Technology Officer |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  | Manager                     
|                |  |                          |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|Chao Hui Hsien  |  |                          |  |          |  |             |  | Vice-General Manager            |  | Director    |  |                 |  |                              |  |                               |  |                 |  | Vice-General Manager        
|                |  |                          |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|Lee Shu Fen     |  |                          |  |          |  |             |  | General Manager                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|                |  |                          |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|Tu Wen Ti       |  |                          |  |          |  |             |  | Assistant General Manager       |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|                |  |                          |  |          |  |             |  |                                 |  |             |  |                 |  |                              |  |                               |  |                 |  |                             
|Shen Wen Che    |  |                          |  |          |  |             |  | Assistant General Manager       |  |             |  |                 |  |                              |  |                               |  |                 |  |                             



101







Reclassification of Certain Common
Stock into Preferred Shares



On July 2, 2012, the Board of Directors
and stockholders of the Company approved, in connection with a reclassification of 1,000,000 issued and outstanding shares of common
stock (the “Reclassified Shares”), par value $0.00001 per share held by Mao Yi Hsiao (“Mr. Mao”) into 1,000,000
shares of Series A Convertible Preferred Stock, par value $0.00001 per share (the “Series A Preferred Stock”) on a
share-for-share basis (the “Reclassification”), the issuance of 1,000,000 shares of Series A Preferred Stock to Mr.
Mao and cancellation of 1,000,000 common stock held and submitted by Mr. Mao pursuant to the Reclassification. All of the 1,000,000
shares of Series A Preferred Stock are reclassified from the 1,000,000 common stock held by Mr. Mao and no additional consideration
has been paid by Mr. Mao in connection with the Reclassification. Each holder of common stock shall be entitled to one vote for
each share of common stock held of record by such holder as of the applicable record date on any matter that is submitted to a
vote of the stockholders of the Company; while each holder of Series A Preferred Stock shall be entitled to ten votes for each
share of Series A Preferred Stock held of record by such holder as of the applicable record date on any matter that is submitted
to a vote of the stockholders of the Company.



Immediately prior to the Reclassification,
the Common Stock beneficially owned by Mr. Mao, a director of the Company, represents 16.91% of the voting power of all of the
Company’s voting power; immediately subsequent to the Reclassification, the Common Stock and the Series A Preferred Stock
represents approximately 42.61% of the combined voting power of all of the Company’s voting stock.



Recent Acquisition of AHFL



On August 24, 2012, the Board of Directors
and the shareholders of the Company have, through unanimous consent, approved the acquisition of all of the issued and outstanding
shares of Action Holdings Financial Limited (“AHFL”), a LLC incorporated under the laws of British Virgin Islands on
April 30, 2012, together with its subsidiaries in Taiwan. Subsequent to the acquisition, AHFL becomes a 100% subsidiary of the
Company.



Pursuant to the provisions of the Acquisition
Agreement and in exchange for all of the issued and outstanding shares of AHFL, the Company will (i) issue eight million shares
of common stock of the Company to the shareholders of AHFL; (ii) issue two million shares of common stock of the Company to certain
employees of Law Broker; (iii) create an employee stock option pool, consisting of available options, exercisable for up to two
million shares of common stock of the Company; and (iv) pay NT$15 million ($500,815) and NT$7.5 million ($250,095) in cash in two
installments, subject to terms and conditions therein.



102







AHFL holds 65.95% of the issued and outstanding
shares of Law Enterprise Co., Ltd. (“Law Enterprise”), a company limited by shares incorporated under the laws of Taiwan
on January 30, 1996. Law Enterprise holds (i) 100% Law Insurance Broker Co., Ltd. (“Law Broker”), a company limited
by shares incorporated in Taiwan on October 9, 1992; (ii) 97.84% of Law Risk Management & Consultant Co., Ltd. (“Law
Management”), a company limited by shares incorporated in Taiwan on December 5, 1987; and (iii) 96% of Law Insurance Agent
Co., Ltd. (“Law Agent”), a LLC incorporated in Taiwan on June 3, 2000.



Law Enterprise acts as a holding company
of its operating subsidiaries in Taiwan. Law Broker primarily engages in insurance brokerage and insurance agency service business
across Taiwan, while Law Management and Law Agent are not in active operation. We operate our Taiwan business primarily through
Law Broker.



