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SECURITIES AND EXCHANGE COMMISSION
o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
NO.35 Financial Street, Xicheng District
Beijing 100033, China
(Address of principal executive offices)
Telephone: + (86 10) 58325399
Email: jun.wang@jrj.com.cn
Facsimile: + (86 10)58325200
9/F, Tower C, Corporate Square
No.35 Financial Street, Xicheng District
Beijing 100033, China
Title of each class | Name of each exchange on which registered | |
None | None |
par value HK$0.001 per share *
(Title of Class)
* | Not for trading, but only in connection with the listing on the Nasdaq Global Market of American Depository Shares each representing 5 ordinary shares pursuant to the requirements of the Securities and Exchange Commission |
None
Large accelerated filero | Accelerated filerþ | Non-accelerated filero |
U.S. GAAPþ | International Financial Reporting Standards as issued | Othero | ||
By the International Accounting Standards Boardo |
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• | we,” “us,” “our company,” “the company,” “our”, “Group” refer to China Finance Online Co. Limited, or CFO Hong Kong and its subsidiaries, and, in the context of describing our operations include our PRC-incorporated affiliates; |
• | “shares” and “ordinary shares” refer to our ordinary shares, “preferred shares” refers to our preferred shares, all of which were converted into our ordinary shares upon the completion of our initial public offering on October 20, 2004, “ADSs” refers to our American depositary shares, each of which represents five ordinary shares, and “ADRs” refers to the American depositary receipts which evidence our ADSs; |
• | “China” or “PRC” refers to the People’s Republic of China, excluding Taiwan, Hong Kong and Macau; |
• | “Hong Kong” refers to the Hong Kong Special Administrative Region of the People’s Republic of China; and |
• | all references to “Renminbi,” “RMB” or “yuan” are to the legal currency of China, all references to “U.S. dollars,” “dollars,” “$” or “US$” are to the legal currency of the United States and all references to “Hong Kong dollars” or “HK$” are to the legal currency of Hong Kong. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding. |
• | our goals and strategies, including how we effect our goals and strategies; |
• | our future business developments, business prospects, financial condition and results of operations; |
• | our future pricing strategies or policies; |
• | our plans to expand our service offerings; |
• | our plans to use acquisitions and strategic investments as part of our corporate strategy; |
• | competition in the PRC financial data and information services industry; |
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• | performance of China’s securities markets; |
• | performance of Hong Kong’s securities markets; |
• | growth in our subscriber base; |
• | PRC governmental policies relating to taxes and how they will impact our business; |
• | PRC governmental policies relating to the Internet and Internet content providers; |
• | PRC governmental policies relating to the distribution of content, especially the distribution of financial content over the Internet; and |
• | PRC governmental policies relating to mobile value-added services. |
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For the year ended December 31, | ||||||||||||||||||||
(in thousands of U.S. dollars, except per share or per ADS data)(1) | 2005 (5) | 2006 (4) (5) | 2007 (4) (5) | 2008 (5) | 2009 | |||||||||||||||
(As adjusted) | (As adjusted) | (As adjusted) | (As adjusted) | |||||||||||||||||
Consolidated statement of operations and comprehensive income (loss) data: | ||||||||||||||||||||
Net revenues | 7,482 | 7,128 | 25,903 | 56,243 | 53,606 | |||||||||||||||
Cost of revenues | (482 | ) | (1,468 | ) | (4,427 | ) | (9,367 | ) | (8,147 | ) | ||||||||||
Gross profit | 7,000 | 5,660 | 21,476 | 46,876 | 45,459 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
General and administrative | (1,740 | ) | (2,956 | ) | (7,784 | ) | (15,371 | ) | (16,982 | ) | ||||||||||
Product development | (236 | ) | (742 | ) | (2,269 | ) | (5,635 | ) | (10,754 | ) | ||||||||||
Sales and marketing | (1,795 | ) | (2,666 | ) | (6,924 | ) | (13,521 | ) | (26,095 | ) | ||||||||||
Total operating expenses | (3,771 | ) | (6,364 | ) | (16,977 | ) | (34,527 | ) | (53,831 | ) | ||||||||||
Subsidy income | — | — | 136 | 437 | 567 | |||||||||||||||
Income (loss) from operations | 3,229 | (704 | ) | 4,635 | 12,786 | (7,805 | ) | |||||||||||||
Interest income | 1,486 | 1,003 | 1,105 | 1,608 | 1,352 | |||||||||||||||
Gain from trading securities | — | — | — | — | 40 | |||||||||||||||
Other income (expense) | — | 115 | 9 | (169 | ) | (257 | ) | |||||||||||||
Exchange gain (net) | 366 | 267 | 424 | 1,490 | 2 | |||||||||||||||
Loss from impairment of cost method investment | (1,322 | ) | (11,127 | ) | — | — | ||||||||||||||
Income (loss) before income taxes | 5,081 | (641 | ) | (4,954 | ) | 15,715 | (6,668 | ) | ||||||||||||
Income tax benefit (provision) | (457 | ) | 41 | 809 | 3,047 | 446 | ||||||||||||||
Purchased pre-acquisition earning | — | — | — | 227 | — | |||||||||||||||
Net income (loss) | 4,624 | (600 | ) | (4,145 | ) | 18,989 | (6,222 | ) | ||||||||||||
Less: net loss attributable to the noncontrolling interests | — | — | 15 | 31 | 2 | |||||||||||||||
Net income (loss) attributable to China Finance Online Co., Ltd. | $ | 4,624 | $ | (600 | ) | $ | (4,130 | ) | $ | 19,020 | $ | (6,220 | ) | |||||||
Net income (loss) per share attributable to China Finance Online Co., Ltd. | ||||||||||||||||||||
-basic | $ | 0.05 | $ | (0.01 | ) | $ | (0.04 | ) | $ | 0.19 | $ | (0.06 | ) | |||||||
-diluted | $ | 0.04 | $ | (0.01 | ) | $ | (0.04 | ) | $ | 0.17 | $ | (0.06 | ) | |||||||
Net income(loss) per ADS equivalent attributable to China Finance Online Co., Ltd. | ||||||||||||||||||||
-basic(2) | $ | 0.25 | $ | (0.03 | ) | $ | (0.22 | ) | $ | 0.96 | $ | (0.30 | ) | |||||||
-diluted(2) | $ | 0.22 | $ | (0.03 | ) | $ | (0.22 | ) | $ | 0.84 | $ | (0.30 | ) |
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For the year ended December 31, | ||||||||||||||||||||
(in thousands of U.S. dollars)(1) | 2005 (5) | 2006 (5) | 2007 (5) | 2008 (5) | 2009 | |||||||||||||||
(As adjusted) | (As adjusted) | (As adjusted) | (As adjusted) | |||||||||||||||||
Consolidated balance sheet data: | ||||||||||||||||||||
Cash and cash equivalents | $ | 46,168 | $ | 44,956 | $ | 74,729 | $ | 97,544 | $ | 107,391 | ||||||||||
Current working capital(3) | 45,227 | 38,011 | 53,811 | 78,226 | 81,255 | |||||||||||||||
Total assets | 63,113 | 71,119 | 103,885 | 141,823 | 165,609 | |||||||||||||||
Deferred revenue, current | 1,859 | 6,419 | 20,457 | 28,202 | 30,620 | |||||||||||||||
Total current liabilities | 2,282 | 8,521 | 31,034 | 35,472 | 52,401 | |||||||||||||||
Deferred revenue, non-current | — | — | 4,665 | 8,786 | 14,547 | |||||||||||||||
Total equity | $ | 60,831 | $ | 62,453 | $ | 67,834 | $ | 96,942 | $ | 97,667 |
(1) | For the results of operations for a specified period, all translations from Renminbi to U.S. dollars were calculated by using the average of the exchange rates on each day during the period. All translations from Renminbi to U.S. dollars were calculated for the periods listed below at the corresponding rates: |
For the years ended December 31, | RMB per US$1.00 | |||
2004 | 8.2780 | |||
2005 | 8.1472 | |||
2006 | 7.9693 | |||
2007 | 7.6072 | |||
2008 | 6.9477 | |||
2009 | 6.8310 |
As at December 31, | RMB per US$1.00 | |||
2004 | 8.2765 | |||
2005 | 8.0702 | |||
2006 | 7.8087 | |||
2007 | 7.2946 | |||
2008 | 6.8225 | |||
2009 | 6.8282 |
(2) | Each ADS represents five ordinary shares. | |
(3) | Current working capital is the difference between total current assets and total current liabilities. | |
(4) | In 2006, the Company changed its method of accounting for stock-based compensation to conform to authoritative pronouncement effective on January 1, 2006. In 2007, the Company adopted the authoritative pronouncement “Accounting for Uncertainty in Income Taxes.” | |
(5) | In 2009, the Company adopted the authoritative guidance on noncontrolling interests in consolidated financial statements on January 1, 2009, which was applied retrospectively. The following adjustments have been made: |
a) | the noncontrolling interests (previously described as minority interest) has now been included as a component of total equity whereas previously it was shown outside of equity, | ||
b) | the net income or loss attributable to the noncontrolling interests is now shown as an allocation of net income for the year rather than being deducted in arriving at net income. |
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Average(1) | High | Low | Period-end | |||||||||||||
(RMB per U.S.$1.00) | ||||||||||||||||
December 31, 2005 | 8.1472 | 8.2765 | 8.0702 | 8.0702 | ||||||||||||
December 31, 2006 | 7.9693 | 8.0705 | 7.8051 | 7.8087 | ||||||||||||
December 31, 2007 | 7.5806 | 7.8127 | 7.2946 | 7.2946 | ||||||||||||
December 31, 2008 | 6.9193 | 7.2946 | 6.7800 | 6.8225 | ||||||||||||
December 31, 2009 | 6.8314 | 6.8399 | 6.8201 | 6.8282 | ||||||||||||
Most recent six months: | ||||||||||||||||
November 2010 | 6.8274 | 6.8282 | 6.8267 | 6.8272 | ||||||||||||
December 2010 | 6.8279 | 6.8287 | 6.8268 | 6.8282 | ||||||||||||
January 2010 | 6.8273 | 6.8281 | 6.8269 | 6.8270 | ||||||||||||
February 2010 | 6.8270 | 6.8273 | 6.8269 | 6.8269 | ||||||||||||
March 2010 | 6.8264 | 6.8268 | 6.8261 | 6.8263 | ||||||||||||
April 2010 | 6.8262 | 6.8265 | 6.8259 | 6.8263 | ||||||||||||
May 2010 (through 17th) | 6.8270 | 6.8275 | 6.8265 | 6.8275 |
(1) | Averages are calculated from month-end rates. |
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• | the acquisition may not further our business strategy, or we may pay more than it is worth; |
• | we may not realize the anticipated increase in our revenues if we are unable to sell the acquired company’s products to our customer base, or the acquired contract models of acquired contract models companies; |
• | we may have difficulty identifying suitable acquisition opportunities and integrating acquired companies with our existing operations or their products and services with our existing products and services; |
• | we may have higher than anticipated costs in continuing support and development of acquired products; |
• | we may have multiple and overlapping product lines that are offered, priced and supported differently, which could cause customer confusion and delays; |
• | our due diligence process may fail to identify problems, such as issues with unlicensed use of intellectual property; |
• | we may have legal and tax exposures or lose anticipated tax benefits as a result of unforeseen difficulties in our legal entity integration activities; |
• | we may face contingencies related to intellectual property, financial disclosures and accounting practices or internal controls; |
• | our ongoing business may be disrupted and our management’s attention may be diverted by transition or integration issues; and |
• | to the extent that we issue a significant amount of equity securities in connection with future acquisitions, existing ADS holders and shareholders may be diluted and earnings per share may decrease. |
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• | providing CFO Software tax exemption for 2007 and a reduced tax rate of 7.5% for 2008, 2009 and 2010; and |
• | providing CFO Meining and CFO Genius a reduced tax rate of 15% for 2008, 2009 and 2010. |
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• | providing CFO Success tax exemption for 2008 and 2009 and a preferential EIT rate of 12.5% for 2010, 2011 and 2012; and |
• | providing CFO Zhengning tax exemption for 2008 and a preferential EIT rate of 12.5% for 2009, 2010 and 2011. |
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• | any breakdowns or system failures resulting in a sustained shutdown of all or a material portion of our servers, including failures which may be attributable to sustained power shutdowns, or efforts to gain unauthorized access to our systems causing loss or corruption of data or malfunctions of software or hardware; and |
• | any disruption or failure in the national backbone network, which would prevent our users from logging on to our website or accessing our services. |
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• | revoking business and operating licenses of CFO Beijing, CFO Software, CFO Stockstar, CFO Genius, CFO Jujin, CFO Zhengning, CFO Wisdom, CFO Success, CFO Juda, CFO Zhengtong, CFO Zhengyong, CFO Fuhua or CFO Meining; |
• | discontinuing or restricting our operations or those of CFO Beijing, CFO Software, CFO Stockstar, CFO Genius, CFO Jujin, CFO Zhengning, CFO Wisdom, CFO Success, CFO Juda, CFO Zhengtong, CFO Zhengyong, CFO Fuhua or CFO Meining; |
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• | imposing conditions or requirements with which we, CFO Beijing, CFO Software, CFO Stockstar, CFO Genius, CFO Jujin, CFO Zhengning, CFO Wisdom, CFO Success, CFO Juda, CFO Zhengtong, CFO Zhengyong, CFO Fuhua or CFO Meining could not satisfy; |
• | requiring us, CFO Beijing, CFO Software, CFO Stockstar, CFO Genius, CFO Jujin, CFO Zhengning, CFO Wisdom, CFO Success, CFO Juda, CFO Zhengtong, CFO Zhengyong, CFO Fuhua or CFO Meining to restructure the relevant ownership structure or operations; |
• | restricting or prohibiting our use of the proceeds of our initial public offering in 2004 to finance our business and operations in China; or |
• | taking other regulatory or enforcement actions, including levying fines that could be harmful to our business. |
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• | Our articles of association provide for a staggered board, which means that our directors, excluding our chief executive officer, are divided into two classes, with half of our board, excluding our chief executive officer, standing for election every two years. Our chief executive officer will at all times serve as a director, and will not retire as a director, so long as he remains our chief executive officer. This means that, with our staggered board, at least two annual shareholders’ meetings, instead of one, are generally required in order to effect a change in a majority of our directors. Our staggered board can discourage proxy contests for the election of our directors and purchases of substantial blocks of our shares by making it more difficult for a potential acquirer to take control of our board in a relatively short period of time. |
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• | Hong Kong law permits shareholders of a company to remove directors by a shareholders’ resolution. Our articles of association require any shareholder who wishes to remove a director in this way to give us at least 120 days’ notice of the resolution, making it more difficult and time consuming for a potential acquirer who has accumulated a substantial voting position to obtain control of our board by removing opposing directors. |
• | Our articles of association provide that our board can have no less than five and no more than nine directors. Our board currently has five directors. Any increase in the maximum number of directors on our board beyond nine directors can only be accomplished by amending our articles of association, which under Hong Kong law requires a shareholders’ supermajority vote of 75% and at least 21 days’ notice. These restrictions can make it more difficult for a potential acquirer who has accumulated a majority of our shares to take control of us by promptly increasing the size of our board and appointing new directors that are its nominees. |
• | Hong Kong does not have merger laws that permit Hong Kong companies to merge in the same way as U.S. companies could in the United States. However, the Hong Kong Companies Ordinance has provisions that facilitate arrangements for the reconstruction and amalgamation of companies. The arrangement must be approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, representing three-fourths in value of each such class of shareholders or creditors that are present and voting either in person or by proxy at meetings convened by the High Court of Hong Kong. The arrangements must be sanctioned by the High Court of Hong Kong after shareholders or creditors approve it at the court-convened meeting. |
• | Our shareholders have authorized our board of directors, without any further action by shareholders, to issue additional shares. Under Hong Kong law, the authority granted by our shareholders will remain valid until the conclusion of our next annual general meeting, or the time when our next annual general meeting is required to be held. For as long as this approval remains effective, or is renewed, our board of directors will have the power to issue additional ordinary shares (including ordinary shares represented by ADSs) and preference shares without any further action by shareholders. |
• | to recognize or enforce against us judgments of courts of the United States based on the civil liability provisions of U.S. securities laws; or |
• | to allow original actions brought in Hong Kong, based on the civil liability provisions of U.S. securities laws that are penal in nature. |
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• | to attract visitors and market our subscription based service offerings. The pool of registered users that are attracted by the two finance portals for information and free services forms a natural target for our subscription services and brokerage services; |
• | to store content and serve as an integral part of our information platform; |
• | to serve as download platforms for our service offerings; and |
• | to display online advertisements. |
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• | financial analysis tools that permit users to calculate and analyze quantitatively financial data; |
• | current and historical financial data and information for China’s and Hong Kong’s listed company stocks, bonds, mutual funds and stock index futures; |
• | categorized news and research reports; and |
• | online forums and bulletin boards. |
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• | Securities market data analysis tools. Our Securities Market Data service packages are developed on the basis of Level II quotes licensed from the Shanghai and Shenzhen Stock Exchanges. In June 2006, we entered into an agreement with SSE Infonet Ltd. Co, which is associated with the Shanghai Stock Exchange. Under the definitive agreement, we are certified by Shanghai Stock Exchange to develop service packages based on Level II quotes, and upgrade the features and functions of our current products. The definitive agreement was contemplated to continue through July 31, 2009 and was renewed in 2009 for an additional three years ending on July 31, 2012. | ||
In April 2010, we were certified by Shenzhen Securities Information Co., Ltd. to develop service packages based on Level II quotes, and upgrade the features and functions of our current products. The definitive agreement is contemplated to continue through March 31, 2011. | |||
Level II quotes give investors unique insight into a stock’s price movement, which, we believe, is of great value to Chinese investors. In addition, Level II quotes provide faster and more comprehensive trading data and statistical information on market transactions. |
• | Technical Analysis.Technical Analysis involves researching historical price and volume data, patterns and trends to predict the performance of a given stock. This type of analysis focuses on chart formations and formulas in identifying major and minor trends to recognize buying opportunities and exit points. |
• | Fundamental Analysis.Fundamental Analysis involves examining the company’s financials and operations, especially sales, earnings, growth potential, assets, debt, management, products, and competition. Fundamental Analysis takes into consideration only those variables that are directly related to the company itself, rather than the overall state of the market or technical analysis data. |
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• | Categorized macro information. This feature allows subscribers to search and sort up-to-date and comprehensive news and information relating to the broader financial markets or a specific financial topic or industry sector. We have a dedicated team of professional editors who collect, organize, categorize and index macro-economic and financial market information on a daily basis, according to user feedback and classification methods that we believe are accepted practice in securities markets in China. |
• | Industry sector analysis. Many investors in China seek to distinguish between listed companies with investment potential and those prone to financial trouble by analyzing listed companies’ financial data published in their financial statements and comparing such data among companies within the same industry sector. We collect and process listed company financial data and information according to classification methods set by relevant PRC regulatory authorities, and allow subscribers to view the relative standings of listed companies in the same industry sector or geographical locations based on market accepted performance parameters, including price-to-earnings ratios and profit margins etc. |
• | Fundamental analysis. Historical and real-time financial information are important to investors because they provide insight into company fundamentals. This research tool integrates the historical and real-time trading information we maintain in our database, as well as fundamental financial information such as earnings-per-share, shareholding structure, business description and competition and other related data and information. Our subscribers can receive fundamental financial and trading information organized by their specifications and display these results on a graphical interface that we designed to be easy to visualize and navigate. |
