**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**ANNUAL
      REPORT**


**ON
      FORM 10-K**





**ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**


**SECURITIES
      EXCHANGE ACT OF 1934**





**For
      the Fiscal Year Ended June 30, 2008**





**Commission
      File Number 0-20532**





CHINA
      INSONLINE CORP.


(Exact
      name of registrant as specified in its charter)





**Delaware**
            
            **74-2559866**(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Identification
                No.)





**Flat/Room
      42, 4F, New Henry House, 10 Ice House Street, Central, Hong
      Kong**





(Address,
      including zip code, of principal executive offices)





**(011)
      00852-25232986**


(Registrants’
      telephone number, including area code)





**Securities
      Registered Under Section 12(b) of the Exchange Act: Common Stock, par value
      $0.001 per share**





Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act. Yes o 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 o 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 and (2) has been subject to such filing
      requirements for the past 90 days.




Yes x No o




Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K 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. o




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 o Accelerated
      filer o Non-accelerated filer o Smaller
      Reporting Company x




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




Aggregate
      market value of the voting stock held by non-affiliates of the registrant as
      of
      June 30, 2008 based upon the closing price was approximately $190,000,000.




The
      number of outstanding shares of the registrant’s Common Stock on September 19,
      2008 was 40,000,000.










**CHINA
        INSONLINE CORP.**
 **ANNUAL
        REPORT ON FORM 10-K**
 **FOR
        THE YEAR ENDED JUNE 30, 2008**
 
 **Index**
 
 **TABLE
        OF CONTENTS**
 PART
                      I
                  
                  
                  
                  1ITEM
                      1.
                  
                  Business
                  
                  1ITEM
                      1A
                  
                  Overview
                  
                  12ITEM
                      1B.
                  
                  Risk
                      Factors
                  
                  14ITEM
                      1B.
                  
                  Unresolved
                      Staff Comments
                  
                  28ITEM
                      2.
                  
                  Properties
                  
                  28ITEM
                      3.
                  
                  Legal
                      Proceedings
                  
                  29ITEM
                      4.
                  
                  Submission
                      of Matters to a Vote of Security Holders
                  
                  29PART
                      II
                  
                  
                  
                  30ITEM
                      5.
                  
                  Market
                      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
                      Purchases of Equity Securities
                  
                  30ITEM
                      6.
                  
                  Selected
                      Financial Data
                  
                  32ITEM
                      7.
                  
                  Management‘s
                      Discussion and Analysis of Financial Condition and Results
                      of
                      Operations
                  
                  32ITEM
                      7A.
                  
                  Quantitative
                      and Qualitative Disclosures about Market Risk
                  
                  47ITEM
                      8.
                  
                  Financial
                      Statements and Supplementary Data
                  
                  48ITEM
                      9.
                  
                  Changes
                      in and Disagreements with Accountants on Accounting and Financial
                      Disclosures
                  
                  48ITEM 9A(T).
                  
                  Controls
                      and Procedures
                  
                  49ITEM
                      9B.
                  
                  Other
                      Information
                  
                  50ITEM
                      10.
                  
                  Directors,
                      Executive Officers, and Corporate Governance
                  
                  51ITEM
                      11.
                  
                  Executive
                      Compensation
                  
                  54ITEM
                      12.
                  
                  Security
                      Ownership of Certain Beneficial Owners and Management and Related
                      Stockholder Matters
                  
                  56ITEM
                      13.
                  
                  Certain
                      Relationships and Related Transactions, and Director
                      Independence
                  
                  57ITEM
                      14.
                  
                  Principal
                      Accountant Fees and Services
                  
                  57PART
                      IV
                  
                  
                  
                  59ITEM
                      15.
                  
                  Exhibits
                      and Financial Statement Schedules
                  
                  59
  -
            i
            -
  **PART
        I**
  ***ITEM
        1.***  **Business**
  **Forward
        Looking Statements**
  Statements
        contained in this Annual Report on Form 10-K of China INSOnline Corp. (formerly
        known as Dexterity Surgical, Inc. and hereinafter, the “ Company ”)
        that
        are not purely historical are forward-looking statements and are being provided
        in reliance upon the “safe harbor” provisions of the Private Securities
        Litigation Reform Act of 1995. Words such as “anticipates”, “expects”,
“intends”, “plans”, "believes", "seeks", "estimates" or similar expressions
        identify forward-looking statements. These forward-looking statements include
        but are not limited to statements regarding the Company’s expectations of our
        future liquidity needs, our expectations regarding our future operating results
        including our planned increase in our revenue levels and the actions we expect
        to take in order to maintain our existing customers and expand our operations
        and customer base. All forward-looking statements are made as of the date
        hereof
        and are based on current management expectations and information available
        to us
        as of such date. We assume no obligation to update any forward-looking
        statement. It is important to note that actual results could differ materially
        from historical results or those contemplated in the forward-looking statements.
        Forward-looking statements involve a number of risks and uncertainties, and
        include risks associated with our target markets and risks pertaining to
        competition, other trend information and our ability to successfully enhance
        our
        operations. Factors that could cause actual results to differ materially
        include, but are not limited to, those identified in “Item 1A-Risk Factors” and
        in other of our filings with the U.S. Securities and Exchange Commission
        (the
“ SEC ”).
        All
        references to “China INSOnline Corp.”, “us”, “we” or the “Company” in this
        Annual Report mean China INSOnline Corp., a Delaware corporation, and all
        entities owned or controlled by China INSOnline Corp., except where it is
        made
        clear that the term means only the parent company. All tabular amounts are
        stated in US dollars.
  **Prior
        Operations of the Company**
  Dexterity
        Surgical, Inc. (now known as China INSOnline Corp. and sometimes referred
        herein
        as “ DEXT ”)
        was
        incorporated on December 23, 1988 as a Delaware corporation and commenced
        operations on January 1, 1989. In August 1992, we completed our initial public
        offering of our common stock, par value $0.001 per share (“ Common
        Stock ”).
        The
        business that we previously engaged in was the distribution of instruments,
        equipment and surgical supplies used in hand-assisted laparoscopic
        surgery (“ HALS ”).
  We
        acquired Dexterity Incorporated, a Delaware corporation (“ Dexterity ”),
        in
        March 1999. Dexterity was located in the Philadelphia, Pennsylvania metropolitan
        area and had the exclusive rights of the Dexterity Pneumo Sleeve and Dexterity
        Protractor proprietary instruments, equipments and supplies used in HALS.
        Effective with such acquisition, we changed our name from LifeQuest Medical,
        Inc. to Dexterity Surgical, Inc.
  On
        April
        19, 2004, DEXT filed a voluntary petition for relief for reorganization (the
        “ Reorganization ”)
        under
        Chapter 11 of the United States Bankruptcy Code (the “ Bankruptcy
        Code ”)
        in the
        United States Bankruptcy Court for the Southern District of Texas Houston
        Division. The Company underwent numerous operating changes and operated its
        business as a “debtor-in-possession” under the jurisdiction of the Bankruptcy
        Court.  On March 2, 2005, the Bankruptcy Court entered an Order confirming
        its First Amended Plan of Liquidation.  In connection with that Plan,
        DEXT’s assets were scheduled to be auctioned, which auction culminated in the
        sale of substantially all of DEXT’s assets as approved by the Bankruptcy Court
        on March 17, 2006.
  -
            1 -
  The
        First
        Amended Plan of Liquidation was subsequently amended on March 2, 2006, by
        an
        order titled “Order Approving Modification of the First Amended Plan” (the
“ Order ”).
        The
        amendments provided for in the Order included the Bankruptcy Court’s
        authorization of a $50,000 DIP Loan (the “ DIP
        Loan ”)
        for
        payment of administrative expenses of the bankruptcy, which converted into
        6,000,000 shares of Common Stock (the “ Section
        1145 Shares ”)
        and
        3,000,000 warrants (the “ Section
        1145 Warrants ”)
        under
        Section 1145 of the U.S. Bankruptcy Code at the option of the holder(s) of
        the
        DIP Loan. Immediately prior to the Exchange (as defined and discussed in
        detail
        herein below), the Section 1145 Warrants were cancelled. For an additional
        $125,000, the Bankruptcy Court authorized the sale of 25,000,000 restricted
        shares of Common Stock to an investor for the payment of both administrative
        claims and creditor claims. The Bankruptcy Court also provided as
        follows:
  ·
              All
                  of the old shares of the Company’s preferred stock, stock options and
                  warrants shall be (and have been)
                  cancelled;
  ·
              The
                  Company shall issue (and did issue) 29,800 new shares of Common
                  Stock
                  under Section 1145 of the U.S. Bankruptcy Code;
  ·
              The
                  Company shall issue up to 25,000 shares of Common Stock under Section
                  1145
                  of the U.S. Bankruptcy Code to those persons deemed appropriate
                  by the
                  Directors (it was not necessary to issue to issue these shares
                  and
                  therefore they have been cancelled);
                  and
  ·
              Appoint
                  new Board members, amend the Certificate of Incorporation to increase
                  the
                  authorized shares of Common Stock to 100,000,000, amend the Bylaws,
                  change
                  the fiscal year, execute a share exchange agreement and issue shares
                  in
                  which effective control or majority ownership is given, all without
                  stockholder approval.
  
 Pursuant
        to the Bankruptcy Court Order, by filing a Certificate of Amendment to the
        Certificate of Incorporation, the Company increased its authorized Common
        Stock,
        and effected a 1-for-500 reverse split of all issued and outstanding Common
        Stock. Immediately following the Exchange, there were 35,706,250 shares of
        Common Stock issued and outstanding and 4,293,750 Section 1145 Shares issuable
        pursuant to the Reorganization. As of the date of this Annual Report, all
        of the
        4,293,750 Section 1145 Shares have been issued and 40,000,000 shares are
        now
        issued and outstanding.
  **Share
        Exchange/Reverse Merger Transaction**
  On
        December 18, 2007 (the “ Closing
        Date ”),
        the
        Company entered into a Share Exchange Agreement (the “ Exchange
        Agreement ”)
        with
        Rise and Grow Limited, a Hong Kong limited company (“ Rise
        & Grow ”)
        and
        Newise Century Inc., a British Virgin Islands company and sole stockholder
        of
        Rise & Grow (the “ Stockholder ”).
        As a
        result of the share exchange, DEXT acquired all of the issued and outstanding
        securities of Rise & Grow, an inactive holding company, from the Stockholder
        in exchange for Twenty-Six Million Four Hundred Thousand (26,400,000)
        newly-issued shares of Common Stock, representing 73.94% of DEXT’s issued and
        outstanding Common Stock (the “ Exchange ”)
        as of
        the Closing Date and sixty-six percent (66%) of the total number of issued
        and
        outstanding shares of Common Stock after the issuance of the remaining 4,293,750
        “Section 1145” shares. As a result of the Exchange, Rise & Grow became our
        wholly-owned and chief operating subsidiary. We have no other business
        operations other than those of Rise & Grow.
  -
            2 -
  The
        following is disclosure with respect to the business of China INSOnline Corp.,
        Rise & Grow and the wholly-owned operating subsidiary of Rise & Grow,
        Zhi Bao Da Tong (Beijing) Technology Co. Ltd. (“ ZBDT ”),
        a
        company formed under the laws of the People’s Republic of China (the
“ PRC ”)
        and
        doing business in the PRC. From and after the Closing Date, the operations
        of
        Rise & Grow, through its operating subsidiary, ZBDT, are the only operations
        of the Company.
  **Current
        Operations of the Company**
  **Organizational
        Structure of Rise & Grow, ZBDT and ZYTX**
  Rise
        & Grow was formed on February 10, 2006 as a Hong Kong limited company. ZBDT
        was established and incorporated by Rise & Grow and commenced business on
        September 6, 2007. Rise & Grow’s sole business is to act as a holding
        company for ZBDT. Rise & Grow contributed One Hundred Fifty Thousand United
        States Dollars ($150,000) in registered capital of ZBDT. ZBDT has no Board
        of
        Directors, however it has one (1) Executive Director designated by Rise &
Grow that serves as the legal representative of ZBDT and appoints a General
        Manager to lead the routine operation of ZBDT. ZBDT is located at Room 210,
        #25
        Office Building, #15 East An Ning Zhuang Road, Qinghe, Haidian District,
        Beijing, the PRC. Rise & Grow is located in Flat/Room 42, 4/F, New Henry
        House, 10 Ice House Street, Central, Hong Kong.
  ZBDT
        was
        formed by Rise & Grow for the purpose of developing computer and network
        software and related products and to promote the development of high-tech
        industries in the field of Chinese information technology. It does this by
        controlling, through an Exclusive Technical Consulting and Service Agreement
        and
        related transaction documents dated as of September 28, 2007 (collectively,
        the
“ Service
        Agreements ”),
        Beijing Zhi Yuan Tian Xia Technology Co., Ltd., a limited liability company
        duly
        established on October 8, 2006 and validly existing under the PRC (“ ZYTX” ).
        In
        compliance with the PRC’s foreign investment restrictions on Internet
        information services and other laws and regulations, we conduct all of our
        Internet information and media services and advertising in China through
        ZYTX, a
        domestic Variable Interest Entity (“ VIE ”),
        as
        its primary beneficiary. In accordance with FASB Interpretation No. 46R
“Consolidation of Variable Interest Entities” (“ FIN
        46R ”),
        an
        Interpretation of Accounting Research Bulletin No. 51, a VIE is to be
        consolidated by a company if that company is subject to a majority of the
        risk
        of loss for the VIE or is entitled to receive a majority of the VIE’s residual
        returns. Upon executing the Service Agreements, ZYTX is now considered a
        VIE and
        ZBDT its primary beneficiary.
  Pursuant
        to the Services Agreements, ZBDT shall provide on-going technical services
        and
        other services to ZYTX in exchange for substantially all net income of ZYTX.
        In
        addition, Mr. Zhenyu Wang and Ms. Junjun Xu have pledged all of their shares
        in
        ZYTX to ZBDT, representing one hundred percent (100%) of the total issued
        and
        outstanding capital stock of ZYTX, as collateral for non-payment under the
        Service Agreements or for fees on technical and other services due to us
        thereunder. We have the power to appoint all directors and senior management
        personnel of ZYTX. Currently, ZYTX is sixty percent (60%) owned by Mr. Zhenyu
        Wang, our Chairman of the Board, and forty percent (40%) owned by Junjun
        Xu, our Chief Executive Officer and a director. The registered capital of
        ZYTX
        is RMB 1 million (US$126,360 upon inception, US$133,883 as of the Closing
        Date),
        of which Mr. Zhenyu Wang has (or will pursuant to installment obligations)
        contributed RMB 600,000 and Ms. Junjun Xu has (or will pursuant to installment
        obligations) contributed RMB 400,000.
  ZYTX
        has
        two (2) offices located at (i) Room b1009, North Mansion, ShiJingShan District,
        ShiXing East, Street No. 11, Beijing, the PRC and (ii) Room 502, HuaTeng
        Edifice, Chaoyang JinSong 3 District, No. 302, Beijing, the PRC.
  -
            3 -
  **Current
        Business**
  We
        are an
        Internet services and media company focusing on the PRC insurance industry.
        With
        localized websites targeting Greater China, the Company primarily provides,
        through ZYTX, a network portal through its industry website, www.soobao.cn (hereinafter also referred to as “ Soobao ”),
        to
        insurance companies, agents and consumers for advertising, online inquiry,
        news
        circulation, online transactions, statistic analysis and software development.
        The Company is also a licensed online motor vehicle, property and life insurance
        agent generating revenues through sales commissions from customers in the
        PRC.
  ZYTX
        was
        originally founded with goal of raising the national insurance consciousness
        and
        reducing the cost on national security in China by constructing and maintaining
        its network portal ( www.soobao.cn )
        in
        order to integrate and optimize business flow during the course of insurance
        sales and related client services. From inception through the end of 2006,
        ZYTX
        was primarily engaged in institutional preparation and prior-period business
        development.
  Thereafter,
        through trial implementation of www.soobao.cn ,
        ZYTX
        strengthened its technical research and development and expanded its product
        line after collecting suggestions from clients. In the first quarter of 2007,
        ZYTX realized net revenue of RMB 17.7 million (US$2.3 million) with a net
        profit
        of RMB 13.9 million (US$1.8 million) as a result of website construction
        services, the promotion and publicity for insurance agents and the undertaking
        of software development. In April 2007, www.soobao.cn was
        formally put into use. As a result, ZYTX’s net revenues rose in the second
        quarter of 2007 to RMB 21.9 million (US$2.9 million) with a net profit of
        RMB
        16.4 million (US$2.2 million) and therefore, from October 8, 2006 (inception)
        through June 30, 2007, ZYTX’s fiscal year end, ZYTX realized net revenue of RMB
        17.2 million (US$2.2 million) and net profits of RMB 13.8 million (US$1.8
        million).
  Today,
        the Company offers online insurance products and services in China including
        (a)
        a network portal for the Chinese insurance industry ( www.soobao.cn ),
        offering industry professionals a forum for the advertising and promotion
        of
        products and services, (b) website construction for marketing teams and others
        in the insurance industry, (c) software development, (d) insurance agency
        services whereby the Company generates sales commissions on motor vehicle
        insurance, property insurance and life insurance and (e) accompanying client
        support services. The following sets forth more detailed descriptions of
        our
        core business segments.
  **Network
        Portal for Chinese Insurance Industry (** **www.soobao.cn** **)**
  Prior
        to
        launching www.soobao.cn ,
        China
        had no insurance website platform. ZYTX was formed with the belief that those
        who need insurance in China desire a network carrier which can provide immediate
        inquiry services with insurance information and knowledge and insurance
        companies require a media network for concentrated advertising to the potential
        insurance consumer. ZYTX has created a real-time communication portal for
        each
        link in the value chain of the insurance industry. Soobao provides real-time
        information, functional practicability and interactivity and media function
        for
        the Chinese insurance industry. In the past year, ZYTX has accumulated as
        members many insurance companies and nearly 3,000 insurance agents and other
        member customers of www.soobao.cn .
        ZYTX
        has become a leading professional service provider, and enjoys a good reputation
        and credibility in the industry.
  -
            4 -
  Soobao
        has the following attributes:
  ·
              Advertising
                  Media:
                  Soobao features a high concentration of industry-specific information
                  on
                  the Chinese insurance industry that is not offered by the traditional
                  media which we believe makes it an ideal media for insurance companies
                  and
                  the related trade professionals to advertise their products and
                  services
                  to consumers. As of the date of this Report, the Company itself
                  not been
                  engaged in Internet advertising however the Company plans to engage
                  in
                  such business in the future;
  ·
              Channel
                  Arrangement:
                  The website is currently comprised of two (2) channels, motor vehicle
                  insurance and life insurance, and we are currently in the process
                  of
                  setting up a third channel for property insurance. Each channel
                  provides
                  visitors with professional information combined with product-specific
                  characteristics;
  ·
              News
                  Releases:
                  News releases are classified and organized along sub-industry lines
                  in
                  order to facilitate searches by a client-users and the website
                  also offers
                  and open review function for visitors to post their individual
                  viewpoints
                  on such releases;
  ·
              Production
                  Introduction:
                  The website provides a classification of insurance companies according
                  to
                  the type and products for the convenience of the consumer and also
                  provides a comparison of insurance
                  products;
  ·
              Online
                  Consultation:
                  The website provides a forum for insurance experts to reply to
                  online
                  inquiries which may offer professional consultation to the consumers
                  in
                  real time;
  ·
              Online
                  Insurance:
                  Client-users may obtain a customized insurance plan by inputting
                  their
                  desired insurance type to be purchased and the insurance company
                  to be
                  selected, together with personal information, which allows the
                  client-user
                  to control the purchase flow and to avoid unnecessary and/or inefficient
                  contact with insurance agents;
  ·
              Insurance
                  College:
                  The website aims to educate professionals and the layperson consumer
                  with
                  professional knowledge of insurance products in light of the particularity
                  and specialty of such products, including, without limitation,
                  trade
                  terminology, interpretation of concepts and terms and information
                  on the
                  settlement of claims via voice, video, cartoon and flash methods;
                  and
  ·
              Marketing
                  Dictionary:
                  The website also offers a marketing dictionary which provides agents
                  with
                  information on marketing skills, team management and professional
                  training
                  in order for agents to provide better services to their clients
                  while
                  improving their marketing skills.
  ZYTX’s
        plan is to increase its publicity and brand popularity in the industry, to
        seek
        regional channel agents for advertisement and to gradually introduce Soobao
        to
        first and second-level cities across China with an aim towards a national
        distribution of direct-marketing of insurance. Currently, our main advertising
        clients are insurance agents, for many of whom we have constructed websites,
        however we plan to increase our client-base to attract insurance companies
        and
        other advertising vendors. As of June 30, 2008, we have contracts with 86
        insurance agents from 37 insurance agents at June 30, 2007 for the promotion
        of
        their services on www.soobao.cn .
        From
        October 8, 2006 (ZYTX’s inception) through June 30, 2007, online insurance
        advertising revenues accounted for approximately thirty-four percent (34%)
        of
        our total revenue and approximately sixty-seven percent (67%) of our total
        revenue for the year ended June 30, 2008.
  -
            5 -
  **Website
        Construction Services**
  Our
        website construction services target marketing teams in the Chinese insurance
        industry, and our clients typically originate from referrals made by ZYTX’s
        insurance agents engaged in the insurance marketing business. Our marketing
        strategy allows prospective clients to enter a trial use period followed
        by a
        payment scheme to be mutually agreed upon between us and the marketing team
        leader of such client.
  With
        respect to website construction, we generate revenues through the construction
        of websites and from the maintenance of such websites. We also cooperate
        with
        the client to conduct direct promotion to the client’s target groups. The final
        product typically offers the following, all of which are specifically tailored
        to the insurance industry and the specific client:
  ·
              Words
                  On Line:
                  Client-users have the ability to leave “words on line” directly through
                  the website for interactive communications with other industry
                  players who
                  may receive such messages through the network at any time and any
                  place;
  ·
              Online
                  Insurance:
                  Client-users may create customized insurance plans directly through
                  the
                  website;
  ·
              Online
                  Employment:
                  Client-users may submit and post their resumes directly through
                  the
                  website for review by prospective employers in the industry;
  ·
              Client
                  Management:
                  Websites facilitate file management for agents and provide individualized
                  services for clients with customized packet transmission functions
                  of
                  short message and e-mail, save time for client maintenance and
                  financial
                  cost and improve service quality;
  ·
              Short
                  Messaging:
                  Value-added short message services, through cooperation with wireless
                  operators, effectively combine the rapidness of packet transmission
                  of
                  short messaging with the individualization of its content with
                  the support
                  of intelligent system configuration.
  ·
              Insurance
                  Classification Management:
                  A
                  strong insurance classification management system enables clients
                  to
                  update and maintain their product information;
                  and
  ·
              News
                  Management:
                  Article management and release systems allow the client to issue
                  the
                  latest messages at their discretion or directly call in the materials
                  or
                  database provided by the system.
  As
        of the
        date of this Annual Report, ZYTX has provided website construction services
        to
        21 **** marketing teams in the insurance industry **.**
  **Software
        Development**
  We
        develop software for clients using technology that we own and information
        obtained through our R&D efforts in the field of operating system
        applications, professional statistics analysis and other business application
        systems. We generate revenues from technology development contracts and as
        of
        June 30, 2008, we have 1 technology development contract in place with customer.
  From
        October 8, 2006 (ZYTX’s inception) through June 30, 2007 (ZYTX’s fiscal year
        end), software development revenues accounted for approximately sixty-six
        percent (66%) of our total revenue and approximately thirty one percent (31%)
        of
        our total revenue for the year ended June 30, 2008.
  -
            6 -
  **Insurance
        Agency Services**
  ZYTX
        obtained qualification to do business as an insurance agent in China on June
        29,
        2007. Although we have generated only a small fraction of our total revenues
        through these services (approximately 2% and Nil for the years ended June
        30,
        2008 and 2007, respectively) , we anticipate insurance sales commissions
        to be a
        vital business for profit and growth. ZYTX plans to cooperate with insurance
        companies with a good reputation and high production competitiveness to sell
        their products and services. Through www.soobao.cn ,
        and in
        reliance on its brand credit with the public, ZYTX plans to fairly and
        objectively recommend appropriate products to consumers through a professional
        financial consultant service. ZYTX plans to make use of preferential premiums
        and abundant value-added member services to provide guidance to the consumer
        with respect to their prospective purchases. ZYTX expects to enlarge its
        market
        share through the direct selling in the current network and to establish
        a
        national marketing network system through developing businesses in first
        and
        second-level cities in China.
  **Research
        and Development**
  ZYTX
        has
        an experienced team engaged in the development of Internet application software.
        The core members have a sustained sense of innovation in the new technology
        of
        the Internet application areas, and have practical experience and keen
        market-oriented insights, especially on e-commerce applications, Internet
        website operation and other aspects. ZYTX’s core members are experienced both in
        the Internet and in the insurance industry, and have many business
        relationships. They have a deep understanding of the development history
        and
        respective characteristics of these industries in China, and therefore we
        believe we have advantages in the development for our insurance industry
        network
        application platform. The core members of the team have also established
        project-based cooperation and good human resource partnerships with The China
        Insurance Regulatory Commission, The Insurance Association of Beijing and
        The
        Development Research Center of the State Council, which we believe will provide
        strong support for the development of the Company.
  ZYTX’s
        core research and development (R&D) team consists of five (5) technicians,
        each of which have work experience on system development in the field of
        Internet application and understand the insurance industry and its business
        flow. Aimed at the functions and applied range of each service system and
        based
        on guaranteed access speed and program expansibility, Net 2.0 and ASP language
        are used together with the SQL Server 2005 database. With this, ZYTX has
        its own
        core technology in the aspects of development and application of www.soobao.cn aimed at
        insurance companies.
  ZYTX’s
        investment in R&D centers on three (3) aspects: (a) personnel, whereby ZYTX
        implements a senior talent strategy for the employment of R&D personnel with
        a development incentive program which is competitive in the industry, (b)
        operating equipment, which the Company plans to make investments in web servers,
        network bandwidth leases and network installation and protection and (c)
        software development tools, whereby ZYTX purchased a Windows Server 2003,
        SQL
        Server 2005 and Visual Studio 2005, and hardware equipment such as brand
        laptop
        and desktop computers.
  -
            7 -
  At
        present, ZYTX has been engaged in preliminary market researching and core
        technology buildings. The Company estimates that it has spend
        $74,446 **** on
        R&D during the fiscal year ended June 30, 2008 and $16,660 **** during
        the fiscal year ended June 30, 2007. In our next phase of development, the
        Company intends to focus its R&D on (i) integral solution to online
        application of insurance industry, (ii) Web-based extended applications of
        the
        network portal system, (iii) a comprehensive life insurance comparison and
        timely quotation system, which shall put life insurance products under a
        scientific and quantitative calculating index and (iv) a data statistical
        and
        analytical system for the insurance industry. Based on a great deal of effective
        clicks on the network portal, we believe that this system will make statistics
        and analysis of the consumer group’s points of interest regarding the present
        and future insurance products. We believe this statistic data will have a
        high
        commercial value with respect to the insurance companies’ release of new
        products and establishment of rates.
  ZYTX
        has
        achieved an integral solution of network integration and promotion for its
        marketing teams for the insurance industry. This system was developed and
        aimed
        at the important links in the marketing flow of insurance agents including
        business expansion, personnel, team construction and client maintenance;
        integrates the application of multisystem modules such as interactive
        transmission of online information, product release, intelligent CRM, member
        display, insurance policy management and SMS packet transmission via Web-based
        wireless access. The system also reduces the time and costs of promotion,
        marketing and client maintenance for the completion of a client’s group
        business.
  ZYTX
        has
        also developed a motor vehicle premium calculation system **** which
        provides different rates of motor vehicle insurance and the different insured
        amounts for about one thousand (1,000) vehicle types of over one hundred
        (100)
        vehicle series, and is capable of generating a detailed statement with respect
        to the expenses of electronic insurance policies and various insurance products
        through the online input of vehicle information, independent selection of
        insured risks and the selected insurance company.
  **Market
        Overview**
  ZYTX
        intends to focus on the following three (3) markets, (a) network marketing,
        (b)
        industrial web portal advertising media and (c) the comprehensive insurance
        sales supermarket. Each market is briefly described below.
  **The
        Network Marketing of Insurance**
  In
        recent
        years, an increasing number of enterprises and individuals have engaged in
        e-commerce activities, and China’s e-commerce market has maintained rapid and
        sustained growth. The “2006-2007 China’s E-commerce Market Research Report”
released by Saidi Adviser revealed that China’s e-commerce market transactions
        achieved a total RMB 1.1 trillion in 2006 (US$0.14 trillion), an increase
        of
        48.6% as compared to the same period in 2005 and more than 80% of Internet
        users
        had tried or were willing to try online shopping in 2006.
  As
        it has
        advantages on cost saving, efficiency, interactive communication transcending
        time and space, information, and the rapid increase in popularity, network
        marketing is becoming an important marketing tool for the Chinese insurance
        industry. In addition to the development of China’s social-economy, the use of
        cold visit by insurance agents, questionnaire surveys, telephone sales, and
        other traditional marketing models are no longer well-suited in the fast-paced,
        highly efficient patterns of life and purchasing habits of customers. Because
        consumer groups tend to be more rational, we believe that they will likely
        make
        purchase decisions according to their own needs. When they have the intent
        to
        make a purchase, they will obtain comprehensive, objective information through
        various channels. Network marketing via www.soobao.cn can meet
        these needs. The potential customer group can make inquiries through the
        network
        and obtain information on each company and their insurance products and
        consumers will be able to obtain a fuller understanding of such products
        prior
        to the purchase.
  -
            8 -
  **The
        Industrial Web Portal Advertising Media**
  With
        the
        development of network technology and the popularization of the Internet,
        e-mail, search engines, Internet banking, online transactions, Internet
        advertising, news, online games, instant communications, virtual servers
        and
        other value-added wireless businesses continue to foster rapid development
        and
        the growth of new forms of services. With the appearance and development
        of Web
        2.0, new business applications are constantly emerging. Many Internet services
        have converted or are in the process of converting from a “one-to-many” model to
        a personalized service model of “one-to-one” or “many to one”. Internet media
        has strengthened, and advertising revenue has become a main source of profits
        of
        major network portals. Professional portals have emerged, however, the web
        portal of insurance industry in China is still devoid.
  According
        to data released by iResearch, an authority in the Internet consulting business,
        in the first half of 2006, the entire network advertising market was of RMB
        20.6
        billion (US$2.58 billion), as compared to the same period in 2005, an increase
        of fifty percent (50%), of which portal network advertising market had a
        considerable share. “2006 China Network Advertiser Research Report” shows that
        the main purpose of advertising is to establish brand recognition and to
        promote
        products. Comprehensive portals, search engines and industrial portals are
        the
        top three (3) network media that advertisers often choose. We believe that
        because of high density of the target groups in industrial portals, the value
        of
        this network media should attain greater importance by the advertisers.
  **The
        Comprehensive Insurance Sales Supermarket**
  To
        carry
        out insurance sales more effectively and to supplement the function and effect
        of www.soobao.cn ,
        ZYTX is
        in the process of constructing a comprehensive insurance supermarket entity,
        which will serve as the social entity version of the www.soobao.cn platform. Such supermarket entity shall set up for insurance transaction
        market
        in fixed locations of key cities in China will provide prospective clients
        with
        a series of services such as one-to-one advisory on different products offered
        by different insurance companies, examination of life insurance, insurance
        site-sales, compensation and appreciation and claims settlement. As there
        will
        be many specialized clients in the transaction market, the Company plans
        to
        organize professional lectures on insurance, create an industry salon and
        release new products and services. It is our goal through such entity to
        (a)
        educate consumers with respect to insurance and insurance products, (b) provide
        objective and impartial information of each company’s product, (c) offer
        personalized insurance programs to consumers, (d) offer after-sale one-stop
        compensation services including improved efficiency with claims settlements
        and
        (e) offer exposure to www.soobao.cn and
        enjoy the network value-added services which are not offered through more
        traditional insurance consumption.
  **Market
        Share**
  Presently,
        ZYTX has provided services to over 7,670 insurance agents, which accounts
        for
        over ninety percent (90%) of the market share of website construction business
        in the Beijing area for insurance-related sales commissions. This figure
        is
        based on the estimated 8,000 insurance agents that own independent websites
        found through major search engine searches (Baidu, Yahoo and Google).
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            9 -
  Based
        on
        the planning concept and the realized functions of www.soobao.cn ,
        there
        currently is no similar service provider in the same industry across China.
        The
        ability of www.soobao.cn to
        sustain its leading position in the same trade will depend on whether or
        not
        ZYTX can rapidly build its good brand image both in the industry and in the
        society.
  **Competition**
  In
        terms
        of our insurance sales business, our competitors are insurance sales agencies.
        However, most of our competitors still adopt the traditional insurance sales
        model and their scope of business is limited to local markets. Our model,
        however, combines an industry Internet portal ( www.soobao.cn )
        and a
        nationwide insurance supermarket.
  In
        the
        field of claims settlement, up to now, we know of no other company that combines
        auto, property and life insurance. If we take advantage of the amiable business
        relationships already existing between ZYTX and insurance companies, we can
        offer our clients with one-stop, highly efficient and high compensation
        services.
  In
        terms
        of professional website construction to insurance agents (and their teams),
        we
        know of no rivals in the Beijing area and there are no professional website
        construction companies that serve specifically the insurance industry in
        other
        areas of China.
  With
        respect to our insurance industry website portal ( www.soobao.cn ),
        we
        know of no rivals in Beijing. However, in Shenzhen and Shanghai, there is
        one
        company in each city that has a similar business model to www.soobao.cn .
        If ZYTX
        expands its nationwide business, they are likely to become our potential
        rivals.
        The first company is Shenzhen Insurance Network Technology Co., Ltd.
        ( www.ins.com );
        this
        website focuses on providing classifications of insurance and insurance related
        information. They have established a shop for insurance agents with sub-domains
        and there is no insurance business conducted via Internet in real-time. Instead,
        its main function is to provide consulting services and information, and
        they
        charge a membership fee from agents. This company’s main business area is
        Shenzhen. It has not obtained the qualification permit for Internet operation
        and insurance agent qualification. The second company is Shanghai Ebao
        Technology Co., Ltd., and this company is similar to www.ins.com in that
        it also provides information related to insurance to the public and workshop
        in
        the network to agents. However, the number of insurance agents registered
        as
        members with this website as members are less than fifty (50), which is
        significantly less than ours.
  In
        terms
        of insurance company oriented advertising and promotion, www.soobao.cn is the
        only insurance professional website media to our knowledge in China. Most
        insurance companies instead advertise via more traditional media and domestic
        comprehensive Internet portals.
  With
        regard to technological services to insurance companies, most management
        systems
        of domestic insurance companies have been self-developed by each company,
        and we
        know of no other professional technological provider that focuses on business
        management systems in the insurance industry.
  -
            10 -
  **Emplo** **y** **ees**
  ZYTX
        attaches great importance to the cultivation of professional managerial persons
        and pursues a talent policy of retaining professionals by undertaking an
        enterprise culture. Through continuously improving its corporate governance
        structure, management system and talent introduction and incentive system,
        ZYTX
        has created an excellent working atmosphere and development opportunity,
        which
        integrates the individual occupational plan with the Company’s development and
        reduces the turnover flow of the employees, especially the core technicians,
        thus forming a relatively stable and high-quality employee team. Figure 1
        below
        sets forth the current institutional structure of ZYTX:
  