As of the date immediately prior to the
consummation of the acquisition, certain shareholders of AHFL, including  Mao Yi Hsiao, are also significant shareholders of
the Company: (i)  Mao Yi Hsiao, together with  Lee Shu Fen (his wife) and  Mao Li Chieh (his daughter), own 17.9% of the
outstanding shares of the Company and 24.25% of the outstanding shares of AHFL.  Mao Yi Hsiao, one of the directors of the Company,
also acts as the sole director of AHFL and the board chairman of Law Enterprise, Law Broker, Law Management and Law Agent, and
as the supervisor of Jiangsu Law Broker Co., Ltd. In addition,  Lee Shu Fen also acts as general manager of Law Broker; (ii)
 Chao Hui Hsien, a shareholder of AHFL and Law Agent, is also a shareholder of the Company. In addition, Chao Hui Hsien
also acts as vice-general manager of Law Broker and director of Law Agent; (iii)  Chuang Yung Chi, a shareholder of AHFL, is
also a shareholder and Chief Financial Officer of the Company; (iv)  Hsieh Tung Chi, a shareholder of AHFL, is also a shareholder
of the Company. In addition,  Hsieh Tung Chi acts as the Chief Operating Officer of the Company; (v)  Tu Wen Ti, a shareholder
of AHFL, is also a shareholder of the Company. In addition,  Tu Wen Ti acts as the assistant general manager of Law Broker;
and (vi)  Shen Wen Che, a shareholder of AHFL, is also a shareholder of the Company. In addition,  Shen Wen Che acts as the
assistant general manager of Law Broker.



Subsequent to the closing of the acquisition,
 Mao Yi Hsiao holds 100% of the Company’s outstanding preferred shares, and holds, together with his affiliates, 15.6%
of the Company’s outstanding common shares, and 37.18% of the voting power of the Company.



Insider Transactions Policies and Procedures



The Company does not currently have an
insider transaction policy.



103







Director Independence



All of the Company’s directors except
Mr. Mao are “independent directors” as defined by the NYSE Amex Stock Exchange.



ITEM 14. PRINCIPAL ACCOUNTANT FEES
AND SERVICES.



Goldman Kurland and Mohidin LLP
(“Goldman”) has served as our independent auditors for the fiscal years ended June
30, 2012 and 2011.



During the fiscal years ended June 30,
2012 and 2011, fees for services billed by Goldman were as follows:



|                   |  | June 30, |         |  | June 30, |  
|------------------ |  | -------- | ------- |  | -------- | -
|                   |  | 2012     |         |  | 2011     |  
|Audit fees(1)      |  | $        | 103,000 |  |          | $
|Audit-related fees |  |          | -       |  |          |  
|Tax fees(2)        |  |          | -       |  |          |  
|All other fees     |  |          | -       |  |          |  
|Total              |  | $        | 103,000 |  |          | $



---



| | (1) | Consists of fees billed for the audit of our annual financial statements, review of financial statements
included in our Quarterly Reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory
and regulatory filings or engagements.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | “Tax Fees” consisted of fees billed for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------



Pre-Approval Policies and Procedures



Under the Sarbanes-Oxley Act of 2002, all
audit and non-audit services performed by our auditors must be approved in advance by our Board to assure that such services do
not impair the auditors’ independence from us. In accordance with its policies and procedures, our Board pre-approved the
audit service performed by Goldman for our consolidated financial statements as of and for the year ended June 30, 2012.