• | Mutual fund analysis. Our mutual fund research tool focuses on categorizing information relating to the portfolio holdings of mutual funds. This feature allows subscribers to study the collective effect of large market players on individual stocks. This feature also offers information relating to the performance of individual mutual funds, allowing subscribers to assess the risks and rewards of investing in mutual funds. |
• | Technical analysis. This feature allows investors interested in trends formulated by historical trading data to perform technical analysis on listed companies. With over 60 markets accepted technical indicators and a complete database of historical data and information on all of China’s and Hong Kong’s listed company stocks, our subscribers can perform extensive chart analysis and pattern recognition on any stock listed on China’s stock exchanges. |
• | Securities market data analysis. This feature provides faster and more comprehensive trading data and statistical information on market transactions. With our Securities Market Data service packages developed on the basis of Level II quotes licensed from the Shanghai and Shenzhen Stock Exchanges, our subscribers are provided with trading transparency and unique insight into a stock price’s movements, and can make more informed investment decisions. |
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• | to increase the breadth of our service offerings through the addition of new features and functions to our service packages; |
• | to enhance our subscribers’ experience by improving the quality of our research tools and website; |
• | to develop additional research tools, features and content specifically targeting the high-end subscribers; and |
• | to design and build new financial instrument service products that fit our strategies. |
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• | leveraging our own website platform and other online and mobile platform to increase registered user base; |
• | increasing our subscriber base by expanding distribution channels such as other websites, banks, mutual funds and brokerage firms; |
• | building our customer database by better understanding and in depth user data mining on our registered users; |
• | upgrading our existing service offerings and expanding our present service; |
• | improving efficiency by providing telemarketing sales personnel with better training to improve sales skills; and |
• | encouraging our subscribers to migrate to newer and more comprehensive service offerings. |
• | acquiring strategic resources and capabilities in order to strength entry barriers, broaden product offering, expand business scale, diverse revenue resources and monetize registered user base; and |
• | obtaining access to complementary resources and capabilities through strategic partnerships that enable us to penetrate into a bigger market to solidify our leading position and enhance our brand awareness. |
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• | publishers and distributors of traditional media, including print, radio and television as well as radio and television programs and news focused on financial news and information; |
• | internet portals providing information on business, finance and investing; |
• | financial information web pages offered by websites; |
• | personal stock research software vendors, especially those that develop and market stock research software through stock brokerage companies; and |
• | stock brokerage companies, especially stock brokerage companies with online trading capabilities. |
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• | MIIT; |
• | CSRC; |
• | Ministry of Culture; |
• | General Administration of Press and Publication (National Copyright Administration); |
• | State Administration of Industry and Commerce; |
• | Ministry of Public Security; |
• | Ministry of Commerce; and |
• | State Administration of Radio, Film and Television |
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Legal | ||||||
Jurisdiction | Ownership | |||||
of | Interest | |||||
Name | Incorporation | Interest | ||||
Fortune Software (Beijing) Co., Ltd. | PRC | 100 | % | |||
China Finance Online (Beijing) Co., Ltd. | PRC | 100 | % | |||
Beijing Fuhua Innovation Technology Development Co., Ltd. * | PRC | Nil | ||||
Fortune (Beijing) Wisdom Technology Co., Ltd. | PRC | 100 | % | |||
Fortune (Beijing) Success Technology Co., Ltd. | PRC | 100 | % | |||
Fortune (Beijing) Yingchuang Technology Co., Ltd. * | PRC | Nil | ||||
Fortune (Beijing) Qicheng Technology Co., Ltd. * | PRC | Nil | ||||
Beijing CFO Glory Technology Co., Ltd.* | PRC | Nil | ||||
Beijing CFO Premium Technology Co., Ltd* | PRC | Nil | ||||
Beijing Chuangying Advisory and Investment Co., Ltd.* | PRC | Nil | ||||
Huifu Jinyuan Co., Ltd.* | PRC | Nil | ||||
Zhongcheng Futong Co., Ltd.* | PRC | Nil | ||||
Shanghai Meining Computer Software Co., Ltd.* | PRC | Nil | ||||
Shanghai Shangtong Co., Limited. * | PRC | Nil | ||||
Zhengning Information & Technology (Shanghai) Co., Ltd. | PRC | 100 | % | |||
Zhengtong Information Technology (Shanghai) Co., Ltd. | PRC | 100 | % | |||
Zhengyong Information Technology (Shanghai) Co., Ltd. | PRC | 100 | % | |||
Shanghai Chongzhi Co., Ltd.* | PRC | Nil | ||||
Shanghai Decheng Information & Technology Co., Ltd. * | PRC | Nil | ||||
Shanghai Securities Consulting Co., Ltd. * | PRC | Nil | ||||
Jujin Software (Shenzhen) Co., Ltd. | PRC | 100 | % | |||
Juda Software (Shenzhen) Co., Ltd. | PRC | 100 | % | |||
Shenzhen Genius Information Technology Co., Ltd. | PRC | 100 | % | |||
Shenzhen Shangtong Software Co., Ltd. * | PRC | Nil | ||||
Shenzhen Newrand Securities Advisory and Investment Co., Ltd.* | PRC | Nil | ||||
Shenzhen Newrand Securities Training Center* | PRC | Nil | ||||
Stockstar Information Technology (Shanghai) Co., Ltd. | PRC | 100 | % | |||
Giant Bright International Holdings Limited | BVI | 100 | % | |||
Daily Growth Financial Holdings Limited | BVI | 100 | % | |||
Daily Growth Futures Limited | Hong Kong | 100 | % | |||
Daily Growth Securities Limited | Hong Kong | 100 | % | |||
Daily Growth Wealth Management Limited | Hong Kong | 100 | % | |||
Daily Growth Investment Services Limited | Hong Kong | 100 | % | |||
Danford (H.K.) Limited | Hong Kong | 100 | % |
* | Denotes variable interest entity or subsidiaries of variable interest entities |
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• | performance of China’s securities markets, and user demand for market intelligence on China’s securities markets, as well as the overall performance of China’s economy; |
• | termination of our TopView series of market data analysis products. On December 31, 2008, SSE Infonet Ltd. Co terminated the provision of TopView data to third-party software vendors, including us. We subsequently terminated the offering of TopView products to our customers. Our 2009 operating results were impacted from the TopView termination; |
• | contribution of alternative revenue resources such as revenues from online advertising; |
• | seasonality associated with the level of activity of our users and subscribers and the trading activities of China’s securities markets; |
• | tax refund from the PRC tax authorities for value-added-taxes we are required to pay on the sale of subscriptions to our service packages; |
• | other tax incentives we receive from PRC tax authorities resulting from CFO Success, CFO Zhengning and CFO Jujin being the “New Software Manufacture Enterprises” and CFO Software, CFO Meining and CFO Genius being the “High and New Technology” companies; |
• | our cost structure, including, in particular, our cost for raw data, bandwidth costs and personnel-related expenses; |
• | the desirability of our service packages relative to other products and offerings available in the market; |
• | our ability to benefit from the acquisition of CFO Stockstar, CFO Genius, Daily Growth Securities and the contractual arrangements with CFO Newrand, CFO Huifu and CFO Zhongcheng, CFO Qicheng, CFO Yingchuang, CFO Fuhua, CFO Decheng, CFO Shenzhen Shangtong, CFO Shangtong, CFO Chongzhi, CFO Chuangying and CFO Securities Consulting; and |
• | PRC telecommunication and regulatory policies. |
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• | the number of registered user accounts on our websites; |
• | the number of active paying individual subscribers; and |
• | the service packages selected by our subscribers. |
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Years ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Subscription fees | $ | 22,712,043 | $ | 49,551,711 | $ | 46,175,235 | ||||||
Advertising revenue | 1,560,194 | 2,946,389 | 3,985,699 | |||||||||
SMS revenue | 1,339,321 | 1,047,218 | 1,025,927 | |||||||||
Brokerage service revenue | 80,896 | 956,549 | 2,228,630 | |||||||||
Others | 210,620 | 1,740,901 | 190,386 | |||||||||
Total revenue from external customers | $ | 25,903,074 | $ | 56,242,768 | $ | 53,605,877 | ||||||
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• | if we enter into additional commercial agreements for purchasing data from new sources or if we obtain different or additional data from existing sources; or |
• | due to rate increases we may experience in the future upon renewal of our existing agreements. |
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• | The revenue growth is projected at a compound annual growth rate, or CAGR. For the year 2010-2014, the CAGR of the four reporting units are approximately 20%, 12%, 10%, 8%, 3% for Southern China, 36.2%, 19%, 12%, 10%, 5% for Eastern China, 20%, 12%, 10%, 8%, 3% for Northern China and 39.8%, 24.3%, 19.9%, 9.8%, 8.6% for Hong Kong, which is within the range of comparable companies at the time of valuation. |
• | In the projection period, the cost of revenues as a percentage of revenues is expected to remain stable. |
• | Operating expenses, including selling expenses, R&D expenses and general and administrative expenses, as a percentage of sales is expected to remain stable. |
• | To maintain normal operations, capital expenditures are estimated to be around 6%, 8%, 6%, and 6.34% of revenue for the four reporting units, respectively. |
• | The working capital requirement is estimated based on main accounts turnover days. |
• | A perpetual growth rate after 2014 is assumed to be at 3% per year for the four reporting units. |
• | The weighted average cost of capital, or WACC, used in the calculation is 21%, 21%, 21% and 19% for the four reporting units, respectively. |
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(in thousands of U.S. dollars, except as % | For the year ended December 31, | |||||||||||||||||||||||
of net revenues)(1) | 2007 (2)(3) | 2008 (3) | 2009 | |||||||||||||||||||||
(As adjusted) | (As adjusted) | |||||||||||||||||||||||
Consolidated statement of operations and comprehensive income (loss) data: | ||||||||||||||||||||||||
Gross revenues | $ | 26,570 | 102.6 | % | $ | 57,146 | 101.6 | % | $ | 55,108 | 102.8 | % | ||||||||||||
Business tax | (667 | ) | (2.6 | ) | (903 | ) | (1.6 | ) | (1,502 | ) | (2.8 | ) | ||||||||||||
Net revenues | 25,903 | 100 | % | 56,243 | 100 | % | 53,606 | 100 | % | |||||||||||||||
Cost of revenues | (4,427 | ) | (17.1 | ) | (9,367 | ) | (16.7 | ) | (8,147 | ) | (15.2 | ) | ||||||||||||
Gross profit | 21,476 | 82.9 | 46,876 | 83.3 | 45,459 | 84.8 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
General and administrative | (7,784 | ) | (30.1 | ) | (15,371 | ) | (27.3 | ) | (16,982 | ) | (31.7 | ) | ||||||||||||
Product development | (2,269 | ) | (8.8 | ) | (5,635 | ) | (10.0 | ) | (10,754 | ) | (20.1 | ) | ||||||||||||
Sales and marketing | (6,924 | ) | (26.7 | ) | (13,521 | ) | (24.0 | ) | (26,095 | ) | (48.7 | ) | ||||||||||||
Total operating expenses | (16,977 | ) | (65.5 | ) | (34,527 | ) | (61.4 | ) | (53,831 | ) | (100.4 | ) | ||||||||||||
Subsidy income | 136 | 0.5 | 437 | 0.8 | 567 | 1.1 | ||||||||||||||||||
Income (loss) from operations | 4,635 | 17.9 | 12,786 | 22.7 | (7,805 | ) | (14.6 | ) | ||||||||||||||||
Interest income | 1,105 | 4.3 | 1,608 | 2.9 | 1,352 | 2.5 | ||||||||||||||||||
Exchange gain (net) | 424 | 1.6 | 1,490 | 2.6 | 2 | — | ||||||||||||||||||
Other expense (income), net | 9 | 0.03 | (169 | ) | (0.3 | ) | (217 | ) | (0.4 | ) | ||||||||||||||
Loss from impairment of cost method investment | (11,127 | ) | (43.0 | ) | — | — | — | — | ||||||||||||||||
(Loss) income before income taxes benefit (provision) | (4,954 | ) | (19.1 | ) | 15,715 | 27.9 | (6,668 | ) | (12.4 | ) | ||||||||||||||
Purchased pre-acquisition earning | — | — | 227 | 0.4 | — | — | ||||||||||||||||||
Income tax benefit | 809 | 3.1 | 3,047 | 5.4 | 446 | 0.8 | ||||||||||||||||||
Net income (loss) | (4,145 | ) | (16.0 | ) | 18,989 | 33.8 | (6,222 | ) | (11.6 | ) | ||||||||||||||
Less: net loss attributable to noncontrolling interests | 15 | 0.06 | 31 | 0.1 | 2 | — | ||||||||||||||||||
Net income (loss) attributable to China Finance Online Co., Ltd. | $ | (4,130 | ) | (15.9 | %) | $ | 19,020 | 33.8 | % | $ | (6,220 | ) | (11.6 | %) |
(1) | For the results of operations for a specified period, all translations from Renminbi to U.S. dollars were calculated by using the average of the exchange rates on each day during the period. All translations from Renminbi to U.S. dollars were calculated for the periods listed below at the corresponding rates |
For the years ended December 31, | RMB per US$1.00 | |||
2004 | 8.2780 | |||
2005 | 8.1472 | |||
2006 | 7.9693 | |||
2007 | 7.6072 | |||
2008 | 6.9477 | |||
2009 | 6.8310 |
As at December 31, | RMB per US$1.00 | |||
2004 | 8.2765 | |||
2005 | 8.0702 | |||
2006 | 7.8087 | |||
2007 | 7.2946 | |||
2008 | 6.8225 | |||
2009 | 6.8282 |
(2) | In 2007, the Company adopted the authoritative pronouncement “Accounting for Uncertainty in Income Taxes.” | |
(3) | In 2009, the Company adopted the authoritative pronouncement on noncontrolling interests in consolidated financial statements on January 1, 2009, which was applied retrospectively. The following adjustments have been made: |
a) | the noncontrolling interests (previously described as minority interest) has now been included as a component of total equity whereas previously it was shown outside of equity, | ||
b) | the net income or loss attributable to the noncontrolling interests is now shown as an allocation of net income for the year rather than being deducted in arriving at net income. |
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For the year ended December 31, | ||||||||||||
(in thousands of U.S. dollars) | 2007 | 2008 | 2009 | |||||||||
Net cash provided by operating activities | $ | 28,426 | $ | 27,849 | $ | 16,231 | ||||||
Net cash used in investing activities | (4,830 | ) | (7,410 | ) | (6,472 | ) | ||||||
Net cash provided by financing activities | 3,226 | 573 | 189 | |||||||||
Net increase in cash and cash equivalents | 29,773 | 22,815 | 9,847 | |||||||||
Cash and cash equivalents at beginning of year | 44,956 | 74,729 | 97,544 | |||||||||
Cash and cash equivalents at end of year | $ | 74,729 | $ | 97,544 | $ | 107,391 |
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• | increase the breadth of our service offerings through the addition of new features and functions to our service packages; |
• | enhance our subscribers’ experience by improving the quality of our research tools and website; and |
• | develop additional research tools, features and content specifically targeting the high-end subscribers. |
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Office Premises | Data Purchase | Total | ||||||||||
(in U.S. dollars) | ||||||||||||
Less than 1 year | 2,535,100 | 916,912 | 3,452,012 | |||||||||
1 – 3 years | 1,907,031 | 130,278 | 2,037,309 | |||||||||
3 – 5 years | — | — | — |
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Name | Age | Position | ||||
Zhiwei Zhao | 46 | Chief Executive Officer and a member of the Board of Directors | ||||
Hugo Shong | 53 | Chairman of the Board of Directors | ||||
Kheng Nam Lee(1) | 62 | Director | ||||
Ling Wang(1)(2)(3) | 47 | Director | ||||
Fansheng Guo(1)(2)(3) | 54 | Director | ||||
Jun (Jeff) Wang+ | 39 | Chief Financial Officer | ||||
Caogang Li | 44 | Chief Operating Officer |
(1) | Member, audit committee | |
(2) | Member, compensation committee | |
(3) | Member, nominations committee |
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Number of | ||||||||||||
ordinary Shares to | ||||||||||||
be issued upon | Exercise price per | |||||||||||
exercise of options | ordinary share | Date of grant | Date of expiration | |||||||||
Zhiwei Zhao | 400,000 | $ | 1.120 | November 15, 2005 | November 15, 2015 | |||||||
400,000 | $ | 1.070 | July 5, 2006 | July 5, 2016 | ||||||||
800,000 | $ | 0.960 | January 18, 2007 | January 17, 2017 | ||||||||
Hugo Shong | * | $ | 0.160 | January 5, 2004 | March 5, 2009 | |||||||
* | $ | 1.040 | June 15, 2004 | March 5, 2009 | ||||||||
* | $ | 1.314 | February 18, 2005 | February 18, 2015 | ||||||||
* | $ | 0.960 | January 18, 2007 | January 17, 2017 | ||||||||
Kheng Nam Lee | * | $ | 0.160 | February 18, 2004 | March 5, 2009 | |||||||
* | $ | 1.040 | June 15, 2004 | March 5, 2009 | ||||||||
* | $ | 1.314 | February 18, 2005 | February 18, 2015 | ||||||||
* | $ | 0.960 | January 18, 2007 | January 17, 2017 | ||||||||
Fansheng Guo | * | $ | 0.160 | January 5, 2004 | March 5, 2009 | |||||||
* | $ | 1.040 | June 15, 2004 | March 5, 2009 | ||||||||
* | $ | 1.314 | February 18, 2005 | February 18, 2015 | ||||||||
* | $ | 0.960 | January 18, 2007 | January 17, 2017 | ||||||||
Ling Wang | * | $ | 0.160 | January 5, 2004 | March 5, 2009 | |||||||
* | $ | 1.040 | June 15, 2004 | March 5, 2009 | ||||||||
* | $ | 1.314 | February 18, 2005 | February 18, 2015 | ||||||||
* | $ | 0.960 | January 18, 2007 | January 17, 2017 | ||||||||
Jun (Jeff) Wang | * | $ | 1.070 | July 5, 2006 | July 5, 2016 | |||||||
* | $ | 0.960 | January 18, 2007 | January 17, 2017 | ||||||||
Caogang Li | * | $ | 1.158 | November 30, 2005 | November 30, 2015 | |||||||
* | $ | 0.96 | January 18, 2007 | January 17, 2017 | ||||||||
Zuoli (Alex) Xu | * | $ | 1.26 | December 1, 2008 | November 30, 2018 |
* | Upon exercise of all options granted, would beneficially own less than 1% of our outstanding ordinary shares. |
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Name | Number | Percent | ||||||
Selected Employees | ||||||||
Zhiwei Zhao | 8,958,493 | 8.16 | % | |||||
Jun (Jeff) Wang | * | * | ||||||
Caogang Li | * | * | ||||||
All executive officers as a group (3 persons) | 10,558,493 | 9.62 | % |
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• | recommending to our shareholders, if appropriate, the annual re-appointment of our independent registered public accounting firm and pre-approving all auditing and non-auditing service fees permitted to be performed by the independent registered public accounting firm; |
• | annually reviewing an independent registered public accounting firm’s report describing the independent registered public accounting firm’s internal quality-control procedures, any material issues raised by the most recent internal quality control review, or peer review, of the independent registered public accounting firm and all relationships between the independent registered public accounting firm and our company; |
• | setting clear hiring policies for employees or former employees of the independent registered public accounting firm; |
• | reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; |
• | reviewing and approving all proposed related-party transactions, as defined in Item 404 of Regulation S-K under the U.S. securities laws; |
• | discussing the annual audited financial statements with management and the independent registered public accounting firm; |
• | discussing with management and the independent registered public accounting firm major issues regarding accounting principles and financial statement presentations; reviewing reports prepared by management or the independent auditors relating to significant financial reporting issues and judgments; |
• | reviewing reports prepared by management or the independent registered public accounting firm relating to significant financial reporting issues and judgments; |
• | discussing earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies; |
• | reviewing with management and the independent registered public accounting firm the effect of regulatory and accounting initiatives, as well as off-balance sheet structures on our financial statements; |
• | discussing policies with respect to risk assessment and risk management; |
• | reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; |
• | timely reviewing annual reports from the independent registered public accounting firm regarding all critical accounting policies and practices to be adopted by our company, all alternative treatments of financial information within U.S. GAAP that have been discussed with management and all other material written communications between the independent registered public accounting firm and management; |
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• | establishing procedures for the receipt, retention and treatment of complaints received from our employees regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; |
• | annually reviewing and reassessing the adequacy of our audit committee charter; |
• | such other matters that are specifically delegated to our audit committee by our board of directors from time to time; |
• | meeting separately, periodically, with management and the independent registered public accounting firm; and |
• | reporting regularly to the full board of directors. |
• | determining and recommending the compensation of our senior management; |
• | reviewing and making recommendations to our board of directors regarding our compensation policies and forms of compensation provided to our directors and officers; |
• | reviewing and determining bonuses for our officers and other employees; |
• | reviewing and determining stock-based compensation for our directors, officers, employees and consultants; |