 
 As
        of the
        date of this Annual Report, the Company has 77 full-time employees, of which
        only Junjun Xu, as Chief Executive Officer of CHIO and General Manager of
        ZYTX
        and Zhenyu Wang, as Executive Director of ZYTX, is a part of the Company’s
        management. None of our employees are covered by a collective bargaining
        agreement. We believe we have good relations with our employees.
  **Intellectual
        Property**
  We
        currently do not own any trademarks or patents however ZYTX filed for its
        website ( www.soobao.cn )
        with
        the Beijing Industrial Commercial Bureau on April 28, 2007.
  **Government
        Regulation**
  The
        following description of PRC laws and regulations is based upon the opinions
        of
        our PRC counsel in Beijing. For a description of legal risks relating to
        our
        ownership structure and business, see “Item 1A-Risk Factors”.
  -
            11 -
  ***ITEM
        1A***  ***Overview***
  The
        Chinese government has enacted an extensive regulatory scheme governing the
        operation of business with respect to the Internet, such as telecommunications,
        Internet information services, international connections to computer information
        networks, information security and censorship and administrative protection
        of
        copyright. Among the regulations, the Telecommunications Regulations of the
        People’s Republic of China, or Telecom Regulations, promulgated on
        September 25, 2000, is the primary governing law. Telecom Regulations set
        out the general framework under which domestic Chinese companies such as
        ZBDT
        and ZYTX may engage in various types of telecommunications services in the
        PRC.
        They reiterate the long-standing principle that telecommunications service
        providers need to obtain operating licenses as a mandatory precondition to
        begin
        operation. The Telecom Regulations differentiate the telecommunications services
        into basic telecommunications services and value-added telecommunications
        services. Value-added telecommunications services are defined as
        telecommunications and information services provided through public networks.
        The “Catalogue of Telecommunications Business”, an attachment to the Telecom
        Regulations and updated by the Ministry of Information Industry’s Notice on
        Adjusting the Catalogue of Telecommunications Business of April 1, 2003,
        categorizes various types of telecommunications and telecommunications-related
        activities into basic or value-added services.
  On
        December 20, 2001, after China’s formal entry into the WTO, the PRC State
        Council promulgated the “Regulations for the Administration of Foreign-Invested
        Telecommunications Enterprises” or the FITE Regulations, which became effective
        on January 1, 2002. The FITE Regulations stipulate that foreign-invested
        telecommunications enterprises, or FITEs, may undertake operations in basic
        telecom services and value-added telecom services. Currently, the foreign
        party
        to a value-added FITE may hold up to fifty percent (50%) of the equity,
        with no geographic restrictions on its operations. Prior to that, foreign
        investors were prohibited from investing in Internet content services. The
        PRC
        government has not made any further commitment to loosen the regulation on
        FITEs.
  According
        to the Measures for the Administration of Internet Information Services
        described below, an enterprise must obtain a Value-added Telecommunication
        Services Operating License in the first place to conduct Internet content
        service businesses. When the Internet content involves areas such as news,
        education, medicine, health, pharmaceuticals and medical equipment, the
        enterprise must also obtain permission from responsible national
        authorities.
  **ZYTX’s
        Business Qualification and Licenses**
  On
        December 8, 2006, ZYTX obtained a Telecommunications and Information Services
        Business License from Beijing Communications Administration, enabling the
        Company to engage in the internet information services business excluding
        services relating to news, publication, education, medical care, medicine
        and
        medical devices. On April 28, 2007, ZYTX received its High and New Technology
        Enterprise Approval Certificate from the Beijing Science and Technology
        Committee whereby ZYTX was approved as a hi-tech enterprise. On June 29,
        2007,
        ZYTX was received qualification to conduct business as an insurance agent
        in the
        Beijing area, including insurance on motor vehicles, insurance on enterprise
        property, insurance on family property and traditional life insurance.
  -
            12 -
  **Internet
        Information Services**
  The
        Measures for the Administration of Internet Information Services, or the
        ICP
        Measures, went into effect on September 25, 2000. Under the ICP Measures,
        any entity that provides information to online Internet users must obtain
        an
        operating license from the Ministry of Information Industry (“ MII ”)
        or its
        local branch at the provincial level in accordance with the Telecom Regulations
        described above. The ICP Measures further stipulate that entities providing
        online information services in areas of news, publishing, education, medicine,
        health, pharmaceuticals and medical equipment must obtain permission from
        responsible national authorities prior to applying for an operating license
        from
        MII or its local branch at the provincial or municipal level. Moreover, ICPs
        must display their operating license numbers in a conspicuous location on
        their
        web sites. ICPs must police their web sites to remove categories of harmful
        content that are broadly defined. This obligation reiterates Internet content
        restrictions set by other ministries over the past few years. On December
        8,
        2006, ZYTX obtained an ICP license from Beijing Telecommunications
        Administration (the Beijing municipal branch of MII).
  **Online
        Advertising**
  The
        State
        Administration of Industry and Commerce in China (“ SAIC ”)
        promulgated the Notice on Registration Issues for Enterprises Specialized
        in
        Advertising Business (the “ Ad
        Notice ”)
        on
        July 19, 2004. Upon the issuance of the Ad Notice, an enterprise
        specialized in advertising business as specified in its business scope need
        not
        apply for the Advertising Operation License. As to placing advertisements
        on the
        Internet, such enterprise must apply for a business scope of Placing Online
        Advertisements on the name of the web site. SAIC and its local departments
        will
        not issue an Advertising Operation License to enterprises specialized in
        online
        advertising business.
  As
        of the
        date of this Report, the Company has not been engaged in Internet advertising
        in
        the traditional sense however the Company plans to engage in such business
        in
        the future. The Company’s business scope includes advertisement designed and
        made (internet technical services), however it does not include advertisement
        agency and issuance (traditional advertising). The Company has not obtained
        an
        Advertising Operation License issued by the State Administration for Industry
        and Commerce and is not required to do so.
  **Administrative
        Protection of Internet Copyright**
  According
        to the Measures for the Administrative Protection of Internet Copyright
        implemented on May 30, 2005, acts of automatically providing such functions
        as uploading, storing, linking or searching works, audio or video products,
        or
        other contents through Internet based on the instruction of an Internet content
        provider, without editing, amending or selecting any stored or transmitted
        content, and other acts of providing Internet information services shall
        be
        governed by the Copyright Law. A copyright administration department shall,
        when
        imposing administrative penalties upon the act infringing upon the right
        of
        communication through information network, apply the Measures for Imposing
        Copyright Administrative Penalties.
  Where
        a
        copyright holder (individual or entity) finds any content communicated through
        the Internet infringes upon its copyright and sends a notice of claim to
        the
        Internet information service provider, the Internet information service provider
        shall immediately take measures to remove the relevant contents, and preserve
        the copyright holder’s notice of claim for six (6) months. An Internet
        information service provider shall, after receipt of the copyright holder’s
        notice, record the contents of the provided information, the publishing time,
        and the Internet address or domain name. Where an Internet information service
        provider removes relevant content of an Internet content provider according
        to
        the notice of a copyright holder, the Internet content provider may deliver
        a
        counter-notice to both the Internet information service provider and the
        copyright holder, stating that the removed contents do not infringe upon
        the
        copyright. After the delivery of such counter-notice, the Internet information
        service provider may immediately reinstate the removed contents and shall
        not
        bear legal liability for such reinstatement.
  -
            13 -
  Where
        an
        Internet information service provider clearly knows an Internet content provider
        infringes other’s copyright through Internet, or, although it does not clearly
        know such activity but fails to take measures to remove relevant contents
        upon
        receipt of the copyright owner’s notice, and as a result, it damages public
        interests, the copyright administration department may, in accordance with
        the
        Copyright Law, order it to stop the tortious act, and impose administrative
        penalties. Where there is no evidence to indicate that an Internet information
        service provider clearly knows the facts of tort, or the Internet information
        service provider has taken measures to remove relevant contents upon receipt
        of
        the copyright owner’s notice, the Internet information service provider shall
        not bear the relevant liabilities.
  ZYTX
        has
        taken measures to protect Internet copyright in pursuance of the specified
        procedures and in compliance with relevant laws and regulations mentioned
        above.
  **Environmental
        Laws**
  The
        Company did not incur any expenses in connection with compliance with
        environmental laws (federal, state, local and foreign) during the fiscal
        year
        ended June 30, 2008. There is no significant effect of compliance with the
        environmental laws.
  ***ITEM
        1B.***  ***Risk
        Factors***
  The
        financial condition, business, operations, and prospects of the Company involve
        a high degree of risk. You should carefully consider the risks and uncertainties
        described below, which constitute the material risks relating to the Company,
        and the other information in this report. If any of the following risks are
        realized, the Company’s business, operating results and financial condition
        could be harmed and the value of the Company’s stock could suffer. This means
        that investors and stockholders of the Company could lose all or a part of
        their
        investment.
  **RISKS
        RELATING TO THE PEOPLE’S REPUBLIC OF CHINA**
  **Certain
        Political and Economic Considerations Relating to China Could Adversely Affect
        Our Company.**
  The
        PRC
        is transitioning from a planned economy to a market economy. While the PRC
        government has pursued economic reforms since its adoption of the open-door
        policy in 1978, a large portion of the PRC economy is still operating under
        five-year plans and annual state plans. Through these plans and other economic
        measures, such as control on foreign exchange, taxation and restrictions
        on
        foreign participation in the domestic market of various industries, the PRC
        government exerts considerable direct and indirect influence on the economy.
        Many of the economic reforms carried out by the PRC government are unprecedented
        or experimental, and are expected to be refined and improved.
  Other
        political, economic and social factors can also lead to further readjustment
        of
        such reforms. This refining and readjustment process may not necessarily
        have a
        positive effect on our operations or future business development. Our operating
        results may be adversely affected by changes in the PRC’s economic and social
        conditions as well as by changes in the policies of the PRC government, such
        as
        changes in laws and regulations (or the official interpretation thereof),
        measures which may be introduced to control inflation, changes in the interest
        rate or method of taxation and the imposition of additional restrictions
        on
        currency conversion.
  -
            14 -
  **Our
        Business May Be Affected By Unexpected Changes In Regulatory Requirements
        In The
        Jurisdictions In Which We Operate.**
  We
        are
        subject to many general regulations governing business entities and their
        behavior in China and in other jurisdictions in which we have operations.
        Such
        regulations typically deal with licensing, approvals and permits. Any change
        in
        product licensing may make our products more or less available on the market.
        Such changes may have a positive or negative impact on the sale of our products
        and may directly impact the associated costs in compliance and our operational
        and financial viability.
  **The
        Chinese Government Exerts Substantial Influence Over The Manner In Which
        We Must
        Conduct Our Business Activities Which Could Adversely Affect Our
        Company.**
  China
        only recently has permitted provincial and local economic autonomy and private
        economic activities. Chinese government has exercised and continues to exercise
        substantial control over virtually every sector of the Chinese economy through
        regulation and state ownership. Our ability to operate in China may be harmed
        by
        changes in its laws and regulations, including those relating to taxation,
        import and export tariffs, environmental regulations, land use rights, property
        and other matters. We believe that our operations in China are in material
        compliance with all applicable legal and regulatory requirements. However,
        the
        central or local governments of these jurisdictions may impose new, stricter
        regulations or interpretations of existing regulations that would require
        additional expenditures and efforts on our part to ensure our compliance
        with
        such regulations or interpretations.
  Accordingly,
        government actions in the future, including any decision not to continue
        to
        support recent economic reforms and to return to a more centrally planned
        economy or regional or local variations in the implementation of economic
        policies, could have a significant effect on economic conditions in China
        or
        particular regions thereof, and could require us to divest ourselves of any
        interest we then hold in Chinese properties or joint ventures.
  **The
        Chinese Legal System Has Inherent Uncertainties That Could Limit The Legal
        Protections Available To You.**
  Our
        contractual arrangements with our VIE in China (ZYTX) are governed by the
        laws
        of the People’s Republic of China. China’s legal system is based upon written
        statutes. Prior court decisions may be cited for reference but are not binding
        on subsequent cases and have limited value as precedents. Since 1979, the
        Chinese legislative bodies have promulgated laws and regulations dealing
        with
        economic matters such as foreign investment, corporate organization and
        governance, commerce, taxation and trade. However, because these laws and
        regulations are relatively new, and because of the limited volume of published
        decisions and their non-binding nature, the interpretation and enforcement
        of
        these laws and regulations involve uncertainties, and therefore you may not
        have
        legal protections for certain matters in China.
  **Even
        If We Are In Compliance With Chinese Governmental Regulations Relating To
        Foreign Investment Prohibitions, The Chinese Government May Prevent Us From
        Advertising Or Distributing Content That It Believes Is Inappropriate And
        We May
        Be Liable For Such Content Or We May Have To Stop Profiting From Such
        Content..**
  China
        has
        enacted regulations governing Internet access and the distribution of news
        and
        other information. In the past, the Chinese government has stopped the
        distribution of information over the Internet that it believes to violate
        Chinese law, including content that it believes is obscene, incites violence,
        endangers national security, is contrary to the national interest or is
        defamatory. In addition, we may not publish certain news items without
        permission from the Chinese government. Furthermore, the Ministry of Public
        Security has the authority to cause any local Internet service provider to
        block
        any web site maintained outside China at its sole discretion. Even if we
        comply
        with Chinese governmental regulations relating to foreign investment
        prohibitions, if the Chinese government were to take any action to limit
        or
        prohibit the distribution of information through our network or to limit
        or
        regulate any current or future content or services available to users on
        our
        network, our business could be significantly harmed.
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            15 -
  Because
        the definition and interpretation of prohibited content is in many cases
        vague
        and subjective, it is not always possible to determine or predict what and
        how
        content might be prohibited under existing restrictions or restrictions that
        might be imposed in the future.
  We
        are
        also subject to potential liability for content on www.soobao.cn that is
        deemed inappropriate and for any unlawful actions of our subscribers and
        other
        users of our systems. Furthermore, we are required to delete content that
        clearly violates the laws of China and report content that we suspect may
        violate Chinese law. It is difficult to determine the type of content that
        may
        result in liability for us, and if we are wrong, we may be prevented from
        operating our web sites.
  **All
        Of Our Assets Are Located In China, Any Dividends Of Proceeds From Liquidation
        Is Subject To The Approval Of The Relevant Chinese Government
        Agencies.**
  Our
        assets are located inside China. Under the laws governing foreign invested
        enterprises in China, dividend distribution and liquidation are allowed but
        subject to special procedures under the relevant laws and rules. Any dividend
        payment will be subject to the decision of the board of directors and subject
        to
        foreign exchange rules governing such repatriation. Any liquidation is subject
        to both the relevant government agency’s approval and supervision as well as
        foreign exchange controls. This may generate additional risk for our investors
        in case of dividend payment and liquidation.
  **Future
        Inflation In China May Inhibit Our Activity To Conduct Business In
        China.**
  In
        recent
        years, the Chinese economy has experienced periods of rapid expansion and
        high
        rates of inflation. During the past ten (10) years, the rate of inflation
        in
        China has been as high as 20.7% and as low as 2.2%. These factors have led
        to
        the adoption by Chinese government, from time to time, of various corrective
        measures designed to restrict the availability of credit or regulate growth
        and
        contain inflation. While inflation has been more moderate since 1995, high
        inflation may in the future cause Chinese government to impose controls on
        credit and/or prices, or to take other action, which could inhibit economic
        activity in China and thereby harm the our business operations.
  **Currency
        Conversion And Exchange Rate Volatility Could Adversely Affect Our Financial
        Condition.**
  The
        PRC
        government imposes control over the conversion of Renminbi into foreign
        currencies. Under the current unified floating exchange rate system, the
        People’s Bank of China publishes an exchange rate, which we refer to as the PBOC
        exchange rate, based on the previous day’s dealings in the inter-bank foreign
        exchange market. Financial institutions authorized to deal in foreign currency
        may enter into foreign exchange transactions at exchange rates within an
        authorized range above or below the PBOC exchange rate according to market
        conditions.
  -
            16 -
  Pursuant
        to the Foreign Exchange Control Regulations of the PRC issued by the State
        Council which came into effect on April 1, 1996, and the Regulations on the
        Administration of Foreign Exchange Settlement, Sale and Payment of the PRC
        which
        came into effect on July 1, 1996, regarding foreign exchange control, conversion
        of Renminbi into foreign exchange by Foreign Investment Enterprises
        (“ FIEs ”),
        for
        use on current account items, including the distribution of dividends and
        profits to foreign investors, is permissible. FIEs are permitted to convert
        their after-tax dividends and profits to foreign exchange and remit such
        foreign
        exchange to their foreign exchange bank accounts in the PRC. Conversion of
        Renminbi into foreign currencies for capital account items, including direct
        investment, loans, and security investment, is still under certain restrictions.
        On January 14, 1997, the State Council amended the Foreign Exchange Control
        Regulations and added, among other things, an important provision, which
        provides that the PRC government shall not impose restrictions on recurring
        international payments and transfers under current account items.
  Enterprises
        in the PRC (including FIEs) which require foreign exchange for transactions
        relating to current account items, may, without approval of the State
        Administration of Foreign Exchange, or SAFE, effect payment from their foreign
        exchange account or convert and pay at the designated foreign exchange banks
        by
        providing valid receipts and proofs.
  Convertibility
        of foreign exchange in respect of capital account items, such as direct
        investment and capital contribution, is still subject to certain restrictions,
        and prior approval from the SAFE or its relevant branches must be
        sought.
  Since
        1994, the exchange rate for Renminbi against the United States dollars has
        remained relatively stable, most of the time in the region of approximately
        RMB8.28 to US$1.00. However, in 2005, the Chinese government announced that
        would begin pegging the exchange rate of the Chinese Renminbi against a number
        of currencies, rather than just the U.S. Dollar. As our operations are primarily
        in China, any significant revaluation of the Chinese Renminbi may materially
        and
        adversely affect our cash flows, revenues and financial condition. For example,
        to the extent that we need to convert United States dollars into Chinese
        Renminbi for our operations, appreciation of this currency against the United
        States dollar could have a material adverse effect on our business, financial
        condition and results of operations. Conversely, if we decide to convert
        Chinese
        Renminbi into United States dollars for other business purposes and the United
        States dollar appreciates against this currency, the United States dollar
        equivalent of the Chinese Renminbi we convert would be reduced.
  **The
        Value Of Our Securities Will Be Affected By The Foreign Exchange Rate Between
        U.S. Dollars And Renminbi.**
  The
        value
        of CHIO’s Common Stock will be affected by the foreign exchange rate between
        U.S. dollars and Renminbi, and between those currencies and other currencies
        in
        which our sales may be denominated. For example, to the extent that we need
        to
        convert U.S. dollars into Renminbi for our operational needs and should the
        Renminbi appreciate against the U.S. dollar at that time, our financial
        position, the business of the Company, and the price of our Common Stock
        may be
        harmed. Conversely, if we decide to convert our Renminbi into U.S. dollars
        for
        the purpose of declaring dividends on our Common Stock or for other business
        purposes and the U.S. dollar appreciates against the Renminbi, the U.S. dollar
        equivalent of our earnings from our China operations would be
        reduced.
  -
            17 -
  **You
        May Experience Difficulties In Effecting Service Of Legal Process, Enforcing
        Foreign Judgments Or Bringing Original Actions In China Based On United States
        Or Other Foreign Laws Against Us.**
  We
        conduct our operations in China and a significant portion of our assets is
        located in China. In addition, our directors and executive officers reside
        within China, and substantially all of the assets of these persons are located
        within China. As a result, it may not be possible to effect service of process
        within the United States or elsewhere outside China upon those directors
        or
        executive officers, including with respect to matters arising under U.S.
        federal
        securities laws or applicable state securities laws. Moreover, our Chinese
        counsel has advised us that China does not have treaties with the U.S. and
        many
        other countries that provide for the reciprocal recognition and enforcement
        of
        judgment of courts. As a result, recognition and enforcement in China of
        judgments of a court of the U.S. or any other jurisdiction in relation to
        any
        matter may be difficult or impossible.
  **Underdeveloped
        Telecommunications Infrastructure Has Limited, And May Continue To Limit,
        The
        Growth Of The Internet Market In China Which, In Turn, Could Limit Our Ability
        To Grow Our Business.**
  The
        telecommunications infrastructure in China is not well developed. Although
        private sector ISPs do exist in China, almost all access to the Internet
        is
        accomplished through ChinaNet, China’s primary commercial network, which is
        owned and operated by China Telecom and China Netcom under the administrative
        control and regulatory supervision of MII. The underdeveloped Internet
        infrastructure in China has limited the growth of Internet usage in China.
        If
        the necessary Internet infrastructure is not developed, or is not developed
        on a
        timely basis, future growth of the Internet in China could be limited and
        our
        business could be harmed.
  **Our
        Significant Amount Of Deposits In Certain Banks In China May Be At Risk If
        These
        Banks Go Bankrupt During Our Deposit Period.**
  As
        of
        June 30, 2008, we had approximately RMB 31.29 million (US$ 4.56 million)
        in
        banks in China, which constitute about 99.9% of our total cash. The terms
        of
        these deposits are, in general, up to twelve (12) months. Historically, deposits
        in Chinese banks are secure due to the state policy on protecting depositors’
interests. However, China promulgated a new Bankruptcy Law in August 2006,
        which has come into effect on June 1, 2007, which contains a separate
        article expressly stating that the State Council may promulgate implementation
        measures for the bankruptcy of Chinese banks based on the Bankruptcy Law.
        Under
        the new Bankruptcy Law, a Chinese bank may go bankrupt. In addition, since
        China’s concession to WTO, foreign banks have been gradually permitted to
        operate in China and have been severe competitors against Chinese banks in
        many
        aspects, especially since the opening of Renminbi business to foreign banks
        in
        late 2006. Therefore, the risk of bankruptcy of those banks in which we have
        deposits has increased. In the event of bankruptcy of one of the banks which
        holds our deposits, we are unlikely to claim our deposits back in full since
        we
        are unlikely to be classified as a secured creditor based on PRC laws.
  -
            18 -