PART IV



ITEM 15. EXHIBITS, FINANCIAL STATEMENT
SCHEDULES.



| | (a) | Index of Financial Statements:
| | --- | ------------------------------



| | (1) | The financial statements required by Item 15(a) are filed in Item 8 of this Annual Report
on Form 10-K.
| | --- | -------------------------------------------------------------------------------------------------------



104







| | (2) | Schedules required by Item 15(a) are omitted because they are not required, are not applicable
or the information is included in the consolidated financial statements or notes thereto.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Index of Exhibits:
| | --- | ------------------



|Exhibit |  |                                                                                                                                                                                                                           
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description of Exhibit                                                                                                                                                                                                    
|2.1     |  | Acquisition Agreement dated August 24, 2012 between the Company and the shareholders of Action Holdings Financial Limited (incorporated by reference to Exhibit 2.1 to the Form 8-K filed with the SEC on August 24, 2012)
|3.1     |  | Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the SEC on July 3, 2012)                                                                           
|3.2     |  | Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Form 8-Kfiled with the SEC on July 3, 2012)                                                                                                  
|4.1     |  | Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 4.1 to the Form 8-K filed with the SEC on July 3, 2012)                                                                      
|10.1    |  | Stock Purchase Agreement, dated January 17, 2011 (incorporated by reference to Exhibit 10.1 to the Form S-1 filed with the SEC on May 13, 2011)                                                                           
|10.2    |  | Exclusive Business Cooperation Agreement, dated January 17, 2011 (incorporated by reference to Exhibit 10.2 to the Form S-1 filed with the SEC on May 13, 2011)                                                           
|10.3    |  | Share Pledge Agreement, dated January 17, 2011 - Zhu Shuqin  (incorporated by reference to Exhibit 10.3 to the Form S-1 filed with the SEC on May 13, 2011)                                                               
|10.4    |  | Share Pledge Agreement, dated January 17, 2011 – Wei Qun (incorporated by reference to Exhibit 10.4 to the Form S-1 filed with the SEC on May 13, 2011)                                                                   
|10.5    |  | Share Pledge Agreement, dated January 17, 2011 – Fang Qunlei (incorporated by reference to Exhibit 10.5 to the Form S-1 filed with the SEC on May 13, 2011)                                                               
|10.6    |  | Share Pledge Agreement, dated January 17, 2011 – Chen Yanxia (incorporated by reference to Exhibit 10.6 to the Form S-1 filed with the SEC on May 13, 2011)                                                               
|10.7    |  | Power of Attorney, dated January 17, 2011 – Zhu Shuqin (incorporated by reference to Exhibit 10.7 to the Form S-1 filed with the SEC on May 13, 2011)                                                                     
|10.8    |  | Power of Attorney, dated January 17, 2011 – Wei Qun (incorporated by reference to Exhibit 10.8 to the Form S-1 filed with the SEC on May 13, 2011)                                                                        
|10.9    |  | Power of Attorney, dated January 17, 2011 – Fang Qunlei (incorporated by reference to Exhibit 10.9 to the Form S-1 filed with the SEC on May 13, 2011)                                                                    
|10.10   |  | Power of Attorney, dated January 17, 2011 – Chen Yanxia (incorporated by reference to Exhibit 10.10 to the Form S-1 filed with the SEC on May 13, 2011)                                                                   
|10.11   |  | Exclusive Option Agreement, dated January 17, 2011 – Zhu Shuqin (incorporated by reference to Exhibit 10.11 to the Form S-1 filed with the SEC on May 13, 2011)                                                           
|10.12   |  | Exclusive Option Agreement, dated January 17, 2011 – Wei Qun (incorporated by reference to Exhibit 10.12 to the Form S-1 filed with the SEC on May 13, 2011)                                                              