• | administering our equity incentive plans in accordance with the terms thereof; and |
• | such other matters that are specifically delegated to the compensation committee by our board of directors from time to time. |
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• | convening shareholders’ meetings and reporting its work to shareholders at such meetings; |
• | implementing shareholders’ resolutions; |
• | determining our business plans and investment proposals; |
• | formulating our profit distribution plans and loss recovery plans; |
• | determining our debt and finance policies and recommending proposals for the increase or decrease in our share capital and the issuance of debentures; |
• | formulating our major acquisition and disposition plans, and plans for consolidation, division or dissolution; |
• | proposing amendments to our articles of association; and |
• | exercising any other powers conferred at shareholders’ meetings or under our memorandum and articles of association. |
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• | each person known to us to own beneficially more than 5% of our ordinary shares; and |
• | each of our directors and executive officers who beneficially own any of our ordinary shares. |
* | Unless otherwise noted, the address of each shareholder is China Finance Online (Beijing) Co., Ltd., 9th Floor of Tower C, Corporate Square, No.35 Financial Street, Xicheng District, Beijing, China 100033. |
Number of Shares Beneficially Owned | ||||||||
Name | Number | Percent | ||||||
5% Shareholder | ||||||||
IDG Technology Venture Investment, Inc.(1) | 16,248,507 | 14.74 | % | |||||
IDG Technology Venture Investments, LP (2) | 6,723,115 | 6.10 | % | |||||
Vertex Technology Fund (III) Ltd. (3) | 7,595,569 | 6.89 | % | |||||
Jianping Lu (4) | 7,156,121 | 6.49 | % | |||||
Ling Zhang (5) | 8,746,370 | 7.93 | % | |||||
C&F International Holdings Limited (6) | 10,558,493 | 9.58 | % | |||||
FMR LLC (7) | 10,993,840 | 9.97 | % | |||||
Directors and executive officers | ||||||||
Hugo Shong | * | * | ||||||
Kheng Nam Lee | * | * | ||||||
Ling Wang | * | * | ||||||
Fansheng Guo | * | * | ||||||
Zhiwei Zhao | 8,946,036 | 8.11 | % | |||||
Jun (Jeff) Wang | * | * | ||||||
Caogang Li | * | * | ||||||
Zuoli (Alex) Xu | * | * | ||||||
All current directors and executive officers as a group (8 persons) | 12,699,248 | 11.52 | % |
* | Upon exercise of all options currently exercisable or vesting within 60 days of the date of this annual report, would beneficially own less than 1% of our ordinary shares. | |
(1) | Includes16,248,507 ordinary shares held by IDG Technology Venture Investment, Inc. IDG Technology Venture Investment, Inc. is the limited partner of IDG Technology Venture Investments, LP and does not control IDG Technology Venture Investments, LP. IDG Technology Venture Investment, Inc., a Massachusetts corporation, is wholly owned by International Data Group Inc., a Massachusetts corporation, which is controlled by Patrick McGovern, the majority shareholder, founder and chairman of International Data Group Inc. IDG Technology Venture Investment, Inc. disclaims beneficial ownership of all of the ordinary shares owned by IDG Technology Venture Investments, LP. The registered address of IDG Technology Venture Investment, Inc. is 5 Speen Street, Framingham, MA 01701, U.S.A. |
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(2) | Includes 6,723,115 ordinary shares held by IDG Technology Venture Investments, LP. The general partner of IDG Technology Venture Investments, LP is IDG Technology Venture Investments, LLC. Messrs. Patrick McGovern and Quan Zhou are managing members of IDG Technology Venture Investments, LLC, both of whom disclaim beneficial ownership of our shares held by IDG Technology Venture Investments, LLC. IDG Technology Venture Investment, Inc. is a limited partner of IDG Technology Venture Investments, LP, and does not control IDG Technology Venture Investments, LP. IDG Technology Venture Investments, LP disclaims beneficial ownership of all of the ordinary shares owned by IDG Technology Venture Investment, Inc. The registered address of IDG Technology Venture Investments, LP is Corporation Service Company, 1013 Centre Road, Wilmington, County of New Castle, Delaware 19805-1297, U.S.A. | |
(3) | Includes 7,595,569 ordinary shares held by Vertex Technology Fund (III) Ltd as of December 31, 2009 in the form of 1,519,113 ADS and 4 ordinary shares. Vertex Management (II) Pte Ltd is the fund manager of Vertex Technology Fund (III) Ltd, and may be deemed to have power to vote and dispose of the shares held of record by Vertex Technology Fund (III) Ltd. Vertex Venture Holdings Ltd, as the sole shareholder of Vertex Technology Fund (III) Ltd, and as the sole shareholder of Vickers Capital Limited, which is the sole shareholder of Vertex Management (II) Pte Ltd, may also be deemed to have the power to vote and dispose of these shares. The address of Vertex Technology Fund (III) Ltd is 250 North Bridge Road, #05-01 Raffles City Tower, Singapore 179101. | |
(4) | Includes (i) 4,028,156 ordinary shares held by Cast Technology, Inc.; and (ii) 3,127,965 ordinary shares held by Fanasia Capital Limited. Both Cast Technology, Inc. and Fanasia Capital Limited are held 45% and 55% by Jianping Lu and Ling Zhang, respectively. | |
(5) | Includes (i) 4,923,302 ordinary shares held by Cast Technology, Inc.; and (ii) 3,823,068 ordinary shares held by Fanasia Capital Limited. Both Cast Technology, Inc. and Fanasia Capital Limited are held 45% and 55% by Jianping Lu and Ling Zhang, respectively. | |
(6) | Includes 10,558,493 ordinary shares held by C&F International Holdings Limited, a company incorporated in British Virgin Islands. C&F International Holdings Limited holds the ordinary shares on behalf of and exclusively for the benefit of the group of employees eligible for the 2007 Equity Incentive Plan. C&F International Holdings Limited is 100% owned by C&F Global Limited, a British Virgin Islands Company, which is in turn owned by the selected employees. | |
(7) | Includes 10,993,840 ordinary shares held by Fidelity Management & Research Company(“Fidelity”), a wholly-owned subsidiary of FMR LLC and an investment adviser. Edward C. Johnson 3d, Chairman of FMR LLC, and FMR LLC, through its control of Fidelity, and the funds each has sole power to dispose of the 10,993,840 shares owned by the funds. Members of the family of Edward C. Johnson 3d are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. Neither FMR LLC nor Edward C. Johnson 3d has the sole power to vote or direct the voting of the shares owned directly by the Fidelity funds. The registered address of FMR LLC is 82 Devonshire Street, Boston, MA 02109, U.S.A. |
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• | a strategic consulting service agreement between CFO Software and CFO Glory; |
• | a technical support agreement between CFO Software and CFO Glory; |
• | an operation agreement between CFO Software and CFO Glory; |
• | Loan agreements with Wu Chen, Zhiwei Zhao and Jun Wang. On September 1, 2007, we entered into a loan agreement with Wu Chen and Zhiwei Zhao, the shareholders of CFO Glory, to extend to each of Wu Chen and Zhiwei Zhao a loan in the amount of $77,000 and $63,000, respectively, for the sole purpose of financing their investments in CFO Glory as CFO Glory’s registered capital. On September 10, 2007, we entered into a loan agreement with Jun Wang to extend to Jun Wang a loan in the amount of $77,000 for the sole purpose of financing Jun Wang to acquire Wu Chen’s entire holdings in CFO Glory; |
• | a purchase option agreement among CFO Software, CFO Glory, Zhiwei Zhao and Jun Wang; |
• | voting arrangements with each of Jun Wang and Zhiwei Zhao regarding their voting rights in CFO Glory; and |
• | a share pledge agreement among CFO Software, Zhiwei Zhao and Jun Wang. |
• | a strategic consulting service agreement between CFO Software and CFO Shangtong; |
• | a technical support agreement between CFO Software and CFO Shangtong; |
• | an operation agreement between CFO Software and CFO Shangtong; |
• | a loan agreement with Shaoming Shi and Lin Yang. We entered into a loan agreement with Lin Yang and Shaoming Shi to extend to each of them a loan in the amount of $80,615 and $65,958, respectively, for the sole purpose of financing their investments in CFO Shangtong as CFO Shangtong’s registered capital; |
• | a purchase option agreement among CFO Software, CFO Shangtong, Lin Yang and Shaoming Shi; |
• | voting arrangements with each of Shaoming Shi and Lin Yang regarding their voting rights in CFO Shangtong; and |
• | a share pledge agreement among CFO Software, Lin Yang and Shaoming Shi. |
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• | a strategic consulting service agreement between CFO Software and CFO Chongzhi; |
• | a technical support agreement between CFO Software and CFO Chongzhi; |
• | an operation agreement between CFO Software and CFO Chongzhi; |
• | a loan agreement with Xun Zhao and Zhenfei Fan. We entered into a loan agreement with Xun Zhao and Zhenfei Fan to extend to them a loan in the amount of $65,958 and $80,615, respectively, for the sole purpose of financing their acquisition of equity interests in CFO Chongzhi; |
• | a purchase option agreement among CFO Software, CFO Chongzhi, Xun Zhao and Zhenfei Fan; |
• | voting arrangements with each of Xun Zhao and Zhenfei Fan regarding their voting rights in CFO Shangtong; and |
• | a share pledge agreement among CFO Software, Xun Zhao and Zhenfei Fan. |
• | a strategic consulting service agreement between CFO Software and CFO Huifu; |
• | a technical support agreement between CFO Software and CFO Huifu; |
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• | an operation agreement between CFO Software and CFO Huifu; |
• | a loan agreement with Shaoming Shi and Lin Yang. We entered into a loan agreement with Shaoming Shi and Lin Yang to extend to each of them a loan in the amount of $5,757 and $8,636, respectively, for the sole purpose of financing their acquisition of equity interests in CFO Huifu; |
• | a purchase option agreement among CFO Software, CFO Huifu, Shaoming Shi and Lin Yang; |
• | voting arrangements with each of Shaoming Shi and Lin Yang regarding their voting rights in CFO Huifu; and |
• | a share pledge agreement among CFO Software, Shaoming Shi and Lin Yang. |
• | a strategic consulting service agreement between CFO Software and CFO Zhongcheng; |
• | a technical support agreement between CFO Software and CFO Zhongcheng; |
• | an operation agreement between CFO Software and CFO Zhongcheng; |
• | a loan agreement with Shaoming Shi and Lin Yang. We entered into a loan agreement with Shaoming Shi and Lin Yang to extend to each of them a loan in the amount of $3,598 and $68,368, respectively, for the sole purpose of financing their acquisition of equity interests in CFO Zhongcheng; |
• | a purchase option agreement among CFO Software, CFO Zhongcheng, Shaoming Shi and Lin Yang; |
• | voting arrangements with each of Shaoming Shi and Lin Yang regarding their voting rights in CFO Zhongcheng; and |
• | a share pledge agreement among CFO Software, Shaoming Shi and Lin Yang. |
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• | a strategic consulting and service agreement between CFO Software and CFO Chuangying; |
• | a technical support agreement between CFO Software and CFO Chuangying; |
• | an operation agreement between CFO Software and CFO Chuangying; |
• | a loan agreement with Yang Yang and Zhenfei Fan. We entered into a loan agreement with Yang Yang and Zhenfei Fan to extend to each of them a loan in the amount of $322,100 and $263,500, respectively, for the sole purpose of financing their acquisition of equity interests in CFO Chuangying; |
• | a purchase option agreement among CFO Software, CFO Chuangying, Yang Yang and Zhenfei Fan; and |
• | voting arrangements with each of Yang Yang and Zhenfei Fan regarding their voting rights in CFO Chuangying. |
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• | a strategic consulting service agreement between CFO Success and CFO Shenzhen Shangtong; |
• | a technical support agreement between CFO Success and CFO Shenzhen Shangtong; |
• | an operation agreement between CFO Success and CFO Shenzhen Shangtong; |
• | a loan agreement with Lin Yang and Shaoming Shi. We entered into a loan agreement with Lin Yang and Shaoming Shi to extend to each of them a loan in the amount of $80,500 and $65,900, respectively, for the sole purpose of financing their acquisition of equity interests in CFO Shenzhen Shangtong; |
• | a purchase option agreement among CFO Success, CFO Shenzhen Shangtong, Lin Yang and Shaoming Shi; |
• | voting arrangements with each of Lin Yang and Shaoming Shi regarding their voting rights in CFO Shenzhen Shangtong; and |
• | a share pledge agreement among CFO Success, Lin Yang and Shaoming Shi. |
• | a strategic consulting service agreement between CFO Chuangying and CFO Qicheng; |
• | a technical support agreement between CFO Chuangying and CFO Qicheng; |
• | an operation agreement between CFO Chuangying and CFO Qicheng; |
• | a loan agreement with Lin Yang and Yang Yang. We entered into a loan agreement with Yang Yang and Lin Yang to extend to each of them a loan in the amount of $80,500 and $65,900, respectively, for the sole purpose of financing their acquisition of equity interests in CFO Qicheng; |
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• | a purchase option agreement among CFO Chuangying, CFO Qicheng, Lin Yang and Yang Yang; |
• | voting arrangements with each of Lin Yang and Yang Yang regarding their voting rights in CFO Qicheng; and |
• | a share pledge agreement among CFO Chuangying, Lin Yang and Yang Yang. |
• | a strategic consulting service agreement between CFO Chuangying and CFO Yingchuang; |
• | a technical support agreement between CFO Chuangying and CFO Yingchuang; |
• | an operation agreement between CFO Chuangying and CFO Yingchuang; |
• | a loan agreement with Yang Yang and Lin Yang. We entered into a loan agreement with Yang Yang and Lin Yang to extend to each of them a loan in the amount of $80,500 and $65,900, respectively, for the sole purpose of financing their acquisition of equity interests in CFO Yingchuang; |
• | a purchase option agreement among CFO Chuangying, CFO Yingchuang, Lin Yang and Yang Yang; |
• | voting arrangements with each of Lin Yang and Yang Yang regarding their voting rights in CFO Yingchuang; and |
• | a share pledge agreement among CFO Chuangying, Lin Yang and Yang Yang. |
• | a strategic consulting service agreement between CFO Chongzhi and CFO Decheng; |
• | a technical support agreement between CFO Chongzhi and CFO Decheng; |
• | an operation agreement between CFO Chongzhi and CFO Decheng; |
• | a loan agreement with Ran Yuan and Zhihong Wang. We entered into a loan agreement with Ran Yuan and Zhihong Wang to extend to each of them a loan in the amount of $8,050 and $6,590, respectively, for the sole purpose of financing their acquisition of equity interests in CFO Decheng; |
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• | a purchase option agreement among CFO Chongzhi,CFO Decheng, Ran Yuan and Zhihong Wang; |
• | voting arrangements with each of Ran Yuan and Zhihong Wang regarding their voting rights in CFO Decheng; and |
• | a share pledge agreement among CFO Chongzhi, Ran Yuan and Zhihong Wang. |
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• | the fifth anniversary of the consummation of our initial public offering, or October 24, 2009; |
• | upon such holder holding less than 1% of our outstanding ordinary shares after our initial public offering; and |
• | upon such holder becoming eligible to sell all of such holder’s registrable securities pursuant to Rule 144 under the Securities Act within any three-month period without volume limitations, under Rule 144(k), or under any comparable securities law of a jurisdiction other than the United States for sale of registrable securities in such jurisdiction. |
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Sales Price | ||||||||
High | Low | |||||||
Yearly highs and lows | ||||||||
Year 2005 | 11.14 | 5.22 | ||||||
Year 2006 | 9.68 | 3.95 | ||||||
Year 2007 | 47.68 | 4.53 | ||||||
Year 2008 | 26.15 | 4.72 | ||||||
Year 2009 | 13.54 | 6.97 | ||||||
Quarterly highs and lows | ||||||||
First Quarter 2008 | 22.43 | 10.02 | ||||||
Second Quarter 2008 | 26.15 | 13.90 | ||||||
Third Quarter 2008 | 18.75 | 10.40 | ||||||
Fourth Quarter 2008 | 11.62 | 4.72 | ||||||
First Quarter 2009 | 11.44 | 6.97 | ||||||
Second Quarter 2009 | 13.54 | 9.17 | ||||||
Third Quarter 2009 | 13.28 | 8.64 | ||||||
Fourth Quarter 2009 | 9.25 | 7.28 | ||||||
First Quarter 2010 | 9.01 | 6.86 | ||||||
Monthly highs and lows | ||||||||
November 2009 | 9.23 | 8.10 | ||||||
December 2009 | 8.24 | 7.28 | ||||||
January 2010 | 9.01 | 7.42 | ||||||
February 2010 | 7.47 | 6.86 | ||||||
March 2010 | 8.31 | 7.15 | ||||||
April 2010 | 8.03 | 7.45 |
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• | dealers in securities or currencies; |
• | traders in securities that elect to use a mark-to-market method of accounting for securities holdings; |
• | banks or other financial institutions; |
• | insurance companies; |
• | tax-exempt organizations; |
• | partnerships and other entities treated as partnerships for U.S. federal income tax purposes or persons holding ADSs through any such entities; |
• | persons that hold ADSs as part of a hedge, straddle, constructive sale, conversion transaction or other integrated investment; |
• | U.S. Holders (as defined below) whose functional currency for tax purposes is not the U.S. dollar; |
• | persons liable for alternative minimum tax; or |
• | persons who actually or constructively own 10% or more of the total combined voting power of all classes of our shares (including ADSs) entitled to vote. |
• | a citizen or resident of the United States for U.S. federal income tax purposes; |
• | a corporation, or other entity taxable as a corporation, that was created or organized in or under the laws of the United States or any political subdivision thereof; |
• | an estate the income of which is subject to U.S. federal income tax regardless of its source; or |
• | a trust if (a) a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (b) the trust has a valid election in effect to be treated as a U.S. person. |
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• | that gain is effectively connected with the conduct of a U.S. trade or business and, if an applicable income tax treaty so requires as a condition for you to be subject to U.S. federal income tax with respect to income from your ADSs, such gain is attributable to a permanent establishment that you maintain in the United States; or |
• | you are a nonresident alien individual and are present in the United States for at least 183 days in the taxable year of the sale or other disposition and either (1) your gain is attributable to an office or other fixed place of business that you maintain in the United States or (2) you have a tax home in the United States. |
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Category | Depositary actions | Associated fee | ||
(a) Depositing or substituting the underlying shares | Each person to whom ADSs are issued against deposits of shares, including deposits and issuances in respect of: | US$5.00 for each 100 ADSs (or portion thereof) evidenced by the ADRs issued | ||
• Share distributions, stock dividend, stock split, merger | ||||
• Exchange of securities or any other transaction or event affecting the ADSs or the deposited securities | ||||
(b) Receiving or distributing dividends | Distribution of cash dividends | US$0.02 or less per ADS | ||
(c) Selling or exercising rights | Distribution or sale of securities, the fee being in an amount equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities | Up to US$5.00 for each 100 ADSs (or portion thereof) |
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Category | Depositary actions | Associated fee | ||||
(d) Withdrawing an underlying security | Acceptance of ADRs surrendered for withdrawal of deposited securities | US$5.00 for each 100 ADSs (or portion thereof) evidenced by the ADRs surrendered | ||||
(e) Transferring, splitting or grouping receipts | Transfers of depositary receipts | US$1.50 per ADS | ||||
(f) General depositary services, particularly those charged on an annual basis | Services performed by the depositary in administering the ADRs | US$0.02 per ADS (or portion thereof) not more than once each calendar year and payable at the sole discretion of the depositary by billing ADR Holders or by deducting such charge from one or more cash dividends or other cash distributions | ||||
(g) Expenses of the Depositary | Expenses incurred on behalf of ADR Holders in connection with: • Compliance with foreign exchange control regulations or any law or regulation relating to foreign investment • The depositary’s or its custodian’s compliance with applicable law, rule or regulation | Expenses payable at the sole discretion of the depositary by billing ADR Holders or by deducting such charges from one or more cash dividends or other cash distributions | ||||
• Stock transfer or other taxes and other governmental charges | ||||||
• Cable, telex and facsimile transmission and delivery charges | ||||||
• fees for the transfer or registration of deposited securities in connection with the deposit or withdrawal of deposited securities | ||||||
• Expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars (which are paid out of such foreign currency) | ||||||
• Any other charge payable by depositary or its agents in connection with the servicing of the shares or the deposited securities |
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We have audited the internal control over financial reporting of China Finance Online Co. Limited and its subsidiaries and its variable interest entities(collectively, the “Group”) as of December 31, 2009, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit.