**RISKS
      RELATING TO OUR BUSINESS**




**Because
      Our Operating History Is Limited And The Revenue And Income Potential Of Our
      Business And Markets Are Unproven, We Cannot Predict Whether We Will Meet
      Internal or External Expectations Of Future Performance.**




We
      believe that our future success depends on our ability to significantly increase
      revenue from our operations, of which we have a limited history. Accordingly,
      our prospects must be considered in light of the risks, expenses and
      difficulties frequently encountered by companies with a limited operating
      history. These risks include our ability to:




·
            offer
                new and innovative services;




·
            attract
                clients for our services;




·
            attract
                advertisers;




·
            attract
                a larger audience to our network;




·
            derive
                revenue from our users from fee-based Internet
                services;




·
            respond
                effectively to competitive pressures and address the effects of strategic
                relationships or corporate combinations among our
                competitors;




·
            maintain
                our current, and develop new, strategic
                relationships;




·
            increase
                awareness of our brand and continue to build user
                loyalty;




·
            attract
                and retain qualified management and
                employees;




·
            upgrade
                our technology to support increased traffic and expanded services;
                and




·
            expand
                the content and services on our network or secure premium
                content.




**In
      Order To Comply With PRC Regulatory Requirements, We Operate Our Main Business
      Through A Company With Which We Have A Contractual Relationship (ZYTX) But
      In
      Which We Do Not Have Controlling Ownership. If The PRC Government Determines
      That Our Agreements With ZYTX Are Not In Compliance With Applicable Regulations,
      Our Business In The PRC Could Be Adversely Affected.**




The
      Chinese government restricts foreign investment in Internet-related and
      advertising businesses, including Internet access, distribution of content
      over
      the Internet and advertising via the Internet. Accordingly, we operate our
      Internet-related businesses in China through ZYTX, a VIE, which is owned by
      our
      Chairman of the Board (60%) and our Chief Executive Officer (40%). We control
      ZYTX and operate its business through contractual arrangements and these
      individual owners, but we have no equity control over ZYTX. Accordingly, we
      cannot be sure that the PRC government would view our operating arrangements
      to
      be in compliance with PRC licensing, registration or other regulatory
      requirements, with existing policies or with requirements or policies that
      may
      be adopted in the future. If we are determined not to be in compliance, the
      PRC
      government could revoke our business and operating licenses, require us to
      discontinue or restrict our operations, restrict our right to collect revenues,
      block our web site, require us to restructure our business, corporate structure
      or operations, impose additional conditions or requirements with which we may
      not be able to comply, impose restrictions on our business operations or on
      our
      customers, or take other regulatory or enforcement actions against us that
      could
      be harmful to our business. We may also encounter difficulties in obtaining
      performance under or enforcement of related contracts.


-
          19 -


**We
      Rely on Contractual Arrangements With ZYTX For Our Operations, Which May Not
      Be
      As Effective In Providing Control Over This Entity As Direct
      Ownership.**




Because
      PRC regulations restrict our ability to provide Internet content, MVAS and
      advertising services directly in China, we are dependent on our VIEs in which
      we
      have little or no equity ownership interest and must rely on contractual
      arrangements to control and operate these businesses. These contractual
      arrangements may not be as effective in providing control over these entities
      as
      direct ownership. For example, the VIEs could fail to take actions required
      for
      our business or fail to maintain our China web sites despite their contractual
      obligation to do so. These companies are able to transact business with parties
      not affiliated with us. If these companies fail to perform under their
      agreements with us, we may have to rely on legal remedies under Chinese law,
      which we cannot be sure would be effective. In addition, we cannot be certain
      that the individual equity owners of the VIEs would always act in the best
      interests of ZYTX, especially if they leave ZYTX.




Substantially
      all profits generated from our VIEs are paid to the subsidiaries of ours in
      China through related party transactions under contractual agreements. We
      believe that the terms of these contractual agreements are in compliance with
      the laws in China. The tax authorities in China have examined some of these
      contractual agreements in the past and have not raised any comment. However,
      due
      to the uncertainties surrounding the interpretation of the transfer pricing
      rules relating to related party transactions in China, it is possible that
      in
      the future tax authorities in China may challenge the transfer prices that
      we
      have used for related party transactions among our entities in China. In the
      event the tax authorities challenge our VIE structure, we may be forced to
      restructure our business operation, which could have a material adverse effect
      on our business.




**We
      Cannot Assure You That Our Organic Growth Strategy Will Be
      Successful.**




One
      of
      our growth strategies is to grow organically through increasing our services
      by
      increasing our market share and entering new markets in the PRC. However, many
      obstacles to increasing our market share and entering such new markets exist,
      including, but not limited to, costs associated with increasing market share
      and
      entering into such markets and attendant marketing efforts. We cannot,
      therefore, assure you that we will be able to successfully overcome such
      obstacles and establish our services in any additional markets. Our inability
      to
      implement this organic growth strategy successfully may have a negative impact
      on our ability to grow and on our future financial condition, results of
      operations or cash flows.




**Our
      Business And Growth Could Suffer If We Are Unable To Hire And Retain Key
      Personnel That Are In High Demand.**




We
      depend
      upon the continued contributions of our senior management and other key
      personnel, including Junjun Xu, Mingfei Yang and Zhenyu Wang. The loss of the
      services of any of our executive officers or other key employees could have
      a
      material adverse effect on our business, operations, revenues or prospects.
      We
      do not maintain key man insurance on the lives of these individuals at present.
      As we plan to expand, we will have to attract managerial staff. We may not
      be
      able to identify and retain qualified personnel due to our lack of understanding
      of different cultures and lack of local contacts. This may impede any potential
      expansion. Our future success will also depend on our ability to attract and
      retain highly skilled and qualified technical, managerial, editorial, finance,
      marketing, sales and customer service personnel in China. Qualified individuals
      are in high demand, and we may not be able to successfully attract, assimilate
      or retain the personnel we need to succeed.


-
          20 -


**We
      May Not Be Able To Manage Our Expanding Operations Effectively, Which Could
      Harm
      Our Business.**




We
      anticipate expansion in our business as discussed in the “Plan of Operation”
section herein, as we address growth in our customer base and market
      opportunities. In addition, the geographic dispersion of our operations as
      a
      result of overall internal growth requires significant management resources
      t h at
      our
      locally-based competitors do not need to devote to their operations. In order
      to
      manage the expected growth of our operations and personnel, we will be required
      to improve and implement operational and financial systems, procedures and
      controls, and expand, train and manage our growing employee base. Further,
      our
      management will be required to maintain and expand our relationships with
      various other websites, Internet and other online service providers and other
      third parties necessary to our business. We cannot assure you that our current
      and planned personnel, systems, procedures and controls will be adequate to
      support our future operations. If we are not successful in establishing,
      maintaining and managing our personnel, systems, procedures and controls, our
      business will be materially and adversely affected.




**If
      We Need Additional Capital To Fund Our Growing Operations, We May Not Be Able
      To
      Obtain Sufficient Capital And May Be Forced To Limit The Scope Of Our
      Operations.**




As
      we
      implement our growth strategies, we may experience increased capital needs
      and
      we may not have enough capital to fund our future operations without additional
      capital investments. Our capital needs will depend on numerous factors,
      including (i) our profitability; (ii) the release of competitive products by
      our
      competition; (iii) the level of our investment in R&D; and (iv) the amount
      of our capital expenditures. We cannot assure you that we will be able to obtain
      capital in the future to meet our needs.




If
      we
      cannot obtain additional funding, we may be required to:




·
            reduce
                our investments in research and
                development;




·
            limit
                our marketing efforts; and




·
            decrease
                or eliminate capital expenditures.




Such
      reductions could materially adversely affect our business and our ability to
      compete. Even if we do find a source of additional capital, we may not be able
      to negotiate terms and conditions for receiving the additional capital that
      are
      acceptable to us. Any future capital investments could dilute or otherwise
      materially and adversely affect the holdings or rights of our existing
      stockholders. We cannot give you any assurance that any additional financing
      will be available to us, or if available, will be on terms favorable to us.




**If
      We Are Unable To Keep Up With The Rapid Technological Changes Of The Internet
      Industry, Our Business May Suffer.**




The
      Internet industry is experiencing rapid technological changes. For example,
      with
      the advances of search engines, Internet users may choose to access information
      through search engines instead of web portals. With the advent of Web 2.0,
      the
      interests and preferences of Internet users may shift to user-generated content,
      such as blogs. As broadband becomes more accessible, Internet users may demand
      contents in audio- and video-rich format. With the development of 2.5G (such
      as
      GPRS) and soon 3G (such as Universal Mobile Telecommunication Service) in China,
      mobile users may shift from the current predominant text messaging services
      to
      newer applications, such as multimedia messaging services, mobile commerce,
      music and video downloads and mobile games. Our future success will depend
      on
      our ability to anticipate, adapt and support new technologies and industry
      standards. If we fail to anticipate and adapt to these and other technological
      changes, our market share and our profitability could suffer.


-
          21 -


**If
      We Fail To Successfully Develop And Introduce New Products And Services, Our
      Competitive Position And Ability To Generate Revenues Could be Harmed.**




We
      are
      developing new products and services, as set forth in our “Plan of Operation”
section herein. The planned timing or introduction of new products and services
      is subject to risks and uncertainties. Actual timing may differ materially
      from
      original plans. Unexpected technical, operational, distribution or other
      problems could delay or prevent the introduction of one or more of our new
      products or services. Moreover, we cannot be sure that any of our new products
      and services will achieve widespread market acceptance or generate incremental
      revenue. If our efforts to develop, market and sell new products and services
      to
      the market are not successful, our financial position, results of operations
      and
      cash flows could be materially adversely affected, the price of our Common
      Stock
      could decline and you could lose part or all of your investment.




**Concerns
      About The Security Of Electronic Commerce Transactions And Confidentiality
      Of
      Information On The Internet May Reduce Use Of Our Network And Impede Growth.**




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




**We
      May Not Be Able To Adequately Protect Our Intellectual Property, Which Could
      Cause Us To Be Less Competitive.**




We
      rely
      on a combination of copyright, trademark and trade secret laws and restrictions
      on disclosure to protect our intellectual property rights. Despite our efforts
      to protect our proprietary rights, unauthorized parties may attempt to copy
      or
      otherwise obtain and use our technology. Monitoring unauthorized use of our
      products is difficult and costly, and we cannot be certain that the steps we
      have taken will prevent misappropriations of our technology, particularly in
      foreign countries where the laws may not protect our proprietary rights as
      fully
      as in the United States. From time to time, we may have to resort to litigation
      to enforce our intellectual property rights, which could result in substantial
      costs and diversion of our resources.




**We
      May Be Exposed To Infringement Claims By Third Parties, Which, If Successful,
      Could Cause Us To Pay Significant Damage Awards.**




Third
      parties may initiate litigation against us alleging infringement of their
      proprietary rights. In the event of a successful claim of infringement and
      our
      failure or inability to develop non-infringing technology or license the
      infringed or similar technology on a timely basis, our business could be harmed.
      In addition, even if we are able to license the infringed or similar technology,
      license fees could be substantial and may adversely affect our results of
      operations.


-
          22 -


**The
      Law Of The Internet Remains Largely Unsettled, Which Subjects Our Business
      To
      Legal Uncertainties That Could Harm Our Business.**




Due
      to
      the increasing popularity and use of the Internet and other online services,
      it
      is possible that a number of laws and regulations may be adopted with respect
      to
      the Internet or other online services covering issues such as user privacy,
      pricing, content, copyrights, distribution, antitrust and characteristics and
      quality of products and services. Furthermore, the growth and development of
      the
      market for electronic commerce may prompt calls for more stringent consumer
      protection laws that may impose additional burdens on companies conducting
      business online. The adoption of any additional laws or regulations may decrease
      the growth of the Internet or other online services, which could, in turn,
      decrease the demand for our products and services and increase our cost of
      doing
      business.




Moreover,
      the applicability to the Internet and other online services of existing laws
      in
      various jurisdictions governing issues such as property ownership, sales and
      other taxes, libel and personal privacy is uncertain and may take years to
      resolve. For example, new tax regulations may subject us or our customers to
      additional sales and income taxes. Any new legislation or regulation, the
      application of laws and regulations from jurisdictions whose laws do not
      currently apply to our business, or the application of existing laws and
      regulations to the Internet and other online services could significantly
      disrupt our operations.




**We
      Are Relying On Advertising Sales As A Part Of Our Revenue, But The Online
      Advertising Market Is Subject To Many Uncertainties, Which Could Cause Our
      Advertising Revenues To Decline.**




Our
      advertising revenue growth is dependent on increased revenue from the sale
      of
      advertising space on our network. The growth of online advertising in China
      is
      subject to many uncertainties and many of our current and potential advertisers
      have limited experience with the Internet as an advertising medium, have not
      traditionally devoted a significant portion of their advertising expenditures
      or
      other available funds to web-based advertising, and may not find the Internet
      to
      be effective for promoting their products and services relative to traditional
      print and broadcast media. Our ability to generate and maintain significant
      advertising revenue will depend on a number of factors, many of which are beyond
      our control, including but not limited to:




·
            the
                development and retention of a large base of users possessing demographic
                characteristics attractive to
                advertisers;




·
            the
                maintenance and enhancement of our brands in a cost effective
                manner;




·
            increased
                competition and potential downward pressure on online advertising
                prices
                and limitations on web page space;




·
            the
                change in government policy that would curtail or restrict our online
                advertising services;




·
            the
                acceptance of online advertising as an effective way for advertisers
                to
                market their businesses;




·
            the
                development of independent and reliable means of verifying levels
                of
                online advertising and traffic; and




·
            the
                effectiveness of our advertising delivery, tracking and reporting
                systems.




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


-
          23 -


Our
      growth in advertising revenues, to a certain extent, will also depend on our
      ability to increase the advertising space on our network. If we fail to increase
      our advertising space at a sufficient rate, our growth in advertising revenues
      could be hampered. Further, the increasing usage of Internet advertising
      blocking software may result in a decrease of our advertising revenues as the
      advertisers may choose not to advertise on the Internet if Internet advertising
      blocking software is widely used.




**We
      May Be Subject To Claims Based On The Content We Provide Over Our Network and
      the Products And Services Sold On Our Network, Which, If Successful, Could
      Cause
      Us To Pay Significant Damage Awards.**




As
      a
      publisher and distributor of content and a provider of services over the
      Internet, we face potential liability for defamation, negligence, copyright,
      patent or trademark infringement and other claims based on the nature and
      content of the materials that we publish or distribute; the selection of
      listings that are accessible through our services and media properties, or
      through content and materials that may be posted by users on our website; losses
      incurred in reliance on any erroneous information published by us; unsolicited
      email, lost or misdirected messages, illegal or fraudulent use of email or
      interruptions or delays in email service; and product liability, warranty and
      similar claims to be asserted against us by end users who purchase goods and
      services through www.soobao.cn and any
      future e-commerce services we may offer.




We
      may
      incur significant costs in investigating and defending any potential claims,
      even if they do not result in liability. Although we carry general liability
      insurance, our insurance may not cover potential claims of this type and may
      not
      be adequate to indemnify us against all potential liabilities.




**Our
      Operations Could Be Disrupted By Unexpected Network Interruptions Caused By
      System Failures, Natural Disasters Or Unauthorized Tampering With Our Systems.**




The
      continual accessibility of our website and the performance and reliability
      of
      our network infrastructure are critical to our reputation and our ability to
      attract and retain users, advertisers and merchants. Any system failure or
      performance inadequacy that causes interruptions in the availability of our
      services or increases the response time of our services could reduce our appeal
      to advertisers and consumers. Factors that could significantly disrupt our
      operations include: system failures and outages caused by fire, floods,
      earthquakes, power loss, telecommunications failures and similar events;
      software errors; computer viruses, break-ins and similar disruptions from
      unauthorized tampering with our computer systems; and security breaches related
      to the storage and transmission of proprietary information, such as credit
      card
      numbers or other personal information.




We
      have
      limited backup systems and redundancy. In the past, we experienced an
      unauthorized tampering of the mail server of our China website which briefly
      disrupted our operations. Future disruptions or any of the foregoing factors
      could damage our reputation, require us to expend significant capital and other
      resources and expose us to a risk of loss or litigation and possible liability.
      We do not carry sufficient business interruption insurance to compensate for
      losses that may occur as a result of any of these events. Accordingly, our
      revenues and results of operations may be adversely affected if any of the
      above
      disruptions should occur.


-
          24 -


**We
      May Be Classified As A Passive Foreign Investment Company, Which Could Result
      In
      Adverse U.S. Tax Consequences To U.S. Investors.**




Based
      upon the nature of our income and assets, we may be classified as a passive
      foreign investment company, or PFIC, by the United States Internal Revenue
      Service for U.S. federal income tax purposes. This characterization could result
      in adverse U.S. tax consequences to you. For example, if we are a PFIC, our
      U.S.
      investors will become subject to increased tax liabilities under U.S. tax laws
      and regulations and will become subject to more burdensome reporting
      requirements. The determination of whether or not we are a PFIC is made on
      an
      annual basis, and those determinations depend on the composition of our income
      and assets, including goodwill, from time to time. We intend to operate our
      business so as to minimize the risk of PFIC treatment, however you should be
      aware that certain factors that could affect our classification as PFIC are
      out
      of our control. For example, the calculation of assets for purposes of the
      PFIC
      rules depends in large part upon the amount of our goodwill, which in turn
      is
      based, in part, on the then market value of our shares, which is subject to
      change. Similarly, the composition of our income and assets is affected by
      the
      extent to which we spend the cash we have raised on acquisitions and capital
      expenditures. In addition, the relevant authorities in this area are not clear
      and so we operate with less than clear guidance in our effort to minimize the
      risk of PFIC treatment. Therefore, we cannot be sure whether we are not and
      will
      not be a PFIC for the current or any future taxable year. In the event we are
      determined to be a PFIC, our stock may become less attractive to U.S. investors,
      thus negatively impacting the price of our stock.




**RISKS
      RELATING TO OUR COMMON STOCK**




**Our
      Common Stock Price Is Volatile And Could Decline In The Future.**




The
      stock
      market, in general, and the market price for shares of internet service and
      media companies in particular, have experienced extreme stock price
      fluctuations. In some cases, these fluctuations have been unrelated to the
      operating performance of the affected companies. Many companies in the internet
      service and media industry have experienced dramatic volatility in the market
      prices of their common stock. We believe that a number of factors, both within
      and outside of our control, could cause the price of our Common Stock to
      fluctuate, perhaps substantially. Factors such as the following could have
      a
      significant adverse impact on the market price of our Common Stock:




·
            announcements
                of technological innovations or new products by us or our
                competitors;




·
            developments
                concerning our proprietary rights or our competitors’
                rights (including litigation);




·
            our
                ability to obtain additional financing and, if available, the terms
                and
                conditions of the financing;




·
            our
                financial position and results of
                operations;




·
            litigation;




·
            period-to-period
                fluctuations in our operating
                results;




·
            changes
                in estimates of our performance by any securities
                analysts;




·
            new
                regulatory requirements and changes in the existing regulatory
                environment;




·
            the
                issuance of new equity securities in a future
                offering;




·
            changes
                in interest rates;




-
          25 -


·
            market
                conditions of securities traded on the NASDAQ Capital
                Market;




·
            investor
                perceptions of us and the insurance industry generally;
                and




·
            general
                economic and other national
                conditions.




**We
      May Have Difficulty Raising Necessary Capital To Fund Operations As A Result
      Of
      Market Price Volatility For Our Shares Of Common Stock.**




In
      recent
      years, the securities markets in the United States have experienced a high
      level
      of price and volume volatility, and the market price of securities of many
      companies have experienced wide fluctuations that have not necessarily been
      related to the operations, performances, underlying asset values or prospects
      of
      such companies. For these reasons, our shares of Common Stock can also be
      expected to be subject to volatility resulting from purely market forces over
      which we will have no control. If our business development plans are successful,
      we may require additional financing to continue to develop and exploit existing
      and new technologies and to expand into new markets. The exploitation of our
      technologies may, therefore, be dependent upon our ability to obtain financing
      through debt and equity or other means.




**Our
      Common Stock Is Considered A “Penny Stock” And As A Result, Related
      Broker-Dealer Requirements Affect Its Trading And
      Liquidity.**




Our
      Common Stock is considered to be a “penny stock” since it meets one or more of
      the definitions in Rules 15g-2 through 15g-6 promulgated under
      Section 15(g) of the Exchange Act. These include but are not limited to the
      following: (i) the common stock trades at a price less than $5.00 per
      share; (ii) the common stock is not traded on a “recognized” national
      exchange; (iii) the common stock is not quoted on the NASDAQ Stock Market,
      or (iv) the common stock is issued by a company with average revenues of
      less than $6.0 million for the past three years. The principal result or
      effect of being designated a “penny stock” is that securities broker-dealers
      cannot recommend our Common Stock to investors, thus hampering its liquidity.




Section 15(g)
      and Rule 15g-2 require broker-dealers dealing in penny stocks to provide
      potential investors with documentation disclosing the risks of penny stocks
      and
      to obtain a manually signed and dated written receipt of the documents before
      effecting any transaction in a penny stock for the investor’s account. Potential
      investors in our Common Stock are urged to obtain and read such disclosure
      carefully before purchasing any of our shares.




Moreover,
      Rule 15g-9 requires broker-dealers in penny stocks to approve the account
      of any investor for transactions in such stocks before selling any penny stock
      to that investor. This procedure requires the broker-dealer to (i) obtain
      from the investor information concerning his or her financial situation,
      investment experience and investment objectives; (ii) reasonably determine,
      based on that information, that transactions in penny stocks are suitable for
      the investor and that the investor has sufficient knowledge and experience
      as to
      be reasonably capable of evaluating the risks of penny stock transactions;
      (iii) provide the investor with a written statement setting forth the basis
      on which the broker-dealer made the determination in (ii) above; and
      (iv) receive a signed and dated copy of such statement from the investor,
      confirming that it accurately reflects the investor’s financial situation,
      investment experience and investment objectives.




Compliance
      with these requirements may make it more difficult for holders of our Common
      Stock to resell their shares to third parties or to otherwise dispose of them
      in
      the market or otherwise.


-
          26 -


**Shares
      Eligible For Future Sale May Adversely Affect The Market Price Of Our Common
      Stock.**




From
      time
      to time, certain of our stockholders may be eligible to sell all or some of
      their shares of Common Stock by means of ordinary brokerage transactions in
      the
      open market pursuant to Rule 144, promulgated under the Securities Act of
      1933, as amended, subject to certain limitations. In general, pursuant to
      Rule 144, a stockholder (or stockholders whose shares are aggregated) who
      has satisfied a six (6) months holding period may, under certain circumstances,
      sell within any three-month period a number of securities which does not exceed
      the greater of 1% of the then outstanding shares of Common Stock. Rule 144
      also permits, under certain circumstances, the sale of securities, without
      any
      limitations, by a non-affiliate of our Company that has satisfied a one (1)
      year
      holding period. Any substantial sale of common stock pursuant to Rule 144
      may have an adverse effect on the market price of our Common Stock.




**Our
      Chairman Of The Board And Our CEO Together Exercise Significant Control Over
      Matters Requiring Stockholder Approval.**




After
      giving effect to the issuance of all the shares of Common Stock, our Chairman
      Zhenyu Wang and our CEO Junjun Xu together have voting power equal to 53.22%
      of
      our voting securities as of the date of this Annual Report. As a result, these
      holders through such stock ownership, exercise control over all matters
      requiring majority stockholder approval, including the election of directors
      and
      approval of significant corporate transactions. This concentration of ownership
      may also have the effect of delaying or preventing a change in control of us
      that may be otherwise viewed as beneficial by stockholders other than these
      holders.