105







|10.13 |  | Exclusive Option Agreement, dated January 17, 2011 – Fang Qunlei (incorporated by reference to Exhibit 10.13 to the Form S-1 filed with the SEC on May 13, 2011)                                                                                                 
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.14 |  | Exclusive Option Agreement, dated January 17, 2011 – Chen Yanxia (incorporated by reference to Exhibit 10.14 to the Form S-1 filed with the SEC on May 13, 2011)                                                                                                 
|10.15 |  | Sichuan Kangzhuang Share Transfer Agreement, between Henan Anhou and Allianz China Life Insurance Company Limited, dated September 6, 2010  (incorporated by reference to Exhibit 10.15 to the Form S-1 filed with the SEC on May 13, 2011)                      
|10.16 |  | Sichuan Kangzhuang Share Transfer Agreement, between Henan Anhou and Chengdu Jingzhan Enterprise Management & Consulting Company Limited, dated September 6, 2010 (incorporated by reference to Exhibit 10.16 to the Form S-1 filed with the SEC on May 13, 2011)
|10.17 |  | Sichuan Kangzhuang Share Transfer Agreement, between Henan Anhou and Li Dan, dated September 6, 2010 (incorporated by reference to Exhibit 10.17 to the Form S-1 filed with the SEC on May 13, 2011)                                                             
|10.18 |  | Sichuan Kangzhuang Share Transfer Agreement, between Henan Anhou and Yan Fang, dated September 6, 2010 (incorporated by reference to Exhibit 10.18 to the Form S-1 filed with the SEC on May 13, 2011)                                                           
|10.19 |  | Jiangsu Law Share Transfer Agreement, between Henan Anhou and Liu Jianxin, dated September 28, 2010 (incorporated by reference to Exhibit 10.19 to the Form S-1 filed with the SEC on May 13, 2011)                                                              
|10.20 |  | Jiangsu Law Share Transfer Agreement, between Henan Anhou and Zhu Xudong, dated September 28, 2010 (incorporated by reference to Exhibit 10.20 to the Form S-1 filed with the SEC on May 13, 2011)                                                               
|10.21 |  | Jiangsu Law Share Transfer Agreement, between Henan Anhou and Zhu Xumin, dated September 28, 2010  (incorporated by reference to Exhibit 10.21 to the Form S-1 filed with the SEC on May 13, 2011)                                                               
|10.22 |  | Translation of Insurance Agency Contract with Taiping Life Insurance Co., Ltd,, dated November 5, 2003  (incorporated by reference to Exhibit 10.22 to the Form S-1 filed with the SEC on May 13, 2011)                                                          
|10.23 |  | Translation of Legal Representative Agreement with Li Fu Chang, dated January 1, 2011 (incorporated by reference to Exhibit 10.23 to the Form S-1/A filed with the SEC on November 14, 2011)                                                                     
|10.24 |  | Translation of Employment Agreement with Lo Chung Mei, dated January 1, 2011 (incorporated by reference to Exhibit 10.24 to the Form S-1/A filed with the SEC on October 28, 2011)                                                                               
|10.25 |  | Translation of Employment Agreement with Chiang Te Yun, dated December 30, 2009  (incorporated by reference to Exhibit 10.25 to the Form S-1 filed with the SEC on May 13, 2011)                                                                                 
|10.26 |  | Translation of Employment Agreement with Hsu Wen Yuan, dated October 1, 2010 (incorporated by reference to Exhibit 10.26 to the Form S-1/A filed with the SEC on October 28, 2011)                                                                               
|10.27 |  | Translation of Employment Agreement with Tsai Shiu Fang, dated January 1, 2011  (incorporated by reference to Exhibit 10.27 to the Form S-1/A filed with the SEC on October 28, 2011)                                                                            