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Beijing, the People’s Republic of China
May 28, 2010
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For the Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Audit Fees(1) | US$ | 735,000 | US$ | 735,000 | US$ | 635,000 | ||||||
Tax Fees(2) | — | 119,737 | 22,278 |
(1) | “Audit Fees” means the aggregate fees in each of the fiscal years listed for professional services rendered by Deloitte Touche Tohmatsu CPA Ltd. for the audit of our annual financial statements, review of interim financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements. | |
(2) | “Tax Fees” means the aggregate fees billed in each of the fiscal years listed for professional tax services rendered by Deloitte Touche Tohmatsu CPA Ltd. |
Exhibit | ||||
Number | Description | |||
1.1 | Amended and Restated Memorandum and Articles of Association of China Finance Online Co. Limited (incorporated by reference to Exhibit 3.1 from our Registration Statement on Form F-1 (File No. 333-119166) filed with the Securities and Exchange Commission on October 4, 2004) | |||
2.1 | Specimen ordinary share certificate (incorporated by reference to Exhibit 4.1 from our Registration Statement on Form F-1 (File No. 333-119166) filed with the Securities and Exchange Commission on September 21, 2004) | |||
2.2 | Specimen American depositary receipt of China Finance Online Co. Limited (Incorporated by reference to the Registration Statement on Form F-6 (File No. 333-119530) filed with the Securities and Exchange Commission with respect to American depositary shares representing ordinary shares on October 5, 2004 |
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Exhibit | ||||
Number | Description | |||
2.3 | Shareholders Agreement of China Finance Online Co. Limited dated June 2000 among China Finance Online Co., Ltd. and certain of its shareholders (incorporated by reference to Exhibit 4.2 from our Registration Statement on Form F-1 (File No. 333-119166) filed with the Securities and Exchange Commission on September 21, 2004) | |||
4.1 | 2004 Incentive Stock Option Plan and form of option agreement (incorporated by reference to Exhibit 4.1 from our 2006 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 29, 2007) | |||
4.2 | Restricted Stock Issuance and Allocation Agreement-2007 Equity Incentive Plan (incorporated by reference to Exhibit 99.1 on Form 6-K (File No. 000-50975) filed with the Securities and Exchange Commission on August 24, 2007) | |||
4.3 | * | Amended Restricted Stock Issuance and Allocation Agreement 2007 Equity Incentive Plan dated May 20, 2009 | ||
4.4 | Form of Option Agreement with outside consultants and strategic advisors (incorporated by reference to Exhibit 10.2 from our Registration Statement on Form F-1 (File No. 333-119166) filed with the Securities and Exchange Commission on September 21, 2004) | |||
4.5 | Purchase Option and Cooperation Agreement dated May 27, 2004 among China Finance Online Co. Limited, Jun Ning, Wu Chen and CFO Fuhua Innovation Technology Development Co., Ltd. (incorporated by reference to Exhibit 10.3 from our Registration Statement on Form F-1 (File No. 333-119166) filed with the Securities and Exchange Commission on September 21, 2004) | |||
4.6 | Share Pledge Agreement dated May 27, 2004 among Jun Ning, Wu Chen and China Finance Online (Beijing) Co., Ltd. (incorporated by reference to Exhibit 10.4 from our Registration Statement on Form F-1 (File No. 333-119166) filed with the Securities and Exchange Commission on September 21, 2004) | |||
4.7 | Proxy from Wu Chen to Jian Feng dated May 27, 2004 (incorporated by reference to Exhibit 10.6 from our Registration Statement on Form F-1 (File No. 333-119166) filed with the Securities and Exchange Commission on September 21, 2004) | |||
4.8 | Framework Agreement on Exercising Purchase Option dated November 20, 2006 by and among Jun Ning, Wu Chen, Zhiwei Zhao, CFO Fuhua Innovation Technology Development Co., Ltd. and China Finance Online (Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.7 from our 2006 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 29, 2007) | |||
4.9 | Purchase Option and Cooperation Agreement dated November 20, 2006 among China Finance Online Co. Limited, Zhiwei Zhao, Wu Chen, Fuhua Innovation Technology Development Co., Ltd. and China Finance Online (Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.10 from our 2006 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 29, 2007) | |||
4.10 | Share Pledge Agreement dated November 20, 2006 among Zhiwei Zhao, Wu Chen, Fuhua Innovation Technology Development Co., Ltd. and China Finance Online (Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.11 from our 2006 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 29, 2007) | |||
4.11 | Equipment Lease Agreement between China Finance Online (Beijing) Co., Ltd. and Fuhua Innovative Technology Development Co., Ltd. dated May 27, 2004 (incorporated by reference to Exhibit 10.7 from our Registration Statement on Form F-1 (File No. 333-119166) filed with the Securities and Exchange Commission on September 21, 2004) | |||
4.12 | Technical Support Agreement between China Finance Online (Beijing) Co., Ltd. and Fuhua Innovative Technology Development Co., Ltd. dated May 27, 2004 (incorporated by reference to Exhibit 10.8 from our Registration Statement on Form F-1 (File No. 333-119166) filed with the Securities and Exchange Commission on September 21, 2004) |
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Exhibit | ||||
Number | Description | |||
4.13 | Amended and Restated Strategic Consulting Agreement between China Finance Online (Beijing) Co., Ltd. and Fuhua Innovative Technology Development Co., Ltd. dated May 27, 2004 (incorporated by reference to Exhibit 10.9 from our Registration Statement on Form F-1 (File No. 333-119166) filed with the Securities and Exchange Commission on September 21, 2004) | |||
4.14 | Framework Agreement on Exercising Purchase Option dated October 18, 2007 by and among China Finance Online Co. Limited, Wu Chen, Zhiwei Zhao, Jun Wang, CFO Fuhua Innovation Technology Development Co., Ltd and China Finance Online (Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.15 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.15 | Loan Agreement between China Finance Online Co. Limited and Jun Wang dated October 18, 2007 (incorporated by reference to Exhibit 4.16 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.16 | Share Transfer Contract (related to shares of Beijing Fuhua Innovation Technology Development Co., Ltd.) dated October 18, 2007 by and between Wu Chen and Jun Wang (incorporated by reference to Exhibit 4.17 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.17 | Share Pledge Agreement dated October 18, 2007 among Zhiwei Zhao, Jun Wang, Fuhua Innovation Technology Development Co., Ltd. and China Finance Online (Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.18 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.18 | Purchase Option and Cooperation Agreement dated October 18, 2007 among China Finance Online Co. Limited, Zhiwei Zhao, Jun Wang and CFO Fuhua Innovation Technology Development Co., Ltd. (incorporated by reference to Exhibit 4.19 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.19 | Purchase Option and Coopration Agreement dated March 3, 2008 among China Finance Online Co. Limited, Zhiwei Zhao, Jun Wang and CFO Fuhua Innovation Technology Development Co., Ltd. (incorporated by reference to Exhibit 4.20 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.20 | Capital Increase Agreement relating to CFO Fuhua Innovation Technology Development Co., Ltd. dated March 3, 2008 among CFO Fuhua Innovation Technology Development Co., Ltd., Jun Wang and Zhiwei Zhao (incorporated by reference to Exhibit 4.21 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.21 | Loan Agreement dated March 3, 2008 among China Finance Online (Beijing) Co., Ltd., Jun Wang and Zhiwei Zhao (incorporated by reference to Exhibit 4.22 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.22 | Share Pledge Agreement dated March 3,2008 among Zhiwei Zhao, Jun Wang, Fuhua Innovation Technology Development Co., Ltd. and China Finance Online (Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.23 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.23 | Loan Agreement dated August 21, 2007 among Fortune Software (Beijing) Co., Ltd., Wei Xiong and Zhenfei Fan (incorporated by reference to Exhibit 4.24 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) |
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Exhibit | ||||
Number | Description | |||
4.24 | Operation Agreement among dated August 21, 2007 by and between Fortune Software (Beijing) Co., Ltd. and Beijing CFO Premium Technology Co., Ltd.(incorporated by reference to Exhibit 4.25 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.25 | Technical Support Agreement between Fortune Software (Beijing) Co., Ltd. and Beijing CFO Premium Technology Co., Ltd. dated August 21, 2007 (incorporated by reference to Exhibit 4.26 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.26 | Strategic Consulting and Service Agreement between Fortune Software (Beijing) Co., Ltd. and Beijing Premium Technology Co., Ltd. dated August 21, 2007 (incorporated by reference to Exhibit 4.27 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.27 | Purchase Option Agreement dated August 21, 2007 among Fortune Software. Limited, Wei Xiong, Zhenfei Fan and Beijing Premium Technology Co., Ltd. (incorporated by reference to Exhibit 4.28 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.28 | Framework Agreement among Fortune Software (Beijing) Co., Ltd., Wu Chen, Jun Wang and Beijing Glory Co., Ltd. dated September 10, 2007 (incorporated by reference to Exhibit 4.29 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.29 | Loan Agreement dated September 1, 2007 among Fortune Software (Beijing) Co., Ltd., Wu Chen and Zhiwei Zhao (incorporated by reference to Exhibit 4.30 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.30 | Share Transfer Contract (related to shares of Beijing Glory Co., Ltd.) dated September 10, 2007 by and between Wu Chen and Jun Wang (incorporated by reference to Exhibit 4.31 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.31 | Operation Agreement dated September 10, 2007 by and between Fortune Software (Beijing) Co.,Ltd. and Beijing Glory Co., Ltd. (incorporated by reference to Exhibit 4.32 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.32 | Technical Support Agreement between Fortune Software (Beijing) Co., Ltd. and Beijing CFO Glory Co., Ltd. dated September 10, 2007 (incorporated by reference to Exhibit 4.33 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.33 | Strategic Consulting and Service Agreement between Fortune Software (Beijing) Co., Ltd. and Beijing Glory Co., Ltd. dated September 10, 2007 (incorporated by reference to Exhibit 4.34 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.34 | Purchase Option Agreement dated September 10, 2007 among China Finance Online Co. Limited, Jun Wang, Zhiwei Zhao and Beijing Glory Co., Ltd. (incorporated by reference to Exhibit 4.3 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.35 | * | Framework Agreement for Exercise of Purchase Option dated June 2, 2009 among Wei Xiong, Zhenfei Fan, Zhiwei Zhao, Jun Wang, CFO Software and CFO Premium | ||
4.36 | * | Purchase Option Agreement dated June 2, 2009 among CFO Software, CFO Premium, Zhiwei Zhao and Jun Wang |
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Exhibit | ||||
Number | Description | |||
4.37 | * | Share Pledge Agreement dated June 2, 2009 among CFO Software, Zhiwei Zhao and Jun Wang | ||
4.38 | Loan Agreement dated January 21, 2009 among CFO Software, Yang Yang and Zhenfei Fan (incorporated by reference to Exhibit 4.92 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.39 | Purchase Option Agreement dated January 21, 2009 among CFO Software, CFO Chuangying (formerly known as Guangzhou Boxin Investment Advisory Co., Ltd.), Yang Yang and Zhenfei Fan (incorporated by reference to Exhibit 4.93 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.40 | * | Operation Agreement dated February 12, 2009 between CFO Software and CFO Chuangying | ||
4.41 | * | Technical Support Agreement dated February 12, 2009 between CFO Software and CFO Chuangying | ||
4.42 | * | Strategic Consulting and Service Agreement dated February 12, 2009 between CFO Software and CFO Chuangying | ||
4.43 | * | Framework Agreement for Exercise of Purchase Option dated October 15, 2009 among Yang Yang, Zhenfei Fan, Zhiwei Zhao, Jun Wang, CFO Chuangying and CFO Software | ||
4.44 | * | Purchase Option Agreement dated October 15, 2009 among CFO Software, CFO Chuangying, Zhiwei Zhao and Jun Wang | ||
4.45 | * | Loan Agreement dated August 3, 2009 among CFO Success, Lin Yang and Shaoming Shi | ||
4.46 | * | Share Pledge Agreement dated August 3, 2009 among CFO Success, Lin Yang and Shaoming Shi | ||
4.47 | * | Purchase Option Agreement dated August 3, 2009 among CFO Success, CFO Shenzhen Shangtong, Lin Yang and Shaoming Shi | ||
4.48 | * | Operation Agreement dated August 3, 2009 between CFO Success and CFO Shenzhen Shangtong | ||
4.49 | * | Technical Support Agreement dated August 3, 2009 between CFO Success and CFO Shenzhen Shangtong | ||
4.50 | * | Strategic Consulting and Service Agreement dated August 3, 2009 between CFO Success and CFO Shenzhen Shangtong | ||
4.51 | * | Loan Agreement dated November 20, 2009 among CFO Chuangying, Yang Yang and Lin Yang | ||
4.52 | * | Share Pledge Agreement dated November 20, 2009 among CFO Chuangying, Yang Yang and Lin Yang | ||
4.53 | * | Purchase Option Agreement dated November 20, 2009 among CFO Chuangying, CFO Qicheng, Yang Yang and Lin Yang | ||
4.54 | * | Operation Agreement dated November 20, 2009 between CFO Chuangying and CFO Qicheng | ||
4.55 | * | Technical Support Agreement dated November 20, 2009 between CFO Chuangying and CFO Qicheng | ||
4.56 | * | Strategic Consulting and Service Agreement dated November 20, 2009 between CFO Chuangying and CFO Qicheng | ||
4.57 | * | Loan Agreement dated November 25, 2009 among CFO Chuangying, Yang Yang and Lin Yang |
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Exhibit | ||||
Number | Description | |||
4.58 | * | Share Pledge Agreement dated November 25, 2009 among CFO Chuangying, Yang Yang and Lin Yang | ||
4.59 | * | Purchase Option Agreement dated November 25, 2009 among CFO Chuangying, CFO Yingchuang, Yang Yang and Lin Yang | ||
4.60 | * | Operation Agreement dated November 25, 2009 between CFO Chuangying and CFO Yingchuang | ||
4.61 | * | Technical Support Agreement dated November 25, 2009 between CFO Chuangying and CFO Yingchuang | ||
4.62 | * | Strategic Consulting and Service Agreement dated November 25, 2009 between CFO Chuangying and CFO Yingchuang | ||
4.63 | * | Loan agreement dated November 30, 2009 among CFO Chuangying, Ran Yuan and Zhihong Wang | ||
4.64 | * | Share Pledge Agreement dated November 25, 2009 among CFO Chongzhi, Ran Yuan and Zhihong Wang | ||
4.65 | * | Purchase Option Agreement dated November 30, 2009 among CFO Chongzhi, CFO Decheng, Ran Yuan and Zhihong Wang | ||
4.66 | * | Operation Agreement dated November 30, 2009 between CFO Chongzhi and CFO Decheng | ||
4.67 | * | Technical Support Agreement dated November 30, 2009 between CFO Chongzhi and CFO Decheng | ||
4.68 | * | Strategic Consulting and Service Agreement dated November 30, 2009 between CFO Chongzhi and CFO Decheng | ||
4.69 | * | Shanghai Stock Exchange Level-II Quotations License Agreement dated July 30, 2009 between SSE Infonet Ltd. and Fortune Software (Beijing) Co., Ltd. (certain portions of the agreement have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment, which request is pending) | ||
4.70 | License Agreement relating to the distribution of TopView between Fortune Software (Beijing) Co., Ltd. and Shanghai Stock Exchange Information Network Co., Ltd. dated December 26, 2007 (incorporated by reference to Exhibit 4.37 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.71 | * | Shenzhen Stock Exchange Proprietary Information License Agreement dated April 15, 2010 between Fortune Software (Beijing) Co., Ltd. and Shenzhen Securities Information Co., Ltd. (certain portions of the agreement have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment, which request is pending) | ||
4.72 | * | Securities Information License Contract dated January 28, 2010 between SSE Infonet Ltd. and CFO Software (certain portions of the agreement have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment, which request is pending) | ||
4.73 | * | Shenzhen Stock Exchange Quatations(Web Based Plus Version) License Agreement dated October 21, 2009 between Shenzhen Stock Exchange and Fortune Software (Beijing) Co., Ltd. |
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Exhibit | ||||
Number | Description | |||
4.74 | * | Basic Market Prices Agreement dated September 28, 2009 between HKEx Information Services Limited and China Finance Online Co., Ltd. (certain portions of the agreement have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment, which request is pending) | ||