**We
      May Incur Significant Costs To Ensure Compliance With U.S. Corporate Governance
      And Accounting Requirements.**




We
      may
      incur significant costs associated with our public company reporting
      requirements, costs associated with newly applicable corporate governance
      requirements, including requirements under the Sarbanes-Oxley Act of 2002 and
      other rules implemented by the SEC. We expect all of these applicable rules
      and
      regulations to increase our legal and financial compliance costs and to make
      some activities more time-consuming and costly. We also expect that these
      applicable rules and regulations may make it more difficult and more expensive
      for us to obtain director and officer liability insurance and we may be required
      to accept reduced policy limits and coverage or incur substantially higher
      costs
      to obtain the same or similar coverage. As a result, it may be more difficult
      for us to attract and retain qualified individuals to serve on our board of
      directors or as executive officers. We cannot predict or estimate the amount
      of
      additional costs we may incur or the timing of such costs.




**We
      May Be Required To Raise Additional Financing By Issuing New Securities With
      Terms Or Rights Superior To Those Of Our Shares Of Common Stock, Which Could
      Adversely Affect The Market Price Of Our Shares Of Common
      Stock.**




We
      may
      require additional financing to fund future operations, including expansion
      in
      current and new markets, programming development and acquisition, capital costs
      and the costs of any necessary implementation of technological innovations
      or
      alternative technologies. We may not be able to obtain financing on favorable
      terms, if at all. If we raise additional funds by issuing equity securities,
      the
      percentage ownership of our current stockholders will be reduced, and the
      holders of the new equity securities may have rights superior to those of the
      holders of shares of Common Stock, which could adversely affect the market
      price
      and the voting power of shares of our Common Stock. If we raise additional
      funds
      by issuing debt securities, the holders of these debt securities would similarly
      have some rights senior to those of the holders of shares of Common Stock,
      and
      the terms of these debt securities could impose restrictions on operations
      and
      create a significant interest expense for us.


-
          27 -


**Standards
      For Compliance With Section 404 Of The Sarbanes-Oxley Act Of 2002 Are Uncertain,
      And If We Fail To Comply In A Timely Manner, Our Business Could Be Harmed And
      Our Stock Price Could Decline.**




Rules
      adopted by the SEC, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002
      require annual assessment of our internal control over financial reporting,
      and
      attestation of our assessment by our independent registered public accountants.
      The standards that must be met for management to assess the internal control
      over financial reporting as effective are new and complex, and require
      significant documentation, testing and possible remediation to meet the detailed
      standards and will impose significant additional expenses on us. We may
      encounter problems or delays in completing activities necessary to make an
      assessment of our internal control over financial reporting. In addition, the
      attestation process by our independent registered public accountants is new
      and
      we may encounter problems or delays in completing the implementation of any
      requested improvements and receiving an attestation of our assessment by our
      independent registered public accountants. If we cannot assess our internal
      control over financial reporting as effective, or our independent registered
      public accountants are unable to provide an unqualified attestation report
      on
      such assessment, investor confidence and share value may be negatively
      impacted.




**We
      Do Not Foresee Paying Cash Dividends In The Foreseeable
      Future.**




We
      have
      not paid cash dividends on our stock and we do not plan to pay cash dividends
      on
      our stock in the foreseeable future.




***ITEM
      1B.***  ***Unresolved
      Staff Comments***




Not
      applicable for smaller reporting companies.




***ITEM
      2.***  ***Properties***




All
      land
      in China is owned by the State. Individuals and companies are permitted to
      acquire rights to use land or land use rights for specific purposes. In the
      case
      of land used for industrial purposes, the land use rights are granted for a
      period of fifty (50) years. This period may be renewed at the expiration of
      the
      initial and any subsequent terms. Granted land use rights are transferable
      and
      may be used as security for borrowings and other obligations.




ZBDT
      has
      two (2) offices which are listed below.




(a)
            Room
                210, #25 Office Building, #15 East An Ning Zhuang Road, Qinghe, Haidian
                District, Beijing, China. This office consists of thirty-two (32)
                square
                meters. We pay approximately RMB 1,700 (US$248) per month to lease
                this
                office. The term of this lease expires on July 26, 2008.




(b)
            Suite
                1113 - 1114, 11/F., Block 6, No. 2 Hai Dian Bei Street, Zhongquancun,
                Beijing, China. This office consists of approximately six hundred
                and
                eight0three (683) square meters and ZBDT pays RMB 86,058 (US$12,547)
                per
                month to lease this office. The term of this lease expires on August
                31,
                2010.




-
          28 -


ZYTX
      has
      four (4) offices which are listed below.




(a)
            Room
                B1009, North Mansion, ShiJingShan District, ShiXing East, Street
                No. 11,
                Beijing, China. This office consists of approximately twenty (20)
                square
                meters and ZYTX pays RMB 10,000 (US$1,458) per year to lease this
                office.
                The term of this lease expires on October 17,
                2008.




(b)
            Room
                502, HuaTeng Edifice, Chaoyang JinSong 3 District, No. 302, Beijing,
                China. This office consists of approximately four hundred eighty
                (480)
                square meters and ZYTX pays RMB 103,608 (US$15,105) every two (2)
                months.
                The term of the lease expires on September 30,
                2008.




(c)
            Unit
                B113 Hua Teng Building, Chaoyang JinSong 3 District, No. 302, Beijing,
                China. This office consists of approximately four hundred eighty
                (480)
                square meters and ZYTX pays RMB 54,184 (US$7,900) every two (2) months.
                The term of the lease expires on July 24,
                2010.




(d)
            Rm
                403, Flat E, Block 10, No. 8 Xin Jie Kuo Wai Da Street, Xi Cheng District,
                Beijing, China. This office consists of approximately four hundred
                eighty
                (480) square meters and ZYTX pays RMB 6,900 (US$1,006) per quarter.
                The
                term of the lease expires on June 15,
                2009.




We
      believe that all our properties and equipment have been adequately maintained,
      are generally in good condition, and are suitable and adequate for our
      business.




***ITEM
      3.***  ***Legal
      Proceedings***




In
      the
      normal course of business, we are named as defendant in lawsuits in which claims
      are asserted against us. In our opinion, the liabilities, if any, which may
      ultimately result from such lawsuits, are not expected to have a material
      adverse effect on our financial position, results of operations or cash flows.
      As of the date hereof, there is no outstanding litigation.




***ITEM
      4.***  ***Submission
      of Matters to a Vote of Security Holders***




None.


-
          29 -





**PART
      II**




***ITEM
      5.***  ***Market
      for Registrant’s*** **Common
      Equity, Related Stockholder Matters and Issuer Purchases of Equity
      Securities**




Our
      Common Stock is quoted on the NASDAQ Capital Market under the symbol “CHIO”. The
      following table sets forth on a per share basis for the periods shown, the
      high
      and low closing bid prices of our Common Stock. The quotations reflect
      inter-dealer prices, without retail mark-up, mark-down or commission and may
      not
      represent actual transactions.




**Closing
                Bid Prices**
            
            **High**
            
            **Low**Calendar
                Year Ending December 31, 20081stQuarter:
            
            $
            5.7500
            
            $
            4.40002ndQuarter:
            
            $
            4.9000
            
            $
            4.2000Calendar
                Year Ended December 31, 20071stQuarter:
            
            $
            0.1400
            
            $
            0.00052ndQuarter (pre 1-for-500 reverse split- April 2 through April
                24):
            
            $
            0.0900
            
            $
            0.02152ndQuarter (post 1-for-500 reverse split- April 25 through June
                29):
            
            $
            2.3000
            
            $
            1.70003rdQuarter:
            
            $
            1.7000
            
            $
            1.70004thQuarter:
            
            $
            4.7500
            
            $
            1.7000Calendar
                Year Ended December 31, 20061stQuarter:
            
            $
            0.001
            
            $
            0.0012ndQuarter:
            
            $
            0.001
            
            $
            0.0013rdQuarter:
            
            $
            0.001
            
            $
            0.0014thQuarter:
            
            $
            0.001
            
            $
            0.001





When
      the
      trading price of our Common Stock is below $5.00 per share, the Common Stock
      is
      considered to be a “penny stock” that is subject to rules promulgated by the SEC
      (Rule 15-1 through 15g-9) under the Exchange Act. These rules impose significant
      requirements on brokers under these circumstances, including:
      (a) delivering to customers the SEC’s standardized risk disclosure
      document; (b) providing customers with current bid and ask prices;
      (c) disclosing to customers the brokers-dealer’s and sales representatives
      compensation; and (d) providing to customers monthly account
      statements.


-
          30 -


**Holders
      of Common Equity**




As
      of the
      date of this Annual Report, we have an aggregate of 40,000,000 shares of our
      Common Stock issued and outstanding and 260 stockholders of record.




**Dividends**




We
      have
      never declared or paid any cash dividends or distributions on our Common Stock.
      We currently intend to retain our future earnings 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.




**Securities
      Authorized for Issuance under Equity Compensation Plans**




The
      following table discloses information as of June 30, 2008 with respect to
      compensation plans (including individual compensation arrangements) under
      which our equity securities are authorized for issuance.




**(a)**
            
            **(b)**
            
            **(c)****Plan Category**
            
            **Number of securities to**
              **be issued upon exercise of**
              **outstanding options,**
              **warrants and rights**
            
            **Weighted-average**
              **exercise price of**
              **outstanding options,**
              **warrants and rights**
            
            **Number of securities**
              **remaining available for**
              **future issuance under**
              **equity compensation**
              **plans (excluding**
              **securities reflected in**
              **column (a)**N/A
            
            -0-
            
            -0-
            
            -0-Total
            
            -0-
            
            -0-
            
            -0-





**Options
      and Warrants**




As
      of the
      date of this Report, we have no outstanding options or warrants.




**Transfer
      Agent and Registrar**




Our
      transfer agent is Corporate Stock Transfer, located at 3200 Cherry Creek Drive
      South, Suite 430, Denver, Colorado 80209. Their telephone number is (303)
      282-4800.




**Performance
      Graph**




Not
      required for a smaller reporting company.




**Recent
      Sales of Unregistered Securities**




In
      connection with the Company’s reorganization in 2006, the Company effectuated a
      500-1 reverse split of its Common Stock effective July 27, 2006 effectively
      reducing the number of issued and outstanding shares of Common Stock to less
      than 25,000 shares (the “ Rolled-Back
      Shares ”).
      The
      Company filed an amendment to its Certificate of Incorporation to reflect these
      changes on August 8 th ,
      2006.


-
          31 -


On
      March
      2, 2006, the Bankruptcy Court directed the issuance of 25,000,000 restricted
      common shares to Rosetta Granite, Inc., in exchange for the sum of $125,000
      which was ultimately paid to creditors of the bankruptcy estate. The 25,000,000
      restricted shares issued by the Company were not registered in reliance upon
      the
      Bankruptcy Court Order under Section 4(2) of the Act, in that they were not
      made
      available for sale to the public and are registered against resale until they
      are registered under the Act or sold under an exemption from registration.
      On
      September 8, 2006, and in a subsequent Resolution dated December 13, 2007,
      the
      Company did issue, pursuant to the Bankruptcy Court Order, 29,800 common shares
      to creditors of the Bankruptcy estate and 1,756,250 shares of Common Stock
      to
      the holder(s) of a DIP Loan authorized under the Bankruptcy Court Order. These
      common shares were issued upon reliance of the Bankruptcy Court Order pursuant
      to Section 1145 of the U.S. Bankruptcy Code, all as provided for and set forth
      in the Bankruptcy Court Order. The warrants called for under the DIP Loan were
      never issued and subsequently relinquished by the holder(s) of the DIP Loan
      pursuant to written agreement with the Company. Four Million Two Hundred
      Forty-Three Thousand Seven Hundred Fifty (4,243,750) common shares remain to
      be
      issued to the holder(s) of the DIP Loan pursuant to the Bankruptcy Court
      Order.




On
      December 18, 2007, pursuant to the terms of the Exchange Agreement, the Company
      acquired all of the issued and outstanding capital stock of Rise & Grow in
      exchange for the issuance by DEXT of 26,400,000 **** newly-issued
      shares of Common Stock to the Stockholder (Newise Century Inc.).




***ITEM
      6.***  ***Selected
      Financial Data***




Not
      required for a smaller reporting company.





***ITEM
      7.***  ***Management‘s
      Discussion and Analysis of Financial Condition and Results of
      Operations***




**Forward
      Looking Statements**




The
      following is management’s discussion and analysis of certain significant factors
      which have affected our financial position and operating results during the
      periods included in the accompanying consolidated financial statements, as
      well
      as information relating to the plans of our current management. This report
      includes forward-looking statements. Generally, the words “ believes ” “
anticipates ”, “ may ”, “ will ”, “ should ”, “ expect ”, “ intend ”, “ estimate
”, “ continue ” and similar expressions or the negative thereof or comparable
      terminology are intended to identify forward-looking statements. Such statements
      are subject to certain risks and uncertainties, including the matters set forth
      in this report or other reports or documents we file with the SEC from time
      to
      time, which could cause actual results or outcomes to differ materially from
      those projected. Undue reliance should not be place on these forward-looking
      statements which speak only as of the date hereof. We undertake no obligation
      to
      update these forward-looking statements.




The
      following discussion and analysis should be read in conjunction with our
      consolidated financial statements and the related notes thereto and other
      financial information contained elsewhere in this Report.


-
          32 -


**Acquisition
      of Rise & Grow**




On
      December 18, 2007 (the “Closing Date”), China INSOnline Corp. (formerly known as
      Dexterity Surgical, Inc. and hereinafter, “ CHIO ” and together with its
      subsidiaries, the “ Company ”) entered into a Share Exchange Agreement (the
“Exchange Agreement ”) with Rise and Grow Limited, an inactive Hong Kong limited
      holding company (“Rise & Grow”) and Newise Century Inc., a British Virgin
      Islands company and the sole stockholder of Rise & Grow (the “ Stockholder
”). As a result of the share exchange, CHIO acquired all of the issued and
      outstanding securities of Rise & Grow from the Stockholder in exchange for
      Twenty-Six Million Four Hundred Thousand (26,400,000) newly-issued shares of
      CHIO’s common stock, par value $0.001 per share (“Common Stock ”). As a result
      of the exchange, Rise & Grow became our wholly-owned and chief operating
      subsidiary. We currently have no other business operations other than those
      of
      Rise & Grow.




The
      following is disclosure regarding CHIO, Rise & Grow and the wholly-owned
      operating subsidiary of Rise & Grow, Zhi Bao Da Tong (Beijing) Technology
      Co. Ltd. (“ZBDT”), a company formed under the laws of the People’s Republic of
      China (the “PRC”) and doing business in the PRC. From and after the Closing
      Date, the operations of Rise & Grow, through its operating subsidiary, ZBDT,
      are the only operations of CHIO.




Effective
      March 17, 2008, the Common Stock of CHIO began trading under a new ticker
      symbol, “CHIO.OB” on the Over-The-Counter Bulletin Board. CHIO changed its
      ticker symbol from “DEXT.OB” to “CHIO.OB” as a result of the Company’s name
      change from “Dexterity Surgical, Inc.” to “China INSOnline Corp.”, which such
      name change became effective as of February 26, 2008.




Effective
      July 1, 2008, the Common Stock of CHIO began trading under the same ticker
      symbol “CHIO” on the NASDAQ Capital Market.




**Organizational
      Structure of Rise & Grow, ZBDT and ZYTX**




Rise
      & Grow was formed on February 10, 2006 as a Hong Kong limited company. ZBDT
      was established and incorporated by Rise & Grow and commenced business on
      September 6, 2007. Rise & Grow’s sole business is to act as a holding
      company for ZBDT. ZBDT was formed by Rise & Grow for the purpose of
      developing computer and network software and related products and to promote
      the
      development of high-tech industries in the field of Chinese information
      technology. It does this by controlling, through an Exclusive Technical
      Consulting and Service Agreement and related transaction documents dated as
      of
      September 28, 2007 (collectively, the “Service Agreements”), Beijing Zhi Yuan
      Tian Xia Technology Co., Ltd. (“ZYTX”), a limited liability company duly
      established on October 8, 2006 and validly existing under the PRC.




Pursuant
      to the Services Agreements, ZYTX shall provide on-going technical services
      and
      other services to ZYTX in exchange for substantially all net income of ZYTX.
      In
      addition, Mr. Zhenyu Wang and Ms. Junjun Xu have pledged all of their shares
      in
      ZYTX to ZBDT, representing one hundred percent (100%) of the total issued and
      outstanding capital stock of ZYTX, as collateral for non-payment under the
      Service Agreements or for fees on technical and other services due to us
      thereunder. We have the power to appoint all directors and senior management
      personnel of ZYTX. Currently, ZYTX is sixty percent (60%) owned by Mr. Zhenyu
      Wang, CHIO’s Chairman of the Board, and forty percent (40%) owned by Junjun
      Xu, CHIO’s Chief Executive Officer and a director.


-
          33 -


**Business
      of the Company**




We
      are an
      Internet service and media company focusing on the PRC insurance industry.
      With
      localized websites targeting Greater China, the Company primarily provides,
      through ZYTX, a network portal through its industry website, www.soobao.cn
      (hereinafter also referred to as “Soobao”), to insurance companies, agents and
      consumers for advertising, online inquiry, news circulation, online
      transactions, statistic analysis and software development. The Company is also
      a
      licensed online motor vehicle, property and life insurance agent generating
      revenues through sales commissions from customers in the PRC.




ZYTX
      was
      originally founded with goal of raising the national insurance consciousness
      and
      reducing the cost on national security in China by constructing and maintaining
      its network portal (www.soobao.cn) in order to integrate and optimize business
      flow during the course of insurance sales and related client services. From
      incorporation through the end of June 30, 2007, ZYTX was primarily engaged
      in
      institutional preparation and prior-period business development. Thereafter,
      through trial implementation of www.soobao.cn, ZYTX’s products and services
      received favorable reviews and recognition in the Chinese insurance industry.
      ZYTX strengthened its technical research and development and expanded its
      product line after collecting suggestions from clients. In April 2007,
      www.soobao.cn was formally put into use. From October 8, 2006 (inception)
      through June 30, 2007, ZYTX’s fiscal year end, ZYTX realized a business income
      of RMB 17.2 million (US$2.2 million) and net profits of RMB 13.8 million
      (US$1.8 million).




Today,
      the Company offers online insurance products and services in China including
      (a)
      a network portal for the Chinese insurance industry ( www.soobao.cn ), offering
      industry players a forum for advertising products and services, (b) website
      construction and software development services for marketing teams in the
      insurance industry, (c) insurance agency services (whereby the Company generates
      sales commissions on motor vehicle insurance, property insurance and life
      insurance) and (d) accompanying client support services.




On
      September 28, 2007, ZBDT signed the following Service Agreements with ZYTX
      and
      its stockholders:




·
            Exclusive
                Technology Consultation Service Agreement, by and between ZYTX and
                ZBDT,
                through which ZBDT will provide, exclusively for both parties, technology
                consultation services to the Company and receive payments periodically;
                and




·
            Exclusive
                Equity Interest Purchase Agreements, by and between each of ZYTX’s
                stockholders and ZBDT, through which ZBDT is entitled to exclusively
                purchase all of the outstanding shares of capital stock of ZYTX from
                its
                current stockholders upon certain terms and conditions, especially
                upon it
                is allowable under the PRC laws and regulations;
                and




·
            Equity
                Interest Pledge Agreements, by and between each of ZYTX’s stockholders and
                ZBDT, through which the current stockholders of ZYTX have pledged
                all
                their respective shares in ZYTX to ZBDT. These Equity Interest Pledge
                Agreements guarantee the cash-flow payments under the Exclusive Technology
                Consultation Service Agreement; and




·
            Powers
                of Attorney, executed by each of the ZYTX’s stockholders, through which
                ZBDT is entitled to perform the equity right of ZYTX’s
                stockholders.




-
          34 -


In
      accordance with Financial Accounting Standards Board (“FASB”) Interpretation No.
      46R “Consolidation of Variable Interest Entities” (“FIN 46R”), an Interpretation
      of Accounting Research Bulletin No. 51, a Variable Interest Entity (a
“VIE”) is to be consolidated by a company if that company is subject to a
      majority of the risk of loss for the VIE or is entitled to receive a majority
      of
      the VIE’s residual returns. After executing the above agreements, ZYTX is now
      considered a VIE and ZBDT its primary beneficiary.




**Plan
      of Operation**




***Publicity
      and Promotion of Soobao***




Since
      its
      inception, ZYTX has been making business preparations and development mainly
      in
      the Beijing area, with a sales mode focusing on marketing. The Company plans
      to
      popularize www.soobao.cn and its insurance sales commission businesses in first
      and second-level cities across China from late mid year of 2008 to the year
      2010. The Company plans to attempt to develop www.soobao.cn so that it is the
      largest network portal in China’s insurance industry and the first choice of
      network media for insurance companies to advertise and to promote their products
      and services. We are also planning to organize an insurance agency marketing
      program.




With
      respect to network promotion, we plan to set “hot-spot” key words for price
      competition of the relevant industries in popular search engines and release
      advertisements in the relevant columns of large portal websites. With respect
      to
      traditional media, we plan to launch an integrated vertical promotion by means
      of LCD televisions installed in office buildings, elevator advertisements,
      public buses, radio stations and airplane media so as to popularize the
      www.soobao.cn brand.




***Technical
      Development Plan***




Our
      technical development plan consists of (a) developing applications of new
      technologies aimed at the network portal to meet the clients’ demand in online
      transactions, member score accumulation and other new functions, (b) building
      a
      two-way bridge for insurance providers and customers based on development and
      application of insurance portal website ( www.soobao.cn ) while taking
      advantage of the Internet platform to connect traditional sales and marketing
      with e-commerce, (c) technical development aimed at comprehensive solutions
      in
      the Internet application field for insurance companies and insurance agencies,
      (d) the introduction of and continued R&D of a comprehensive life insurance
      real-time quotation system whereby all life insurance products may be thoroughly
      compared under certain scientific and quantifiable factors and (e) the
      introduction and continued R&D of an insurance statistical and data analysis
      system that can analyze a present and prospective customer’s “ hot-points ” of
      insurance through analyzing a large number of effective clicks.




***Products
      and Services Plan***




The
      Company intends to focus on its products and services in following
      areas:




·
            With
                respect to the Company’s motor vehicle insurance sales business, the
                Company plans to provide motor vehicle-owners more value-added services
                following the purchase of motor vehicle insurance and the Company
                plans to
                improve its membership club programs in the area of motor vehicle
                insurance;




-
          35 -


·
            The
                Company plans to gradually grow its property insurance and life insurance
                business as insurance agent by utilizing third-party insurance brokers
                and
                by choosing cost-effective products. With online product optimization
                and
                the ability to compare products online in real-time, the Company
                will be
                able to choose more suitable insurance, enhance customer insurance
                purchasing efficiency and reduce
                costs.




·
            Capitalize
                on our brand name and current influence in the Chinese insurance
                industry
                through www.soobao.cn in order to drive consumer
                sales.




***Nationwide
      Marketing Network Construction Plan***




To
      carry
      out insurance sales more effectively and to supplement the function and effect
      of www.soobao.cn, ZYTX is in the process of constructing a comprehensive chain
      insurance supermarket entity whereby the Company intends to establish branch
      sales agency locations in key cities throughout China in the form of purchase
      or
      franchisee, and strive to establish a nationwide insurance marketing network
      system. ZYTX plans to set up subsidiaries and branches in every province and
      major city across China, provide prospective clients with a series of services
      such as one-to-one advisory on different products offered by different insurance
      companies, examination of life insurance, insurance site-sales, compensation
      and
      appreciation and claims settlement. As there will likely be many specialized
      clients in the transaction market, the Company plans to organize professional
      lectures on insurance, create an industry salon and release new products and
      services. It is our goal through such entity to (a) educate consumers with
      respect to insurance and insurance products, (b) provide objective and impartial
      information of each company’s product, (c) offer personalized insurance programs
      to consumers, (d) offer after-sale one-stop compensation services including
      improved efficiency with claims settlements and (e) offer exposure to
      www.soobao.cn and enjoy the network value-added services which are not offered
      through more traditional insurance consumption.




***Purchase
      of Equipment***




In
      light
      of the expanding insurance industry and in order to make web-browsing timely,
      smooth and secure, it will be necessary for the Company to continually upgrade
      the existing network portal hardware environment and to strengthen its network
      security inputs, while at the same time increase advertisement promotion related
      to network portal brand building. Therefore, we expect to purchase an estimated
      RMB 10 million (US$1.3 million) of equipment over the next twelve (12)
      months.




***Employees***




With
      the
      anticipated business growth and nationwide business development as discussed
      above, the Company plans to employ up to three hundred (300) employees in the
      following two (2) to three (3) years through external introduction and internal
      training.




***Cash
      Requirements***




As
      of the
      date of this Report, all of our capital is equity capital and we do not have
      any
      debt financing with any bank or other financial institutions. We believe our
      capital is sufficient to satisfy our cash requirements. As our business
      develops, the Company may consider raising additional funds if conditions are
      suitable.


-
          36 -


**Critical
      Accounting Policies**




***(a)***  ***Economic
      and Political Risks***




The
      Company's operations are conducted in the PRC. Accordingly, the Company's
      business, financial condition and results of operations may be influenced by
      the
      political, economic and legal environments in the PRC, and by the general state
      of the PRC economy. The Company's operations in the PRC are subject to special
      considerations and significant risks not typically associated with companies
      in
      North America and Western Europe. These include risks associated with, among
      others, the political, economic and legal environment and foreign currency
      exchange. 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,
      currency conversion, remittances abroad, and rates and methods of taxation,
      among other things.




***(b)***  ***Use
      of Estimates***




The
      preparation of financial statements in conformity with generally accepted
      accounting principles 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 date of the financial statements and
      the reported amounts of revenue and expenses during the reporting period. Actual
      results could differ from those estimates.




***(c)***  ***Fair
      Value of Financial Instruments***




The
      carrying value of financial instruments classified as current assets and current
      liabilities, such as accounts receivables, other receivables, prepayments and
      deposits, accounts payable, other payables and accrued liabilities, approximate
      fair value due to the short-term maturity of the instruments.




***(d)***  ***Cash
      and Cash Equivalents***




The
      Company considers all highly liquid investments purchased with original maturity
      of three months or less to be cash equivalents.




***(e)***  ***Prepayments***




Prepayments
      represents cash paid in advance for rental payments, application software,
      advertising, promotion campaigns, and leasehold improvements.




***(f)***  ***Fixed
      Assets***




Fixed
      assets are carried at cost less accumulated depreciation. Depreciation is
      computed using the straight-line method over the estimated useful lives of
      the
      assets, which are five years for motor vehicles, furniture and fixtures,
      computers and equipment. For the leasehold improvements, deprecation is computed
      using the straight-line method over the estimated useful lives or lease term,
      whichever is shorter.