106







|10.28 |  | Translation of Employment Agreement with Hsieh Tung Chi, dated December 30, 2009  (incorporated by reference to Exhibit 10.28 to the Form S-1 filed with the SEC on May 13, 2011)                      
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.29 |  | Translation of Tenancy Contract, Building 4K, dated January 10, 2011 (incorporated by reference to Exhibit 10.29 to the Form S-1 filed with the SEC on May 13, 2011)                                   
|10.30 |  | Translation of Tenancy Contract, Building 4F, dated January 10, 2011 (incorporated by reference to Exhibit 10.30 to the Form S-1 filed with the SEC on May 13, 2011)                                   
|10.31 |  | Translation of Creditors Right Subrogation Agreement  (incorporated by reference to Exhibit 10.31 to the Form S-1/A filed with the SEC on November 14, 2011)                                           
|10.32 |  | Translation of Debt Waiver Agreement  (incorporated by reference to Exhibit 10.32 to the Form S-1/A filed with the SEC on November 14, 2011)                                                           
|10.33 |  | Translation of Legal Representative Agreement with Li Fu Chang, dated January 1, 2010 (incorporated by reference to Exhibit 10.33 to the Form S-1/A filed with the SEC on November 14, 2011)           
|10.34 |  | Translation of Insurance Agency Contract with Cathay Insurance Co., Ltd., dated November 30, 2011 (incorporated by reference to Exhibit 10.34 to the Form S-1/A filed with the SEC on December 2, 2011)
|10.35 |  | Translation of Insurance Agency Contract with Tianan Insurance Co., Ltd., dated July 1, 2011 (incorporated by reference to Exhibit 10.35 to the Form S-1/A filed with the SEC on December 2, 2011)     
|10.36 |  | Translation of Employment Agreement with Chuang Yun Chi, dated July 2, 2012                                                                                                                            
|10.37 |  | Translation of Insurance Agency Contract between Law Broker and China Life Insurance Company dated January 1, 2008                                                                                     
|10.38 |  | Translation of Insurance Agency Contract between Law Broker and Farglory Life Insurance Co, Ltd. dated December 30, 2000                                                                               
|10.39 |  | Translation of Insurance Agency Contract between Law Broker and Fubon Life Insurance Co, Ltd. dated February 20, 2004                                                                                  
|10.40 |  | Translation of Insurance Agency Contract between Law Broker and Kuo Hua Life Insurance Company dated July 22, 1993                                                                                     
|10.41 |  | Translation of Insurance Agency Contract between Law Broker and TransGlobe Life Insurance Company dated January 1, 2002                                                                                
|10.42 |  | Translation of Insurance Agency Contract between Law Broker and ACE Insurance Company dated September 1, 2009                                                                                          
|10.43 |  | Translation of Insurance Agency Contract between Law Broker and Fubon Insurance Co, Ltd. dated December 1, 2006                                                                                        
|10.44 |  | Translation of Insurance Agency Contract between Law Broker and Taian Insurance Co., Ltd. dated August 5, 2010                                                                                         
|10.45 |  | Translation of Insurance Agency Contract between Law Broker and Union Insurance Company dated April 1, 2008                                                                                            
|10.46 |  | Translation of Insurance Agency Contract between Law Broker and Zurich Insurance Company dated October 1, 2005                                                                                         
|10.47 |  | Reclassification Agreement between the Company and Mao Yi Hsiao, dated July 2, 2012 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the SEC on July 3, 2012).                    



107







|21    |  | Subsidiaries of the registrant                                                                            
|----- |  | ----------------------------------------------------------------------------------------------------------
|31.1  |  | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
|31.2  |  | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
|32.1* |  | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002    
|32.2* |  | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002    



*The certifications attached as Exhibits
32.1 and 32.2 accompany this annual report on Form 10-K pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18
of the Securities Exchange Act of 1934, as amended.



108







SIGNATURES



Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



|                         | China United Insurance Service, Inc.
|------------------------ | ------------------------------------
|                         |                                     
|                         | By:                                 
|Date: September 28, 2012 |                                     
|                         |                                     



|                         | By: | /s/ Chuang Yung Chi                     
|------------------------ | --- | ----------------------------------------
|Date: September 28, 2012 |     | Chuang Yung Chi, Chief Financial Officer
|                         |     | Principal Accounting Officer            



Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.



|Signature           |  | Title                                                  |  | Date              
|------------------- |  | ------------------------------------------------------ |  | ------------------
|                    |  |                                                        |  |                   
|/s/ Lo Chung Mei    |  | Chief Executive Officer (Principal Executive Officer)  |  | September 28, 2012
|Lo Chung Mei        |  |                                                        |  |                   
|                    |  |                                                        |  |                   
|/s/ Chuang Yung Chi |  | Chief Financial Officer (Principal Accounting Officer) |  | September 28, 2012
|Chuang Yung Chi     |  |                                                        |  |                   
|                    |  |                                                        |  |                   
|/s/ Mao Yi Hsiao    |  |                                                        |  | September 28, 2012
|Mao Yi Hsiao        |  | Director                                               |  |                   
|                    |  |                                                        |  |                   
|/s/ Li Fu Chang     |  |                                                        |  | September 28, 2012
|Li Fu Chang         |  | Director                                               |  |                   
|                    |  |                                                        |  |                   
|/s/ Li Chwan Hau    |  |                                                        |  | September 28, 2012
|Li Chwan Hau        |  | Director                                               |  |                   
|                    |  |                                                        |  |                   
|/s/ Hsu Tzu En      |  |                                                        |  | September 28, 2012
|Hsu Tzu En          |  | Director                                               |  |                   



109