4.75 | * | China Financial Futures Exchange Futures Information License Agreement dated April 8, 2009 between CFO Software and China Financial Futures Exchange (certain portions of the agreement have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment, which request is pending) | ||
4.76 | Lease Contract for Housing Unit of Corporate Square dated August 9, 2007 between Fortune Software (Beijing) Co. Ltd. and China Galaxy Securities Company Limited (incorporated by reference to Exhibit 4.46 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.77 | Lease Contract for Housing Unit of Corporate Square dated August 9, 2007 between Beijing Fuhua Innovation Technology Development Co., Ltd. and China Galaxy Securities Company Limited (incorporated by reference to Exhibit 4.47 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.78 | Lease Contract for Housing Unit of Corporate Square dated August 1, 2007 between China Finance Online (Beijing) Co., Ltd. and China Galaxy Securities Company Limited (incorporated by reference to Exhibit 4.48 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.79 | Lease Contract for Housing Unit of Corporate Square dated August 1, 2007 between Beijing Fuhua Innovation Technology Development Co., Ltd. and China Galaxy Securities Company Limited (incorporated by reference to Exhibit 4.49 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.80 | Lease Contract for Housing Unit of Corporate Square dated August 1, 2007 between Fortune Software (Beijing) Co. Ltd. and China Galaxy Securities Company Limited (incorporated by reference to Exhibit 4.50 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.81 | * | Lease Contract dated June 26, 2009 between China National Precision Machinery I&E Corp. Beijing Aerospace CPMIEC Building and CFO Wisdom (Unit 619) | ||
4.82 | * | Lease Contract dated June 26,2009 between China National Precision Machinery I&E Corp. Beijing Aerospace CPMIEC Building and CFO Wisdome (Unit 621) | ||
4.83 | * | Lease Contract dated June 26,2009 between China National Precision Machinery I&E Corp. Beijing Aerospace CPMIEC Building and CFO Wisdom (Unit 622) | ||
4.84 | * | Lease Contract dated June 26, 2009 between China National Precision Machinery I&E Corp. Beijing Aerospace CPMIEC Building and CFO Success (Unit 623) | ||
4.85 | * | Lease Contract dated June 26,2009 between China National Precision Machinery I&E Corp. Beijing Aerospace CPMIEC Building and CFO Software (Unit 626) | ||
4.86 | * | Lease Contract dated March 30, 2009 between Beijing Jintai Hengye Co., Ltd. House Lease Branch and CFO Wisdom (Unit 1106) | ||
4.87 | * | Suntrans Office Building Lease Contract dated April 30, 2009 between Beijing Suntrans Real Estate Development Co. Ltd. and CFO Chuangying (Unit 1125-1136) | ||
4.88 | * | Suntrans Office Building Lease Contract dated April 30, 2009 between Beijing Suntrans Real Estate Development Co. Ltd. CFO Yingchuang (Unit 1137-1140) | ||
4.89 | * | Suntrans Office Building Lease Contract dated April 30, 2009 between Beijing Suntrans Real Estate Development Co. Ltd. and CFO Qicheng (Unit 1141-1144) | ||
4.90 | * | Suntrans Office Building Lease Contract dated April 30, 2009 between Beijing Suntrans Real Estate Development Co. Ltd. and CFO Wisdom (Unit 1145-1148) |
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Exhibit | ||||
Number | Description | |||
4.91 | Agreement for the Sale and Purchase of Shares in Daily Growth Investment Company Limited dated September 7, 2007 among William Wang, FNG International Holdings Limited and China Finance Online Co. Limited (incorporated by reference to Exhibit 4.51 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.92 | Agreement for the Sale and Purchase of Shares in Daily Growth Investment Company Limited dated September 7, 2007 among Tsang Kin-Woo, FNG International Holdings Limited and China Finance Online Co., Limited (incorporated by reference to Exhibit 4.52 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.93 | Agreement for the Sale and Purchase of Shares in Daily Growth Investment Company Limited dated September 7, 2007 among Wong Chan Miu-Wan Stella, FNG International Holdings Limited and China Finance Online Co. Limited (incorporated by reference to Exhibit 4.53 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.94 | Agreement for the Sale and Purchase of Shares in Daily Growth Investment Company Limited dated September 7, 2007 among Shun Kin Enterprises Limited, FNG International Holdings Limited and China Finance Online Co. Limited (incorporated by reference to Exhibit 4.54 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.95 | Agreement for the Sale and Purchase of Shares in Daily Growth Investment Company Limited dated September 7, 2007 among Midopa Enterprises Limited, FNG International Holdings Limited and China Finance Online Co. Limited (incorporated by reference to Exhibit 4.55 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.96 | Agreement for the Sale and Purchase of Shares in Daily Growth Investment Company Limited dated September 7, 2007 among Hung Yung, FNG International Holdings Limited and China Finance Online Co. Limited (incorporated by reference to Exhibit 4.56 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.97 | Agreement for the Sale and Purchase of Shares in Daily Growth Investment Company Limited dated September 7, 2007 among Chu Ping-Im, FNG International Holdings Limited and China Finance Online Co. Limited (incorporated by reference to Exhibit 4.57 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.98 | Agreement for the Sale and Purchase of Shares in Daily Growth Investment Company Limited dated September 7, 2007 among Eternal Growth Investment Limited, FNG International Holdings Limited and China Finance Online Co. Limited (incorporated by reference to Exhibit 4.58 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.99 | Form of indemnification agreement for directors and officers (incorporated by reference to Exhibit 10.18 from our Registration Statement on Form F-1 (File No. 333-119166) filed with the Securities and Exchange Commission on September 21, 2004) | |||
4.100 | Labor Contract of Jeff Wang dated May 24, 2006 (incorporated by reference to Exhibit 4.25 from our 2006 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 29, 2007) | |||
4.101 | Labor Contract of Zhao Zhiwei dated June 21, 2005 (incorporated by reference to Exhibit 4.26 from our Annual Report on Form 20-F filed with the Securities and Exchange Commission on May 23, 2006) |
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Exhibit | ||||
Number | Description | |||
4.102 | Form of Amended Change in Control Agreement dated October 15, 2008 (incorporated by reference to Exhibit 4.55 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.103 | Engagement Letter between China Finance Online Co., Ltd. and Deloitte Touche Tohmatsu CPA. Ltd dated February 26, 2008 (incorporated by reference to Exhibit 4.67 from our 2007 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on June 5, 2008) | |||
4.104 | Loan Agreement dated May 8, 2008 among Fortune Software (Beijing) Co., Ltd., Lin Yang and Shaoming Shi (incorporated by reference to Exhibit 4.57 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.105 | Operation Agreement dated June 8, 2008 between Fortune Software (Beijing) Co., Ltd. and Shanghai Shangtong Information Technology Co., Ltd. (incorporated by reference to Exhibit 4.58 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.106 | Technical Support Agreement dated June 8, 2008 between Fortune Software (Beijing) Co., Ltd. and Shanghai Shangtong Information Technology Co., Ltd. (incorporated by reference to Exhibit 4.59 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.107 | Strategic Consulting Service Agreement dated June 8, 2008 between Fortune Software (Beijing) Co., Ltd. and Shanghai Shangtong Information Technology Co., Ltd. (incorporated by reference to Exhibit 4.60 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.108 | Purchase Option and Cooperation Agreement dated June 8, 2008 among Fortune Software(Beijing) Co., Ltd., Lin Yang, Shaoming Shi and Shanghai Shangtong Information Technology Co., Ltd. (incorporated by reference to Exhibit 4.61 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.109 | Share Pledge Agreement dated June 8, 2008 among Lin Yang, Shaoming Shi and Fortune Software(Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.62 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.110 | * | Framework Agreement on Exercising Purchase Option dated January 5, 2010 by and among Shaoming Shi, Lin Yang, Juanjuan Wang, Minghua Wang, Shanghai Shangtong Co., Ltd. and Fortune Software (Beijing) Co., Ltd. | ||
4.111 | * | Purchase Option and Cooperation Agreement dated January 5, 2010 among Fortune Software(Beijing) Co., Ltd., Juanjuan Wang, Minghua Wang and Shanghai Shangtong Co., Ltd. | ||
4.112 | * | Share Pledge Agreement dated January 5, 2010 among Juanjuan Wang, Minghua Wang and Fortune Software(Beijing) Co., Ltd. | ||
4.113 | Loan Agreement dated May 8, 2008 among Fortune Software (Beijing) Co., Ltd., Zhenfei Fan and Xun Zhao (incorporated by reference to Exhibit 4.63 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.114 | Operation Agreement dated June 8, 2008 between Fortune Software (Beijing) Co., Ltd. and Shanghai Chongzhi Information Technology Co., Ltd. (also known as Shanghai Chongzhi Co., Ltd.) (incorporated by reference to Exhibit 4.64 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) |
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Exhibit | ||||
Number | Description | |||
4.115 | Technical Support Agreement dated June 8, 2008 between Fortune Software (Beijing) Co., Ltd. and Shanghai Chongzhi Co., Ltd. (incorporated by reference to Exhibit 4.65 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.116 | Strategic Consulting Service Agreement dated June 8, 2008 between Fortune Software (Beijing) Co., Ltd. and Shanghai Chongzhi Co., Ltd. (incorporated by reference to Exhibit 4.66 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.117 | Purchase Option and Cooperation Agreement dated June 8, 2008 among Fortune Software(Beijing) Co., Ltd., Zhenfei Fan, Xun Zhao and Shanghai Chongzhi Co., Ltd. (incorporated by reference to Exhibit 4.67 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.118 | Share Pledge Agreement dated June 8, 2008 among Zhenfei Fan, Xun Zhao and Fortune Software(Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.68 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.119 | * | Framework Agreement on Exercising Purchase Option dated January 8, 2010 by and among Zhenfei Fan, Xun Zhao, Zhengyan Wu, Shanghai Chongzhi Co., Ltd., and Fortune Software (Beijing) Co., Ltd. | ||
4.120 | * | Purchase Option and Cooperation Agreement dated January 8, 2010 among Fortune Software(Beijing) Co., Ltd., Zhengyan Wu, Xun Zhao and Shanghai Chongzhi Co., Ltd. | ||
4.121 | * | Share Pledge Agreement dated January 8, 2010 among Zhengyan Wu, Xun Zhao and Fortune Software(Beijing) Co., Ltd. | ||
4.122 | Loan Agreement dated August 21, 2008 among Fortune Software (Beijing) Co., Ltd., Shaoming Shi and Lin Yang (incorporated by reference to Exhibit 4.69 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.123 | Operation Agreement dated October 15, 2008 by and between Fortune Software (Beijing) Co., Ltd. and Zhongcheng Futong Co., Ltd. (formerly known as Beijing Tongxinshengshi Environment Engineering Co., Ltd.) (incorporated by reference to Exhibit 4.70 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.124 | Technical Support Agreement dated October 15, 2008 between Fortune Software (Beijing) Co., Ltd. and Zhongcheng Futong Co., Ltd. (incorporated by reference to Exhibit 4.71 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.125 | Strategic Consulting Service Agreement dated October 15, 2008 between Fortune Software (Beijing) Co., Ltd. and Zhongcheng Futong Co., Ltd. (incorporated by reference to Exhibit 4.72 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.126 | Purchase Option Agreement dated October 15, 2008 among Fortune Software(Beijing) Co., Ltd., Shaoming Shi, Lin Yang and Zhongcheng Futong Co., Ltd. (incorporated by reference to Exhibit 4.73 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.127 | * | Framework Agreement on Exercising Purchase Option dated January 5, 2010 by and among Shaoming Shi, Lin Yang, Dongmei Wang, Wei Cui, Zhongcheng Futong Co., Ltd. and Fortune Software (Beijing) Co., Ltd. |
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Exhibit | ||||
Number | Description | |||
4.128 | * | Purchase Option and Cooperation Agreement dated January 5, 2010 among Fortune Software(Beijing) Co., Ltd., Dongmei Wang, Wei Cui and Zhongcheng Futong Co., Ltd. | ||
4.129 | * | Share Pledge Agreement dated January 5, 2010 among Dongmei Wang, Wei Cui and Fortune Software(Beijing) Co., Ltd. | ||
4.130 | Share Transfer Agreement dated August 19, 2008 among Lin Yang, Shaoming Shi, Xin Wang and Zhihua Yang (incorporated by reference to Exhibit 4.74 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.131 | Loan Agreement dated August 21, 2008 among Fortune Software (Beijing) Co., Ltd., Shaoming Shi and Lin Yang (incorporated by reference to Exhibit 4.75 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.132 | Operation Agreement dated October 15, 2008 by and between Fortune Software (Beijing) Co., Ltd. and Huifu Jinyuan Co., Ltd., (formerly known as Wisdom Door (Beijing) International Culture Spread Co., Ltd.) (incorporated by reference to Exhibit 4.76 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.133 | Technical Support Agreement dated October 15, 2008 by and between Fortune Software (Beijing) Co., Ltd. and Huifu Jinyuan Co., Ltd., (incorporated by reference to Exhibit 4.77 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.134 | Strategic Consulting Service Agreement dated October 15, 2008 between Fortune Software (Beijing) Co., Ltd. and Huifu Jinyuan Co., Ltd., (incorporated by reference to Exhibit 4.78 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.135 | Purchase Option Agreement dated October 15, 2008 among Fortune Software(Beijing) Co., Ltd., Shaoming Shi, Lin Yang and Huifu Jinyuan Co., Ltd., (incorporated by reference to Exhibit 4.79 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.136 | Share Transfer Agreement dated September 25, 2008 among Lin Yang, Shaoming Shi, Yiming Li and Xu Wang (incorporated by reference to Exhibit 4.80 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.137 | Loan Agreement dated October 17, 2008 between Fortune Software (Beijing) Co., Ltd. and Lin Yang (incorporated by reference to Exhibit 4.81 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.138 | Loan Agreement dated October 17, 2008 among Fortune Software (Beijing) Co., Ltd., Fortune (Beijing) Success Technology Co., Ltd. and Linghaima (incorporated by reference to Exhibit 4.82 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.139 | Purchase Option Agreement dated October 17, 2008 among Fortune Software (Beijing) Co., Ltd., Shenzhen Newland Securities Investment and Advisory Co., Ltd. and Lin Yang (incorporated by reference to Exhibit 4.83 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.140 | Purchase Option Agreement dated October 17, 2008 among Fortune Software (Beijing) Co., Ltd., Fortune (Beijing) Success Technology Co., Ltd., Shenzhen Newland Securities Investment and Advisory Co., Ltd. and Linghai Ma (incorporated by reference to Exhibit 4.84 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) |
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Exhibit | ||||
Number | Description | |||
4.141 | Share Transfer Agreement dated September 16, 2008 among Linhai Ma, Lin Yang, Shenzhen Guoxuan Capital Holding Co., Ltd., Labor Union Committee of Shenzhen Newland Securites Investment Advisory Co., Ltd., Zhaowen Li and Shiqin Wang (incorporated by reference to Exhibit 4.85 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.142 | * | Securities Investment and Consultancy Information and Technical Support Agreement dated October 17, 2009 between Shenzhen Newland Securities Investment and Advisory Co., Ltd. and Shenzhen Genius Information Technology Co., Ltd. | ||
4.143 | * | Securities Investment and Consultancy Information and Technical Support Agreement dated January 27, 2010 between Shanghai Securities Consulting Co.,Ltd. and Shanghai Meining Computer Software Co., Ltd. | ||
4.144 | * | Securities Investment and Consultancy Information and Technical Support Agreement dated January 27, 2010 between Beijing Chuangying Advisory and Investment Co., Ltd. and Beijing Fuhua Innovation Technology Development Co., Ltd. | ||