-
          37 -


***(g)***  ***Software***




Software
      is carried at cost less accumulated amortization. Amortization is computed
      using
      the straight-line method over the estimated useful lives of the assets, which
      is
      seven years for software. The Company acquired two sets of application software,
      an insurance policy management system and a website streaming system during
      the
      year ended June 30, 2008. Both sets of application software are used for
      internal operations to enhance the Company’s online insurance agency business in
      total amount of $2,813,780, which was purchased from independent third-parties.
      None of the software was internally developed nor was there any internal cost
      that was capitalized for the software. Based on the American Institute of
      Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) 98-1,
      Accounting for the Costs of Computer Software Developed or Obtained for Internal
      Use, the Company capitalized all the external direct cost of services in
      obtaining the computer software. Software is periodically reviewed when
      indicators are present to assess recoverability from future operations using
      undiscounted cash flows in accordance with Statement of Financial Accounting
      Standards (“SFAS”) No.144, “Accounting for the Impairment or Disposal of
      Long-Live Assets”. To the extent carrying value exceeds fair value, an
      impairment loss is recognized in operating result. No impairment was recorded
      for the year ended June 30, 2008.




***(h)***  ***Deferred
      Revenue***




Deferred
      revenue primarily comprises contractual billings in excess of recognized revenue
      and payments received in advance of revenue recognition.




***(i)***  ***Revenue
      Recognition***




***Advertising***




Advertising
      revenues are derived mainly from online advertising arrangements, which allow
      advertisers to place advertisements on particular areas of the Company’s web
      sites, in particular formats and over particular periods of time. In accordance
      with Emerging Issues Task Force (“EITF”) No. 00-21, “Accounting for Revenue
      Arrangements with Multiple Deliverables,” advertising arrangements involving
      multiple deliverables are broken down into single-element arrangements based
      on
      their relative fair value for revenue recognition purposes.




For
      web
      site construction services, which is usually included in new advertising
      contract, revenue is recognized ratably over the displayed period, typically
      one
      year. For web site maintenance services, revenue is recognized ratably over
      the
      contact period, generally one year.




***Software
      Development***




Software
      development revenue is recognized in accordance with SOP 97-2, when the outcome
      of a contract for software development can be estimated reliably, contract
      revenue and costs are charged to the income statement by reference to the stage
      of completion of the contract activity at the balance sheet date, as measured
      by
      the proportion that costs incurred to date bear to estimated total costs for
      each contract. When the outcome of a contract cannot be estimated reliably,
      contract costs are recognized as an expense in the period in which they are
      incurred. Contract revenue is recognized to the extent of contract costs
      incurred, provided that it is probable such costs will be recoverable. Where
      it
      is probable that the total contract costs will exceed total contract revenue,
      the expected loss is recognized as an expense immediately.




***Insurance
      Commissions***




Insurance
      revenues, net of discounts, represent commissions earned from performing
      agency-related services. Insurance commissions are recognized at the later
      of
      the date when the customer is initially billed or the insurance policy effective
      date.


-
          38 -




In
      accordance with EITF No. 01-9, “Accounting for Consideration Given by a Vendor
      to a Customer or a Reseller of the Vendor’s Product,” cash consideration given
      to customers or resellers, for which the Company does not receive a separately
      identifiable benefit or cannot reasonably estimate fair value, are accounted
      for
      as a reduction of revenue rather than as an expense.




Cash
      consideration includes discounts and other offers that entitle a customer to
      receive a reduction in the price of a product. For the years ended June 30,
      2008
      and 2007, the Company recognized $304,686 and Nil, respectively, as a reduction
      of revenue for the discount offered to its customers.




***(j)***  ***Foreign
      Currency Translation***




The
      accompanying financial statements are presented in United States dollars. The
      functional currencies of the Company are the Renminbi (“RMB”) and Hong Kong
      Dollar (“HKD”). The financial statements are translated into United States
      dollars (“US$”) from RMB and US$ from HKD at year-end exchange rates as to
      assets and liabilities and average exchange rates as to revenues and expenses.
      Capital accounts are translated at their historical exchange rates when the
      capital transactions occurred.




**June
                30, 2008**
            
            **June
                30, 2007**Year
                end RMB: US$ exchange rate
            
            
            6.8591
            
            
            7.6155Year
                average RMB: US$ exchange rate
            
            
            7.2753
            
            
            7.7446Year
                end HKD: US$ exchange rate
            
            
            7.7973
            
            
            7.8190Year
                average HKD: US$ exchange rate
            
            
            7.8081
            
            
            7.7960





***(k)***  ***Advertising
      Costs***




The
      Company expenses advertising costs as incurred or the first time advertising
      takes place. Advertising costs were $962,160 and Nil for the years ended June
      30, 2008 and 2007, respectively.




***(l)***  ***Income
      Taxes***




The
      Company accounts for income tax using the asset and liability approach. Deferred
      taxes are provided for the net tax effects of temporary differences between
      the
      carrying amounts of assets and liabilities for financial reporting purposes
      and
      the amounts used for income tax purposes. A valuation allowance is provided
      for
      deferred tax assets if it is more likely than not these items will either expire
      before the Company is able to realize their benefits, or that future utilization
      is uncertain.




***(m)***  ***Reserve
      Fund***




In
      2008,
      the subsidiary of the Company in China transferred 15% of their PRC profit
      after
      taxation to the surplus reserve fund. Subject to certain restrictions set out
      in
      the PRC Companies Law, the surplus reserve fund may be distributed to
      shareholders in the form of share bonus issues and/or cash dividends. The
      Company’s retained earnings in the amount of $315,584 and Nil is restricted as
      of June 30, 2008 and 2007, respectively, for the surplus reserve
      fund.




-
          39 -




***(n)***  ***Comprehensive
      Income***




Comprehensive
      income is defined to include all changes in equity except those resulting from
      investments by owners and distributions to owners. Among other disclosures,
      all
      items that are required to be recognized under current accounting standards
      as
      components of comprehensive income should be reported in a financial statement
      that is presented with the same prominence as other financial statements. The
      Company’s only current component of comprehensive income is the foreign currency
      translation adjustment.




***(o)***  ***Earnings
      Per Share***




Basic
      earnings per share is computed by dividing income available to common
      shareholders by the weighted-average number of common shares outstanding during
      the period. Diluted earnings per share is computed similar to basic earnings
      per
      share except that the denominator is increased to include the number of
      additional common shares that would have been outstanding if the potential
      common shares had been issued and if the additional common shares were dilutive.
      There were no dilutive securities outstanding for the periods
      presented.




**Results
      of Operations**




**For
      the Year Ended June 30, 2008 Compared To Year Ended June 30,
      2007**




Our
      operating results are presented on a consolidated basis for the year ended
      June
      30, 2008, as compared to the year ended June 30, 2007.




The
      following table sets forth the amounts and the percentage relationship to
      revenues of certain items in our consolidated statements of income for the
      years
      ended June 30, 2008 and 2007.




**2008**
            
            **2007**
            
            **Variance****REVENUES**
            
            $
            14,040,062
            
            
            102.22
            %
            $
            2,223,258
            
            
            100.00
            %
            $
            11,816,804
            
            
            531.51
            %**DISCOUNT
                ALLOWED**
            
            
            304,686
            
            
            2.22
            %
            
            0
            
            
            N/A
            
            
            304,686
            
            
            N/A**REVENUES,
                NET**
            
            
            13,735,376
            
            
            100.00
            %
            
            2,223,258
            
            
            100.00
            %
            
            11,512,118
            
            
            517.80
            %**COST
                OF SALES**
            
            
            1,313,582
            
            
            9.56
            %
            
            77,346
            
            
            3.48
            %
            
            1,236,236
            
            
            1598.32
            %**GROSS
                PROFIT**
            
            
            12,421,794
            
            
            90.44
            %
            
            2,145,912
            
            
            96.52
            %
            
            10,275,882
            
            
            478.86
            %General
                & administrative expenses
            
            
            808,432
            
            
            5.89
            %
            
            43,150
            
            
            1.94
            %
            
            765,282
            
            
            1773.54
            %Selling
                expenses
            
            
            1,130,063
            
            
            8.23
            %
            
            10,991
            
            
            0.49
            %
            
            1,119,072
            
            
            10181.71
            %**OPERATING
                INCOME**
            
            
            10,483,299
            
            
            76.32
            %
            
            2,091,771
            
            
            94.09
            %
            
            8,391,528
            
            
            401.17
            %Interest
                income, net
            
            
            19,904
            
            
            0.14
            %
            
            289
            
            
            0.01
            %
            
            19,615
            
            
            6787.20
            %**INCOME
                BEFORE TAXES**
            
            
            10,503,203
            
            
            76.47
            %
            
            2,092,060
            
            
            94.10
            %
            
            8,411,143
            
            
            402.05
            %Income
                tax
            
            
            2,166,846
            
            
            15.78
            %
            
            313,809
            
            
            14.11
            %
            
            1,853,037
            
            
            590.50
            %**NET
                INCOME**
            
            $
            8,336,357
            
            
            60.69
            %
            $
            1,778,251
            
            
            79.98
            %
            $
            6,558,106
            
            
            368.80
            %




**Revenues**




The
      Company’s consolidated revenues rose to a record $14,040,062 for the year ended
      June 30, 2008, a 531.51% increase from $2,223,258 reported for the year ended
      June 30, 2007. The consolidated net revenues rose to a record $13,735,376 for
      the year ended June 30, 2008, a 517.80% increase from $2,223,258 reported for
      the year ended June 30, 2007.




-
          40 -




The
      increase in revenue can be attributed to the following factors: the significant
      increase of online insurance advertising services, the increase of software
      development project and the launch of new business operation of insurance agency
      services.




**2008**
            
            **2007**
            
            **Variance**Software
                development
            
            $
            4,298,739
            
            
            31
            %
            $
            1,469,252
            
            
            66
            %
            $
            2,829,487
            
            
            193
            %Online
                insurance advertising
            
            
            9,432,393
            
            
            67
            %
            
            754,006
            
            
            34
            %
            
            8,678,387
            
            
            1151
            %Insurance
                agency
            
            
            308,930
            
            
            2
            %
            
            -
            
            
            -
            
            
            308,930
            
            
            N/ATotal
                Revenue
            
            $
            14,040,062
            
            
            100
            %
            $
            2,223,258
            
            
            100
            %
            $
            11,816,804
            
            
            532
            %




The
      significant increase of online insurance advertising services owing to
      significant increase the numbers of recruitment of new insurance agent to 86
      teams and over 7,670 members for the year ended June 30, 2008, and the revenue
      was increased by 1151% or $8,678,387 to $9,432,393 for the year ended June
      30,
      2008 from $754,006 for the year ended June 30, 2007.




The
      increase of software development project during the year ended June 30, 2008,
      which rose the software development income by 193% to $4,298,739 for the year
      ended June 30, 2008 from $1,469,252 for the year ended June 30, 2007 by increase
      of new projects.




The
      launch of new business sector, insurance agency services, since September 2007,
      it has a positive contributions on revenue of $308,930 for the year ended June
      30, 2008.




**Cost
      of Sales (“COS”)**




The
      Company’s consolidated COS increased $1,236,236 or 1598.32% to $1,313,582 or
      9.56% of net revenues for the year ended June 30, 2008, from $77,346 or 3.48%
      of
      net revenues for the year ended June 30, 2007. The increase in COS is attributed
      to the significant increase of revenues and accordingly enlarged the scale
      of
      operation to meet the operational needs. Besides, the Business Tax for the
      inter-company transactions was amounting to $645,099 to the Tax Bureau for
      the
      year ended June 30, 3008, which was generated from the consultancy services
      fee
      paid by VIE, ZYXT, to its primary beneficiary, ZBDT.




**Gross
      Profit**




The
      Company’s consolidated gross profit increased by $10,275,882 or 478.86% to
      $12,421,794 for the year ended June 30, 2008 from $2,145,912 for the year ended
      June 30, 2007. The increase in gross profit is attributed to the significant
      increase of revenues, including the software development and online insurance
      advertising.




**General
      and Administrative Expenses**




General
      and administrative expenses were $808,432 or 5.89% of our net revenue for the
      year ended June 30, 2008, as compared to $43,150 or 1.94% of net revenues for
      the year ended June 30, 2007. The increase was mainly attributable to growing
      of
      business operations and accordingly along with the enlarged company
      scale.




-
          41 -




**Selling
      Expenses**




Selling
      expenses were $1,130,063 or 8.23% of net revenues for the year ended June 30,
      2008, as compared to $10,991, or 0.49% of net revenues for the year ended June
      30, 2007. The increase is attributed to the expenses on advertising and
      promotion incurred from May 2008 in amounting of $962,160 (RMB7,000,000) for
      branding and promotion of the business and our web portal, which has been never
      incurred before May 2008.




**Interest
      Income, net**




Net
      interest income for the year ended June 30, 2008 was $19,904, which represents
      a
      6787.20% or $19,615 increase from $289 for the year ended June 30, 2007. The
      increase was the result of the increase scale of operation and positive cash
      flow, which has led to the growing of balance of cash and cash equivalents;
      therefore the interest income has been increased correspondingly.




**Income
      Taxes**




The
      Company has not recorded a provision for U.S. federal income tax for the year
      ended June 30, 2008 due to the net operating loss carry forward in the
      United States.




On
      March 16, 2007, the National People’s Congress of China approved the new
      Corporate Income Tax (“CIT”) Law of the People’s Republic of China (the “New CIT
      Law”), which is effective from January 1, 2008. Prior to January 1,
      2008, the CIT rate applicable to the Company’s subsidiary in the PRC is at 33%.
      As from January 1, 2008, the applicable CIT rate, ZBDT, the wholly owned
      subsidiary, is 25%, replacing the currently applicable tax rate of 33%. For
      the
      year ended June 30, 2008, CIT for ZBDT was $2,570,357 and is due in March 2009.
      ZYTX, a VIE of the Company, enjoys a favorable tax rate of 15% as it is
      considered a high technology company by the Chinese government. ZYTX is also
      entitled to a full exemption from CIT for the first two years from January
      1,
      2007 to December 31, 2008. Starting from January 1, 2009, the actual CIT rate
      of
      ZYTX will be 15%. Since ZYTX is exempted from CIT, the Company revised the
      previous estimated CIT amounting $335,941 for the year ended June 30,
      3008.




Under
      the
      new CIT law, the corporate income tax rate applicable to the Company starting
      from January 1, 2008 is 25%, replacing the current applicable tax rate of
      33%. Some of the tax concession granted to eligible companies prior to the
      new
      CIT law is grand fathered. The new CIT Law has an impact on the deferred tax
      assets and liabilities of the Company. The Company adjusted deferred tax
      balances as of June 30, 2008 based on the current applicable tax rate and
      will continue to assess the impact of such new law in the future. Effects
      arising from the enforcement of the new CIT Law were reflected into the accounts
      by best estimation method.




Pursuant
      to the Inland Revenue Ordinance of Hong Kong, Rise & Grow is subject to Hong
      Kong Profits Tax at 17.5% for both the years ended June 30, 2008 and 2007,
      respectively. As Rise & Grow has no assessable profits for the years ended
      June 30, 2008 and 2007, no provision of profits tax has been made.




Income
      tax expense is summarized as follows:




**2008**
            
            **2007**Computed
                “expected” expense
            
            $
            2,401,192
            
            $
            315,614Favorable
                tax rate effect
            
            
            (245,217
            )
            
            (1,805
            )Permanent
                difference
            
            
            10,871
            
            
            -Income
                tax expense
            
            $
            2,166,846
            
            $
            313,809





-
          42 -




Provision
      for income tax expense is summarized as follows:




**2008**
            
            **2007**Current
            
            $
            2,401,192
            
            $
            315,614Deferred
            
            
            (234,346
            )
            
            (1,805
            )Income
                tax expense
            
            $
            2,166,846
            
            $
            313,809




**Net
      Income**




The
      net
      income of Company for year ended June 30, 2008 increased 368.80% or $6,558,106
      to $8,336,357 from $1,778,251 for the year ended June 30, 2007. This huge
      increase is result from the increase of online insurance advertising income
      and
      the effective promotion of business in Beijing city.




**Results
      by Segment**




The
      Company has determined that there are three reportable business segments for
      the
      years ended June 30, 2008 and 2007, which are software development, online
      insurance advertising and insurance agency within the PRC.




***(a)***  ***Software
      Development***




**2008**
            
            **2007**
            
            **Variance**Revenues,
                net
            
            $
            4,298,739
            
            
            100
            %
            $
            1,469,252
            
            
            100
            %
            $
            2,829,487
            
            
            193
            %COS
            
            
            94,502
            
            
            2
            %
            
            33,868
            
            
            2
            %
            
            60,634
            
            
            179
            %Gross
                profit
            
            $
            4,204,237
            
            
            98
            %
            $
            1,435,384
            
            
            98
            %
            $
            2,768,853
            
            
            193
            %G.P.
                ratio
            
            
            98
            %
            
            
            
            
            98
            %




Revenues
      of software development was increased by 193% or $2,829,487 to $4,298,739 for
      the year ended June 30, 2008 from $1,469,252 for the year ended June 30, 2007.
      The increase is attributed to the completion of 4 projects during the fiscal
      year 2008 and also the Company could maintain the stable COS and same GP ratio
      throughout the fiscal years 2008 and 2007.




-
          43 -


***(b)***  ***Online
      Insurance Advertising***




**2008**
            
            **2007**
            
            **Variance**Revenues,
                net
            
            $
            9,432,393
            
            
            100
            %
            $
            754,006
            
            
            100
            %
            $
            8,678,387
            
            
            1151
            %COS
            
            
            556,683
            
            
            6
            %
            
            43,478
            
            
            6
            %
            
            513,205
            
            
            1180
            %Gross
                profit
            
            $
            8,875,710
            
            
            94
            %
            $
            710,528
            
            
            94
            %
            $
            8,165,182
            
            
            1149
            %G.P.
                ratio
            
            
            94
            %
            
            
            
            
            94
            %




Revenues
      of online insurance advertising was increased by 1151% or $8,678,387 to
      $9,432,393 for the year ended June 30, 2008 from $754,006 for the year ended
      June 30, 2007. The increase is attributed to the significant recruitment of
      new
      insurance agent to 86 teams and over 7670 members to subscribe the online
      advertising and website construction services during the fiscal year 2008.
      Meanwhile, the Company could maintain the stable COS and same GP ratio for
      both
      fiscal years 2008 and 2007.




***(c)***  ***Insurance
      Agency***




**2008**
            
            **2007**
            
            **Variance**Revenues
            
            $
            308,930
            
            
            100
            %
            $
            -
            
            
            -
            
            $
            308,930
            
            
            N/ADiscount
                allowed
            
            
            304,686
            
            
            99
            %
            
            -
            
            
            -
            
            
            304,686
            
            
            N/ARevenues,
                net
            
            $
            4,244
            
            
            1
            %
            $
            -
            
            
            -
            
            $
            4,244
            
            
            N/ACOS
            
            
            17,298
            
            
            6
            %
            
            -
            
            
            -
            
            
            17,298
            
            
            N/AGross
                loss
            
            $
            (13,054
            )
            
            (4
            )%
            $
            -
            
            
            -
            
            
            (13,054
            )
            
            N/AG.P.
                ratio
            
            
            (4
            %)




Insurance
      agency was launched in October 2007, which is a new operating sector for the
      Company. In order to penetrate the market, the Company offered attractive
      discounts to the customers and promoted the brand and web portal.




**Recent
      Accounting Pronouncements**




In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, (“SFAS
      No. 157”) which provides enhanced guidance for using fair value to measure
      assets and liabilities. SFAS No. 157 provides a common definition of fair value
      and establishes a framework to make the measurement of fair value in generally
      accepted accounting principles more consistent and comparable. SFAS No. 157
      also
      requires expanded disclosures to provide information about the extent to which
      fair value is used to measure assets and liabilities, the methods and
      assumptions used to measure fair value, and the effect of fair value measures
      on
      earnings. SFAS No. 157 is effective for financial statements issued in fiscal
      years beginning after November 15, 2007 and to interim periods within those
      fiscal years. The Company does not have to adopt this until next fiscal year.
      The Company is currently evaluating the impact on the adoption of SFAS No.
      157
      may have on its financial statements.




In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option of Financial
      Assets and Financial Liabilities” (“SFAS No. 159”), which permits entities to
      measure many financial instruments and certain other items of fair value. SFAS
      No. 159’s overall objective is to improve financial reporting by providing
      entities with the opportunity to mitigate volatility in reported earnings caused
      by measuring related assets and liabilities differently without having to apply
      complex hedge accounting provisions. SFAS No. 159 applies to all entities,
      including not-for-profit organization, and most of its provisions apply only
      to
      entities that elect the fair value option, although FAS 159's amendment to
      FAS
      115 applies to all entities with available-for-sale and trading securities.
      This
      Statement was effective as of the beginning of each reporting entity's first
      fiscal year that begins after November 15, 2007. Adoption of the first interim
      period of earlier fiscal years, provided the entity also elects to early adopt
      SFAS No. 159. The Company is currently evaluating the impact on adoption of
      SFAS
      No. 159 may have on its financial statements.




-
          44 -




In
      December 2007, the FASB issued SFAS No. 141 (revised 2007) (“SFAS No.
      141R”), “Business Combinations”, which replaces SFAS No. 141. This statement
      retains the purchase method of accounting for acquisitions, but requires a
      number of changes, including changes in the way assets and liabilities are
      recognized in the purchase accounting. It also changes the recognition of assets
      acquired and liabilities assumed arising from contingencies, requires the
      capitalization of in-process research and development at fair value, and
      requires the expensing of acquisition-related costs as incurred. SFAS
      No. 141R is effective for the Company beginning July 1, 2009 and will
      apply prospectively to business combinations completed on or after that
      date.




In
      December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
      Consolidated Financial Statements, an amendment of ARB 51, which changes the
      accounting and reporting for minority interests. Minority interests will be
      recharacterized as noncontrolling interests and will be reported as a component
      of equity separate from the parent’s equity, and purchases or sales of equity
      interests that do not result in a change in control will be accounted for as
      equity transactions. In addition, net income attributable to the noncontrolling
      interest will be included in consolidated net income on the face of the income
      statement and, upon a loss of control, the interest sold, as well as any
      interest retained, will be recorded at fair value with any gain or loss
      recognized in earnings. SFAS No. 160 is effective for us beginning
      July 1, 2009 and will apply prospectively, except for the presentation and
      disclosure requirements, which will apply retrospectively. The Company is
      currently assessing the potential impact that adoption of SFAS No. 160 may
      have on the Company’s financial statements.




In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities” (“SFAS No. 161”), which amends SFAS No.133 and expands
      disclosures to include information about the fair value of derivatives, related
      credit risks and a company’s strategies and objectives for using derivatives.
      SFAS No. 161 is effective for fiscal periods beginning on or after November
      15,
      2008. We are currently in the process of assessing the impact that SFAS No.
      161
      may have on the disclosures in our consolidated financial
      statements.




**Material
      Commitments**




The
      Company occupies office spaces leased from third parties. For the years ended
      June 30, 2008 and 2007, the Company recognized $132,739 and $9,781,
      respectively, as rental expense for these spaces. As of June 30, 2008, the
      Company has outstanding commitments with respect to non-cancelable operating
      leases as follows:




**Year
                Ending June 30,**
            
            **Amount**2009
            
            $
            182,2542010
            
            
            186,6322011
            
            
            27,381$
            396,267




-
          45 -




**Off-Balance
      Sheet Arrangements**




We
      currently have no off-balance sheet arrangements that have, or are reasonably
      likely to have, a current or future material effect on our financial condition,
      changes in financial condition, revenues or expenses, results of operations,
      liquidity, capital expenditures or capital resources.




**Liquidity
      and Capital Resources**




**Cashflow**




As
      of
      June 30, 2008, the Company has $4,562,222 in bank deposits with a bank in China,
      which constitutes about ninety-nine point nine percent (99.9%) of its total
      cash
      and cash equivalent as of such date.




We
      summarize our Statement of Cashflow for the years ended June 30, 2008 and 2007
      as below:




**2008**
            
            **2007**
            
            **Variance**Net
                cash provided by (used in)Operating
                activities
            
            $
            6,731,373
            
            $
            (74,802
            )
            $
            6,806,175Investing
                activities
            
            
            (3,096,239
            )
            
            (39,022
            )
            
            (3,057,217
            )Financing
                activities
            
            
            153,069
            
            
            126,360
            
            
            26,709Net
                change in cash and cash equivalents
            
            
            3,788,203
            
            
            12,536
            
            
            3,775,667Effect
                of exchange rate changes on cash and cash equivalents
            
            
            731,993
            
            
            35,121
            
            
            696,872Cash
                and cash equivalents at beginning of year
            
            
            47,657
            
            
            0
            
            
            47,657Cash
                and cash equivalents at end of year
            
            $
            4,567,853
            
            $
            47,657
            
            $
            4,520,196




Cash
      flows provided by operating activities during the year ended June 30, 2008
      amounted to $6,731,373, representing an increase of $6,806,175 or from cash
      outflow to cash inflow, as compared with cash flows used in operating activities
      of $74,802 during the year ended June 30, 2007. The increase in cash flows
      from
      operating activities was primarily due to the benefits obtained from the
      Company’s operating activities have been enhanced on both software development
      and online insurance advertising.




Cash
      flows used in investing activities was $3,096,239 during the year ended June
      30,
      2008, which represented an increase of $3,057,217 or 78 times, as compared
      to
      $39,022 at June 30, 2007. This increase is mainly attributed to the acquisition
      of two sets of operating software amounting to $2,813,780 and acquisition of
      fixed assets amounting to $282,459 to facilitate the new business of insurance
      agency services.




For
      the
      year ended June 30, 2008, the cash provided by financing activities was
      $153,069, which represented an increase of $26,709 or 21%, as compared to
      $126,360 for the year ended June 30, 2007. They are advance for the director
      and
      proceeds of registered capital of ZYTX for the years ended June 30, 2008 and
      2007, respectively.




-
          46 -




**Liquidity**




The
      primary source of liquidity had been cash generated from operations, which
      included cash inflows from currency translation activities. Historically, the
      primary liquidity requirements were for capital expenditures, working capital
      and investments. Our contractual obligations, commitments and debt service
      requirements over the next several years are non-significant. Our primary source
      of liquidity will continue to be cash generated from operations as well as
      existing cash on hand. We have availability under our amended and restated
      credit facilities to assist, if required, in meeting our working capital needs
      and other contractual obligations.




We
      believe our current cash and cash equivalents and cash generated from operations
      will satisfy our expected working and other capital requirements for the
      foreseeable future based on our current business strategy and expansion plan.
      We
      believe we will have available resources to meet our short-term liquidity
      requirements.




As
      of the
      date of this Annual Report, all of our capital is equity capital and we do
      not
      have any debt financing with any bank or other financial institutions. We
      believe our capital is sufficient to satisfy our cash requirements in the next
      twelve months. As for our business development, the Company may consider raising
      additional funds for the following future business plans if conditions are
      suitable:




1)
            To
                expand our Beijing office and upgrade our network operating
                environment;




2)
            To
                expand our online insurance sales supermarket;
                and




3)
            To
                expand our operations in different cities in the PRC;
                and




4)
            To
                acquire equipment to continually upgrade the existing network portal
                hardware environment and to strengthen its network security
                inputs.




***ITEM
      7A.***  ***Quantitative*** **and
      Qualitative Disclosures about Market Risk**




The
      Company is exposed to certain market risks that in the ordinary course of
      business. The Company may enter into derivative financial instrument
      transactions to manage or reduce market risk. The Company does not enter into
      derivative financial instrument transactions for trading purpose. Financial
      instruments that potentially subject the Company to significant concentrations
      of credit risk consist primarily of cash and cash equivalents and accounts
      receivable. A discussion of the Company’s primary market risk exposure and
      credit risk is presented below.




The
      Company has $4,562,222 and $37,707 in bank deposits with a bank in China, which
      constitutes about 99.9% and 79.1% of its total cash and cash equivalents as
      of
      June 30, 2008 and 2007, respectively. Historically, deposits in Chinese banks
      are secured due to the state policy on protecting depositors’ interests.
      However, China promulgated a new Bankruptcy Law in August 2006, which came
      into
      effect on June 1, 2007. The new Bankruptcy Law contains a separate article
      expressly stating that the State Council may promulgate implementation measures
      for the bankruptcy of Chinese banks. Under the new Bankruptcy Law, a Chinese
      bank may go bankrupt. In addition, since China’s concession to WTO, foreign
      banks have been gradually permitted to operate in China and have been severe
      competitors against Chinese banks in many aspects, especially since the opening
      of Renminbi business to foreign banks in late 2006.




-
          47 -




Therefore,
      the risk of bankruptcy of the bank in which that the Company has deposits has
      increased. In the event of bankruptcy of the bank which holds the Company’s
      deposits, the Company is unlikely to recover its deposits back in full since
      it
      is unlikely to be classified as a secured creditor based on PRC
      laws.




Accounts
      receivable consist primarily of software development clients and insurance
      agents. As of June 30, 2008 and 2007, approximately 35% and 66% of the accounts
      receivable and 31% and 66% of revenues were derived from the software
      development business, respectively. Regarding its online advertising and
      insurance agency operations, no individual customer accounted for more than
      10%
      of total net revenues for both the years ended June 30, 2008 and
      2007.




***ITEM
      8.***  **** ***Financial
      Statements and Supplementary Data***




Reference
      is made to pages F-1 through F-20 comprising a portion of this Annual
      Report on Form 10-K.




***ITEM
      9.***  ***Changes
      in and Disagreeme*** **n** **ts
      *with Accountan*** **t****s
      on Accounting and Financial Disclosures**




Effective
      December 14, 2007, Akin, Doherty, Klein & Feuge, P.C. (“ Akin ”)
      resigned as the Company’s independent registered public accounting firm.




Akin’s
      report on the Company’s financial statements for the past two (2) fiscal years,
      as well as the subsequent interim period through December 14, 2007, did not
      contain an adverse opinion or a disclaimer of opinion, and was not qualified
      as
      to uncertainty, audit scope, or accounting principles; however, the report
      included an explanatory paragraph wherein Akin expressed substantial doubt
      about
      the Company’s ability to continue as a going concern.




The
      resignation of the independent registered public accountants was approved by
      the
      Company’s Board of Directors on December 14, 2007.




During
      the Company’s most recent two (2) fiscal years, as well as the subsequent
      interim period through December 14, 2007, as well as the subsequent interim
      period through December 14, 2007, there were no disagreements on any matter
      of
      accounting principles or practices, financial statement disclosure, or auditing
      scope or procedures, which disagreements if not resolved to their satisfaction
      would have caused them to make reference in connection with their opinion to
      the
      subject matter of the disagreement.




During
      the Company’s most recent two (2) fiscal years, as well as the subsequent
      interim period through December 14, 2007, Akin did not advise the Company of
      any
      of the matters identified in Item 304(a)(v)(A)-(D) of Regulation S-K.




The
      Company requested Akin to furnish a letter addressed to the SEC stating whether
      it agreed with the statements made by the Company and, if not, stating the
      respects in which it does not agree and Akin did furnish such letter to the
      SEC
      on December 18, 2007.  A copy of the letter is also attached hereto as
      Exhibit 16.1.




Effective
      as of January 31, 2008, the Board of Directors of the Company approved the
      engagement of Weinberg & Company, P.A. (“ Weinberg ”)
      as its
      independent registered public accounting firm to audit the Company’s financial
      statements, effective immediately.  The Company did not consult
      Weinberg on any matters described in Item 304(a)(2) of Regulation S-K during
      the
      Company’s two (2) most recent fiscal years or any subsequent interim period
      prior to engaging Weinberg.




-
          48 -




***ITEM
      9A(T).****Control****s****and Procedures***




**Evaluation
      of Disclosure Controls and Procedures**




We
      are
      required to maintain disclosure controls and procedures that are designed to
      ensure that information required to be disclosed in our reports under the
      Exchange Act is recorded, processed, summarized and reported within the time
      periods specified in the Commission’s rules and forms, and that such information
      is accumulated and communicated to our management, including our Chief Executive
      Officer (“ CEO ”)
      and
      Chief Financial Officer (“ CFO ”)
      as
      appropriate, to allow timely decisions regarding required
      disclosure.




In
      connection with the preparation of this Form 10-K for the year ended June
      30, 2008 our management, under the supervision of the CEO and CFO, conducted
      an
      evaluation of disclosure controls and procedures. A control system, no matter
      how well conceived and operated, can provide only reasonable, not absolute,
      assurance that the objectives of the control systems are met. Based on that
      evaluation, our CEO and CFO concluded that our disclosure controls and
      procedures were effective as of the filing date of this Annual
      Report.




**Management’s
      Annual Report on Internal Control over Financial Reporting**




Management
      is responsible for establishing and maintaining adequate internal control
      structure and procedures over financial reporting (as defined in
      Rules 13a-15(f) and 15d-15(f)) under the Exchange Act. Our management
      conducted an assessment of the effectiveness of our internal control over
      financial reporting as of June 30, 2008 based on the framework set forth in
      Internal Control — Integrated Framework issued by the Committee of
      Sponsoring Organizations of the Treadway Commission (“COSO”).




Internal
      control over financial reporting cannot provide absolute assurance of achieving
      financial reporting objectives because of its inherent limitations. Internal
      control over financial reporting is a process that involves human diligence
      and
      compliance and is subject to lapses in judgment and breakdowns resulting from
      human failures. Because of such limitations, there is a risk that material
      misstatements may not be prevented or detected on a timely basis by internal
      control over financial reporting. Also, projections of any evaluation of
      effectiveness to future periods are subject to the risk that controls may become
      inadequate because of changes in conditions, or that the degree of compliance
      with the policies or procedures may deteriorate.




Based
      on
      that evaluation, our CEO and CFO concluded that our internal control over
      financial reporting as of June 30, 2008 were effective.




**Changes
      in Internal Control over Financial Reporting**




Except
      as
      disclosed above, there were no changes in our internal control over financial
      reporting that occurred during our last fiscal quarter that have materially
      affected, or are reasonably likely to materially affect, our internal control
      over financial reporting.




-
          49 -




***ITEM
      9B.***  ***Other
      Information***




On
      January 31, 2008, the Board of Directors of the Company unanimously resolved
      to
      change the Company’s fiscal year end from December 31 to June 30 in light of the
      change of control of the Company as set forth in the Company’s Current Report on
      Form 8-K as filed with the SEC on December 20, 2007.




Effective
      March 17, 2008, the Company’s Common Stock began trading under a new ticker
      symbol, “CHIO.OB” on the Over-The-Counter Bulletin Board. The Company changed
      its ticker symbol from “DEXT.OB” to “CHIO.OB” as a result of the Company’s name
      change from “Dexterity Surgical, Inc.” to “China INSOnline Corp.”, which such
      name change became effective as of February 26, 2008.




Effective
      July 1, 2008, the Company’s Common Stock began trading under the same ticker
      symbol “CHIO” on the NASDAQ Capital Market.




-
          50 -





**PART
      III**




***ITEM
      10.***  ***Directors,
      Executive Officers, and Corporate Governance***




**Directors
      and Executive Officers**




Set
      forth
      below are the names of our directors and officers, their ages, all positions
      and
      offices that they hold with the Company, the period during which they have
      served as such, and their business experience during at least the last five
      (5)
      years. The Company has no “significant employees.”




**Name**
            
            **Age**
            
            **Position(s)**Zhenyu
                Wang
            
            38
            
            Chairman
                of the BoardJunjun
                Xu
            
            28
            
            Chief
                Executive Officer and DirectorMingfei
                Yang
            
            25
            
            Chief
                Financial OfficerYuefeng
                Wang
            
            39
            
            DirectorYinan
                Zhang
            
            28
            
            DirectorXueyuan
                Han
            
            34
            
            DirectorEdith
                Kam Ying Ho
            
            54
            
            DirectorChunsheng
                Zhou
            
            42
            
            Director





**Family
      Relationships**




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




**Biographies
      (Business Experience)**




**Zhenyu
      Wang.** Mr.
      Wang
      has served as Chairman of the Board of the Company since January 4, 2008 and
      has
      served as Executive Director and Chairman of ZYTX since July 2007. Prior to
      that, Mr. Wang served as Chairman of Kaixin Jiye Investment Management Co.,
      Ltd.
      from November 1994 through July 2001. Mr. Wang also currently serves as Chairman
      of Huayuan Runtong (Beijing) Science and Technology Co., Ltd. (since March
      2004), General Manager of Huayuan Kaituo (Beijing) Science and Technology Co.,
      Ltd. (since November 2004), Chairman of Beijing Putaika Guarding Technology
      Co.,
      Ltd. (since April 2004) and Beijing Jinzheng Wantong Network Technology
      Development Co., Ltd. (since July 2001). Mr. Wang earned a master’s degree
      (EMBA) from Peking University.




**Junjun
      Xu.** Ms.
      Xu
      has served as Chief Executive Officer of the Company since January 4, 2008
      and
      has served as a Director of DEXT since December 18, 2007. Ms. Xu has also served
      as General Manager of ZYTX since October 2006. Prior to that, Ms. Xu served
      as
      Manager of Shiji Xinxun Science and Technology (Beijing) Co., Ltd. since
      December 2003. Prior to that, she was Senior Director of China Life Insurance
      Inc. since November 2002 and a Partner with Yi Hu Technology (Beijing) Network
      Co., Ltd. from August 2000 through November 2002. Prior to that, Ms. Xu founded
      Beijing No. 9 Building Science and Technology Development Co., Ltd. in April
      2000. Ms. Xu received her Bachelors Degree in Economics and Trade at Beijing
      Business College.




-
          51 -




**Mingfei
      Yang:** Mr. Yang
      has served as Chief Financial Officer of the Company since January 4, 2008
      and
      has served as Financial Department Manager of ZYTX since May 2007. Prior to
      that, Mr. Yang worked as an accountant for Hua Yuan Run Tong (Beijing)
      Technology Co., Ltd. from June 2005 through May 2007, for Mongolia Guo Li
      Industries Co., Ltd. from April 2003 through June 2005 and for Mongolia Xiao
      Fei
      Yang Food Chain Co., Ltd. from September 2002 through March 2003. Mr. Yang
      earned his Academic Degree in Finance and Tax at Inner Mongolia Financial
      Institute.




**Yuefeng
      Wang:** Mr. Wang
      has served as a Director of the Company since January 4, 2008 and he has served
      as Chairman of Hua Yuan Run Tong (Beijing) Technology Co., Ltd. since February
      2007. From March 2005 through January 2007 Mr. Wang served as Chairman,
      Assistant and HR Director of Hua Yuan Run Tong (Beijing) Technology Co., Ltd.
      Prior to that, Mr. Wang served as the HR Supervisor of Beijing Panasonic &
Putian Communications Equipment Co., Ltd. from August 2004 through February
      2005. Prior to that, Mr. Wang served as President, Assistant and Manager of
      the
      HR Department at BaoDing Chang An Car Manufacturing Co., Ltd. from July 1997
      through August 2002. Mr. Wang earned his MBA at Tsinghua
      University.




**Yinan
      Zhang:** Ms.
      Zhang has served as a Director of the Company since January 4, 2008 and
      currently serves as president of Nautilus Creative Co., Ltd since June 2007.
      Prior to that, Ms. Zhang served as Editor of Travel & Leisure Magazine,
      Chinese Edition from October, 2006 through June, 2007, Prior to that, Ms. Zhang
      served as Editor of Shanghai Weekly from October,2002 through September, 2003.
      Ms. Zhang earned her master degree in Arts et Sciences de l’enregistrement at
      Université de Marne-la-Vallée, France.




**Xueyuan
      Han:** Mr. Han
      has served as a Director of the Company since January 4, 2008 and currently
      serves as a Consultant to Han Fu Capital (International) Investment Consulting
      Co., Ltd. since January 1, 2003. Prior to that, Mr. Han served as General Manger
      of Zhong Bao Xin He Security Co., Ltd. from June 2001 through May 2003 and
      as
      General Manger of Beijing Zhong Yu Zheng Asset Evaluation Company from December
      1998 through June 2001. Mr. Han earned a Masters Degree in Executive Master
      of
      Business Administration at Peking University.




**Edith
      Kam Ying Ho:** Ms. Ho
      has served as a Director of the Company since January 4, 2008 and has served
      (and continues to serve) as a Director and a Tax and Financial Consultant for
      Taxplan Services Pte. Ltd. Singapore since 1989 and as a Director and a Tax
      and
      Financial Consultant for Taxplan Limited, Hong Kong since 1997. Prior to that,
      Ms. Ho served as Chief Financial Officer of Asia Payment Systems, Inc. from
      February 2005 through June 2006 and as a Consultant and Finance Director from
      2003 through 2005. Ms. Ho earned her MBA in Accounting and Finance at the
      University of Hawaii.




**Chunsheng
      Zhou:** Professor Zhou has served as a Director of the Company since January 4, 2008
      and
      is currently a Professor of Finance at the Guanghua School of Management of
      Peking University where he has taught since 2002. Prior to that, Professor
      Zhou
      was a Planning Commission Member for the China Securities Regulatory Commission
      and Director of the Financial Department at the Guanghua School of Management
      from April 2001 through 2002. Prior to that, he was a Professor at The
      University of California and The University of Hong Kong School of Business
      from
      1997 through March 2001. Professor Zhou earned a Doctorate Degree in Financial
      Economics at Princeton University.




-
          52 -




**Involvement
      in Certain Legal Proceedings**




None
      of
      the members of the Board of Directors or other executives has been involved
      in
      any bankruptcy proceedings, criminal proceedings, any proceeding involving
      any
      possibility of enjoining or suspending members of our Board of Directors or
      other executives from engaging in any business, securities or banking
      activities, and have not been found to have violated, nor been accused of having
      violated, any federal or state securities or commodities laws.




**Promoters
      and Control Persons**




None.




**Section
      16(a) Beneficial Ownership Reporting Compliance**




Section
      16(a) of the Exchange Act requires our officers and directors, and persons
      who
      own more than ten percent (10%) of a registered class of our equity securities,
      to file reports of ownership and changes in ownership with the SEC. Officers,
      directors and greater than ten percent (10%) stockholders are required by SEC
      regulation to furnish us with copies of all Section 16(a) forms they
      file.




Based
      solely on a review of the copies of such forms furnished to us, we believe
      that
      during the year ended June 30, 2008 all officers, directors and ten percent
      (10%) beneficial owners who were subject to the provisions of Section 16(a)
      complied with all of the filing requirements during the year with the exception
      of Yanling Chen, a non-affiliate of the Company beneficially holding 7.5% of
      the
      Company’s Common Stock, who failed to file a Form 3 Report.




**Code
      of Ethics**




We
      have
      adopted a Code of Ethics, as required by the rules of the SEC and NASDAQ. This
      Code of Ethics is attached as Exhibit 14.1 hereto, applies to all of our
      directors, officers and employees. The Code of Ethics, and any  amendments
      to, or waivers from, the Code of Ethics, is available in print, at no charge,
      to
      any stockholder who requests such information.




**Committees
      of our Board of Directors**




Our
      Board
      of Directors has an Audit Committee, a Compensation Committee and a Nominating
      Committeee established in accordance with the Exchange Act and NASDAQ rules.
      The
      Audit Committee met one time, the Compensation Committee met two times and
      the
      Nominating Committee met two times between the date after the Exchange on
      December 18, 2007 to the date of this Annual Report. A brief description of
      each
      committee is set forth below.




·
            Audit
                Committee–
                The purpose of the Audit Committee is to provide assistance to our
                Board
                of Directors in fulfilling their oversight responsibilities relating
                to
                our consolidated financial statements and financial reporting process
                and
                internal controls in consultation with our independent registered
                public
                accountants and internal auditors. The Audit Committee is also responsible
                for ensuring that the independent registered public accountants submit
                a
                formal written statement to us regarding relationships and services
                which
                may affect the auditors’ objectivity and independence. During 2008,
                members of the Audit Committee were independent directors Yinan Zhang,
                Yeufeng Wang, and Edith Kam Ying Ho. Our Audit Committee financial
                expert
                is Edith Kam Ying Ho, an independent
                director.




·
            Compensation
                Committee–****Independent
                directors Yinan Zhang, Yeufeng Wang and Chunsheng Zhou were members
                of our
                Compensation Committee during fiscal 2008. The purpose of the Compensation
                Committee is to review and make recommendations to our Board of Directors
                regarding all forms of compensation to be provided to the executive
                officers and directors of our company, including stock compensation
                and
                loans, and all bonus and stock compensation to all employees.




-
          53 -




·
            Nominating
                Committee–
                Independent directors Yinan Zhang, Yeufeng Wang and Chunsheng Zhou
                were
                members of our Nominating Committee, effective February 22, 2008.
                The
                purpose of the Nominating Committee is to review the composition
                and
                evaluate the performance of the Board, recommend persons for election
                to
                the Board and evaluate director compensation; The nominating committee
                is
                also responsible for reviewing the composition of committees of the
                Board
                and recommending persons to be members of such committees, and maintaining
                compliance of committee membership with applicable regulatory
                requirements. The Company has not adopted procedures by which security
                holders may recommend nominees to the Company’s Board of Directors.




***ITEM
      11.***  ***Executive
      Compensation***




**Compensation
      Discussion and Analysis**




Not
      required for smaller reporting companies.





**Summary
      Compensation Table**





The
      following table sets forth compensation information for services rendered by
      certain of our current and former executive officers in all capacities during
      the last three (3) completed fiscal years (ended June 30, 2008, 2007 and
      December 31, 2006). The following information includes the U.S. dollar value
      of
      base salaries, bonus awards, the number of stock options granted and certain
      other compensation, if any, whether paid or deferred.




**Summary
      Compensation Table**




Name
                    And Principal
                  Function
                
                Year
                
                Salary
                
                Bonus
                
                Stock
                  Awards
                
                Option
                  Awards
                
                Non-Equity
                  Incentive
                  Plan
                  Compensation
                
                Nonqualified
                  Deferred
                  Compensation
                  Earnings
                
                All
                    Other
                  Compensation
                
                Total(a)
                
                (b)
                
                ($)
                  (c)
                
                ($)
                  (d)
                
                ($)
                  (e)
                
                ($)
                  (f)
                
                ($)
                  (g)
                
                ($)
                  (h)
                
                ($)
                  (i)
                
                ($)
                  (j)Junjun
                    Xu,
                
                2008
                
                
                19,476
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                19,476Chief
                    ExecutiveOfficer
                
                2007
                
                
                1,859
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                1,8592006
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-Mingfei
                    Yang,
                
                2008
                
                
                8,288
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                8,288Chief
                    Financial Officer
                
                2007
                
                
                332
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                3322006
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-Randall
                    K. Boatright,
                
                2008
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-Former
                    Chief Executive Officer and Former
                
                2007
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-Chief
                  Financial Officer (1)
                
                2006
                
                
                129,000
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                129,000James
                    Ditanna,
                
                2008
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-Current
                    President, Chief Executive Officer
                
                2007
                
                
                5,000 (
                2)
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                5,000 (
                2)and
                  Chief Financial Officer (2)
                
                2006
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-




-
          54 -




(1) 
      Mr. Boatright resigned as Chief Executive Officer and Chief Financial Officer
      of
      the Company on November 5, 2007.




(2)  Mr.
      Ditanna served as President, Chief Executive Officer and Chief Financial Officer
      of the Company since November 5, 2007 and effectively resigned on January 4,
      2008.





**Grants
      of Plan-Based Awards**




None.




**Outstanding
      Equity Awards At Fiscal Year End**





None.





**Option
      Exercises and Stock Vested**




None.




**Pension
      Benefits**




None.




**Nonqualified
      Deferred Compensation**




None.




**Potential
      Payments Upon Termination or Change in Control**




None.




**Additional
      Narrative Disclosure**




None.




**Compensation
      of Directors**




Randall
      K. Boatright was the sole director of DEXT from 2005 through November 5, 2007,
      and Mr. Boatright earned zero dollars ($0) per year for his services as a
      director of DEXT. From November 5, 2007 through January 4, 2008, James Ditanna
      has served as a director of DEXT and was not entitled compensation for his
      services as a director of DEXT.




Each
      director currently serving on the Company’s Board of Directors receives earned
      zero dollars ($0) for their services for the year ended June 30,
      2008.




All
      directors are reimbursed for out-of-pocket expenses in connection with
      attendance at Board’s and/or committee meetings. The Company may establish other
      compensation plans (e.g. options, cash for attending meetings, etc.) in the
      future. The table below sets forth director compensation as of June 30,
      2008:




**Employment
      Agreements**




There
      are
      currently no employment agreements by and between the Company and its
      employees.




-
          55 -




ZYTX
      has
      two (2) employment agreements with each employee, a Labor Contract and a
      Confidentiality Agreement. The Labor Contract mainly includes working content,
      working time, payment and other terms. The Confidentiality Agreement mainly
      includes confidentiality content, responsibilities, validity and other terms.




***ITEM
      12.******Security
      Ownership of Certain Beneficial Owners and Management******and Related Stockholder Matters*********




The
      following table sets forth each person known by us to be the beneficial owner
      of
      five (5%) percent or more of the Common Stock of the Company, all directors
      individually and all directors and officers as a group as of the date hereof.
      Each person named below has sole voting and investment power with respect to
      the
      shares shown unless otherwise indicated.




**Name
                and Address of**
              **Beneficial
                Owner****(1)**
            
            **Amount
                of**
              **Direct**
              **Ownership**
            
            **Amount
                of**
              **Indirect**
              **Ownership**
            
            **Total**
              **Beneficial**
              **Ownership**
            
            **Percentage of Class****(2)**Zhenyu
                Wang, Chairman of the Board
            
            
            16,008,960
            
            
            0
            
            
            16,008,960
            
            
            40.02
            %Junjun
                Xu, Chief Executive Officer and Director
            
            
            5,280,000
            
            
            0
            
            
            5,280,000
            
            
            13.20
            %Mingfei
                Yang, Chief Financial Officer
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            %Yuefeng
                Wang, Director
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            %Yinan
                Zhang, Director
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            %Xueyuan
                Han, Director
            
            
            792,000
            
            
            **0**
            )
            
            792,000
            
            
            1.98
            %Edith
                Kam Ying Ho, Director
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            %Chunsheng
                Zhou, Director
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            %**ALL
                DIRECTORS AND OFFICERS AS A GROUP (8 PERSONS):**
            
            
            **22,080,960**
            
            
            **0**
            
            
            **22.080,960**
            
            
            **55.20**
            **%**Yanling
                Chen
              Room
                704, Zhenxing District Yijing Street, 33# No.2, Dandong City, Liaoning
                Province, China
            
            
            2,999,040
            
            
            0
            
            
            2,999,040
            
            
            7.50
            %





(1)  
      Unless otherwise noted, each beneficial owner has the same address as the
      Company.


(2)  
      Applicable percentage of ownership is based on 40,000,000 shares of the
      Company’s Common Stock outstanding as of the date of this Annual Report,
      together with securities exercisable or convertible into shares of Common Stock
      within sixty (60) days of the date of this Annual Report for each stockholder.
      Beneficial ownership is determined in accordance with the rules of the SEC
      and
      generally includes voting or investment power with respect to securities. Shares
      of Common Stock are deemed to be beneficially owned by the person holding such
      securities for the purpose of computing the percentage of ownership of such
      person, but are not treated as outstanding for the purpose of computing the
      percentage ownership of any other person. Note that affiliates are subject
      to
      Rule 144 and Insider trading regulations - percentage computation is for form
      purposes only.




-
          56 -




***ITEM
      13.******Certain
      Relationships and Related Transactions, and Director
      Independence***




**Transactions
      With Related Persons**




The
      Company had an outstanding amount of $645,737 due from Jin Zheng Wan Tong
      Network (“ JZWT ”),
      which
      has a common director and legal representative with ZYTX. As of the date of
      this
      Report, the Company has fully paid off this obligation.




During
      the year ended June 30, 2008, the Chairman of the Company, Mr. Wang Zhenyu,
      made
      an advance amounting to $153,069 to Rise & Grow for its operational needs.
      At June 30, 2008, the amount outstanding was $153,069. The outstanding amount
      due to a director is non-interest bearing, unsecured and no fixed term of
      repayment.




**Promoters
      and Certain Control Persons**




None.




**Director
      Independence**




The
      following directors are independent pursuant to NASDAQ rules and the rules
      of
      the SEC: Yinan Zhang, Yuefeng Wang, Chunsheng Zhou and Edith Kam Ying Ho and
      Xueyuan Han. The following directors are not independent: Zhenyu Wang and Junjun
      Xu. All of the members of our Audit Committee, Compensation Committee and
      Nominating Committee are independent pursuant to the Exchange Act and NASDAQ
      rules.




***ITEM
      14.******Principal
      Accountant Fees and Services***




The
      firm
      of Akin, Doherty, Klein & Feuge, P.C. (“Akin”) acted as our principal
      accountant and resigned as the position with effective from December 14, 2007.
      The following is a summary of fees incurred for services rendered.




The
      firm
      of Weinberg & Company, P.A. (“Weinberg”) acts as our principal accountant
      with effective from January 31, 2008. The following is a summary of fees
      incurred for services rendered.




**Audit
      Fees**




During
      the fiscal year ended June 30, 2008, the fees for our current principal
      accountant, Weinberg, were $185,243, which was composed of $47,900 for quarterly
      reviews, and $137,343 for the audit of our consolidated financial statements
      included in this Annual Report on Form 10-K.




During
      the fiscal year ended June 30, 2008, the fees for our former principal
      accountant, Akin, were $3,000 **** for
      quarterly reviews for the period ended September 30, 2007.




**Audit-Related
      Fees**




During
      the fiscal year ended June 30, 2008, our current principal accountant, Weinberg,
      did not render assurance and related services reasonably related to the
      performance of the audit or review of financial statements.




**Tax
      Fees**




During
      the fiscal year ended June 30, 2008, our current principal accountant, Weinberg,
      did not render assurance and related services reasonably related to the
      performance of the audit or review of financial statements.




-
          57 -




**All
      Other Fees**




During
      the fiscal year ended June 30, 2008, there were no fees billed for products
      and
      services provided by the current principal accountant, Weinberg, other than
      those set forth above.