4.145 | Loan Agreement dated January 21, 2009 among Fortune Software (Beijing) Co., Ltd., Yang Yang and Zhenfei Fan (incorporated by reference to Exhibit 4.92 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.146 | Lease Contract dated January 10, 2008 between Shanghai Lushi Food Co., Ltd. and Shanghai Meining Computer Software Co., Ltd. (incorporated by reference to Exhibit 4.96 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.147 | Lease Contract dated April 10, 2008 between Shenzhen Zhiguangda Industrial Development Co., Ltd. and Shenzhen Genius Information Technology Co., Ltd. (incorporated by reference to Exhibit 4.99 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.148 | Entrusted Loan Contract dated May 7, 2008 among Fortune (Beijing) Success Technology Co., Ltd., Beijing Glory Co., Ltd. and China Bohai Bank Co., Ltd. Beijing Branch (incorporated by reference to Exhibit 4.100 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.149 | Entrusted Loan Contract dated December 11, 2007 among Beijing Glory Co., Ltd., Fortune Software (Beijing) Co., Ltd. and China Construction Bank (incorporated by reference to Exhibit 4.101 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.150 | Entrusted Loan Contract dated April 11, 2008 between Beijing Premium Technology Co., Ltd., Zhengning Information Technology (Shanghai) Co., Ltd. and China Construction Bank Corporation (incorporated by reference to Exhibit 4.102 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) | |||
4.151 | * | Entrusted Loan Contract dated January 12, 2009 among CFO Success, CFO Glory and Hua Xia Bank Co, Ltd. Beijing Zizhuqiao Branch | ||
4.152 | Issuer Information Feed Service Agreement dated February 13, 2009 between HKEx Information Service Limited and Fortune Software (Beijing) Co., Ltd. (incorporated by reference to Exhibit 4.103 from our 2008 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 22, 2009) |
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Exhibit | ||||
Number | Description | |||
8.1 | * | List of subsidiaries | ||
12.1 | * | CEO Certification Pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a)) (17 CFR 240.13a-14(a)) or Rule 15d-1(a) (17 CFR 240.15d-14(a)) | ||
12.2 | * | CFO Certification Pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-1(a) (17 CFR 240.15d-14(a)) | ||
13.1 | * | CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
13.2 | * | CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
15.1 | * | Consent of Deloitte Touche Tohmatsu CPA Ltd. | ||
15.2 | * | Written Consent of American Appraisal China Limited |
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Date: May 28, 2010 | CHINA FINANCE ONLINE CO. LIMITED | |||
/s/ Jeff Wang | ||||
Name: | Jeff Wang | |||
Title: | Chief Financial Officer | |||
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and Consolidated Financial Statements
For the years ended December 31, 2007, 2008 and 2009
127
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CONTENTS | PAGE | |||
F - 2 | ||||
F - 3 | ||||
F - 4 | ||||
F - 5 | ||||
F - 6 | ||||
F - 7 | ||||
F - 50 |
Table of Contents
SHAREHOLDERS OF CHINA FINANCE ONLINE CO. LIMITED
Beijing, the People’s Republic of China
May 28, 2010
F - 2
Table of Contents
December 31, | ||||||||
2008 | 2009 | |||||||
(As adjusted) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 97,544,219 | $ | 107,391,084 | ||||
Prepaid expenses and other current assets | 8,581,415 | 4,281,137 | ||||||
Trust bank balances held on behalf of customers | 2,010,339 | 13,310,238 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $31,466 and $31,440 in 2008 and 2009, respectively | 2,875,548 | 5,369,152 | ||||||
Trading securities | — | 67,588 | ||||||
Advances to employees | 160,837 | — | ||||||
Deferred tax assets | 2,525,523 | 3,236,810 | ||||||
Total current assets | 113,697,881 | 133,656,009 | ||||||
Property and equipment, net | 8,588,691 | 10,268,480 | ||||||
Acquired intangible assets, net | 3,473,116 | 4,779,101 | ||||||
Cost method investment | 1,479,571 | 1,479,571 | ||||||
Rental deposits | 592,048 | 725,261 | ||||||
Goodwill | 12,018,512 | 12,602,699 | ||||||
Other assets | 219,358 | 219,473 | ||||||
Deferred tax assets, non-current | 1,754,134 | 1,878,843 | ||||||
Total assets | $ | 141,823,311 | $ | 165,609,437 | ||||
Liabilities and shareholders’ equity | ||||||||
Current liabilities: | ||||||||
Deferred revenue | $ | 28,202,139 | $ | 30,620,060 | ||||
Accrued expenses and other current liabilities | 4,895,859 | 8,244,867 | ||||||
Amounts due to customers for the trust bank balances held on their behalf | 2,010,339 | 13,310,238 | ||||||
Accounts payable | 221,574 | 101,646 | ||||||
Income taxes payable | 142,103 | 123,880 | ||||||
Total current liabilities | 35,472,014 | 52,400,691 | ||||||
Deferred revenue, non-current | 8,786,143 | 14,547,248 | ||||||
Deferred tax liabilities, non-current | 622,799 | 994,573 | ||||||
Total liabilities | 44,880,956 | 67,942,512 | ||||||
Commitments (Note 18) | ||||||||
Equity: | ||||||||
China Finance Online Co. Limited shareholder’s equity: | ||||||||
Ordinary shares ($0.00013 par value; 500,000,000 shares authorized; shares issued and outstanding 110,014,433 in 2008 and 110,250,163 in 2009) | 14,206 | 14,237 | ||||||
Additional paid-in capital | 67,340,543 | 74,130,609 | ||||||
Accumulated other comprehensive income | 6,448,078 | 6,342,765 | ||||||
Retained earnings | 23,139,528 | 16,919,785 | ||||||
Total China Finance Online Co. Limited shareholders’ equity | 96,942,355 | 97,407,396 | ||||||
Noncontrolling interests | — | 259,529 | ||||||
Total equity | 96,942,355 | 97,666,925 | ||||||
Total liabilities and equity | $ | 141,823,311 | $ | 165,609,437 | ||||
F - 3
Table of Contents
Years ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
(As adjusted) | (As adjusted) | |||||||||||
Net revenues | $ | 25,903,074 | $ | 56,242,768 | $ | 53,605,877 | ||||||
Cost of revenues (including stock-based compensation of $16,192, $nil and $nil for 2007, 2008 and 2009, respectively) | 4,426,602 | 9,367,143 | 8,146,724 | |||||||||
Gross profit | 21,476,472 | 46,875,625 | 45,459,153 | |||||||||
Operating expenses: | ||||||||||||
General and administrative (including stock-based compensation of $2,667,613, $7,767,874 and $6,436,536 for 2007, 2008 and 2009, respectively) | 7,783,668 | 15,371,171 | 16,982,032 | |||||||||
Product development (including stock-based compensation of $123,461, $59,200 and $56,505 for 2007, 2008 and 2009, respectively) | 2,268,878 | 5,635,173 | 10,754,380 | |||||||||
Sales and marketing (including stock-based compensation of $139,074, $213,076 and $107,675 for 2007, 2008 and 2009, respectively) | 6,924,336 | 13,520,295 | 26,095,233 | |||||||||
Total operating expenses | 16,976,882 | 34,526,639 | 53,831,645 | |||||||||
Government subsidies | 135,834 | 436,946 | 567,373 | |||||||||
Income (loss) from operations | 4,635,424 | 12,785,932 | (7,805,119 | ) | ||||||||
Interest income | 1,104,701 | 1,609,112 | 1,352,307 | |||||||||
Exchange gain | 424,338 | 1,489,076 | 1,874 | |||||||||
Gain from trading securities | — | — | 40,574 | |||||||||
Other income (expense), net | 8,731 | (168,536 | ) | (257,674 | ) | |||||||
Loss from impairment of cost method investment | (11,127,000 | ) | — | — | ||||||||
Income (loss) before income tax benefit | (4,953,806 | ) | 15,715,584 | (6,668,038 | ) | |||||||
Income tax benefit | 808,625 | 3,047,129 | 446,164 | |||||||||
Purchased pre-acquisition earning | — | 226,769 | — | |||||||||
Net income (loss) | $ | (4,145,181 | ) | $ | 18,989,482 | $ | (6,221,874 | ) | ||||
Less: net loss attributable to the noncontrolling interests | 15,477 | 30,633 | 2,131 | |||||||||
Net income (loss) attributable to China Finance Online Co. Limited | $ | (4,129,704 | ) | $ | 19,020,115 | $ | (6,219,743 | ) | ||||
Net income (loss) per share attributable to China Finance Online Co. Limited | ||||||||||||
Basic | $ | (0.04 | ) | $ | 0.19 | $ | (0.06 | ) | ||||
Diluted | $ | (0.04 | ) | $ | 0.17 | $ | (0.06 | ) | ||||
Weighted average shares used in calculating net income (loss) per share | ||||||||||||
Basic | 94,500,529 | 98,957,993 | 105,203,564 | |||||||||
Diluted | 94,500,529 | 112,984,532 | 105,203,564 | |||||||||
F - 4
Table of Contents
Accumulated other | Total China Finance | Non | Total | |||||||||||||||||||||||||||||||||
Ordinary shares | Additional | comprehensive | Retained | Online Co. Limited | controlling | Total | comprehensive | |||||||||||||||||||||||||||||
Shares | Amount | paid-in capital | income (loss) | earnings | shareholders’ equity | interests | equity | income (loss) | ||||||||||||||||||||||||||||
Balance as of January 1, 2007 | 104,384,933 | 13,474 | 52,555,919 | 1,634,269 | 8,249,117 | 62,452,779 | — | 62,452,779 | ||||||||||||||||||||||||||||
Exercise of share option by employees | — | — | 2,366,697 | — | — | 2,366,697 | — | 2,366,697 | ||||||||||||||||||||||||||||
Exercise of share options by non-employees | 5,369,500 | 698 | 858,422 | — | — | 859,120 | — | 859,120 | ||||||||||||||||||||||||||||
Stock-based compensation | — | — | 2,946,340 | — | — | 2,946,340 | — | 2,946,340 | ||||||||||||||||||||||||||||
Acquisition of Daily Growth Securities | — | — | — | — | — | — | 486,908 | 486,908 | ||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | 2,867,163 | — | 2,867,163 | — | 2,867,163 | $ | 2,867,163 | ||||||||||||||||||||||||||
Net loss | — | — | — | — | (4,129,704 | ) | (4,129,704 | ) | (15,477 | ) | (4,145,181 | ) | (4,145,181 | ) | ||||||||||||||||||||||
Balance as of December 31, 2007 (As adjusted) | 109,754,433 | 14,172 | 58,727,378 | 4,501,432 | 4,119,413 | 67,362,395 | 471,431 | 67,833,826 | (1,278,018 | ) | ||||||||||||||||||||||||||
Exercise of share option by employees | — | — | 531,449 | — | — | 531,449 | — | 531,449 | ||||||||||||||||||||||||||||
Exercise of share options by non-employees | 260,000 | 34 | 41,566 | — | — | 41,600 | — | 41,600 | ||||||||||||||||||||||||||||
Stock-based compensation | — | — | 8,040,150 | — | — | 8,040,150 | — | 8,040,150 | ||||||||||||||||||||||||||||
Additional capital injection in Daily Growth Securities | — | — | — | — | — | — | (440,798 | ) | (440,798 | ) | ||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | 1,946,646 | — | 1,946,646 | — | 1,946,646 | $ | 1,946,646 | ||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | 19,020,115 | 19,020,115 | (30,633 | ) | 18,989,482 | 18,989,482 | ||||||||||||||||||||||||||
Balance as of December 31, 2008 (As adjusted) | 110,014,433 | 14,206 | 67,340,543 | 6,448,078 | 23,139,528 | 96,942,355 | — | 96,942,355 | 20,936,128 | |||||||||||||||||||||||||||
Exercise of share option by employees | 185,730 | 24 | 181,357 | — | — | 181,381 | — | 181,381 | ||||||||||||||||||||||||||||
Exercise of share options by non-employees | 50,000 | 7 | 7,993 | — | — | 8,000 | — | 8,000 | ||||||||||||||||||||||||||||
Stock-based compensation | — | — | 6,600,716 | — | — | 6,600,716 | — | 6,600,716 | ||||||||||||||||||||||||||||
Acquisition of CFO Securities Consulting | — | — | — | — | — | — | 261,660 | 261,660 | ||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | (105,313 | ) | — | (105,313 | ) | — | (105,313 | ) | $ | (105,313 | ) | ||||||||||||||||||||||
Net loss | — | — | — | — | (6,219,743 | ) | (6,219,743 | ) | (2,131 | ) | (6,221,874 | ) | (6,221,874 | ) | ||||||||||||||||||||||
Balance as of December 31, 2009 | 110,250,163 | 14,237 | 74,130,609 | 6,342,765 | 16,919,785 | 97,407,396 | 259,529 | 97,666,925 | (6,327,187 | ) | ||||||||||||||||||||||||||
F - 5
Table of Contents
Years ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
(As adjusted) | (As adjusted) | |||||||||||
Operating activities: | ||||||||||||
Net (loss) income | $ | (4,145,181 | ) | $ | 18,989,482 | $ | (6,221,874 | ) | ||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||
Stock-based compensation | 2,946,340 | 8,040,150 | 6,600,716 | |||||||||
Depreciation and amortization | 973,953 | 2,139,145 | 2,987,094 | |||||||||
Gain from trading securities | — | — | (40,553 | ) | ||||||||
Deferred taxes | (737,712 | ) | (3,200,390 | ) | (917,284 | ) | ||||||
Loss on disposal of property and equipment | 84,796 | 37,659 | 182,235 | |||||||||
Loss from impairment of cost method investment | 11,127,000 | — | — | |||||||||
Purchased pre-acquisition earning | — | (226,769 | ) | — | ||||||||
Changes in assets and liabilities: | ||||||||||||
Accounts receivable | 37,377 | (1,292,386 | ) | (2,497,002 | ) | |||||||
Prepaid expenses and other current assets | (1,786,912 | ) | (5,567,706 | ) | 4,648,114 | |||||||
Advances to employees | (1,672,575 | ) | 1,597,941 | 160,634 | ||||||||
Trust bank balances held on behalf of customers | (465,101 | ) | 854,063 | (11,305,861 | ) | |||||||
Rental deposits | (403,912 | ) | (74,487 | ) | (133,601 | ) | ||||||
Deferred revenue | 17,509,161 | 9,943,656 | 8,206,417 | |||||||||
Account payable | (30,297 | ) | (182,528 | ) | (113,289 | ) | ||||||
Accrued expenses and other current liabilities | 4,566,829 | (2,482,122 | ) | 3,387,725 | ||||||||
Amounts due to customers for the trust bank balance held on their behalf | 465,101 | (854,063 | ) | 11,305,861 | ||||||||
Income taxes payable | (43,267 | ) | 126,961 | (18,097 | ) | |||||||
Net cash provided by operating activities | 28,425,600 | 27,848,606 | 16,231,235 | |||||||||
Investing activities: | ||||||||||||
Purchase of property and equipment | (3,836,412 | ) | (5,006,365 | ) | (4,514,342 | ) | ||||||
Acquisition of businesses (net of cash acquired of $2,631,008, $1,521,109 and $8,282 for the years ended December 31, 2007, 2008, and 2009, respectively) | (993,845 | ) | (2,403,620 | ) | (1,932,472 | ) | ||||||
Purchase of trading securities | — | — | (267,782 | ) | ||||||||
Proceeds from sales of trading securities | — | — | 240,775 | |||||||||
Proceeds from disposal of fixed assets | — | — | 1,468 | |||||||||
Net cash used in investing activities | (4,830,257 | ) | (7,409,985 | ) | (6,472,353 | ) | ||||||
Financing activities: | ||||||||||||
Proceeds from stock options exercised by employees | 2,366,697 | 531,449 | 181,381 | |||||||||
Proceeds from exercise of options granted to non-employee | 859,120 | 41,600 | 8,000 | |||||||||
Net cash provided by financing activities | 3,225,817 | 573,049 | 189,381 | |||||||||
Effect of exchange rate changes | 2,952,320 | 1,803,516 | (101,398 | ) | ||||||||
Net increase in cash and cash equivalents | 29,773,480 | 22,815,186 | 9,846,865 | |||||||||
Cash and cash equivalents, beginning of year | 44,955,553 | 74,729,033 | 97,544,219 | |||||||||
Cash and cash equivalents, end of year | 74,729,033 | 97,544,219 | 107,391,084 | |||||||||
Supplemental disclosure of cash flow information Income taxes paid | $ | 38,761 | $ | 169,270 | $ | 515,782 | ||||||
F - 6
Table of Contents
1. | ORGANIZATION AND PRINCIPAL ACTIVITIES |
Place of | Date of | legal | ||||||||
incorporation or | incorporation or | ownership | Principal | |||||||
Company name | establishment | acquisition | interest | activity | ||||||
Subsidiaries: | ||||||||||
China Finance Online (Beijing) Co., Ltd. (“CFO Beijing”) | Beijing, PRC | Jul. 9, 1998 | 100 | % | Subscription service | |||||
Fortune Software (Beijing) Co., Ltd. (“CFO Software”) | Beijing, PRC | Dec. 7, 2004 | 100 | % | Subscription service | |||||
Fortune (Beijing) Wisdom Technology Co., Ltd. (“CFO Wisdom”) | Beijing, PRC | Oct. 16, 2007 | 100 | % | Subscription service | |||||
Fortune (Beijing) Success Technology Co., Ltd. (“CFO Success”) | Beijing, PRC | Oct. 16, 2007 | 100 | % | Subscription service | |||||
Shenzhen Genius Information Technology Co., Ltd. (“CFO Genius”) | Shenzhen, PRC | Sep. 21, 2006 | 100 | % | Database subscription | |||||
Jujin Software (Shenzhen) Co., Ltd. (“CFO Jujin”) | Shenzhen, PRC | Mar. 9, 2007 | 100 | % | Subscription service | |||||
Juda Software (Shenzhen) Co., Ltd. (“CFO Juda”) | Shenzhen, PRC | Nov. 11, 2008 | 100 | % | Subscription service | |||||
Stockstar Information Technology (Shanghai) Co., Ltd. (“CFO Stockstar”) | Shanghai, PRC | Oct. 1, 2006 | 100 | % | Subscription service | |||||
Zhengning Information & Technology (Shanghai) Co., Ltd. (“CFO Zhengning”) | Shanghai, PRC | Jan. 31, 2007 | 100 | % | Subscription service | |||||
Zhengtong Information Technology (Shanghai) Co., Ltd (“CFO Zhengtong”) | Shanghai, PRC | Jun. 26, 2008 | 100 | % | N/A | |||||
Zhengyong Information Technology (Shanghai) Co., Ltd (“CFO Zhengyong”) | Shanghai, PRC | Jun. 24, 2008 | 100 | % | N/A | |||||
Daily Growth Financial Holdings Limited (“Daily Growth Holdings”) | BVI | Jul. 16, 2007 | 100 | % | Investment Holdings | |||||
Giant Bright International Holdings Limited (“CFO Giant Bright”) | BVI | Jul. 16, 2007 | 100 | % | N/A | |||||
Mount First Investments Limited (“CFO Mount First”) | BVI | Jul. 23, 2007 | 100 | % | N/A | |||||
Mainfame Group Limited (“CFO Mainfame”) | BVI | Jan. 2, 2008 | 100 | % | N/A | |||||
Manca Development Limited (“CFO Manca”) | BVI | Jan. 3, 2008 | 100 | % | N/A | |||||
Team Gear Limited (“CFO Team Gear”) | Hong Kong, PRC | Oct. 22, 2007 | 100 | % | N/A | |||||
Kinco Limited (“CFO Kinco”) | Hong Kong, PRC | Oct. 22, 2007 | 100 | % | N/A | |||||
Danford (H.K) Limited (“CFO Danford”) | Hong Kong, PRC | Nov. 30, 2007 | 100 | % | N/A | |||||
Kingford International Limited (“CFO Kingford”) | Hong Kong, PRC | Feb. 11, 2008 | 100 | % | N/A | |||||
Asiaciti (H.K.) Limited (“CFO Asiaciti”) | Hong Kong, PRC | Feb. 11, 2008 | 100 | % | N/A | |||||
Daily Growth Securities Limited (“Daily Growth Securities”) (Note 3) | Hong Kong, PRC | Nov. 23, 2007 | 100 | % | Brokerage service | |||||
Daily Growth Futures Limited (“Daily Growth Futures”) | Hong Kong, PRC | Apr. 16, 2008 | 100 | % | Brokerage service | |||||
Daily Growth Wealth Management Limited (“Daily Growth Wealth Management”) | Hong Kong, PRC | Oct. 8, 2008 | 100 | % | Consulting | |||||
Daily Growth Investment Services Limited (“Daily Growth Investment Services”) | HongKong, PRC | Jun. 30, 2009 | 100 | % | N/A | |||||
Variable interest entities: | ||||||||||
Beijing Fuhua Innovation Technology Investment Co., Ltd. (“CFO Fuhua”) | Beijing, PRC | Dec. 31, 2000 | Nil | Advertising service | ||||||
Shanghai Shangtong Co., Ltd. (“CFO Shangtong”) | Shanghai, PRC | Jun. 6, 2008 | Nil | Subscription service | ||||||
Shanghai Chongzhi Co., Ltd., (“CFO Chongzhi”) | Shanghai, PRC | Jun. 6, 2008 | Nil | Subscription service | ||||||
Shanghai Decheng Information & Technology Co., Ltd. (“CFO Decheng”) | Shanghai, PRC | Dec. 24, 2009 | Nil | N/A | ||||||
Beijing Premium Technology Co., Ltd. (“CFO Premium”) | Beijing, PRC | Aug. 31, 2007 | Nil | N/A | ||||||
Beijing Glory Technology Co., Ltd. (“CFO Glory”) | Beijing, PRC | Sep. 11, 2007 | Nil | N/A | ||||||
Huifu Jinyuan Co., Ltd. (“CFO Huifu”) (Note 3) | Beijing, PRC | Oct. 31, 2008 | Nil | N/A | ||||||
Zhongcheng Futong Co., Ltd. (“CFO Zhongcheng”) (Note 3) | Beijing, PRC | Oct. 31, 2008 | Nil | N/A | ||||||
Fortune (Beijing) Yingchuang Technology Co., Ltd. (“CFO Yingchuang”) | Beijing,PRC | Dec. 18, 2009 | Nil | N/A | ||||||
Fortune (Beijing) Qicheng Technology Co., Ltd. (“CFO Qicheng”) | Beijing, PRC | Dec. 18, 2009 | Nil | N/A | ||||||
Beijing Chuangying Advisory and Investment Co., Ltd. (“CFO Chuangying”) (Note 3) | Beijing, PRC | Jan. 9, 2009 | Nil | Consulting | ||||||
Shenzhen Newrand Securities Advisory and Investment Co., Ltd. (“CFO Newrand “) (Note 3) | Shenzhen, PRC | Oct. 17, 2008 | Nil | Consulting and training | ||||||
Shenzhen Shangtong Software Co., Ltd. (“CFO Shenzhen Shangtong”) | Shenzhen, PRC | Sep. 23, 2009 | Nil | N/A | ||||||
Subsidiaries of variable interest entities: | ||||||||||
Shanghai Meining Computer Software Co., Ltd. (“CFO Meining”) | Shanghai, PRC | Oct. 1, 2006 | Nil | Subscription and SMS | ||||||
Shenzhen Newrand Securities Training Center (“CFO Newrand Training”) | Shenzhen, PRC | Oct. 17, 2008 | Nil | Training | ||||||
Shanghai Securities Consulting Co., Ltd (“CFO Securities Consulting”) (Note 3) | Shanghai, PRC | Nov. 5, 2009 | Nil | Consulting |
F - 7
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
1. | ORGANIZATION AND PRINCIPAL ACTIVITIES — continued |
• | the shareholders of the VIEs have granted the Group or individuals designated by the Group an irrevocable proxy to exercise all their voting rights as shareholders of the VIEs, including the right to appoint directors, the general manager and other senior management of the VIEs; |
• | the VIEs will not enter into any transaction that may materially affect its assets, liabilities, equity or operations without the Group’s prior written consent; |
• | the VIEs will not distribute any dividends; |
• | the Group may purchase the entire equity interest in, or all the assets of the VIEs at a price equal to the total principal amount of the loan lent by the Group to the owners of the VIEs when and if such purchase is permitted by PRC law or the current shareholders of the VIEs cease to be directors or employees of the VIEs; |
• | the shareholders of the VIEs will not transfer, sell, pledge, dispose of or create any encumbrance on their equity interest in the VIEs without the prior written consent of the Group. |
• | strategic consulting services agreement, pursuant to which the amount of the fee to be charged is 30% of each VIE’s income before tax; |
• | technical support services agreement, pursuant to which the amount of the fee to be charged is 30% of each VIE’s income before tax; | ||
• | operating support services agreement, pursuant to which the amount of the fee to be charged is 40% of each VIE’s income before tax; |
F - 8
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
1. | ORGANIZATION AND PRINCIPAL ACTIVITIES — continued |
VIE Name | Contractual Arrangement Date | Counterpart | ||||
CFO Fuhua | May 27, 2004 | CFO Beijing | ||||
CFO Premium | August 21,2007 | CFO Software | ||||
CFO Glory | September 10, 2007 | CFO Software | ||||
CFO Chongzhi | June 8, 2008 | CFO Software | ||||
CFO Shangtong | June 8, 2008 | CFO Software | ||||
CFO Zhongcheng | October 15, 2008 | CFO Software | ||||
CFO Huifu | October 15, 2008 | CFO Software | ||||
CFO Newrand | October 17, 2008 | CFO Software | ||||
CFO Chuangying | January 21, 2009 | CFO Software | ||||
CFO Shenzhen Shangtong | August 3, 2009 | CFO Success | ||||
CFO Qicheng | November 20, 2009 | CFO Chuangying | ||||
CFO Yingchuang | November 25, 2009 | CFO Chuangying | ||||
CFO Decheng | November 30,2009 | CFO Chongzhi |
Year ended December 31, | ||||||||
2008 | 2009 | |||||||
Total assets | $ | 75,142,761 | $ | 90,506,462 | ||||
Total liabilities | 71,209,109 | 83,135,588 | ||||||
Year ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Net revenue | 1,022,735 | 3,712,343 | 11,167,473 | |||||||||
Net income (loss) | (1,021,290 | ) | 227,474 | 2,572,248 | ||||||||
F - 9
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
F - 10
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued |
Technology infrastructure | 5 years | |||
Computer equipment | 5 years | |||
Furniture, fixtures and equipment | 5 years | |||
Motor vehicle | 5 years | |||
Leasehold improvements | Shorter of the lease term or 5 years |
F - 11
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued |
F - 12
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued |
F - 13
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued |
F - 14
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued |
F - 15
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued |
F - 16
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued |
F - 17
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued |
F - 18
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued |
F - 19
Table of Contents
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued |
F - 20
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued |
F - 21
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued |
F - 22
Table of Contents
3. | ACQUISITIONS |
Useful life | ||||||||
Purchase price allocation: | ||||||||
Acquired intangible assets: | ||||||||
Securities consulting license | $ | 549,758 | 15 years | |||||
Total assets acquired | 549,758 | |||||||
Deferred tax liabilities | (137,440 | ) | ||||||
Total net asset | 412,318 | |||||||
Goodwill | 172,794 | |||||||
Total | 585,112 | |||||||
F - 23
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
3. | ACQUISITIONS — continued |
Useful life | ||||||||
Purchase price allocation: | ||||||||
Cash and cash equivalents | $ | 8,282 | ||||||
Other account receivables | 222,317 | |||||||
Acquired intangible asset: | ||||||||
Trademark | 350,191 | 15 years | ||||||
Securities consulting license | 900,596 | 15 years | ||||||
Total assets acquired | 1,481,386 | |||||||
Deferred tax liabilities | (312,697 | ) | ||||||
Noncontrolling interests | (261,660 | ) | ||||||
Total net asset | 907,029 | |||||||
Goodwill | 421,011 | |||||||
Total | 1,328,040 | |||||||
F - 24
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
3. | ACQUISITIONS — continued |
Useful life | ||||||||
Purchase price allocation: | ||||||||
Cash and cash equivalents | $ | 1,521,109 | ||||||
Acquired intangible assets: | ||||||||
Securities consulting license | 1,183,926 | 15 years | ||||||
Trade mark | 440,496 | 15 years | ||||||
Total assets acquired | 3,145,531 | |||||||
Deferred tax liabilities | (406,106 | ) | ||||||
Total net asset | 2,739,425 | |||||||
Goodwill | 1,086,871 | |||||||
Total | 3,826,296 | |||||||
F - 25
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
3. | ACQUISITIONS — continued |
Useful life | ||||||||
Purchase price allocation: | ||||||||
Cash and cash equivalents | $ | 2,631,008 | ||||||
Accounts receivable | 998,320 | |||||||
Trust bank balance held on behalf of customers | 2,391,925 | |||||||
Prepaid and other current assets | 55,761 | |||||||
Property and equipment, net | 26,100 | |||||||
Acquired intangible asset: | ||||||||
Stock exchange trading right | 54,642 | Indefinite | ||||||
Total assets acquired | 6,157,756 | |||||||
Account payable | (350,261 | ) | ||||||
Amount due to customers for the trust bank balance held on their behalf | (2,391,925 | ) | ||||||
Accrued expenses and other current liabilities | (57,137 | ) | ||||||
Income tax payable | (49,225 | ) | ||||||
Deferred tax liabilities | (9,562 | ) | ||||||
Minority interest | (488,186 | ) | ||||||
Total net asset | 2,811,460 | |||||||
Goodwill | 813,393 | |||||||
Total | 3,624,853 | |||||||
F - 26
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
3. | ACQUISITIONS — continued |
For the years ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||
Revenues | $ | 26,930,986 | $ | 56,371,385 | $ | 53,605,878 | ||||||
Net income (loss) attributable to China Finance Online Co., Limited | $ | 235,997 | $ | 18,858,118 | $ | (6,318,295 | ) | |||||
Net income (loss) per share attributable to China Finance Online Co. Limited | ||||||||||||
— basic | $ | 0.00 | $ | 0.19 | $ | (0.06 | ) | |||||
— diluted | $ | 0.00 | $ | 0.17 | $ | (0.06 | ) | |||||
F - 27
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
4. | PREPAID EXPENSES AND OTHER CURRENT ASSETS |
December 31, | ||||||||
2008 | 2009 | |||||||
Prepayment of advertising fees | $ | 3,833,486 | $ | 526,492 | ||||
Advertising deposit (note 1) | 175,889 | 261,460 | ||||||
Prepayment to sales agents | 950,752 | 212,294 | ||||||
Advances to suppliers | 817,432 | 805,212 | ||||||
VAT refund receivable | 791,784 | 817,532 | ||||||
Income tax prepayment and business tax refund receivable | 228,564 | 175,434 | ||||||
Rebate receivable for raw data fee (note 2) | 477,596 | 22,131 | ||||||
Prepayment for raw data fee (note 3) | 305,328 | — | ||||||
Interest receivable | 224,656 | 409,194 | ||||||
Other current assets | 775,928 | 1,051,388 | ||||||
$ | 8,581,415 | $ | 4,281,137 | |||||
Notes: | ||
(1) | The advertising deposit represents amounts of deposit paid to advertising agent, which is expected to be refunded within a year. | |
(2) | According to various license agreements with SSE Infonet Ltd., the Company was entitled to receive certain rebate as incentive, which was calculated based on the volume of raw data used by the Company in the provision of subscription services. | |
(3) | On December 12, 2008, SSE Infonet Ltd., terminated one of the license agreements and would no longer provide certain raw data to third party vendors, including the Company, effective January 1, 2009. As a result, the Company would not be able to continue to provide the subscription services based on such raw data, which were subscribed by the customers before the termination of this license agreement. Therefore, the prepaid royalty fee according to this agreement was refunded by SSE Infonet Ltd. in year 2009. |
F - 28
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
5. | TRADING SECURITIES |
6. | COST METHOD INVESTMENT |
F - 29
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
7. | PROPERTY AND EQUIPMENT, NET |
December 31, | ||||||||
2008 | 2009 | |||||||
Technology infrastructure | $ | 5,954,777 | $ | 7,759,146 | ||||
Computer equipment | 1,574,533 | 1,874,318 | ||||||
Furniture, fixtures and equipment | 1,955,792 | 2,384,253 | ||||||
Motor vehicle | 432,940 | 645,517 | ||||||
Leasehold improvements | 1,807,211 | 2,667,512 | ||||||
11,725,253 | 15,330,746 | |||||||
Less: accumulated depreciation | (3,136,562 | ) | (5,062,266 | ) | ||||
$ | 8,588,691 | $ | 10,268,480 | |||||
8. | ACQUIRED INTANGIBLE ASSETS, NET |
December 31, | ||||||||||
Useful | ||||||||||
2008 | 2009 | life | ||||||||
Intangible assets not subject to amortization: | ||||||||||
Trademarks | 844,265 | 843,561 | Indefinite | |||||||
Stock exchange trading right | 64,517 | 64,475 | Indefinite | |||||||
Futures exchange trading right | 64,517 | 64,475 | Indefinite | |||||||
Intangible assets subject to amortization: | ||||||||||
Completed technology | 851,594 | 850,883 | 5 years | |||||||
Customer relationship | 687,431 | 686,857 | 4-5 years | |||||||
Value-added service license | 27,116 | 27,094 | 3 years | |||||||
Agreement with mobile operators | 12,166 | 12,155 | 3 years | |||||||
Securities consulting license and related trademarks | 1,626,969 | 3,426,717 | 15 years | |||||||
Intellectual property | 73,287 | 73,226 | 10 years | |||||||
4,251,862 | 6,049,443 | |||||||||
Less: Accumulated amortization | (778,746 | ) | (1,270,342 | ) | ||||||
$ | 3,473,116 | $ | 4,779,101 | |||||||
F - 30
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
8. | ACQUIRED INTANGIBLE ASSETS, NET — continued |
9. | GOODWILL |
Southern | Eastern | Northern | ||||||||||||||||||
China | China | China | Hong Kong | Total | ||||||||||||||||
Balance as of December 31, 2007 | 1,161,337 | 7,679,127 | — | 811,255 | 9,651,719 | |||||||||||||||
Acquisition (Note 3) | 1,086,871 | — | 202,359 | 456,501 | 1,745,731 | |||||||||||||||
Exchange difference | 82,066 | 531,377 | 400 | 7,219 | 621,062 | |||||||||||||||
Balance as of December 31, 2008 | 2,330,274 | 8,210,504 | 202,759 | 1,274,975 | 12,018,512 | |||||||||||||||
Acquisition (Note 3) | — | 421,011 | 172,794 | — | 593,805 | |||||||||||||||
Exchange difference | (1,945 | ) | (6,886 | ) | 35 | (822 | ) | (9,618 | ) | |||||||||||
Balance as of December 31, 2009 | 2,328,329 | 8,624,629 | 375,588 | 1,274,153 | 12,602,699 | |||||||||||||||
F - 31
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
9. | GOODWILL — continued |
F - 32
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
10. | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
December 31, | ||||||||
2008 | 2009 | |||||||
Accrued bonus | $ | 1,079,265 | $ | 4,355,130 | ||||
Accrued professional service fees | 295,152 | 436,834 | ||||||
Withholding individual income tax-option exercise | 171,158 | 144,979 | ||||||
Value added taxes payable | 908,699 | 444,278 | ||||||
Other taxes payable | 313,201 | 487,461 | ||||||
Accrued raw data cost | 173,841 | 308,566 | ||||||
Accrued office rental | 93,600 | 131,603 | ||||||
Accrued bandwidth cost | 1,231 | 519,763 | ||||||
Accrued welfare benefits | 143,834 | 288,123 | ||||||
Sales return to customers (note 1) | 906,182 | — | ||||||
Loan payable | 146,574 | 146,451 | ||||||
Acquisition consideration payable | 117,259 | 89,335 | ||||||
Others | 545,863 | 892,344 | ||||||
$ | 4,895,859 | $ | 8,244,867 | |||||
Notes: | ||
(1) | Sales return to customers represents the amounts of sales return resulting from termination of license agreement with SSE Infonet Ltd. for certain information provision. (see Note 4(3)). |
11. | STOCK OPTIONS AND NONVESTED SHARES |
F - 33
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
11. | STOCK OPTIONS AND NONVESTED SHARES — continued |
Years ended December 31, | ||||||||
2008 | 2009 | |||||||
Weighted average risk free rate of return | 2.14 | % | 2.03 | % | ||||
Weighted average expected option life | 5.98 years | 5.98 years | ||||||
Expected volatility rate | 61.87 | % | 57.92 | % | ||||
Dividend yield | — | — |
F - 34
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
11. | STOCK OPTIONS AND NONVESTED SHARES — continued |
(1) | Expected volatility |
(2) | Risk-free interest rate |
(3) | Expected option life |
(4) | Dividend yield |
F - 35
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
11. | STOCK OPTIONS AND NONVESTED SHARES — continued |
2007 | 2008 | 2009 | ||||||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||||||
Number | average | Number | average | Number | average | |||||||||||||||||||
of options | exercise price | of options | exercise price | of options | exercise price | |||||||||||||||||||
Outstanding at beginning of year | 14,843,688 | $ | 0.56 | 10,557,568 | $ | 0.84 | 11,439,978 | $ | 0.91 | |||||||||||||||
Granted | 3,848,000 | $ | 1.07 | 2,820,840 | $ | 1.79 | 10,000 | $ | 1.65 | |||||||||||||||
Exercised | (7,746,280 | ) | $ | 0.42 | (829,670 | ) | $ | 0.69 | (236,480 | ) | $ | 0.80 | ||||||||||||
Forfeited | (387,840 | ) | $ | 0.87 | (138,760 | ) | $ | 1.00 | (69,360 | ) | $ | 1.22 | ||||||||||||
Cancelled | — | — | (970,000 | ) | $ | 2.81 | (309,840 | ) | $ | 2.03 | ||||||||||||||
Outstanding at end of year | 10,557,568 | $ | 0.84 | 11,439,978 | $ | 0.91 | 10,834,298 | $ | 0.87 | |||||||||||||||
Shares exercisable at end of year | 5,939,888 | $ | 0.68 | 7,903,538 | $ | 0.80 | 9,439,258 | $ | 0.82 | |||||||||||||||
F - 36
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
11. | STOCK OPTIONS AND NONVESTED SHARES — continued |
Options outstanding | Option exercisable | |||||||||||||||||||||||||||
Aggregate | Aggregate | |||||||||||||||||||||||||||
Weighted | Weighted | intrinsic | Weighted | intrinsic | ||||||||||||||||||||||||
average | average | value as of | average | value as of | ||||||||||||||||||||||||
Number | remaining | exercise | December 31, | Number | exercise | December 31, | ||||||||||||||||||||||
outstanding | contractual life | price | 2009 | exercisable | price | 2009 | ||||||||||||||||||||||
Ordinary shares | ||||||||||||||||||||||||||||