**Audit
      Committee Pre-Approval**




The
      policy of the Audit Committee is to pre-approve all audit and non-audit services
      provided by the independent accountants. These services may include audit
      services, audit-related services, tax fees, and other services. Pre-approval
      is
      generally provided for up to one year and any pre-approval is detailed as to
      the
      particular service or category of services. The Audit Committee has delegated
      pre-approval authority to certain committee members when expedition of services
      is necessary. The independent accountants and management are required to
      periodically report to the full Audit Committee regarding the extent of services
      provided by the independent accountants in accordance with this pre-approval
      delegation, and the fees for the services performed to date. All of the services
      described above in this Item 14 were approved in advance by the Audit Committee
      during the fiscal year ended June 30, 2008.




-
          58 -





**PART
      IV**





***ITEM
      15.***  ***Exhibits
      and Financial Statement Schedules***





**(a)**
            **Financial
                Statements and Schedules**





The
      financial statements are set forth under Item 8 of this Annual Report.
      Financial statement schedules have been omitted since they are either not
      required, not applicable, or the information is otherwise included.





**(b)**
            **Exhibits**





**EXHIBIT**
                **NO.**
              
              **DESCRIPTION**
              
              **LOCATION**3.1
              
              Certificate
                  of Incorporation (as amended) of Dexterity Surgical, Inc.
              
              Incorporated
                  by reference to the Company’s Current Report on Form 8-K as filed with the
                  SEC on December 20, 20073.2
              
              Certificate
                  of Amendment to the Company’s Certificate of Incorporation, dated February
                  26, 2008
              
              Incorporated
                  by reference to the Company’s Quarterly Report on Form 10-Q for the period
                  ended March 31, 20083.3
              
              Amended
                  and Restated Bylaws of the Company
              
              Incorporated
                  by reference to the Company’s Quarterly Report on Form 10-Q for the period
                  ended March 31, 20083.4
              
              Certificate
                  of Incorporation of Rise and Grow Limited
              
              Incorporated
                  by reference to the Company’s Current Report on Form 8-K as filed with the
                  SEC on December 20, 20073.5
              
              Certificate
                  of Incorporation of ZBDT (Beijing) Technology Co., Ltd.
              
              Incorporated
                  by reference to the Company’s Current Report on Form 8-K as filed with the
                  SEC on December 20, 20073.6
              
              Company
                  Charter of ZBDT (Beijing) Technology Co., Ltd.
              
              Incorporated
                  by reference to the Company’s Current Report on Form 8-K as filed with the
                  SEC on December 20, 200710.1
              
              Share
                  Exchange Agreement, dated December 17, 2007, by and among Dexterity
                  Surgical, Inc., Rise and Grow Limited and Newise Century
                  Inc.
              
              Incorporated
                  by reference to the Company’s Current Report on Form 8-K as filed with the
                  SEC on December 20, 200710.2
              
              Exclusive
                  Technology Consultation Service Agreement, dated September 28,
                  2007, by
                  and between ZBDT and ZYTX
              
              Incorporated
                  by reference to the Company’s Current Report on Form 8-K as filed with the
                  SEC on December 20, 200710.3
              
              Exclusive
                  Interest Purchase Agreement, dated September 28, 2007, by and between
                  ZBDT
                  and Zhenyu Wang
              
              Incorporated
                  by reference to the Company’s Current Report on Form 8-K as filed with the
                  SEC on December 20, 200710.4
              
              Exclusive
                  Interest Purchase Agreement, dated September 28, 2007, by and between
                  ZBDT
                  and Junjun Xu
              
              Incorporated
                  by reference to the Company’s Current Report on Form 8-K as filed with the
                  SEC on December 20, 2007




-
          59 -


**EXHIBIT**
                    **NO.**
                  
                  **DESCRIPTION**
                  
                  **LOCATION**10.5
                  
                  Equity
                      Interest Pledge Agreement, dated September 28, 2007, by and
                      between ZBDT
                      and Zhenyu Wang
                  
                  Incorporated
                      by reference to the Company’s Current Report on Form 8-K as filed with the
                      SEC on December 20, 200710.6
                  
                  Equity
                      Interest Pledge Agreement, dated September 28, 2007, by and
                      between ZBDT
                      and Junjun Xu
                  
                  Incorporated
                      by reference to the Company’s Current Report on Form 8-K as filed with the
                      SEC on December 20, 200710.7
                  
                  Power
                      of Attorney, dated September 28, 2007, executed by Zhenyu Wang
                      in favor of
                      ZBDT
                  
                  Incorporated
                      by reference to the Company’s Current Report on Form 8-K as filed with the
                      SEC on December 20, 200710.8
                  
                  Power
                      of Attorney, dated September 28, 2007, executed by Junjun Xu
                      in favor of
                      ZBDT
                  
                  Incorporated
                      by reference to the Company’s Current Report on Form 8-K as filed with the
                      SEC on December 20, 200714.1
                  
                  Code
                      of Ethics
                  
                  Provided
                      herewith16.1
                  
                  Auditor’s
                      Letter
                  
                  Provided
                      herewith31.1
                  
                  Certifications
                      of the Chief Executive Officer pursuant to Section 302 of the
                      Sarbanes-Oxley Act of 2002
                  
                  Provided
                      herewith31.2
                  
                  Certifications
                      of the Chief Financial Officer pursuant to Section 302 of the
                      Sarbanes-Oxley Act of 2002
                  
                  Provided
                      herewith32.1
                  
                  Certification
                      Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To
                      Section 906 of
                      the Sarbanes-Oxley Act Of 2002
                  
                  Provided
                      herewith32.2
                  
                  Certification
                      Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To
                      Section 906 of
                      the Sarbanes-Oxley Act Of 2002
                  
                  Provided
                      herewith99.1
                  
                  Audit
                      Committee Charter of the Company
                  
                  Incorporated
                      by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K
                      as filed with the SEC on February 27, 200899.2
                  
                  Compensation
                      Committee Charter of the Company
                  
                  Incorporated
                      by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K
                      as filed with the SEC on February 27, 200899.3
                  
                  Corporate
                      Governance and Nominating Committee Charter of the Company
                  
                  Incorporated
                      by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K
                      as filed with the SEC on February 27,
                      2008




-
          60 -




**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
      the
      registrant has duly caused this report to be signed on our behalf by the
      undersigned, thereunto duly authorized.




**CHINA
                INSONLINE CORP.**Date:
                September 29, 2008By:
            /s/
                Junjun XuJunjun
                XuChief
                Executive Officer, Principal Executive Officer and
                Director/s/
                Mingfei YangMingfei
                YangChief
                Financial Officer, Principal Financial and Accounting Officer




In
      accordance with the requirements 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 indicated on the dates indicated.


**Signatures**
              
              **Title**
              
              **Date**/s/
                  Junjun Xu
              
              Chief
                  Executive Officer, Principal
              
              September
                  29, 2008Junjun
                  Xu
              
              Executive
                  Officer andDirector/s/
                  Mingfei Yang
              
              Chief
                  Financial Officer, Principal
              
              September
                  29, 2008Mingfei
                  Yang
              
              Financial
                  and Accounting Officer/s/
                  Zhenyu Wang
              
              Chairman
                  of the Board
              
              September
                  29, 2008Zhenyu
                  Wang/s/
                  Yuefeng Wang
              
              Director
              
              September
                  29, 2008Yuefeng
                  Wang/s/
                  Yinan Zhang
              
              Director
              
              September
                  29, 2008Yinan
                  Zhang/s/
                  Xueyan Han
              
              Director
              
              September
                  29, 2008Xueyan
                  HanDirectorEdith
                  Kam Ying Ho/s/
                  Chunsheng Zhou
              
              Director
              
              September
                  29, 2008Chunsheng
                  Zhou




-
          61 -





**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**




**TABLE
      OF CONTENTS**




**Page**REPORTS
                OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS
            F-2 –
                F-3CONSOLIDATED
                BALANCE SHEETS AS OF JUNE 30, 2008 AND 2007
            F-4CONSOLIDATED
                STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR THE YEARS ENDED
                JUNE 30,
                2008 AND 2007
            F-5CONSOLIDATED
                STATEMENT OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED JUNE 30, 2008 AND
                2007
            F-6CONSOLIDATED
                STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2008 AND
                2007
            F-7NOTES
                TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30,
                2008 AND
                2007
            F-8
                – F-20




F-1




**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





To
      the
      Board of Directors and Shareholders of


China
      INSOnline Corp. and Subsidiaries





We
      have
      audited the accompanying consolidated balance sheet of China INSOnline Corp.
      (formerly Dexterity Surgical, Inc.) and subsidiaries (the “Company”) as of June
      30, 2008 and the related consolidated statements of income and comprehensive
      income, shareholders’ equity and cash flows for the year then ended. These
      consolidated financial statements are the responsibility of the Company's
      management. Our responsibility is to express an opinion on these consolidated
      financial statements based on our audit.





We
      conducted our audit in accordance with standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the
      consolidated financial statements are free of material misstatement. An audit
      includes examining, on a test basis, evidence supporting the amounts and
      disclosures in the consolidated financial statements. An audit also includes
      assessing the accounting principles used and significant estimates made by
      management, as well as evaluating the overall financial statement presentation.
      We believe that our audit provides a reasonable basis for our
      opinion.





We
      were
      not engaged to examine management’s assertion about the effectiveness of the
      Company’s internal control over financial reporting as of June 30, 2008 included
      in the Company’s Item 9A(T) “Controls and Procedures” in the Annual Report on
      Form 10-K and, accordingly, we do not express an opinion thereon.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of China INSOnline
      Corp. and subsidiaries as of June 30, 2008, and the consolidated results of
      their operations and their cash flows for the year then ended in conformity
      with
      accounting policies generally accepted in the United States of
      America.




/s/
          Weinberg & Company, P.A.
  Weinberg
          & Company, P.A.
 
 Boca
          Raton, Florida
 September
          20, 2008


F-2





**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





To
      the
      Board of Directors and Shareholders of


China
      INSOnline Corp.





We
      have
      audited the accompanying balance sheet of China INSOnline Corp. (the “Company”)
      as of June 30, 2007 and the related statement of income and comprehensive
      income, shareholders’ equity and cash flows for the year 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 audit.





We
      conducted our audit in accordance with standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company is not required to
      have, nor were we engaged to perform, an audit of their internal control over
      financial reporting. Our audit included consideration of internal control over
      financial reporting as a basis for designing audit procedures that were
      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 that our audit provides
      a
      reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of China INSOnline Corp. as of June
      30, 2007 and the results of their operations and their cash flows for the year
      then ended in conformity with accounting principles generally accepted in the
      United States of America.




/s/
        K.P.
        Cheng & Co.
 
  K.P.
        Cheng & Co.
 
 Certified
        Public Accountants
 Hong
        Kong, China
 September
        28, 2007


F-3


**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**CONSOLIDATED
      BALANCE SHEETS**





**June 30, 2008**
            
            **June 30, 2007****ASSETS**Cash
                and cash equivalents
            
            $
            4,567,853
            
            $
            47,657Accounts
                receivable
            
            
            6,387,502
            
            
            2,224,342Deferred
                taxes
            
            
            243,676
            
            
            1,805Prepayments
                and deposits
            
            
            1,284,963
            
            
            4,891Other
                receivables
            
            
            7,440
            
            
            10,505Total
                Current Assets
            
            
            12,491,434
            
            
            2,289,200Fixed
                assets, net
            
            
            257,199
            
            
            35,721Software,
                net
            
            
            2,671,286
            
            
            -Deferred
                taxes
            
            
            37,216
            
            
            -Total
                Long-Term Assets
            
            
            2,965,701
            
            
            35,721**TOTAL
                ASSETS**
            
            $
            15,457,135
            
            $
            2,324,921**LIABILITIES
                AND SHAREHOLDERS’ EQUITY**Accounts
                payable
            
            $
            2,642
            
            $
            -Other
                payables and accrued liabilities
            
            
            1,304,805
            
            
            20,727Amount
                due to a director
            
            
            153,069
            
            
            -Taxes
                payable
            
            
            2,902,587
            
            
            364,431Deferred
                taxes
            
            
            11,530
            
            
            -Deferred
                revenue
            
            
            63,583
            
            
            -Total
                Current Liabilities
            
            
            4,438,216
            
            
            385,158Deferred
                taxes
            
            
            18,792
            
            
            -Total
                Long-Term Liabilities
            
            
            18,792
            
            
            385,158**TOTAL
                LIABILITIES**
            
            
            4,457,008
            
            
            385,158**COMMITMENTS****SHARHOLDERS’
                EQUITY**Common
                stock, $.001 par value; 100,000,000 shares authorized; 40,000,000
                shares
                and 26,400,000 shares issued and outstanding as of June 30, 2008
                and 2007,
                respectively
            
            
            40,000
            
            
            26,400Additional
                paid-in capital
            
            
            86,360
            
            
            99,960Retained
                earnings
            
            
            10,113,609
            
            
            1,778,251Accumulated
                other comprehensive income
            
            
            760,158
            
            
            35,152Total
                Shareholders’ Equity
            
            
            11,000,127
            
            
            1,939,763**TOTAL
                LIABILITIES AND SHARHOLDERS’ EQUITY**
            
            $
            15,457,135
            
            $
            2,324,921




See
      accompanying notes to consolidated financial
      statements


F-4





**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF INCOME AND COMPREHENSIVE INCOME**





**Year Ended**
              **June 30, 2008**
            
            **Year Ended**
              **June 30, 2007****REVENUES,
                NET**
            
            $
            13,735,376
            
            $
            2,223,258**COST
                OF SALES**
            
            
            1,313,582
            
            
            77,346**GROSS
                PROFIT**
            
            
            12,421,794
            
            
            2,145,912General
                and administrative expenses
            
            
            808,432
            
            
            43,150Selling
                expenses
            
            
            1,130,063
            
            
            10,991**INCOME
                FROM OPERATIONS**
            
            
            10,483,299
            
            
            2,091,771Interest
                income, net
            
            
            19,904
            
            
            289**INCOME
                FROM OPERATIONS BEFORE INCOME TAXES**
            
            
            10,503,203
            
            
            2,092,060Income
                taxes
            
            
            (2,166,846
            )
            
            (313,809
            )**NET
                INCOME**
            
            
            8,336,357
            
            
            1,778,251**OTHER
                COMPREHENSIVE INCOME**Foreign
                currency translation gain
            
            
            725,006
            
            
            35,183**COMPREHENSIVE
                INCOME**
            
            $
            9,061,363
            
            $
            1,813,434**NET
                INCOME PER SHARE****-
                BASIC AND DILUTED**
            
            $
            0.24
            
            $
            0.07**WEIGHTED
                AVERAGE SHARES OUTSTANDING****-
                BASIC AND DILUTED**
            
            
            33,946,666
            
            
            26,400,000




See
      accompanying notes to consolidated financial
      statements




F-5





**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**CONSOLIDATED
      STATEMENT OF SHAREHOLDERS’ EQUITY**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**Common
                Stock**
            
            **Additional**
              **Paid-in**
            
            **Retained**
            
            **Accumulated**
              **Other**
              **Comprehensive****Shares**
            
            **Par
                Value**
            
            **Capital**
            
            **Earnings**
            
            **Income**
            
            **Total**BALANCE,
                JUNE 30, 2006
            
            
            26,400,000
            
            $
            26,400
            
            $
            99,960
            
            $
            -
            
            $
            (31
            )
            $
            126,329Foreign
                currency translation gain
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            35,183
            
            
            35,183Net
                income
            
            
            -
            
            
            -
            
            
            -
            
            
            1,778,251
            
            
            -
            
            
            1,778,251BALANCE,
                JUNE 30, 2007
            
            
            26,400,000
            
            
            26,400
            
            
            99,960
            
            
            1,778,251
            
            
            35,152
            
            
            1,939,763Recapitalization
            
            
            25,079,127
            
            
            25,079
            
            
            (25,079
            )
            
            (999
            )
            
            -
            
            
            (999
            )Issuance
                of common stock underSection
                1145 Shares
            
            
            6,000,000
            
            
            6,000
            
            
            (6,000
            )
            
            -
            
            
            -
            
            
            -Cancellation
                of common stock underBankruptcy
                Court Order
            
            
            (17,479,127
            )
            
            (17,479
            )
            
            17,479
            
            
            -
            
            
            -
            
            
            -Foreign
                currency translation gain
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            725,006
            
            
            725,006Net
                income
            
            
            -
            
            
            -
            
            
            -
            
            
            8,336,357
            
            
            -
            
            
            8,336,357BALANCE,
                JUNE 30, 2008
            
            
            40,000,000
            
            $
            40,000
            
            $
            86,360
            
            $
            10,113,609
            
            $
            760,158
            
            $
            11,000,127





See
      accompanying notes to consolidated financial
      statements




F-6


**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**





**Year
                Ended**
              **June
                30, 2008**
            
            **Year
                Ended**
              **June
                30, 2007****CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                income
            
            $
            8,336,357
            
            $
            1,778,251Adjustments
                to reconcile net income to net cash provided by (used in) operating
                activities:Depreciation
            
            
            61,148
            
            
            3,301Amortization
            
            
            134,342
            
            
            -Deferred
                taxes
            
            
            (248,766
            )
            
            (1,774
            )Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            (4,163,160
            )
            
            (2,224,342
            )Other
                receivables
            
            
            3,065
            
            
            (10,505
            )Prepayments
                and deposits
            
            
            (1,280,072
            )
            
            (4,891
            )Accounts
                payable
            
            
            2,642
            
            
            -Other
                payables and accrued liabilities
            
            
            1,284,078
            
            
            20,727Taxes
                payable
            
            
            2,538,156
            
            
            364,431Deferred
                revenue
            
            
            63,583
            
            
            -Net
                cash provided by (used in) operating activities
            
            
            6,731,373
            
            
            (74,802
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES:**Purchases
                of equipment
            
            
            (282,459
            )
            
            (39,022
            )Acquisition
                of software
            
            
            (2,813,780
            )
            
            -Net
                cash used in investing activities
            
            
            (3,096,239
            )
            
            (39,022
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Proceeds
                from registered capital
            
            
            -
            
            
            126,360Advance
                from a director
            
            
            153,069
            
            
            -Net
                cash provided by financing activities
            
            
            153,069
            
            
            126,360**NET
                INCREASE IN CASH AND CASH EQUIVALENTS**
            
            
            3,788,203
            
            
            12,536Effect
                of exchange rate changes on cash
            
            
            731,993
            
            
            35,121Cash
                and cash equivalents, at beginning of the year
            
            
            47,657
            
            
            -**CASH
                AND CASH EQUIVALENTS, END OF THE YEAR**
            
            $
            4,567,853
            
            $
            47,657**SUPPLEMENTARY
                CASH FLOW INFORMATION:**Interest
                paid
            
            $
            -
            
            $
            -Income
                taxes paid
            
            $
            631
            
            $
            -





F-7





**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**1.**  **Organization
      and Principal of Activities**





China
      INSOnline Corp. (“CHIO”), formerly known as Dexterity Surgical, Inc. (“Dexterity
      Surgical”) was incorporated on December 23, 1988 as a Delaware corporation and
      commenced operations on January 1, 1989. In August 1992, CHIO completed an
      initial public offering of common stock. In March 2008, CHIO changed its name
      from Dexterity Surgical, Inc. to China
      INSOnline Corp. and was
      traded on The Over-The-Counter Bulletin Board under the symbol “CHIO”. On July
      1, 2008, China INSOnline Corp. was approved by the NASDAQ and currently trades
      on the NASDAQ Capital Market under the same symbol “CHIO”.




On
      December 18, 2007, CHIO, Rise and Grow Limited (“Rise & Grow”) and Newise
      Century Inc., the sole stockholder of Rise & Grow (the “Shareholder”)
      consummated a share exchange agreement (the “Share Exchange Agreement”) pursuant
      to which the Shareholder transferred to CHIO, and CHIO acquired from the
      Shareholder, all of the capital stock of Rise & Grow (the “Shares”), which
      Shares constitute 100% of the issued and outstanding capital stock of Rise
&
Grow, in exchange for 26,400,000 shares of CHIO’s common stock (“Common Stock”),
      which shares now constitute 66% of the fully diluted outstanding shares of
      Common Stock. There were 25,079,127 shares outstanding in CHIO immediately
      before the Share Exchange Agreement. This share exchange transaction resulted
      in
      the Shareholder obtaining a majority voting interest in CHIO. Generally accepted
      accounting principles require that a company whose shareholders retain the
      majority interest in a combined business be treated as the acquirer for
      accounting purposes, resulting in a reverse acquisition. Accordingly, the share
      exchange transaction has been accounted for as a recapitalization of CHIO.




On
      April
      19, 2004, Dexterity Surgical filed a voluntary petition for relief for
      reorganization (the “Reorganization”) under Chapter 11 of the United States
      Bankruptcy Code in the United States Bankruptcy Court for the Southern District
      of Texas Houston Division (the “Bankruptcy Court”). Dexterity Surgical underwent
      numerous operating changes and operated its business as a “debtor-in-possession”
under the jurisdiction of the Bankruptcy Court.  On March 2, 2005, the
      Bankruptcy Court entered an Order confirming its First Amended Plan of
      Liquidation. In connection with that Plan, Dexterity Surgical’s assets were
      scheduled to be auctioned, which auction culminated in the sale of substantially
      all of Dexterity Surgical’s assets as approved by the Bankruptcy Court on March
      17, 2006.




The
      First
      Amended Plan of Liquidation was subsequently amended on March 2, 2006, by an
      order titled “Order Approving Modification of the First Amended Plan” (the
“Order”). The amendments provided for in the Order included the Bankruptcy
      Court’s authorization of a Debtor-In-Possession Loan (the “DIP Loan”) for
      payment of administrative expenses of the bankruptcy, which converted into
      6,000,000 shares of common stock (the “Section 1145 Shares”) and 3,000,000
      warrants under Section 1145 of the U.S. Bankruptcy Code at the option of the
      holder(s) of the DIP Loan, which were cancelled immediately prior to the
      Exchange. For an additional $125,000, the Bankruptcy Court authorized the sale
      of 25,000,000 restricted shares of common stock to an investor for the payment
      of both administrative claims and creditor claims. Also see Note
      10.




The
      Bankruptcy Court also provided that all of the old shares of Dexterity
      Surgical’s preferred stock, stock options and warrants were cancelled; issued
      29,800 new shares of Common Stock under Section 1145 of the U.S. Bankruptcy
      Code; issue up to 25,000 shares of Common Stock under Section 1145 of the U.S.
      Bankruptcy Code to those persons deemed appropriate by the Board of Directors
      (it was not necessary to issue these shares and therefore they have been
      cancelled); and appoint new Board members, amend the Certificate of
      Incorporation to increase the authorized shares of common stock to 100,000,000,
      amend the Bylaws, change the fiscal year, execute the Share Exchange Agreement
      and issue shares in which effective control or majority ownership is given,
      all
      without stockholder approval. Also see Note 10.




Rise
      & Grow was formed on February 10, 2006 as a Hong Kong limited company. Zhi
      Bao Da Tong (Beijing) Technology Co., Ltd (“ZBDT”), a company registered in the
      People’s Republic of China (the “PRC” or “China”), was established and
      incorporated by Rise & Grow and commenced business on September 6, 2007.
      Rise & Grow’s sole business is to act as a holding company for ZBDT.




F-8




**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**1.**  **Organization
      and Principal of Activities (Continued)**





ZBDT
      was
      formed by Rise & Grow for the purpose of developing computer and network
      software and related products and to promote the development of high-tech
      industries in the field of Chinese information technology. In compliance with
      the PRC’s foreign investment restrictions on Internet information services and
      other laws and regulations, ZBDT conducts all of our Internet information and
      media services and advertising in China through ZYTX, a domestic Variable
      Interest Entity (“VIE”), as its primary beneficiary. It does this by controlling
      Beijing ZYTX Technology Co., Ltd (“ZYTX”), through an Exclusive Technical
      Consulting and Service Agreement (the “Consulting Agreement”) and related
      transaction documents dated as of September 28, 2007 (collectively, the “Service
      Agreements”).





According
      to the Consulting Agreement, ZBDT has the exclusive right to provide technical
      consulting and other services to ZYTX, effectively restricting and controlling
      the operations of ZYTX. Pursuant to Clause 1.3 of the Consulting Agreement,
      ZBDT, “shall be the sole and exclusive owner of all right, title and interests
      to any and all intellectual property rights arising from the performance of
      this
      Agreement (including but not limited to, copyrights, patent, know-how,
      commercial secrets and others), no matter whether it is developed by ZBDT or
      by
      ZYTX based on ZBDT’s intellectual property rights.” Thus, ZBDT could
      substantially, solely and exclusively possess all intellectual property of
      ZYTX
      which comprise the core value and assets of ZYTX (ultimately, solely and
      exclusively possessed by the Company).





According
      to the Equity Purchase Agreements by and between the owners of ZYTX, on the
      one
      hand, and ZBDT, on the other hand, ZBDT has the exclusive and irrevocable right
      to acquire 100% of the equity interests of ZYTX. Furthermore, the Equity
      Purchase Agreements also state that ZBDT has the right to control the operating
      activities and the shareholding structure of ZYTX.




In
      light
      of the above, ZBDT has a controlling interest in ZYTX because:





ZBDT
      has
      the ability to absorb all of the expected residual return from ZYTX, which
      makes
      ZBDT the primary beneficiary of ZYTX. In the event ZYTX fails to pay any
      required amounts, ZBDT could exercise its right to acquire certain pledged
      shares in ZYTX pursuant to a pledge agreement executed by and between ZYTX’s
      stockholders and ZBDT which guarantee all required payments;





ZBDT
      has
      the exclusive right to purchase all of the outstanding interests in ZYTX, which
      would make ZYTX a wholly-owned subsidiary of ZBDT when it’s allowable under the
      PRC regulation;





The
      Company’s CEO and the Chairman of the Board own all of the interests in ZYTX and
      also serve as ZYTX’s directors. Furthermore, such individuals oversee and run
      the business in ZYTX. As a result, the Company, through ZBDT, could exercise
      absolute influence over ZYTX.





Arrangements
      with these business enterprises have been evaluated, and those in which ZYTX
      is
      determined to have controlling financial interest are consolidated. In
      January 2003, the Financial Accounting Standards Board (“FASB”) issued
      FASB Interpretation (“FIN”) No. 46, Consolidation of Variable Interest
      Entities (“FIN 46”), and amended it by issuing FIN 46R in December 2003.
      FIN 46R addresses the consolidation of business enterprises to which the usual
      condition of consolidation (ownership of a majority voting interest) does not
      apply. This interpretation focuses on controlling financial interests that
      may
      be achieved through arrangements that do not involve voting interests. It
      concludes that, in the absence of clear control through voting interests, a
      company’s exposure (variable interest) to the economic risks and potential
      rewards from the variable interest entity’s assets and activities are the best
      evidence of control. If an enterprise holds a majority of the variable interests
      of an entity, it would be considered the primary beneficiary. The primary
      beneficiary is required to consolidate the assets, liabilities and results
      of
      operations of the variable interest entity in its financial statements. Upon
      executing the Consulting Agreement and Service Agreements, ZYTX is now
      considered a VIE and ZBDT is its primary beneficiary.


F-9


**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**1.**  **Organization
      and Principal of Activities (Continued)**





ZYTX,
      an
      entity consolidated into the Company under FIN 46R, a company registered in
      the
      PRC on October 8, 2006, is an Internet e-business development, online
      advertisement publishing and related online servicing company, which focuses
      on
      the PRC insurance industry. With localized web sites targeting Greater China,
      ZYTX provides a platform through its web site, www.soobao.cn, to consumers,
      agents and insurance companies for online transaction, advertising, online
      inquiry, news circulation, statistic analysis and software development. ZYTX
      also provides online insurance agent services including car, property and life
      insurance to customers in the PRC.





**2.**  **Principles
      of Consolidation**





The
      consolidated financial statements included the accounts of CHIO and the
      following subsidiaries (collectively, the “Company”):





a)  Rise
      and
      Grow Limited (“Rise and Grow”) – 100% subsidiary of CHIO.





b)  Zhi
      Bao
      Da Tong (Beijing) Technology Co., Ltd (“ZBDT”) – 100% subsidiary of Rise
      and Grow.





c)  Beijing
      ZYTX Technology Co., Ltd (“ZYTX”) – a VIE of ZBDT





ZYTX
      is
      the major component of the Company’s consolidated financial statements,
      representing over 95% of the assets and liabilities of the Company.





Inter-company
      accounts and transactions have been eliminated in consolidation.





**3.**  **Summary
      of Significant Accounting Policies**





(a)  Economic
      and Political Risks





The
      Company's operations are conducted in the PRC. Accordingly, the Company's
      business, financial condition and results of operations may be influenced by
      the
      political, economic and legal environments in the PRC, and by the general state
      of the PRC economy. The Company's operations in the PRC are subject to special
      considerations and significant risks not typically associated with companies
      in
      North America and Western Europe. These include risks associated with, among
      others, the political, economic and legal environment and foreign currency
      exchange. 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,
      currency conversion, remittances abroad, and rates and methods of taxation,
      among other things.





(b)  Use
      of
      Estimates




The
      preparation of financial statements in conformity with generally accepted
      accounting principles 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 date of the financial statements and
      the reported amounts of revenue and expenses during the reporting period. Actual
      results could differ from those estimates.





(c)  Fair
      Value of Financial Instruments





The
      carrying value of financial instruments classified as current assets and current
      liabilities, such as accounts receivables, other receivables, prepayments and
      deposits, accounts payable, other payables and accrued liabilities, approximate
      fair value due to the short-term nature of the instruments.


F-10


**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**3.**  **Summary
      of Significant Accounting Policies (Continued)**





(d)  Cash
      and
      Cash Equivalents




The
      Company considers all highly liquid investments purchased with original maturity
      of three months or less to be cash equivalents.





(e)  Prepayments





Prepayments
      represents cash paid in advance for rental payments, application software,
      advertising, promotional campaigns, and leasehold improvements.





(f)  Fixed
      assets





Fixed
      assets are carried at cost less accumulated depreciation. Depreciation is
      computed using the straight-line method over the estimated useful lives of
      the
      assets, which are five years for motor vehicles, furniture and fixtures,
      computers and equipment. For the leasehold improvements, deprecation is computed
      using the straight-line method over the estimated useful lives or lease term,
      whichever is shorter.





(g)  Software





Software
      is carried at cost less accumulated amortization. Amortization is computed
      using
      the straight-line method over the estimated useful lives of the assets, which
      is
      seven years for software. The Company acquired two sets of application software,
      an insurance policy management system and a website streaming system during
      the
      year ended June 30, 2008. Both sets of application software are used for
      internal operations to enhance the Company’s online insurance agency business in
      the total amount of $2,813,780, which was purchased from independent
      third-parties. None of the software was internally developed nor was there
      any
      internal cost that was capitalized for the software. Based on the American
      Institute of Certified Public Accountants (“AICPA”) Statement of Position
      (“SOP”) 98-1, Accounting for the Costs of Computer Software Developed or
      Obtained for Internal Use, the Company capitalized all the external direct
      cost
      of services in obtaining the computer software. Software is periodically
      reviewed when indicators are present to assess recoverability from future
      operations using undiscounted cash flows in accordance with Statement of
      Financial Accounting Standards (“SFAS”) No.144, “Accounting for the Impairment
      or Disposal of Long-Live Assets”. To the extent the carrying value exceeds fair
      value, an impairment loss is recognized. No impairment was recorded for the
      year
      ended June 30, 2008.





(h)  Deferred
      Revenue





Deferred
      revenue primarily comprises contractual billings in excess of recognized revenue
      and payments received in advance of revenue recognition.


F-11


**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**3.**  **Summary
      of Significant Accounting Policies (Continued)**





(i)  Revenue
      Recognition





Advertising





Advertising
      revenues are derived mainly from online advertising arrangements, which allow
      advertisers to place advertisements on particular areas of the Company’s web
      sites, in particular formats and over particular periods of time. In accordance
      with Emerging Issues Task Force (“EITF”) No. 00-21, “Accounting for Revenue
      Arrangements with Multiple Deliverables,” advertising arrangements involving
      multiple deliverables are broken down into single-element arrangements based
      on
      their relative fair value for revenue recognition purposes.





For
      web
      site construction service, which is usually included in new advertising
      contract, revenue is recognized ratably over the displayed period, typically
      one
      year. For web site maintenance services, revenue is recognized ratably over
      the
      contact period, generally one year.





Software
      Development





Software
      development revenue is recognized in accordance with SOP 97-2, when the outcome
      of a contract for software development can be estimated reliably, contract
      revenue and costs are charged to the income statement by reference to the stage
      of completion of the contract activity at the balance sheet date, as measured
      by
      the proportion that costs incurred to date bear to estimated total costs for
      each contract. When the outcome of a contract cannot be estimated reliably,
      contract costs are recognized as an expense in the period in which they are
      incurred. Contract revenue is recognized to the extent of contract costs
      incurred that it is probable will be recoverable. Where it is probable that
      the
      total contract costs will exceed total contract revenue, the expected loss
      is
      recognized as an expense immediately.





Insurance
      Commissions





Insurance
      revenues, net of discounts, represent commissions earned from performing
      agency-related services. Insurance commissions are recognized at the later
      of
      the date when the customer is initially billed or the insurance policy effective
      date.





In
      accordance with EITF No. 01-9, “Accounting for Consideration Given by a Vendor
      to a Customer or a Reseller of the Vendor’s Product,” cash consideration given
      to customers or resellers, for which the Company does not receive a separately
      identifiable benefit or cannot reasonably estimate fair value, are accounted
      for
      as a reduction of revenue rather than as an expense.





Cash
      consideration includes discounts and other offers that entitle a customer to
      receive a reduction in the price of a product. For the years ended June 30,
      2008
      and 2007, the Company recognized $304,686 and Nil, respectively, as a reduction
      of revenue for the discount offered to its customers.




F-12


**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**3.**  **Summary
      of Significant Accounting Policies (Continued)**





(j)  Foreign
      Currency Translation





The
      accompanying financial statements are presented in United States dollars. The
      functional currencies of the Company are the Renminbi (“RMB”) and Hong Kong
      Dollar (“HKD”). The financial statements are translated into United States
      dollars (“US$”) from RMB and US$ from HKD at year-end exchange rates as to
      assets and liabilities and average exchange rates as to revenues and expenses.
      Capital accounts are translated at their historical exchange rates when the
      capital transactions occurred.





**June 30, 2008**
            
            **June 30, 2007**Year
                end RMB: US$ exchange rate
            
            
            6.8591
            
            
            7.6155Year
                average RMB: US$ exchange rate
            
            
            7.2753
            
            
            7.7446Year
                end HKD: US$ exchange rate
            
            
            7.7973
            
            
            7.8190Year
                average HKD: US$ exchange rate
            
            
            7.8081
            
            
            7.7960





(l)  Advertising
      Costs





The
      Company expenses advertising costs as incurred or the first time advertising
      takes place. Advertising costs were $962,160 and Nil for the years ended June
      30, 2008 and 2007, respectively.





(l)  Income
      Taxes





The
      Company accounts for income tax using the asset and liability approach. Deferred
      taxes are provided for the net tax effects of temporary differences between
      the
      carrying amounts of assets and liabilities for financial reporting purposes
      and
      the amounts used for income tax purposes. A valuation allowance is provided
      for
      deferred tax assets if it is more likely than not these items will either expire
      before the Company is able to realize their benefits, or that future utilization
      is uncertain.





(m)  Reserve
      Fund





In
      2008,
      a subsidiary of the Company in China transferred 15% of their PRC profit after
      taxation to the surplus reserve fund. Subject to certain restrictions set out
      in
      the PRC Companies Law, the surplus reserve fund may be distributed to
      shareholders in the form of share bonus issues and/or cash dividends. The
      Company’s retained earnings in the amount of $315,584 and Nil is restricted as
      of June 30, 2008 and 2007, respectively, for the surplus reserve
      fund.





(n)  Comprehensive
      Income





Comprehensive
      income is defined to include all changes in equity except those resulting from
      investments by owners and distributions to owners. Among other disclosures,
      all
      items that are required to be recognized under current accounting standards
      as
      components of comprehensive income should be reported in a financial statement
      that is presented with the same prominence as other financial statements. The
      Company’s only current component of comprehensive income is the foreign currency
      translation adjustment.





(o)  Earnings
      Per Share





Basic
      earnings per share is computed by dividing income available to common
      shareholders by the weighted-average number of common shares outstanding during
      the period. Diluted earnings per share is computed similar to basic earnings
      per
      share except that the denominator is increased to include the number of
      additional common shares that would have been outstanding if the potential
      common shares had been issued and if the additional common shares were dilutive.
      There were no dilutive securities outstanding for the periods
      presented.


F-13


**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**4.**  **Recent
      Accounting Pronouncements**





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, (“SFAS
      No. 157”) which provides enhanced guidance for using fair value to measure
      assets and liabilities. SFAS No. 157 provides a common definition of fair value
      and establishes a framework to make the measurement of fair value in generally
      accepted accounting principles more consistent and comparable. SFAS No. 157
      also
      requires expanded disclosures to provide information about the extent to which
      fair value is used to measure assets and liabilities, the methods and
      assumptions used to measure fair value, and the effect of fair value measures
      on
      earnings. SFAS No. 157 is effective for financial statements issued in fiscal
      years beginning after November 15, 2007 and to interim periods within those
      fiscal years. The Company does not have to adopt this until next fiscal year.
      The Company is currently evaluating the impact on the adoption of SFAS No.
      157
      may have on its financial statements.





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option of Financial
      Assets and Financial Liabilities” (“SFAS No. 159”), which permits entities to
      measure many financial instruments and certain other items of fair value. SFAS
      No. 159’s overall objective is to improve financial reporting by providing
      entities with the opportunity to mitigate volatility in reported earnings caused
      by measuring related assets and liabilities differently without having to apply
      complex hedge accounting provisions. SFAS No. 159 applies to all entities,
      including not-for-profit organization, and most of its provisions apply only
      to
      entities that elect the fair value option, although FAS 159's amendment to
      FAS
      115 applies to all entities with available-for-sale and trading securities.
      This
      Statement was effective as of the beginning of each reporting entity's first
      fiscal year that begins after November 15, 2007. Adoption of the first interim
      period of earlier fiscal years, provided the entity also elects to early adopt
      SFAS No. 159. The Company is currently evaluating the impact on adoption of
      SFAS
      No. 159 may have on our financial statements.





In
      December 2007, the FASB issued SFAS No. 141 (revised 2007) (“SFAS No.
      141R”), “Business Combinations”, which replaces SFAS No. 141. This statement
      retains the purchase method of accounting for acquisitions, but requires a
      number of changes, including changes in the way assets and liabilities are
      recognized in the purchase accounting. It also changes the recognition of assets
      acquired and liabilities assumed arising from contingencies, requires the
      capitalization of in-process research and development at fair value, and
      requires the expensing of acquisition-related costs as incurred. SFAS
      No. 141R is effective for the Company beginning July 1, 2009 and will
      apply prospectively to business combinations completed on or after that
      date.





In
      December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
      Consolidated Financial Statements, an amendment of ARB 51, which changes the
      accounting and reporting for minority interests. Minority interests will be
      recharacterized as noncontrolling interests and will be reported as a component
      of equity separate from the parent’s equity, and purchases or sales of equity
      interests that do not result in a change in control will be accounted for as
      equity transactions. In addition, net income attributable to the noncontrolling
      interest will be included in consolidated net income on the face of the income
      statement and, upon a loss of control, the interest sold, as well as any
      interest retained, will be recorded at fair value with any gain or loss
      recognized in earnings. SFAS No. 160 is effective for us beginning
      July 1, 2009 and will apply prospectively, except for the presentation and
      disclosure requirements, which will apply retrospectively. The Company is
      currently assessing the potential impact that adoption of SFAS No. 160
      would have on the Company’s financial statements.





In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities” (“SFAS No. 161”), which amends SFAS No.133 and expands
      disclosures to include information about the fair value of derivatives, related
      credit risks and a company’s strategies and objectives for using derivatives.
      SFAS No. 161 is effective for fiscal periods beginning on or after November
      15,
      2008. The Company is currently in the process of assessing the impact that
      SFAS
      No. 161 will have on the disclosures in the Company’s consolidated financial
      statements.




F-14


**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**5.**  **Amount
      Due To a Director**





The
      amount due to a director represents an advance from a director of the Company
      to
      Rise & Grow during the year ended June 30, 2008. The outstanding amount is
      non-interest bearing, unsecured and has no fixed term of repayment.





**6.**  **Fixed
      Assets**





Fixed
      assets consist of the following:





**June 30, 2008**
            
            **June 30, 2007**At
                cost:Leasehold
                improvement
            
            $
            135,003
            
            $
            -Furniture
                and fixtures
            
            
            13,339
            
            
            -Computers
                and equipment
            
            
            83,004
            
            
            39,022Motor
                vehicles
            
            
            94,438
            
            
            -$
            325,784
            
            $
            39,022Less:
                Accumulated depreciationLeasehold
                improvement
            
            
            44,972
            
            
            -Furniture
                and fixtures
            
            
            1,032
            
            
            -Computers
                and equipment
            
            
            15,456
            
            
            3,301Motor
                vehicles
            
            
            7,125
            
            
            -$
            68,585
            
            $
            3,301Fixed
                assets, net
            
            $
            257,199
            
            $
            35,721





Depreciation
      expense for the years ended June 30, 2008 and 2007 was $61,148 and $3,301,
      respectively.





**7.**  **Software**





Software
      consists of the following:




**June 30, 2008**Cost
            
            $
            2,813,780Less:
                Accumulated amortization
            
            
            142,494Software,
                net
            
            $
            2,671,286





Amortization
      expense for the years ended June 30, 2008 and 2007 was $134,342 and Nil,
      respectively.




Amortization
      expense for the next five years and thereafter is as follows:




**Year
                ending June 30,**
            
            **Amount**2009
            
            $
            401,9692010
            
            
            401,9682011
            
            
            401,9692012
            
            
            401,9682013
            
            
            401,969Thereafter
            
            
            661,443Total
            
            $
            2,671,286




F-15


**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**8.**  **Taxes**





(a)  Corporation
      Income Tax (“CIT”)





The
      Company has not recorded a provision for U.S. federal income taxes for the
      year
      ended June 30, 2008 due to the net operating loss carry forward in the
      United States.





On
      March 16, 2007, the National People’s Congress of China approved the new
      Corporate Income Tax Law of the People’s Republic of China (the “New CIT Law”),
      which is effective from January 1, 2008. Prior to January 1, 2008, the
      CIT rate applicable to the Company’s subsidiary in the PRC is at 33%. As from
      January 1, 2008, the applicable CIT rate, ZBDT, the wholly owned subsidiary,
      is
      25%, replacing the currently applicable tax rate of 33%. For the year ended
      June
      30, 2008, CIT for ZBDT was $2,570,357 and is due in March 2009. ZYTX, a VIE
      of
      the Company, enjoys a favorable tax rate of 15% as it is considered a high
      technology company by the Chinese government. ZYTX is also entitled to a full
      exemption from CIT for the first two years from January 1, 2007 to December
      31,
      2008. Starting from January 1, 2009, the actual CIT rate of ZYTX will be 15%.
      Since ZYTX is exempted from CIT, the Company revised the previous estimated
      CIT
      amounting to $335,941 for the year ended June 30, 3008.





Under
      the
      new CIT law, the corporate income tax rate applicable to the Company starting
      from January 1, 2008 is 25%, replacing the current applicable tax rate of
      33%. Some of the tax concession granted to eligible companies prior to the
      new
      CIT law is grand fathered. The new CIT Law has an impact on the deferred tax
      assets and liabilities of the Company. The Company adjusted deferred tax
      balances as of June 30, 2008 based on the current applicable tax rate and
      will continue to assess the impact of such new law in the future. Effects
      arising from the enforcement of the new CIT Law were reflected into the accounts
      by best estimation method.





Pursuant
      to the Inland Revenue Ordinance of Hong Kong, Rise & Grow is subject to Hong
      Kong Profits Tax at 17.5% for both the years ended June 30, 2008 and 2007,
      respectively. As Rise & Grow has no assessable profits for the years ended
      June 30, 2008 and 2007, no provision of profits tax has been made.





Income
      tax expense is summarized as follows:





**2008**
            
            **2007**Computed
                “expected” expense
            
            $
            2,401,192
            
            $
            315,614Favorable
                tax rate effect
            
            
            (245,217
            )
            
            (1,805
            )Permanent
                difference
            
            
            10,871
            
            
            -Income
                tax expense
            
            $
            2,166,846
            
            $
            313,809





Provision
      for income tax expense is summarized as follows:





**2008**
            
            **2007**Current
            
            $
            2,401,192
            
            $
            315,614Deferred
            
            
            (234,346
            )
            
            (1,805
            )Income
                tax expense
            
            $
            2,166,846
            
            $
            313,809


F-16


**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**8.**  **Taxes
      (continued)**





(a)  Corporation
      Income Tax (“CIT”) (Continued)





The
      tax
      effects of temporary differences that give rise to the Company’s deferred tax
      assets and liabilities are as follows:





**2008**
            
            **2007**Deferred
                tax assets:Social
                welfare expenses
            
            $
            19,231
            
            $
            1,630Consumable
                expenses
            
            
            4,607
            
            
            175Advertising
            
            
            43,738
            
            
            -Discount
                allowed
            
            
            2,591
            
            
            -Business
                tax
            
            
            170,953
            
            
            -Other
            
            
            2,556
            
            
            -Total
                current deferred tax assets
            
            $
            243,676
            
            $
            1,805Amortization
            
            $
            32,373
            
            $
            -Depreciation
            
            
            4,843
            
            
            -Total
                long-term deferred tax assets
            
            $
            37,216
            
            $
            -Total
                deferred tax assets
            
            $
            280,892
            
            $
            1,805Deferred
                tax liabilities:Commission
                income
            
            $
            7,776
            
            $
            -Software
                income
            
            
            1,194
            
            
            -Depreciation
            
            
            80
            
            
            -Rent
            
            
            2,480
            
            
            -Total
                current deferred tax liabilities
            
            $
            11,530
            
            $
            -Amortization
            
            $
            18,089
            
            $
            -Depreciation
            
            
            703
            
            
            -Total
                long-term deferred tax liabilities
            
            $
            18,792
            
            $
            -Total
                deferred tax liabilities
            
            $
            30,322
            
            $
            -Net
                deferred tax assets
            
            $
            250,570
            
            $
            1,805





The
      Company adopted the provisions of FASB Interpretation No. 48, “Accounting
      for Uncertainty in Income Taxes—an Interpretation of FASB Statement
      No. 109,” (“FIN 48”), on January 1, 2007. The Company did not
      have any material unrecognized tax benefits and there was no effect on its
      financial condition or results of operations as a result of implementing FIN
      48.





(b)
            Tax
                holiday





The
      Company enjoys certain tax holidays under the new CIT law. The combined effects
      of the income tax expense reductions available to the Company are as
      follows:





**2008**
            
            **2007**Tax
                holiday effect
            
            $
            2,101,224
            
            $
            -Basic
                net income per share excluding tax holidays
            
            $
            0.19
            
            $
            0.07




F-17


**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**8.**  **Taxes
      (Continued)**





(c)
            Business
                Tax





Pursuant
      to the relevant PRC tax laws, the Company is subject to business tax at 5%
      of
      the gross sales, excluding software development income. For the years ended
      June
      30, 2008 and 2007, the Company incurred a total business tax of $1,180,971
      and
      $39,543, respectively, which is included in the cost of sales in the
      accompanying consolidated statement of income and comprehensive
      income.





The
      business tax payable balance of $1,031,519 and Nil at June 30, 2008 and
      2007, respectively, are included in other payables and accrued liabilities
      in
      the accompanying consolidated balance sheets.





**9.**  **Lease
      Commitments**





The
      Company occupies office spaces leased from third parties. For the years ended
      June 30, 2008 and 2007, the Company recognized $132,739 and $9,781,
      respectively, as rental expense for these spaces. As of June 30, 2008, the
      Company has outstanding commitments with respect to non-cancelable operating
      leases as follows:





**Year
                Ending June 30,**
            
            **Amount**2009
            
            $
            182,2542010
            
            
            186,6322011
            
            
            27,381$
            396,267





**10.**  **Shareholders’
      Equity**





(a)  Issue
      of
      Shares under Section 1145 Shares Pursuant to the Reorganization





On
      December 18, 2007, the Company issued 1,756,250 shares of common stock under
      Section 1145 pursuant to the Reorganization. On January 2, 2008, the Company
      issued the remaining 4,243,750 shares of common stock for a total of 6,000,000
      shares of common stock under Section 1145 pursuant to the
      Reorganization.





(b)  Cancellation
      of Shares Pursuant to the Bankruptcy Court Order





On
      December 27, 2007, the Company cancelled 17,454,127 shares of common stock
      pursuant to the Bankruptcy Court Order. On February 4, 2008, 25,000 shares
      of
      common stock were cancelled pursuant to the Bankruptcy Court Order.




F-18


**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**11.**  **Certain
      Risks and Concentrations**





Financial
      instruments that potentially subject the Company to significant concentrations
      of credit risk consist primarily of cash and cash equivalents and accounts
      receivable.





The
      Company has $4,562,222 and $37,707 in bank deposits with a bank in China, which
      constitutes about 99.9% and 79.1% of its total cash and cash equivalents as
      of
      June 30, 2008 and 2007, respectively. Historically, deposits in Chinese banks
      are secured due to the state policy on protecting depositors’ interests.
      However, China promulgated a new Bankruptcy Law in August 2006, which came
      into
      effect on June 1, 2007. The new Bankruptcy Law contains a separate article
      expressly stating that the State Council may promulgate implementation measures
      for the bankruptcy of Chinese banks. Under the new Bankruptcy Law, a Chinese
      bank may go bankrupt. In addition, since China’s concession to World Trade
      Organization, foreign banks have been gradually permitted to operate in China
      and have been severe competitors against Chinese banks in many aspects,
      especially since the opening of Renminbi business to foreign banks in late
      2006.





Therefore,
      the risk of bankruptcy of the bank in which that the Company has deposits has
      increased. In the event of bankruptcy of the bank which holds the Company’s
      deposits, the Company is unlikely to recover its deposits back in full since
      it
      is unlikely to be classified as a secured creditor based on PRC
      laws.





Accounts
      receivable consist primarily of software development clients and insurance
      agents. As of June 30, 2008 and 2007, approximately 35% and 66% of the accounts
      receivable and 31% and 66% of revenues were derived from the software
      development business, respectively. Regarding its online advertising and
      insurance agency operations, no individual customer accounted for more than
      10%
      of total net revenues for both the years ended June 30, 2008 and
      2007.





The
      concentration of sales and accounts receivable for the years ended June 30,
      2008
      and 2007 are summarized as below:





**Sales**
            
            **Accounts**
              **Receivable****2008**
            
            **2007**
            
            **2008**
            
            **2007****Software
                Development**Company
                A
            
            
            18
            %
            
            -
            
            
            22
            %
            
            -Company
                B
            
            
            5
            %
            
            56
            %
            
            13
            %
            
            57
            %Company
                C
            
            
            -
            
            
            9
            %
            
            -
            
            
            9
            %Others
            
            
            8
            %
            
            1
            %
            
            -
            
            
            -31
            %
            
            66
            %
            
            35
            %
            
            66
            %**Online
                Insurance Advertising**
            
            
            67
            %
            
            34
            %
            
            64
            %
            
            34
            %**Insurance
                Agency**
            
            
            2
            %
            
            -
            
            
            1
            %
            
            -**Total**
            
            
            100
            %
            
            100
            %
            
            100
            %
            
            100
            %




F-19


**CHINA
      INSONLINE CORP.**


**(FORMERLY
      KNOWN AS DEXTERITY SURGICAL, INC.)**


**AND
      SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
      THE YEARS ENDED JUNE 30, 2008 AND 2007**





**12.**  **Segment
      Information**





Based
      on
      criteria established by SFAS 131, “Disclosures about Segments of an Enterprise
      and Related Information,” the Company operates three business segments for the
      years ended June 30, 2008 and 2007, which are software development, online
      insurance advertising and insurance agency within the PRC. The following is
      the
      summary information by segment as of and for the years ended June 30, 2008
      and
      2007:





**Software**
              **Development**
            
            **Online**
              **Insurance**
              **Advertising**
            
            **Insurance**
              **Agency**
            
            **Administ-**
              **ration**
            
            **Total****Year ended June 30, 2008**Revenues,
                net
            
            $
            4,298,739
            
            $
            9,432,393
            
            $
            4,244
            
            $
            -
            
            $
            13,735,376Cost
                of sales
            
            
            94,502
            
            
            556,683
            
            
            17,298
            
            
            645,099
            
            
            1,313,582Gross
                profit (loss)
            
            $
            4,204,237
            
            $
            8,875,710
            
            $
            (13,054
            )
            $
            (645,099
            )
            $
            12,421,794**Year
                ended June 30, 2008**Long-lived
                assets
            
            $
            30,849
            
            $
            1,954
            
            $
            2,674,724
            
            $
            258,174
            
            $
            2,965,701Current
                assets
            
            $
            2,226,184
            
            $
            4,044,456
            
            $
            1,325,961
            
            $
            4,894,833
            
            $
            12,491,434**Year
                ended June 30, 2007**Revenues,
                net
            
            $
            1,469,252
            
            $
            754,006
            
            $
            -
            
            $
            -
            
            $
            2,223,258Cost
                of sales
            
            
            33,868
            
            
            43,478
            
            
            -
            
            
            -
            
            
            77,346Gross
                profit
            
            $
            1,435,384
            
            $
            710,528
            
            $
            -
            
            $
            -
            
            $
            2,145,912**Year
                ended June 30, 2007**Long-lived
                assets
            
            $
            17,047
            
            $
            18,674
            
            $
            -
            
            $
            -
            
            $
            35,721Current
                assets
            
            $
            1,459,998
            
            $
            769,235
            
            $
            -
            
            $
            -
            
            $
            2,229,233




F-20