$0.16 | 2,883,738 | 2,883,738 | ||||||||||||||||||||||||||
$1.04 | 200,000 | 200,000 | ||||||||||||||||||||||||||
$1.31 | 1,497,600 | 1,497,600 | ||||||||||||||||||||||||||
$1.32 | 27,000 | 27,000 | ||||||||||||||||||||||||||
$1.12 | 400,000 | 400,000 | ||||||||||||||||||||||||||
$1.16 | 200,000 | 200,000 | ||||||||||||||||||||||||||
$1.07 | 700,000 | 700,000 | ||||||||||||||||||||||||||
$0.96 | 2,886,360 | 2,681,400 | ||||||||||||||||||||||||||
$1.25 | 100,000 | 84,000 | ||||||||||||||||||||||||||
$1.32 | 128,600 | 110,200 | ||||||||||||||||||||||||||
$2.03 | 3,000 | 2,280 | ||||||||||||||||||||||||||
$1.26 | 1,798,000 | 653,040 | ||||||||||||||||||||||||||
$1.65 | 10,000 | — | ||||||||||||||||||||||||||
10,834,298 | 5.00 years | $ | 0.87 | $ | 6,366,038 | 9,439,258 | $ | 0.82 | $ | 6,028,593 | ||||||||||||||||||
F - 37
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
11. | STOCK OPTIONS AND NONVESTED SHARES — continued |
Weighted- | ||||||||||||
average | Aggregate | |||||||||||
grant date | intrinsic | |||||||||||
Nonvested shares | Shares | fair value | value | |||||||||
At the beginning of year 2007 | — | — | — | |||||||||
Granted | 10,558,493 | 1.84 | — | |||||||||
Vested | — | — | — | |||||||||
Forfeited | — | — | — | |||||||||
At the end of year 2007 | 10,558,493 | 1.84 | 46,246,199 | |||||||||
Granted | — | — | — | |||||||||
Vested | (4,329,024 | ) | — | — | ||||||||
Forfeited | — | — | — | |||||||||
At the end of year 2008 | 6,229,469 | 1.84 | 8,758,633 | |||||||||
Granted | — | — | — | |||||||||
Vested | (2,886,016 | ) | — | — | ||||||||
Forfeited | — | — | — | |||||||||
At the end of year 2009 | 3,343,453 | 1.84 | 4,881,441 | |||||||||
F - 38
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
12. | INCOME TAXES |
F - 39
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
12. | INCOME TAXES — continued |
The new HNTE status obtained by CFO Software, CFO Meining and CFO Genius in 2008 under the New EIT Law is valid for three years and qualifying entities can then apply to renew for an additional three years provided their business operations continue to qualify for the new HNTE status. The Group assumed its qualifying entities will not continue to obtain the renewal in the future. Accordingly, in calculating deferred tax assets and liabilities, the Group assumed its qualifying entities will not continue to renew the new HNTE status at the conclusion of the initial three year period. |
F - 40
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
12. | INCOME TAXES — continued |
December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Current | $ | 70,913 | $ | (153,261 | ) | $ | (471,120 | ) | ||||
Deferred | 737,712 | 3,200,390 | 917,284 | |||||||||
Total | $ | 808,625 | $ | 3,047,129 | $ | 446,164 | ||||||
December 31, | ||||||||
2008 | 2009 | |||||||
Current deferred tax assets: | ||||||||
Deferred revenue — current | $ | 1,873,600 | $ | 2,852,510 | ||||
Accrued expenses and other liability | 50,706 | 200,775 | ||||||
Net operating loss carrying forwards | 601,217 | 183,525 | ||||||
Total current deferred tax assets | $ | 2,525,523 | 3,236,810 | |||||
Non-current deferred tax assets: | ||||||||
Deferred revenue — non-current | $ | 1,167,931 | $ | 1,829,496 | ||||
Net operating loss carrying forwards | 1,367,919 | 2,321,949 | ||||||
Less: valuation allowance | (781,716 | ) | (2,272,602 | ) | ||||
Total non-current deferred tax assets | $ | 1,754,134 | $ | 1,878,843 | ||||
Non-current deferred tax liabilities: | ||||||||
Intangible assets | (622,005 | ) | (994,573 | ) | ||||
Property and equipment | (794 | ) | — | |||||
Total non-current deferred tax liabilities | $ | (622,799 | ) | $ | (994,573 | ) | ||
F - 41
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
12. | INCOME TAXES — continued |
Years ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
% | % | % | ||||||||||
Statutory tax rate in PRC | (33.0 | ) | 25.0 | (25.0 | ) | |||||||
Effect of tax holiday | (91.8 | ) | (73.0 | ) | (35.6 | ) | ||||||
Non-deductible expenses | 99.7 | 39.0 | 45.9 | |||||||||
Non-taxable income | (16.7 | ) | (7.9 | ) | (14.4 | ) | ||||||
Effect on deferred taxes due to changes in tax rates under the new EIT law for certain PRC entities | 18.5 | — | — | |||||||||
Change in valuation allowance | 7.0 | (2.2 | ) | 22.4 | ||||||||
Effective tax rate | (16.3 | ) | (19.1 | ) | (6.7 | ) | ||||||
F - 42
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
13. | SHAREHOLDERS’ EQUITY |
F - 43
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
14. | NET INCOME (LOSS) PER SHARE |
Years ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Net income (loss) attributable to China Finance Online Co. Limited | $ | (4,129,704 | ) | $ | 19,020,115 | $ | (6,219,743 | ) | ||||
Weighted average ordinary shares outstanding used in computing basic net income per share | 94,500,529 | 98,957,993 | 105,203,564 | |||||||||
Plus: Incremental shares from assumed conversions of stock options and nonvested shares | — | 14,026,539 | — | |||||||||
Weighted average ordinary shares outstanding used in computing diluted net income per share (note) | 94,500,529 | 112,984,532 | 105,203,564 | |||||||||
Net income (loss) per share attributable to China Finance Online Co. Limited | ||||||||||||
— basic | $ | (0.04 | ) | $ | 0.19 | $ | (0.06 | ) | ||||
— diluted | $ | (0.04 | ) | $ | 0.17 | $ | (0.06 | ) | ||||
Note: | ||
(1) | In July 2007, the Company granted nonvested shares covering 10,558,493 ordinary shares of the Company to the employees who are eligible for the 2007 Plan. The vesting of the nonvested shares is subject to achieving certain financial performance targets stated in the 2007 Plan. Nonvested shares are not included in the computation of basic earnings per share as such shares may be returned to the Company if the employee does not render the requisite service. | |
(2) | As of December 31, 2008, 1,491,776 options and zero nonvested shares were excluded in computation of diluted net income per share because their effects were anti-dilutive. For year 2007 and 2009, all of the options and nonvested shares were anti-dilutive because the Group were in the loss position. |
F - 44
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
15. | MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION |
16. | NONCONTROLLING INTERESTS |
17. | ADOPTION OF AUTHORITATIVE GUIDANCE REGARDING NONCONTROLLING INTERESTS |
(a) | the noncontrolling interests (previously described as minority interest) has now been included as a component of total equity whereas previously it was shown outside of equity, |
(b) | the net income or loss attributable to the noncontrolling interests is now shown as an allocation of net income for the year rather than being deducted in arriving at net income, and |
(c) | consolidated comprehensive income or loss now includes the comprehensive income or loss attributable to the noncontrolling interests. |
F - 45
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
18. | COMMITMENTS |
Year ending | ||||
2010 | 3,452,012 | |||
2011 | 1,572,457 | |||
2012 | 464,852 | |||
Total | $ | 5,489,321 | ||
19. | SEGMENT AND GEOGRAPHIC INFORMATION |
F - 46
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
19. | SEGMENT AND GEOGRAPHIC INFORMATION — continued |
Subscription | ||||||||||||
services and | ||||||||||||
other related | Brokerage | |||||||||||
services | services | Consolidated | ||||||||||
Net revenue | $ | 51,377,247 | $ | 2,228,630 | $ | 53,605,877 | ||||||
Cost of revenue | 7,498,892 | 647,832 | 8,146,724 | |||||||||
Operating expenses: | ||||||||||||
General and administrative | 15,302,683 | 1,679,349 | 16,982,032 | |||||||||
Product development | 10,754,380 | — | 10,754,380 | |||||||||
Sales and marketing | 25,762,671 | 332,562 | 26,095,233 | |||||||||
Total operating expenses | 51,819,734 | 2,011,911 | 53,831,645 | |||||||||
Government subsidies | 567,373 | — | 567,373 | |||||||||
Loss from operations | (7,374,006 | ) | (431,113 | ) | (7,805,119 | ) | ||||||
Total assets | 137,075,374 | 28,534,063 | 165,609,437 | |||||||||
Subscription | ||||||||||||
services and | ||||||||||||
other related | Brokerage | |||||||||||
services | services | Consolidated | ||||||||||
Net revenue | $ | 55,286,219 | $ | 956,549 | $ | 56,242,768 | ||||||
Cost of revenue | (9,181,922 | ) | (185,221 | ) | (9,367,143 | ) | ||||||
Operating expenses: | ||||||||||||
General and administrative | (14,055,716 | ) | (1,315,455 | ) | (15,371,171 | ) | ||||||
Product development | (5,635,173 | ) | — | (5,635,173 | ) | |||||||
Sales and marketing | (13,342,967 | ) | (177,328 | ) | (13,520,295 | ) | ||||||
Total operating expenses | (33,033,856 | ) | (1,492,783 | ) | (34,526,639 | ) | ||||||
Government subsidies | 436,946 | — | 436,946 | |||||||||
Income (loss) from operations | 13,507,387 | (721,455 | ) | 12,785,932 | ||||||||
Total assets | 124,128,214 | 17,695,097 | 141,823,311 | |||||||||
F - 47
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
19. | SEGMENT AND GEOGRAPHIC INFORMATION — continued |
Subscription | ||||||||||||
services and | ||||||||||||
other related | Brokerage | |||||||||||
services | services | Consolidated | ||||||||||
Net revenue | $ | 25,822,178 | $ | 80,896 | $ | 25,903,074 | ||||||
Cost of revenue | (4,403,605 | ) | (22,997 | ) | (4,426,602 | ) | ||||||
Operating expenses: | ||||||||||||
General and administrative | (7,599,367 | ) | (184,301 | ) | (7,783,668 | ) | ||||||
Product development | (2,268,878 | ) | — | (2,268,878 | ) | |||||||
Sales and marketing | (6,911,624 | ) | (12,712 | ) | (6,924,336 | ) | ||||||
Total operating expenses | (16,779,869 | ) | (197,013 | ) | (16,976,882 | ) | ||||||
Government subsidies | 135,834 | — | 135,834 | |||||||||
Income (loss) from operations | 4,774,538 | (139,114 | ) | 4,635,424 | ||||||||
Total assets | 95,774,776 | 8,109,972 | 103,884,748 | |||||||||
Years ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Subscription fees | $ | 22,712,043 | $ | 49,551,711 | $ | 46,175,235 | ||||||
Advertising revenue | 1,560,194 | 2,946,389 | 3,985,699 | |||||||||
SMS revenue | 1,339,321 | 1,047,218 | 1,025,927 | |||||||||
Brokerage service revenue | 80,896 | 956,549 | 2,228,630 | |||||||||
Others | 210,620 | 1,740,901 | 190,386 | |||||||||
Total revenue from external customers | $ | 25,903,074 | $ | 56,242,768 | $ | 53,605,877 | ||||||
F - 48
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollars)
20. | RESTRICTED NET ASSETS |
21. | SUBSEQUENT EVENT |
F - 49
Table of Contents
December 31, | ||||||||
2008 | 2009 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,435,407 | $ | 3,620,238 | ||||
Amounts due from subsidiaries | 18,388,250 | 19,016,051 | ||||||
Prepaid expenses and other current assets | 48,877 | 20,352 | ||||||
Dividends receivable | 25,858,199 | 25,836,613 | ||||||
Total current assets | 48,730,733 | 48,493,254 | ||||||
Investments in subsidiaries | 47,021,860 | 47,893,966 | ||||||
Cost-method investment | 1,479,571 | 1,479,571 | ||||||
Goodwill | 50,534 | 50,534 | ||||||
Total assets | $ | 97,282,698 | $ | 97,917,325 | ||||
Liabilities and shareholders’ equity | ||||||||
Current liabilities: | ||||||||
Accrued expenses and other current liabilities | 327,021 | 367,357 | ||||||
Amounts due to subsidiaries | 13,322 | 142,572 | ||||||
Total current liabilities | $ | 340,343 | $ | 509,929 | ||||
Shareholders’ equity | ||||||||
Ordinary shares ($0.00013 par value; 500,000,000 shares authorized; shares issued and outstanding 109,754,433 in 2007, 110,014,433 in 2008 and 110,250,163 in 2009) | 14,206 | 14,237 | ||||||
Additional paid-in capital | 67,340,543 | 74,130,609 | ||||||
Accumulated other comprehensive income | 6,448,078 | 6,342,765 | ||||||
Retained earnings | 23,139,528 | 16,919,785 | ||||||
Total shareholders’ equity | 96,942,355 | 97,407,396 | ||||||
Total liabilities and shareholders’ equity | $ | 97,282,698 | $ | 97,917,325 | ||||
F - 50
Table of Contents
Statements of operations
(In U.S. dollars)
December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Operating expenses: | ||||||||||||
General and administrative | $ | 975,931 | $ | 577,934 | $ | 1,071,533 | ||||||
Stock-based compensation | 2,946,340 | 8,040,150 | 6,600,716 | |||||||||
Total operating expenses | 3,922,271 | 8,618,084 | 7,672,249 | |||||||||
Interest income | 253,003 | 50,970 | 4,510 | |||||||||
Equity in earnings of subsidiaries and VIEs | 10,299,974 | 25,997,391 | 1,469,390 | |||||||||
Exchange gain(loss) | 365,135 | 1,589,838 | (21,394 | ) | ||||||||
Other income | 1,455 | — | — | |||||||||
Loss from impairment of cost method investment | (11,127,000 | ) | — | — | ||||||||
Net income (loss) | $ | (4,129,704 | ) | $ | 19,020,115 | $ | (6,219,743 | ) | ||||
F - 51
Table of Contents
Parent Company Statement of Shareholders’ Equity and Comprehensive Income
(In U.S. dollars, except share data)
Additional | Accumulated other | Total | ||||||||||||||||||||||||||
Ordinary shares | paid-in | comprehensive | Retained | shareholders’ | Comprehensive | |||||||||||||||||||||||
Shares | Amount | capital | income (loss) | earnings | equity | income | ||||||||||||||||||||||
Balance as of January 1, 2007 | 104,384,933 | 13,474 | 52,555,919 | 1,634,269 | 8,249,117 | 62,452,779 | ||||||||||||||||||||||
Exercise of share option by employees | — | — | 2,366,697 | — | — | 2,366,697 | ||||||||||||||||||||||
Exercise of share options by non-employees | 5,369,500 | 698 | 858,422 | — | — | 859,120 | ||||||||||||||||||||||
Stock-based compensation | — | — | 2,946,340 | — | — | 2,946,340 | ||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | 2,867,163 | — | 2,867,163 | $ | 2,867,163 | ||||||||||||||||||||
Net loss | — | — | — | — | (4,129,704 | ) | (4,129,704 | ) | (4,129,704 | ) | ||||||||||||||||||
Balance as of December 31, 2007 | 109,754,433 | 14,172 | 58,727,378 | 4,501,432 | 4,119,413 | 67,362,395 | (1,262,541 | ) | ||||||||||||||||||||
Exercise of share option by employees | — | — | 531,449 | — | — | 531,449 | ||||||||||||||||||||||
Exercise of share options by non-employees | 260,000 | 34 | 41,566 | — | — | 41,600 | ||||||||||||||||||||||
Stock-based compensation | — | — | 8,040,150 | — | — | 8,040,150 | ||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | 1,946,646 | — | 1,946,646 | $ | 1,946,646 | ||||||||||||||||||||
Net income | — | — | — | — | 19,020,115 | 19,020,115 | 19,020,115 | |||||||||||||||||||||
Balance as of December 31, 2008 | 110,014,433 | 14,206 | 67,340,543 | 6,448,078 | 23,139,528 | 96,942,355 | 20,966,761 | |||||||||||||||||||||
Exercise of share option by employees | 185,730 | 24 | 181,357 | — | — | 181,381 | — | |||||||||||||||||||||
Exercise of share options by non-employees | 50,000 | 7 | 7,993 | — | — | 8,000 | — | |||||||||||||||||||||
Stock-based compensation | — | — | 6,600,716 | — | — | 6,600,716 | — | |||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | (105,313 | ) | — | (105,313 | ) | $ | (105,313 | ) | |||||||||||||||||
Net loss | — | — | — | — | (6,219,743 | ) | (6,219,743 | ) | (6,219,743 | ) | ||||||||||||||||||
Balance as of December 31, 2009 | 110,250,163 | 14,237 | 74,130,609 | 6,342,765 | 16,919,785 | 97,407,396 | (6,325,056 | ) | ||||||||||||||||||||
F - 52
Table of Contents
(In U.S. dollars, except share-related data)
December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Operating activities: | ||||||||||||
Net income (loss) | $ | (4,129,704 | ) | $ | 19,020,115 | $ | (6,219,743 | ) | ||||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||||||||||
Stock-based compensation | 2,946,340 | 8,040,150 | 6,600,716 | |||||||||
Loss from impairment of cost method investment | 11,127,000 | — | — | |||||||||
Equity in earnings of subsidiaries | (10,299,974 | ) | (25,997,391 | ) | (1,469,390 | ) | ||||||
Changes in assets and liabilities: | ||||||||||||
Dividend receivable | 2,473,269 | — | — | |||||||||
Prepaid expenses and other current assets | (39,954 | ) | 84,695 | 28,525 | ||||||||
Amounts due from subsidiaries | (4,344,190 | ) | (15,071,573 | ) | (105,742 | ) | ||||||
Accrued expenses and other current liabilities | 1,719,911 | (1,541,036 | ) | 31,836 | ||||||||
Amounts due to subsidiaries | 3 | (47,217 | ) | 129,250 | ||||||||
Net cash used in operating activities | (547,299 | ) | (15,512,257 | ) | (1,004,548 | ) | ||||||
Investing activities: | ||||||||||||
Net increase in loans to subsidiaries | 4,000,000 | — | — | |||||||||
Acquisition of businesses | (2,300,476 | ) | — | — | ||||||||
Net cash provided by investing activities | 1,699,524 | — | — | |||||||||
Financing activities: | ||||||||||||
Proceeds from stock options exercised by employees | 2,366,697 | 531,449 | 181,381 | |||||||||
Proceeds from exercise of options granted to non-employee | 859,120 | 41,600 | 8,000 | |||||||||
Dividend from a subsidiary | 9,238,436 | — | — | |||||||||
Net cash provided by financing activities | 12,464,253 | 573,049 | 189,381 | |||||||||
Effect of exchange rate changes | 76 | (2 | ) | (2 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 13,616,554 | (14,939,210 | ) | (815,169 | ) | |||||||
Cash and cash equivalents, beginning of the year | 5,758,063 | 19,374,617 | 4,435,407 | |||||||||
Cash and cash equivalents, end of the year | $ | 19,374,617 | $ | 4,435,407 | $ | 3,620,238 | ||||||
F - 53